UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF APRIL 2005
COMMISSION FILE NUMBER: 000-50975
CHINA FINANCE ONLINE CO. LIMITED
ROOM 610B, 6/F PING'AN MANSION
NO. 23 FINANCIAL STREET
XICHENG DISTRICT, BEIJING 100032
CHINA
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
FORM 20-F [X] FORM 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(1):
Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
YES [ ] NO [X]
If "Yes" is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2(b): 82- N.A. .
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The index of exhibits may be found at Page 2
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CHINA FINANCE ONLINE CO. LIMITED
FORM 6-K
TABLE OF CONTENTS
PAGE
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Signature Page 3
Report of the Directors Page 4
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CHINA FINANCE ONLINE CO. LIMITED
By: /s/ Jun Ning
--------------------------------
Name: Jun Ning
Title: Chairman of the Board of
Directors and Chief Executive
Officer
Date: April 28, 2005
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EXHIBIT 99.1
REPORT OF THE DIRECTORS
The board of directors of China Finance Online Co. Limited, or the Company, is
pleased to submit this report and the Company's audited accounts for the year
ended 31 December 2004. References to the Company's annual report on Form 20-F
are to the Company's 2004 annual report on Form 20-F filed with the U.S.
Securities and Exchange Commission, or the SEC, on April 28, 2005, which will
also be provided in hardcopy to the ordinary shareholders along with this Report
of the Directors at the Company's Annual General Meeting on June 12, 2005 at
10:00 a.m., Beijing time, at the Company's offices located at Room 610B, 6/F
Ping'an Mansion, No. 23 Financial Street, Xicheng District, Beijing, 100032,
China. The Company's annual report on Form 20-F can be accessed through the
Company's website at www.chinafinanceonline.com/investor/annual_rep.asp or
through the SEC's website at www.sec.gov, starting from April 28, 2005.
PRINCIPAL ACTIVITIES AND OPERATING RESULTS
The principal activity of the Company is to provide online financial and listed
company data and information in China. The Company offers subscription-based
services based on a single information platform that integrates data and
information from multiple sources with features and functions such as data and
information search, retrieval, delivery, storage and analysis.
SUMMARY OF FINANCIAL INFORMATION
The operating result and financial condition of the Company for the year ended
31 December 2004 are prepared and presented in accordance with accounting
principles generally accepted in the United States, or U.S. GAAP, and are set
out in the consolidated financial statements on page F-1 of the Company's annual
report on Form 20-F.
SHARES ISSUED
The Company completed its initial public offering on NASDAQ national market on
October 20, 2004. The Company's Registration Statement was declared effective by
the SEC on October 14, 2005 and the Company began offering and selling American
Depositary Shares, or ADSs, each representing five ordinary shares, on October
15, 2004. In the offering the Company sold 5,000,000 ADSs and certain
participating selling shareholders sold 1,200,000 ADSs.
The Company received net proceeds of approximately US$58.5 million from the
Company's initial public offering (after deducting underwriting discounts and
other expenses related to the offering). In March 2005, the Company received
approval from PRC government authorities to make additional capital
contributions of $9 million and $11.5 million to CFO Beijing and Fortune
Software (each, a wholly-owned subsidiary of the Company), respectively. In
April 2005, the Company received further approval from PRC government
authorities to make shareholder loans of $16.8 million and $18.0 million to CFO
Beijing and Fortune Software, respectively. The Company is making these
additional capital contributions and shareholder loans solely for purposes of
capitalizing CFO Beijing and Fortune Software. The Company intends to fund these
additional capital contributions and shareholder loans from a portion of the net
proceeds of the Company's initial public offering. The Company intends to use
the additional capital to fund the operations of CFO Beijing and Fortune
Software.
DIRECTORS
The names and biographical details of the directors of the Company as at the
date of this Report and those who were in office during 2004 are listed under
Item 6 of the
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Company's annual report on Form 20-F headed "Directors, Senior Management and
Employees".
DIRECTORS' SERVICE CONTRACTS
The Company has no service contract with any of its directors that provide
benefits to them upon termination, except for the change in control agreement
the Company entered into with its chief executive officer, who is also a
director.
DIRECTORS' INTEREST IN CONTRACTS; RELATED PARTY TRANSACTIONS
Except as disclosed in Item 7 of the Company's annual report on Form 20-F headed
"Related Party Transactions", no director had a material interest, either direct
or indirect, in any significant contract to which the Company or any of its
affiliates was a party at any time during 2004.
DIRECTORS' INTERESTS; OPTIONS GRANTED TO DIRECTORS; COMPENSATION AND OTHER
MATTERS RELATED TO DIRECTORS
In 2004, the Company granted to its non-executive directors, in the aggregate,
options representing the right to purchase 400,000 ordinary shares. Other than
the foregoing option grants, the Company did not pay any other compensation to
its non-executive directors in 2004.
