UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2011

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ______________

~~For~~Commission ~~the~~file ~~fiscal~~number ~~year ended December 31, 2010~~000-18731

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________ to ______________

Commission File Number 0-18731

FORLINK SOFTWARE CORPORATION, INC.

(Exact name of ~~Registrant~~registrant as specified in its charter)

Nevada

(State or other jurisdiction of

incorporation or organization)

98-0398666

(I.R.S. Employer Identification No.)

9F Shenzhou Mansion, No. 31

ZhongGuanCun South Road

Haidian District, Beijing, P.R. China

(Address of principal executive offices)

N/A

(Zip Code)

(0086) 10 6811 8866 (Issuer's telephone number, including area code)
(0086) 10 6811 8866 (Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class None	Name of each exchange on which registered None
Securities registered pursuant to Section 12(g) of the Act:
Title of Class Common Stock, $.001 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ~~Yes ¨ No x~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.~~ Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.

Yes ¨ No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x ¨ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”,” “accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

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

~~The~~Yes ¨ No aggregate market value of the voting and non-voting common equity held by non-affiliates of the registrant on June 30, 2010 was approximately $1,627,911 The per share stock price for computational purposes was $0.35, based on the closing sale price per share for the registrant's common stock as reported on the OTC Bulletin Board on such date. This value is not intended to be a representation as to the value or worth of the registrant's common stock. The number of non-affiliates of the registrant has been calculated by subtracting the number of shares held by persons affiliated with the registrant from the number of outstanding shares.x

The ~~number~~aggregate market ofvalue ~~shares~~ of the ~~registrant's~~voting and non-voting common ~~stock,~~equity ~~$.001~~held ~~par~~by ~~value,~~non-affiliates ~~outstanding~~of the registrant on ~~March~~June 2530, 2011 was 4$1,~~651~~395,~~173~~352, based ~~shares~~on a closing price of our common stock as reported by the OTC Bulletin Board of $0.30.

The number of shares of the registrant's common stock, $.001 par value, outstanding on March 23, 2012 was 4,651,173 shares.

TABLE OF CONTENTS

TO ANNUAL REPORT ON FORM 10-K

FOR YEAR ENDED DECEMBER 31, ~~2010~~2011

		Page
CAUTIONARY NOTE REGARDING FORWARD-LOOKING INFORMATION
PART I
Item 1.	Business	54
Item 1A.	Risk Factors	129
Item 1B.	Unresolved Staff Comments	1310
Item 2.	Properties	1311
Item 3.	Legal Proceedings	1411
Item 4.	Mine Safety Disclosures	11
PART II
Item 5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	1511
Item 6.	Selected Financial Data	1512
Item 7.	Management’s Discussion and Analysis orof ~~Plan~~Financial Condition and Results of ~~Operation~~Operations	1612
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	2320
Item 8.	Financial Statements and Supplementary Data ~~Changes in and Disagreements with Accountants on Accounting and Financial Disclosure~~	2320
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	2521
Item 9A(T).	Controls and Procedures	25
Item 9A.	Controls and Procedures	21
Item 9B.	Other Information	2521
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	2622
Item 11.	Executive Compensation	2723
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	2924
Item 13.	Certain Relationships and Related Transactions, and Director Independence	2925
Item 14.	Principal ~~Accountant~~Accounting Fees and Services	3025
Item 15.	Exhibits, Financial Statement Schedules	30
PART IV
Signatures		33
Item 15.	Exhibits, Financial Statement Schedules	26
SIGNATURES		27

CAUTIONARY ~~NOTES~~NOTE REGARDING FORWARD-LOOKING INFORMATION

~~FORWARD~~Readers ~~LOOKING~~of ~~INFORMATION~~this Annual Report on Form 10-K (“Form 10-K”) are advised that this document may contain statements of historical facts and forward-looking statements. Forward-looking statements are subject to certain risks and uncertainties that may cause actual results to differ materially from those indicated by the forward-looking statements. Forward-looking statements usually contain the words “estimate,” “anticipate,” “believe,” “expect,” or similar expressions, and are subject to numerous known and unknown risks and uncertainties. Examples of forward-looking statements include, but are not limited to, (i) projections of revenues, income or loss, earning or loss per share, capital expenditures, dividends, capital structure, and other financial items, (ii) statements of the plans and objectives of the Company or our management or board of directors, including the introduction of new products, or estimates or predictions of actions by customers, suppliers, competitors, or regulatory authorities, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about the Company or our business.

~~Readers~~This ofcautionary ~~this~~note ~~Annual~~should ~~Report~~not onbe ~~Form~~construed ~~10-K~~as ~~(“Form~~exhaustive ~~10-K”)~~or as ~~and~~ any ~~document~~admission ~~incorporated~~regarding bythe ~~reference~~adequacy ~~herein,~~of ~~are~~disclosures ~~advised~~made ~~that this document and documents incorporated~~ by ~~reference~~the ~~into this document contain both statements of historical facts and forward looking statements~~Company. Forward -looking statements are ~~subject~~beyond toour ~~certain~~ability ~~risks~~to control, and, ~~uncertainties~~in many cases, ~~which~~we ~~could~~cannot ~~cause~~predict ~~actual~~what factors will cause results to differ materially ~~for~~from those indicated by ~~the~~ forward-looking statements. ~~Forward-looking~~Unless ~~statements~~otherwise ~~usually~~required ~~contain~~by ~~the~~applicable ~~words “estimate~~law,” ~~“anticipate,”~~we ~~“believe,”~~do ~~“expect,”~~not ~~or similar expressions~~undertake, and ~~are~~we ~~subject~~specifically todisclaim ~~numerous~~any ~~known~~obligation, ~~and~~to ~~unknown~~update any ~~risks and uncertainties. Examples of~~ forward -looking statements ~~include, but are not limited~~ to ~~(i)~~reflect ~~projections of revenues~~occurrences, ~~income or loss~~developments, ~~earning~~ or ~~loss~~unanticipated ~~per~~events ~~share, capital expenditures, dividends, capital structure and other financial items, (ii) statements of the plans and objectives of the Company~~ or ~~its~~circumstances ~~management~~after ~~or board of directors, including~~ the ~~introduction~~date of this new products, or estimates or predictions of actions by customers, suppliers, competitors or regulatory authorities, (iii) statements of future economic performance, and (iv) statements of assumptions underlying other statements and statements about the Company or its businessreport.

This document and any documents incorporated by reference herein also identify important factors which could cause actual results to differ materially from those indicated by forward looking statements. These risks and uncertainties include price competition, the decisions of customers, the actions of competitors, the effects of government regulation, possible delays in the introduction of new products and services, customer acceptance of products and services, the Company's ability to secure debt and/or equity financing on reasonable terms, and other factors which are described herein and/or in documents incorporated by reference herein.

The cautionary statements made above and elsewhere by the Company should not be construed as exhaustive or as any admission regarding the adequacy of disclosures made by the Company. Forward looking statements are beyond the ability of the Company to control and in many cases the Company cannot predict what factors would cause results to differ materially from those indicated by the forward looking statements. Unless otherwise required by applicable law, we do not undertake, and we specifically disclaim any obligation, to update any forward looking statements to reflect occurrences, developments, unanticipated events or circumstances after the date of such statement.

PART I

Item 1. Business.

Overview

Forlink Software Corporation, Inc. (the "“Company"” or the "“Registrant"” or "“Forlink"” or "“we"” or "“us"”) provides ~~is in the business of providing~~ e-business application solutions and IT outsourcing services in the People’s Republic of China (the “PRC” or “China”). ~~Through~~through our subsidiaries,. weWe offer ~~our~~ clients business information management consulting and planning, application software design, agency and integrated application services for ~~the~~ third party’s software, and other online application services. We also offer the “For”-series of software products. Our clients are mainly in the telecom and logistics industries, as well as government agencies. We have also invested in companies in logistics, finance and information technology (IT) industries. The application platforms used by these companies are supported by our integrated application systems, software and IT outsourcing services. Our headquarters are located in Beijing, with branch offices in Chengdu and Shanghai. We also have a research and development (“R&D”) center located in Chengdu.

~~Company~~Our ~~Organization~~clients are mainly in the telecom and logistics ~~History~~industries or are government agencies.

We ~~are~~have aalso ~~Nevada~~invested ~~corporation~~in ~~which~~companies ~~was~~in ~~originally~~the logistics, ~~incorporated on January 7~~finance, ~~1986~~and asinformation ~~"Why~~technology ~~Not?,~~(IT) ~~Inc~~industries." ~~under~~The ~~the~~application ~~laws~~platforms ofused ~~the~~by ~~State~~these ofcompanies ~~Utah~~are ~~and~~supported by ~~subsequently~~our ~~reorganized~~integrated ~~under~~application ~~the laws of Nevada on December 30~~systems, ~~1993. From 1996 until 1999~~software, ~~the~~and ~~Company~~IT ~~continued~~outsourcing ~~as an unfunded venture in search of a suitable business acquisition or business combination~~services.

OnWe ~~November~~are 3,headquartered ~~1999,~~in ~~we entered into a Plan of Reorganization with~~ Beijing ~~Forlink Software Technology Co.~~, ~~Ltd.,~~China ~~(hereinafter~~and have ~~"BFSTC"),~~ a ~~limited~~branch ~~liability~~office company organized under the laws of the PRC, under the terms of which BFSTC gained control of the Company. Pursuant to the Plan of Reorganization, we acquired 100% of the registered and fully paid-up capital of BFSTC in ~~exchange for 20~~Chengdu,~~000,000~~ ~~shares of the Company's authorized, but unissued, common stock~~China. ~~BFSTC~~Our isresearch ~~engaged in the provision of computer software consultancy~~ and ~~engineering services and the~~ development ~~and~~center ~~sale of computer software in the PRC. As a part of its computer consultancy and engineering services, BFSTC~~ is also ~~engaged~~located in ~~the sale of computer hardware~~Chengdu. ~~In June 2001, BFSTC changed its name to Forlink Technologies Co. Ltd. (“FTCL”). FTCL is our major operating subsidiary in China.~~

In August 2001, we acquired Beijing Slait Science & Technology Development Limited Co. (“SLAIT”) pursuant to a Plan of Reorganization dated January 11, 2001. We issued 59,430,000 shares of our common stock to SLAIT’s original owners in exchange for 100% of the outstanding equity of SLAIT. As a result of the share exchange, the former owners of SLAIT own approximately 70% of the issued and outstanding shares of the Company, ~~and~~History SLAIT became a wholly-owned subsidiary of the Company. We also agreed to transfer 1,085,000 Renminbi (“RMB”) (approximately US$131,039) to the former owners of SLAIT. A change in control occurred in which all but one of the officers and directors of the Company resigned and two former directors (also former owners) of SLAIT became officers and directors of the Company. Prior to its dissolution in 2004, SLAIT provided application system integration technology and specializes in large volume transaction processing software for networks such as mobile phone billing and band operation. Subsequent to our acquisition, the principal activities of SLAIT were gradually shifted to those of FTCL. On February 13, 2004, SLAIT was officially dissolved in accordance with relevant PRC regulations.

OnWe ~~June~~are ~~18,~~a ~~2003,~~Nevada ~~Forlink~~corporation ~~Technologies~~originally ~~(Hong Kong) Limited (“FTHK”) was~~ incorporated in ~~Hong~~1986 ~~Kong Special Administrative Region~~ as aWhy ~~limited liability company. In December 2003~~Not?, ~~FTHK became a wholly owned subsidiary of Forlink~~Inc. ~~FTHK is an investment holding company. Because of the favorable business environment~~ in ~~Hong Kong, we can simplify and speed up investment transactions through this subsidiary~~Utah. ~~Through~~In ~~FTHK~~1993, ~~on December 18, 2003,~~ we ~~invested~~reorganized ~~$760,870~~ in ~~All China Logistics Online Co~~Nevada., ~~Ltd.~~From ~~("All~~1996 ~~China~~until ~~Logistics")~~1999, awe ~~privately~~were ~~held~~an ~~PRC~~unfunded ~~company~~venture ~~and~~in ~~a leading provider~~ search of ~~logistic~~a ~~services~~suitable inbusiness ~~China,~~acquisition inor ~~exchange~~business ~~for a 17~~combination.8% ~~equity~~In ~~interest. Through this investment~~1999, we ~~have~~began ~~become~~our ~~the~~current ~~second~~operations ~~largest~~with ~~shareholder~~the acquisition of ~~All~~our major ~~China~~operating ~~Logistics~~subsidiary, ~~and~~Forlink ~~its~~Technologies ~~sole~~Co. ~~software solution provider~~Ltd. ~~FTHK is also responsible for directly importing from overseas companies certain hardware needed for product integration, which allows us to improve our hardware pass-through profit margin~~(“FTCL”).

Organization and Subsidiaries

FTCL is an indirect wholly owned subsidiary of the Company, and is our major operating subsidiary located in China. FTCL provides computer software consultancy and engineering services, develops and sells computer software, and sells computer hardware

We have 2 wholly owned subsidiaries, Forlink Technologies (Hong Kong) Limited (“FTHK”) and Beijing Forlink Hua Xin Technology Co. Ltd. (“BFHX”).

FTHK was formed in 2003 in Hong Kong as a limited liability company and serves as a holding company. Because of Hong Kong’s favorable business environment, we can simplify and speed up investment transactions through this subsidiary. FTHK directly imports from overseas companies certain hardware needed for product integration, which allows us to improve our hardware pass-through profit margin.

BFHX was formed in 2003 in the PRC as a limited liability company. Through BFHX, we conduct our telecom value-added services and application integration services for government organizations in China. Our CEO, Mr. Yi He, and FTCL’s administration manager, Mr. Wei Li, are the nominee owners of BFHX, and, as such, hold 70% and 30%, respectively, of the fully paid up capital of BFHX on behalf of the Company as the primary beneficiary. BFHX is considered a Variable Interest Entity (“VIE”), and, because we are the primary beneficiary, our consolidated financial statements include BFHX. Upon our request, Mr. Yi He and Mr. Wei Li are required to transfer their ownership in BFHX to us or our designee at any time for the amount of the fully paid registered capital of BFHX.

OnFollowing ~~June~~is ~~14, 2004, Forlink Technologies (Chengdu) Limited ("FTCD") was established as~~ a ~~limited~~diagram ~~liability~~illustrating ~~company~~our inentire ~~Chengdu,~~corporate PRC and subsequently became a wholly owned subsidiary of FTHK in September 2004. FTCD is in the business of providing software outsourcing services and software development. The registered capital of FTCD is $5,000,000 and the fully paid up capital was $750,000 as of December 31, 2005. In April 2006, FTHK further invested $130,000 in FTCD. FTCD commenced operations in late 2005. The registered capital of FTCD was reduced to $200,000 in December 2007.structure:

In compliance with China’s foreign investment restrictions on telecom value-added services and other laws and regulations, we conduct our telecom value-added services and application integration services for government organizations in China via Beijing Forlink Hua Xin Technology Co. Ltd. ("BFHX"). BFHX was established in the PRC on September 19, 2003 as a limited liability company. The registered capital of BFHX is $120,733 (RMB 1,000,000) and was fully paid up as of March 31, 2005. Mr. Yi He and Mr. Wei Li have been entrusted as nominee owners of BFHX to hold 70% and 30%, respectively, of the fully paid up capital of BFHX on behalf of Forlink as the primary beneficiary. BFHX is considered a Variable Interest Entity ("VIE"), and because we are the primary beneficiary, our consolidated financial statements include BFHX. Upon the request of the Company, Mr. Yi He and Mr. Wei Li are required to transfer their ownership in BFHX to us or our designee at any time for the amount of the fully paid registered capital of BFHX. Mr. Yi He is the Chief Executive Officer, a director and a major stockholder of the Company. Mr. Wei Li is the administration manager of FTCL.

On October 24, 2005, we entered into a definitive agreement to acquire a 17.5% equity interest from China Liquid Chemical Exchange Company Limited (“CLCE”), a PRC limited liability company. Under the terms of the agreement, Forlink deployed the “For-online Electronic Trading System”, a proprietary, integrated software solution, to support CLCE’s operations, including, but not limited to, online trading, online billing and payment, user authentication and customer care, in exchange for the 17.5% equity interest. In early 2007, CLCE increased its share capital to $1,708,526 (RMB 13,000,000). As we did not subscribe for the new shares, our shareholding of CLCE was diluted and as of December 31 2008 was 13.46%. CLCE commenced operations fully in early 2007.

On October 3, 2006, we entered into a Transfer of Right to Invest and Project Cooperation Agreement (“Statelink Agreement”) with Statelink International Group, Ltd., a British Virgin Islands company (“Statelink”), pursuant to which we acquired 22.73% registered capital in Guangxi Caexpo International Trade and Logistics Co., Ltd. (“Guangxi Caexpo”), a PRC limited liability company in the businesses of real estate development, advertising and computer distribution, for cash consideration of $2,557,545 (RMB 20,000,000) from BFHX and stock consideration of 13,000,000 shares of our restricted common stock. Thereafter, we also won a contract from Guangxi Caexpo to build an “Electronic Trade and Logistics Information Platform and Call Center” (the “Project”). On October 26, 2006, BFHX established Forlink Technologies (Guangxi) Limited (“FTGX”), a PRC limited liability company and wholly owned subsidiary, to carry out this contract. At the time of incorporation, BFHX injected RMB 20,000,000 (approximately US$2,557,545) as registered capital to FTGX. The Project was completed in the fourth quarter of 2007, and with the successful deployment of the relevant software, the client signed the final inspection report in January 2009. On August 20, 2010, the Company transferred all its ownership interests in Guangxi Caexpo to Guangxi Sanqi Investment Co., Ltd for the amount of Guangxi Caexpo’s 22.73% fully paid up capital. The Company got cash payment of $3,024,355 (RMB 20,000,000).

On October 12, 2006, we invested $31,969 (RMB 250,000) in Wuxi Stainless Steel Exchange Co., Ltd. (“Wuxi Exchange”), a PRC limited liability company, for a 12.5% equity interest. In addition, we agreed to deploy a proprietary, integrated software solution, estimated at RMB 1,000,000, to support Wuxi Exchange’s operations. The software was deployed in February 2007. On January 14, 2007, the Company entered into an agreement with a major shareholder of Wuxi Exchange pursuant to which the Company transferred 2.5% of the Company’s interest in Wuxi Exchange to this major shareholder for a cash payment of RMB 500,000.

