o
|
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934
OR
|
|
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the fiscal year ended December 31, 2014
OR
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||
o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
OR
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||
o
|
SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of event requiring this shell company report
|
Title of each class
|
Name of each exchange on which registered
|
||||
None
|
None
|
*
|
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
|
|
·
|
“
we
”
,
“
us
”
,
“
our Company
”
,
“
the Company
”
,
“
our
”
, refer to China Finance Online Co. Limited, or CFO Hong Kong and its subsidiaries, and, in the context of describing our operations include consolidated affiliates in China, Hong Kong or British Virgin Islands;
|
|
·
|
“
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, and solely for the purpose of this annual report, excluding Taiwan, Hong Kong and Macau;
|
|
·
|
“
Hong Kong
”
or
“
H.K.
”
refers to the Hong Kong Special Administrative Region of the People
’
s Republic of China;
|
|
·
|
“
U.S. GAAP
”
refers to generally accepted accounting principles in the United States; 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 new strategies, including how we effect our goals and new 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 and upgrade our business strategies;
|
|
·
|
our plans to use acquisitions and investments as part of our corporate strategy;
|
|
·
|
our strategic transformation initiative;
|
|
·
|
cost-cutting initiatives and their effect on efficiency and operational performance;
|
|
·
|
competition in the PRC financial data and information services industry, securities investment advisory, wealth management and financial services industry;
|
|
·
|
the market prospect of the online financial data and information services market;
|
|
·
|
the market prospect of the securities investment advisory and wealth management services markets;
|
|
·
|
the market prospect and competition in other business areas that we have expanded or ventured into, including without limitation, futures contracts brokerage business and precious metals trading business;
|
|
·
|
performance of China
’
s securities markets, Hong Kong
’
s securities markets and global financial markets;
|
|
·
|
global macroeconomic uncertainties;
|
|
·
|
wavering investor confidence that could impact our business;
|
|
·
|
our ability to retain key personnel and attract new talents;
|
|
·
|
possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income;
|
|
·
|
PRC and Hong Kong 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 securities investment advisory companies to provide advisory services on securities and related products;
|
|
·
|
PRC governmental policies relating to wealth management services and our precious metals trading business;
|
|
·
|
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.
|
ITEM
1.
|
IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
|
ITEM
2.
|
OFFER STATISTICS AND EXPECTED TIMETABLE
|
ITEM
3.
|
KEY INFORMATION
|
For the year ended December 31,
|
||||||||||||||||||||
(in thousands of U.S. dollars, except per share or per ADS data)
|
2010
|
2011
|
2012
|
2013
|
2014
|
|||||||||||||||
Consolidated statement of operations and comprehensive income (loss) data:
|
||||||||||||||||||||
Net revenues
|
$ | 59,716 | $ | 53,008 | $ | 29,599 | $ | 52,738 | $ | 83,696 | ||||||||||
Cost of revenues
|
(8,497 | ) | (8,771 | ) | (8,089 | ) | (10,570 | ) | (20,353 | ) | ||||||||||
Gross profit
|
51,219 | 44,237 | 21,510 | 42,168 | 63,343 | |||||||||||||||
Operating expenses:
|
||||||||||||||||||||
General and administrative
|
(13,208 | ) | (11,228 | ) | (11,387 | ) | (15,210 | ) | (17,592 | ) | ||||||||||
Product development
|
(13,028 | ) | (13,314 | ) | (10,736 | ) | (9,033 | ) | (11,148 | ) | ||||||||||
Sales and marketing
|
(26,991 | ) | (21,337 | ) | (13,072 | ) | (30,588 | ) | (43,761 | ) | ||||||||||
Loss from impairment of intangible assets
|
- | (4,078 | ) | - | - | (1,802 | ) | |||||||||||||
Loss from impairment of goodwill
|
- | (13,463 | ) | - | - | (8,150 | ) | |||||||||||||
Total operating expenses
|
(53,227 | ) | (63,420 | ) | (35,195 | ) | (54,831 | ) | (82,453 | ) | ||||||||||
Government subsidies
|
514 | 265 | 76 | 11 | 659 | |||||||||||||||
Loss from operations
|
(1,494 | ) | (18,918 | ) | (13,609 | ) | (12,652 | ) | (18,451 | ) | ||||||||||
Interest income
|
1,590 | 2,745 | 3,178 | 1,341 | 4,044 | |||||||||||||||
Interest expense
|
(142 | ) | (248 | ) | (518 | ) | (197 | ) | (12 | ) | ||||||||||
Exchange gain (loss), net
|
813 | 1,350 | 72 | 557 | (112 | ) | ||||||||||||||
Gain from sale of cost method investment
|
- | - | - | - | 4,338 | |||||||||||||||
Equity method investment income
|
- | - | - | 2,774 | - | |||||||||||||||
Short-term investments income
|
1,138 | 1,032 | 435 | 132 | 58 | |||||||||||||||
Other income (expense), net
|
(7 | ) | (7 | ) | (634 | ) | (29 | ) | 18 | |||||||||||
Loss from impairment of cost method investment
|
- | (1,480 | ) | - | - | - | ||||||||||||||
Income (loss) before income tax expense
|
1,898 | (15,526 | ) | (11,076 | ) | (8,074 | ) | (10,117 | ) | |||||||||||
Income tax expense
|
(264 | ) | (3,938 | ) | (884 | ) | (100 | ) | (514 | ) | ||||||||||
Net income (loss)
|
1,634 | (19,464 | ) | (11,960 | ) | (8,174 | ) | (10,631 | ) | |||||||||||
Less: net income (loss) attributable to the noncontrolling interests
|
(326 | ) | (137 | ) | (105 | ) | 399 | (3,463 | ) | |||||||||||
Net income (loss) attributable to China Finance Online Co. Limited
|
$ | 1,960 | $ | (19,327 | ) | $ | (11,855 | ) | $ | (8,573 | ) | $ | (7,168 | ) | ||||||
Net income (loss) per share attributable to China Finance Online Co. Limited
|
||||||||||||||||||||
-basic
|
$ | 0.02 | $ | (0.18 | ) | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) | ||||||
-diluted
|
$ | 0.02 | $ | (0.18 | ) | $ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) | ||||||
Net income (loss) per ADS equivalent attributable to China Finance Online Co. Limited
|
||||||||||||||||||||
-basic (1)
|
$ | 0.09 | $ | (0.89 | ) | $ | (0.54 | ) | $ | (0.39 | ) | $ | (0.33 | ) | ||||||
-diluted (1)
|
$ | 0.09 | $ | (0.89 | ) | $ | (0.54 | ) | $ | (0.39 | ) | $ | (0.33 | ) |
(in thousands of U.S. dollars)
|
As of December 31,
|
|||||||||||||||||||
2010
|
2011
|
2012
|
2013
|
2014
|
||||||||||||||||
Consolidated balance sheet data:
|
||||||||||||||||||||
Cash and cash equivalents
|
$ | 106,773 | $ | 64,641 | $ | 40,906 | $ | 36,371 | $ | 32,539 | ||||||||||
Current working capital (2)
|
90,146 | 90,098 | 70,360 | 56,677 | 55,771 | |||||||||||||||
Total assets
|
180,091 | 159,977 | 121,371 | 133,493 | 113,903 | |||||||||||||||
Short-term loan
|
6,424 | 19,171 | 13,546 | - | - | |||||||||||||||
Deferred revenue, current
|
32,995 | 17,287 | 7,551 | 6, 150 | 4,936 | |||||||||||||||
Total current liabilities
|
60,259 | 61,903 | 36,331 | 39,203 | 36,443 | |||||||||||||||
Deferred revenue, non-current
|
13,022 | 7,237 | 3,155 | 1,986 | 1,373 | |||||||||||||||
Total China Finance Online Co. limited shareholders’ equity
|
105,900 | 90,941 | 79,965 | 75,771 | 64,615 |
(1)
|
Each ADS represents five ordinary shares.
|
(2)
|
Current working capital is the difference between total current assets and total current liabilities.
|
Average(1)
|
High
|
Low
|
Period-end
|
|||||||||||||
|
(RMB per U.S.$1.00)
|
|
||||||||||||||
December 31, 2010
|
6.7668
|
6.8284
|
6.6227
|
6.6227
|
||||||||||||
December 31, 2011
|
6.4445
|
6.6349
|
6.3009
|
6.3009
|
||||||||||||
December 31, 2012
|
6.3085
|
6.3495
|
6.2670
|
6.2855
|
||||||||||||
December 31, 2013
|
6.1896
|
6.2898
|
6.0969
|
6.0969
|
||||||||||||
December 31, 2014
|
6.1453
|
6.1710
|
6.0930
|
6.1190
|
||||||||||||
Most recent six months:
|
||||||||||||||||
October 2014
|
6.1441
|
6.1493
|
6.1395
|
6.1461
|
||||||||||||
November 2014
|
6.1432
|
6.1602
|
6.1320
|
6.1345
|
||||||||||||
December 2014
|
6.1241
|
6.1411
|
6.1137
|
6.1190
|
||||||||||||
January 2015
|
6.1272
|
6.1384
|
6.1188
|
6.1370
|
||||||||||||
February 2015
|
6.1339
|
6.1475
|
6.1261
|
6.1475
|
||||||||||||
March 2015
|
6.1507
|
6.1617
|
6.1375
|
6.1422
|
||||||||||||
April 2015 (through 15th)
|
6.1368
|
6.1434
|
6.1305
|
6.1340
|
(1)
|
Annual averages are calculated using the average of month-end rates of the relevant year. Monthly averages are calculated using the average of the daily rates during the relevant period.
|
·
|
we may not identify suitable candidates and successfully complete acquisition and investment transactions, and may not be able to manage post-closing issues such as the integration of acquired businesses, products or employees;
|
·
|
we may not fully realize all of the anticipated benefits of any acquisition and investment transaction;
|
·
|
the pricing and other terms of contracts for acquisition and investment transactions require us to make estimates and assumptions at the time we enter into these contracts, so that we may pay more than it is worth;
|
·
|
we may not identify all of the problems during the course of our due diligence, such as factors necessary to estimate our costs accurately, and issues with unlicensed use of intellectual property;
|
·
|
any increased or unexpected costs, unanticipated delays or failure to meet contractual obligations, and failure of investments to perform as expected, could make these transactions less profitable or unprofitable;
|
·
|
if we fail to successfully complete acquisitions that further our strategic objectives, we may be required to expend resources to develop products and technology internally, and we may be at a competitive disadvantage or we may be adversely affected by negative market perceptions;
|
·
|
our ongoing business may be disrupted and our management
’
s attention may be diverted by transition or integration issues;
|
·
|
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;
|
·
|
when goodwill, intangible assets and investments, in connection with potential acquisition and investment transactions become impaired, we may be required to incur additional material charges relating to the impairment of those assets;
|
·
|
we may incur additional amortization expense over the useful lives of certain intangible assets acquired in connection with acquisitions;
|
·
|
any acquisition and investment transactions may require a significant amount of capital investment, which would decrease the amount of cash available for working capital or capital expenditures;
|
·
|
we may issue common stock, potentially creating dilution for existing stockholders to complete acquisition and investment transactions;
|
·
|
we may borrow to finance these transactions, the amount and terms of which as well as other factors could affect our liquidity and financial condition, and debt instruments may contain restrictive covenants that could, among other things, restrict us from distributing dividends;
|
·
|
we may experience risks relating to the challenges and costs of closing acquisition and investment transactions and the risk that an announced acquisition and investment transaction may not close.
|
(a)
|
Earnings of our PRC subsidiaries that we directly own and operate inside the PRC are transferred to us by means of dividend payments. The amount of dividends paid to us by our directly owned PRC subsidiaries depends mainly on the service fees paid to them from our consolidated affiliated entities.
|
(b)
|
Earnings of our PRC subsidiaries that we indirectly hold through an intermediary Hong Kong or British Virgin Islands company are transferred to us by means of dividend payments via such intermediary company. The transfer of dividend payments from such intermediary company to us is not subject to PRC taxation or other regulatory restrictions.
|
(c)
|
Earnings of the VIEs, which we exert control via VIE contracts including without limitation exclusive technology consulting and management service agreement, exclusive purchase right agreement, power of attorney and pledge agreement, are first transferred in full (pre-tax) to our wholly foreign owned enterprise via such contractual arrangements.
|
·
|
Our articles of association provide for a staggered board, which means that certain number of our directors, not exceeding the half of the remaining directors after excluding our chief executive officer, are retired at every annual general meeting and the vacancies created by the retirement stand for election. Our chief executive officer will at all times serves 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, making it more difficult for any potential acquirer to take control of our board in a relatively short period of time, which may discourage proxy contests for the election of our directors and purchases of substantial blocks of our shares.
|
·
|
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 by resolutions to give us at least 120 days
’
advanced notice of the same, 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 as of the date of this report. 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.
|
ITEM
4.
|
INFORMATION ON THE COMPANY
|
a.
|
Subscription Services and other Related Services in the PRC
|
(i)
|
Financial Services Business
|
|
Ÿ
|
Text and audio interactive messaging system for real-time broadcast and Q&As between investment advisors and their clients;
|
|
Ÿ
|
Daily market analytics, research reports and investment strategies for investment advisors;
|
|
Ÿ
|
Access to fast trade order placement with direct connection to the Company’s Securities Masters platform; and
|
|
Ÿ
|
Client Management system for every investment advisor to view and manage client profiles, historical data and activities.
|
(ii)
|
Financial information and advisory business
|
(iii)
|
Advertising Business
|
b.
|
Precious Metal Trading Business
|
c.
|
Hong Kong Securities and Futures Contracts Brokerage Business
|
|
·
|
competition from traditional financial service providers offering similar services and products;
|
|
·
|
competition from existing internet companies entering into financial service market offering similar services and products; and
|
|
·
|
competition from new entrants providers offering similar services and products.
|
|
·
|
Publishers and distributors of traditional media, including print, radio and television as well as radio and television programs and news programs focused on financial news and information;
|
|
·
|
Internet portals providing information on business, finance and investing;
|
|
·
|
Financial information web pages offered by websites;
|
|
·
|
Stock research software vendors, especially those that develop and market stock research software through stock brokerage companies;
|
|
·
|
Stock brokerage companies, especially stock brokerage companies with online trading capabilities; and
|
|
·
|
Other companies that provide similar products and services as ours.
|
|
·
|
MIIT (Ministry of Industry and Information Technology);
|
|
·
|
PBC (The People
’
s Bank of China);
|
|
·
|
CSRC (China Securities Regulatory Commission);
|
|
·
|
CBRC (China Banking Regulatory Commission);
|
|
·
|
Ministry of Culture;
|
|
·
|
General Administration of Press and Publication (National Copyright Administration);
|
|
·
|
National Development and Reform Commission (NDRC);
|
|
·
|
SAIC (State Administration of Industry and Commerce);
|
|
·
|
Ministry of Public Security;
|
|
·
|
Ministry of Commerce; and
|
|
·
|
State Administration of Radio Film and Television
|
|
•
|
PRC Trust Law (2001) and the Administrative Rules Regarding Trust Company-Sponsored Collective Fund Trust Plans (2007 and amended in 2009) are principal laws and regulations for trust products;
|
|
•
|
PRC Partnership Enterprise Law (2006), the Notice on Further Standardizing the Development and Record-filing Administration of Equity Investment Enterprises in Pilot Regions (2011) promulgated by the NDRC and a series of local regulations promulgated by provinces and certain cities, including Beijing, Shanghai and Tianjin, to encourage and regulate the development of private equity investment in the applicable region;
|
|
·
|
Obtained the securities investment consulting services license, and with a registered capital of not less than RMB 50 million;
|
|
·
|
There are at least 10 employees with securities investment consulting services license and more than 2 years’ relevant experience in securities, funds or futures, and qualified senior management;
|
|
·
|
Proper operational management, internal control and investment protection systems commensurate with its businesses;
|
|
·
|
Proper operational premises and facilities and technology system commensurate with its businesses;
|
|
·
|
There has been no criminal or administrative penalty relating to violation of law or regulations in the past 3 years, nor is there ongoing investigation or correction involving potential violation of law or regulations; and
|
|
·
|
Other conditions pursuant to relevant laws or regulations and rules by the Association.
|
|
|
Jurisdiction of
|
Legal Ownership
|
|
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) Success Technology Co., Ltd.
|
PRC
|
100%
|
||
Beijing Chuangying Advisory and Investment Co., Ltd.*
|
PRC
|
Nil
|
||
Shanghai Meining Computer Software Co., Ltd.*
|
PRC
|
Nil
|
||
Zhengning Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
||
Zhengyong Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
||
Zhengtong Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
||
Shanghai Chongzhi Co., Ltd.*
|
PRC
|
Nil
|
||
Fortune (Beijing) Qicheng Technology Co., Ltd.*
|
PRC
|
Nil
|
||
Shanghai Stockstar Securities Advisory and Investment Co., Ltd. *
|
PRC
|
Nil
|
||
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
|
||
Shanghai Stockstar Wealth Management Co., Ltd.*
|
PRC
|
Nil
|
||
Fortune (Beijing) Huiying Investment Consulting Co., Ltd.*
|
PRC
|
Nil
|
||
Zhengjin(Fujian)Precious Metals Investment Co., Ltd.*
|
PRC
|
Nil
|
||
Henghui (Tianjin) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
||
Zhengjin (Tianjin) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
||
Zhengjin (Shanghai) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
||
Shenzhen Tahoe Investment and Development Co., Ltd.*
|
PRC
|
Nil
|
||
iSTAR Financial Holdings Limited
|
BVI
|
85%
|
||
iSTAR International Securities Co. Limited
|
Hong Kong
|
85%
|
||
iSTAR International Futures Co. Limited
|
Hong Kong
|
85%
|
||
iSTAR International Wealth Management Co. Limited
|
Hong Kong
|
85%
|
||
iSTAR International Credit Co. Limited
|
Hong Kong
|
85%
|
|
·
|
have the power to direct the activities that most significantly affect the economic performance of the VIEs and their subsidiaries;
|
|
·
|
receive substantially all of the economic benefits from the VIEs and their subsidiaries in consideration for the services provided by our WFOEs; and
|
|
·
|
have an exclusive option to purchase from each of the shareholders of the VIEs all or part of the VIEs’ equity interest, when and to the extent permitted by PRC law, or request any existing shareholder of VIEs to transfer all or part of the equity interest in the VIEs to another PRC person or entity designated by us at any time in our discretion.
|
|
·
|
strategic consulting services agreement, pursuant to which the amount of fees to be charged is 30% of each VIE’s income before tax;
|
|
·
|
technical support services agreement, pursuant to which the amount of fees to be charged is 30% of each VIE’s income before tax; and
|
|
·
|
operating support services agreement, pursuant to which the amount of fees to be charged is 40% of each VIE’s income before tax.
|
|
·
|
the corporate structure of the Company and its subsidiaries and our PRC-incorporated affiliates are in compliance with existing PRC laws and regulations; and
|
|
·
|
the contractual arrangements governing each of our VIE relationships are valid, binding and enforceable under, and do not violate PRC laws or regulations currently in effect.
|
Variable interest entities
|
Business sector
|
Beijing Fuhua Innovation Technology Development Co., Ltd.
|
Web Portal and advertising services
|
Shanghai Chongzhi Co., Ltd.
|
Subscription services and other related services
|
Fortune (Beijing) Qicheng Technology Co., Ltd.
|
Subscription services and other related services
|
Shenzhen Newrand Securities Advisory and Investment Co., Ltd.
|
Subscription services and other related services
|
Shanghai Stockstar Securities Advisory and Investment Co., Ltd.
|
Subscription services and other related services
|
Shanghai Stockstar Wealth Management Co., Ltd
|
Precious metals trading services
|
ITEM
4A.
|
UNRESOLVED STAFF COMMENTS
|
ITEM
5.
|
OPERATING AND FINANCIAL REVIEW AND PROSPECTS
|
|
·
|
global macroeconomic uncertainties, as well as the overall performance of China’s economy;
|
|
·
|
the strategic transition of our core business from providing premium subscription services to developing fee-based securities investment advisory services with wealth management services to be added over time;
|
|
·
|
performance of China
’
s securities markets, and user demand for market intelligence on China
’
s securities markets;
|
|
·
|
competition in the PRC financial data and information services industry, precious metal trading business and other financial services we may enter into;
|
|
·
|
PRC governmental policies relating to the precious metal trading industry and security advisory consulting industry;
|
|
·
|
possible non-cash goodwill, intangible assets and investment impairment may adversely affect our net income;
|
|
·
|
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 Qicheng and Shenzhen Shangtong Software Co., Ltd. (
“
CFO Shenzhen Shangtong
”
) being the
“
Software Enterprises
”
; Shanghai Meining Computer Software Co., Ltd. (
“
CFO Meining
”
) and CFO Genius being the HNTE companies;
|
|
·
|
our cost structure, including, in particular, our cost for commission paid, 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, and the contractual arrangements with CFO Newrand, CFO Fuhua, CFO Chongzhi, CFO Chuangying, and CFO Securities Consulting and other VIEs; and
|
|
·
|
business restructure
|
|
·
|
PRC regulatory policies.
|
Years ended December 31, 2014
|
||||||||||||
PRC
|
Hong Kong
|
Total
|
||||||||||
Precious metals trading services revenues
|
$ | 60,091,117 | $ | - | $ | 60,091,117 | ||||||
Hong Kong brokerage services revenues
|
- | 4,610,516 | 4,610,516 | |||||||||
Subscription services and other related
services revenues
|
18,994,252 | - | 18,994,252 | |||||||||
Total revenues from external customers
|
$ | 79,085,369 | $ | 4,610,516 | $ | 83,695,885 |
Years ended December 31, 2013
|
||||||||||||
PRC
|
Hong Kong
|
Total
|
||||||||||
Precious metals trading services revenues
|
$ | 30,124,245 | $ | - | $ | 30,124,245 | ||||||
Hong Kong brokerage services revenues
|
- | 3,404,767 | 3,404,767 | |||||||||
Subscription services and other related
services revenues
|
19,209,065 | - | 19,209,065 | |||||||||
Total revenues from external customers
|
$ | 49,333,310 | $ | 3,404,767 | $ | 52,738,077 |
Years ended December 31, 2012
|
||||||||||||
PRC
|
Hong Kong
|
Total
|
||||||||||
Hong Kong brokerage services revenues
|
$ | - | $ | 3,817,762 | $ | 3,817,762 | ||||||
Subscription services and other related
services revenues
|
25,781,724 | - | 25,781,724 | |||||||||
Total revenues from external customers
|
$ | 25,781,724 | $ | 3,817,762 | $ | 29,599,486 |
|
·
|
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.
|
|
·
|
The revenue growth is projected at a compound annual growth rate, or CAGR. The CAGR of the reporting unit is approximately 5.1% for 2016 through 2019, which is within the range of comparable companies at the time of valuation.
|
|
·
|
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 3% of revenue for each of the four reporting units, respectively.
|
|
·
|
The working capital requirement is estimated based on main accounts turnover days.
|
|
·
|
A perpetual growth rate after 2019 is assumed to be at 3% per year for each of the four reporting units.
|
For the year ended December 31,
|
||||||||||||||||||||||||
(in thousands of U.S. dollars, except as % of net revenues)
|
2012
|
2013
|
2014
|
|||||||||||||||||||||
Consolidated statement of comprehensive income (loss) data:
|
||||||||||||||||||||||||
Gross revenues
|
$ | 30,239 | 102.2 | % | $ | 53,336 | 101.1 | % | $ | 85,122 | 101.7 | % | ||||||||||||
Business tax
|
(640 | ) | (2.2 | ) | (598 | ) | (1.1 | ) | (1,426 | ) | (1.7 | ) | ||||||||||||
Net revenues
|
29,599 | 100.0 | % | 52,738 | 100.0 | % | 83,696 | 100.0 | % | |||||||||||||||
Cost of revenues
|
(8,089 | ) | (27.3 | ) | (10,570 | ) | (20.0 | ) | (20,353 | ) | (24.3 | ) | ||||||||||||
Gross profit
|
21,510 | 72.7 | 42,168 | 80.0 | 63,343 | 75.7 | ||||||||||||||||||
Operating expenses:
|
||||||||||||||||||||||||
General and administrative
|
(11,387 | ) | (38.5 | ) | (15,210 | ) | (28.9 | ) | (17,592 | ) | (21.0 | ) | ||||||||||||
Product development
|
(10,736 | ) | (36.3 | ) | (9,033 | ) | (17.1 | ) | (11,148 | ) | (13.3 | ) | ||||||||||||
Sales and marketing
|
(13,072 | ) | (44.2 | ) | (30,588 | ) | (58.0 | ) | (43,761 | ) | (52.3 | ) | ||||||||||||
Loss from impairment of
intangible assets
|
- | - | - | - | (1,802 | ) | (2.2 | ) | ||||||||||||||||
Loss from impairment of goodwill
|
- | - | - | - | (8,150 | ) | (9.7 | ) | ||||||||||||||||
Total operating expenses
|
(35,195 | ) | (119.0 | ) | (54,831 | ) | (104.0 | ) | (82,453 | ) | (98.5 | ) | ||||||||||||
Government subsidies
|
76 | 0.3 | 11 | - | 659 | 0.8 | ||||||||||||||||||
Loss from operations
|
(13,609 | ) | (46.0 | ) | (12,652 | ) | (24.0 | ) | (18,451 | ) | (22.0 | ) | ||||||||||||
Interest income
|
3,178 | 10.7 | 1,341 | 2.5 | 4,044 | ) | 4.8 | |||||||||||||||||
Interest expense
|
(518 | ) | (1.8 | ) | (197 | ) | (0.4 | ) | (12 | ) | 0.0 | |||||||||||||
Exchange gain (loss), net
|
72 | 0.2 | 557 | 1.1 | (112 | ) | (0.1 | ) | ||||||||||||||||
Gain from sale of cost method investment
|
- | - | - | - | 4,338 | 5.2 | ||||||||||||||||||
Equity method investment income
|
- | - | 2,774 | 5.3 | - | - | ||||||||||||||||||
Short-term investment income
|
435 | 1.5 | 132 | 0.3 | 58 | 0.1 | ||||||||||||||||||
Other income (expense), net
|
(634 | ) | (2.1 | ) | (29 | ) | (0.1 | ) | 18 | 0.0 | ||||||||||||||
Loss before income tax expense
|
(11,076 | ) | (37.5 | ) | (8,074 | ) | (15.3 | ) | (10,117 | ) | (12.1 | ) | ||||||||||||
Income tax expense
|
(884 | ) | (3.0 | ) | (100 | ) | (0.2 | ) | (514 | ) | (0.6 | ) | ||||||||||||
Net loss
|
(11,960 | ) | (40.5 | ) | (8,174 | ) | (15.5 | ) | (10,631 | ) | (12.7 | ) | ||||||||||||
Less: net income (loss) attributable to noncontrolling interests
|
(105 | ) | (0.4 | ) | 399 | 0.8 | (3,463 | ) | (4.1 | ) | ||||||||||||||
Net loss attributable to China Finance Online Co. Limited
|
(11,855 | ) | (40.1 | %) | (8,573 | ) | (16.3 | %) | (7,168 | ) | (8.6 | %) |
For the year ended December 31
|
||||||||||||
(in thousands of U.S. dollars)
|
2012
|
2013
|
2014
|
|||||||||
Net cash (used in) provided by operating activities
|
$ | (29,043 | ) | $ | 159 | $ | 1,172 | |||||
Net cash provided by (used in) investing activities
|
10,959 | 7,578 | (4,598 | ) | ||||||||
Net cash used in financing activities
|
(5,669 | ) | (12,138 | ) | (372 | ) | ||||||
Net decrease in cash and cash equivalents
|
(23,735 | ) | (4,535 | ) | (3,832 | ) | ||||||
Cash and cash equivalents at beginning of year
|
64,641 | 40,906 | 36,371 | |||||||||
Cash and cash equivalents at end of year
|
$ | 40,906 | $ | 36,371 | $ | 32,539 |
For the year ended December 31,
|
||||||||
2013
|
2014
|
|||||||
Cash, cash equivalents and restricted cash
|
||||||||
held inside of the PRC and subject to restrictions
|
||||||||
Denomination in RMB
|
$ | 26,912,315 | $ | 19,633,320 | ||||
Denomination in foreign currencies
|
$ | 480 | $ | 9,284 | ||||
Cash, cash equivalents and restricted cash
|
||||||||
held by VIEs and VIEs’ subsidiaries in the PRC
|
||||||||
Denomination in RMB
|
$ | 19,412,207 | $ | 17,572,213 | ||||
Denomination in foreign currencies
|
- | - | ||||||
Cash, cash equivalents and restricted cash
|
||||||||
held outside of the PRC
|
||||||||
Denomination in RMB
|
$ | 66,294 | $ | 99,170 | ||||
Denomination in foreign currencies
|
$ | 9,395,807 | $ | 12,802,237 |
|
·
|
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, content and services specifically targeting the high-end subscribers.