In 2004, the Company paid aggregate cash compensation of approximately $126,870
to the Company's directors and executive officers as a group. In 2004, the
Company granted to selected directors, officers, employees and individual
consultants and advisors options to acquire an aggregate of 5,688,488 ordinary
shares, and the Company granted additional options to purchase an aggregate of
4,353,000 ordinary shares in February 2005. Unvested options to purchase 25,000
ordinary shares were returned to the pool of the Company's ungranted options
upon resignation of two employees holding such options in December 2004. The
Company has no service contracts with any of its directors or executive officers
that provide benefits to them upon termination, except for change in control
agreements the Company entered into with each of its chief executive officer,
chief financial officer and chief operating officer.
All of the Company's current directors have entered into indemnification
agreements in which the Company agrees to indemnify, to the fullest extent
allowed by Hong Kong law, the Company's charter documents or other applicable
law, the Company's directors from any liability or expenses, unless the
liability or expense arises from the director's own willful negligence,
intentional malfeasance, bad faith act, or other transactions from which the
director may not be relieved of liability under applicable law. The
indemnification agreements also specify the procedures to be followed with
respect to indemnification.
The Company has purchased directors' and officers' liability insurance on behalf
of the Company's directors and officers that will expire in January 2006.
CONNECTED TRANSACTIONS
Connected Transactions that qualify as related party transactions under the
requirements of the Form 20-F are set forth in Item 7 of the Company's annual
report on Form 20-F headed "Major Shareholders and Related Party Transactions".
SUBSTANTIAL SHAREHOLDERS' AND OTHER PERSONS' INTERESTS
Information with respect to the beneficial ownership, within the meaning of Rule
13(d)(3) promulgated under the U.S. Securities Exchange Act of 1934, as amended,
of the Company's ordinary shares by each person known to us to own beneficially
more than 5% of the Company's ordinary shares is set forth under Item 7 of the
Company's annual report on Form 20-F headed "Major Shareholders and Related
Party Transactions".
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ACCOUNTING POLICIES
A summary of the Company's significant accounting policies are set forth under
Note 2 to the Notes to Consolidated Financial Statements for the Years Ended
December 31, 2002, 2003 and 2004 attached the Company's annual report on Form
20-F.
SUBSIDIARIES
The Company conducts substantially all of its business through the Company's
wholly owned subsidiaries in China, CFO Beijing and Fortune Software. In
addition, the Company is dependent on Fuhua Innovation Technology Development
Co., Ltd. to host the Company's website.
The following table sets forth details of the Company's subsidiaries:
NAME COUNTRY OF OWNERSHIP
INCORPORATION INTEREST
China Finance Online (Beijing) Co., Ltd. China 100%
Fortune Software (Beijing) Co., Ltd. China 100%
Further information on the Company's subsidiaries and affiliated PRC entities is
set forth in Item 4 of the Company's annual report on Form 20-F headed
"Information on the Company".
PURCHASE, SALE OR REDEMPTION OF THE COMPANY'S LISTED SECURITIES
In March 2005, the Company's board of directors approved a stock repurchase
program pursuant to which the Company expects to purchase from time to time up
to $10 million worth of the Company's ADSs over a period of six months. Under
the terms of the approved stock repurchase program, the Company will repurchase
its ADSs through open market purchases on NASDAQ on terms deemed appropriate by
the Company in compliance with the anti-manipulation provisions of the
Securities and Exchange Commission's Rule 10b-18. The timing and amount of
repurchase transactions under this program will depend on market conditions as
well as other corporate and regulatory considerations, and will also be subject
to Rule 10b-18 requirements. The purchases will be funded from available working
capital. Repurchases of the Company's ADSs do not constitute repurchases of the
Company's ordinary shares under Hong Kong law.
CODE OF BEST PRACTICE
The Company's board of directors has adopted a code of ethics, which is
applicable to the Company's senior executive and financial officers. In
addition, the Company's board of directors has adopted a code of conduct, which
is applicable to all of the Company's directors, officers and employees. The
Company's code of ethics and the Company's code of conduct are publicly
available on the Company's website.
In addition, the Company's board of directors has adopted a set of corporate
governance guidelines. The guidelines reflect certain guiding principles with
respect to the Company's board structure, procedures and committees. The
guidelines are not intended to change or interpret any law, or the Company's
memorandum and articles of association.
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AUDITORS
A resolution to approve and ratify the appointment of Deloitte Touche Tohmatsu
CPA Ltd. as independent auditors of the Company is to be proposed at the
forthcoming Annual General Meeting on June 12, 2005.
On behalf of the Board
Jun Ning
Chairman of the Board of Directors
and Chief Executive Officer
Hong Kong
April 28, 2005
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