On January 25, 2007, our board of directors and the majority holders of the Company’s common stock jointly approved an amendment to our Articles of Incorporation by written consent, to increase the number of authorized shares of common stock from 100,000,000 to 200,000,000. The Certificate of Amendment to our Articles of Incorporation to effect the increase of the number of our authorized common shares was filed with Nevada’s Secretary of State on April 4, 2007.

On April 29, 2007, we invested, through BFHX, $138,158 (RMB 1,050,000) in Beijing GuoXin Forlink Internet Technologies Limited (“BGXF”), a privately held PRC company that operates a finance study website, for a 35% equity interest. The investment in BGXF is accounted for under the equity method of accounting due to the Company’s significant influence over the operational and financial policies of BGXF. BGXF commenced operations on March 9 2008. On October 14, 2008, BGXF increased its registered capital to RMB 4,285,700, and since we did not invest additional funds into BGXF, the ratio of our holding was diluted to a 24.5% equity interest.

OnRecent ~~July~~Major ~~12,~~Business ~~2007,~~Developments we invested through FTGX, $1,063,830 (RMB 8,000,000) in Nanning Bulk Commodities Exchange Corporation Limited (“NNBCE”), a privately held PRC company, for an 80% equity interest. NNBCE became a subsidiary of FTGX. NNBCE, established on April 29, 2007, commenced operations on March 28, 2008, and provides logistical e-commerce service.

On ~~September~~February 58, ~~2007~~2010, we ~~invested~~transferred ~~through~~all NNBCE, $465,425 (RMB 3,500,000) in Guangxi Bulk Sugar & Ethanol Exchange Corporation Limited (“GBSEE”), a PRC limited liability company established on September 12, 2007, for a 35% equity interest. On the same date, All China Logistics was entrusted to hold 20% of ~~the~~our ~~fully paid up capital of GBSEE on behalf of NNBCE as the primary beneficiary. Upon the request of NNBCE, All China Logistics is required to transfer its~~ ownership interests in ~~GBSEE~~FTCL to ~~NNBCE~~BFHX orin ~~its~~exchange ~~designees at any time~~ for ~~the~~FTCL’s ~~amount of the 20~~100% fully paid up capital. InAs ~~accordance~~a ~~with Financial Accounting Standards Board (“FASB”) Interpretation No. 46R “Consolidation of Variable Interest Entities - An Interpretation of ARB No. 51” (“FIN 46R”)~~result, ~~NNBCE~~FTCL is ~~deemed~~no tolonger ~~hold~~our ~~the~~direct ~~primary beneficial interest of the 55% equity interest in GBSEE. GBSEE was established to provide logistical e-commerce service~~subsidiary, but itBFHX’s ~~was~~wholly ~~dissolved~~owned ondirect December 16, 2007 before it commenced any operations, and NNBCE received payments back of its investment in GBSEE of $410,397 (RMB 3,000,000) in December 2007; $66,211 (RMB 484,000) in February 2008, and $2,189 (RMB 16,000) in September 2008subsidiary.

On ~~December~~August 2420, ~~2007~~2010, ~~our~~we ~~board~~sold ofour ~~directors~~22.73% ~~and~~ownership ~~the~~interests ~~majority~~in Guangxi ~~holders~~Caexpo ofInternational ~~the~~Trade ~~Company’s~~and ~~common~~Logistics ~~stock~~Co., ~~jointly~~Ltd. ~~approved~~(“Guangxi anCaexpo”), ~~amendment~~a toPRC ~~our~~limited ~~Articles~~liability ofcompany, ~~Incorporation~~to Guangxi bySanqi ~~written~~Investment ~~consent~~Co., toLtd ~~effect~~in aexchange 1-for~~-20~~ ~~reverse~~Guangxi ~~stock~~Caexpo’s ~~split~~22.73% ~~The~~fully ~~Certificate~~paid ofup ~~Amendment~~capital toand ~~our~~cash ~~Articles~~consideration of $3,024,355 ~~Incorporation~~(RMB ~~to effect the reverse split was filed with Nevada’s Secretary of State on February 21~~20, ~~2008~~000,000).

On ~~March~~October 208, ~~2008~~2010, ~~Forlink~~we, through BFHX, invested $71151,~~124~~213 (RMB ~~500~~ 1,000),000) ~~through BFHX,~~ in ~~Shandong~~Shanghai ~~LongDong~~Shipping ~~Internet~~Freight ~~Technologies~~Exchange ~~Limited~~Co., LTD (“~~SDLD~~SSFE”), a PRC limited liability company, ~~established on October 24, 2007,~~ for a 5% equity interest. ~~SDLD, which commenced operations in December 2007, is in the business of providing of providing primary products e-commerce services. The purpose of the investment is to gain cash dividends from SDLD.~~

On February 8, 2010, the Company transferred all its ownership interests in FTCL to BFHX for the amount of FTCL’s 100% fully paid up capital.

On October 8, 2010, the Company invested $151,213 (RMB 1,000,000), through BFHX, in Shanghai Shipping Freight Exchange Co., LTD (“SSFE”), a PRC limited liability company, established on October 8, 2010, for a 5% equity interest. SSFE will not commence its operations until March 25, 2011.

Forlink and its subsidiaries are all operating companies, and during the reporting period, none of the companies’ operations were discontinued or dissolved. Set forth below is a diagram illustrating our corporate structure as of December 31, 2010:

Employees

AsWe ofhave ~~December~~177 ~~31, 2010, we had 194~~ employees, all of ~~which~~whom are full-time. Approximately ~~146~~123 of ~~our~~these ~~full-time~~ employees are software and information technology specialists engaged in ~~research and development~~R&D, maintenance and support activities. The remaining employees are sales, marketing, and administrative personnel. ~~As an incentive, we have created employee stock option plans that include vesting provisions designed to encourage long-term employment.~~

Products and Solutions

Our application solutions are developed on Enterprise Application Integration (EAI) platforms. Our ~~current~~ product offerings include:

· For-EAI: For-EAI is an e-business application integration platform based on service-oriented architecture (SOA), including basic components (SSO, workflow, etc.), ~~and~~ product components (For-Mail, ForCRM, ForOA, etc.), and mobile-commerce application technologies. ~~Now~~All ~~all~~ of our industry application solutions are developed on For-EAI. · For-Online: For-Online is a SaaS operating platform designed to deliver application services over the internet. The applications that can be delivered over the internet include many of our flagship products such as ForOA and ForCRM. · For-eMarket: This is a Forlink bulk stock electronic transaction system and is an online exchange system designed to facilitate the matching of vendors and sellers on an electronic trading market. · ForOSS: The Forlink Operation Support System is our solution for Business & Operation Support Systems (BSS/OSS) for e-business carriers and telecom carriers, and consists of software products designed to support existing and expanding business operations for these companies. ForOSS supports billing, customer care, customer relation management, accounting, decision support, and other internal functionalities.

·We released For-~~Online:~~eTrade V1.0 and For-~~Online~~WMS V2.0 in January 2011 and SMS Gateway Management Platform V2.0 in November 2011. For-eTrade is aan ~~SaaS~~exchange ~~operating~~market management platform ~~designed~~based toon ~~deliver~~For-eMarket, ~~application~~which ~~services~~is ~~over~~designed ~~the~~for ~~internet~~spot exchange market. ~~The~~For-WMS is ~~applications~~a ~~that~~subsidiary ~~can~~system beof ~~delivered~~For-Online, ~~over~~which meets the ~~internet~~needs ~~include~~of ~~many~~existing ofstorage ~~our~~system ~~flagship~~software market as the core products ~~such~~and logistics assolutions, ~~ForOA~~reduces warehouse management project development costs, and ~~ForCRM~~reduces project delivery time. SMS Gateway Management Platform is an application integration management platform for exchanging SMS in different telecom system providers.

·Distribution ~~For-eMarket:~~Methods ~~Forlink bulk stock electronic transaction system is an online exchange system designed to facilitate the matching~~ of ~~vendors~~our Products and ~~sellers on electronic trading market.~~Services

·We ~~ForOSS:~~primarily ~~Forlink~~sell ~~Operation Support System is~~ our ~~solution~~products ~~for Business & Operation Support Systems (BSS/OSS) for e-business carriers~~ and ~~telecom~~services ~~carriers,~~directly ~~and~~to isour customers. ~~consist~~We ofutilize ~~software~~distribution ~~products~~partners ~~designed~~ to ~~support~~sell ~~existing and expanding business operations of these companies. ForOSS supports billing~~For-Online, ~~customer~~but ~~care,~~this ~~customer~~distribution ~~relation~~method ~~management,~~accounts ~~accounting,~~for ~~decision~~a ~~support~~small ~~and~~portion ~~other~~of ~~internal~~our overall ~~functionalities~~sales method.

Distribution Methods of the Products and Services

We mainly sell our products and services directly to our customers. We also utilize distribution partners to sell our products and services.

Research and Development

We are committed to continually research, design, and develop information technology solutions and software products that meet the needs of our customers. ~~Our~~We established our Chengdu R&D center ~~was established~~ in February 1998. AsWe ofhave ~~December~~51 ~~31, 2010, we had 52~~ employees at ~~the~~this ~~Chengdu~~ R&D ~~Center~~center. Our R&D expenses in ~~2010~~2011 and ~~2009~~2010 were $~~743~~724,~~845~~014 and $1743,~~039~~845,~~742,~~ respectively.

~~Status of New Product or Service~~6

We released For-EAI 5.0 and For-Online 5.0 in June 2009. The strengths of For-EAI 5.0 include function integration, data integration and business integration. We have also added more co-operating products and cell phone terminal components on For-EAI 5.0. We plan to develop more product components and application solutions based on For-EAI 5.0 and For-Online 5.0 in 2011.

Market Opportunities

Based on ~~our extensive~~ market research and industry insights, we believe ~~that the~~ our major ~~market~~markets ~~opportunities for our business~~ include the following: industry application integration; industry SaaS (software-as-a-Service); and mobile-commerce applications. We have entered these markets but believe we are in the early stages of taking advantage of the opportunities these markets present to our business.

Our Strategy

AsOur ~~a professional software-solutions and technology service company, our~~ business objective is to become a leading e-business application solutions and online application services provider in China. Our operating strategy is to use shared core technologies and management systems to identify potential clients, and, through consistent long-term technology supports, build tight strategic partnerships with our clients.

The key aspects of our strategy include the following:

· Establish a unified and standard software engineering and project management system to provide assurance for designing high-quality software products and services. As an important milestone, we have achieved Level 3 (Managed Level of Software Process Maturity) of Capability Maturity Model® Integration (CMMI), which was certified by the Software Engineering Institution. · Establish a unified e-business application platform and online services platform. We provide support for e-business application technologies and platforms in different industries, and strive to make available to our clients’ high-quality IT outsourcing services that are cost-effective. To that end, we have made gradual improvements to the power and reliability of our For-Online platform since 2004, culminating with the launch in August 2007 of For-Online 4.0. · Participate in our clients’ e-business application operations to become their strategic partner. We have invested in several companies in the logistics, finance, and IT industries, whose application platforms are supported by our integrated application systems, software, and IT outsourcing services.

·Competitive Establish a unified e-business application platform and online services platform. We provide support for e-business application technologies and platforms in different industries, and strive to make available to our clients’ high-quality IT outsourcing services that are cost-effective. To that end, we have made gradual improvements to the power and reliability of our For-Online platform since 2004, culminating with the launch in August 2007 of For-Online 4.0.Strengths

· ~~Participate~~Professional inSoftware Development and Services System. Our professional software development and services system has substantially strengthened our ~~clients’~~competitive ~~e-business~~advantages ~~application~~by ~~operations~~ensuring tothat ~~become~~we ~~their~~are ~~strategic~~in ~~partner~~compliance with all relevant international standards and regulations for business. We ~~have~~passed ~~invested~~the ISO9001:2000 international quality assurance system certification and the CMMI Level 3 certification certifying that our software development and services system is in ~~several~~compliance ~~companies~~with international standards. We also passed system integration Level 2 certification. · 18 Years of Experience in ~~logistics,~~Industry ~~finance,~~Applications ITwith ~~industries,~~Proven ~~whose~~Solutions ~~application~~and ~~platforms~~Products. ~~are~~We ~~supported~~have bydeveloped ~~our~~core ~~integrated~~application software products based on standardized application ~~systems~~integration technologies. Our customers, ~~software~~strategic partners, and ITsuppliers ~~outsourcing~~recognize Forlink as a dependable provider of high quality services, solutions, and products, and frequently recommend us to their business contacts. ~~These~~· Established Customer Relationships. Because of our successful track record, we have established relationships with leading companies ~~include~~in ~~NNBCE~~telecom, ~~CLCE~~logistic, ~~BGXF~~finance, ~~NBBCE~~government, and ~~Wuxi~~other ~~Stainless~~industry ~~Steel~~verticals ~~Exchange~~in CoChina. Our in-depth understanding of their requirements allows us to successfully deliver customized solutions. Moreover, ~~Ltd~~we have strong customer service and R&D teams based in China, which allow us to respond quickly and efficiently to our clients’ needs. · A Strong and Stable Management Team. The current management team has been with Forlink since we commenced business and includes pioneers of enterprise application integration (EAI) technologies in China. The backgrounds of these individuals offer a breadth of knowledge and experience that covers all aspects relating to the control and development of EAI systems. Beyond expertise in the field, their close working relationships with major long-term clients demonstrate a proven ability to sustain and cultivate a successful business.

~~Our Competitive Strengths~~7

·Strategic ~~Professional Software Development and Services System.~~Partners

~~Our~~Strategic ~~professional~~partnerships ~~software~~are ~~development~~an ~~and~~essential ~~services~~element ~~system~~of ~~has substantially strengthened~~ our ~~competitive~~business model. ~~advantages~~At bythis ~~ensuring~~time, ~~that~~ we ~~are in compliance with all relevant international standards and regulations for business. We~~ have ~~passed~~three ~~the~~types ~~ISO9001:2000~~of ~~international~~partners ~~quality~~that ~~assurance~~contribute ~~system~~to ~~certification and~~ the ~~CMMI~~continuing ~~Level~~success 3of ~~certification, certifying that~~ our ~~software development and services system is in compliance with international standards~~business. ~~We have passed system integration Level 2 certification.~~

· ~~Eighteen~~Technology ~~Years~~Development ofPartners. ~~Experience~~These inpartners ~~Industry~~provide ~~Applications~~technology (through licensing or other arrangements) for our solutions or for joint development. Our major technology development partners include HP, Oracle, BEA, IONA, Redhat, and Redflag-linux. · Marketing and Product Partners. These partners provide products and/or technology that are bundled with ~~Proven~~our ~~Solutions~~solutions and ~~Products~~products for marketing purposes. Our marketing and product partners include HP, Intel, IBM, Oracle, Lenovo, and Digital China. · Distribution Partners. These partners distribute our solutions and products to our customers. Our current distribution partner is Beijing Federal.

Forlink has developed core application software products such as For-eMarket, ForCRM, ForOSS and ForROA based on standardized application integration technologies. Our customers, strategic partners and suppliers recognize our company as a dependable provider of high quality services, solutions and products, and frequently recommend us to their business contacts.

· Established Customer Relationships.

Because of our successful track record, we have established relationships with leading companies in telecom, logistic, finance, government, and other industry verticals in China. Our in-depth understanding of their requirements allows us to successfully deliver customized solutions. Moreover, we have strong customer service and research and development teams based in China, which allow us to respond quickly and efficiently to the needs of our clients.

· A Strong and Stable Management Team.

The current management team has been with Forlink since we commenced business, and includes pioneers of enterprise application integration (EAI) technologies in China. The backgrounds of the individuals in our management team offer a breadth of knowledge and experience that covers all aspects relating to the control and development of EAI systems. Beyond expertise in the field, their close working relationships with major long-term clients demonstrate a proven ability to sustain and cultivate a successful business.

Our Strategic Partners

Strategic partnerships are essential elements of our business model. At this time, we have three types of partners that contribute to the continuing success of our business.

· Technology Development Partners. These partners provide technology (through licensing or other arrangements) for our solutions or for joint development. Our major technology development partners include HP, Oracle, BEA, IONA, Redhat and Redflag-linux.

· Marketing and Product Partners. These partners provide products and/or technology that are bundled with our solutions and products for marketing purposes. Our marketing and product partners include HP, Intel, IBM, Oracle, Lenovo and Digital China.

· Distribution Partners. These partners distribute our solutions and products to our customers. Our current distribution partner is Beijing Federal.

Competitive Conditions

The market for information technology services in China is rapidly growing and changing. We compete with many domestic companies. Our principal competitors in application integration services include AsiaInfo and Digital China. Our principal competitors in the SaaS field include UFSOFT and MYCRM. All of these companies are leading companies in the Chinese IT industry.

Government Regulations

The Chinese government has generally encouraged the development of the information technology industry, and the products and services we offer are currently subject to PRC government regulations.

The State Council of the PRC ~~(the “State Council”)~~ promulgated the Regulations on the Protection of Computer Software (the “Software Protection Regulations”) in December 2001, which became effective in January 2002. The Software Protection Regulations were promulgated, among other things, to protect the copyright of computer software in China. According to the Software Protection Regulations, computer software that is independently developed and exists in a physical form or is attached to physical goods will be protected. ~~However,~~Such ~~such~~ protection, however, does not apply to ~~any~~ ideas, mathematical concepts, processing, and operation methods used in the development of software solutions.

Under the Software Protection Regulations, PRC citizens, legal persons, and organizations enjoy copyright protection over computer software they have developed, regardless of whether the software has been published. Other developers may enjoy PRC copyright protection over computer software they have developed if such computer software was first distributed in China, or in accordance with a bilateral agreement between China and the developer’s country of citizenship or residence, or in accordance with an international treaty to which China is a party.

Under the Software Protection Regulations, owners of software copyright protection enjoy rights of publication, authorship, modification, duplication, issuance, lease, transmission on the information network, translation, licensing, and transfer. Software copyright protection takes effect on the day of completion of the software’s development.

For software developed by legal persons and other organizations, software protection extends until December ~~31st~~31 of the 15th year from the date the software solution was first published. The ~~However, the~~ Software Protection Regulations, however, will not protect the software unless it is published within 50 years of the completion of its development. Licensing agreements may allow others to exploit the software copyright, but exclusive licenses must be in writing. A written contract is also required to transfer any software copyright.