|
Office Premises
|
Data Purchase
|
Total
|
||||||||||
(in U.S. dollars)
|
||||||||||||
Less than 1 year
|
$ | 4,955,227 | $ | 1,534,828 | $ | 6,490,055 | ||||||
1 - 3 years
|
1,707,377 | 170,942 | 1,878,319 | |||||||||
3 - 5 years
|
- | - | - |
ITEM
6.
|
DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
|
*
|
Upon exercise of all options granted, would beneficially own less than 1% of our outstanding ordinary shares. |
Number of
|
|||||||
ordinary Shares to
|
|||||||
be issued upon
|
Exercise price per
|
||||||
exercise of options
|
ordinary share
|
Date of grant
|
Date of expiration
|
||||
Kheng Nam Lee
|
*
|
$
|
-
|
August 8, 2014
|
August 8, 2024
|
||
Rongquan Leng
(1)
|
*
|
$
|
-
|
August 8, 2014
|
August 8, 2024
|
||
Neo Chee Beng
|
*
|
$
|
-
|
August 8, 2014
|
August 8, 2024
|
*
|
Upon exercise of all options granted, would beneficially own less than 1% of our outstanding ordinary shares. |
Name
|
Number
|
Percent
|
||||||
Selected Employees
|
|
|
||||||
Zhiwei Zhao
|
8,958,493 | 7.97 | % | |||||
Jun (Jeff) Wang
|
* | * | ||||||
Caogang Li
|
* | * | ||||||
All executive officers as a group (3 persons)
|
10,558,493 | 9.39 | % |
|
·
|
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;
|
|
·
|
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 share-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.
|
|
·
|
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.
|
Name
|
Age
|
Position
|
Expiration of Term
|
Zhiwei Zhao
|
51
|
Chairman of the Board of Directors and Chief Executive Officer
|
-
|
Kheng Nam Lee
|
67
|
Director
|
Date of 2015 annual general meeting
|
Neo Chee Beng
|
54
|
Director
|
Date of 2015 annual general meeting
|
Jun (Jeff) Wang
|
44
|
Director and Chief Financial Officer
|
Date of 2016 annual general meeting
|
|
·
|
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.
|
Number of Shares Beneficially Owned
|
||||||||
Name
|
Number
|
Percent
|
||||||
Directors and executive officers
|
|
|
||||||
Zhiwei Zhao
|
32,071,983 | 28.53 | % | |||||
Kheng Nam Lee
|
* | * | ||||||
Neo Chee Beng
|
* | * | ||||||
Rongquan Leng (i)
|
||||||||
Jun (Jeff) Wang
|
* | * | ||||||
All current directors and executive officers as of December 31, 2014 as a group (5 persons)
|
35,629,069 | 31.69 | % | |||||
(i)
Mr. Rongquan Leng, former director, resigned from the Company’s Board for personal reasons in April 2015.
|
||||||||
5% Shareholder
|
|
|
||||||
Zhiwei Zhao (1)
|
32,071,983 | 28.53 | % | |||||
IDG Technology Venture Investment, LP (2)
|
6,723,115 | 5.98 | % | |||||
IDG Technology Venture Investment, Inc. (3)
|
4,670,505 | 4.15 | % | |||||
Jianping Lu (4)
|
7,156,121 | 6.37 | % | |||||
Ling Zhang (5)
|
8,746,370 | 7.78 | % |
*
|
|
Upon exercise of all options currently exercisable or vesting within 60 days of December 31, 2014, would beneficially own less than 1% of our ordinary shares.
|
(1)
|
|
Mr. Zhiwei Zhao is considered the beneficial owner of 32,071,983 ordinary shares of the Company, which consists of (i) 10,558,493 ordinary shares issued by the Company to C&F International Holdings Limited, whose parent company C&F Global Limited is wholly held by Mr. Zhiwei Zhao, on behalf of and exclusively for the benefit of the Company’s employees pursuant to the Company’s 2007 Plan and related Restricted Stock Issuance and Allocation Agreement; All the shares granted to C&F International Holdings Limited that have not been activated and vested by the end of calendar year 2012 have been forfeited to the company; (ii) 11,000,000 ordinary shares from IDG Technology Venture Investment, Inc. as of December 31, 2014 to Grand Continental Holdings Limited, a British Virgin Islands company wholly held by Mr. Zhiwei Zhao, as disclosed in a Schedule 13D/A filed with the SEC on November 14, 2011; (iii) 7,101,490 ordinary shares from Vertex Technology Fund (III) Ltd. as of December 31, 2014 to Grand Continental Holdings Limited, a British Virgin Islands company wholly held by Mr. Zhiwei Zhao, as disclosed in a Schedule 13D/A filed with the SEC on August 6, 2013; and (iv) 3,412,000 ordinary shares considered beneficially owned by Zhiwei Zhao upon exercise of all options exercisable or vesting within 60 days of December 31, 2014.
|
(2)
|
|
Includes 6,723,115 ordinary shares held by IDG Technology Venture Investment, LP. as of December 31, 2014, according to a Schedule 13G/A filed with the SEC dated February 8, 2013. The general partner of IDG Technology Venture Investment, LP is IDG Technology Venture Investments, LLC. Chi Sing Ho
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. The registered address of IDG Technology Venture Investment, LP is One Exeter Plaza, Boston, MA 02109, U.S.A.
|
(3)
|
Includes 4,670,505 ordinary shares held by IDG Technology Venture Investment, Inc. as of December 31, 2014 in the form of 934,101 ADSs, according to a Schedule 13G/A filed with the SEC dated February 8, 2013. IDG Technology Venture Investment, Inc. is a wholly owned by International Data Group, Inc., whose controlling shareholder is Patrick J. McGovern. Patrick J. McGovern is citizen of the United States of America. IDG Technology Venture Investment, Inc. and International Data Group, Inc. are each organized under the laws of the Commonwealth of Massachusetts. The registered address of IDG Technology Venture Investment, Inc. is One Exeter Plaza, Boston, MA 02109, U.S.A.
|
|
(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.
|
ITEM
7.
|
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
|
ITEM
8.
|
FINANCIAL INFORMATION
|
ITEM
9.
|
THE OFFER AND LISTING
|
Trading Price
|
||
High
|
Low
|
|
Yearly highs and lows
|
||
Year 2010
|
9.10
|
6.20
|
Year 2011
|
7.27
|
1.43
|
Year 2012
|
2.91
|
1.02
|
Year 2013
|
6.45
|
1.14
|
Year 2014
|
11.88
|
2.33
|
Quarterly highs and lows
|
||
First Quarter 2013
|
1.60
|
1.16
|
Second Quarter 2013
|
1.74
|
1.22
|
Third Quarter 2013
|
2.10
|
1.14
|
Fourth Quarter 2013
|
6.45
|
1.80
|
First Quarter 2014
|
8.20
|
4.12
|
Second Quarter 2014
|
6.40
|
2.33
|
Third Quarter 2014
|
11.88
|
3.83
|
Fourth Quarter 2014
|
8.65
|
4.42
|
First Quarter 2015
|
6.75
|
4.10
|
Monthly highs and lows
|
||
October 2014
|
6.88
|
4.42
|
November 2014
|
7.95
|
5.51
|
December 2014
|
8.65
|
5.24
|
January 2015
|
5.70
|
4.59
|
February 2015
|
6.45
|
4.80
|
March 2015
|
6.75
|
4.10
|
ITEM
10.
|
ADDITIONAL INFORMATION
|
|
·
|
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;
|
|
·
|
regulated investment companies or real estate investment trusts;
|
|
·
|
U.S. expatriates;
|
|
·
|
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 individual resident of the United States;
|
|||
•
|
a corporation, or other entity taxable as a corporation for U.S. federal income purposes, 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 under applicable U.S. Treasury regulations to be treated as a U.S. person.
|
•
|
at least 75% of its gross income is passive income (the
“
income test
”
), or
|
||
•
|
at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the
“
asset test
”
).
|
•
|
the excess distribution or gain will be allocated ratably over your holding period for the ADSs or ordinary shares,
|
||
•
|
the amount allocated to the current taxable year, and any taxable year prior to the first taxable year in which we became a PFIC, will be treated as ordinary income, and
|
||
•
|
the amount allocated to each other taxable year will be subject to the highest tax rate in effect for that taxable year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such taxable year.
|
•
|
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.
|
ITEM
11.
|
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
|
ITEM
12.
|
DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
|
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:
u
Share distributions, stock dividend, stock split, merger
u
Exchange of securities or any other transaction or event affecting the ADSs or the deposited securities
|
US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs issued
|
||
(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)
|
||
(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
|
||
Category
|
Depositary actions
|
Associated fee
|
||
(f) General depositary
services, particularly those
charged on an annual basis
|
Services performed by the depositary in administering the
ADRs
|
US$0.02 per ADS (or portion thereof) not more than once each calendar year and payable at the sole discretion of the depositary by billing ADR Holders or by deducting such charge from one or more cash dividends or other cash distributions
|
(g) Expenses of the Depositary
|
Expenses incurred on behalf of ADR Holders in connection with:
•
Compliance with foreign exchange control regulations or any law or regulation relating to foreign investment
•
The depositary’s or its custodian’s compliance with applicable law, rule or regulation
•
Stock transfer or other taxes and other governmental charges
•
Cable, telex and facsimile transmission and delivery charges
•
Fees for the transfer or registration of deposited securities in connection with the deposit or withdrawal of deposited securities
•
Expenses of the depositary in connection with the conversion of foreign currency into U.S. dollars (which are paid out of such foreign currency)
•
Any other charge payable by depositary or its agents in connection with the servicing of the shares or the deposited securities
|
Expenses payable at the sole discretion of the depositary by billing ADR Holders or by deducting such charges from one or more cash dividends or other cash distributions
|
ITEM
13.
|
DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
|
ITEM
14.
|
MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
|
ITEM
15.
|
CONTROLS AND PROCEDURES
|
ITEM
16A.
|
AUDIT COMMITTEE FINANCIAL EXPERT
|
ITEM
16B.
|
CODE OF ETHICS
|
ITEM
16C.
|
PRINCIPAL ACCOUNTANT FEES AND SERVICES
|
For the Year Ended December 31,
|
|||||||||||||||
2014
|
2013
|
2012
|
|||||||||||||
Audit Fees
(1)
|
US$
|
630,000 |
US$
|
433,000 |
US$
|
594,000 | |||||||||
Audit Related Fees
|
- | - | - | ||||||||||||
Tax Fees
(2)
|
- | - | - | ||||||||||||
All Other Fees
|
- | - | - |
ITEM
16D.
|
EXEMPTION FROM THE LISTING STANDARD FOR AUDIT COMMITTEES
|
ITEM
16E.
|
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
|
ITEM
16F.
|
CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
|
ITEM
16G.
|
CORPORATE GOVERNANCE
|
ITEM
16H.
|
MINE SAFETY DISCLOSURE
|
ITEM
17.
|
FINANCIAL STATEMENTS
|
ITEM
18.
|
FINANCIAL STATEMENTS
|
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
|
|
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(incorporated by reference to Exhibit 4.3 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.4
|
Translation of Purchase Option and Cooperation Agreement dated May 27, 2004 among China Finance Online Co. Limited, Jun Ning, Wu Chen and CFO Fuhua (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)
|
|
4.5
|
Translation of Share Pledge Agreement dated May 27, 2004 among Jun Ning, Wu Chen and CFO Beijing (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)
|
|
4.6
|
Translation of Framework Agreement on Exercising Purchase Option dated November 20, 2006 by and among Jun Ning, Wu Chen, Zhiwei Zhao, CFO Fuhua and CFO Beijing(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)
|
|
4.7
|
Translation of Purchase Option and Cooperation Agreement dated November 20, 2006 among China Finance Online Co. Limited, Zhiwei Zhao, Wu Chen, CFO Fuhua and CFO Beijing (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)
|
|
4.8
|
Translation of Share Pledge Agreement dated November 20, 2006 among Zhiwei Zhao, Wu Chen, CFO Fuhua and CFO Beijing(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)
|
4.9
|
Translation of Equipment Lease Agreement between CFO Beijing and CFO Fuhua 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)
|
|
4.10
|
Translation of Technical Support Agreement between CFO Beijing and CFO Fuhua 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)
|
|
4.11
|
Translation of Amended and Restated Strategic Consulting Agreement between CFO Beijing and CFO Fuhua 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)
|
|
4.12
|
Translation of 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 and CFO Beijing (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)
|
|
4.13
|
Translation of Share Transfer Contract (related to shares of CFO Fuhua) 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)
|
|
4.14
|
Translation of Share Pledge Agreement dated October 18, 2007 among Zhiwei Zhao, Jun Wang, CFO Fuhua and CFO Beijing (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)
|
|
4.15
|
Translation of Purchase Option and Cooperation Agreement dated March 3, 2008 among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO Fuhua (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)
|
|
4.16
|
Translation of Purchase Option and Cooperation Agreement dated March 3, 2008 among China Finance Online Co. Limited, Zhiwei Zhao, Jun Wang and CFO Fuhua (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)
|
|
4.17
|
Translation of Share Pledge Agreement dated March 3,2008 among Zhiwei Zhao, Jun Wang, CFO Fuhua and CFO Beijing (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)
|
|
4.18
|
Translation of loan Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and Lin Yang (incorporated by reference to Exhibit 4.51 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.19
|
Translation of share Pledge Agreement dated November 20, 2009 among CFO Chuangying, Yang Yang and Lin Yang (incorporated by reference to Exhibit 4.52 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.20
|
Translation of purchase Option Agreement dated November 20, 2009 among CFO Chuangying, CFO Qicheng, Yang Yang and Lin Yang (incorporated by reference to Exhibit 4.53 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
4.21
|
Translation of operation Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng (incorporated by reference to Exhibit 4.54 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.22
|
Translation of technical Support Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng (incorporated by reference to Exhibit 4.55 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.23
|
Translation of strategic Consulting and Service Agreement dated November 20, 2009 between CFO Chuangying and CFO Qicheng (incorporated by reference to Exhibit 4.56 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.24
|
Translation of 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)
|
|
4.25
|
Translation of 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)
|
|
4.26
|
Translation of 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)
|
|
4.27
|
Translation of 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)
|
|
4.28
|
Translation of 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)
|
|
4.29
|
Translation of 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)
|
|
4.30
|
Translation of 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)
|
|
4.31
|
Translation of 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 (incorporated by reference to Exhibit 4.35 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.32
|
Translation of Purchase Option Agreement dated June 2, 2009 among CFO Software, CFO Premium, Zhiwei Zhao and Jun Wang (incorporated by reference to Exhibit 4.36 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
4.33
|
Translation of Share Pledge Agreement dated June 2, 2009 among CFO Software, Zhiwei Zhao and Jun Wang (incorporated by reference to Exhibit 4.37 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.34
|
Translation of 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)
|
|
4.35
|
Translation of 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)
|
|
4.36
|
Translation of 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)
|
|
4.37
|
Translation of Loan Agreement dated November 25, 2009 among CFO Chuangying, Yang Yang and Lin Yang (incorporated by reference to Exhibit 4.57 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.38
|
Translation of Framework Agreement of Exercising Purchase Option dated November 1, 2012 among Yang Yang, Ying Zhu, CFO Chuangying and CFO Yingchuang (incorporated by reference to Exhibit 4.45 from our Amendment No. 1 to 2013 Annual Report on Form 20-F/A (File No.000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.39
|
Translation of Share Pledge Agreement dated November 1, 2012 among CFO Chuangying, Ying Zhu and Lin Yang (incorporated by reference to Exhibit 4.46 from our Amendment No. 1 to 2013 Annual Report on Form 20-F/A (File No.000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.40
|
Translation of Operation Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang (incorporated by reference to Exhibit 4.60 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.41
|
Translation of Technical Support Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang (incorporated by reference to Exhibit 4.61 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.42
|
Translation of Strategic Consulting and Service Agreement dated November 25, 2009 between CFO Chuangying and CFO Yingchuang (incorporated by reference to Exhibit 4.62 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.43
|
Translation of Loan Agreement dated May 8,2008 among CFO Software, Zhenfei Fan and Xun Zhao (incorporated by reference to Exhibit 4.50 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.44
|
Translation of Framwork Agreement of Erercising Purchase Option dated January 8, 2010 amoung Zhenfei Fan, Xun Zhao, Zhengyan Wu, CFO Chongzhi and CFO Software (incorporated by reference to Exhibit 4.51 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015))
|
4.45
|
Translation of Purchase Option and Cooperation Agreement dated January 8, 2010 among Xun Zhao, Zhengyan Wu and CFO Software (incorporated by reference to Exhibit 4.52 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.46
|
Translation of Share Pledge Agreement dated January 8, 2010 among Xun Zhao, Zhengyan Wu and CFO Software (incorporated by reference to Exhibit 4.53 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.47
|
Translation of Operation Agreement dated June 8, 2008 between CFO Chongzhi and CFO Software (incorporated by reference to Exhibit 4.54 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015))
|
|
4.48
|
Translation of Technical Support Agreement dated June 8, 2008 between CFO Chongzhi and CFO Software (incorporated by reference to Exhibit 4.55 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.49
|
Translation of Strategic Consulting and Service Agreement dated June 8, 2008 between CFO Chongzhi and CFO Software (incorporated by reference to Exhibit 4.56 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.50
|
Translation of Loan Agreement dated November 25,2009 among CFO Chongzhi, Zhihong Wang and Ran Yuan (incorporated by reference to Exhibit 4.63 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.51
|
Translation of Purchase Option and Cooperation Agreement dated November 30, 2009 among CFO Chongzhi, Shanghai Stockstar Information & Technology Co., Ltd., Ran Yuan and Zhihong Wang (incorporated by reference to Exhibit 4.65 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.52
|
Translation of Framwork Agreement of Exercising Purchase Option dated April 6, 2010 amoung Zhihong Wang, Na Zhang, CFO Chongzhi and Shanghai Stockstar Information & Technology Co., Ltd. (incorporated by reference to Exhibit 4.59 from Amendment No. 1 to our 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.53
|
Translation of Framwork Agreement of Exercising Purchase Option dated November 8, 2010 amoung Ran Yuan, Xun Zhao, CFO Chongzhi and Shanghai Stockstar Information & Technology Co., Ltd (incorporated by reference to Exhibit 4.60 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.54
|
Translation of Share Pledge Agreement dated January 15, 2012 among Na Zhang, Xun Zhao and CFO Chongzhi (incorporated by reference to Exhibit 4.61 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.55
|
Translation of Operation Agreement dated November 30, 2009 between CFO Chongzhi and Shanghai Stockstar Information & Technology Co., Ltd. (incorporated by reference to Exhibit 4.66 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
4.56
|
Translation of Technical Support Agreement dated November 30, 2009 between CFO Chongzhi and Shanghai Stockstar Information & Technology Co., Ltd. (incorporated by reference to Exhibit 4.67 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.57
|
Translation of Strategic Consulting and Service Agreement dated November 30, 2009 between CFO Chongzhi and Shanghai Stockstar Information & Technology Co., Ltd. (incorporated by reference to Exhibit 4.68 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.58
|
Translation of Loan Agreement dated March 29, 2011 among CFO Zhengtong, Zhiwei Zhao and Jun Wang (incorporated by reference to Exhibit 4.65 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.59
|
Translation of Purchase Option and Cooperation Agreement dated March 29, 2011 among Zhiwei Zhao, Jun Wang, Stockstar Wealth Management and CFO Zhengtong (incorporated by reference to Exhibit 4.66 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.60
|
Translation of Share Pledge Agreement dated March 29, 2011 among Zhiwei Zhao, Jun Wang and CFO Zhengtong (incorporated by reference to Exhibit 4.67 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.61
|
Translation of Operation Agreement dated March 29, 2011 between Stockstar Wealth Management and CFO Zhengtong (incorporated by reference to Exhibit 4.68 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.62
|
Translation of Technical Support Agreement dated March 29, 2011 between Stockstar Wealth Management and CFO Zhengtong (incorporated by reference to Exhibit 4.69 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.63
|
Translation of Strategic Consulting and Service Agreement dated March 29, 2011 between Stockstar Wealth Management and CFO Zhengtong (incorporated by reference to Exhibit 4.70 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.64
|
Translation of Framwork Agreement of Erercising Purchase Option dated Novermber 15, 2012 amoung Zhiwei Zhao, Jun Wang, Xiaowei Wang, Na Zhang, CFO Chuangying and CFO Software (incorporated by reference to Exhibit 4.71 from our 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.65
|
Translation of Purchase Option and Cooperation Agreement dated December 11, 2012 among Xiaowei Wang, Na Zhang, CFO Chuangying and CFO Software (incorporated by reference to Exhibit 4.72 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.66
|
Translation of Share Pledge Agreement dated November 15, 2012 amongXiaowei Wang, Na Zhang and CFO Software (incorporated by reference to Exhibit 4.73 from our Amendment No. 1 to 2013 Annual Report on Form 20F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
|
4.67
|
Operation Agreement dated February 12, 2009 between CFO Software and CFO Chuangying (incorporated by reference to Exhibit 4.40 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
4.68
|
Technical Support Agreement dated February 12, 2009 between CFO Software and CFO Chuangying (incorporated by reference to Exhibit 4.41 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.69
|
Strategic Consulting and Service Agreement dated February 12, 2009 between CFO Software and CFO Chuangying (incorporated by reference to Exhibit 4.42 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010)
|
|
4.70*
|
Translation of Loan Agreement dated June 1, 2014 among CFO Zhengyong, Lin Yang and Yi Yang
|
|
4.71*
|
Translation of Purchase Option and Cooperation Agreement dated June 1, 2014 among Lin Yang, Yi Yang, CFO Newrand and CFO Zhengyong
|
|
4.72*
|
Translation of Operation Agreement dated June 1, 2014 between CFO Newrand and CFO Zhengyong
|
|
4.73*
|
Translation of Technical Support Agreement dated June 1, 2014 between CFO Newrand and CFO Zhengyong
|
|
4.74*
|
Translation of Strategic Consulting and Service Agreement dated June 1, 2014 between CFO Newrand and CFO Zhengyong
|
|
4.75*
|
Translation of Loan Agreement dated February 12, 2014 among CFO Zhengyong, Ran Tao and Haibin Wang
|
|
4.76*
|
Translation of Purchase Option and Cooperation Agreement dated February 12, 2014 among Tao Ran, Haibin Wang, Beijing Mingfu Economics Research Institute Co., Ltd. and CFO Zhengyong
|
|
4.77*
|
Translation of Share Pledge Agreement dated February 12, 2014 among Ran Tao, Haibin Wang and CFO Zhengyong
|
|
4.78*
|
Translation of Operation Agreement dated February12, 2014 between Beijing Mingfu Economics Research Institute Co., Ltd. and CFO Zhengyong
|
|
4.79*
|
Translation of Technical Support Agreement dated February12, 2014 between Beijing Mingfu Economics Research Institute Co., Ltd. and CFO Zhengyong
|
|
4.80*
|
Translation of Strategic Consulting and Service Agreement dated February12, 2014 between Beijing Mingfu Economics Research Institute Co., Ltd. and CFO Zhengyong
|
|
4.81*
|
Translation of Loan Agreement dated May 14, 2014 among CFO Software, Zhiwei Zhao and Jun Wang
|
|
4.82*
|
Translation of Purchase Option and Cooperation Agreement dated May 14, 2014 among Zhiwei Zhao, Jun Wang, CFO Securities Consulting and Software
|
|
4.83*
|
Translation of Operation Agreement dated May 14, 2014 between CFO Securities Consulting and CFO Software
|
|
4.84*
|
Translation of Technical Support Agreement dated May 14, 2014 between CFO Securities Consulting and CFO Software
|
|
4.85*
|
Translation of Strategic Consulting and Service Agreement dated May 14, 2014 between CFO Securities Consulting and CFO Software
|
|
4.86
|
Translation of Labor Contract of Zhao Zhiwei dated June 21, 2010 (incorporated by reference to Exhibit 4.103 from our 2010 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 31, 2011)
|
4.87
|
Translation of Labor Contract of Jeff Wang dated May 24, 2011(incorporated by reference to Exhibit 4.104 from our 2010 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 31, 2011)
|
|
4.88
|
Translation of Shenzhen Stock Exchange Proprietary Information License Agreement dated March, 2012 between CFO Fuhua and Shenzhen Securities Information Co., Ltd. (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.; filed as Exhibit 4.61 to the Company’s Report on Form 20-F (File No.000-50975) filed on April 30, 2012, and incorporated herein by reference)
|
|
4.89
|
Translation of Securities Information License Contract dated December 26, 2011 between SSE Infonet Ltd. and CFO Fuhua (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission., which request is pending; filed as Exhibit 4.62 to the Company’s Report on Form 20-F (File No.000-50975) filed on April 30, 2012, and incorporated herein by reference)
|
|
4.90
|
Market Data Vendor License Agreement dated March 31, 2011 between HKEx Information Services Limited and CFO Software (filed as Exhibit 4.63 to the Company’s Report on Form 20-F (File No.000-50975) filed on April 30, 2012, and incorporated herein by reference)
|
|
4.91
|
Translation of China Financial Futures Exchange Futures Information License Agreement dated April 8, 2009 between CFO Software and China Financial Futures Exchange (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.) (incorporated by reference to Exhibit 4.75 from our 2009 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 28, 2010); Supplemental Agreement dated April 16, 2011 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.) (incorporated by reference to Exhibit 4.78 from our 2010 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 31, 2011)
|
|
4.92
|
Translation of Agreement for Supply of Real-time Hang Seng Family of Indexes by and between the Company and Hang Seng Indexes Company Limited dated February 27, 2009 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
|
4.93
|
Translation of Agreement for Supply of Real-time Hang Seng Family of Indexes by and between CFO Fuhua and Hang Seng Indexes Company Limited dated December 11, 2012 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
|
4.94
|
Renewal of Shanghai Stock Exchange Securities Information Operation License Agreement by and between CFO Fuhua and Shanghai Stock Exchange Information Network Co., Ltd. dated December 25, 2012 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
4.95
|
Renewal of Shenzhen Stock Exchange Proprietary Information License Agreement by and between CFO Fuhua and Shenzhen Securities Information Network Co., Ltd. dated March 15, 2013 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
|
4.96
|
Renewal of Shenzhen Stock Exchange Proprietary Information License Agreement by and between CFO Meining and Shenzhen Securities Information Network Co., Ltd. dated March 1, 2013 (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
|
4.97
|
English Summary of the real estate investment contract and the shareholder agreement by and among CFO Yingchuang, Langfang Shengshi Real Estate Development Co., Ltd. and its original shareholders dated March 19, 2013. (Certain portions of this exhibit have been omitted pursuant to a request for confidential treatment under Rule 83 (17 C.F.R. Section 200.83). The omitted materials have been filed separately with the Securities and Exchange Commission.)
