CHINA FINANCE ONLINE CO. LIMITED
REPORT OF THE DIRECTORS
The directors of China Finance Online Co. Limited, or the Company, present their report and the audited financial
statements for the year ended December 31, 2009, or the Financial Statements, which can be accessed through the
SEC website at http:///www.sec.gov or through the Company’s website at
http://www.chinafinanceonline.com/investor/annual_rep.asp beginning May 28, 2010. The Financial
Statements have been prepared in accordance with accounting principles generally accepted in the United States.
The Company acts as an investment holding company and provides corporate management services. The activities
of its principal subsidiaries including its variable interest entity are set out in note 1 to the Financial Statements.
The results of the Company and its subsidiaries for the year ended December 31, 2009 are set out in the
consolidated income statement on page F-4 of the Financial Statements.
The directors do not recommend the payment of a dividend and propose that the profit for the year be retained.
PROPERTY AND EQUIPMENT
Details of the movements during the year in property and equipment of the Company and its subsidiaries are set out
in note 7 to the Financial Statements.
In 2009, the Company issued 50,000 shares to Gainer Capital Inc. in satisfaction of an option exercise
commitment issued outside of the Company’s 2004 Stock Incentive Plan. The Company also issued 185,730
shares to employees under the Company’s 2004 Stock Incentive Plan.
In addition, the Company granted share options to purchase 10,000 ordinary shares pursuant to the 2004 Stock
Incentive Plan during 2009. Further, the Company issued and allotted 10,558,493 ordinary shares to selective
employees pursuant to 2007 Equity Incentive Plan during 2007. Based on the Company’s operating performance
during 2008 and 2009, 4,329,024 and 2,886,016 shares were vested as of December 31, 2008 and 2009. Other