Civil remedies available under the Software Protection Regulations against infringements of copyright include cessation of the infringement and elimination of its effects, an apology, and compensation for losses. The administrative department of copyright may order the infringer of a software copyright to stop all infringing acts, confiscate illegal gains, confiscate and destroy infringing copies, and impose a fine on the infringer under certain circumstances. Disputes regarding infringements of software copyright may be settled through mediation, arbitration, or the PRC courts directly.

108

Dependence on Major Customers

For the year ended December 31, ~~2010~~2011, approximately 5542% of ~~the Company's~~ our total net revenues were generated by two customers, Beijing Mobile Communication Company ~~(“Beijing Mobile”)~~ and ~~Guangxi~~HP ~~Caexpo International Trade and Logistics~~ Co., Ltd ~~(“Guangxi Caexpo”)~~. The loss of any or both of these customers could have a material adverse effect on our business.

~~Our~~During ~~largest~~the ~~customer~~year ~~has~~ended December 31, 2011, sales to Beijing Mobile totaled $1,060,918, which accounted for 32% of our total revenue for the period. Since 1998, we have been ~~Guangxi~~developing ~~Caexpo~~and maintaining Beijing Mobile’s BOSS. WeBOSS ~~won~~is ~~the~~an ~~contract~~integrated software platform, and it is developed in ~~2006~~stages to ~~build~~accommodate the ~~Electronic~~carrier’s ~~Trade~~increasing subscribers and ~~Logistics~~service ~~Information~~offerings. ~~Platform~~We ~~and~~completed ~~Call~~phase one ~~Center.~~in ~~The~~2002, ~~revenue~~phrase ~~from~~two ~~hardware~~in ~~integration~~2006, ~~sales~~and ~~was~~phrase ~~recognized~~three in ~~2009~~2007. We continue to maintain these 3 phases.

During the year ended December 31, 2010, sales to Guangxi Caexpo totaled $1,683,246, which accounted for 33% of our total revenue for the period.

Although we are an important strategic IT partner of Guangxi Caexpo, we do not have long-term contracts with Guangxi Caexpo. All of our agreements with Guangxi Caexpo are for short-term projects or sales of third-party hardware. While we feel that our significant relationships with Guangxi Caexpo will likely provide additional sales agreements in the future, Guangxi Caexpo is not contractually bound to purchase any products or services from us. The loss of this customer could hurt our business by reducing our revenues and profitability.

Our second largest customer in 2010 was Beijing Mobile. Since 1998, we have been developing and maintaining the carrier’s BOSS. BOSS is an integrated software platform and it is developed in stages to accommodate the carrier’s increasing subscribers and service offerings. We completed phase one in 2002, phrase two in 2006 and phrase three in 2007. We are currently continuing to maintain phases one, two and three.

Patents, Intellectual Property, and Licensing

We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality agreements, and other contractual restrictions with employees and third parties to establish and protect our proprietary rights. Despite these precautions, the measures we undertake may not prevent misappropriation or infringement of our proprietary technology. These measures may not preclude competitors from independently developing products with functionality or features similar to our products.

AsWe ~~of December 31, 2010, we~~ have been issued 6261 patents in the PRC that are currently in force. ~~We also have 2 patent applications submitted for review and approval.~~ The normal expiration dates of our issued patents in the PRC range from 2026 to 2030. We also have 2 patent applications submitted for review and approval. It is possible that we will not receive patents for these applications or ~~that we have submitted and~~ those that we plan to file in the future. ~~Furthermore~~Additionally, our issued patents may not adequately protect our technology from infringement or prevent others from claiming that our products infringe the patents of those third parties. Our failure to protect our intellectual property could materially harm our business. ~~In addition~~Furthermore, our competitors may independently develop similar or superior technology, duplicate our products, or design around our patents. It is possible that litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, or to determine the validity and scope of the proprietary rights of others. Litigation could result in substantial costs and diversion of resources and could materially harm our business.

Some of our products are designed to include software or other intellectual property licensed from third parties. While it may be necessary in the future to seek or renew licenses relating to various aspects of our products, we believe that such licenses generally could be obtained on commercially reasonable terms. ~~However,~~Failure ~~failure~~ to obtain such licenses on commercially reasonable terms could materially harm our business.

~~Environmental~~Item ~~Matters~~1A. Risk Factors

~~None.~~In addition to the other information in this Form 10-K, the following factors should be considered in evaluating our business and our future prospects:

11POLITICAL AND ECONOMIC POLICIES OF THE CHINESE GOVERNMENT COULD AFFECT OUR INDUSTRY IN GENERAL AND OUR COMPETITIVE POSITION IN PARTICULAR

~~Item~~Since 1Athe establishment of the People's Republic of China in 1949, the Communist Party has been the governing political party in the PRC. ~~Risk~~The ~~Factors~~highest bodies of leadership are the Politburo of the Communist Party, the Central Committee, and the National People's Congress. The State Council, which is the highest institution of government administration, reports to the National People's Congress and has under its supervision various commissions, agencies, and ministries, including The Ministry of Information Industry and the telecommunications regulatory body of the Chinese government. Since the late 1970s, the Chinese government has been reforming the Chinese economic system. Although we believe that economic reforms and the macroeconomic measures adopted by the Chinese government have had and will continue to have a positive effect on economic development in China, there can be no assurance that the economic reform strategy will not from time to time be modified or revised. Such modifications or revisions, if any, could have a material adverse effect on the overall economic growth of China and investment in the internet and telecommunications industries in China. Such developments could reduce, perhaps significantly, the demand for our products and services. There is no guarantee that the Chinese government will not impose other economic or regulatory controls that would have a material adverse effect on our business. Furthermore, changes in political, economic, and social conditions in China, adjustments in policies of the Chinese government, or changes in laws and regulations could affect our industry in general and our competitive position in particular.

~~In addition to the other information in this Form 10-K, the following factors should be considered in evaluating our business and our future prospects:~~9

~~POLITICAL~~THE ~~AND~~GROWTH ~~ECONOMIC~~OF ~~POLICIES~~OUR OFBUSINESS ~~THE~~IS ~~CHINESE~~DEPENDENT ON GOVERNMENT ~~COULD~~TELECOMMUNICATIONS ~~AFFECT~~INFRASTRUCTURE ~~OUR~~AND ~~INDUSTRY~~BUDGETARY INPOLICY, ~~GENERAL~~PARTICULARLY ~~AND~~THE ~~OUR~~ALLOCATION ~~COMPETITIVE~~OF ~~POSITION~~FUNDS TO SUSTAIN THE GROWTH OF THE TELECOMMUNICATIONS INDUSTRY IN ~~PARTICULAR~~CHINA

~~Since~~Virtually ~~the~~all ~~establishment~~ of ~~the~~our ~~People's~~large ~~Republic~~customers ofare ~~China~~directly or inindirectly ~~1949,~~owned ~~the~~or ~~Communist~~controlled ~~Party~~by ~~has been~~ the ~~governing~~government ~~political party in the PRC. The highest bodies~~ of ~~leadership are the Politburo of the Communist Party, the Central Committee and the National People's Congress~~China. ~~The State Council~~Accordingly, ~~which~~their isbusiness ~~the highest institution of government administration~~strategies, ~~reports~~capital toexpenditure ~~the National People's Congress and has under its supervision various commissions~~budgets, ~~agencies~~ and ~~ministries,~~spending ~~including~~plans ~~The~~are ~~Ministry~~largely ofdecided ~~Information~~in ~~Industry~~accordance ~~and~~with ~~the telecommunications regulatory body of the Chinese~~ government. ~~Since~~policies, ~~the~~which, ~~late~~in ~~1970s~~turn, ~~the~~are ~~Chinese~~determined ~~government~~on ~~has~~a ~~been~~centralized basis ~~reforming~~at the ~~Chinese~~highest ~~economic~~level ~~system. Although we believe that economic reforms and the macroeconomic measures adopted~~ by the ~~Chinese~~National ~~government~~Development ~~have had~~ and ~~will~~Reform ~~continue~~Commission toof ~~have~~China. As a ~~positive effect on economic development in China~~result, ~~there can be no assurance that~~ the ~~economic~~growth ~~reform~~of ~~strategy~~our ~~will~~business is ~~not~~heavily ~~from~~dependent ~~time~~on togovernment ~~time~~policies befor ~~modified~~telecommunications orand ~~revised~~internet infrastructure. ~~Such~~Insufficient ~~modifications~~government orallocation of ~~revisions,~~funds ifto ~~any,~~sustain ~~could have a material adverse effect on~~ the ~~overall economic~~ growth of China's ~~and~~telecommunications ~~investment~~industries in the ~~Internet~~future ~~and the telecommunications industry in China. Such developments~~ could reduce, ~~perhaps significantly,~~ the demand for our products and services. ~~There~~and ~~is no guarantee that the Chinese government will not impose other economic or regulatory controls that would~~ have a material adverse effect on our ~~business.~~ability ~~Furthermore,~~to ~~changes~~grow ~~in political, economic and social conditions in China, adjustments in policies of the Chinese government or changes in laws and regulations could affect~~ our ~~industry in general and our competitive position in particular~~business.

~~THE~~CURRENCY ~~GROWTH~~EXCHANGE OFRATE ~~OUR~~RISK ~~BUSINESS~~DUE ~~IS DEPENDENT ON GOVERNMENT TELECOMMUNICATIONS INFRASTRUCTURE AND BUDGETARY POLICY, PARTICULARLY THE ALLOCATION OF FUNDS~~ TO ~~SUSTAIN~~FLUCTUATIONS IN THE ~~GROWTH~~EXCHANGE OFRATE ~~THE~~BETWEEN ~~TELECOMMUNICATIONS~~U.S. ~~INDUSTRY~~DOLLARS INAND ~~CHINA~~RENMINBI

~~Virtually~~The ~~all~~functional currency of our ~~large~~operations ~~customers~~is Renminbi (“RMB”), and our financial statements are ~~directly~~expressed orin ~~indirectly~~U.S. ~~owned~~dollars or(“USD”). ~~controlled~~As bya result, we are subject to the ~~government~~effects of ~~China~~exchange rate fluctuations between these currencies. ~~Accordingly~~In July 2005, ~~their~~the ~~business~~Chinese ~~strategies,~~government ~~capital~~announced ~~expenditure~~that ~~budgets~~it would no longer peg its currency exclusively to USD but instead would switch to a managed floating exchange rate based on market supply and ~~spending~~demand ~~plans~~with ~~are~~reference to ~~largely~~a ~~decided~~basket of currencies determined by the People’s Bank of China. The exchange rate of RMB to USD changed from RMB 8.28 to RMB 7.82 in ~~accordance~~late ~~with~~December ~~government~~2006. ~~policies~~Any future devaluation of the RMB against the USD may have an adverse effect on our reported net income. As our operations are conducted in the PRC, ~~which~~substantially all our revenues, inexpenses, ~~turn~~assets, and liabilities are ~~determined~~denominated in onRMB. aIn ~~centralized~~general, ~~basis~~our atexposure ~~the~~to ~~highest~~foreign ~~level~~exchange risks should be limited. The value in our shares, however, may be affected by the ~~National~~foreign ~~Development~~exchange rate between the USD and ~~Reform~~the ~~Commission~~RMB because the value of ~~China~~our business is effectively denominated in RMB while our shares are traded in USD. AsFurthermore, a ~~result,~~decline in the ~~growth~~value of ~~our~~RMB ~~business~~could isreduce ~~heavily~~the ~~dependent~~USD onequivalent ~~government~~of ~~policies~~the ~~for~~value ~~telecommunications~~of the earnings from, and ~~internet~~our ~~infrastructure.~~investment ~~Insufficient~~in, ~~government~~our ~~allocation~~subsidiaries in the PRC, while an increase in the value of ~~funds~~the RMB may require us to ~~sustain~~exchange more USD into RMB to meet the ~~growth~~working capital requirements of our subsidiaries in China's. ~~telecommunications~~Depreciation ~~industries~~of inthe value of the ~~future~~USD ~~could~~will also reduce the ~~demand~~value ~~for~~of ~~our~~the ~~products~~cash ~~and~~we ~~services~~hold ~~and~~in ~~have~~USD, awhich ~~material~~we ~~adverse~~may ~~effect~~use onfor purposes of future acquisitions or other business expansion. We actively monitor our ~~ability~~exposure to ~~grow~~these risks and adjust our ~~business~~cash position in RMB and USD when we believe such adjustments will reduce risks.

~~CURRENCY~~GENERAL ~~EXCHANGE RATE~~ RISK ~~DUE~~OF ~~TO FLUCTUATIONS IN THE EXCHANGE RATE BETWEEN U.S. DOLLARS AND RENMINBI~~FINANCING

The functional currency of our operations is Renminbi (“RMB”) and our financial statements are expressed in U.S. dollars (“USD”). As a result, we are subject to the effects of exchange rate fluctuations between these currencies. In ~~July~~order ~~2005,~~for the ~~Chinese~~Company ~~government~~to ~~announced~~meet ~~that it would no longer peg~~ its ~~currency~~continuing cash ~~exclusively~~requirements ~~to USD but instead would switch to a managed floating exchange rate based on market supply~~ and ~~demand with reference~~ to asuccessfully ~~basket~~implement ofits ~~currencies~~growth ~~determined~~strategy, bywe ~~the~~will ~~People’s~~need ~~Bank of China. The exchange rate of RMB~~ to ~~USD~~rely ~~changed~~on ~~from~~increased ~~RMB 8.28 to RMB 7.82 in late December 2006. Any~~ future ~~devaluation of the RMB against the USD may have an adverse effect on our reported net income. As our operations are conducted in the PRC, substantially all our~~ revenues, ~~expenses,~~or ~~assets~~will require ~~and~~additional ~~liabilities are denominated in RMB~~financing. In ~~general, our exposure to foreign exchange risks should be limited. However,~~ the ~~value~~event inadditional ~~our~~financing ~~shares may be affected by the foreign exchange rate between the USD and the RMB because the value of our business~~ is ~~effectively denominated in RMB~~required, ~~while~~no ~~our~~assurances ~~shares~~can ~~are~~be ~~traded~~given inthat ~~USD.~~such ~~Furthermore,~~financing awill be ~~decline~~available in the ~~value~~amount ofrequired ~~RMB could reduce the USD equivalent of the value of the earnings from~~or, ~~and~~if ~~our investment in~~available, ~~our~~that ~~subsidiaries~~it incan ~~the~~be ~~PRC;~~on ~~while~~terms ansatisfactory ~~increase in the value of the RMB may require us~~ to ~~exchange more USD into RMB to meet~~ the ~~working capital requirements of our subsidiaries in China~~Company. Depreciation of the value of the USD will also reduce the value of the cash we hold in USD, which we may use for purposes of future acquisitions or other business expansion. We actively monitor our exposure to these risks and adjust our cash position in RMB and USD when we believe such adjustments will reduce risks.

12RISK OF SLOW CHINESE ECONOMIC RECOVERY

~~GENERAL~~The ~~RISK~~Chinese OFeconomy ~~FINANCING~~is continuing the recovery from the recent global crisis in the financial services and credit markets, which resulted in significant volatility and dislocation in the global capital markets and particularly in China’s growth rate. The road to recovery remains uncertain and may be slow, and the impact of a slow economic recovery in China could result in slowing growth for China’s major telecommunications carriers, which are our major customers, as well as slowing growth for enterprises and government entities that buy our IT software products and services. Any such adverse conditions for our customers could reduce their demand for our software and services and therefore reduce our revenues.

InItem order for the Company to meet its continuing cash requirements and to successfully implement its growth strategy, the Company will need to rely on increased future revenues and/or will require additional financing1B. InUnresolved ~~the~~Staff ~~event additional financing is required, no assurances can be given that such financing will be available in the amount required or, if available, that it can be on terms satisfactory to the Company.~~Comments

~~RISK~~Not ~~OF CHINESE ECONOMIC SLOW DOWN~~applicable.

The Chinese economy has recently experienced a slowing of its growth rate. The slow-down has been exacerbated by the recent global crisis in the financial services and credit markets, which has resulted in significant volatility and dislocation in the global capital markets. It is still uncertain how long the global crisis in the financial services and credit markets will continue and how much adverse impact it will have on the global economy in general or the Chinese economy in particular. Slowing economic growth in China could result in slowing growth for China’s major telecommunications carriers, which are our major customers, as well as slowing growth for enterprises and government entities that buy our IT software products and services. Any such adverse conditions for our customers could reduce their demand for our software and services and therefore reduce our revenues.10

Item 1B2. ~~Unresolved Staff Comments.~~Properties

~~Not~~We ~~applicable~~have an office in Chengdu, PRC, which houses FTCD. The building is located at B-16B, Wangfujing Business Mansion, No.5 Huaxingzheng Street, Chengdu, Sichuan Province, PRC.

~~Item~~We rent office space of approximately 2,027 square meters that serves as our headquarters at 9/F Shenzhou Mansion, No. ~~Description~~31 ofZhongguancun ~~Property~~Street, Haidian District, Beijing, China. We have a renewable lease agreement for these premises until March 29, 2011. The total rent from March 30, 2011 to March 29, 2013 is $864,764 (RMB 5,539,680).

WeIn ~~have an office in Chengdu~~addition, ~~PRC,~~we ~~which~~have ~~houses~~one ~~FTCD.~~regional ~~The~~field ~~building~~support isoffice ~~located~~in ~~at B-16B, Wangfujing Business Mansion, No.5 Huaxingzheng Street,~~ Chengdu, ~~Sichuan Province,~~ PRC~~, and was purchased on behalf of the Company by Mr~~. YiThe ~~He,~~lease ~~our~~term ~~Chief~~for ~~Executive~~this ~~Officer.~~office Byis aas ~~stockholders’ resolution passed on March 8, 1999, it was ratified that the title to the building belongs to the Company. In 2005, the title to the building was transferred to FTCD.~~follow:

We currently rent office space of approximately 2,027 square meters that serves as our headquarters at 9/F Shenzhou Mansion, No. 31 Zhongguancun Street, Haidian District, Beijing, China. We have a renewable lease agreement for these premises until March 29, 2011. The total rent from March 30, 2009 to March 29, 2011 is $770,457 (RMB 5,326,944).