|
|
4.98
|
Translation of Assets Purchase Agreement among Shenzhen Newrand and Shenzhen Champion Connection (incorporated by reference to Exhibit 4.31 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.99
|
Translation of Purchase Agreement between Giant Bright and Champion Connection Network H.K. Limited (incorporated by reference to Exhibit 4.32 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.100
|
Translation of Agreement for Change of Parties to the Contract (incorporated by reference to Exhibit 4.33 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.101
|
Translation of Purchase Agreement between Giant Bright and Hadevan (incorporated by reference to Exhibit 4.34 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.102
|
Translation of Assets Purchase Agreement among Shenzhen Genius and Shenzhen Champion Connection (incorporated by reference to Exhibit 4.35 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.103
|
Translation of Purchase Agreement between Mainfame and Champion Connection Network H.K. Limited (incorporated by reference to Exhibit 4.36 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.104
|
Translation of Cooperation Framework Agreement among Shanghai Stockstar Wealth Management, Golden Pioneer Network Technologies and Shanghai Excellence Advertising (incorporated by reference to Exhibit 4.37 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.105
|
Translation of Capital Increase and Shareholders’ Agreement of Shenzhen Tahoe Investment and Development Co, Ltd. (incorporated by reference to Exhibit 4.38 from our 2013 Annual Report on Form 20-F (File No.000-50975) filed with the Securities and Exchange Commission on May 6, 2014)
|
|
4.106
|
Translation of Equity Transfer Agreement among Fortune (Beijing) Huiying Investment Consulting Co., Ltd. And Beijing Bluestone Investment Management Co., Ltd, Langfang Great Sky Investment Co., Ltd. (incorporated by reference to Exhibit 4.123 from our Amendment No. 1 to 2013 Annual Report on Form 20-F/A (File No. 000-50975) filed with the Securities and Exchange Commission on April 21, 2015)
|
4.107*
|
2014 Stock Incentive Plan (incorporated by reference to Appendix A of Exhibit 99.1 from our Form 6-K (File No. 000-50975) filed with the Securities and Exchange Commission on May 30, 2014)
|
|
4.108*
|
Restricted Stock Issuance and Allocation Agreement - 2007 Equity Incentive Plan (incorporated by reference to Appendix B of Exhibit 99.1 from our Form 6-K (File No. 000-50975) filed with the Securities and Exchange Commission on May 30, 2014)
|
|
4.109*
|
Translation of Strategic Cooperation Framework Agreement about Precious Metals Business dated on December 23, 2014 among Fujian Zhengjin, Tianjin Zhengjin, Du Shihong and Bai Xuefeng
|
|
4.110*
|
Translation of Reorganization Framework Agreement dated on June 1, 2014 among Stockstar Wealth Management, Shanghai Excellence Advertising Co., Ltd. And Golden Pioneer (Beijing) Network Technology Co.
|
|
4.111*
|
Translation of Reorganization Framework Agreement dated on June 1, 2014 among China Finance Online Co. Limited and Shanghai Excellence Advertising Co., Ltd.
|
|
4.112*
|
Translation of Business Cooperation Framework Agreement dated on April 24, 2014 between CITIC Securities Co., Ltd and China Finance Online Co., Ltd.
|
|
4.113*
|
Translation of Online Securities Business Cooperation Agreement between Zhongshan Securities Co. Ltd. and Beijing Glory Technology Co., Ltd.
|
|
4.114*
|
Translation of Online Securities Business Cooperation Agreement between Greatwall Securities Co. Ltd. and Beijing Glory Technology Co., Ltd.
|
|
4.115*
|
Translation of Online Securities Business Cooperation Agreement between China International Capital Co. Ltd. and Beijing Glory Technology Co., Ltd.
|
|
4.116*
|
Translation of Online Securities Business Cooperation Agreement between Heng Tai Securities Co. Ltd. and Beijing Glory Technology Co., Ltd.
|
|
8.1*
|
List of principal subsidiaries and significant PRC-incorporated affiliates
|
|
12.1*
|
CEO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
12.2*
|
CFO Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
|
|
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 BDO China Shu Lun Pan Certified Public Accountants LLP.
|
|
15.2*
|
Consent of Jincheng Tongda & Neal Law Firm
|
|
101.INS**
|
XBRL Instance Document
|
|
101.SCH**
|
XBRL Taxonomy Extension Schema Document
|
|
101.CAL**
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
|
101.DEF**
|
XBRL Taxonomy Extension Definition Linkbase Document
|
|
101.LAB**
|
XBRL Taxonomy Extension Label Linkbase Document
|
|
101.PRE**
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
*
|
Filed with this annual report on Form 20-F.
|
|
**
|
XBRL (eXtensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.
|
|
|
|
|
|
Date:
April 27
, 2015
|
CHINA FINANCE ONLINE CO. LIMITED
|
|
||
|
/s/ Jeff Wang
|
|
||
|
Name:
|
Jeff Wang
|
|
|
|
Title:
|
Chief Financial Officer
|
|
|
|
CONTENTS |
PAGE
|
December 31,
|
||||||||
Assets
|
2013
|
2014
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 36,370,950 | $ | 32,538,513 | ||||
Restricted cash
|
3,946 | 5,498 | ||||||
Prepaid expenses and other current assets
|
3,306,679 | 8,540,863 | ||||||
Trust bank balances held on behalf of customers
|
9,999,366 | 11,922,216 | ||||||
Consideration receivable
|
13,449,458 | 13,400,882 | ||||||
Accounts receivable - margin clients, net of allowance for doubtful accounts of $135,275 and nil in 2013 and 2014, respectively
|
5,976,641 | 1,698,861 | ||||||
Accounts receivable - others, net of allowance for doubtful accounts of $102,236 and $43,077 in 2013 and 2014, respectively
|
15,325,284 | 12,885,493 | ||||||
Loan receivable
|
10,333,120 | 10,295,800 | ||||||
Deferred tax assets, current
|
1,114,438 | 926,081 | ||||||
Total current assets
|
95,879,882 | 92,214,207 | ||||||
Property and equipment, net
|
3,868,267 | 4,862,949 | ||||||
Acquired intangible assets, net
|
7,544,762 | 2,185,280 | ||||||
Cost method investment
|
1,138,899 | 1,217,617 | ||||||
Rental deposits
|
1,115,152 | 1,387,653 | ||||||
Goodwill
|
16,974,437 | 7,089,780 | ||||||
Guarantee fund deposits
|
6,877,073 | 4,874,332 | ||||||
Deferred tax assets, non-current
|
94,263 | 71,540 | ||||||
Total assets
|
$ | 133,492,735 | $ | 113,903,358 | ||||
Liabilities and shareholders' equity
|
||||||||
Current liabilities:
|
||||||||
Deferred revenue, current (including deferred revenue, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $3,807,846 and $2,954,098 as of December 31, 2013 and December 31, 2014, respectively)
|
$ | 6,150,118 | $ | 4,935,972 | ||||
Accrued expenses and other current liabilities (including accrued expenses and other current liabilities of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $7,460,581 and $6,282,466 as of December 31, 2013 and December 31, 2014, respectively)
|
9,696,462 | 8,837,734 | ||||||
Amounts due to customers for the trust bank balances held on their behalf (including amounts due to customers for the trust bank balances held on their behalf of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $647,560 and $398,936 as of December 31, 2013 and December 31, 2014, respectively)
|
9,999,366 | 11,922,216 | ||||||
Accounts payable (including accounts payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $5,519,554 and $1,997,774 as of December 31, 2013 and December 31, 2014, respectively)
|
12,572,723 | 9,852,491 | ||||||
Income taxes payable (including income taxes payable of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $414,023 and $300,679 as of December 31, 2013 and December 31, 2014, respectively)
|
459,209 | 314,270 | ||||||
Deferred tax liabilities, current (including deferred tax liabilities, current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $325,340 and $578,006 as of December 31, 2013 and December 31, 2014, respectively)
|
325,340 | 580,197 | ||||||
Total current liabilities
|
39,203,218 | 36,442,880 | ||||||
Deferred revenue, non-current (including deferred revenue, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $632,829 and $353,035 as of December 31, 2013 and December 31, 2014, respectively)
|
1,986,078 | 1,372,722 | ||||||
Deferred tax liabilities, non-current (including deferred tax liabilities, non-current of the consolidated variable interest entities without recourse to China Finance Online Co. Limited $1,886,190 and $546,320 as of December 31, 2013 and December 31, 2014, respectively)
|
1,886,190 | 546,320 | ||||||
Total liabilities
|
43,075,486 | 38,361,922 |
December 31,
|
||||||||
Commitments and contingencies (Note 23)
|
2013
|
2014
|
||||||
Equity:
|
||||||||
China Finance Online Co. Limited shareholder's equity:
|
||||||||
Ordinary shares (111,145,633 and 112,417,933 shares issued and outstanding as of December 31, 2013 and 2014, respectively)
|
14,353 | 56,386,606 | ||||||
Additional paid-in capital
|
84,346,266 | 24,207,606 | ||||||
Accumulated other comprehensive income
|
12,285,615 | 12,064,338 | ||||||
Retained deficits
|
(20,875,337 | ) | (28,043,186 | ) | ||||
Total China Finance Online Co. Limited shareholders' equity
|
75,770,897 | 64,615,364 | ||||||
Noncontrolling interest
|
14,646,352 | 10,926,072 | ||||||
Total equity
|
90,417,249 | 75,541,436 | ||||||
Total liabilities and equity
|
$ | 133,492,735 | $ | 113,903,358 |
Years ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Net revenues
|
$ | 29,599,486 | $ | 52,738,077 | $ | 83,695,885 | ||||||
Cost of revenues
|
8,089,394 | 10,570,070 | 20,352,729 | |||||||||
Gross profit
|
21,510,092 | 42,168,007 | 63,343,156 | |||||||||
Operating expenses:
|
||||||||||||
General and administrative (including share-based compensation of $765,937 , $2,985,112 and $4,533,562 for 2012, 2013 and 2014, respectively)
|
11,387,381 | 15,210,102 | 17,592,119 | |||||||||
Product development (including share-based compensation of $12,017, $39,574 and $52,099 for 2012, 2013 and 2014, respectively)
|
10,735,570 | 9,032,327 | 11,147,873 | |||||||||
Sales and marketing (including share-based compensation of $24,771,$10,436 and $113,292 for 2012, 2013 and 2014, respectively)
|
13,072,017 | 30,588,236 | 43,761,473 | |||||||||
Loss from impairment of intangible assets
|
- | - | 1,802,125 | |||||||||
Loss from impairment of goodwill
|
- | - | 8,149,525 | |||||||||
Total operating expenses
|
35,194,968 | 54,830,665 | 82,453,115 | |||||||||
Government subsidies
|
75,883 | 11,187 | 659,417 | |||||||||
Loss from operations
|
(13,608,993 | ) | (12,651,471 | ) | (18,450,542 | ) | ||||||
Interest income
|
3,177,544 | 1,340,563 | 4,044,288 | |||||||||
Interest expense
|
(517,620 | ) | (196,458 | ) | (12,311 | ) | ||||||
Exchange gain (loss), net
|
71,516 | 556,757 | (112,672 | ) | ||||||||
Gain from sale of cost method investment
|
- | - | 4,337,736 | |||||||||
Equity method investment income
|
- | 2,773,839 | - | |||||||||
Short-term investment income
|
435,105 | 132,069 | 58,451 | |||||||||
Other income (expense), net
|
(633,981 | ) | (29,131 | ) | 18,236 | |||||||
Loss before income tax expense
|
(11,076,429 | ) | (8,073,832 | ) | (10,116,814 | ) | ||||||
Income tax expense
|
(883,718 | ) | (100,058 | ) | (513,914 | ) | ||||||
Net loss
|
$ | (11,960,147 | ) | $ | (8,173,890 | ) | $ | (10,630,728 | ) | |||
Less: net income (loss) attributable to the noncontrolling interest
|
(104,940 | ) | 399,238 | (3,462,879 | ) | |||||||
Net loss attributable to China Finance Online Co. Limited
|
$ | (11,855,207 | ) | $ | (8,573,128 | ) | $ | (7,167,849 | ) | |||
Net loss per share attributable to China Finance Online Co. Limited
|
||||||||||||
Basic
|
$ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||
Diluted
|
$ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||
Weighted average shares used in calculating net loss per share
|
||||||||||||
Basic
|
108,983,249 | 109,019,513 | 109,385,712 | |||||||||
Diluted
|
108,983,249 | 109,019,513 | 109,385,712 | |||||||||
Other comprehensive income (loss), net of tax:
|
||||||||||||
Changes in foreign currency translation adjustment
|
130,115 | 1,195,795 | (221,277 | ) | ||||||||
Net unrealized loss on available-for-sale securities, net of tax effects of $5,728, nil and nil for 2012, 2013 and 2014, respectively
|
(13,110 | ) | - | - | ||||||||
Reclassification adjustment of available-for-sale securities,net of tax effects of nil, nil and nil for 2012, 2013 and 2014, respectively
|
45,567 | - | - | |||||||||
Other comprehensive income (loss), net of tax
|
162,572 | 1,195,795 | (221,277 | ) | ||||||||
Comprehensive loss
|
(11,797,575 | ) | (6,978,095 | ) | (10,852,005 | ) | ||||||
Less: net income (loss) attributable to the noncontrolling interest
|
(104,940 | ) | 399,238 | (3,462,879 | ) | |||||||
Comprehensive loss attributable to China Finance Online Co. Limited
|
$ | (11,692,635 | ) | $ | (7,377,333 | ) | $ | (7,389,126 | ) |
Ordinary shares
|
Additional
|
Accumulated other
comprehensive
|
Retained
|
Total China Finance
Online Co. Limited
|
Noncontrolling
|
Total
|
||||||||||||||||||||||||||
Shares
|
Amount
|
paid-in capital
|
income (loss)
|
deficits | shareholders' equity |
interest
|
equity | |||||||||||||||||||||||||
Balance as of January 1, 2012
|
110,935,383 | $ | 14,325 | $ | 80,446,578 | $ | 10,927,248 | $ | (447,002 | ) | $ | 90,941,149 | $ | (104,908 | ) | $ | 90,836,241 | |||||||||||||||
Exercise of share options by employees
|
20,000 | 3 | 3,197 | - | - | 3,200 | - | 3,200 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 713,469 | - | - | 713,469 | 89,256 | 802,725 | ||||||||||||||||||||||||
Acquisition of business combination
|
- | - | - | - | - | - | 871,960 | 871,960 | ||||||||||||||||||||||||
Net unrealized losses on available-for-sale
securities, net of tax effects of $5,728
|
- | - | - | (13,110 | ) | - | (13,110 | ) | - | (13,110 | ) | |||||||||||||||||||||
Reclassification adjustment of available-for-sale securities, net of tax effects of nil
|
- | - | - | 45,567 | - | 45,567 | - | 45,567 | ||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | 130,115 | - | 130,115 | - | 130,115 | ||||||||||||||||||||||||
Net loss
|
- | - | - | - | (11,855,207 | ) | (11,855,207 | ) | (104,940 | ) | (11,960,147 | ) | ||||||||||||||||||||
Balance as of December 31, 2012
|
110,955,383 | $ | 14,328 | $ | 81,163,244 | $ | 11,089,820 | $ | (12,302,209 | ) | $ | 79,965,183 | $ | 751,368 | $ | 80,716,551 | ||||||||||||||||
Exercise of share options by employees
|
190,250 | 25 | 30,415 | - | - | 30,440 | - | 30,440 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 2,960,746 | - | - | 2,960,746 | 74,376 | 3,035,122 | ||||||||||||||||||||||||
Acquisition of business combination
|
- | - | 191,861 | - | - | 191,861 | 13,421,370 | 13,613,231 | ||||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | 1,195,795 | - | 1,195,795 | - | 1,195,795 | ||||||||||||||||||||||||
Net income (loss)
|
- | - | - | - | (8,573,128 | ) | (8,573,128 | ) | 399,238 | (8,173,890 | ) | |||||||||||||||||||||
Balance as of December 31, 2013
|
111,145,633 | $ | 14,353 | $ | 84,346,266 | $ | 12,285,615 | $ | (20,875,337 | ) | $ | 75,770,897 | $ | 14,646,352 | $ | 90,417,249 | ||||||||||||||||
Transfer share premium to share capital (Note)
|
- | 55,718,184 | (55,718,184 | ) | - | - | - | - | - | |||||||||||||||||||||||
Exercise of share options by employees
|
1,164,300 | 654,055 | - | - | - | 654,055 | - | 654,055 | ||||||||||||||||||||||||
Restricted shares issued
|
108,000 | 14 | - | - | - | 14 | - | 14 | ||||||||||||||||||||||||
Share-based compensation
|
- | - | 4,540,257 | - | - | 4,540,257 | 158,696 | 4,698,953 | ||||||||||||||||||||||||
Business restructure
|
- | - | (8,960,940 | ) | - | - | (8,960,940 | ) | 613,915 | (8,347,025 | ) | |||||||||||||||||||||
Dividends paid to noncontrolling shareholders
|
- | - | - | - | - | - | (1,030,012 | ) | (1,030,012 | ) | ||||||||||||||||||||||
Foreign currency translation adjustment
|
- | - | 207 | (221,277 | ) | - | (221,070 | ) | - | (221,070 | ) | |||||||||||||||||||||
Net loss
|
- | - | - | - | (7,167,849 | ) | (7,167,849 | ) | (3,462,879 | ) | (10,630,728 | ) | ||||||||||||||||||||
Balance as of December 31, 2014
|
112,417,933 | $ | 56,386,606 | $ | 24,207,606 | $ | 12,064,338 | $ | (28,043,186 | ) | $ | 64,615,364 | $ | 10,926,072 | $ | 75,541,436 |
Note:
|
Under Hong Kong Companies Ordinance (Cap.622), which came into force on March 3, 2014, the concept of authorized share capital no longer exists. In accordance with the said Ordinance, the Company’s shares no longer have a par value. There is no impact on the number of shares in issue or the relevant entitlement of any of the shareholders as a result of this transition. In addition, in accordance with the transitional provisions set out in section 37 of Schedule 11 to the said Ordinance, any amount outstanding to the credit of the share premium has become part of the Company’s share capital.
|
Years ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Operating activities:
|
||||||||||||
Net loss
|
$ | (11,960,147 | ) | $ | (8,173,890 | ) | $ | (10,630,728 | ) | |||
Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
|
||||||||||||
Share-based compensation
|
802,725 | 3,035,122 | 4,698,953 | |||||||||
Depreciation and amortization
|
3,062,461 | 2,164,992 | 1,973,423 | |||||||||
Provision of allowance for doubtful accounts
|
1,203 | 521,567 | (193,832 | ) | ||||||||
Gain from equity method investment
|
- | (2,773,839 | ) | - | ||||||||
Gain from short-term investments
|
(435,105 | ) | (132,069 | ) | (58,451 | ) | ||||||
Deferred taxes
|
568,521 | (357,014 | ) | (106,900 | ) | |||||||
Loss on disposal of property and equipment
|
237,154 | 163,963 | 194,136 | |||||||||
Gain from sale of cost method investment
|
- | - | (4,337,736 | ) | ||||||||
Loss from impairment of intangible assets
|
- | - | 1,802,125 | |||||||||
Loss from impairment of goodwill
|
- | - | 8,149,525 | |||||||||
Gain from business restructure
|
- | - | (90,666 | ) | ||||||||
Changes in assets and liabilities:
|
||||||||||||
Accounts receivable, others
|
(3,495,881 | ) | (8,132,005 | ) | 2,371,865 | |||||||
Accounts receivable, margin clients
|
(2,129,273 | ) | 8,933,007 | 4,413,011 | ||||||||
Prepaid expenses and other current assets
|
471,699 | 1,131,750 | (1,284,341 | ) | ||||||||
Advances to employees
|
(1,051,971 | ) | 1,071,769 | - | ||||||||
Trust bank balances held on behalf of customers
|
9,894,410 | (1,181,312 | ) | (1,928,568 | ) | |||||||
Restricted cash
|
468,367 | 7,143 | (1,560 | ) | ||||||||
Rental deposits
|
(2,796 | ) | (273,402 | ) | (368,933 | ) | ||||||
Guarantee deposit funds
|
- | (4,881,966 | ) | 865,963 | ||||||||
Amount due from noncontrolling shareholders
|
- | - | (1,821,928 | ) | ||||||||
Deferred revenue
|
(15,332,999 | ) | (2,866,258 | ) | (1,749,432 | ) | ||||||
Account payable
|
516,086 | 11,666,365 | (2,671,121 | ) | ||||||||
Accrued expenses and other current liabilities
|
(715,741 | ) | (1,189,465 | ) | 161,455 | |||||||
Amounts due to customers for the trust bank balance held on their behalf
|
(9,894,410 | ) | 1,181,312 | 1,928,568 | ||||||||
Income taxes payable
|
(47,235 | ) | 242,886 | (142,692 | ) | |||||||
Net cash (used in) provided by operating activities
|
$ | (29,042,932 | ) | $ | 158,656 | $ | 1,172,136 | |||||
Investing activities:
|
||||||||||||
Purchase of property and equipment
|
(775,437 | ) | (833,921 | ) | (3,158,042 | ) | ||||||
Purchase of intangible assets
|
(2,063,361 | ) | (578,624 | ) | (81,378 | ) | ||||||
Acquisition of businesses (net of cash acquired of $14,073, $121,044 and nil for the years ended December 31, 2012, 2013 and 2014, respectively)
|
(2,834,434 | ) | (3,627,963 | ) | (705,180 | ) | ||||||
Business restructure
|
- | - | (2,873,988 | ) | ||||||||
Acquistioin of equity method investment
|
- | (21,525,608 | ) | - | ||||||||
Proceeds from transfer of equity method investment
|
- | 11,445,202 | - | |||||||||
Loan given to equity method investee
|
- | (20,461,773 | ) | - | ||||||||
Repayment of loans given to equity method investee
|
- | 10,247,235 | - | |||||||||
Purchase of short-term investments
|
(28,277,746 | ) | (83,911,858 | ) | (90,694,201 | ) | ||||||
Proceeds from sales of short-term investments
|
36,767,023 | 86,716,413 | 90,764,098 | |||||||||
Acquisition of cost method investment
|
(802,202 | ) | (309,698 | ) | (81,378 | ) | ||||||
Proceeds from sales of cost method investment
|
- | - | 2,168,868 | |||||||||
Restricted cash
|
542,818 | 29,282,705 | - | |||||||||
Loan receivable
|
8,379,638 | 994,459 | - | |||||||||
Proceeds from disposal of fixed assets
|
24,556 | 140,942 | 63,038 | |||||||||
Net cash provided by (used in) investing activities
|
$ | 10,960,855 | $ | 7,577,511 | $ | (4,598,163 | ) | |||||
Financing activities:
|
||||||||||||
Proceeds from stock options exercised by employees
|
3,200 | 640 | 654,069 | |||||||||
Proceeds from capital injection of noncontrolling shareholders
|
- | 1,397,616 | - | |||||||||
Repayment of short-term loan
|
(5,672,004 | ) | (13,536,161 | ) | - | |||||||
Dividends paid to noncontrolling shareholders
|
- | - | (1,025,788 | ) | ||||||||
Net cash used in financing activities
|
$ | (5,668,804 | ) | $ | (12,137,905 | ) | $ | (371,719 | ) | |||
Effect of exchange rate changes
|
$ | 15,785 | $ | (133,308 | ) | $ | (34,691 | ) | ||||
Net decrease in cash and cash equivalents
|
(23,735,096 | ) | (4,535,046 | ) | (3,832,437 | ) | ||||||
Cash and cash equivalents, beginning of year
|
64,641,092 | 40,905,996 | 36,370,950 | |||||||||
Cash and cash equivalents, end of year
|
$ | 40,905,996 | $ | 36,370,950 | $ | 32,538,513 | ||||||
Supplemental disclosure of cash flow information
|
||||||||||||
Income taxes paid
|
375,107 | 81,188 | 758,006 | |||||||||
Interest paid
|
$ | 516,311 | $ | 174,353 | $ | 5,130 |
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES
|
|
Place of
incorporation or
establishment
|
Date of
incorporation or
|
Legal
ownership
|
Principal
activity
|
Subsidiaries:
|
||||
China Finance Online (Beijing) Co., Ltd. ("CFO Beijing")
|
Beijing, PRC
|
Jul. 9, 1998
|
100%
|
N/A
|
Fortune Software (Beijing) Co., Ltd. ("CFO Software")
|
Beijing, PRC
|
Dec. 7, 2004
|
100%
|
N/A
|
Fortune (Beijing) Success Technology Co., Ltd. ("CFO Success")
|
Beijing, PRC
|
Oct. 16, 2007
|
100%
|
N/A
|
Shenzhen Genius Information Technology Co., Ltd. ("CFO Genius")
|
Shenzhen, PRC
|
Sep. 21, 2006
|
100%
|
Subscription service
|
Stockstar Information Technology (Shanghai) Co., Ltd. ("CFO Stockstar")
|
Shanghai, PRC
|
Oct. 1, 2006
|
100%
|
N/A
|
Zhengyong Information & Technology (Shanghai) Co., Ltd.
(“CFO Zhengyong”) |
Shanghai, PRC
|
Aug. 17, 2008
|
100%
|
N/A
|
Zhengtong Information Technology (Shanghai) Co., Ltd ("CFO Zhengtong")
|
Shanghai, PRC
|
Jun. 24, 2008
|
100%
|
N/A
|
iSTAR Financial Holdings Limited ("iSTAR Financial Holdings")
|
BVI
|
Jul. 16, 2007
|
85%
|
Investment holdings
|
iSTAR International Securities Co. Limited ("iSTAR Securities")
|
Hong Kong, PRC
|
Nov. 23, 2007
|
85%
|
Brokerage service
|
iSTAR International Futures Co. Limited ("iSTAR Futures")
|
Hong Kong, PRC
|
Apr. 16, 2008
|
85%
|
Brokerage service
|
iSTAR International Wealth Management Co. Limited
("iSTAR Wealth Management")
|
Hong Kong, PRC
|
Oct. 8, 2008
|
85%
|
Securities advising
, future contract
advising and asset management
|
iSTAR International Credit Co. Limited ("iSTAR Credit")
|
Hong Kong, PRC
|
Feb. 10, 2012
|
85%
|
N/A
|
Variable interest entities:
|
||||
Beijing Fuhua Innovation Technology Development Co., Ltd. ("CFO Fuhua")
|
Beijing, PRC
|
Dec. 31, 2000
|
Nil
|
Web portal and advertising service
|
Shanghai Chongzhi Co., Ltd. ("CFO Chongzhi")
|
Shanghai, PRC
|
Jun. 6, 2008
|
Nil
|
Subscription service
|
Fortune (Beijing) Qicheng Technology Co., Ltd. ("CFO Qicheng")
|
Beijing, PRC
|
Dec. 18, 2009
|
Nil
|
N/A
|
Shenzhen Newrand Securities Advisory and Investment Co., Ltd.
("CFO Newrand ")
|
Shenzhen, PRC
|
Oct. 17, 2008
|
Nil
|
Securities investment advising
|
Shanghai Stockstar Securities Advisory and Investment Co., Ltd.
("CFO Securities Consulting")
|
Shanghai, PRC
|
Nov. 5, 2009
|
Nil
|
Securities investment advising
|
Shanghai Stockstar Wealth Management Co., Ltd.