Name		Rent Period		Size (in m²)		Annual Rent
Chengdu R&D Center		11/22/2011 – 11/21/2012		602.59		$35,927 (RMB 248,400)

InWe ~~addition,~~believe wethat ~~currently~~our ~~have~~current ~~two~~facilities ~~regional~~occupied ~~field~~are ~~support~~adequate to ~~offices~~meet inour ~~the~~current ~~PRC,~~operational ~~namely, in Shanghai and Chengdu~~needs. ~~The lease terms for these offices are as follows:~~

Name	Rent Period	Size (in m2)	Annual Rent
Shanghai Office	3/23/2010 – 3/22/2011*	75.53	$5,022(RMB33,600)
Chengdu R&D Center	11/22/2010 – 11/21/2011	602.59	$35,927 (RMB 248,400)

Item 3. Legal Proceedings

* At the expiration of the lease, we will continue to lease the premises on a month-to-month basis for $585 (RMB 4,000) per monthNone.

WeItem 4. Mine ~~believe~~Safety ~~that the current facilities occupied by the Company and its subsidiaries will be able to meet the Company’s operational needs for the coming year.~~Disclosures

~~Item~~Not 3applicable. ~~Legal Proceedings.~~

~~The~~PART Company is not a party to any legal proceedings and to the best of the Company's knowledge, no such proceedings are threatened or contemplated. At this time, the Company has no bankruptcy, receivership, or similar proceedings pending.II

~~PART~~Market IIInformation

~~Item~~Our 5common stock, par value $0.001 ~~Market~~per share, is quoted on the Over-the-Counter Bulletin Board system under the symbol “FLSW.” The following table sets forth the range of high and low bid prices for ~~Registrant’s~~our ~~Common~~common ~~Equity~~stock ~~Related~~for ~~Stockholder~~each ~~Matters~~quarterly period indicated, as reported by the OTCBB. Quotations reflect inter-dealer prices without retail markup, markdown, or commissions, and ~~Issuer~~may ~~Purchases~~not ofrepresent ~~Equity~~actual ~~Securities~~trades.

~~Market~~Common ~~Information~~Stock

Our common stock, par value $0.001 per share, is currently trading on the Over the Counter Bulletin Board system under the symbol "FLSW". There is no assurance that our common stock will continue to be quoted or that any liquidity exists for the Company’s shareholders.

Quarter Ended	High Bid		Low Bid

December 31, 2011		—		—
September 30, 2011		—		—
June 30, 2011		—		—
March 31, 2011	$	0.00	$	0.00

December 31, 2010		—		—
September 30, 2010	$	0.14	$	0.00
June 30, 2010	$	0.35	$	0.03
March 31, 2010	$	0.25	$	0.13

The following table sets forth the range of high and low bid prices for the Company's common stock for each quarterly period indicated, as reported by the “Businessweek Companies” website. Quotations reflect inter-dealer prices without retail markup, markdown or commissions and may not represent actual trades.Holders

~~Common~~As ~~Stock~~of March 23, 2012, we have 486 stockholders of record.

Quarter Ended	High Bid		Low Bid
December 31, 2010	$	0.30	$	0.15
September 30, 2010	$	0.95	$	0.12
June 30, 2010	$	0.70	$	0.20
March 31, 2010	$	0.30	$	0.13
December 31, 2009	$	0.30	$	0.13
September 30, 2009	$	0.36	$	0.12
June 30, 2009	$	0.80	$	0.22
March 31, 2009	$	0.90	$	0.85

~~Holders~~Dividends

AsWe ofhave ~~March~~never ~~25,~~paid ~~2011,~~cash ~~there~~dividends ~~were~~on ~~4,651,173~~our ~~shares of the Company's~~ common stock ~~outstanding~~and ~~held~~do not ofintend ~~record~~to bydo ~~approximately~~so ~~548~~in ~~stockholders~~the ~~(not~~foreseeable ~~including~~future. ~~beneficial~~We ~~owners~~retain ~~who~~any ~~hold~~earnings ~~shares~~for atthe ~~broker/dealers~~operation inand ~~“street~~expansion ~~name”)~~of our business.

~~Dividends~~Securities Authorized for Issuance under Equity Compensation Plans

~~The~~Please ~~Company~~see ~~has~~the ~~never~~discussion ~~paid cash dividends on its common stock and does not intend to do so~~ in ~~the~~Item ~~foreseeable~~12 ~~future.~~titled ~~The~~“Equity ~~Company~~Compensation Plan ~~currently~~Information” ~~intends to retain its earnings for the operation and expansion of its business~~below.

~~Securities~~Item ~~Authorized~~6. ~~for~~Selected ~~Issuance~~Financial ~~under Equity Compensation Plans~~Data

~~Please~~Not ~~see the discussion in Item 12 titled “Equity Compensation Plan Information” below~~applicable.

Item 67. ~~Selected~~ Management’s Discussion and Analysis of Financial ~~Data~~Condition and Results of Operations

~~Not applicable.~~General

14The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-K. Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-K. Our actual results could differ materially from those discussed here. Except as required by law, we undertake no obligation to update any forward-looking statements for any reason. Please see the “Cautionary Note Regarding Forward-Looking Information” section above for more information regarding forward-looking statements.

~~Item 7. Management’s Discussion and Analysis or Plan of Operation~~Overview

~~General~~We are a professional software development and technology service company. We are also a leading provider of industry e-business application solutions in China. Our main business is providing application development and maintenance services for companies in the telecom, logistics, and government industries. We are inputting our efforts to develop our new products and services on on-line trading platform, SaaS platform (For-Online), the internet of things (“IOT”) application solutions, and mobile business application solutions.

~~Statements~~In ~~contained~~addition ~~herein~~to ~~that~~our ~~are~~core ~~not~~business, ~~historical facts are forward-looking statements as that term is defined by the Private Securities Litigation Reform Act of 1995. Although~~ we believe that ~~the~~there ~~expectations reflected in such forward looking statements~~ are opportunities ~~reasonable,~~for ~~the~~us ~~forward~~to ~~looking~~expand ~~statements~~into ~~are~~new ~~subject~~areas ~~to risks~~ and ~~uncertainties that could cause actual results~~ to ~~differ~~grow ~~from~~our ~~those~~business ~~projected. We caution investors that any forward looking statements made by us are~~ not ~~guarantees~~only ofinternally ~~future~~but ~~performance~~through acquisitions and ~~those~~investments. Please ~~actual~~see ~~results may differ materially from those in~~ the ~~forward-looking~~“Business” ~~statements.~~section ~~Such~~above ~~risks~~for ~~and~~more ~~uncertainties~~information ~~include,~~about ~~without~~our ~~limitation:~~operations ~~well-established competitors who have substantially greater financial resources~~ and ~~longer~~recent ~~operating~~developments ~~histories, regulatory delays or denials, ability~~ to ~~compete~~our ~~as a start-up company in a highly competitive market, and access to sources of capital~~business.

The following discussion and analysis should be read in conjunction with our financial statements and notes thereto included elsewhere in this Form 10-K. Except for the historical information contained herein, the discussion in this Form 10-K contains certain forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations and intentions. The cautionary statements made in this Form 10-K should be read as being applicable to all related forward looking statements wherever they appear in this Form 10-K. The Company's actual results could differ materially from those discussed here. We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available or other events occur in the future.Revenues

~~Overview~~Our business includes the Forlink branded "For-"series software system sales such as ForOSS, ForRMS, and For-Mail and their copyright licensing, and For-series related system integration, which consists of hardware sales and other related services rendered to customers. The following table shows our revenue breakdown by business line:

We are a professional software development and technology service company. We are also a leading provider of industry e-business application solutions in China. Our main business is providing application development and maintenance services for companies in the telecom, logistics and government industries. We are inputting our efforts to develop our new products and services on on-line trading platform, SaaS platform (For-Online), the internet of things (“IOT”) application solutions and mobile business application solutions. We anticipate making profits from these products and services in the foreseeable future

	Year Ended December 31,
	2011			2010

Sales of For-series software	$	3,287,638		$	4,624,918
as a percentage of net sales		96	%		92	%

For-series related system integration	$	120,927		$	402,789
as a percentage of net sales		4	%		8	%

InAs ~~addition~~indicated toin ~~our~~the ~~core~~foregoing ~~business~~table, wesales ~~believe~~of ~~that~~For-series ~~there~~software as ~~are~~a ~~opportunities~~percentage ~~for~~of usnet tosales ~~expand~~increased ~~into~~from ~~new~~92% ~~areas~~in ~~and~~2010 to ~~grow~~96% ~~our~~in ~~business~~2011 ~~not~~while ~~only~~sales ~~internally~~of ~~but~~For-series ~~through~~related ~~acquisitions~~system ~~and~~integration ~~investments. For~~ as a ~~description~~percentage of ~~all~~net ofsales ~~our~~decreased ~~investments~~from ~~and~~8% ~~other~~in ~~business~~2010 ~~activities~~to ~~since~~4% ~~1999,~~in ~~please~~2011. ~~refer~~The decrease in our sales of system integration was attributable to ~~the~~a ~~section~~decrease ~~titled~~in ~~“Company~~customer ~~History~~sales ~~and~~contracts ~~Recent~~due ~~Developments”~~to ~~under~~lower ~~Item~~customer 1demand. ~~(Description~~Our ofstrategy, ~~Business)~~however, inis ~~Part~~to Iincrease ofsoftware ~~this~~sales ~~Form~~as such ~~10-K~~sales carry higher profit margins.

~~Revenues~~12

~~Our~~Generally, ~~business~~we ~~includes~~offer ~~Forlink~~our ~~brand~~products ~~"For-"series~~and ~~software~~services ~~system~~to ~~sales~~our ~~such~~customers on asa ~~ForOSS, ForRMS, For~~total-~~Mail~~solutions ~~and~~basis. ~~their~~Most ~~copyright licensing, and For-series related system integration, which consists~~ of ~~hardware~~the ~~sales~~contracts ~~and~~we ~~other~~undertake ~~related~~for ~~services~~our ~~rendered to~~ customers. ~~The~~include ~~following~~revenue ~~table~~from ~~shows~~hardware ~~our~~and ~~revenue~~software ~~breakdown~~sales and byprofessional ~~business line:~~services.

	Year Ended December 31,
	2010			2009
Sales of For-series software	$	4,499,719		$	3,473,568
as a percentage of net sales		92	%		55	%
For-series related system integration	$	402,789		$	2,815,396
as a percentage of net sales		8	%		45	%

Sources of Revenue

As· ~~indicated~~Hardware inRevenue: ~~the~~Revenues ~~foregoing~~from ~~table,~~ sales of ~~For-series~~products ~~software~~are asmainly aderived ~~percentage~~from sales of ~~net~~hardware. ~~sales~~Normally, ~~increased~~the ~~from~~hardware ~~55%~~that inwe ~~2009~~procure tois ~~92%~~ in ~~2010~~connection ~~while~~with ~~sales of For~~total-~~series~~solutions ~~related~~basis system integration ascontracts. a· ~~percentage~~Service ofRevenue: ~~net~~Service ~~sales~~revenue ~~decreased~~consists ~~from~~of ~~45%~~revenue infor ~~2009~~the toprofessional 8%services inwe ~~2010.~~provide ~~The~~to ~~main~~our ~~reason~~customers ~~was~~for ~~that~~network ~~our~~planning, ~~third~~design and ~~last~~systems ~~sale for the system~~ integration, ~~project~~software ~~for~~development, ~~Guangxi~~modification ~~Caexpo~~and ~~was~~installation, ~~recognized~~and inrelated ~~2009~~training services. ~~The~~· ~~decrease~~Software inLicense ~~our~~Revenue: ~~sales~~We ofgenerate ~~system~~revenue ~~integration~~in ~~was~~the ~~also~~form ~~attributable~~of tofees areceived ~~decrease~~from incustomers ~~customer sales contracts due~~ to ~~lower~~whom ~~customer~~we ~~demand.~~issue ~~However,~~licenses for the ~~Company’s~~use ~~strategy~~of isour ~~to increase~~ software ~~sales~~products ~~which~~over ~~carry~~an ~~higher~~agreed ~~profit~~period ~~margins~~of time.

~~Generally,~~Costs ~~we offer our products and services to our customers on a total-solutions basis. Most~~ of ~~the contracts we undertake for our customers include revenue from hardware and software sales and professional services.~~Revenue

15Our costs of revenue include hardware costs, software-related costs, and compensation and travel expenses for the professionals involved with relevant projects. Hardware costs consist primarily of third-party hardware costs. We recognize hardware costs in full upon delivery of the hardware to our customers. Software-related costs consist primarily of packaging and written manual expenses for our proprietary software products and software license fees paid to third-party software providers for the right to sublicense their products to our customers as part of our solutions offerings. The costs associated with designing and modifying our proprietary software are classified as research and development expenses as such costs are incurred.

~~Sources~~Operating ~~of Revenue~~Expenses

·Operating ~~Hardware~~expenses ~~Revenue: Revenues from sales of products~~ are ~~mainly~~comprised ~~derived from sales~~ of ~~hardware. Normally~~selling expenses, ~~the~~research ~~hardware~~and ~~that~~development weexpenses, ~~procure~~and isgeneral inand ~~connection~~administrative ~~with total-solutions basis system integration contracts~~expenses.

·Selling ~~Service~~expenses ~~Revenue:~~include ~~Service~~compensation ~~revenue consists of revenue~~ expenses for ~~the~~employees ~~professional~~in ~~services we provide to~~ our ~~customers~~sales ~~for~~and ~~network~~marketing ~~planning~~departments, ~~design~~third ~~and~~party ~~systems~~advertising ~~integration~~expenses, ~~software~~and ~~development,~~sales ~~modification~~commissions and ~~installation,~~sales ~~and related training services~~agency fees.

·Research ~~Software~~and ~~License~~development ~~Revenue:~~expenses Werelate ~~generate revenue in~~ to the ~~form~~development of ~~fees~~new ~~received~~software ~~from~~and ~~customers to whom we issue licenses for~~ the ~~use~~modification of ~~our~~existing software. ~~products~~We ~~over~~expense ansuch ~~agreed~~costs ~~period~~as ofthey ~~time~~are incurred.

~~Costs of Revenue~~ Taxes

~~Our~~According ~~costs~~to ofrelevant ~~revenue~~PRC ~~include~~tax ~~hardware~~rules ~~costs, software-related costs~~ and ~~compensation~~regulations, FTCL and ~~travel~~BFHX, ~~expenses~~both ~~for the professionals involved in the relevant projects. Hardware costs consist primarily~~ of ~~third~~which ~~party~~are ~~hardware~~recognized ~~costs.~~as WeNew ~~recognize~~Technology ~~hardware~~Enterprises ~~costs~~operating inwithin ~~full~~a ~~upon~~New ~~delivery of the hardware to our customers. Software-related costs consist primarily of packaging~~ and ~~written~~High ~~manual~~Technology ~~expenses~~Development Zone, ~~for~~are ~~our~~entitled ~~proprietary software products and software license fees paid~~ to ~~third-party~~an ~~software~~Enterprise ~~providers~~Income ~~for~~Tax ~~the~~(“EIT”) ~~right~~rate ~~to sublicense their products to our customers as part~~ of ~~our solutions offerings~~15%. ~~The costs associated with designing and modifying our proprietary software are classified as research and development expenses as such costs are incurred.~~

~~Operating~~Pursuant ~~Expenses~~to approval documents dated September 23, 1999 and August 2, 2000 issued by the Beijing Tax Bureau and the State Tax Bureau respectively, FTCL received full exemption from the EIT for fiscal years 1999 through 2002 and a 50% EIT reduction at the rate of 7.5% for fiscal years 2003 through 2005. As of December, 31, 2011, FTCL was entitled to an EIT rate of 15%.

~~Operating~~Pursuant ~~expenses~~to ~~are~~an ~~comprised~~approval document dated January 19, 2004 issued by the State Tax Bureau, BFHX received full exemption from EIT for fiscal years 2004 through 2006. As of ~~selling~~December ~~expenses~~31, ~~research~~2011, ~~and~~BFHX was ~~development~~entitled ~~expenses~~to ~~and~~an ~~general~~EIT ~~and~~rate ~~administrative~~of ~~expenses~~25%.

~~Selling~~The ~~expenses~~Hong ~~include~~Kong ~~compensation~~profits ~~expenses~~tax is calculated at 16.5% on the estimated assessable profits of FTHK. The EIT rates for ~~employees~~FTCD inand ~~our~~NNBCE ~~sales~~are 25%. No provision for EIT and ~~marketing~~Hong ~~departments~~Kong profits tax were made for FTCL, ~~third~~BFHX, ~~party~~FTCD, ~~advertising~~FTGX, ~~expenses~~NNBCE, asand ~~well~~FTHK as ~~sales~~they ~~commissions~~did ~~and~~not ~~sales~~have ~~agency~~taxable ~~fees~~income during relevant periods.

~~Research and development expenses relate to the development of new software and the modification of existing software. We expense such costs as they are incurred.~~13

~~Taxes~~Revenue from the sale of hardware procured in China together with the related system integration is subject to a 17% value added tax (“VAT”). But companies that develop their own software and have the software registered are generally entitled to a VAT refund. If the net amount of the VAT payable exceeds 3% of software sales, the excess portion of the VAT is refundable upon our application to the tax authority. This policy is effective until 2012. Changes in Chinese tax laws may adversely affect our future operations.

~~According~~Foreign to the relevant PRC tax rules and regulations, FTCL and BFHX, both of which are recognized as New Technology Enterprises operating within a New and High Technology Development Zone, are entitled to an Enterprise Income Tax (“EIT”) rate of 15%.Exchange

~~Pursuant~~Our tofunctional ~~approval~~currency ~~documents~~is ~~dated~~United ~~September~~States ~~23,~~Dollars ~~1999~~ (“USD”), and ~~August~~our 2,financial ~~2000~~records ~~issued~~are bymaintained, ~~the Beijing Tax Bureau~~ and the ~~State~~financial ~~Tax~~statements ~~Bureau respectively~~prepared, ~~FTCL~~in ~~received~~USD. ~~full~~The ~~exemption~~functional ~~from~~currency ~~EIT~~of ~~for~~FTHK ~~fiscal~~is ~~years~~Hong Kong ~~1999~~Dollars ~~through 2002~~(“HKD”), and athe ~~50%~~financial ~~EIT~~records ~~reduction~~are atmaintained, and the ~~rate~~financial ofstatements 7prepared, in HKD.5% ~~for~~The functional ~~fiscal~~currency ~~years~~of ~~2003~~FTCL, ~~through~~BFHX, ~~2005.~~FTGX, Asand ofFTCD ~~December,~~is ~~31,~~Renminbi ~~2008~~(“RMB”), ~~FTCL~~and ~~was~~the ~~entitled~~financial torecords anare ~~EIT~~maintained, ~~rate~~and the offinancial ~~25%~~statements prepared, in RMB.

~~Pursuant~~Foreign tocurrency antransactions ~~approval~~during ~~document~~the ~~dated~~year ~~January~~are ~~19,~~translated into ~~2004~~each ~~issued~~company’s bydenominated currency at the ~~State~~exchange ~~Tax~~rates ~~Bureau,~~at ~~BFHX~~the ~~received~~transaction ~~full~~dates. ~~exemption~~Gains and losses resulting from foreign ~~EIT~~currency ~~for~~transactions ~~fiscal~~are ~~years~~included ~~2004~~in ~~through~~the ~~2006.~~consolidated Asstatement of ~~December~~operations. ~~31,~~Assets ~~2008,~~and ~~BFHX~~liabilities ~~was~~denominated ~~entitled~~in toforeign currencies anat ~~EIT~~the ~~rate~~balance sheet date are translated into each company’s denominated currency at year-end exchange rates. All exchange differences are dealt with in the consolidated statements of 7operations.~~5%.~~

~~Hong~~The ~~Kong~~financial ~~profits~~statements ~~tax~~of isour ~~calculated~~operations atbased 16outside of the United States have been translated into USD in accordance with ASC 830.5% onManagement has determined that the ~~estimated~~functional ~~assessable~~currency for ~~profits~~each of ~~FTHK~~our ~~for~~foreign ~~the~~operations ~~period~~is its applicable local currency. ~~The~~When ~~EIT~~translating ~~rates~~functional ~~for~~currency ~~FTCD~~financial ~~and~~statements into ~~NNBCE~~USD, year-end exchange rates are ~~25%.~~applied Noto ~~provision~~the ~~for~~consolidated ~~EIT~~balance ~~and~~sheets ~~Hong~~while ~~Kong~~average ~~profits~~period ~~tax~~rates ~~were~~are ~~made~~applied ~~for~~to ~~FTCL,~~consolidated statements ~~BFHX,~~of ~~FTCD,~~operations. ~~FTGX,~~Translation ~~NNBCE~~gains and ~~FTHK~~losses asare ~~they~~recorded ~~have~~in ~~not~~translation ~~gained~~reserve ~~taxable~~as ~~income~~a ~~for~~component ~~the~~of ~~periods~~stockholders’ equity.

~~Revenue~~The ~~from~~value of the ~~sale~~RMB ofis ~~hardware~~subject ~~procured~~to changes in China’s central ~~together~~government ~~with~~policies ~~the~~and ~~related~~to ~~system~~international ~~integration~~economic isand ~~subject~~political todevelopments aaffecting ~~17%~~supply ~~value~~and ~~added~~demand ~~tax~~in ~~(“VAT”)~~the China Foreign Exchange Trading System market. ~~However~~Since 1994, ~~companies~~the ~~that~~conversion ~~develop~~of ~~their~~RMB ~~own~~into ~~software~~foreign ~~and~~currencies, ~~have~~including USD, has been based on rates set by the ~~software~~People’s ~~registered~~Bank of China, which are ~~generally~~set ~~entitled~~daily tobased aon ~~VAT~~the ~~refund.~~previous Ifday’s interbank foreign exchange market rates and current exchange rates on the ~~net~~world ~~amount~~financial ofmarkets. Since 1994, the ~~VAT~~official ~~payable~~exchange ~~exceeds~~rate 3%generally ofhas ~~software~~been ~~sales~~stable. In July 2005, the ~~excess~~Chinese ~~portion~~government ofannounced ~~the~~that ~~VAT~~it iswill ~~refundable~~no ~~upon~~longer ~~our~~peg ~~application~~its currency exclusively to ~~the tax~~USD ~~authority.~~but ~~This~~will ~~policy~~switch isto ~~effective~~a managed ~~until~~floating ~~2011.~~exchange ~~Changes~~rate inbased ~~Chinese~~on ~~tax~~market ~~laws~~supply ~~may~~and ~~adversely~~demand ~~affect~~with ~~our~~reference ~~future~~to ~~operations~~a basket of currencies.

16The following table shows the exchange rates and the weighted average rates for the years ended December 31, 2011 and 2010:

Foreign Exchange

		USD		HKD		RMB
Exchange rate as of December 31,	2011		1		7.80		6.30
	2010		1		7.82		6.61

Weighted average rates ruling for	2011		1		7.80		6.40
	2010		1		7.80		6.69

~~Our~~Critical ~~functional~~Accounting ~~currency~~Policies ~~is United States Dollars (“USD”)~~ and our financial records are maintained and the financial statements prepared in USD. The functional currency of FTHK is Hong Kong Dollars (“HKD”) and the financial records are maintained and the financial statements prepared in HKD. The functional currency of FTCL, BFHX, FTGX and FTCD is Renminbi (“RMB”) and the financial records are maintained and the financial statements are prepared in RMB.Estimates

~~Foreign~~We ~~currency~~prepare ~~transactions~~our ~~during~~consolidated financial statements in accordance with generally accepted accounting principles in the ~~year~~United ~~are~~States ~~translated~~of ~~into~~America. ~~each~~The ~~company’s~~preparation ~~denominated~~of ~~currency~~those atfinancial statements requires us to make estimates and assumptions that affect the ~~exchange~~reported ~~rates~~amounts ~~ruling~~of atassets and liabilities and the ~~transaction~~disclosure of ~~dates.~~contingent ~~Gains~~assets and ~~losses~~liabilities ~~resulting~~at ~~from~~the ~~foreign~~date ~~currency~~of ~~transactions~~the ~~are~~financial ~~included~~statements inand the ~~consolidated~~reported ~~statement~~amount of ~~operations~~revenues and expenses during the reporting period. ~~Assets~~On an on-going basis, we evaluate our estimates and ~~liabilities~~judgments, ~~denominated~~including those related to revenues and cost of revenues under customer contracts, bad debts, income taxes, investment in ~~foreign~~affiliate, ~~currencies~~long-lived atassets ~~the~~and ~~balance~~goodwill. ~~sheet~~We ~~date~~base our estimates and judgments on historical experience and on various other factors that we believe are ~~translated~~reasonable. ~~into~~Actual ~~each~~results may ~~company’s~~differ ~~denominated~~from ~~currency~~these atestimates ~~year-end~~under ~~exchange~~different ~~rates~~assumptions or conditions. ~~All~~While ~~exchange~~our ~~differences~~significant accounting policies are ~~dealt~~more ~~with~~fully described in ~~the~~Note 2 to our consolidated financial statements, we believe the following critical accounting policies affect the more significant judgments and estimates used in the preparation of ~~operations~~our consolidated financial statements.

The financial statements of the Company’s operations based outside of the United States have been translated into USD in accordance with ASC 830. Management has determined that the functional currency for each of the Company’s foreign operations is its applicable local currency. When translating functional currency financial statements into USD, year-end exchange rates are applied to the consolidated balance sheets, while average period rates are applied to consolidated statements of operations. Translation gains and losses are recorded in translation reserve as a component of stockholders’ equity.14

~~The~~Revenue value of the RMB is subject to changes in China’s central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Since 1994, the conversion of RMB into foreign currencies, including USD, has been based on rates set by the People’s Bank of China, which are set daily based on the previous day’s interbank foreign exchange market rates and current exchange rates on the world financial markets. Since 1994, the official exchange rate generally has been stable. In July 2005, the Chinese government announced that it will no longer peg its currency exclusively to USD but will switch to a managed floating exchange rate based on market supply and demand with reference to a basket of currencies yet to be named by the People’s Bank of China, which will likely increase the volatility of RMB as compared to USD. The exchange rate of RMB to USD changed from RMB 8.28 to 8.11 in late July 2005.Recognition

~~The~~We ~~following~~generally ~~table~~provide ~~shows~~services under multiple element arrangements, which include software license fees, hardware and software sales, provision of system integration services including consulting, implementation, and software maintenance. We evaluate revenue recognition on a contract-by-contract basis as the ~~exchange~~terms ~~rates~~of each arrangement vary. The evaluation of the contractual arrangements often requires judgments and estimates that affect the ~~weighted~~timing ~~average~~of ~~rates~~revenue ~~for~~recognized in the ~~years~~statements ~~ended~~of ~~December~~operations. 31Specifically, ~~2010~~we ~~and~~may ~~2009~~be required to make judgments about:

		USD	HKD	RMB
Exchange rate as of December 31,	2010	1	7.82	6.61
	2009	1	7.79	6.84
Weighted average rates ruling for	2010	1	7.80	6.69
	2009	1	7.78	6.84

·	whether the fees associated with our products and services are fixed or determinable;
·	whether collection of our fees is reasonably assured;
·	whether professional services are essential to the functionality of the related software product;
·	whether we have the ability to make reasonably dependable estimates in the application of the percentage-of-completion method; and
·	whether we have verifiable objective evidence of fair value for our products and services.

~~Critical~~We ~~Accounting~~recognize ~~Policies~~revenues in accordance with the provisions of ASC 985, “Software Revenue Recognition.” ASC 985 requires among other matters, that there be a signed contract evidencing an arrangement exists, delivery has occurred, the fee is fixed or determinable, and ~~Estimates~~collectability is probable.

WeSoftware ~~prepare~~license ~~our~~revenue ~~consolidated~~is ~~financial~~recognized ~~statements~~over inthe ~~accordance with generally accepted~~ accounting ~~principles~~periods contained in the ~~United~~terms ~~States~~ of ~~America. The preparation of those financial statements requires us to make estimates and assumptions that affect~~ the ~~reported~~relevant ~~amounts~~agreements, ofcommencing ~~assets~~upon ~~and liabilities and~~ the ~~disclosure~~delivery of ~~contingent assets and liabilities at~~ the ~~date~~software ofprovided ~~the~~that ~~financial~~(1) ~~statements~~there ~~and~~is ~~the reported amount~~ evidence of ~~revenues~~an ~~and~~arrangement, ~~expenses~~(2) ~~during~~ the ~~reporting~~fee ~~period.~~is Onfixed anor ~~on-going basis~~determinable, ~~we evaluate our estimates~~ and ~~judgments,~~(3) ~~including~~collection ~~those related to revenues and cost~~ of revenues under customer contracts, bad debts, income taxes, investment in affiliate, long-lived assets and goodwill. We base our estimates and judgments on historical experience and on various other factors that we believe are reasonable. Actual results may differ from these estimates under different assumptions or conditions. We believe the ~~following~~fee ~~critical~~is ~~accounting~~considered ~~policies affect the more significant judgments and estimates used in the preparation of our consolidated financial statements~~probable.

Revenue ~~Recognition~~from non-software, multiple-element arrangements is recognized in accordance with ASC 605-25, “Revenue Arrangements with Multiple Deliverables.” Under ASC 605-25, we recognize revenue from the multiple-deliverables that has value to the customer on a stand-alone basis. Deliverables in an arrangement that do not meet the separation criteria in ASC 605-25 are treated as one unit of accounting for purposes of revenue recognition.

WeIn ~~generally~~the ~~provide~~case ~~services~~of ~~under~~maintenance ~~multiple element arrangements~~revenues, ~~which~~vendor-specific ~~include software license fees~~objective evidence, ~~hardware~~or ~~and software sales~~VSOE, ~~provision~~ of ~~system~~fair ~~integration~~value ~~services~~is ~~including~~based ~~consulting, implementation, and software maintenance. We evaluate revenue recognition~~ on asubstantive ~~contract-by-contract~~renewal ~~basis~~prices, ~~as the terms of each arrangement vary. The evaluation of the contractual arrangements often requires judgments~~ and ~~estimates that affect~~ the ~~timing~~revenues ofare ~~revenue~~ recognized inratably over the ~~statements of operations~~maintenance period. ~~Specifically, we may be required to make judgments about:~~

17In the case of consulting and implementation services revenues, where VSOE is based on prices from stand-alone sale transactions, the revenues are recognized as services that are performed pursuant to ASC 985-605-25.

·For ~~whether~~hardware transactions where software is incidental, we do not apply separate accounting guidance to the ~~fees~~hardware ~~associated~~and ~~with~~software ~~our~~elements. We ~~products~~apply the provisions of ASC 985-605-15. Per ASC 985-605-15, if the software is considered non-essential to the functionality of the hardware, then the hardware is not considered “software related” and ~~services~~is excluded from the scope of ASC 985-605-15. Such sale of computer hardware is recognized as revenue on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are ~~fixed~~delivered to orcustomers ~~determinable;~~and title has passed.

·Remote ~~whether~~hosting ~~collection~~services, where VSOE is based upon consistent pricing charged to customers based on volumes and performance requirements on a stand-alone basis and substantive renewal terms, are recognized ratably over the contract term as the services are performed. The remote hosting arrangements generally require the Company to perform one-time set-up activities and include a one-time set-up fee. This one-time set-up fee is generally paid by the customer at the time the contract is executed. We have determined that these set-up activities do not constitute a separate unit of ~~our~~accounting, and accordingly, the related set-up fees isare ~~reasonably~~recognized ~~assured;~~protractedly over the term of the contract.

·We ~~whether~~are ~~professional~~considering ~~services~~the ~~are~~applicability ~~essential~~of ASC 985-605-55, “Application of AICPA Statement of SOP 97-2 to Arrangements That Include the ~~functionality~~Right ofto Use Software Stored on Another Entity’s Hardware,” to the ~~related~~hosting services arrangements on a contract-by-contract basis. If we determine that the customer does not have the contractual right to take possession of our software ~~product;~~at any time during the hosting period without significant penalty, ASC 985-605 would not apply to these contracts in accordance with ASC 985-605-55.

~~· whether we have the ability to make reasonably dependable estimates in the application of the percentage-of-completion method; and~~15

·Income ~~whether we have verifiable objective evidence of fair value for our products and services.~~Taxes

~~The~~We ~~Company~~account ~~recognizes~~for ~~revenues~~income taxes in accordance with ~~the provisions of~~ ASC ~~985,~~740 “~~Software~~Accounting for ~~Revenue~~Income ~~Recognition~~Taxes.” Under ASC ~~985~~740, ~~requires~~deferred ~~among~~tax ~~other~~liabilities ~~matters,~~or ~~that~~assets ~~there~~at the end of each period are determined using the tax rate expected to be ain ~~signed~~effect ~~contract~~when ~~evidencing~~taxes anare ~~arrangement~~actually ~~exists,~~paid ~~delivery~~or ~~has~~recovered. ~~occurred,~~Valuation ~~the~~allowances ~~fee~~are established when it is ~~fixed~~more likely than not that some or ~~determinable,~~all ~~and~~of ~~collectability~~the isdeferred ~~probable~~tax assets not be realized.

~~Software~~In ~~license~~July ~~revenue~~2006, isthe ~~recognized~~FASB ~~over~~ASC ~~the~~740-10-25, ~~accounting~~“Accounting ~~periods~~for Uncertainty ~~contained~~ in ~~the~~Income ~~terms~~Taxes-an interpretation of ~~the~~FASB ~~relevant~~Statement ~~agreements~~No. 109.” This interpretation provides guidance for recognizing and measuring uncertain tax positions, ~~commencing~~as ~~upon~~defined ~~the~~in ~~delivery~~ASC of740, ~~the~~“Accounting ~~software~~for ~~provided~~Income Taxes.” ASC 740-10-25 prescribes a threshold condition that ~~(1)~~a ~~there~~tax isposition ~~evidence~~must ofmeet anfor ~~arrangement,~~any ~~(2)~~of the ~~fee~~benefit isof ~~fixed~~the oruncertain ~~determinable,~~tax ~~and~~position ~~(3)~~to ~~collection~~be ofrecognized in the ~~fee~~financial statements. Guidance is ~~considered~~also ~~probable~~provided regarding derecognition, classification, and disclosure of these uncertain tax positions.

~~Revenue~~Allowance from non-software, multiple-element arrangements is recognized in accordance with ASC 605-25, “Revenue Arrangements with Multiple Deliverables”. Under ASC 605-25, the Company recognizes revenue from the multiple-deliverables which has value to the customer on a stand-alone basis. Deliverables in an arrangement that do not meet the separation criteria in ASC 605-25 are treated as one unit of accounting for ~~purposes~~Doubtful ~~of revenue recognition.~~Accounts

InWe record an allowance for doubtful accounts based on specifically identified amounts that the ~~case~~Company believes to be uncollectible. We have a limited number of ~~maintenance~~customers ~~revenues,~~with ~~vendor-specific~~individually ~~objective~~large amounts ~~evidence,~~due at any given balance sheet date. Any unanticipated change in one of those customers’ credit worthiness or ~~VSOE,~~other matters affecting the collectability of ~~fair~~amounts ~~value~~due isfrom ~~based~~such customers could have a material effect on ~~substantive~~the ~~renewal~~results ~~prices,~~of ~~and~~operations in the ~~revenues~~period ~~are~~in ~~recognized~~which ~~ratably~~such ~~over~~changes or events occur. After all attempts to collect a receivable have failed, the ~~maintenance~~receivable ~~period~~is written off against the allowance.

InRecent ~~the~~Accounting ~~case~~Pronouncements of consulting and implementation services revenues, where VSOE is based on prices from stand-alone sale transactions, the revenues are recognized as services that are performed pursuant to ASC 985-605-25.