("Stockstar Wealth Management")
|
Shanghai, PRC
|
Apr. 12, 2011
|
Nil
|
N/A
|
Subsidiaries of variable interest entities:
|
||||
Shanghai Meining Computer Software Co., Ltd. ("CFO Meining")
|
Shanghai, PRC
|
Oct. 1, 2006
|
Nil
|
Web portal, advertising,
subscription,
and SMS
|
Shenzhen Newrand Securities Training Center ("CFO Newrand Training")
|
Shenzhen, PRC
|
Oct. 17, 2008
|
Nil
|
Securities investment training
|
Fortune (Beijing) Huiying Investment Consulting Co., Ltd. ("CFO Huiying")
|
Beijing, PRC
|
Dec. 18, 2009
|
Nil
|
N/A
|
Shenzhen Tahoe Investment and Development Co., Ltd ("CFO Tahoe")
|
Shenzhen, PRC
|
Sep. 30, 2013
|
Nil
|
N/A
|
Shenzhen Shangtong Software Co., Ltd. ("CFO Shenzhen Shangtong")
|
Shenzhen, PRC
|
Sep. 23, 2009
|
Nil
|
N/A
|
Zhengjin (Fujian) Precious Metals Investment Co., Ltd.
("CFO Zhengjin Fujian")
|
Fujian, PRC
|
Jan. 6, 2013
|
Nil
|
Precious metals brokerage
|
Zhengjin (Shanghai) Precious Metals Investment Co., Ltd.
("CFO Zhengjin Shanghai")
|
Shanghai, PRC
|
Dec. 12, 2013
|
Nil
|
Precious metals brokerage
|
Zhengjin (Tianjin) Precious Metals Investment Co., Ltd.
("CFO Zhengjin Tianjin")
|
Tianjin, PRC
|
Jul. 23, 2013
|
Nil
|
Precious metals brokerage
|
Henghui (Tianjin) Precious Metals Investment Co., Ltd.
("CFO Henghui")
|
Tianjin, PRC
|
Sep. 30, 2013
|
Nil
|
Precious metals brokerage
|
Zhengjin (Beijing) Wisdom Petroleum and Chemical Investment
Management Co., Ltd. ("CFO Zhengjin Beijing")
|
Beijing, PRC
|
Jan. 13, 2014
|
Nil
|
N/A
|
Yinglibao (Beijing) Technology Co., Ltd. ("CFO Yinglibao")
|
Beijing, PRC
|
Jan. 15, 2014
|
Nil
|
Internet-based financial platform
|
Zhengjin (Qingdao) Wisdom Trading Co., Ltd. ("CFO Zhengjin Qingdao")
|
Qingdao, PRC
|
Sep. 4, 2014
|
Nil
|
N/A
|
Zhengjin (Jiangsu) Precious Metals Co., Ltd. ("CFO Zhengjin Jiangsu")
|
Nanjing, PRC
|
Nov. 19, 2014
|
Nil
|
Precious metals brokerage
|
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES - continued
|
|
The consolidated financial statements of the Group include the financial statements of the Company and its controlled operating entities including the subsidiaries and the variable interest entities for which the Company is the primary beneficiary. A variable interest entity is the entity in which the Company, through contractual arrangements as the primary beneficiary, bears the risks of, and enjoys the rewards normally associated with ownership of the entity.
|
|
People
'
s Republic of China
("PRC") regulations prohibit or restrict direct foreign ownership of business entities providing certain services in PRC, such as internet content service and securities investment advisory service. In order to comply with these regulations, China Finance Online, through its subsidiaries, entered into contractual arrangements with the Company's VIEs and their equity owners who are PRC citizens.
|
|
The Group made loans to the shareholders of the VIEs solely for the purposes of capitalizing the VIEs. Pursuant to the loan agreements, these loans can only be repaid by transferring all of their interests in the VIEs to the Group or a third party designated by the Group. The Group has entered into proxy agreements or power of attorney and exclusive equity purchase option agreements with the VIEs and nominee shareholders of the VIEs through the Company's wholly owned significant subsidiaries including CFO Beijing, CFO Software, CFO Zhengyong and CFO Zhengtong (collectively, the "
WFOEs
" and each a "
WFOE
"). The foregoing agreements provide the WFOEs the right to direct the activities that most significantly affect the economic performance of the VIEs and to acquire the equity interests in the VIEs when permitted by the PRC laws, respectively. Certain exclusive agreements have been entered into with the VIEs through the WFOEs, which obligate the WFOEs to absorb the majority of the risk of loss from the VIEs' activities and entitle the WFOEs to receive the majority of their residual returns. In addition, the Group has entered into share pledge agreements for the equity interests in the VIEs held by the shareholders of the VIEs.
|
|
Despite the lack of technical majority ownership, the agreements with the VIEs provide the WFOEs with effective control over and the ability to receive substantially all of the economic benefits of its VIEs, resembling a parent-subsidiary relationship between the WFOEs and the VIEs. The shareholders of the VIEs effectively assigned all of their voting rights underlying their equity interest in the VIEs to the WFOEs. In addition, through the other exclusive agreements, which consist of strategic consulting services agreement, technical support services agreement and operating support services agreement, the WFOEs demonstrate their ability and intention to continue to exercise the ability to absorb substantially all of the profits and all of the expected losses of the VIEs. The VIEs are subject to operating risks, which determine the variability of the Company's interest in those entities. Based on these contractual arrangements, the Company consolidates the VIEs as required by SEC Regulation SX-3A-02 and Accounting Standards Codification ("ASC") Topic 810 ("ASC 810")
because the Company holds all the variable interests of the VIEs through the WFOEs.
|
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES - continued
|
|
·
|
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; and
|
|
·
|
operating support services agreement, pursuant to which the amount of the fee to be charged is 40% of each VIE's income before tax.
|
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES – continued
|
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES - continued
|
VIE name
|
Contractual arrangement
|
Date counterpart
|
CFO Fuhua
|
May 27, 2004
|
CFO Beijing
|
CFO Chongzhi
|
June 8, 2008
|
CFO Software
|
CFO Newrand
|
October 17, 2008
|
CFO Zhengyong
|
CFO Qicheng
|
November 20, 2009
|
CFO Chuangying
|
Stockstar Wealth Management
|
April 12, 2011
|
CFO Zhengtong
|
CFO Securities Consulting
|
May 14, 2014
|
CFO Software
|
|
·
|
revoke the business and operating licenses of our PRC subsidiaries or VIEs;
|
|
·
|
restrict the rights to collect revenues from any of our PRC subsidiaries;
|
|
·
|
discontinue or restrict the operations of any related-party transactions among our PRC subsidiaries or VIEs;
|
|
·
|
require our PRC subsidiaries or VIEs to restructure the relevant ownership structure or operations;
|
|
·
|
take other regulatory or enforcement actions, including levying fines that could be harmful to our business; or
|
|
·
|
impose additional conditions or requirements with which we may not be able to comply.
|
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES – continued
|
December 31 ,
|
||||||||
2013
|
2014
|
|||||||
Securities investment advisory business:
|
||||||||
Securities consulting license
|
$ | 5,012,884 | $ | - | ||||
Precious metals business:
|
||||||||
Precious metals trading right
|
1,295,740 | 1,291,061 | ||||||
Completed technology
|
47,608 | - | ||||||
Customer relationship
|
1,188,530 | 894,219 | ||||||
$ | 2,531,878 | $ | 2,185,280 | |||||
$ | 7,544,762 | $ | 2,185,280 |
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES - continued
|
Years ended December 31,
|
||||||||
2013
|
2014
|
|||||||
Assets
|
||||||||
Current assets
|
||||||||
Cash and cash equivalents
|
$ | 18,760,701 | $ | 17,615,035 | ||||
Consideration receivable
|
13,449,458 | 13,400,882 | ||||||
Account receivable -others, net
|
19,406,559 | 22,217,745 | ||||||
Loan receivable
|
10,333,120 | 10,295,800 | ||||||
Others
|
4,477,360 | 6,558,399 | ||||||
Total current assets
|
$ | 66,427,198 | $ | 70,087,861 | ||||
Non-current assets
|
||||||||
Property and equipment, net
|
1,843,201 | 3,242,905 | ||||||
Acquired intangible assets, net
|
7,544,762 | 2,185,280 | ||||||
Cost method investment
|
829,201 | 907,919 | ||||||
Rental deposits
|
676,280 | 913,187 | ||||||
Guarantee fund deposits
|
6,601,095 | 4,604,924 | ||||||
Investment in subsidiaries
|
29,143,486 | 43,751,417 | ||||||
Deferred tax assets, non-current
|
26,171 | 13,328 | ||||||
Total assets
|
$ | 113,091,394 | $ | 125,706,821 | ||||
Third-party liabilities
|
||||||||
Current liabilities
|
||||||||
Accrued expenses and other current liabilities
|
12,704,555 | 10,514,186 | ||||||
Accounts payable
|
16,667,516 | 18,843,147 | ||||||
Total current liabilities
|
$ | 29,372,071 | $ | 29,357,333 | ||||
Non-current liabilities
|
2,519,019 | 899,356 | ||||||
Total third-party liabilities
|
$ | 31,891,090 | $ | 30,256,689 | ||||
Inter-company liabilities
|
$ | 39,822,918 | $ | 42,155,248 |
1.
|
ORGANIZATION AND PRINCIPAL ACTIVITIES - continued
|
Year ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Net revenues
|
$ | 17,271,563 | $ | 58,549,393 | $ | 98,207,958 | ||||||
Net income (loss)
|
$ | (6,948,118 | ) | $ | (5,469,402 | ) | $ | 12,305,855 |
Year ended December 31,
|
||||||||||||
2012
|
2013
|
2014
|
||||||||||
Net cash (used in) provided by operating activities
|
$ | (13,860,354 | ) | $ | (14,469,067 | ) | $ | 3,204,749 | ||||
Net cash provided by (used in) investing activities
|
3,449,449 | (9,440,165 | ) | (5,685,885 | ) | |||||||
Net cash provided by financing activities
|
6,461,007 | 35,830,988 | 1,430,739 | |||||||||
Effect of exchange rate changes
|
$ | 52,740 | $ | (46,900 | ) | $ | (95,269 | ) |
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
Technology infrastructure (years) | 5 |
Computer equipment (years) | 5 |
Furniture, fixtures and equipment (years) | 5 |
Motor vehicle (years) | 5 |
Leasehold improvements | Shorter of the lease term or 5 years |
License and related trademarks (years) | 15 | ||
Completed technology (years) | 5 | ||
Customer relationship (years) | 4 | - |
5
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
Years ended December 31,
|
||||||||
2013
|
2014
|
|||||||
Commodity trading gains
|
$ | 18,537,459 | $ | 38,297,005 | ||||
Commission income
|
10,953,632 | 17,397,978 | ||||||
Carrying charges
|
633,154 | 4,396,134 | ||||||
$ | 30,124,245 | $ | 60,091,117 |
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – continued
|
Year ended December 31,
|
|||||||||||||||||
2013
|
2014
|
||||||||||||||||
Amount
|
%
|
Amount
|
%
|
||||||||||||||
A | $ | 3,885,608 | 18.2 | $ | - | - | |||||||||||
B | * | * | $ | 1,963,900 | 13.5 | ||||||||||||
C | * | * | $ | 5,044,178 | 34.6 |
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
2.
|
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - continued
|
3.
|
ACQUISITIONS
|
Useful life
|
|||||
(Years) | |||||
Purchase price allocation:
|
|||||
Cash and cash equivalents
|
$ | 5,279,425 | |||
Prepaid expenses and current assets
|
1,135,765 | ||||
Accounts receivable
|
2,143,957 | ||||
Property and equipment, net
|
47,770 | ||||
Rental deposit
|
72,431 | ||||
Acquired intangible assets:
|
|||||
Precious metal trading right
|
699,414 | ||||
Customer relationship
|
1,250,813 |
4.3
|
|||
Guarantee fund deposits
|
1,626,545 | ||||
Total assets acquired
|
12,256,120 | ||||
Accrued expenses and other current liabilities
|
(2,810,425 | ) | |||
Deferred tax liabilities
|
(487,557 | ) | |||
Total net assets
|
8,958,138 | ||||
Noncontrolling interest
|
(9,508,295 | ) | |||
Goodwill
|
7,056,338 | ||||
Total purchase price
|
$ | 6,506,181 |
Purchase price allocation:
|
||||
Property and equipment, net
|
$ | 199,803 | ||
Total assets acquired
|
199,803 | |||
Goodwill
|
6,544,150 | |||
Cash consideration
|
4,044,980 | |||
The fair value of 30% shares of CFO GB
|
1,760,861 | |||
The fair value of 30% shares of CFO MF
|
804,142 | |||
Contingent consideration of 5% shares of CFO MF
|
133,970 | |||
Total purchase price
|
$ | 6,743,953 |
3.
|
ACQUISITIONS - continued
|
Useful life
|
|||||
(Years) | |||||
Purchase price allocation:
|
|||||
Cash and cash equivalents
|
$ | 121,044 | |||
Prepaid expenses and current assets
|
339,296 | ||||
Accounts receivable
|
4,912 | ||||
Acquired intangible assets:
|
|||||
Security consulting license
|
598,657 |
15
|
|||
Total assets acquired
|
1,063,909 | ||||
Accrued expenses and other current liabilities
|
(274,748 | ) | |||
Deferred tax liabilities
|
(149,664 | ) | |||
Income tax payable
|
612 | ||||
Total net assets
|
640,109 | ||||
Goodwill
|
168,887 | ||||
Total purchase price
|
$ | 808,996 |
Useful life
|
|||||
(Years) | |||||
Purchase price allocation:
|
|||||
Acquired intangible assets:
|
|||||
Securities consulting license
|
$ | 2,751,148 |
15
|
||
Deferred tax liabilities
|
(687,787 | ) | |||
Total purchase price
|
$ | 2,063,361 |
3.
|
ACQUISITIONS – continued
|
Useful life
|
|||||
(Years) | |||||
Purchase price allocation:
|
|||||
Cash and cash equivalents
|
$ | 14,073 | |||
Prepaid and other current assets
|
215,868 | ||||
Accounts receivable
|
949 | ||||
Property and equipment, net
|
625,258 | ||||
Rental deposit
|
8,998 | ||||
Acquired intangible assets
|
|||||
Security consulting license
|
2,065,168 |
15
|
|||
Core technology
|
66,465 |
5
|
|||
Total assets acquired
|
2,996,779 | ||||
Accounts payable
|
(137,665 | ) | |||
Accrued expenses and other current liabilities
|
(1,608,027 | ) | |||
Income tax payable
|
(30,780 | ) | |||
Deferred tax liabilities
|
(532,908 | ) | |||
Total net assets
|
687,399 | ||||
Noncontroling interests
|
(871,960 | ) | |||
Goodwill
|
3,033,068 | ||||
Total purchase price
|
$ | 2,848,507 |
3.
|
ACQUISITIONS - continued
|
4.
|
BUSINESS RESTRUCTURE
|
5.
|
ACCOUNTS RECEIVABLE
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Accounts receivable-margin clients
|
$ | 6,111,916 | $ | 1,698,861 | ||||
Less: Allowance for doubtful accounts
|
(135,275 | ) | - | |||||
Accounts receivable- margin clients, net
|
$ | 5,976,641 | $ | 1,698,861 | ||||
Accounts receivable-others
|
15,427,520 | 12,928,570 | ||||||
Less: Allowance for doubtful accounts
|
(102,236 | ) | (43,077 | ) | ||||
Accounts receivable-others, net
|
$ | 15,325,284 | $ | 12,885,493 |
6.
|
CONSIDERATION RECEIVABLE
|
7.
|
PREPAID EXPENSES AND OTHER CURRENT ASSETS
|
December 31, | |||||||||
2013 |
2014
|
||||||||
Prepayment of advertising fees
|
$ | 281,590 | $ | 213,837 | |||||
Advertising deposit
|
250,837 | 355,390 | |||||||
Advances to suppliers
|
1,182,555 | 840,308 | |||||||
VAT refund receivable
|
141,292 | 139,908 | |||||||
Interest receivable
|
419,991 | 1,264,075 | |||||||
Prepayment of office rental
|
185,698 | 380,325 | |||||||
Amount due from noncontrolling shareholders (i)
|
- | 2,393,645 | |||||||
Sales of cost method investment receivable (Note 11)
|
- | 2,168,868 | |||||||
Other current assets
|
844,716 | 784,507 | |||||||
$ | 3,306,679 | $ | 8,540,863 |
8.
|
LOAN RECEIVABLE
|
As of December 31,
|
|||||||||||
2013
|
2014
|
Interest rate
|
Period
|
||||||||
A (i) | $ | 10,333,120 | $ | 10,295,800 |
1.5% per month
|
October 9, 2013 to October 20, 2014
|
|||||
19-21% per annum
|
October 21, 2014 to December 31, 2014
|
||||||||||
$ | 10,333,120 | $ | 10,295,800 |
(i)
|
The loan was made to the Langfang Developer, in which the Group also made an equity method investment in 2013 (Note 6). The principal and its return are pledged by the 100% equity interests of Langfang Developer.
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Beginning balance
|
$ | 1,205,604 | $ | 10,333,120 | ||||
Additioins
|
10,333,120 | - | ||||||
Collection
|
(995,190 | ) | - | |||||
Write-offs
|
(209,956 | ) | - | |||||
Exchange difference
|
(458 | ) | (37,320 | ) | ||||
Ending balance
|
$ | 10,333,120 | $ | 10,295,800 |
9.
|
SHORT-TERM INVESTMENTS
|
9.
|
SHORT-TERM INVESTMENTS - continued
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Beginning balance
|
$ | - | $ | - | ||||
Purchases
|
81,664,295 | 90,205,903 | ||||||
Redemption
|
(81,824,078 | ) | (90,323,594 | ) | ||||
Realized gain
|
127,835 | 106,392 | ||||||
Exchange difference
|
31,948 | 11,299 | ||||||
Ending balance
|
$ | - | $ | - |
Year ended December 31, 2014 | ||||||||||||||||
Proceeds
|
Costs
|
Gains
|
Exchange
difference
|
|||||||||||||
Available-for-sale securities
|
$ | 90,323,594 | $ | 90,205,903 | $ | 106,392 | $ | 11,299 | ||||||||
Total
|
$ | 90,323,594 | $ | 90,205,903 | $ | 106,392 | $ | 11,299 |
Year ended December 31, 2013 | ||||||||||||||||
Proceeds
|
Costs
|
Gains
|
Exchange
difference
|
|||||||||||||
Available-for-sale securities
|
$ | 81,824,078 | $ | 81,664,295 | $ | 127,835 | $ | 31,948 | ||||||||
Total
|
$ | 81,824,078 | $ | 81,664,295 | $ | 127,835 | $ | 31,948 |
10.
|
FAIR VALUE MEASUREMENT
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Beginning balance
|
$ | - | $ | - | ||||
Purchases
|
81,664,295 | 90,205,903 | ||||||
Redemption
|
(81,824,078 | ) | (90,323,594 | ) | ||||
Realized gain
|
127,835 | 106,392 | ||||||
Exchange difference
|
31,948 | 11,299 | ||||||
Ending balance
|
$ | - | $ | - |
11.
|
COST METHOD INVESTMENT
|
12.
|
EQUITY METHOD INVESTMENT
|
13.
|
PROPERTY AND EQUIPMENT, NET
|
December 31, | ||||||||
2013
|
2014
|
|||||||
Technology infrastructure
|
$ | 10,299,529 | $ | 9,842,789 | ||||
Computer equipment
|
1,840,958 | 1,995,876 | ||||||
Furniture, fixtures and equipment
|
3,548,706 | 4,052,425 | ||||||
Motor vehicle
|
609,345 | 929,340 | ||||||
Leasehold improvements
|
4,173,025 | 4,610,488 | ||||||
20,471,563 | 21,430,918 | |||||||
Less: accumulated depreciation
|
(16,603,296 | ) | (16,567,969 | ) | ||||
$ | 3,868,267 | $ | 4,862,949 |
14.
|
ACQUIRED INTANGIBLE ASSETS, NET
|
December 31
|
||||||||||||||||||||||||||||||||
2013
|
2014
|
|||||||||||||||||||||||||||||||
Gross
carrying
amount
|
Accumulated
amortization
|
Net
carrying
amount
|
Gross
carrying
amount
|
Accumulated
amortization
|
Impairment
|
Disposal
|
Net
carrying
amount
|
|||||||||||||||||||||||||
Intangible assets not subject to amortization:
|
||||||||||||||||||||||||||||||||
Precious metal trading right
|
$ | 1,295,740 | $ | - | $ | 1,295,740 | $ | 1,372,773 | $ | - | $ | - | $ | (81,712 | ) | $ | 1,291,061 | |||||||||||||||
Intangible assets subject to
amortization:
|
||||||||||||||||||||||||||||||||
Completed technology
|
68,887 | (21,279 | ) | 47,608 | 68,639 | (27,187 | ) | (41,452 | ) | - | - | |||||||||||||||||||||
Customer relationship
|
1,261,297 | (72,767 | ) | 1,188,530 | 1,256,741 | (362,522 | ) | - | - | 894,219 | ||||||||||||||||||||||
Securities consulting license and related trademarks
|
5,590,273 | (577,389 | ) | 5,012,884 | 5,570,082 | (741,279 | ) | (1,760,673 | ) | (3,068,130 | ) | - | ||||||||||||||||||||
$ | 8,216,197 | $ | (671,435 | ) | $ | 7,544,762 | $ |
|
$ |
|
) | $ |
|
) | $ |
|
) | $ |
|
15.
|
GOODWILL
|
Precious Metals trading |
Investment
advisory
services
|
Institutional
subscription
services
|
Total
|
|||||||||||||
Balance as of January 1, 2012
|
$ | - | $ | - | $ | - | $ | - | ||||||||
Acquisition of CFO East Win (Note 3)
|
- | 3,033,068 | - | 3,033,068 | ||||||||||||
Exchange difference
|
- | 16,213 | - | 16,213 | ||||||||||||
Balance as of December 31, 2012
|
$ | - | $ | 3,049,281 | $ | - | $ | 3,049,281 | ||||||||
Acquisition of CFO Tahoe (Note 3)
|
7,056,338 | - | - | 7,056,338 | ||||||||||||
Acquisition of Champion
Connection's business (Note3)
|
- | 4,867,660 | 1,676,490 | 6,544,150 | ||||||||||||
Acquisition of CFO Netinfo (Note 3)
|
- | 168,887 | - | 168,887 | ||||||||||||
Exchange difference
|
59,141 | 96,640 | - | 155,781 | ||||||||||||
Balance as of December 31, 2013
|
$ | 7,115,479 | $ | 8,182,468 | $ | 1,676,490 | $ | 16,974,437 | ||||||||
Impairment of CFO East Win
|
- | (3,112,365 | ) | - | (3,112,365 | ) | ||||||||||
Impairment of Champion Connection's business
|
- | (4,867,660 | ) | - | (4,867,660 | ) | ||||||||||
Disposal of Champion Connection's business (Note 4)
|
- | - | (1,676,490 | ) | (1,676,490 | ) | ||||||||||
Impairment of CFO Netinfo
|
- | (169,500 | ) | - | (169,501 | ) | ||||||||||
Exchange difference
|
(25,699 | ) | (32,943 | ) | - | (58,641 | ) | |||||||||
Balance as of December 31, 2014
|
$ | 7,089,780 | $ | - | $ | - | $ | 7,089,780 |
15.
|
GOODWILL- continued
|
16.
|
Accounts payable
|
December 31,
|
||||||||
2013
|
2014
|
|||||||
Amount due to customers of H.K. brokerage business
|
$ | 7,039,937 | $ | 7,982,827 | ||||
Amount due to sales agents
|
4,202,811 | 583,367 | ||||||
Amount due to noncontrolling shareholders
|
1,175,319 | 876,911 | ||||||
Others
|
154,656 | 409,386 | ||||||
$ | 12,572,723 | $ | 9,852,491 |
17.
|
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES
|
December 31, | ||||||||
2013
|
2014
|
|||||||
Accrued bonus
|
$ | 3,687,135 | $ | 3,612,689 | ||||
Accrued professional service fees
|
676,758 | 760,780 | ||||||
Withholding individual income tax-option exercise
|
61,683 | 61,683 | ||||||
Value added taxes and other taxes payable
|
915,601 | 945,471 | ||||||
Accrued raw data cost
|
565,747 | 762,492 | ||||||
Accrued bandwidth cost
|
68,168 | 127,650 | ||||||
Accrued welfare benefits
|
117,392 | 72,160 | ||||||
Acquisition consideration payable
|
2,221,680 | - | ||||||
Amount payable related to business restructure (Note 4)
|
- | 360,520 | ||||||
Accrued sales service fees
|
213,314 | 491,981 | ||||||
Others
|
1,168,984 | 1,642,308 | ||||||
$ | 9,696,462 | $ | 8,837,734 |
18.
|
STOCK OPTIONS AND NONVESTED SHARES
|
Years ended December 31, 2013
|
||||
Weighted average risk free rate of return
|
1.40 | % | ||
Weighted average expected option life (years)
|
6.14
|
|||
Expected volatility rate
|
76.67 | % | ||
Dividend yield
|
- |
18.
|
STOCK OPTIONS AND NONVESTED SHARES - continued
|
|
(1)
|
Expected volatility
|
|
(2)
|
Risk-free interest rate
|
|
(3)
|
Expected option life
|
|
(4)
|
Dividend yield
|
|
(5)
|
Exercise price
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES - continued
|
2012
|
2013
|
2014
|
||||||||||||||||||||||
Number
of options
|
Weighted
average
exercise price
|
Number
of options
|
Weighted
average
exercise price
|
Number
of options
|
Weighted
average
exercise price
|
|||||||||||||||||||
Outstanding at beginning of year
|
11,994,698 | $ | 0.96 | 11,144,998 | $ | 0.93 | 24,505,348 | $ | 0.54 | |||||||||||||||
Granted
|
- | - | 14,000,000 | 0.25 | - | - | ||||||||||||||||||
Exercised
|
(20,000 | ) | 0.16 | (190,250 | ) | 0.16 | (1,164,300 | ) | 0.54 | |||||||||||||||
Forfeited
|
(829,700 | ) | 1.35 | (449,400 | ) | 1.25 | (2,014,888 | ) | 0.27 | |||||||||||||||
Outstanding at end of year
|
11,144,998 | $ | 0.93 | 24,505,348 | $ | 0.54 | 21,326,160 | $ | 0.57 | |||||||||||||||
Shares exercisable at end of year
|
10,856,838 | $ | 0.92 | 10,500,548 | $ | 0.93 | 14,070,240 | $ | 0.73 |
Options outstanding
|
Option exercisable
|
||||||||||||||||||||||||||
Stock option
with exercise price of:
|
Number
outstanding
|
Weighted
average
remaining
contractual life
(years)
|
Weighted average exercise price | Aggregate intrinsic value as of December 31, 2014 |
Number
exercisable
|
Weighted average exercise price | Aggregate intrinsic value as of December 31,2014 | ||||||||||||||||||||
$ 0.16 | 1,095,000 | 1,095,000 | |||||||||||||||||||||||||
$ 1.314 | 1,035,200 | 1,035,200 | |||||||||||||||||||||||||
$ 1.316 | 27,000 | 27,000 | |||||||||||||||||||||||||
$ 1.12 | 400,000 | 400,000 | |||||||||||||||||||||||||
$ 1.16 | 200,000 | 200,000 | |||||||||||||||||||||||||
$ 1.07 | 700,000 | 700,000 | |||||||||||||||||||||||||
$ 0.96 | 2,286,000 | 2,286,000 | |||||||||||||||||||||||||
$ 1.318 | 53,600 | 53,600 | |||||||||||||||||||||||||
$ 1.26 | 413,360 | 413,360 | |||||||||||||||||||||||||
$ 1.648 | 10,000 | 10,000 | |||||||||||||||||||||||||
$ 1.426 | 2,099,000 | 2,099,000 | |||||||||||||||||||||||||
$ 1.43 | 50,000 | 50,000 | |||||||||||||||||||||||||
$ 0.25 | 12,957,000 | 5,701,080 | |||||||||||||||||||||||||
21,326,160 |
6.16
|
$ |
0.57
|
$ |
11,774,622
|
14,070,240 | $ |
0.73
|
$ |
5,868,304
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES - continued
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES - continued
|
Nonvested shares
|
Shares
|
Weighted-
average grant/
modification
date fair value
|
Aggregate
intrinsic value
|
|||||||||
At the beginning of year 2013
|
1,900,445 | $ | 0.27 | $ | 433,301 | |||||||
Granted
|
- | - | - | |||||||||
Vested
|
- | - | - | |||||||||
Forfeited
|
- | - | - | |||||||||
At the end of year 2013
|
1,900,445 | $ | 0.252 | $ | 2,390,760 | |||||||
Granted
|
1,099,555 | $ | 0.82 | $ | 901,635 | |||||||
Vested
|
- | - | - | |||||||||
Forfeited
|
- | - | - | |||||||||
At the end of year 2014
|
3,000,000 | $ | 0.82 | $ | 3,192,000 |
18.
|
STOCK OPTIONS AND NONVESTED SHARES - continued
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES – continued
|
Years ended December 31,2014
|
||||
Weighted average risk free rate of return
|
1.39% | - | 1.62% | |
Weighted average expected option life (years)
|
6.82 |
-
|
6.87 | |
Expected volatility rate
|
77.74% | - | 79.37% | |
Dividend yield
|
- |
|
(1)
|
Expected volatility
|
|
(2)
|
Risk-free interest rate
|
|
(3)
|
Expected option life
|
|
(4)
|
Dividend yield
|
|
(5)
|
Exercise price
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES – continued
|
2014
|
||||||||
Number
of options
|
Weighted
average
exercise price
|
|||||||
Outstanding at beginning of year
|
- | $ | - | |||||
Granted
|
1,960,000 | 0.90 | ||||||
Exercised
|
- | - | ||||||
Forfeited
|
(100,000 | ) | 0.88 | |||||
Outstanding at end of year
|
1,860,000 | $ | 0.89 | |||||
Shares exercisable at end of year
|
- | - |
Options outstanding
|
Option exercisable
|
|||||||||||||||||||||||||
Stock option
with exercise price of:
|
Number outstanding
|
Weighted average remaining contractual life (years)
|
Weighted average exercise price
|
Aggregate intrinsic value as of December 31, 2014
|
Number exercisable
|
Weighted average exercise price
|
Aggregate intrinsic value as of December 31, 2014
|
|||||||||||||||||||
$ 0.878 | 1,470,000 | - | ||||||||||||||||||||||||
$ 0.92 | 290,000 | - | ||||||||||||||||||||||||
$ 1.032 | 50,000 | - | ||||||||||||||||||||||||
$ 1.038 | 50,000 | - | ||||||||||||||||||||||||
1,860,000 |
9.65
|
$ |
0.89
|
$ |
318,080
|
- |
-
|
-
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES – continued
|
18.
|
STOCK OPTIONS AND NONVESTED SHARES – continued
|
19.
|
INCOME TAXES
|
19.
|
INCOME TAXES - continued
|
PRC entities
|
Chinese EIT rate
|
Qualification for preferential tax rate
|
CFO Success
|
Preferential tax rate of 12.5% in 2012.
|
Software Enterprises
|
CFO Qicheng
|
Preferential tax rate of 12.5% from 2012 to 2014.
|
Software Enterprises
|
CFO Shenzhen Shangtong
|
Preferential tax rate of 12.5% from 2012 to 2014.
|
Software Enterprises
|
CFO Software
|
Preferential tax rate of 15% from 2012 to 2013.
|
HNTE
|
CFO Meining
|
Preferential tax rate of 15% from 2012 to 2014.
|
HNTE
|
CFO Genius
|
Preferential tax rate of 15% from 2012 to 2014.
|
HNTE
|
19.
|
INCOME TAXES - continued
|
December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Current
|
$ | (315,197 | ) | $ | (478,966 | ) | $ | (558,696 | ) | |||
Deferred
|
(568,521 | ) | 378,908 | 44,782 | ||||||||
Total
|
$ | (883,718 | ) | $ | (100,058 | ) | $ | (513,914 | ) |
19.
|
INCOME TAXES - continued
|
December 31, | ||||||||
2013
|
2014
|
|||||||
Current deferred tax assets:
|
||||||||
Deferred revenue - current
|
$ | 618,648 | $ | 594,196 | ||||
Accrued expenses and other liabilities
|
583,849 | 467,758 | ||||||
Net operating loss carrying forwards
|
4,442,678 | 4,233,246 | ||||||
5,645,175 | 5,295,200 | |||||||
Less: valuation allowance
|
(4,530,737 | ) | (4,369,119 | ) | ||||
Total current deferred tax assets
|
1,114,438 | 926,081 | ||||||
Non-current deferred tax assets:
|
||||||||
Deferred revenue - non-current
|
$ | 381,522 | $ | 268,393 | ||||
Net operating loss carrying forwards
|
8,370,153 | 10,556,749 | ||||||
8,751,675 | 10,825,142 | |||||||
Less: valuation allowance
|
(8,657,442 | ) | (10,753,602 | ) | ||||
Total non-current deferred tax assets
|
$ | 94,233 | $ | 71,540 | ||||
Current deferred tax liabilities:
|
||||||||
Account receivable and other assets
|
(325,340 | ) | (580,197 | ) | ||||
Total current deferred tax liabilities
|
$ | (325,340 | ) | $ | (580,197 | ) | ||
Non-current deferred tax liabilities:
|
||||||||
Intangible assets
|
(1,886,190 | ) | (546,320 | ) | ||||
Total non-current deferred tax liabilities
|
$ | (1,886,190 | ) | $ | (546,320 | ) |
19.
|
INCOME TAXES - continued
|
Years ended December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Loss before tax
|
$ | (11,076,429 | ) | $ | (8,073,832 | ) | $ | (10,116,814 | ) | |||
Income tax expense calculated at 25%
|
(2,769,107 | ) | (2,018,458 | ) | (2,529,204 | ) | ||||||
Effect of tax holiday
|
2,206,739 | (266,396 | ) | (4,125,912 | ) | |||||||
Effect of income tax rate difference in other jurisdictions
|
250,412 | 305,505 | 1,789,762 | |||||||||
Non-deductible expenses
|
851,680 | 267,748 | 1,425,655 | |||||||||
Non-taxable income
|
(2,122 | ) | (439,861 | ) | (549,315 | ) | ||||||
Change in valuation allowance
|
346,116 | 2,251,520 | 4,502,928 | |||||||||
Income tax expense
|
$ | 883,718 | $ | 100,058 | $ | 513,914 |
20.
|
NET LOSS PER SHARE
|
Years ended December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Net loss attributable to China Finance Online Co. Limited
|
$ | (11,855,207 | ) | $ | (8,573,128 | ) | $ | (7,167,849 | ) | |||
Weighted average ordinary shares outstanding used in computing basic net loss per share
|
108,983,249 | 109,019,513 | 109,385,712 | |||||||||
Weighted average ordinary shares outstanding used in computing diluted net loss per share
|
108,983,249 | 109,019,513 | 109,385,712 | |||||||||
Net loss per share attributable to China Finance Online Co. Limited
|
||||||||||||
- basic
|
$ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) | |||
- diluted
|
$ | (0.11 | ) | $ | (0.08 | ) | $ | (0.07 | ) |
21.
|
MAINLAND CHINA CONTRIBUTION PLAN AND PROFIT APPROPRIATION
|
22.
|
NONCONTROLLING INTERESTS
|
Precious
metal trading
services
|
Investment advisory services
|
Institutional Subscription Services
|
iSTAR Financial
holdings brokerage
services
|
Other
|
Total
|
|||||||||||||||||||
Balance as of January 1, 2012
|
$ | - | $ | - | $ | - | $ | (104,908 | ) | $ | - | $ | (104,908 | ) | ||||||||||
Acquisition of CFO East Win (Note3)
|
- | 871,960 | - | - | - | 871,960 | ||||||||||||||||||
Share-based compensation (Note 18)
|
- | - | - | 89,256 | - | 89,256 | ||||||||||||||||||
Net income (loss)
|
- | (183,898 | ) | - | 78,958 | - | (104,940 | ) | ||||||||||||||||
Balance as of December 31, 2012
|
- | 688,062 | - | 63,306 | - | 751,368 | ||||||||||||||||||
Acquisition of CFO Tahoe (Note3)
|
9,508,295 | - | - | - | - | 9,508,295 | ||||||||||||||||||
Acquisition of Champion Connection (Note3)
|
- | 1,760,861 | 938,112 | - | - | 2,698,973 | ||||||||||||||||||
Acquisition of Nontrolling interests of CFO East Win
|
- | 586,954 | - | - | - | 586,954 | ||||||||||||||||||
Changes in ownership of subsidiaries
|
- | 289,656 | (1,068,471 | ) | - | - | (778,815 | ) | ||||||||||||||||
Capital injection from noncontrolling interests
|
1,405,963 | - | - | - | - | 1,405,963 | ||||||||||||||||||
Share-based compensation (Note 18)
|
- | - | - | 74,376 | - | 74,376 | ||||||||||||||||||
Net income (loss)
|
1,056,322 | (419,202 | ) | (64,585 | ) | (173,297 | ) | - | 399,238 | |||||||||||||||
Balance as of December 31, 2013
|
11,970,580 | 2,906,331 | (194,944 | ) | (35,615 | ) | - | 14,646,352 | ||||||||||||||||
Business restructure
|
(2,569,160 | ) | 2,384,519 | 786,355 | - | 12,201 | 613,915 | |||||||||||||||||
Dividends paid to noncontrolling interest
|
(1,030,012 | ) | - | - | - | - | (1,030,012 | ) | ||||||||||||||||
Share-based compensation (Note 18)
|
158,696 | - | - | - | - | 158,696 | ||||||||||||||||||
Net income (loss)
|
2,463,956 | (5,290,850 | ) | (591,411 | ) | 3,936 | (48,510 | ) | (3,462,879 | ) | ||||||||||||||
Balance as of December 31, 2014
|
$ | 10,994,060 | $ | - | $ | - | $ | (31,679 | ) | $ | (36,309 | ) | $ | 10,926,072 |
23.
|
COMMITMENTS AND CONTINGENCIES
|
Year ending
|
|||||
2015 | $ | 6,490,055 | |||
2016 | 1,724,215 | ||||
2017 | 154,104 | ||||
Total
|
$ | 8,368,374 |
24.
|
SEGMENT AND GEOGRAPHIC INFORMATION
|
Precious metal
services
|
Subscription
services
and other
related s
ervices
|
Brokerage services
in Hong Kong
|
Consolidated
|
|||||||||||||
Net revenues
|
$ | 80,943,201 | $ | 25,250,486 | $ | 4,610,516 | $ | 110,804,203 | ||||||||
Less: intersegment sales
|
(20,852,084 | ) | (6,256,234 | ) | - | (27,108,318 | ) | |||||||||
Net revenues from external customer
|
60,091,117 | 18,994,252 | 4,610,516 | 83,695,885 | ||||||||||||
Cost of revenues
|
10,526,980 | 8,091,595 | 1,731,651 | 20,350,226 | ||||||||||||
Less: intersegment cost of revenues
|
- | 2,503 | - | 2,503 | ||||||||||||
Cost of revenues after elimination
|
10,526,980 | 8,094,098 | 1,731,651 | 20,352,729 | ||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
8,320,540 | 19,544,999 | 2,655,925 | 30,521,464 | ||||||||||||
Product development
|
2,460,048 | 13,567,759 | - | 16,027,807 | ||||||||||||
Sales and marketing
|
52,371,135 | 12,845,724 | 586,015 | 65,802,874 | ||||||||||||
Loss from impairment of intangible assets
|
- | 1,802,125 | - | 1,802,125 | ||||||||||||
Loss from impairment of goodwill
|
- | 8,149,525 | - | 8,149,525 | ||||||||||||
Total segments operating expenses
|
63,151,723 | 55,910,132 | 3,241,940 | 122,303,795 | ||||||||||||
Less: intersegment operating expenses
|
(24,533,694 | ) | (15,199,246 | ) | (117,740 | ) | (39,850,680 | ) | ||||||||
Total operating expenses
|
38,618,029 | 40,710,886 | 3,124,200 | 82,453,115 | ||||||||||||
Government subsidies
|
655,437 | 3,980 | - | 659,417 | ||||||||||||
Income (loss) from operations
|
$ | 11,601,545 | $ | (29,806,752 | ) | $ | (245,335 | ) | $ | (18,450,542 | ) | |||||
Total segments assets
|
$ | 62,272,231 | $ | 171,870,606 | $ | 52,776,273 | $ | 286,919,110 | ||||||||
Less: intersegment assets
|
(26,824,659 | ) | (127,444,636 | ) | (18,746,458 | ) | (173,015,752 | ) | ||||||||
Total assets
|
$ | 35,447,572 | $ | 44,425,970 | $ | 34,029,815 | $ | 113,903,358 |
Precious metal
trading services
|
Subscription
services and other
related services
|
Brokerage services
in Hong Kong
|
Consolidated
|
|||||||||||||
Net revenues
|
$ | 30,124,245 | $ | 21,656,482 | $ | 3,404,767 | $ | 55,185,494 | ||||||||
Less: intersegment sales
|
- | (2,447,417 | ) | - | (2,447,417 | ) | ||||||||||
Net revenues from external customer
|
30,124,245 | 19,209,065 | 3,404,767 | 52,738,077 | ||||||||||||
Cost of revenues
|
2,613,287 | 7,018,379 | 938,404 | 10,570,070 | ||||||||||||
Operating expenses:
|
||||||||||||||||
General and administrative
|
1,087,048 | 10,831,336 | 3,291,718 | 15,210,102 | ||||||||||||
Product development
|
784,083 | 8,248,244 | - | 9,032,327 | ||||||||||||
Sales and marketing
|
22,015,190 | 10,429,389 | 591,074 | 33,035,653 | ||||||||||||
Total segments operating expenses
|
23,886,321 | 29,508,969 | 3,882,792 | 57,278,082 | ||||||||||||
Less: intersegment operating expenses
|
(2,447,417 | ) | - | - | (2,447,417 | ) | ||||||||||
Total operating expenses
|
21,438,904 | 29,508,969 | 3,882,792 | 54,830,665 | ||||||||||||
Government subsidies
|
- | 11,187 | - | 11,187 | ||||||||||||
Income (loss) from operations
|
$ | 6,072,054 | $ | (17,307,096 | ) | $ | (1,416,429 | ) | $ | (12,651,471 | ) | |||||
Total segments assets
|
27,791,654 | 80,844,211 | 31,893,233 | 140,529,098 | ||||||||||||
Less: intersegment balances
|
- | (7,036,363 | ) | - | (7,036,363 | ) | ||||||||||
Total assets
|
$ | 27,791,654 | $ | 73,807,848 | $ | 31,893,233 | $ | 133,492,735 |
24.
|
SEGMENT AND GEOGRAPHIC INFORMATION - continued
|
Subscription
services and other
related services
|
Brokerage services
in Hong Kong
|
Consolidated
|
||||||||||
Net revenues
|
$ | 25,781,724 | $ | 3,817,762 | $ | 29,599,486 | ||||||
Cost of revenues
|
7,297,061 | 792,333 | 8,089,394 | |||||||||
Operating expenses:
|
||||||||||||
General and administrative
|
8,515,833 | 2,871,548 | 11,387,381 | |||||||||
Product development
|
10,735,570 | - | 10,735,570 | |||||||||
Sales and marketing
|
12,500,788 | 571,229 | 13,072,017 | |||||||||
Total operating expenses
|
31,752,191 | 3,442,777 | 35,194,968 | |||||||||
Government subsidies
|
75,883 | - | 75,883 | |||||||||
Loss from operations
|
$ | (13,191,645 | ) | $ | (417,348 | ) | $ | (13,608,993 | ) | |||
Total assets
|
$ | 72,474,437 | $ | 48,896,558 | $ | 121,370,995 |
24.
|
SEGMENT AND GEOGRAPHIC INFORMATION - continued
|
Years ended December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Precious metals trading services revenues
|
$ | - | $ | 30,124,245 | $ | 60,091,117 | ||||||
Financial information and advisory services revenues
|
20,826,995 | 11,122,400 | 10,355,732 | |||||||||
Advertising revenue
|
4,848,622 | 6,799,109 | 8,160,310 | |||||||||
Hong Kong brokerage services revenues
|
3,817,762 | 3,404,767 | 4,610,516 | |||||||||
Others
|
106,107 | 1,287,556 | 478,210 | |||||||||
Total revenue from external customers..
|
$ | 29,599,486 | $ | 52,738,077 | $ | 83,695,885 |
25.
|
STATUTORY RESERVES AND RESTRICTED NET ASSETS
|
|
The balance of the statutory reserves was $6,140,514 and $6,811,842 as of December 31 2013 and 2014. Such reserves have been included in the retained earnings of the Company's consolidated balance sheet.
|
26.
|
SUBSEQUENT EVENT
|
|
iii) In April, 2015, the Company collected $2,168,868, the remaining consideration related to the sale of Ocean Butterflies Holdings Inc.
|
December 31, | ||||||||
2013
|
2014
|
|||||||
Assets
|
||||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$ | 721,271 | $ | 1,383,205 | ||||
Amounts due from subsidiaries, VIEs and VIE’s subsidiaries
|
6,807,051 | 7,492,739 | ||||||
Prepaid expenses and other current assets
|
167,562 | 2,479,810 | ||||||
Dividends receivable
|
18,917,296 | 17,541,570 | ||||||
Total current assets
|
26,613,180 | 28,897,324 | ||||||
Investments in subsidiaries, VIEs and VIE’s subsidiaries
|
60,283,341 | 48,389,562 | ||||||
Rental deposits
|
66,893 | 66,893 | ||||||
Total assets
|
$ | 86,963,414 | $ | 77,353,779 | ||||
Liabilities and shareholders' equity
|
||||||||
Current liabilities:
|
||||||||
Accrued expenses and other current liabilities
|
286,041 | 296,866 | ||||||
Amounts due to subsidiaries, VIEs and VIE’s subsidiaries
|
10,906,476 | 12,441,549 | ||||||
Total current liabilities
|
$ | 11,192,517 | $ | 12,738,415 | ||||
Shareholders' equity
|
||||||||
Ordinary shares (111,145,633 and 112,417,933 shares issued and outstanding as of December 31, 2013 and 2014, respectively)
|
14,353 | 56,386,606 | ||||||
Additional paid-in capital
|
84,346,266 | 24,207,606 | ||||||
Accumulated other comprehensive income
|
12,285,615 | 12,064,338 | ||||||
Retained deficits
|
(20,875,337 | ) | (28,043,186 | ) | ||||
Total shareholders' equity
|
75,770,897 | 64,615,364 | ||||||
Total liabilities and shareholders' equity
|
$ | 86,963,414 | $ | 77,353,779 |
December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Cost of revenues
|
$ | 4,245 | $ | 2,584 | $ | - | ||||||
Gross loss
|
(4,245 | ) | (2,584 | ) | - | |||||||
Operating expenses:
|
||||||||||||
General and administrative
|
1,445,591 | 1,417,843 | 1,418,198 | |||||||||
Product development
|
68,961 | 62,914 | 50,859 | |||||||||
Sales and marketing
|
43,018 | 160,112 | 108,384 | |||||||||
Stock-based compensation
|
207,677 | 2,539,274 | 4,132,182 | |||||||||
Total operating expenses
|
1,765,247 | 4,180,143 | 5,709,623 | |||||||||
Interest income
|
2,180 | 605 | 30 | |||||||||
Equity in deficits of subsidiaries, VIEs and VIE’s subsidiaries
|
(9,674,955 | ) | (4,985,519 | ) | (6,394,055 | ) | ||||||
Exchange gain, net
|
(413,004 | ) | 594,513 | (76,351 | ) | |||||||
Other income
|
64 | - | 674,414 | |||||||||
Gain from sale of cost method investment
|
- | - | 4,337,736 | |||||||||
Net loss
|
$ | (11,855,207 | ) | $ | (8,573,128 | ) | $ | (7,167,849 | ) | |||
Other comprehensive income, net of tax:
|
||||||||||||
Changes in foreign currency translation adjustment
|
130,115 | 1,195,795 | (221,070 | ) | ||||||||
Net unrealized loss on available-for-sale securities, net of tax effects of $5,728, nil and nil for 2012, 2013 and 2014, respectively
|
(13,110 | ) | - | - | ||||||||
Reclassification adjustment of available-for-sale securities, net of tax effects of nil, nil and nil for 2012, 2013 and 2014, respectively
|
45,567 | - | - | |||||||||
Other comprehensive income (loss), net of tax
|
162,572 | 1,195,795 | (221,070 | ) | ||||||||
Comprehensive loss
|
$ | (11,692,635 | ) | $ | (7,377,333 | ) | $ | (7,388,919 | ) |
Ordinary shares
|
Additional paid-in
|
Accumulated other
comprehensive
|
Retained
|
Total shareholders'
|
||||||||||||||||||||
Shares
|
Amount
|
capital | income (loss) | deficits | equity | |||||||||||||||||||
Balance as of January 1, 2012
|
110,935,383 | $ | 14,325 | $ | 80,446,578 | $ | 10,927,248 | $ | (447,002 | ) | $ | 90,941,149 | ||||||||||||
Exercise of share options by employees
|
20,000 | 3 | 3,197 | - | - | 3,200 | ||||||||||||||||||
Share-based compensation
|
- | - | 207,677 | - | - | 207,677 | ||||||||||||||||||
Equity pick up from compensation of a subsidiary
|
- | - | 505,791 | - | - | 505,792 | ||||||||||||||||||
Net unrealized loss on available-for-sale securities, net of tax effects of $5,728
|
- | - | - | (13,110 | ) | - | (13,110 | ) | ||||||||||||||||
Reclassification adjustment of available-for sale securities, net of tax effects of nil
|
- | - | - | 45,567 | - | 45,567 | ||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | 130,115 | - | 130,115 | ||||||||||||||||||
Net loss
|
- | - | - | - | (11,855,207 | ) | (11,855,207 | ) | ||||||||||||||||
Balance as of December 31, 2012
|
110,955,383 | $ | 14,328 | $ | 81,163,243 | $ | 11,089,820 | $ | (12,302,209 | ) | $ | 79,965,182 | ||||||||||||
Exercise of share options by employees
|
190,250 | 25 | 30,415 | - | - | 30,440 | ||||||||||||||||||
Share-based compensation
|
- | - | 2,539,274 | - | - | 2,539,274 | ||||||||||||||||||
Equity pick up from compensation of a subsidiary
|
- | - | 421,473 | - | - | 421,473 | ||||||||||||||||||
Acquisition of business combination
|
- | - | 191,861 | - | - | 191,861 | ||||||||||||||||||
Foreign currency translation adjustment
|
- | - | - | 1,195,795 | - | 1,195,795 | ||||||||||||||||||
Net loss
|
- | - | - | - | (8,573,128 | ) | (8,573,128 | ) | ||||||||||||||||
Balance as of December 31, 2013
|
111,145,633 | $ | 14,353 | $ | 84,346,266 | $ | 12,285,615 | $ | (20,875,337 | ) | $ | 75,770,897 | ||||||||||||
Transfer share premium to share capital
|
- | 55,718,184 | (55,718,184 | ) | - | - | - | |||||||||||||||||
Exercise of share options by employees
|
1,164,300 | 654,055 | - | - | - | 654,055 | ||||||||||||||||||
Restricted shares issued
|
108,000 | 14 | - | - | - | 14 | ||||||||||||||||||
Share-based compensation
|
- | - | 4,132,182 | - | - | 4,132,182 | ||||||||||||||||||
Equity pick up from compensation of a subsidiary
|
- | - | 408,075 | - | - | 408,075 | ||||||||||||||||||
Business restructure
|
- | - | (8,960,940 | ) | - | - | (8,960,940 | ) | ||||||||||||||||
Foreign currency translation adjustment
|
- | - | 207 | (221,277 | ) | - | (221,070 | ) | ||||||||||||||||
Net loss
|
- | - | - | - | (7,167,849 | ) | (7,167,849 | ) | ||||||||||||||||
Balance as of December 31, 2014
|
112,417,933 | $ | 56,386,606 | $ | 24,207,606 | $ | 12,064,338 | $ | (28,043,186 | ) | $ | 64,615,364 |
December 31, | ||||||||||||
2012
|
2013
|
2014
|
||||||||||
Operating activities:
|
||||||||||||
Net loss
|
$ | (11,855,207 | ) | $ | (8,573,128 | ) | $ | (7,167,849 | ) | |||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
|
||||||||||||
Stock-based compensation
|
207,677 | 2,539,274 | 4,132,182 | |||||||||
Gain from sale of cost method investment
|
- | - | (4,337,736 | ) | ||||||||
Equity in losses of subsidiaries, VIEs and VIE's subsidiaries
|
9,674,955 | 4,985,519 | 6,394,055 | |||||||||
Changes in assets and liabilities:
|
||||||||||||
Prepaid expenses and other current assets
|
26,907 | (63,446 | ) | (143,380 | ) | |||||||
Amounts due from subsidiaries, VIEs and VIE's subsidiaries
|
317,359 | (4,092,500 | ) | 983,297 | ||||||||
Rental deposits
|
(66,622 | ) | (271 | ) | - | |||||||
Accrued expenses and other current liabilities
|
(10,225 | ) | 34,392 | 10,825 | ||||||||
Amounts due to subsidiaries, VIEs and VIE's subsidiaries
|
8,095,649 | 1,779,098 | 1,535,073 | |||||||||
Net cash provided by (used in) operating activities
|
6,390,493 | (3,391,062 | ) | 1,406,467 | ||||||||
Investing activities:
|
||||||||||||
Dividend receivable
|
4,171,269 | 1,140,713 | 1,375,727 | |||||||||
Capital injection to subsidiaries
|
(10,327,422 | ) | - | (2,774,315 | ) | |||||||
Net cash (used in) provided by investing activities
|
(6,156,153 | ) | 1,140,713 | (1,398,588 | ) | |||||||
Financing activities:
|
||||||||||||
Proceeds from stock options exercised by employees
|
3,200 | 30,440 | 654,055 | |||||||||
Net cash provided by financing activities
|
3,200 | 30,440 | 654,055 | |||||||||
Effect of exchange rate changes
|
1 | - | - | |||||||||
Net increase (decrease) in cash and cash equivalents
|
237,541 | (2,219,909 | ) | 661,934 | ||||||||
Cash and cash equivalents, beginning of the year
|
2,703,639 | 2,941,180 | 721,271 | |||||||||
Cash and cash equivalents, end of the year
|
$ | 2,941,180 | $ | 721,271 | $ | 1,383,205 |
1.
|
The Borrowers desire to establish Shenzhen Newrand Securities Advisory and Investment Co., Ltd. (the “Company”), whose registered capital will be RMB20, 000, 000, and Borrower A and Borrower B will respectively hold 70% and 30% of the equity interest in the Company.
|
2.
|
The Borrowers desire to borrow a loan (the “Loan”) from the Lender to invest in the Company.
|
3.
|
The Lender agrees to provide the Loan to Borrowers.