~~For~~In ~~hardware~~May ~~transactions where software is incidental~~2011, the ~~Company does~~FASB ~~not~~issued ~~apply~~an ~~separate~~authoritative pronouncement ~~accounting~~on ~~guidance~~fair tovalue ~~the hardware and software elements~~measurement. The ~~Company~~guidance ~~applies~~is the ~~provisions~~result of ~~ASC~~joint ~~985-605-15.~~efforts ~~Per~~by ~~ASC~~the ~~985-605-15,~~FASB ifand the ~~software~~International isAccounting Standards ~~considered~~Board ~~not essential~~ to ~~the~~develop ~~functionality~~a ~~of the hardware~~single, ~~then~~converged ~~the~~fair ~~hardware~~value ~~is not considered “software related” and is excluded from the scope of ASC 985-605-15~~framework. ~~Such~~The ~~sale~~guidance ~~of computer hardware~~ is ~~recognized~~largely asconsistent ~~revenue~~with onexisting ~~the~~fair ~~transfer~~value measurement ofprinciples ~~risks~~in ~~and~~GAAP. ~~rewards~~The ofguidance ~~ownership,~~expands ~~which generally coincides with~~ the ~~time~~existing ~~when~~disclosure ~~the~~requirements ~~goods~~for ~~are~~fair ~~delivered~~value tomeasurements ~~customers~~ and ~~title~~makes other ~~has~~amendments, ~~passed.~~mainly including:

~~Remote~~· ~~hosting services, where VSOE is based upon consistent pricing charged to customers based on volumes~~ Highest-and ~~performance requirements on a stand~~-~~alone~~best-use ~~basis~~ and ~~substantive~~valuation-premise ~~renewal~~concepts ~~terms,~~for ~~are~~nonfinancial ~~recognized ratably over~~ assets—the ~~contract~~guidance ~~term~~indicates asthat the ~~services are performed. The remote hosting arrangements generally require the Company to perform one~~highest-~~time set-up activities~~ and ~~include a one~~-~~time set~~best-upuse ~~fee.~~and ~~This one~~valuation-~~time~~premise ~~set-up~~concepts ~~fee~~only isapply ~~generally~~to ~~paid~~measuring by the ~~customer~~fair atvalue ~~contract execution. The Company has determined that these set-up activities do not constitute a separate unit~~ of ~~accounting,~~nonfinancial ~~and accordingly, the related set-up fees are recognized protractedly over the term of the contract~~assets.

~~The~~· ~~Company~~Application isto ~~considering~~financial ~~the~~assets ~~applicability~~and offinancial ~~ASC~~liabilities ~~985-605-55,~~with ~~“Application~~offsetting ofpositions ~~AICPA~~in ~~Statement~~market ofrisks ~~SOP~~or ~~97-2~~counterparty tocredit ~~Arrangements That Include~~ risk—the ~~Right~~guidance topermits ~~Use~~an ~~Software~~exception ~~Stored on Another Entity’s Hardware,”~~ to ~~the~~fair ~~hosting~~value ~~services~~measurement ~~arrangements~~principles onfor afinancial ~~contract-by-contract~~assets ~~basis.~~and Iffinancial ~~the~~liabilities ~~Company~~(and ~~determines~~derivatives) ~~that~~with ~~the~~offsetting ~~customer~~positions ~~does~~in ~~not~~market ~~have~~risks ~~the~~or ~~contractual~~counterparty ~~right~~credit torisk ~~take~~when ~~possession~~several ofcriteria ~~the~~are ~~Company’s~~met. ~~software~~When ~~at any time during~~ the ~~hosting~~criteria ~~period~~are ~~without significant penalty~~met, ~~ASC~~an ~~985-605~~entity ~~would~~can ~~not~~measure ~~apply~~the tofair ~~these~~value ~~contracts~~of inthe ~~accordance~~net ~~with~~risk ~~ASC 985-605-55~~position.

~~Income~~· ~~Taxes~~Premiums or discounts in fair value measure—the guidance provides that premiums or discounts that reflect size as a characteristic of the reporting entity’s holding (specifically, a blockage factor that adjusts the quoted price of an asset or a liability because the market’s normal daily trading volume is not sufficient to absorb the quantity held by the entity) rather than as a characteristic of the asset or liability (for example, a control premium when measuring the fair value of a controlling interest) are not permitted in a fair value measurement.

~~The~~· ~~Company~~Fair ~~accounts~~value ~~for~~of ~~income~~an ~~taxes~~instrument classified in ~~accordance~~a ~~with~~reporting ~~ASC~~entity’s ~~740~~stockholders’ ~~“Accounting for Income Taxes.” Under ASC 740, deferred tax liabilities or assets at~~ equity—the ~~end~~guidance ofprescribes ~~each~~a ~~period~~model ~~are~~for ~~determined~~measuring ~~using~~ the ~~tax~~fair ~~rate~~value ~~expected~~of toan beinstrument classified in ~~effect~~stockholders’ ~~when~~equity; ~~taxes~~this ~~are~~model ~~actually paid or recovered. Valuation allowances are established when it~~ is ~~more~~consistent ~~likely~~with ~~than~~the ~~not~~guidance ~~that~~on ~~some~~measuring ~~or all of~~ the ~~deferred~~fair ~~tax~~value ~~assets~~of ~~not be realized~~liabilities.

18· Disclosures about fair value measurements—the guidance expands disclosure requirements, particularly for Level 3 inputs. Required disclosures include:

In(i) ~~July,~~For ~~2006,~~fair ~~the~~value ~~FASB~~measurements ~~ASC~~categorized ~~740-10-25,~~in ~~“Accounting~~Level ~~for~~3 ~~Uncertainty~~of inthe ~~Income~~fair ~~Taxes-an~~value ~~interpretation~~hierarchy: of(1) ~~FASB~~a ~~Statement~~quantitative ~~No. 109”. This~~disclosure ~~Interpretation~~of ~~provides~~the ~~guidance~~unobservable ~~for~~inputs ~~recognizing~~ and ~~measuring~~assumptions ~~uncertain~~used ~~tax~~in ~~positions~~the measurement, as(2) ~~defined~~a indescription ~~ASC~~of ~~740,~~the ~~“Accounting~~valuation ~~for~~process ~~Income~~in ~~Taxes~~place (e.”g., ~~ASC~~how ~~740-10-25~~the ~~prescribes~~entity adecides ~~threshold~~its ~~condition~~valuation ~~that~~policies aand ~~tax~~procedures, ~~position~~as ~~must~~well ~~meet~~as ~~for~~changes ~~any~~in ofits ~~the~~analyses ~~benefit~~ of ~~the~~fair ~~uncertain~~value ~~tax~~measurements, ~~position~~from period to beperiod), ~~recognized~~and in(3) a narrative description of the ~~financial~~sensitivity ~~statements. Guidance~~of isthe ~~also~~fair ~~provided~~value ~~regarding~~to ~~derecognition,~~changes ~~classification~~in ~~and~~unobservable ~~disclosure~~inputs ofand ~~these~~interrelationships ~~uncertain~~between ~~tax~~those ~~positions~~inputs.

~~Allowance for Doubtful Accounts~~16

We(ii) ~~record~~The anlevel ~~allowance~~in ~~for doubtful accounts based on specifically identified amounts that~~ the ~~Company~~fair ~~believes~~value tohierarchy ~~be uncollectible. We have a limited number~~ of ~~customers~~items ~~with~~that ~~individually~~are ~~large~~not ~~amounts~~measured ~~due~~ at ~~any~~fair ~~given~~value ~~balance sheet date. Any unanticipated change~~ in ~~one of those customers’ credit worthiness or other matters affecting~~ the ~~collectability~~statement of ~~amounts~~financial ~~due~~position ~~from~~but ~~such~~whose ~~customers~~fair ~~could~~value ~~have~~must abe ~~material effect on the results of operations in the period in which such changes or events occur~~disclosed. ~~After all attempts to collect a receivable have failed, the receivable is written off against the allowance.~~

~~Recent~~The ~~Accounting~~guidance ~~Pronouncements~~is to be applied prospectively and is effective for interim and annual periods beginning after December 15, 2011 for public entities. Early application by public entities is not permitted. We do not expect the adoption of this guidance to have a significant effect on our consolidated financial statements.

OnIn ~~October~~June 272011, ~~2010~~the FASB issued an authoritative pronouncement to require an entity to present the total of comprehensive income, the ~~FASB~~components ~~clarified~~of ~~that~~net income, and the ~~disclosures~~components of ~~proposed~~other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The guidance eliminates the option to present the components of other comprehensive income as part of ~~its~~the ~~project~~statement onof ~~disclosures~~changes ofin ~~certain~~stockholders’ equity. ~~loss~~The ~~contingencies~~guidance ~~will~~does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The guidance should be applied retrospectively. For public entities, the guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. In December 2011, the ~~2010~~FASB ~~annual~~issued an authoritative pronouncement related to deferral of the effective date for amendments to the presentation of reclassifications of items out of accumulated other comprehensive income. This guidance allows the FASB to redeliberate whether to present on the face of the financial statements the effects of ~~public~~reclassifications ~~calendar-year-end~~out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities asshould ~~originally~~continue ~~proposed~~to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before the pronouncement updated was issued in June 2011. ~~The~~We ~~Board~~do ~~will~~not ~~discuss~~expect athe ~~revised~~adoption ~~effective~~of ~~date~~this ~~during~~guidance ~~redeliberations~~to have a significant effect on ~~the~~our ~~project~~consolidated financial statements.

OnIn ~~October~~September 192011, ~~2010,~~ the FASB ~~and IASB~~ issued an aauthoritative DPpronouncement related to ~~obtain~~testing ~~feedback~~goodwill ~~from~~for ~~the~~impairment. ~~FASB’s~~The ~~and~~guidance ~~IASB’s~~is ~~stakeholders~~intended onto ~~(1)~~simplify ~~the~~how ~~time~~entities, both public and ~~effort~~nonpublic, ~~they~~test ~~would~~goodwill ~~need~~for impairment. The guidance permits an entity to ~~adopt~~first ~~several~~assess ~~new~~qualitative ~~and~~factors ~~significant~~to ~~accounting~~determine whether ~~and~~it ~~reporting~~is ~~standards~~“more ~~and~~likely ~~(2)~~than not” that the ~~dates~~fair onvalue ~~which~~of ~~those~~a ~~new~~reporting ~~standards~~unit ~~should~~is beless ~~effective.~~than Onits ~~the~~carrying amount as a basis offor determining whether it is necessary to perform the ~~responses~~two-step goodwill impairment test. The guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, ~~the~~2011. ~~FASB~~Early adoption is permitted, including for annual and ~~IASB~~interim ~~plan~~goodwill toimpairment ~~develop~~tests anperformed ~~implementation~~as ~~plan~~of ~~whose~~a ~~main~~date ~~objective~~before ~~will~~September 15, be2011 toif ~~help~~a ~~stakeholders~~public ~~properly~~entity’s financial ~~manage~~statements for the ~~cost~~most ~~and~~recent ~~pace~~annual ofor ~~these~~interim ~~changes~~period have not yet been issued. ~~Comments~~We ondo not expect the DPadoption ~~are~~of ~~due~~this pronouncement byto ~~January~~have ~~31,~~a ~~2011~~significant effect on our consolidated financial statements.

OnIn ~~August~~December 172011, ~~2010,~~ the FASB has issued an authoritative pronouncement related to Disclosures about Offsetting Assets and ~~IASB~~Liabilities. ~~issued~~The guidance requires an EDentity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on ~~lease~~its ~~accounting~~financial position. ~~The~~An ~~ED,~~entity ~~released~~is byrequired to apply the ~~FASB~~amendments asfor aannual ~~proposed~~reporting ~~ASU~~periods beginning on or after January 1, ~~creates~~2013, aand ~~new~~interim ~~accounting~~periods ~~model~~within ~~for~~those ~~both~~annual ~~lessees~~periods. ~~and~~An ~~lessors~~entity ~~and~~should ~~eliminates~~provide the ~~concept~~disclosures required ofby ~~operating~~those ~~leases.~~amendments ~~The~~retrospectively ~~proposed~~for ~~ASU,~~all ifcomparative ~~finalized,~~periods ~~would~~presented. ~~converge~~We are in the ~~FASB’s~~process ~~and~~of ~~IASB’s~~evaluating ~~accounting~~the ~~for~~effect of ~~lease~~adoption ~~contracts~~of inthis ~~most~~guidance ~~significant~~on ~~areas~~our consolidated financial statements.

In January 2010, the FASB issued guidance to amend the disclosure requirements related to recurring and nonrecurring fair value measurements. The guidance requires new disclosures on the transfers of assets and liabilities between Level 1 (quoted prices in active market for identical assets or liabilities) and Level 2 (significant other observable inputs) of the fair value measurement hierarchy, including the reasons and the timing of the transfers. Additionally, the guidance requires a roll forward of activities on purchases, sales, issuance, and settlements of the assets and liabilities measured using significant unobservable inputs (Level 3 fair value measurements). The guidance became effective for us with the reporting period beginning January 1, 2010, except for the disclosure on the roll forward activities for Level 3 fair value measurements, which will become effective for us with the reporting period beginning July 1, 2011. Other than requiring additional disclosures, adoption of this new guidance did not have a material impact on our financial statements.17

InConsolidated ~~September~~Results 2009, FASB introduced new guidance addressing the accounting for revenue arrangements with multiple elements and certain revenue arrangements that include software. The guidance allows companies to allocate consideration in a multiple element arrangement in a way that better reflects the economics of the transaction and eliminates the residual method. In addition, tangible products that have software components that are “essential to the functionality” of the tangible product will be scoped out of the software revenue guidance. The new guidance became effective on January 1, 2011 and it is not expected to have a material impact on our financial statements.Operations

19Year Ended December 31, 2011 Compared to Year Ended December 31, 2010

~~Consolidated~~The ~~Results~~following table sets forth the results of ~~Operations~~our operations for the periods indicated:

Year Ended December 31, 2010 Compared to Year Ended December 31, 2009

	Year Ended			Year Ended
	December 31,			December 31,
	2011			2010
Net Sales	$	3,408,565		$	5,027,707
Cost of Sales		(1,658,765	)		(2,038,463	)
Gross Profit		1,749,800			2,989,244
Selling Expenses		(1,109,193	)		(1,050,740	)
Research and Development Expenses		(723,754	)		(743,845	)
General and Administrative Expenses		(4,957,735	)		(1,626,102	)
Operating Profit (Loss)		(5,040,882	)		(431,443	)
Other Income		25,561			728,107
Net Profit (Loss)		(4,944,011	)		(330,428	)
Gain/Loss Per Share		(1.06	)		(0.07	)
Basic Weighted Average Shares Outstanding		4,651,173			4,651,173
Diluted Weighted Average Shares Outstanding		4,651,173			4,651,173

~~The~~Net ~~following table sets forth the results of our operations for the periods indicated:~~Sales.

	Year Ended			Year Ended
	December 31,			December 31,
	2010			2009
Net Sales	$	5,027,707		$	6,288,964
Cost of Sales		(2,038,463	)		(2,592,005	)
Gross Profit		2,989,244			3,696,959
Selling Expenses		(1,050,740	)		(1,199,800	)
Research and Development Expenses		(743,845	)		(1,039,742	)
General and Administrative Expenses		(1,626,102	)		(1,199,494	)
Operating Profit (Loss)		(431,443	)		257,923
Other Income		728,107			298,254
Net Profit (Loss)		(330,428	)		625,040
Gain/Loss Per Share		(0.07	)		0.13
Basic Weighted Average Shares Outstanding		4,651,173			4,651,173
Diluted Weighted Average Shares Outstanding		4,651,173			4,651,173

Our net sales decreased 32% from $5,027,707 in 2010 to $3,408,565 in 2011. Sales of For-series software decreased 29% from $4,624,918 in 2010 to $3,287,638 in 2011. The decrease in net sales was mainly attributable to a significant decrease in software sales from $4,624,918 in 2010 to $3,287,638 in 2011, a decrease of 29%. We recognized significant sales from Guangxi Caexpo in 2010 but no comparable sales to this customer or another customer in 2011.

~~Net~~Cost of Sales.

Our ~~net~~cost of sales decreased 2019% from $62,~~288~~038,~~964~~ 463 in ~~2009 to $5,027,707 in~~ 2010. ~~Sales of For-series software increased 33.% from $3,473,568 in 2009~~ to $41,~~624~~658,~~918~~765 in ~~2010~~2011. ~~The~~This decrease ~~in net sales~~ was ~~mainly~~in ~~attributable~~line towith athe ~~significant~~ decrease in ~~system integration~~ sales,. ~~from~~Cost ~~$2,815,396~~of ~~in 2009 to $402~~sales,~~789~~ inas ~~2010,~~ a ~~decrease~~percentage of ~~86%.~~net ~~We did not enter into any~~ sales, was ~~contracts~~approximately ~~with~~42% ~~significant system integration providers~~ in both 2010 asand ~~we did in 2009~~2011. ~~It is the Company’s strategy to focus on sales for its For-series software because software sales carry higher profit margins.~~

~~Cost~~Gross ~~of Sales~~Profit.

~~Our~~Gross ~~cost~~profit ~~of sales~~ decreased 2141% from $2,~~592~~989,~~005~~ 244 in ~~2009~~2010 to $21,~~038~~749,~~463~~800 in ~~2010~~2011. This decrease was inattributable ~~line~~to ~~with~~the ~~our~~ decrease in ~~sales~~net ~~for 2010~~sales. ~~Cost~~The ofgross ~~sales~~profit margin, ~~as a percentage of net sales~~however, remained at approximately 4158% in ~~2009~~both 2010 and ~~2010~~2011.

~~Gross Profit~~Operating Expenses.

~~Gross~~Total ~~profit~~operating ~~decreased~~expenses ~~19%~~increased from $3,~~696~~420,~~959~~ 687 in ~~2009~~2010 to $26,~~989~~790,~~244~~682 in ~~2010~~2011. This ~~decrease~~increase was ~~attributable~~mainly due to ~~the~~a ~~decrease~~significant inincrease ~~overall net sales. However, the gross profit margin remained at approximately 59%~~ in ~~both~~general ~~2009~~ and ~~2010~~administrative expenses.

~~Operating~~Selling ~~Expenses~~expenses increased 6% from $1,050,740 in 2010 to $1,109,193 in 2011 as a result of an increase in marketing in 2011.