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. OPERATIONAL SUPPORT
|
4
|
ARTICLE 3. OBLIGATIONS OF PARTY B
|
4
|
ARTICLE 4. CONSIDERATION FOR PROVIDING OPERATIONAL SUPPORT
|
5
|
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
|
5
|
ARTICLE 6. CONFIDENTIALITY
|
5
|
ARTICLE 7. GOVERNING LAW AND OBLIGATIONS UPON DEFAULT
|
6
|
ARTICLE 8. DISPUTE RESOLUTION
|
6
|
ARTICLE 9. EFFECTIVENESS
|
6
|
ARTICLE 10. NO SUBSEQUENT OBLIGATION
|
7
|
ARTICLE 11. AMENDMENT
|
7
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONSIDERATION FOR OPERATION GUARANTEE
|
8
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. TECHNICAL SUPPORT SERVICES FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
5
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
6
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
6
|
ARTICLE 10. TRANSFER LIMITATION
|
6
|
ARTICLE 11. AMENDMENT
|
6
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONTENT OF THE TECHNICAL SUPPORT SERVICES
|
8
|
EXHIBIT 2 TECHNICAL SUPPORT SERVICE FEE
|
9
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. STRATEGIC CONSULTING SERVICE FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
4
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
5
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
5
|
ARTICLE 10. TRANSFER LIMITATION
|
5
|
ARTICLE 11. COMPENSATION
|
6
|
ARTICLE 12. AMENDMENT
|
6
|
ARTICLE 13. COUNTERPARTS
|
6
|
ARTICLE 14. MISCELLANEOUS
|
6
|
EXHIBIT 1 CONTENT OF THE STRATEGIC CONSULTING SERVICES
|
7
|
EXHIBIT 2 STRATEGIC CONSULTING SERVICE FEE
|
8
|
1.
|
The Borrowers desire to establish
Beijing Mingfu Economics Institute Co., Ltd.
(the “Company”), whose registered capital will be RMB1, 000, 000, and Borrower A and Borrower B will respectively hold 55% and 45% of the equity interest in the Company.
|
2.
|
The Borrowers desire to borrow a loan (the “Loan”) from the Lender to invest in the Company.
|
3.
|
The Lender agrees to provide the Loan to Borrowers.
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. OPERATIONAL SUPPORT
|
4
|
ARTICLE 3. OBLIGATIONS OF PARTY B
|
4
|
ARTICLE 4. CONSIDERATION FOR PROVIDING OPERATIONAL SUPPORT
|
5
|
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
|
5
|
ARTICLE 6. CONFIDENTIALITY
|
5
|
ARTICLE 7. GOVERNING LAW AND OBLIGATIONS UPON DEFAULT
|
5
|
ARTICLE 8. DISPUTE RESOLUTION
|
6
|
ARTICLE 9. EFFECTIVENESS
|
6
|
ARTICLE 10. NO SUBSEQUENT OBLIGATION
|
6
|
ARTICLE 11. AMENDMENT
|
7
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONSIDERATION FOR OPERATION GUARANTEE
|
8
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. TECHNICAL SUPPORT SERVICES FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
4
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
6
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
6
|
ARTICLE 10. TRANSFER LIMITATION
|
6
|
ARTICLE 11. AMENDMENT
|
6
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONTENT OF THE TECHNICAL SUPPORT SERVICES
|
8
|
EXHIBIT 2 TECHNICAL SUPPORT SERVICE FEE
|
9
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. STRATEGIC CONSULTING SERVICE FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
4
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
5
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
5
|
ARTICLE 10. TRANSFER LIMITATION
|
5
|
ARTICLE 11. COMPENSATION
|
6
|
ARTICLE 12. AMENDMENT
|
6
|
ARTICLE 13. COUNTERPARTS
|
6
|
ARTICLE 14. MISCELLANEOUS
|
6
|
EXHIBIT 1 CONTENT OF THE STRATEGIC CONSULTING SERVICES
|
7
|
EXHIBIT 2 STRATEGIC CONSULTING SERVICE FEE
|
8
|
1.
|
The Borrowers desire to establish Shanghai Stockstar Securities Advisory and Investment Co., Ltd. (the “Company”), whose registered capital will be RMB60, 000, 000, and Borrower A and Borrower B will respectively hold 55% and 42.5% of the equity interest in the Company; Shanghai Meining Computer Software Co., Ltd. holds 2.5% of the equity interest in the Company.
|
2.
|
The Borrowers desire to borrow a loan (the “Loan”) from the Lender to invest in the Company.
|
3.
|
The Lender agrees to provide the Loan to Borrowers.
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. OPERATIONAL SUPPORT
|
4
|
ARTICLE 3. OBLIGATIONS OF PARTY B
|
4
|
ARTICLE 4. CONSIDERATION FOR PROVIDING OPERATIONAL SUPPORT
|
5
|
ARTICLE 5. REPRESENTATIONS AND WARRANTIES
|
5
|
ARTICLE 6. CONFIDENTIALITY
|
5
|
ARTICLE 7. GOVERNING LAW AND OBLIGATIONS UPON DEFAULT
|
5
|
ARTICLE 8. DISPUTE RESOLUTION
|
6
|
ARTICLE 9. EFFECTIVENESS
|
6
|
ARTICLE 10. NO SUBSEQUENT OBLIGATION
|
6
|
ARTICLE 11. AMENDMENT
|
7
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONSIDERATION FOR OPERATION GUARANTEE
|
8
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. TECHNICAL SUPPORT SERVICES FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
5
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
6
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
6
|
ARTICLE 10. TRANSFER LIMITATION
|
6
|
ARTICLE 11. AMENDMENT
|
6
|
ARTICLE 12. COUNTERPARTS
|
7
|
ARTICLE 13. MISCELLANEOUS
|
7
|
EXHIBIT 1 CONTENT OF THE TECHNICAL SUPPORT SERVICES
|
8
|
EXHIBIT 2 TECHNICAL SUPPORT SERVICE FEE
|
9
|
ARTICLE 1. DEFINITIONS
|
3
|
ARTICLE 2. TECHNICAL SUPPORT SERVICES
|
4
|
ARTICLE 3. STRATEGIC CONSULTING SERVICE FEE
|
4
|
ARTICLE 4. REPRESENTATIONS AND WARRANTIES
|
4
|
ARTICLE 5. CONFIDENTIALITY
|
4
|
ARTICLE 6. GOVERNING LAW AND EVENTS OF DEFAULT
|
5
|
ARTICLE 7. DISPUTE RESOLUTION
|
5
|
ARTICLE 8. EFFECTIVENESS
|
5
|
ARTICLE 9. NO SUBSEQUENT OBLIGATION
|
5
|
ARTICLE 10. TRANSFER LIMITATION
|
5
|
ARTICLE 11. COMPENSATION
|
6
|
ARTICLE 12. AMENDMENT
|
6
|
ARTICLE 13. COUNTERPARTS
|
6
|
ARTICLE 14. MISCELLANEOUS
|
6
|
EXHIBIT 1 CONTENT OF THE STRATEGIC CONSULTING SERVICES
|
7
|
EXHIBIT 2 STRATEGIC CONSULTING SERVICE FEE
|
8
|
ARTICLE 1
|
REORGANIZATION OBJECTIVES AND PRINCIPLES
|
4
|
1.1
|
Reorganization Objectives of Tahoe
|
4
|
1.2
|
Reorganization Objectives of Investment Consulting Platform
|
5
|
1.3
|
Reorganization Objectives of Institutional Platform
|
6
|
1.4
|
Reorganization Principles
|
7
|
ARTICLE 2
|
REORGANIZATION STEPS AND CLOSING
|
7
|
2.1
|
Execution of Relevant Documents
|
7
|
2.2
|
Change of Registration.
|
7
|
2.3
|
Transfer of Operation and Management Right
|
7
|
2.4
|
Payment of Equity Transfer Price
|
8
|
2.5
|
TRANSITIONAL ARRANGEMENT
|
8
|
ARTICLE 3
|
CONFIDENTIALITY
|
8
|
ARTICLE 4
|
BREACH AND LIABILITIES
|
9
|
4.1
|
Default
|
9
|
4.2
|
LIABILITIES FOR BREACH OF CONTRACT
|
9
|
ARTICLE 5
|
GOVERNING LAW AND DISPUTE SETTLEMENT
|
9
|
5.1
|
Governing Law
|
9
|
5.2
|
Dispute Settlement
|
9
|
ARTICLE 6
|
MISCELLANEOUS
|
10
|
6.1
|
Effectiveness
|
10
|
6.2
|
Termination and Consequence
|
10
|
6.3
|
Amendment
|
10
|
6.4
|
Counterparts
|
11
|
(1)
|
The Parties and their respective affiliates have integrated their advantageous resources in precious metal business, securities investment consulting business (including securities software business) ("
Investment Consulting Business
") and institutional subscription business ("
Institutional Business
"), and jointly built the corresponding platform companies to carry out the businesses mentioned above, with the following details:
|
(2)
|
In precious metal business, using Shenzhen Tahoe Investment and Development Co., Ltd as a platform company ("
Tahoe
"), wherein Party A, Party B and Party C hold 60%, 10% and 30% equity interest respectively. As of the date of this Agreement, Tahoe (a) holds 70% equity interest in Zhongjun Sunshine (Beijing) Investment Management Co., Ltd. ("
Zhongjun Sunshine
"), and through Zhongjun Sunshine, indirectly holds 55% equity interest in Henghui (Tianjin) Precious Metals Management Co., Ltd ("
Henghui
"); (b) indirectly holds 100% equity interest in Guangdong Rongxiang Precious Metals Trading Co., Ltd ("
Rongxiang
"); (c) indirectly holds 100% equity interest in Zhengjin (Shanghai) Precious Metals Management Co., Ltd ("
Zhengjin Shanghai
"); (d) indirectly holds 100% equity interest in Zhengjin (Fujian) Precious Metals Investment Co., Ltd ("
Zhengjin Fujian
"); and (e) through an agreement and subject to the regulatory conditions, may acquire 100% equity interest in Zhengjin (Tianjin) Precious Metals Management Co., Ltd ("
Zhengjin Tianjin
") at any time;
|
(3)
|
In Investment Consulting Business, using Zhengyong Information Technologies (Shanghai) Co., Ltd as the platform company ("
Investment Consulting Platform
"), Party B, through its overseas subsidiary, holds 30% equity interest in the overseas parent (i.e. Giant Bright International Holdings Limited, hereinafter as "
Giant
") of the Investment Consulting Platform. As of the date of this Agreement, the Investment Consulting Platform, through agreements, controls
four Licensed Companies
, including: (a) Shenzhen Newland Securities Advisory and Investment Co., Ltd ("
Newland
"); (b) East Win Investmen Consulting Co., Ltd. ("
East Win
"); (c) Shanghai Maibu Investment Management Co., Ltd ("
Maibu
"); and (d) Sinoinfo (Dalian)Investment Consulting Co., Ltd. ("
Sinoinfo
"). Newland has acquired and integrated the assets, software, technologies, employees and relevant businesses of Shenzhen Champion Connection Co., Ltd ("
Champion
") and Party D in investment area. Refer to Appendix 1 attached for the details of the
Acquired Subject Matters
.
|
(4)
|
In Institution Business, using Shenzhen Genius Information Technology Co., Ltd ("
Genius
") as the platform company ("
Institutional Platform
"), Party D, through its overseas subsidiary, holds 30% equity interest in the overseas parent (i.e. Mainfame Group Limited, hereinafter as "
Mainfame
") of the Institutional Platform. The Institutional Platform has acquired and integrated the assets, software, technologies, employees and relevant businesses of Champion and Party D in institution business area. Refer to Appendix 2 attached for the details of the
Acquired Subject Matters
.
|
(5)
|
Now, the Parties and their affiliates intend to further optimize and reorganize the business blocks and relevant operating entities mentioned above ("
Reorganization
");
|
ARTICLE 1
|
REORGANIZATION OBJECTIVES AND PRINCIPLES
|
1.1
|
Reorganization Objectives of Tahoe
|
1.1.1
|
Rongxiang shall be spun off from Tahoe, and its 100% equity interest will be acquired without charge by Party D or its designated affiliate without consideration.
|
1.1.2
|
For the customers' equity of over RMB 5 million held by Zhengjin Precious Metals Shenzhen Branch and Shanghai Branch, which are currently being managed by Rongxiang, the operation and management right and the interest therein shall be transferred to Zhengjin Precious Metals.
|
1.1.3
|
For the net profit generated from business operations of Zhengjin Tianjing, Zhengjin Shanghai and Zhengjin Fujian from June 1 to December 31, 2014, 20% of the net profit ("
Party B's Earning
") shall be paid to Champion or an affiliate designated by Party D in the form of profit distribution or any other lawful form. The particulars are as follows:
|
(a)
|
From June 1, 2014 to September 30, 2014, 20% profit of Zhengjin Shanghai and Zhengjin Fujian shall be distributed to Party D or its designated beneficiary on a monthly basis; from October 1, 2014 to December 31, 2014, 20% profit of Zhengjin Shanghai and Zhengjin Fujian shall be distributed to Party D or its designated beneficiary on a quarterly basis. If the distribution is defaulted within the agreed period, Zhengjin Tianjing, Zhengjin Shanghai and Zhengjin Fujian shall pay to Party D an overdue fine, at 10% annual rate charged on the defaulted amount.
|
(b)
|
During the payment periods above, if any month in the period from June 1, 2014 to September 30, 2014 suffers a loss, Party D shall make up the loss at the rate specified in the preceding paragraph on or before the 15th day of the next month; if any month in the period from October 1, 2014 to December 31, 2014 suffers a loss, Party D shall make up the loss at the rate specified in the preceding paragraph on or before January 15, 2015. If the payment is defaulted on the due date, Party D shall pay an overdue fine at 10% annual rate on the defaulted amount.
|
1.1.4
|
Party C's all equity and interests in Tahoe shall be transferred to Party A and Party B (or their respectively designated affiliates) at the proportion of 2:1 and at the total transfer price of RMB 15 million (say Renminbi Fifteen Million Yuan Net). The transferee shall acquire the equity and interests at the proportion mentioned above. "Tahoe" brand shall still be owned by Champion, and Tahoe shall change its company name and stop using the trade name of "Taihe".
|
1.1.5
|
Party C and Party D will not own interests in Henghui therefore.
|
1.1.6
|
In September 2013, Zhengjing (Fujian) Precious Metals Investment Co., Ltd Shenzhen Branch and Ding Yijun signed a Cooperation Agreement. According to the Cooperation Agreement and subsequent agreement among the Parties:
|
i.
|
After the Cooperation Agreement is entered into, Party A shall pay a sum of RMB 750,000 to Party D or its designated third party;
|
ii.
|
After Party A has made the payment according to the preceding paragraph, all expenses arising from the operations of Ding Yijun and his team, any and all debts payable after the date of the Cooperation Agreement as well as other liabilities shall be borne by Party C and Party D, while Zhengjing (Fujian) Precious Metals Investment Co., Ltd Shenzhen Branch and Party A will not bear the said expenses, debts and liabilities.
|
1.2
|
Reorganization Objectives of Investment Consulting Platform
|
1.2.1
|
Sinoinfo and its license of Investment Consulting Business (i.e. the qualification certificate of securities investment consulting business) (excluding such assets as cash and accounts receivable) shall be spun off from the Investment Consulting Platform, and its 100% equity interest will be acquired by Party D or its designated affiliate without consideration.
|
1.2.2
|
The domain name of Sinoinfo Financial News website, and the radio and television program production license ("
Audio-visual Program License
") shall be split from Sinoinfo and transferred to an entity designated by Party A. In addition, Sinoinfo shall change its ICP certificate, and assist Party A's designated entity in acquiring the right to operate and control Sinoinfo Financial News website without charge, including but not limited to changing the website designated server, changing IDC hosting party to an entity designated by Party A and executing an amendment agreement for this purpose. The assets such as cash and accounts receivable owned by Sinoinfo as of the date of this Agreement shall be split from Sinoinfo and transferred to Party A or its designated affiliate.
|
1.2.3
|
The domain name of Huagu Financial News website (www.huagu.com) and the right to operate and control the website shall be transferred to Party C and Party D without charge. Newland shall assist Party C and Party D in transferring the right to control.
|
1.2.4
|
The assets such as cash and accounts receivable owned by Maibu as of the date of this Agreement shall be split from Maibu and transferred to Party A or its designated affiliate. Upon completion of the splitting and reorganization mentioned above, Maibu and its license of Investment Consulting Business (i.e. the qualification certificate of securities investment consulting business) (excluding such assets as cash and accounts receivable) shall be spun off from the Investment Consulting Platform, and its 100% equity interest will be acquired by Party D or his designated affiliate without consideration. The Parties further agree that, if Maibu fails to pass the annual inspection on securities investment consulting license and thus the Qualification Certificate of Securities Investment Consulting Business is suspended, Party A shall pay the compensation of RMB 10 million to Party D or his designated affiliate within 10 days upon receiving the notice of result from China Securities Regulatory Commission.
|
1.2.5
|
Party C's all equity and interests in the overseas parent (i.e. Giant) of the Investment Consulting Platform through its overseas subsidiary (i.e. Jovial Sino Limited, hereinafter as "
Jovial
") shall be transferred to Party A's and Party B's respectively designated affiliates at the proportion of 2:1 without charge.
|
1.2.6
|
Newland and its Investment Consulting Business license (i.e. qualification certificate of securities investment consulting business), fund distribution license and other business licenses, as well as the assets relating to fund distribution, shall still be owned by Newland. The employees, assets, products and customer resources relating the Investment Consulting Business of Newland as listed in Appendix 1 attached hereto shall be spun off from the Investment Consulting Platform and transferred to Party D or his designated affiliate (Party D shall responsible for novation of the employment contracts with relevant employee and pay the compensation arising therefrom).
|
1.3
|
Reorganization Objectives of Institutional Platform
|
1.3.1
|
Party D's all equity and interests in the overseas parent (i.e. Mainfame) of the Institutional Platform through its overseas subsidiary (i.e. "Jovial") shall be transferred without charge to Party A's or its designated affiliate.
|
1.3.2
|
Within 3 days after the date of this Agreement, Party C and Party D and their teams shall transfer the right to operate and manage the Institutional Platform and the subsidiaries and branches thereunder to Party A or its designated entity.
|
1.3.3
|
The employees, assets, products and customer resources relating the Investment Consulting Business transferred from Champion to Genius as listed in Appendix 2 attached hereto shall be spun off from the Institutional Platform and transferred to Party D or his designated affiliate (Party D shall responsible for novation of the employment contracts with relevant employee and pay the compensation arising therefrom).
|
1.4
|
Reorganization Principles
|
1.4.1
|
Each Party hereby acknowledges and agrees that the reorganization arrangements hereunder are unanimously accepted by the Parties through equal consultation and based on their true will. Each Party shall (and shall procure its affiliates to) make best efforts to fulfill the reorganization objectives set forth herein.
|
1.4.2
|
Each Party shall coordinate and cooperate with each other based on the principles of reliance and responsibility, so as to lay a good foundation for future development and cooperation.
|
ARTICLE 2
|
REORGANIZATION STEPS AND CLOSING
|
2.1
|
Execution of Relevant Documents
|
2.2
|
Change of Registration
|
2.3
|
Transfer of Operation and Management Right
|
2.3.1
|
Within [3] days after the date of this Agreement, each Party will acquire the operation and management right of the transferred entity, and the transferor shall assist the transferee to effectuate the operation and management right. The "operation and management right" as referred in this paragraph and other parts of this Agreement, i.e. operation and control right, shall mean the right to actually control the operation of a company, including but not limited to right to hold and use the common seal and various seals, right to hold and change the passwords of various accounts for the operation of a company, ownership and use right of intellectual properties and products, and right to manage and receive benefits (if any) from the customer funds under control, other than the rights expressly excluded by this Agreement. After the operation and management right has been transferred, the transferor shall not carry out business operation in the name of the original company.
|
2.4
|
Payment of Equity Transfer Price
|
2.4.1
|
The total transfer price of equity interest in Tahoe stipulated in Article 1.1.4 above shall be RMB 15 million (say Renminbi Fifteen Million Yuan Net) shall be paid by Party A and Party B to the transferor, at the proportion of 2:1. Of which, a sum of RMB 3 million has been paid by the transferee before the date of this Agreement, and Rongxiang, as the beneficiary designated by Party D, has received such sum; the remaining sum of RMB 12 million, together with the sum of RMB 750,000 payable under Article 1.1.6 above, (i.e. RMB 12.75 million totally), shall be paid according to the following terms and conditions:
|
(a)
|
Party A and Party B shall pay a sum of RMB 10 million to Party D or his designated affiliate no later than July 3, 2014 (inclusive);
|
(b)
|
Party A and Party B shall pay a sum of RMB 1.75 million to Party D or his designated affiliate no later than July 21, 2014 (inclusive);
|
(c)
|
Within 3 business days after the change of registration with respect to transfer of equity interest in Tahoe has been completed under Article 1.1.4 above, Party A and Party B shall pay the remaining sum of RMB 1 million to Party D or his designated affiliate.
|
2.4.2
|
Handling Other Credits and Liabilities
Upon execution of this Agreement, Champion hereby abandons its creditor's right to the rent payable by Rongxiang to Champion as of May 31, 2014.
|
2.5
|
Transitional Arrangement
|
2.5.1
|
Before the change of registration with respect to all equity transfers hereunder are completed, each Party shall not (and shall procure its affiliates not to):
|
(a)
|
Sell, pledge, transfer or otherwise dispose of any equity interest which it will transfer hereunder but is still owned by the company whose operation and management is under its control, unless it is for the performance of this Agreement.
|
ARTICLE 3
|
CONFIDENTIALITY
|
ARTICLE 4
|
BREACH AND LIABILITIES
|
4.1
|
Default
|
4.2
|
LIABILITIES FOR BREACH OF CONTRACT
|
4.2.1
|
The Breaching party shall indemnify the other Parties against all actual losses, damages, expenses and liabilities resulting from its Breach. If the Parties all have certain fault, the liabilities and losses shall be allocated among them as per the actual circumstances. For avoidance of doubt, the breaching party at all events is not required to indemnify the other Parties against any indirect or consequential losses or damages or any profit loss resulting from such Breach.
|
4.2.2
|
Cross-Default Event
|
ARTICLE 5
|
GOVERNING LAW AND DISPUTE SETTLEMENT
|
5.1
|
Governing Law
|
5.2
|
Dispute Settlement
|
ARTICLE 6
|
MISCELLANEOUS
|
6.1
|
Effectiveness
|
6.1.1
|
This Agreement shall become effective as of being duly executed by the authorized representatives of the Parties. The Reorganization contemplated herein shall be launched and effected as of June 1, 2014. From June 1, 2014, all costs and debts payable arising from the operations of Rongxiang shall be borne by Party C and Party D.
|
6.1.2
|
The purpose of this Agreement is to set forth the principles in respect of the Transactions accepted by the Parties. The Parties shall negotiate and execute certain specific legal documents relating to the Transaction according to the principles set forth herein.
|
6.1.3
|
The specific legal documents executed by the Parties and their affiliates subsequently shall not go beyond the framework of principles set forth herein. Any term or condition of any specific legal document conflicts with the provisions hereof shall be invalid.
|
6.2
|
Termination and Consequence
|
6.2.1
|
This Agreement may be terminated if all Parties agree so through consultation.
|
6.2.2
|
Termination of any specific transaction document will not affect any right or obligation of any party accrued or accumulated before the termination, including the obligation of the Party to other Parties accrued or accumulated under the transaction document and the applicable laws, or right of the Party against other Parties or any Party under the transaction document. The termination will not affect the provisions which shall survive after the termination according to the explicit or implied provision of the transaction document.
|
6.2.3
|
Article 3 (Confidentiality), Article 4 (Default and Liabilities), Article 5 (Governing Law and Dispute Settlement) and Article 6 (Miscellaneous) of this Agreement shall survive after the termination of this Agreement or any other transaction document.
|
6.3
|
Amendment
|
6.4
|
Counterparts
|
ARTICLE 1
|
REORGANIZATION OBJECTIVES AND PRINCIPLES
|
3
|
1.1
|
The Reorganization Objectives of Newrand and East Win
|
3
|
1.2
|
The Reorganization Objectives of Cowboy
|
3
|
1.3
|
Reorganization Principles
|
3
|
ARTICLE 2
|
REORGANIZATION STEPS AND CLOSING
|
3
|
2.1
|
Execution of Relevant Documents
|
3
|
2.2
|
Change of Registration
|
3
|
2.3
|
Transitional Arrangement
|
4
|
ARTICLE 3
|
CONFIDENTIALITY
|
4
|
ARTICLE 4
|
BREACH AND LIABILITIES
|
4
|
4.1
|
Default
|
4
|
4.2
|
LIABILITIES FOR BREACH OF CONTRACT
|
4
|
ARTICLE 5
|
GOVERNING LAW AND DISPUTE SETTLEMENT
|
5
|
5.1
|
Governing Law
|
5
|
5.2
|
Dispute Settlement
|
5
|
ARTICLE 6
|
MISCELLANEOUS
|
5
|
6.1
|
Effectiveness
|
5
|
6.2
|
Termination and Consequence
|
5
|
6.3
|
Amendment
|
6
|
6.4
|
Counterparts
|
6
|
(1)
|
Giant Bright International Holdings Limited
(
“Giant”
)
is incorporated in British Virigin Islands. Giant indirectly holds, through the investment arrangement, 100% equity interest of Shenzhen Newrand Securities Advisory and Investment Co., Ltd ("Newrand"), and indirectly holds 100% equity interest of East Win Investment Consulting Co., Ltd ("East Win"). Party A and Hadevan Investment Co., Ltd (Hadevan) each hold 80% and 20% equity interest of Giant, respectively; Party D holds 100% equity interest of Hadevan.
|
(2)
|
Beijing Cowboy Network Technology Co., Ltd ("Cowboy") is a limited liability company established in China, whose shareholder structure is as follows: East Win holds 5% equity interest, Beijing Zhongcheng Futong technology Co., Ltd ("Zhongcheng Futong") holds 5% equity interest, Fortune Xinying technology (Beijing) Co., Ltd ("Fortune Xinying") holds 90% equity interest.
|
(3)
|
Now, the Parties and their affiliates intend to further optimize and reorganize the equity structure of relevant companies mentioned above ("Reorganization");
|
1.1.1
|
Newrand and East Win will be reorganized, after which Party A shall indirectly hold 100% equity interest of Shenzhen Newrand Securities Advisory and Investment Co., Ltd and Party C shall indirectly hold 100% equity interest of East Win Investment Consulting Co., Ltd.
|
1.2.1
|
Party C shall coordinate the equity interest of Cowboy, so that 5.1% of which may be voluntarily transferred from Fortune Xinying to Zhongcheng Futong without any consideration.
|
1.2.2
|
After the transfer, Zhongcheng Futong shall hold 10.1% equity interest, Fortune Xinying shall hold 84.9% equity interest and Chongqing East Win shall hold 5% equity interest
|
1.3.1
|
Each Party hereby acknowledges and agrees that the reorganization arrangements hereunder are unanimously accepted by the Parties through equal consultation and based on their true will. Each Party shall (and shall procure its affiliates to) make best efforts to fulfill the reorganization objectives set forth herein.
|
1.3.2
|
Each Party shall coordinate and cooperate with each other based on the principles of reliance and responsibility, so as to lay a good foundation for future development and cooperation.
|
(
1
)
|
Sell, pledge, transfer or otherwise dispose of any equity interest which it will transfer hereunder but is still owned by the company whose operation and management is under its control, unless it is for the performance of this Agreement.
|
Party A (Seal):
|
Party B (Seal):
|
Legal Representative
or Authorized Representative:
|
Legal Representative or Authorized
Representative:
|
Date:
|
Date:
|
1.
|
Party A, Zhongshan Securities Co. Ltd, is a comprehensive securities corporation approved by China Securities Regulatory Commission (CSRC), and has various financial products, services and businesses as well as the core financial support system, and is committed to providing convenient, fast and safe financial services to customers.
|
2.
|
NOW, THEREFORE
, Party A and Party B hereby enter into this Agreement for a solution to guide investors to open accounts and online trading by investors, based on the principles of complementary advantages and reciprocity, and through friendly consultation.
|
(1)
|
System Interfacing: an open system interface opened by Party A to Party B. Party B's registered users may link to the securities accounts opened at Party A, to do trading and make inquiry via the front-end system independently developed by Party B.