~~Total~~Research ~~operating~~and development expenses ~~year-over-year~~decreased ~~was~~2% ~~maintained~~from ~~at comparable levels, at~~ $3743,~~420,687~~ 845 in 2010 ~~and~~to $3723,~~440,061~~754 in ~~2009~~2011. ~~This situation was the principal result of the offset from an increase in general and administrative expenses against a decrease in research and development expenses.~~

~~Selling~~General ~~expenses~~and ~~decreased~~administrative 12expenses increased 205% from $1,~~199~~626,~~800~~102 in ~~2009~~2010 to $14,~~050~~957,~~740~~735 in ~~2010,~~2011. asThe aincrease ~~result~~was ofprimarily ~~the~~due ~~dissolution~~to ofa ~~one~~provision offor ~~our~~bad ~~sales~~debts ~~agency located~~ in ~~Hangzhou, China on September 28, 2009~~2011.

~~Research~~Operating ~~and~~Profit development expenses decreased 28% from $1,039,742 in 2009, to $743,845 in 2010, stemming from our decreased number of employees in our research and development department from 61 in 2009 to 51 in 2010(Loss). ~~We started several new internal projects in 2009 which required additional research and development. These projects have been finished and integrated into our new products in 2009.~~

~~General~~We ~~and~~recorded ~~administrative~~an ~~expenses~~operating ~~increased~~loss ~~36%~~of ~~from~~ $15,~~199~~040,~~494~~ 882 in ~~2009~~2011 toas ~~$1,626,102~~compared ~~in 2010. The increase was primarily due~~ to ~~the increase in communication fees, such as the internet trusteeship management fee for telecom providers and~~ an ~~increase~~operating inloss rent for Forlink Technologies Co. Ltd. (“FTCL”) and Beijing Forlink Hua Xin Technology Co. Ltd. (“BFHX”). Pursuant to our prior lease agreements for FTCL and BFHX, we were able to obtain a month of ~~rent free during February 2009. Under the current lease agreements for FTCL and BFHX~~$431,443 ~~the~~in ~~free rent provision was eliminated~~2010, ~~and~~an weincrease ~~instead pay standard rent on a monthly basis pursuant to the terms~~ of ~~the lease agreements~~1068%. The increase ~~in general and administration expenses~~ was ~~also~~largely due to ~~the~~an ~~reclassification~~increase in ofprovision ~~expenses~~ for ~~the~~bad ~~Chengdu~~debts ~~office~~ of ~~FTCL. The function of FTCL’s Chengdu office has been changed from a sales office to a management platform since January 2010. Therefore~~$3, ~~the expenses of FTCL’s Chengdu office~~719,713 ~~including employee wages and communication fees, have been reclassified from selling expenses~~ in ~~2009 to general and administrative expenses in 2010~~2011.

2018

~~Operating~~Other ~~Profit (Loss)~~Income.

WeOur ~~recorded~~other anincome ~~operating~~decreased ~~loss~~96% offrom $~~330~~728,~~428~~ 107 in 2010 ~~as compared~~ to ~~an operating profit of~~ $~~625~~25,~~040~~561 in ~~2009,~~2011 as a ~~decrease~~result of ~~153%.~~a ~~The~~ decrease ~~was~~in ~~largely~~our ~~due~~VAT torefund. ~~the~~Our ~~decrease~~other inincome ~~net~~is ~~sales~~derived ofentirely ~~20%~~ from ~~$6,288,964~~VAT inrefund ~~2009~~associated with toour ~~$5,027,707~~software ~~in 2010~~sales.

~~Other~~Net ~~Income~~Profit (Loss).

~~Our~~We ~~other~~recorded ~~income~~a ~~increased~~net ~~144%~~loss ~~from~~of $~~298~~4,~~254 in 2009 to $728~~944,~~107~~011 in ~~2010~~2011, or asbasic aand ~~result~~diluted loss of an$1.06 ~~increase~~per inshare, ~~our~~as ~~VAT~~compared ~~refund.~~to ~~Our~~a ~~other~~net ~~income~~loss isof ~~derived~~$330,428 ~~entirely~~in ~~from~~2010, ~~VAT~~or ~~refund~~basic ~~associated~~and ~~with~~diluted ~~our~~loss ~~software~~of ~~sales~~$0.07 per share.

~~Net~~Liquidity ~~Profit~~and ~~(Loss).~~Capital Resources

Our capital requirements are primarily working capital requirements related to costs of hardware for network solution projects and costs associated with the expansion of our business. In order to minimize our working capital requirements, we generally obtain from our hardware vendors payment terms that are timed to permit us to receive payment from our customers for the hardware before our payments to our hardware vendors are due. But we sometimes obtain less favorable payment terms from our customers, thereby increasing our working capital requirements. We have ~~recorded~~historically financed our working capital and other financing requirements through careful management of our billing cycle and, to a limited extent, bank loans. The net ~~loss~~cash ofused in operating activities was $~~303~~2,~~632~~331,803 in ~~2010~~2011 as compared to $2,037,642 in or2010. ~~basic~~The ~~and~~increase ~~diluted~~in net cash used was net loss of $04,944,011 in 2011.07 ~~per~~The ~~share~~cash flow from investing activities was $50,370 in as2011, compared to $2,974,215 in 2010. The significant decrease in cash used in investing activities was because we did not transfer a ~~net~~long-term ~~profit~~investment ofin 2011 as we did in 2010. The increase in cash flow from financing activities from $~~625~~(10,~~040~~458) in ~~2009~~2010 to $313,232 orin ~~basic~~2011 ~~and~~was ~~diluted~~due ~~profit~~to ofan ~~$0.13~~increase ~~per~~in ~~share~~the balance of short-term borrowings.

~~Liquidity~~Our ~~and~~accounts ~~Capital~~receivable balance ~~Resources~~at December 31, 2011 was $203,910, as compared to $3,778,529 at the end of 2010. The decrease is mainly attributable to one customer, Guangxi Caexpo. The balance of Guangxi Caexpo’s accounts receivable decreased to $0 at December 31, 2011 from $1,901,562 (RMB 12,170,000) at December 31, 2010. All accounts receivable from Guangxi Caexpo in 2011 were accounted for as a provision for bad debts. Our inventory position at the end of 2011 was $1,157,934 as compared to $633,998 at the beginning of the year. At the end of 2011, we had several inventory items in the process of delivery to two of our major customers.

~~Our~~We ~~capital~~ended ~~requirements~~the ~~are primarily working capital requirements related to costs of hardware for network solution projects and costs associated~~ year with the expansion of our business. In order to minimize our working capital requirements, we generally obtain from our hardware vendors payment terms that are timed to permit us to receive payment from our customers for the hardware before our payments to our hardware vendors are due. However, we sometimes obtain less favorable payment terms from our customers, thereby increasing our working capital requirements. We have historically financed our working capital and other financing requirements through careful management of our billing cycle and, to a ~~limited extent, bank loans. The net~~ cash ~~used~~position inof ~~operating activities was~~ $21,~~045~~692,~~634 in 2010 as compared to $685,985 in 2009~~449. ~~The~~We ~~decrease~~had innegative ~~net~~operating cash ~~used~~flow ~~was mainly due to the decreased balance~~ of ~~other taxes payable in 2010. The cash flow from investing activities was~~ $21,~~974~~887,~~215~~820 inprimarily due ~~2010, compared~~ to ~~$340,862 in 2009. The huge increase in cash flow from investing activities resulted from~~ the increase in ~~funds~~operating ~~when~~loss ~~we received $3,024,255 by transferring the long-term investment~~ in ~~Guangxi Caexpo~~2011. ~~The decrease in cash flow from financing activities resulted from the decrease in the balance of short term borrowings.~~

~~Our~~Although ~~accounts~~our ~~receivable~~revenues ~~balance~~and atoperating ~~December~~results for ~~31,~~any ~~2010~~period ~~was~~are $3not necessarily indicative of future periods,~~914,923,~~ aswe ~~compared~~anticipate that our available funds and cash flows generated from operations will be sufficient to $2meet our anticipated needs for working capital,~~434,557~~ atcapital ~~the~~expenditures, ~~end~~and ofbusiness ~~2009~~expansion through 2012. ~~The~~ ~~increase~~In isOctober ~~mainly~~2011, ~~attributable~~we tosigned ~~one~~a ~~customer~~bank ~~Guangxi~~loan ~~Caexpo.~~finance ~~The~~contract ~~balance~~with ofChina ~~Guangxi~~Mingsheng ~~Caexpo’s~~Bank ~~accounts~~Ltd. ~~receivable~~We ~~increased~~received toa $3credit of RMB 2,~~543~~000,~~155~~000 onto ~~December~~meet ~~31,~~our ~~2010~~working ~~from~~capital. $0As onof the end of December 31, ~~2009~~2011, the balance of our bank loans was RMB 2,000,000. ~~Our~~We may ~~inventory~~need ~~position~~to atraise additional funds in the ~~end~~future ofin ~~2010~~order ~~was~~to ~~$760~~fund acquisitions,~~655,~~ asdevelop ~~compared~~new toor ~~$935~~enhanced services or products,~~566~~ atrespond to ~~the~~competitive ~~beginning~~pressures ofto ~~the~~compete ~~year.~~successfully Atfor ~~the~~larger ~~end~~projects involving higher levels of ~~2010~~hardware purchases, or if our business otherwise grows more rapidly than we ~~had~~currently ~~several~~predict. ~~inventory~~If ~~items~~we indo ~~the~~need ~~process~~to ofraise ~~delivery~~additional funds, we expect to ~~two~~raise those funds through new issuances of our ~~major~~equity ~~customers~~securities through one or more public offerings or private placements, or through credit facilities extended by lending institutions.

WeOff-Balance ~~ended~~Sheet ~~the year with a cash position of $3,580,269. We had positive operating cash flow of $1,339,406, primarily due to the disposal of long term investments in 2010.~~Arrangements

~~Although~~There ~~our revenues and operating results for any period~~ are ~~not~~no ~~necessarily~~off-balance ~~indicative~~sheet ofarrangements ~~future periods, we anticipate~~ that ~~our~~have ~~available~~or ~~funds~~are reasonably ~~and~~likely ~~cash flows generated from operations will be sufficient~~ to ~~meet~~have ~~our anticipated needs for working capital, capital expenditures, and business expansion through 2010. On July 27, 2010, we signed~~ a ~~bank~~current ~~loan~~or ~~finance~~future ~~contract~~effect ~~with~~on ~~Standard Chartered Bank (China) Ltd. We received a recycle credit of RMB 4,990,000 to meet~~ our ~~working~~financial ~~capital. The bank loan contract is an accounts receivable finance contract. When applying for a bank loan under the limitation of our bank loan credits~~condition, wechanges ~~use the accounts receivable from our customers as loan mortgage. As of the end of December 31, 2010, the balance of our bank loans was zero, but we may need to apply for bank loans~~ in ~~the~~financial ~~future. We may need to raise additional funds in the future in order to fund acquisitions~~condition, ~~develop~~revenues ~~new~~ or ~~enhanced services or products~~expenses, results ~~respond to competitive pressures to compete successfully for larger projects involving higher levels~~ of ~~hardware purchases~~operations, ~~or if our business otherwise grows more rapidly than we currently predict. If we do need to raise additional funds~~liquidity, wecapital ~~expect to raise those funds through new share issuances of our equity securities through one or more public offerings or private placements~~expenditures, or ~~through~~capital ~~credit facilities extended by lending institutions~~resources.

2119

~~Off-Balance~~Contractual ~~Sheet Arrangements~~Obligations

As of December 31, ~~2010~~2011, we ~~have~~had ~~not~~commitments under ~~entered~~non-cancelable ~~into~~operating ~~any~~leases ~~off-balance~~requiring ~~sheet~~annual ~~arrangements~~minimum ~~with~~rental ~~any~~payments ~~individuals~~as ~~or entities.~~follows:

Contractual Obligations

	December 31, 2011

January 1, 2011 to December 31, 2011	$	528,762
January 1, 2012 to December 31, 2012		522,201
January 1, 2013 to December 31, 2013		167,527

	$	1,218,490

AsItem of7A. Quantitative and ~~December~~Qualitative ~~31,~~Disclosures ~~2010,~~About weMarket ~~had commitments under non-cancelable operating leases requiring annual minimum rental payments as follows:~~Risk

	December 31,
	2010
January 1, 2010 to December 31, 2010	$	472,277
January 1, 2011 to December 31, 2011		130,580
January 1, 2012 to December 31, 2012		0
	$	602,857

Not applicable.

~~ITEM~~Item 7A8. ~~Quantitative~~Financial Statements and ~~Qualitative~~Supplementary ~~Disclosures about Market Risk’~~Data

~~Not~~The ~~applicable~~information required by Item 8 begins on page F-1 following this page. Below is an index to the consolidated financial statements.

~~Item~~Index 8.to Consolidated Financial Statements.

The information required by Item 8 and the index thereto commences on the next page.

	Pages

Report of Independent Registered Public Accounting Firm		F-1

Consolidated Balance Sheets		F-2

Consolidated Statements of Operations		F-3

Consolidated Statements of Stockholders’ Equity		F-4

Consolidated Statements of Cash Flows		F-5

Notes to Consolidated Financial Statements		F-6 - F-20

2220

~~Forlink~~REPORT ~~Software~~OF ~~Corporation,~~INDEPENDENT ~~Inc.~~REGISTERED PUBLIC ACCOUNTING FIRM

~~Index~~ To ~~Consolidated~~the ~~Financial~~board ~~Statements~~of directors and stockholders of

		Pages
Report of Independent Registered Public Accounting Firm		F-1
Consolidated Balance Sheets		F-2
Consolidated Statements of Operations		F-3
Consolidated Statements of Stockholders’ Equity		F-4
Consolidated Statements of Cash Flows		F-5
Notes to Consolidated Financial Statements		F-6 - F-20

Forlink Software Corporation, Inc.

23We have audited the accompanying consolidated balance sheets of Forlink Software Corporation Inc as of December 31, 2011 and 2010, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for the years then ended. Forlink Software Corporation, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.

~~REPORT~~We OFconducted ~~INDEPENDENT~~our ~~REGISTERED~~audits ~~PUBLIC~~in ~~ACCOUNTING~~accordance ~~FIRM~~with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

ToIn our opinion, the ~~board~~financial statements referred to above present fairly, in all material respects, the financial position of ~~directors~~Forlink Software Corporation, Inc. as of December 31, 2011 and ~~stockholders~~2010, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

~~Forlink~~/s/ ~~Software~~Kenne ~~Corporation~~Ruan, ~~Inc~~CPA, P.C.

~~We have audited the accompanying consolidated balance sheets of Forlink Software Corporation Inc as of December 31~~Woodbridge, 2010 and 2009, and the related consolidated statements of income, stockholders’ equity and comprehensive income, and cash flows for the years then ended. Forlink Software Corporation Inc’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits.Connecticut

WeMarch conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have16, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.2012

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Forlink Software Corporation Inc as of December 31, 2010 and 2009, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.F-1

~~/s/~~Forlink ~~Kenne~~Software ~~Ruan~~Corporation, ~~CPA, P~~Inc.C.

~~Woodbridge,~~Consolidated ~~Connecticut~~Balance Sheets

~~March~~(Expressed in ~~16,~~US ~~2011~~Dollars)

F-1

	December 31,			December 31,
	2011			2010
Current assets
Cash and cash equivalents	$	1,692,449		$	3,580,269
Accounts receivable		203,910			3,778,529
Other receivables, deposit and prepayments		530,018			563,568
Inventories		1,157,934			633,998
Deferred Taxes Assets		66,001			-
Total current assets		3,650,312			8,556,364

Property, plant and equipment		262,340			370,409
Long term investments		1,074,531			1,183,585

Total assets	$	4,987,183		$	10,110,358

Liabilities and stockholders' equity
Current liabilities
Short-term borrowings	$	317,496
Accounts payable		56,311		$	1,027,862
Amounts due to shareholders		260,470			524,668
Customer deposits		1,811,937			1,206,267
Other payables and accrued expenses		451,464			370,318
Other tax payable		-			21,531
Deferred Taxes Debt		-			32,736
Total current liabilities	$	2,897,678		$	3,183,382

Stockholders' equity
Common stock, par value $0.001 per share; 200,000,000 and 200,000,000 shares authorized; 4,966,173 and 4,966,173 shares issued and 4,651,173 and 4,651,173 shares outstanding, respectively	$	99,322		$	99,322
Treasury stock		(163,800	)		(163,800	)
Additional paid-in capital		10,195,693			10,195,693
Accumulated losses		(9,488,659	)		(4,544,648	)
Accumulated other comprehensive income		1,397,824			1,240,849
Non-controlling interest		49,125			99,560

Total stockholders' equity	$	2,089,505		$	6,926,976

Total liabilities and stockholders' equity	$	4,987,183		$	10,110,358

~~Forlink~~See ~~Software~~accompanying ~~Corporation,~~notes ~~Inc~~to consolidated financial statements.

~~Consolidated Balance Sheets~~F-2

~~(Expressed~~Forlink inSoftware USCorporation, ~~Dollars)~~Inc.

	December 31,			December 31,
	2010			2009
Current assets
Cash and cash equivalents	$	3,580,269		$	2,240,863
Accounts receivable		3,778,529			2,434,557
Other receivables, deposit and prepayments		563,568			687,413
Inventories		633,998			935,566
Total current assets		8,556,364			6,298,399
Property, plant and equipment		370,409			391,671
Long term investments		1,183,585			4,707,136
Total assets	$	10,110,358		$	11,397,206
Liabilities and stockholders' equity
Current liabilities
Accounts payable	$	1,027,862		$	1,193,643
Amounts due to shareholders		524,668			415,078
Customer deposits		1,206,267			1,329,203
Other payables and accrued expenses		370,318			535,668
Other tax payable		21,531			727,097
Deferred Taxes Debt		32,736			38,992
Total current liabilities	$	3,183,382		$	4,239,681
Commitments and contingencies
Non-controlling interest in subsidiaries	$	99,560		$	151,785
Stockholders' equity
Common stock, par value $0.001 per share; 200,000,000 and 200,000,000 shares authorized; 4,966,173 and 4,966,173 shares issued and 4,651,173 and 4,651,173 shares outstanding, respectively	$	99,322		$	99,322
Treasury stock		(163,800	)		(163,800	)
Additional paid-in capital		10,195,693			10,195,693
Accumulated losses		(4,544,648	)		(4,214,220	)
Accumulated other comprehensive income		1,240,849			1,088,745
Total stockholders' equity	$	6,827,416		$	7,005,740
Total liabilities and stockholders' equity	$	10,110,358		$	11,397,206

Consolidated Statements of Operations

~~See~~(Expressed in ~~accompanying~~US ~~notes to consolidated financial statements.~~Dollars)

F-2

	Year ended December 31, 2011			Year ended December 31, 2010

Net sales	$	3,408,565		$	5,027,707
Cost of sales		(1,658,765	)		(2,038,463	)

Gross profit		1,749,800			2,989,244

Selling expenses		(1,109,193	)		(1,050,740	)
Research and development expenses		(723,754	)		(743,845	)
General and administrative expenses		(4,957,735	)		(1,626,102	)

Operating profit / (loss)		(5,040,882	)		(431,443	)

Investment loss		(41,233	)		(650,717	)
Interest income		6,584			6,550
Interest expenses		(4,264	)		(10,458	)
Impairment loss on assets		-			(24,692	)
Loss from cost method investee		(33,718	)		0
Other income, net		25,561			728,107

Profit before income taxes		(5,087,952	)		(382,653	)

Income tax		93,506			0

Consolidated profit		(4,994,446	)		(382,653	)

Net loss attributable to non-controlling interest		(50,435	)		(52,225	)

Net consolidated profit (loss)	$	(4,944,011	)	$	(330,428	)

Gain/Loss per share	$	(1.06	)	$	(0.07	)
Weighted average common shares outstanding - basic and diluted		4,651,173			4,651,173

~~Forlink~~See accompanying ~~Software~~notes ~~Corporation,~~to ~~Inc~~consolidated financial statements.