|
(2)
|
Front-end System: the front-end display interfaced and packed to the transaction system opened by Party A to Party B, which is independently developed by Party B.
|
(3)
|
Party A's System Interface: the account opening, transaction and inquiry system interface opened by Party A to Party B (including but not limited to API, link and insertion).
|
1
|
SCOPE AND CONTENT OF COOPERATION
|
1.1
|
Party B shall guide customers to open securities account (including but not limited to stock account, wealth management account and fund account) via Party A's online account opening system.
|
1.2
|
After the users (or investors) of Party B's Websites have opened a securities account at Party A via Party B's front-end system, the users may use the function of securities transaction (HuiLv Tong, “
惠率通
”
).
|
1.3
|
After the users (or investors) of Party B's Websites have opened a securities account at Party A via Party B's front-end system, the users may use the function of micro financing (Xiao Rong Tong,
小融通
). Micro Financing (Xiao Rong Tong,
小融通
): Xiao Rong Tong (
小融通
) provided by Zhongshan Securities is a kind of micro financing service with the minimum financing amount of RMB 5,000 provided to users through the floor channels at Shanghai Stock Exchange and Shenzhen Stock Exchange.
|
1.4
|
Party A shall open the system interface to Party B, but the account information and transaction information of the customers will still be maintained in Party A's system. Party A shall take security measures to ensure the security of customers' information, and Party B shall not use any technical means to intercept any information.
|
1.5
|
To the extent permitted by the laws and regulations and authorized by investors, Party A shall provide Party B with true, complete, timely and effective information about investors, including but not limited to name, identity card number, mobile phone number, account details and activated status.
|
1.6
|
Party B shall use its websites or affiliates to promote Party A's company brand or service brand. Party A shall cooperate with Party B to jointly hold events, and the costs shall be allocated between both Parties through consultation.
|
2
|
TERMS AND CONDITIONS OF BUSINESS COOPERATION
|
2.1
|
Party A's Rights and Obligations:
|
2.1.1
|
Support for Application of Authorization. Party A shall assist Party B in deploying the production system, testing and debugging the network connection and applying for authorization, etc.
|
2.1.2
|
Technical Connection. Party A shall appoint certain special persons to promptly eliminate technical failure in case of any failure in the technical interface between both Parties. Party A shall expressly notify Party B of the proper access to transactions and countermeasures to accidents, as well as Party A's contact information, etc.
|
2.1.3
|
Provision of Service to New Customers. The "New Customer" referred to herein shall mean any securities investment customer who opens a securities transaction account through the system interfacing via Party B's Websites or any website of any other affiliate or partner. With respect to the New Customers, Party A hereby undertakes to designate a business office (Shennan Avenue Securities Business Office in Shenzhen) to open online account for customers, and provide the securities trader standardized customer service to the customers guided by Party B). Party A hereby guarantees that it will provide 24/7 online account opening service. If Party A fails to do so, Party B may close the guidance channel to protect user's experience and its brand image.
|
2.1.4
|
Customer Transaction Fee. Party A undertakes to apply a uniform commission rate for all new customers. The commission rate (including charges and other fees charged by Party A or any third party against the customers for transaction) shall be 0.25
‰
of the turnover.
|
2.1.5
|
Provision of Customer Service Plan. Party A shall provide Party B with the technical development support and business consulting support for accessing to the transactions at the national securities exchanges, allow customers to use the links on Party B's websites to access to Party A's account opening and transaction system, and provide account opening and transaction services to New Customers. Party A shall be responsible for and solve all problems arising from the customer service relating to the transactions in Party A's transaction system.
|
2.1.6
|
Obligation of Risk Disclosure. Party A shall sufficiently disclose risks regarding securities transaction to new customers, and cause new customers to execute the online and off-line risk disclosure form and others compliance documents that must be executed under the law based on the activities of securities transaction.
|
2.1.7
|
Authentication information matching service. At the beginning when Party B is building its channel service system, Party A shall provide Party B with the transaction authentication information matching service, so that Party A's access point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.1.8
|
Party A shall ensure the success rate of account opening service. If the success rate of Party A's online account opening is less than 10% [success rate of Party A's online account opening = number of accounts successfully opened at Party A upon request of Party B / (number of accounts to be opened at Party A upon request of Party B - number of accounts failed to be opened due to error in personal information provided by users or any other reason beyond the reasonable control of Party A)], for the purpose of protecting the experience of users and Party B's own brand, Party B may close the guidance entry to Party A's system, and stop providing the service to Party A. With respect to the assessment data mentioned above, Party A shall provide Party B with true, complete, timely and effective information.
|
2.1.9
|
Party A shall ensure the stability of transaction interface. If the success rate of Party A's transaction interface accessing is less than 95% [success rate of accessing to Party A's transaction interface = number of transactions successfully completed at Party A upon request of Party B / (number of transactions to be processed at Party A upon request of Party B - number of transactions failed to be processed due to error in personal information provided by users or any other reason beyond the reasonable control of Party A)], for the purpose of protecting the experience of users and Party B's own brand, Party B may close the guidance entry to Party A's system, and stop providing the service to Party A. With respect to the assessment data mentioned above, Party A shall provide Party B with true, complete, timely and effective information.
|
2.1.10
|
Party A shall regularly provide Party B with the display data of each page during the process of opening accounts at Party A. Both Parties will jointly analyze the data, and increase the success rate of opening users' accounts.
|
2.2
|
Rights and Obligations of Party B:
|
2.2.1
|
Technical Connection. Party B shall investigate barriers on the technical cooperation interface between both Parties 24 hours every day. If any barrier that would hinder any customer to place an instruction is found, Party B shall promptly contact with Party A's designated persons to eliminate the barrier. Where the barrier cannot be eliminated during the non-transaction time, Party B must give a public announcement to all customers, so as to avoid damages or losses to customers.
|
2.2.2
|
Guaranteed Link. Party B shall coordinate with Party B's Websites to launch the service agreed herein, provide the links to Party A's account opening, transaction and inquiry service for the New Customers registered at Party B's Websites, and ensure the stability of the link.
|
2.2.3
|
Guaranteeing Online Transaction Channel. Party B shall provide sufficient technical measures to guarantee that the investors with newly opened accounts may access to their transaction account at Party to invest stocks and give instruction of fund payment through Party A's link via Party B's website during the transaction period. Where any investor's transaction instruction cannot be placed successfully due to any technical issue, Party B shall provide the technical failure elimination service 24 hours every day.
|
2.2.4
|
Secondary Development Technical Support. Based on the cooperation hereunder, if Party A requests Party B to make any technical improvement or fix any security bug, Party B shall actively cooperate with Party A.
|
2.2.5
|
Technical Security Protection. Party B shall use commercial reasonable efforts to ensure the secure and stable operation of its channel service system, guarantee the continuity and reliability of system business, and prevent unauthorized access to the system, including but not limited to use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system.
|
2.2.6
|
Local Compliance. The channel service used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection.
|
2.2.7
|
Regular Assessment. Party B shall regularly assess the status of information resources at Party B's platform system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of its services.
|
2.2.8
|
The channel service used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection. The physical site deploying Party B's platform shall comply with Party A's requirements for building information system.
|
2.2.9
|
Party B's platform shall conduct strict virus scan and Trojan check, and ensure that it will cause any damage to Party A's business system.
|
2.2.10
|
Party B shall conduct internal testing on the Front-end System after the system is developed and issue a testing report, and deliver the system to Party A for conducting a user experience testing before the system is officially launched. After it is confirmed by Party A, the system may be officially launched.
|
3
|
CONFIDENTIALITY
|
3.1
|
Content and Scope of Confidentiality.
|
3.1.1
|
Content and scope of confidentiality obligation to be complied with by each Party shall include all information and data received by either Party ("Receiving Party") from the other Party ("Disclosing Party") in writing, orally or by any other means, which are developed, created, discovered or known by the Disclosing Party, or transferred to the Disclosing Party, commercially valuable to the Disclosing Party’s business, non-public, confidential or relating to such Disclosing Party or the cooperation between both Parties hereunder ("Confidential Information").
|
3.1.2
|
The "Confidential Information" referred to herein shall include but not limited to trade secret, computer program, design technology, proprietary technology, processes, data, business and product development plan, customer information and other information relating to the business of such Disclosing Party, and any non-public confidential information received by such Disclosing Party from any third party.
|
3.1.3
|
For the purpose of this Agreement, "Confidential Information" shall exclude:
|
3.1.3.1
|
Any information has become public, not due to disclosure by the Receiving Party;
|
3.1.3.2
|
Any information made public with the approval of the Disclosing Party or its authorized representative;
|
3.1.3.3
|
Any information independently developed by the Receiving Party without direct or indirect utilization of the "Confidential Information" of the Disclosing Party;
|
3.1.3.4
|
Any information has been properly and lawfully owned by the Receiving Party prior to the disclosure thereof.
|
3.2
|
Confidentiality Obligation of Both Parties
|
3.2.1
|
Both Parties hereby undertake that the content and scope of confidentiality obligation specified in Article 4.1 shall be binding upon both Parties during the term of this Agreement and within two years upon expiration or termination of this Agreement.
|
3.2.2
|
Unless it is otherwise required by the law, neither Party may disclose any Confidential Information to any third party in whatever forms for any purpose other than for performance of this Contract, other than the Confidential Information disclosed by the Receiving Party before or after the start of business cooperation hereunder as required by the court, arbitration tribunal, securities exchange, securities depository and clearing house, trade association or any other judicial, administrative or regulatory authority, or self-regulatory organization, or as required by laws, regulations, administrative rules or other regulatory provisions.
|
3.2.3
|
During the performance of this Agreement, if either Party has to make public any information regarding the rights or obligations of the other Party, it shall give a prior notice to the other Party and obtain the written notice of the other Party, unless it is otherwise required by the laws or it is not practically feasible.
|
3.2.4
|
Both Parties agree to take all reasonable steps to procure their employees that have directly accessed to the Confidential Information will not disclose or disseminate any Confidential Information in violation of this Agreement.
|
4
|
FORCE MAJEURE
|
4.1
|
After this Agreement is entered into, if either Party fails to perform all or part of its obligations hereunder due to any unforeseeable, inevitable or uncontrollable event (i.e. event of force majeure), such as fire, drought, typhoon, blizzard, earthquake, war, turmoil, strike, emergent event of public health, power or communication failure, system failure, equipment failure, network hacker attack, any accident in securities exchange or securities depository and clearing house, or change to any policy or regulation, its liabilities for breach of contract may be released wholly or partly to the extent of the effect caused by the force majeure.
|
4.2
|
The Party affected by the force majeure shall notify the other Party of the occurrence of force majeure and the effect thereof, and within a reasonable period, provide the other Party with a written certificate of such event issued by the relevant authority.
|
5
|
SETTLEMENT OF DISPUTE AND ALLOCATION OF LIABILITIES
|
5.1
|
If Party A has sufficient evidence to prove that there is a material bug in Party B's system and failure to discontinue the channel service would cause irreparable losses to the users, Party A shall immediately notify Party B to upgrade the system and back up data. If Party A fails to perform its obligation of notification and discontinue the channel service and thus cause the users of the channel service to suffer losses in transaction or fund, Party A shall be liable for such losses, and indemnify Party B against all damages and losses resulting therefrom. If both Parties have any dispute about the business hereunder and the securities regulatory authority or any other government agency demands to discontinue the channel service, both Parties shall immediately negotiate to find a solution. Party B shall provide customer service and appease the customers, and terminate the channel service within the time period prescribed by the regulatory authority. In that case, Party A is not liable for the losses of customers suffered in transaction and fund, or Party B's losses.
|
5.2
|
Any dispute with any customer or damages arising from the guidance or channel service provided by Party B hereunder shall be settled and assumed by Party B. If necessary, Party A shall actively assist Party B in settling the dispute, and provide relevant information as required. Where any customer has any dispute or damages arising from any transaction instruction given via Party B's channel service, the Party owns the relevant system shall be liable for the losses. If either Party has advanced the damages to the customer, it may recover the damages from other Party.
|
5.3
|
If any New Customer or any user who purchases Party A's any other product or service based on the service received hereunder and has registered with Party B's Websites ("Other User") files an action against either Party as defendant due to such dispute, the other Party shall actively provide assistance in providing the relevant evidence as required.
|
5.4
|
Without the prior written approval of either Party, neither Party may use the name nor product of the other Party's company to carry out any activity not expressly indicated herein; otherwise, the non-breaching party may at any time terminate this Agreement without assuming any liabilitynor claiming damages against the other Party.
|
6
|
DEFAULT AND LIABILITIES
|
6.1
|
Default. Any of the following events constitutes a default hereunder:
|
6.1.1
|
Either Party substantially violates any provision hereof, or fails to perform any obligation hereunder in any substantial aspect, and fails to make remedy within 10 days upon receiving a written notice for remedy from the other Party; or
|
6.1.2
|
Any undertaking, representation or warranty made by either Party hereunder is proven false or misleading.
|
6.2
|
Default Liabilities. If either Party defaults under this Agreement, it shall indemnify the other Party against any and all damages and losses resulting from the default, other than indirect damages. The non-breaching party may also unilaterally terminate this Agreement without any liability.
|
6.3
|
If either Party intends to terminate this Agreement according to any law, regulation, or opinion of the regulatory authority, it shall provide a hard copy of the law or regulation, or opinion of the regulatory authority. If both Parties terminate this Agreement according to this provision, neither Party shall be subject to the default liabilities.
|
7
|
MISCELLANEOUS
|
7.1
|
The execution, validity, interpretation, performance as well as dispute settlement of or in connection with this Agreement shall be governed by the applicable laws of the People’s Republic of China (excluding Hong Kong SAR, Macao SAR and Taiwan). Any amendment to this Agreement or any issue absent hereof shall be settled by both Parties through friendly consultation.
|
7.2
|
With respect to any issue absent hereof, both Parties will enter into a supplemental agreement based on the business advances and needs of both Parties and based on the principle of beneficial for furthering cooperation. The provisions regarding additional fee and other matters set forth in the supplementary agreement shall prevail. Invalidity of any provision hereof will not affect the validity of the remaining provisions of this Agreement, and the remaining provisions shall remain full force and effect.
|
7.3
|
Any dispute arising from or in connection with this Agreement shall be settled by both Parties through friendly consultation at first. If no settlement can be reached through consultation, either Party may file an action tothe competent people's court where the plainiff resides.
|
7.4
|
All issues relating to this Agreement shall be settled by both Parties based on the principles of equality and reciprocity, and through friendly consultation.
|
7.5
|
This Agreement is made and executed in two counterparties, one for each Party. This Agreement shall become effective as of being duly signed by the legal representatives or authorized representatives of both Parties and affixed with the official seal of both Parties, and shall remain full force and effect until it is confirmed by both Parties in writing to terminate this Agreement or either Party unilaterally terminates this Agreement according to any provision hereof.
|
Party A: | Party B: | ||
(Official Seal) | (Official Seal) | ||
Legal Representative or Authorized Representative (Signature): ____________
|
|||
Legal Representative or Authorized Representative (Signature): ____________
|
|||
Date: ______ | Date: ______ |
1
|
SCOPE AND CONTENT OF COOPERATION
|
1.1
|
Guiding Customers: On Party B's Website, Party B will embed a link to Party A's online account opening system and guide customers to open securities account (including but not limited to stock account, wealth management account and fund account) with Party A.
|
1.2
|
Securities Transaction Interfacing Cooperation: After the identity of users (or investors) at Party B's Website are verified by Party B, Party B will bind the verified accounts of users with their own accounts opened with Party A. After the accounts are bound, customers may access Party A's securities transaction system via the order system on Party B's Website to transact securities and purchase Party A's wealth management and service products ("Channel Service").
|
2
|
TERMS AND CONDITIONS OF BUSINESS COOPERATION
|
2.1
|
Party A's Rights and Obligations:
|
2.1.1
|
Support for Application of Authorization. Party A shall assist Party B in deploying the production system, testing and debugging the network connection and applying for authorization, etc.
|
2.1.2
|
Technical Connection. Party A shall appoint certain special persons to promptly eliminate technical failure in case of any failure in the technical interface between both Parties. Party A shall expressly notify Party B of the proper access to transactions and countermeasures to accidents, as well as Party A's contact information etc.
|
2.1.3
|
Provision of Service to New Customers. The new customers referred herein shall mean the customers opening securities transaction account on Party A`s online account opening system, who is guided via Party B`s Website or other websites affiliating or cooperating with China Finance Online Co., Ltd or due to any hint on such websites. Party A shall provide standardized customer service on securities to the customers guided by Party B.
|
2.1.4
|
The Principle on Cooperative Interests Distribution. Party B shall be responsible for the customer marketing and guide customer flow. It shall guide customers through Party B`s Website or the marketing, promotion, guidance, links on the website channel of other affiliates or cooperative parties, and finally lead them to Party A`s online opening system to successfully open securities accounts. Such customers shall be defined as "Customers guided by Glory". Party A shall pay consulting service fee to Party B corresponding to the business incurred by the customers guided by Guosheng Rongyuan, the payment standard of which shall be carried out as agreed by the Parties.
|
2.1.5
|
Provision of Customer Service Plan. Party A shall provide Party B with the technical development support for accessing to transactions at domestic securities exchange, and after the identity of customers has been verified and customer account has been bound by Party B, allow customer to access to Party A's securities transaction system for securities transaction via Party B's order system. The customer service problems related to opening account, transactions in Party A`s transaction system shall be borne and handled by Party A. In order to optimize customer service, Party A shall provide Party B with the library of service problems, so that new customers may immediately search and inquire about relevant problems online. In addition, Party A shall provide each customer with a unique service number and customer service specialist support, so that the customers may consult on relevant services by telephone, including but not limited to guidance for account opening and online operation. Where an event is designed and initiated by Party B, Party B shall provide consulting service to the customers.
|
2.1.6
|
Obligation of Risk Disclosure. Party A shall sufficiently disclose risks regarding securities transaction to new customers, and cause new customers to execute the online and off-line risk disclosure form and others compliance documents that must be executed under the law based on the activities of securities transaction.
|
2.1.7
|
Authentication information matching service. At the beginning when Party B is building its channel service system, Party A shall provide Party B with the transaction authentication information matching service, so that Party A's assess point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2
|
Rights and Obligations of Party B:
|
2.2.1
|
Technical Connection. Party B shall investigate barriers on the technical cooperation interface between both Parties 24 hours every day. If any barrier that would hinder any customer to place an instruction is found, Party B shall promptly contact with Party A's designated persons to eliminate the barrier. Where the barrier cannot be eliminated during the non-transaction time, Party B must give a public announcement to all customers, so as to avoid damages or losses to customers.
|
2.2.2
|
Guidance to Open Accounts. Party B shall coordinate its website to launch the Channel Service required hereunder, and shall guide the new customers registered on Party B`s Website to open account via Party A's online account opening system.
|
2.2.3
|
Guaranteeing Online Transaction Channel. Party B shall provide sufficient technologies to guarantee that investors with newly opened accounts may access to their transaction account opened with Party A during the transaction time via the designated web page on Party B`s Website to transact stock investment and place fund instructions. Where any investor's transaction instruction cannot be placed successfully due to any technical issue, Party B shall provide the technical failure elimination service 24 hours*7 days.
|
2.2.4
|
Secondary Development Technical Support. Based on the cooperation hereunder, if Party A requests Party B to make any technical improvement or fix any security bug, Party B shall actively cooperate with Party A.
|
2.2.5
|
Business Promotion. The Parties confirm that the channel platform of the current online transactions shall be Prty B`s Website. Party B shall actively promote this cooperative business so that the users can gradually connect the online transaction channel via multiple platforms and realize the securities transactions and online purchase of other products of Party A.
|
2.2.6
|
Technical Security Protection. Party B shall use commercial reasonable efforts to ensure the secure and stable operation of its channel service system, guarantee the continuity and reliability of system business, and prevent unauthorized access to the system, including but not limited to use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system.
|
2.2.7
|
Local Compliance. The channel service used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection.
|
2.2.8
|
Regular Assessment. Party B shall regularly assess the status of information resources at Party B's channel service system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of its services.
|
2.2.9
|
Party B shall ensure the confidentiality, integrity and service availability of the information on Party B's order system through technical measures and management means.
|
2.2.10
|
Party B shall use reasonable efforts to ensure the secure and stable operation of its system, guarantee the continuity and reliability of transaction system business, and prevent unauthorized access to the system, including but not limited to Party B`s use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system.
|
2.2.11
|
The order system used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection. The physical site deploying Party B's order system shall comply with Party A's requirements for building information system.
|
2.2.12
|
Party B's order system shall provide sufficient identification information, so that Party A's assess point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2.13
|
Party B's order system shall conduct strict virus scan and Trojan check, and ensure that it will cause any damage to Party A's business system.
|
2.2.14
|
Party B shall regularly assess the status of information resources at Party B's platform system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of the securities services.
|
2.2.15
|
With respect to the order system testing, Party B shall submit a detailed testing report to Party A for verification and confirmation.
|
3
|
CONFIDENTIALITY
|
3.1
|
Content and Scope of Confidentiality.
|
3.1.1
|
Content and scope of confidentiality obligation to be complied with by each Party shall include all information and data received by either Party ("Receiving Party") from the other Party ("Disclosing Party") in writing or orally, which are developed, created, discovered or known by the Disclosing Party, or transfered to the Disclosing Party, commercially valuable such the Disclosing Party`s business, non-public, confidential or relating to the Disclosing Party or the cooperation between both Parties hereunder ("Confidential Information").
|
3.1.2
|
The "Confidential Information" referred to herein shall include but not limited to trade secret, computer program, design technology, proprietary technology, processes, data, business and product development plan, customer information and other information relating to the business of such Disclosing Party, and any non-public confidential information related to the Disclosing Party received by such Disclosing Party from any third party.
|
3.1.3
|
For the purpose of this Agreement, "Confidential Information" shall exclude:
|
3.1.3.1
|
Any information has become public, not due to disclosure by the Receiving Party;
|
3.1.3.2
|
Any information made public with the approval of the Disclosing Party or its authorized representative;
|
3.1.3.3
|
Any information independently developed by the Receiving Party without direct or indirect utilization of the "Confidential Information" of the Disclosing Party;
|
3.1.3.4
|
Any information has been properly and lawfully owned by the Receiving Party prior to the disclosure thereof.
|
3.2
|
Confidentiality Obligation of Both Parties
|
3.2.1
|
Both Parties hereby undertake that the content and scope of confidentiality obligation specified in Article 3.1 shall be binding upon both Parties during the term of this Agreement and within two years upon expiration or termination of this Agreement.
|
3.2.2
|
Unless it is otherwise required by the law, neither Party may disclose any Confidential Information to any third party in whatever forms for any purpose other than for performance of this Contract, other than the Confidential Information disclosed by the Receiving Party before or after the start of business cooperation hereunder as required by the court, arbitration tribunal, securities exchange, trade association or any other judicial, administrative or regulatory authority, or self-regulatory organization, or as required by laws, regulations, administrative rules or other regulatory provisions.
|
3.2.3
|
During the performance of this Agreement, if either Party has to make public any information regarding the rights or obligations of the other Party, it shall give a prior notice to the other Party and obtain the written notice of the other Party, unless it is otherwise required by the laws or it is not practically feasible.
|
3.2.4
|
Both Parties agree to take all reasonable steps to procure their employees that have directly accessed to the Confidential Information will not disclose or disseminate any Confidential Information in violation of this Agreement.
|
4
|
FORCE MAJEURE
|
4.1
|
After this Agreement is entered into, if either Party fails to perform all or part of its obligations hereunder due to any unforeseeable, inevitable or uncontrollable event (i.e. event of force majeure), such as fire, drought, typhoon, blizzard, earthquake, war or change to any policy or regulation, its liabilities for breach of contract may be released wholly or partly to the extent of the effect caused by the force majeure.
|
4.2
|
The Party affected by the force majeure shall notify the other Party of the occurrence of force majeure and the effect thereof, and within a reasonable period, provide the other Party with a written certificate of such event issued by the relevant authority.
|
5
|
SETTLEMENT OF DISPUTE AND ASSUMPTION OF LIABILITIES
|
5.1
|
Any dispute with any customer with newly opened account or registered at Party B`s Website and purchased other products or service of Party A by using the service agreed herein ("other users"), or damages arising from the channel service provided by Party B hereunder shall be settled and assumed by Party B. Party A shall actively assist Party B in settling the dispute, and provide relevant information as required. Party A shall legally bear the liabilities corresponding to its misconduct, if any. Party B shall only be responsible for customer`s loss incurred due to Party B`s fault when the customer has not accessed to the transaction interface of Party A. The disputes and losses caused due to the transaction instructions placed by the customer through Party B`s channel service shall be borne by Party A.
|
5.2
|
If any customer with newly opened account or registered at Party B`s Website and purchased other products or service of Party A by using the service agreed herein ("other users") files an action against Party B as defendant due to such claim, Party A shall actively assist Party B in providing the relevant evidence.
|
6
|
DEFAULT AND LIABILITIES
|
6.1
|
Default. Any of the following events constitutes a default hereunder:
|
6.1.1
|
Either Party substantially violates any provision hereof, or fails to perform any obligation hereunder in any substantial aspect, and fails to make remedy within 10 days upon receiving a written notice for remedy from the other Party; or
|
6.1.2
|
Any undertaking, representation or warranty made by either Party hereunder is proven false or misleading.
|
6.2
|
Default Liabilities. If either Party defaults under this Agreement, it shall indemnify the other Party against any and all damages and losses resulting from the default, other than indirect damages. The non-default Party may also unilaterally terminate this Agreement without any liability.
|
6.3
|
If either Party intends to terminate this Agreement according to any law, regulation, or opinion of the regulatory authority, it shall provide a hard copy of the law or regulation, or opinion of the regulatory authority. If both Parties terminate this Agreement according to this provision, neither Party shall be subject to the default liabilities.
|
7
|
MISCELLANEOUS
|
7.1
|
The execution, validity, interpretation, performance as well as dispute settlement of or in connection with this Agreement shall be governed by the applicable laws of the People’s Republic of China (excluding Hong Kong SAR, Macao SAR and Taiwan). Any amendment to this Agreement or any issue absent hereof shall be settled by both Parties through friendly negotiation.
|
7.2
|
Any dispute arising from or in connection with this Agreement shall be settled by both Parties through friendly negotiation at first. Where such negotiation fails, any party shall be entitled to file an action at the competent People`s court where the defendant is located.
|
7.3
|
Both Parties hereby acknowledge that performance of this Agreement and realization of the objectives contemplated herein are based on trust and mutual collaboration between both Parties. Both Parties further acknowledge that, unless it is otherwise agreed herein, neither Party may assign all or part of its rights or obligations hereunder to any third party without the prior approval of the other Party.
|
7.4
|
All issues relating to this Agreement shall be settled by both Parties based on the principles of equality and reciprocity, and through friendly negotiation.
|
7.5
|
his Agreement shall be made in four (4) originals, two (2) for each party hereto. This Agreement shall become effective as of being duly signed by the legal representatives or authorized representatives of both Parties and affixed with the official seal of both Parties, and shall remain full force and effect for three years.
|
Party A: Greatwall Securities Co., Ltd
|
Party B: Beijing Glory Technology Co., Ltd
|
Authorized Representative:
|
Authorized Representative:
|
Seal:
|
Seal:
|
Date: _________
|
Date: _________
|
1
|
SCOPE AND CONTENT OF COOPERATION
|
1.1
|
Guiding Customers: On Party B's Platform, Party B will embed a link to Party A's online account opening system. Party B shall guide customers to open securities account (including but not limited to stock account, wealth management account and fund account) via Party A's online account opening system.
|
1.2
|
Securities Transaction Interfacing Cooperation: After the identity of users (or investors) at Party B's Platform are verified by Party B, Party B will bind the verified accounts of users with their own accounts opened with Party A. After the accounts are bound, users may access Party A's securities transaction system via Party B's order system to transact securities and purchase Party A's wealth management and service products ("
Channel Service
").
|
2
|
TERMS AND CONDITIONS OF BUSINESS COOPERATION
|
2.1
|
Party A's Rights and Obligations:
|
2.1.1
|
Support for Application of Authorization. Party A shall assist Party B in deploying the production system, testing and debugging the network connection and applying for authorization, etc.
|
2.1.2
|
Technical Connection. Party A shall appoint certain special persons to promptly eliminate technical failure in case of any failure in the technical interface between both Parties. Party A shall expressly notify Party B of the proper access to transactions and countermeasures to accidents, as well as Party A's contact information etc.
|
2.1.3
|
Provision of Service to New Customers. The "New Customer" referred to herein shall mean any customer guided to open a securities account on Party A's online account opening system, with the guidance or instruction from www.jrj.com. Party A shall provide the services to new customers to the extent of Party A's business scope. Party A may decide whether to accept the application of a new customer for opening account and financial transaction in accordance with the laws and regulations, as well as the requirements of organs, among other things, regulatory authority, depository and stock exchange.
|
2.1.4
|
Party B shall provide technical services and guide customer flow.
|
2.1.5
|
Provision of Customer Service Plan. Party A shall provide Party B with the technical development support for accessing to transactions at domestic securities exchange, and after the identity of customers has been verified and customer account has been bound by Party B, allow customer to access to Party A's securities transaction system for securities transaction via Party B's order system. Party A shall solve all problems in the customer service caused by Party A, and Party B shall provide necessary assistance. In order to optimize customer service, Party A shall provide Party B with the library of service problems, so that new customers may immediately search and inquire about relevant problems online. In addition, Party A shall provide each customer with a unique service number and customer service specialist support, so that the customers may consult on relevant services by telephone, including but not limited to guidance for account opening and online operation. Where an event is designed and initiated by Party B, Party B shall provide consulting service to the customers.
|
2.1.6
|
Obligation of Risk Disclosure. Party A shall sufficiently disclose risks regarding securities transaction to new customers, and cause new customers to execute the online and off-line risk disclosure form and others compliance documents that must be executed under the law based on the activities of securities transaction.
|
2.1.7
|
Authentication information matching service. At the beginning when Party B is building its channel service system, Party A shall provide Party B with the transaction authentication information matching service, so that Party A's accessing point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2
|
Rights and Obligations of Party B:
|
2.2.1
|
Technical Connection. Party B shall investigate barriers on the technical cooperation interface between both Parties 24 hours every day. If any barrier that would hinder any customer to place an instruction is found, Party B shall promptly contact with Party A's designated persons to eliminate the barrier. Where the barrier cannot be eliminated during the non-transaction time, Party B must give a public announcement to all customers, so as to avoid damages or losses to customers.
|
2.2.2
|
Guidance to Open Accounts. Party B shall ensure that its platform has launched the Channel Service required hereunder, and shall guide the users to browse or log in www.jrj.com to open account via Party A's online account opening system.
|
2.2.3
|
Guaranteeing Online Transaction Channel. Party B shall provide sufficient technologies and resources to guarantee the normal promotion and operation of Party B's platform at www.jrj.com, so that investors with newly opened accounts may access to Party A's securities transaction system to transact securities, place fund instructions and carry out other operations via the web page designated on www.jrj.com during the transaction time. Where any investor's transaction instruction cannot be placed successfully due to any technical issue, Party B shall provide the technical failure elimination service 24 hours every day.
|
2.2.4
|
Secondary Development Technical Support. Based on the cooperation hereunder, if Party A requests Party B to make any technical improvement or fix any security bug, Party B shall actively cooperate with Party A.
|
2.2.5
|
Business Promotion. Both Parties hereby confirm that the business platform hereunder is "Securities Master" on www.jrj.com. Party B shall actively promote the business, so that users may gradually access to Party A's securities transaction system via multiple platforms to transact securities and purchase other products supplied by Party A.
|
2.2.6
|
Technical Security Protection. Party B shall use commercial reasonable efforts to ensure the secure and stable operation of its channel service system, guarantee the continuity and reliability of system business, and prevent unauthorized access to the system, including but not limited to use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system. Party B shall indemnify Party A and Party A's customers from all property damages, losses and other expenses arising from Party A's default in or failure to fulfill its technical security protection obligation hereunder.
|
2.2.7
|
Local Compliance. The channel service used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection.
|
2.2.8
|
Regular Assessment. Party B shall regularly assess the status of information resources at Party B's platform system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of its services.
|
2.2.9
|
Party B shall ensure the confidentiality, integrity and service availability of the information on Party B's platform through technical measures and management means.
|
2.2.10
|
Party B's platform shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection. The physical site deploying Party B's platform shall comply with Party A's requirements for building information system.
|
2.2.11
|
Party B's platform shall provide sufficient identification information, so that Party A's accessing point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2.12
|
Party B's platform shall conduct strict virus scan and Trojan check, and ensure that it will cause any damage to Party A's business system. Party B shall indemnify Party A from all damages, losses and expenses arising from any damage to Party A's business system due to Party B's reason.
|
2.2.13
|
With respect to the platform testing, Party B shall submit a detailed testing report to Party A for verification and confirmation.
|
2.2.14
|
Party B shall have the competence and qualification required for performance of its obligations hereunder. In case of any change to its competence or qualification, Party B shall immediately notify Party A. If any change to Party B's competence or qualification causes any damages to Party A or any third party, Party B shall be fully liable for the damages and indemnify Party A against all direct damages and losses resulting therefrom.
|
2.2.15
|
Party B hereby undertakes that, during the term of this Agreement, its performance of obligations hereunder will not violate any applicable law, regulation, policy or rule of any government authority, or infringe upon any legitimate right or interest of any third party (including but not limited to intellectual property right or right of reputation). If Party B's platform, www.jrj.com or any other platform or website affiliated to or cooperated with Party B contains any illegal or infringing information, or infringes upon any legitimate right or interest of any third party (including but not limited to intellectual property right or right of reputation), all legal liabilities resulting therefrom shall be borne by Party B. Party B shall indemnify Party A against all damages, losses and liabilities from Party B's violation of any representation mentioned above.
|
2.2.16
|
Party B hereby undertakes that it has not and will not commit any direct or indirect commercial bribery, or give, offer to give or authorize to give any cash, loan, gift or any other valuable thing, or commit any act in violation of any law or regulation, or constitutes or would constitute unfair competition, when it is providing the service hereunder.
|
3
|
CONFIDENTIALITY
|
3.1
|
Content and Scope of Confidentiality.
|
3.1.1
|
Content and scope of confidentiality obligation to be complied with by each Party shall include all information and data received by either Party ("Receiving Party") from the other Party ("Disclosing Party") in writing, orally or by any other means, which are developed, created, discovered or known by the Disclosing Party, or transferred to the Disclosing Party, non-public, confidential or relating to the Disclosing Party or the cooperation between both Parties hereunder ("Confidential Information").
|
3.1.2
|
The "Confidential Information" referred to herein shall include but not limited to trade secret, computer program, design technology, proprietary technology, processes, data, business and product development plan, customer information and other information relating to the business of the Disclosing Party, and any non-public confidential information received by the Disclosing Party from any third party.
|
3.1.3
|
For the purpose of this Agreement, "Confidential Information" shall exclude:
|
3.1.3.1
|
Any information has become public, not due to disclosure by the Receiving Party;
|
3.1.3.2
|
Any information made public with the approval of the Disclosing Party or its authorized representative;
|
3.1.3.3
|
Any information independently developed by the Receiving Party without direct or indirect utilization of the "Confidential Information" of the Disclosing Party;
|
3.1.3.4
|
Any information has been properly and lawfully owned by the Receiving Party prior to the disclosure thereof.
|
3.2
|
Confidentiality Obligation of Both Parties
|
3.2.1
|
Both Parties hereby undertake that the content and scope of confidentiality obligation specified in Article 3.1 shall be binding upon both Parties during the term of this Agreement and within two years upon expiration or termination of this Agreement.
|
3.2.2
|
Unless it is otherwise required by the law, neither Party may disclose any Confidential Information to any third party in whatever forms for any purpose other than for performance of this Contract, other than the Confidential Information disclosed by the Receiving Party before or after the start of business cooperation hereunder as required by the court, arbitration tribunal, securities exchange, securities depository and clearing house, trade association or any other judicial, administrative or regulatory authority, or self-regulatory organization, or as required by laws, regulations, administrative rules or other regulatory provisions.
|
3.2.3
|
During the performance of this Agreement, if either Party has to make public any information regarding the rights or obligations of the other Party, it shall give a prior notice to the other Party and obtain the written notice of the other Party, unless it is otherwise required by the laws or it is not practically feasible.
|
3.2.4
|
Both Parties agree to take all reasonable steps to procure their employees that have directly accessed to the Confidential Information will not disclose or disseminate any Confidential Information in violation of this Agreement.
|
4
|
FORCE MAJEURE
|
4.1
|
After this Agreement is entered into, if either Party fails to perform all or part of its obligations hereunder due to any unforeseeable, inevitable or uncontrollable event (i.e. event of force majeure), such as fire, drought, typhoon, blizzard, earthquake, war, turmoil, strike, emergent event of public health, power or communication failure, system failure, equipment failure, network hacker attack, any accident in securities exchange or securities depository and clearing house, or change to any policy or regulation, its liabilities for breach of contract may be released wholly or partly to the extent of the effect caused by the force majeure.
|
4.2
|
The Party affected by the force majeure shall notify the other Party of the occurrence of force majeure and the effect thereof, and within a reasonable period, provide the other Party with a written certificate of such event issued by the relevant authority.
|
5
|
SETTLEMENT OF DISPUTE AND ASSUMPTIONOF LIABILITIES
|
5.1
|
Any dispute with any customer or damages arising from the guidance or channel service provided by Party B hereunder shall be settled and assumed by Party B. If necessary, Party A shall actively assist Party B in settling the dispute, and provide relevant information as required. If Party B is at fault, it shall be subject to the liabilities according to law.
|
5.2
|
If any customer files an action against Party B as defendant due to such claim, Party A shall actively assist Party B in providing the relevant evidence as required.
|
6
|
DEFAULT AND LIABILITIES
|
6.1
|
Default. Any of the following events constitutes a default hereunder:
|
6.1.1
|
Either Party substantially violates any provision hereof, or fails to perform any obligation hereunder in any substantial aspect, and fails to make remedy within 10 days upon receiving a written notice for remedy from the other Party; or
|
6.1.2
|
Any undertaking, representation or warranty made by either Party hereunder is proven false or misleading.
|
6.2
|
Default Liabilities. If either Party defaults under this Agreement, it shall indemnify the other Party against any and all damages and losses resulting from the default, other than indirect damages. The non-breaching party may also unilaterally terminate this Agreement without any liability. The non-breaching party may demand the breaching party to indemnify the non-breaching party against all losses and expenses resulting from the default (including but not limited to damages, court costs and attorney's fees).
|
6.3
|
If either Party intends to terminate this Agreement according to any law, regulation, or opinion of the regulatory authority, it shall provide a hard copy of the law or regulation, or written opinion of the regulatory authority. If both Parties terminate this Agreement according to this provision, neither Party shall be subject to the default liabilities.
|
7
|
MISCELLANEOUS
|
7.1
|
Each Party further undertakes that:
|
7.2
|
The execution, validity, interpretation, performance as well as dispute settlement of or in connection with this Agreement shall be governed by the applicable laws of the People’s Republic of China (excluding Hong Kong SAR, Macao SAR and Taiwan). Any amendment to this Agreement or any issue absent hereof shall be settled by both Parties through friendly negotiation.
|
7.3
|
Any dispute arising from or in connection with this Agreement shall be settled by both Parties through friendly negotiation at first. If no settlement can be reached, either Party may submit the dispute to the China International Economic and Trade Arbitration Commission (CIETAC) for arbitration in Beijing. Both Parties agree that the ordinary arbitration procedure shall be applied, and the tribunal shall be composed of three arbitrators. The arbitral award shall be final and binding on both Parties.
|
7.4
|
Both Parties hereby acknowledge that performance of this Agreement and realization of the objectives contemplated herein are based on trust and mutual collaboration between both Parties. Both Parties further acknowledge that, unless it is otherwise agreed herein, neither Party may assign all or part of its rights or obligations hereunder to any third party without the prior approval of the other Party.
|
7.5
|
All issues relating to this Agreement shall be settled by both Parties based on the principles of equality and reciprocity, and through friendly negotiation.
|
7.6
|
This Agreement shall be made in four (4) originals, two (2) for each party hereto, all of which shall be of same authenticity. This Agreement shall become effective as of being duly signed by the legal representatives or authorized representatives of both Parties and affixed with the official seal of both Parties, and shall remain full force and effect until it is confirmed by both Parties in writing to terminate this Agreement or either Party unilaterally terminates this Agreement according to any provision hereof.
|
Party A: China International Capital Co. Ltd
|
Party B: Beijing Glory Technology Co., Ltd
|
Authorized Representative:
|
Authorized Representative:
|
Seal:
|
Seal:
|
Date: _________, 2014
|
Date: _________, 2014
|
1
|
SCOPE AND CONTENT OF COOPERATION
|
1.1
|
Guiding Customers: On Party B's Website, Party B will embed a link to Party A's online account opening system and guide customers to open securities account (including but not limited to stock account, wealth management account and fund account) with Party A.
|
1.2
|
Securities Transaction Interfacing Cooperation: After the identity of users (or investors) at Party B's Website are verified by Party B, Party B will bind the verified accounts of users with their own accounts opened with Party A. After the accounts are bound, customers may access Party A's securities transaction system via the order system on Party B's Website to transact securities and purchase Party A's wealth management and service products ("Channel Service").
|
2
|
TERMS AND CONDITIONS OF BUSINESS COOPERATION
|
2.1
|
Party A's Rights and Obligations:
|
2.1.1
|
Support for Application of Authorization. Party A shall assist Party B in deploying the production system, testing and debugging the network connection and applying for authorization, etc.
|
2.1.2
|
Technical Connection. Party A shall appoint certain special persons to promptly eliminate technical failure in case of any failure in the technical interface between both Parties. Party A shall expressly notify Party B of the proper access to transactions and countermeasures to accidents, as well as Party A's contact information etc.
|
2.1.3
|
Provision of Service to New Customers. The new customers referred herein shall mean the customers opening securities transaction account on Party A`s online account opening system, who is guided via Party B`s Website or other websites affiliating or cooperating with China Finance Online Co., Ltd or due to any hint on such websites. Party A shall provide standardized customer service on securities to the customers guided by Party B.
|
2.1.5
|
Provision of Customer Service Plan. Party A shall provide Party B with the technical development support for accessing to transactions at domestic securities exchange, and after the identity of customers has been verified and customer account has been bound by Party B, allow customer to access to Party A's securities transaction system for securities transaction via Party B's order system. The customer service problems related to opening account, transactions in Party A`s transaction system shall be borne and handled by Party A. In order to optimize customer service, Party A shall provide Party B with the library of service problems, so that new customers may immediately search and inquire about relevant problems online. In addition, Party A shall provide each customer with a unique service number and customer service specialist support, so that the customers may consult on relevant services by telephone, including but not limited to guidance for account opening and online operation. Where an event is designed and initiated by Party B, Party B shall provide consulting service to the customers.
|
2.1.6
|
Obligation of Risk Disclosure. Party A shall sufficiently disclose risks regarding securities transaction to new customers, and cause new customers to execute the online and off-line risk disclosure form and others compliance documents that must be executed under the law based on the activities of securities transaction.
|
2.1.7
|
Authentication information matching service. At the beginning when Party B is building its channel service system, Party A shall provide Party B with the transaction authentication information matching service, so that Party A's access point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2
|
Rights and Obligations of Party B:
|
2.2.1
|
Technical Connection. Party B shall investigate barriers on the technical cooperation interface between both Parties 24 hours*7days. If any barrier that would hinder any customer to place an instruction is found, Party B shall promptly contact with Party A's designated persons to eliminate the barrier. Where the barrier cannot be eliminated during the non-transaction time, Party B must give a public announcement to all customers, so as to avoid damages or losses to customers.
|
2.2.2
|
Guidance to Open Accounts. Party B shall coordinate its website to launch the Channel Service required hereunder, and shall guide the new customers registered on Party B`s Website to open account via Party A's online account opening system.
|
2.2.3
|
Guaranteeing Online Transaction Channel. Party B shall provide sufficient technologies to guarantee that investors with newly opened accounts may access to their transaction account opened with Party A during the transaction time via the designated web page on Party B`s Website to transact stock investment and place fund instructions. Where any investor's transaction instruction cannot be placed successfully due to any technical issue, Party B shall provide the technical failure elimination service 24 hours*7 days.
|
2.2.4
|
Secondary Development Technical Support. Based on the cooperation hereunder, if Party A requests Party B to make any technical improvement or fix any security bug, Party B shall actively cooperate with Party A.
|
2.2.5
|
Business Promotion. The Parties confirm that the channel platform of the current online transactions shall be Party B`s Website. Party B shall actively promote this cooperative business so that the users can gradually connect the online transaction channel via multiple platforms and realize the securities transactions and online purchase of other products of Party A.
|
2.2.6
|
Technical Security Protection. Party B shall use commercial reasonable efforts to ensure the secure and stable operation of its channel service system, guarantee the continuity and reliability of system business, and prevent unauthorized access to the system, including but not limited to use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system.
|
2.2.7
|
Local Compliance. The channel service used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection.
|
2.2.8
|
Regular Assessment. Party B shall regularly assess the status of information resources at Party B's channel service system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of its services.
|
2.2.9
|
Party B shall ensure the confidentiality, integrity and service availability of the information on Party B's order system through technical measures and management means.
|
2.2.10
|
Party B shall use reasonable efforts to ensure the secure and stable operation of its system, guarantee the continuity and reliability of transaction system business, and prevent unauthorized access to the system, including but not limited to Party B`s use of reasonable software and other measures to prevent virus or any other harmful code from entering into the system.
|
2.2.11
|
The order system used by Party B shall be deployed within the territory of the People's Republic of China, and shall satisfy the requirements of technical audit or regulatory authority for field inspection and the requirements of China judicial authority for investigation and evidence collection, and be approved by Party A. The physical site deploying the order system shall comply with Party A's requirements for building information system and shall be at the place designated by Party A. And Party A shall provide the public IP addresses and ports.
|
2.2.12
|
Party B's order system shall provide sufficient identification information, so that Party A's access point may conduct consistency verification for Party B's transaction system sending the connection request.
|
2.2.13
|
Party B's order system shall conduct strict virus scan and Trojan check, and ensure that it will cause any damage to Party A's business system.
|
2.2.14
|
Party B shall regularly assess the status of information resources at Party B's platform system, predict the demand of capacity based on the real-time monitoring information and predictable business development demand, ensure sufficient processing ability, storage capacity and communication bandwidth, satisfy the demand of business increase, and ensure high availability of the securities services.
|
2.2.15
|
With respect to the order system testing, Party B shall submit a detailed testing report to Party A for verification and confirmation.
|
3
|
CONFIDENTIALITY
|
3.1
|
Content and Scope of Confidentiality.
|
3.1.1
|
Content and scope of confidentiality obligation to be complied with by each Party shall include all information and data received by either Party ("Receiving Party") from the other Party ("Disclosing Party") in writing or orally, which are developed, created, discovered or known by the Disclosing Party, or transferred to the Disclosing Party, commercially valuable to the Disclosing Party`s business, non-public, confidential or relating to the Disclosing Party or the cooperation between both Parties hereunder ("Confidential Information").
|
3.1.2
|
The "Confidential Information" referred to herein shall include but not limited to trade secret, computer program, design technology, proprietary technology, processes, data, business and product development plan, customer information and other information relating to the business of such Disclosing Party, and any non-public confidential information related to such Disclosing Party received by the Disclosing Party from any third party.
|
3.1.3
|
For the purpose of this Agreement, "Confidential Information" shall exclude:
|
3.1.3.1
|
Any information has become public, not due to disclosure by the Receiving Party;
|
3.1.3.2
|
Any information made public with the approval of the Disclosing Party or its authorized representative;
|
3.1.3.3
|
Any information independently developed by the Receiving Party without direct or indirect utilization of the "Confidential Information" of the Disclosing Party;
|
3.1.3.4
|
Any information has been properly and lawfully owned by the Receiving Party prior to the disclosure thereof.
|
3.2
|
Confidentiality Obligation of Both Parties
|
3.2.1
|
Both Parties hereby undertake that the content and scope of confidentiality obligation specified in Article 3.1 shall be binding upon both Parties during the term of this Agreement and within two years upon expiration or termination of this Agreement.
|
3.2.2
|
Unless it is otherwise required by the law, neither Party may disclose any Confidential Information to any third party in whatever forms for any purpose other than for performance of this Contract, other than the Confidential Information disclosed by the Receiving Party before or after the start of business cooperation hereunder as required by the court, arbitration tribunal, securities exchange, trade association or any other judicial, administrative or regulatory authority, or self-regulatory organization, or as required by laws, regulations, administrative rules or other regulatory provisions.
|
3.2.3
|
During the performance of this Agreement, if either Party has to make public any information regarding the rights or obligations of the other Party, it shall give a prior notice to the other Party and obtain the written notice of the other Party, unless it is otherwise required by the laws or it is not practically feasible.
|
3.2.4
|
Both Parties agree to take all reasonable steps to procure their employees that have directly accessed to the Confidential Information will not disclose or disseminate any Confidential Information in violation of this Agreement.
|
4
|
FORCE MAJEURE
|
4.1
|
After this Agreement is entered into, if either Party fails to perform all or part of its obligations hereunder due to any unforeseeable, inevitable or uncontrollable event (i.e. event of force majeure), such as fire, drought, typhoon, blizzard, earthquake, war or change to any policy or regulation, its liabilities for breach of contract may be released wholly or partly to the extent of the effect caused by the force majeure.
|
4.2
|
The Party affected by the force majeure shall notify the other Party of the occurrence of force majeure and the effect thereof, and within a reasonable period, provide the other Party with a written certificate of such event issued by the relevant authority.
|
5
|
SETTLEMENT OF DISPUTE AND ALLOCATION OF LIABILITIES
|
5.1
|
Any dispute with any customer with newly opened account or registered at Party B`s Website and purchased other products or service of Party A by using the service agreed herein ("other users"), or damages arising from the channel service provided by Party B hereunder shall be settled and assumed by Party B. Party A shall actively assist Party B in settling the dispute, and provide relevant information as required. Party A shall legally bear the liabilities corresponding to its misconduct, if any. Party B shall only be responsible for customer`s loss incurred due to Party B`s fault when the customer has not accessed to the transaction interface of Party A. The disputes and losses caused due to the transaction instructions placed by the customer through Party B`s channel service shall be borne by Party A.
|
5.2
|
If any customer with newly opened account or registered at Party B`s Website and purchased other products or service of Party A by using the service agreed herein ("other users") files an action against Party B as defendant due to such claim, Party A shall actively assist Party B in providing the relevant evidence. Where Party A is named as a defendant by such customer, Party B shall also actively assist Party A in providing relevant evidence.
|
6
|
DEFAULT AND LIABILITIES
|
6.1
|
Default. Any of the following events constitutes a default hereunder:
|
6.1.1
|
Either Party substantially violates any provision hereof, or fails to perform any obligation hereunder in any substantial aspect, and fails to make remedy within 10 days upon receiving a written notice for remedy from the other Party;
|
6.1.2
|
Any undertaking, representation or warranty made by either Party hereunder is proven false or misleading.
|
6.2
|
Default Liabilities. If either Party defaults under this Agreement, it shall indemnify the other Party against any and all damages and losses resulting from the default, other than indirect damages. The non-breaching party may also unilaterally terminate this Agreement without any liability.
|
6.3
|
If either Party intends to terminate this Agreement according to any law, regulation, or opinion of the regulatory authority, it shall provide a hard copy of the law or regulation, or opinion of the regulatory authority. If both Parties terminate this Agreement according to this provision, neither Party shall be subject to the default liabilities.
|
7
|
MISCELLANEOUS
|
7.1
|
The execution, validity, interpretation, performance as well as dispute settlement of or in connection with this Agreement shall be governed by the applicable laws of the People’s Republic of China (excluding Hong Kong SAR, Macao SAR and Taiwan). Any amendment to this Agreement or any issue absent hereof shall be settled by both Parties through friendly consultation.
|
7.2
|
Any dispute arising from or in connection with this Agreement shall be settled by both Parties through friendly consultation at first. Where such consultation fails, any party shall be entitled to file an action at the competent People`s court where the defendant is located.
|
7.3
|
Both Parties hereby acknowledge that performance of this Agreement and realization of the objectives contemplated herein are based on trust and mutual collaboration between both Parties. Both Parties further acknowledge that, unless it is otherwise agreed herein, neither Party may assign all or part of its rights or obligations hereunder to any third party without the prior approval of the other Party.
|
7.4
|
All issues relating to this Agreement shall be settled by both Parties based on the principles of equality and reciprocity, and through friendly consultation.
|
7.5
|
This Agreement shall be made in four (4) originals, two (2) for each party hereto. This Agreement shall become effective as of being duly signed by the legal representatives or authorized representatives of both Parties and affixed with the official seal of both Parties, and shall remain full force and effect until it is confirmed by both Parties in writing to terminate this Agreement or either Party unilaterally terminates this Agreement according to any provision hereof.
|
Party A: HengTai Securities CO., Ltd
|
Party B: Beijing Glory Technology Co., Ltd
|
Authorized Representative:
|
Authorized Representative:
|
Seal:
|
Seal:
|
Date: _________, 2014
|
Date: _________, 2014
|
Name
|
Jurisdiction of
Incorporation
|
Legal Ownership
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) Success Technology Co., Ltd.
|
PRC
|
100%
|
Beijing Chuangying Advisory and Investment Co., Ltd.*
|
PRC
|
Nil
|
Shanghai Meining Computer Software Co., Ltd.*
|
PRC
|
Nil
|
Zhengning Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
Zhengyong Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
Zhengtong Information & Technology (Shanghai) Co., Ltd.
|
PRC
|
100%
|
Shanghai Chongzhi Co., Ltd.*
|
PRC
|
Nil
|
Fortune (Beijing) Qicheng Technology Co., Ltd.*
|
PRC
|
Nil
|
Shanghai Stockstar Securities Advisory and Investment Co., Ltd. *
|
PRC
|
Nil
|
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
|
Shanghai Stockstar Wealth Management Co., Ltd.*
|
PRC
|
Nil
|
Fortune (Beijing) Huiying Investment Consulting Co., Ltd.*
|
PRC
|
Nil
|
Zhengjin(Fujian)Precious Metals Investment Co., Ltd.*
|
PRC
|
Nil
|
Henghui (Tianjin) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
Zhengjin (Tianjin) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
Zhengjin (Shanghai) Precious Metals Management Co., Ltd. *
|
PRC
|
Nil
|
Shenzhen Tahoe Investment and Development Co., Ltd.*
|
PRC
|
Nil
|
iSTAR Financial Holdings Limited
|
BVI
|
85%
|
iSTAR International Securities Co. Limited
|
Hong Kong
|
85%
|
iSTAR International Futures Co. Limited
|
Hong Kong
|
85%
|
iSTAR International Wealth Management Co. Limited
|
Hong Kong
|
85%
|
iSTAR International Credit Co. Limited
|
Hong Kong
|
85%
|
1.
|
I have reviewed this annual report on Form 20-F of China Finance Online Co. Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|
1.
|
I have reviewed this annual report on Form 20-F of China Finance Online Co. Limited;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
|
4.
|
The Company’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting.
|
5.
|
The company's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the company's internal control over financial reporting.
|