~~Consolidated Statements of Operations~~F-3

~~(Expressed~~Forlink inSoftware USCorporation, ~~Dollars)~~Inc.

	Year ended December 31, 2010			Year ended December 31, 2009
Net sales	$	5,027,707		$	6,288,964
Cost of sales		(2,038,463	)		(2,592,005	)
Gross profit		2,989,244			3,696,959
Selling expenses		(1,050,740	)		(1,199,800	)
Research and development expenses		(743,845	)		(1,039,742	)
General and administrative expenses		(1,626,102	)		(1,199,494	)
					-
Operating profit / (loss)		(431,443	)		257,923
Investment loss		(650,717	)		(181,497	)
Interest income		6,550			9,636
Interest expenses		(10,458	)		0
Impairment loss on assets		(24,692	)		0
Income from cost method investee		0			257,522
Other income, net		728,107			298,254
Profit before income taxes		(382,653	)		641,838
Income tax		0			(58,308	)
Consolidated profit		(382,653	)		583,530
Net loss attributable to minority interest		(52,225	)		(41,510	)
Net consolidated profit (loss)	$	(330,428	)	$	625,040
Gain/Loss per share	$	(0.07	)	$	0.13
Weighted average common shares outstanding - basic and diluted		4,651,173			4,651,173

Consolidated Statement of Stockholders’ Equity

~~See~~(Expressed ~~accompanying~~in ~~notes~~US ~~to consolidated financial statements.~~Dollars)

F-3

	Common Stock
	Number of shares issued		Amount		Number of Treasury Stock		Amount		Treasury Stock			Additional paid-in capital		Accumulated other comprehensive income		Non-controlling interest			Retained Profits/ (Accumulated Losses)			Total Stockholders’ Equity			Comprehensive Income/ (Losses)
Balance, December 31, 2009		4,966,173		4,651,173		315,000	$	99,322	($	163,800	)	$	10,195,693	$	1,088,745	$	151,785		($	4,214,220	)	$	7,157,525
Shares issued
Net profit for the year																($	52,225	)	($	330,428	)	($	382,653	)	($	382,653	)
Translation of foreign operations														$	152,104							$	152,104		$	152,104
Comprehensive income																									($	230,549	)
Balance, December 31, 2010		4,966,173		4,651,173		315,000	$	99,322	($	163,800	)	$	10,195,693	$	1,240,849	$	99,560		($	4,544,648	)	$	6,926,976
Shares issued
Net profit for the year																($	50,435	)	($	4,944,011	)	($	4,994,446	)	($	4,994,446	)
Translation of foreign operations														$	156,975							$	156,975		$	156,975
Comprehensive income																									($	4,837,471	)
Balance, December 31, 2011		4,966,173		4,651,173		315,000	$	99,322	($	163,800	)	$	10,195,693	$	1,397,824	$	49,125		($	9,488,659	)	$	2,089,505

~~Forlink~~See ~~Software~~accompanying ~~Corporation,~~notes ~~Inc~~to consolidated financial statements.

~~Consolidated Statement of Stockholders’ Equity~~F-4

~~(Expressed~~Forlink inSoftware USCorporation, ~~Dollars)~~Inc.

	Common Stock													Accumulated		Retained
	Number of Share Issued		Number of Share Outstanding		Number of Treasury Stock		Amount		Treasury Stock			Additional Paid-in Capital		other comprehensive income		Profits/ (Accumulated Losses)			Total Stockholders’ Equity		Comprehensive Income/ (Losses)
Balance, December 31, 2007		4,966,173		4,651,173		315,000	$	99,322	$	(163,000	)	$	10,195,693	$	1,064,396	$	(4,759,592	)	$	6,436,019	$
Shares issued
Net profit for the year																	545,372					545,372
Translation reserve															24,349							24,349
Comprehensive income																					$	569,721
Balance, December 31, 2008		4,966,173		4,651,173		315,000	$	99,322	$	(163,000	)	$	10,195,693	$	1,088,745	$	(4,214,220	)	$	7,005,740
Shares issued
Net profit for the year																	(330,428	)				(330,428	)
Translation reserve															152,104							152,104
Comprehensive income																					$	(178,324	)
Balance, December 31, 2009		4,966,173		4,651,173		315,000	$	99,322	$	(163,000	)	$	10,195,693	$	1,240,849	$	(4,544,648	)	$	6,827,416

Consolidated Statements of Cash Flows

~~See~~(Decrease)/Increase ~~accompanying~~in ~~notes~~Cash toand ~~consolidated financial statements.~~Cash Equivalents

~~F-4~~(Expressed in US Dollars)

Forlink Software Corporation, Inc.

	Year Ended December 31,
	2011			2010
Cash flows from operating activities
Net income		(4,944,011	)		(330,428	)
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Non-controlling interest		(50,435	)		(52,225	)
Depreciation of property, plant and equipment		79,062			143,415
Interest expenses		4,264			10,458
Loss from equity method investee		41,233			650,717
Dividend from cost method investee		33,718			-
Impairment of assets		-			24,692
Effect of deferred taxes		(100,368	)		(7,587	)

Charge in:
Account receivables		3,762,907			(1,260,847	)
Other receivables, deposits & prepayments		61,633			147,316
Inventories		(492,343	)		333,512
Account payable		(1,022,770	)		(709,731	)
Amounts due to stockholders		(290,343	)		95,418
Customers deposits		545,561			(168,320	)
Other payables & accrued expenses		62,693			(183,640	)
Other taxes payable / recoverable		(22,604	)		(730,392	)

Net cash used in operating activities		(2,331,803	)		(2,037,642	)

Cash flows from investing activities
Purchase of long term investment		-			(151,213	)
Acquisition of property, plant & equipments		(49,600	)		(10,505	)
Proceeds from disposal of long term investment		15,199			3,024,255
Cash dividend from cost method investee		84,771			111,678

Net cash generated from investing activities		50,370			2,974,215

Cash flow from financing activities
Proceeds from short term borrowings		(4,264	)		(10,458	)
Bank loan obtained		317,496
Net cash generated from financing activities		313,232			(10,458	)

Effect of exchange rate changes on cash and cash equivalents		80,381			413,291

Net increase (decrease) in cash and cash equivalents		(1,887,820	)		1,339,406

Cash and cash equivalents at the beginning of year		3,580,269			2,240,863

Cash and cash equivalents at the end of year		1,692,449			3,580,269

Supplemental disclosure of cash flow information
Income tax paid	$	5,278		$	-
Interest paid	$	-		$	-

~~Consolidated~~See ~~Statements~~accompanying ofnotes ~~Cash~~to ~~Flows~~consolidated financial statements.

~~(Decrease)/Increase in Cash and Cash Equivalents~~F-5

~~(Expressed~~Forlink inSoftware USCorporation, ~~Dollars)~~Inc.

	Year Ended December 31,
	2010			2009
Cash flows from operating activities
Net income		(330,428	)		625,041
Adjustment to reconcile net income to net cash provided by (used in) operating activities:
Minority interest		(52,225	)		(41,510	)
Depreciation of property, plant and equipment		143,415			204,262
Interest expenses		10,458			-
Loss from equity method investee		650,717			181,498
Dividend from cost method investee		-			(257,522	)
Impairment of assets		24,692			-
Effect of deferred taxes		(7,587	)		(16,659	)
Charge in:
Account receivables		(1,260,847	)		(1,536,902	)
Other receivables, deposits & prepayments		147,316			959,005
Inventories		333,512			83,715
Account payable		(709,731	)		(855,809	)
Amounts due to stockholders		95,418			36,567
Customers deposits		(168,320	)		199,308
Other payables & accrued expenses		(183,640	)		(20,884	)
Income tax payable		-			(16	)
Other taxes payable / recoverable		(730,392	)		(246,078	)
Net cash used in operating activities		(2,037,642	)		(685,985	)
Cash flows from investing activities
Purchase of long term investment		(151,213	)		-
Acquisition of property, plant & equipments		(10,505	)		(19,171	)
Proceeds from disposal of long term investment		3,024,255
Cash dividend from cost method investee		111,678			360,033
Net cash used in investing activities		2,974,215			340,862
Cash flow from financing activities
Proceeds from short term borrowings		(10,458	)		-
Net cash generated from financing activities		(10,458	)		-
Effect of exchange rate changes on cash and cash equivalents		413,291			42,556
Net increase (decrease) in cash and cash equivalents		1,339,406			(302,567	)
Cash and cash equivalents at the beginning of year		2,240,863			2,543,430
Cash and cash equivalents at the end of year		3,580,269			2,240,863
Supplemental disclosure of cash flow information
Income tax paid	$	-		$	28,755
Interest paid	$	-		$	-

Notes to Consolidated Financial Statements

~~See~~NOTE ~~accompanying~~1 ~~notes~~- toORGANIZATION ~~consolidated~~AND ~~financial~~DESCRIPTION ~~statements.~~OF BUSINESS

~~F-5~~Forlink Software Corporation, Inc. (the "Company" or the "Registrant" or "Forlink"), is a Nevada corporation originally incorporated on January 7, 1986 as "Why Not?, Inc. " under the laws of the State of Utah and subsequently reorganized under the laws of Nevada on December 30, 1993. From 1996 until 1999, the Company was an unfunded venture in search of a suitable business acquisition or business combination.

~~NOTE~~On 1November 3, 1999, the Company entered into a Plan of Reorganization with Beijing Forlink Software Technology Co., Ltd., (hereinafter "BFSTC"), a limited liability company organized under the laws of the People’s Republic of China (“PRC” or “China”), under the terms of which BFSTC gained control of the Company. Pursuant to the Plan of Reorganization, the Company acquired 100% of the registered and fully paid-up ~~ORGANIZATION~~capital ~~AND~~of ~~DESCRIPTION~~BFSTC OFin ~~BUSINESS~~exchange for 20,000,000 shares of the Company's authorized, but unissued, common stock. BFSTC is engaged in the provision of computer software consultancy and engineering services and the development and sale of computer software in the People’s Republic of China (“PRC”). As a part of its computer consultancy and engineering services, BFSTC is also engaged in the sale of computer hardware. In June 2001, BFSTC changed its name to Forlink Technologies Co. Ltd. (“FTCL”). FTCL is the Company’s major operating subsidiary in China.

~~Forlink~~In ~~Software~~August ~~Corporation~~2001, ~~Inc~~the Company acquired Beijing Slait Science & Technology Development Limited Co. (~~the~~“SLAIT”) "pursuant to a Plan of Reorganization dated January 11, 2001. The Company" orissued 59,430,000 shares of its common stock to SLAIT’s original beneficial owners in exchange for 100% of the ~~"Registrant"~~outstanding orequity ~~"Forlink")~~of SLAIT. As a result of the share exchange, isthe former beneficial owners of SLAIT own approximately 70% of the issued and outstanding shares of the Company, and SLAIT became a ~~Nevada~~wholly ~~corporation~~owned ~~which~~subsidiary ~~was~~of ~~originally~~the ~~incorporated~~Company. onThe ~~January~~Company also 7agreed to transfer 1,085,000 ~~1986~~Renminbi as(“RMB”) ~~"Why~~(approximately ~~Not?~~US$131,039) ~~Inc~~to the former owners of SLAIT. "A ~~under~~change in ~~the~~control ~~laws~~occurred in which all but one of the ~~State~~officers and directors of ~~Utah~~the Company resigned and ~~subsequently~~two ~~reorganized~~former ~~under~~directors ~~the~~(also ~~laws~~former owners) of ~~Nevada~~SLAIT onbecame ~~December~~officers 30and directors of the Company. Prior to its dissolution 2004, ~~1993~~SLAIT provided application system integration technology and specializes in large volume transaction processing software for networks such as mobile phone billing and band operation. ~~From~~ ~~1996~~Subsequent ~~until~~to ~~1999~~the acquisition, the ~~Company~~principal ~~continued~~activities asof anSLAIT ~~unfunded~~were ~~venture~~gradually inshifted ~~search~~to those of aFTCL. ~~suitable~~On February ~~business~~13, ~~acquisition~~2004, orSLAIT ~~business~~was ~~combination~~officially dissolved in accordance with relevant PRC regulations.

On ~~November~~June 318, ~~1999~~2003, ~~the~~Forlink ~~Company~~Technologies ~~entered~~(Hong Kong) ~~into~~Limited a(“FTHK”) ~~Plan~~was ofincorporated ~~Reorganization~~in ~~with~~Hong ~~Beijing~~Kong ~~Forlink~~Special ~~Software~~Administrative ~~Technology~~Region ~~Co.,~~as ~~Ltd., (hereinafter "BFSTC"),~~ a limited liability company. In ~~organized~~December ~~under~~2003, ~~the~~FTHK ~~laws~~became ofa ~~the~~wholly ~~People’s~~owned ~~Republic~~subsidiary of ~~China~~Forlink. ~~(“PRC”~~FTHK oris ~~“China”),~~an ~~under~~investment ~~the~~holding ~~terms~~company ofset ~~which~~up ~~BFSTC gained control of the Company. Pursuant~~ to ~~the~~take ~~Plan~~ advantage of ~~Reorganization,~~ the ~~Company~~favorable ~~acquired~~business ~~100%~~environment ofin ~~the~~Hong ~~registered~~Kong and ~~fully~~to ~~paid-up~~facilitate ~~capital of BFSTC in exchange for 20,000,000 shares of~~ the Company'’s ~~authorized,~~investment ~~but unissued, common stock~~transactions. ~~BFSTC~~ isThrough ~~engaged~~FTHK, on inDecember ~~the~~18, ~~provision~~2003, ~~of computer software consultancy and engineering services and~~ the ~~development~~Company ~~and~~invested ~~sale~~$760,870 ofin ~~computer~~All ~~software~~China inLogistics ~~the~~Online ~~People’s~~Co., ~~Republic~~Ltd. of("All China ~~(“PRC”~~Logistics")~~. As~~ , a ~~part~~privately ofheld ~~its~~PRC ~~computer~~company ~~consultancy~~providing ~~and~~logistic ~~engineering~~ services, ~~BFSTC is also engaged~~ in ~~the sale of computer hardware. In June 2001~~China, ~~BFSTC~~in ~~changed~~exchange ~~its~~for ~~name~~a ~~to Forlink Technologies Co~~17.8% ~~Ltd.~~equity ~~(“FTCL”)~~interest. ~~FTCL is the Company’s major operating subsidiary in China.~~

InOn ~~August~~June ~~2001~~14, ~~the~~2004, ~~Company~~Forlink ~~acquired~~Technologies ~~Beijing Slait Science & Technology Development~~ (Chengdu) Limited ~~Co.~~ (~~“SLAIT”~~"FTCD") ~~pursuant~~was toestablished as a ~~Plan~~limited ofliability ~~Reorganization~~company ~~dated~~in ~~January 11~~Chengdu, ~~2001. The~~PRC ~~Company~~and ~~issued~~subsequently ~~59,430,000~~became ~~shares~~a ofwholly ~~its~~owned subsidiary ~~common~~of ~~stock~~FTHK ~~to SLAIT’s original beneficial owners~~ in ~~exchange~~September ~~for 100% of the outstanding equity of SLAIT~~2004. As aFTCD ~~result~~is ofin the ~~share~~business ~~exchange, the former beneficial owners~~ of ~~SLAIT~~providing ~~own~~software ~~approximately~~outsourcing ~~70%~~services ~~of the issued~~ and ~~outstanding~~software ~~shares of the Company, and SLAIT became a wholly-owned subsidiary of the Company~~development. The ~~Company~~registered ~~also~~capital ~~agreed~~of toFTCD ~~transfer~~is 1$5,~~085~~000,000 ~~Renminbi (“RMB”) (approximately US$131,039) to the former owners of SLAIT. A change in control occurred in which all but one of the officers~~ and ~~directors of~~ the ~~Company~~fully ~~resigned~~paid ~~and~~up ~~two~~capital ~~former~~was ~~directors~~$750,000 ~~(also~~as ~~former owners)~~ of ~~SLAIT~~December ~~became~~31, ~~officers and directors of the Company~~2005. ~~Prior~~ toIn ~~its~~April ~~dissolution 2004~~2006, FTHK ~~SLAIT~~further ~~provided~~invested ~~application~~$130,000 ~~system~~in ~~integration~~FTCD. ~~technology~~FTCD ~~and~~commenced ~~specializes~~operations in ~~large~~late ~~volume transaction processing software for networks such as mobile phone billing and band operation~~2005. ~~Subsequent~~ toThe ~~the~~registered ~~acquisition,~~capital ~~the principal activities~~ of ~~SLAIT~~FTCD ~~were~~was ~~gradually~~reduced ~~shifted~~ to ~~those~~$200,000 in ofDecember ~~FTCL. On February 13~~2007, ~~2004,~~which ~~SLAIT~~amount was ~~officially~~fully ~~dissolved~~paid inas ~~accordance~~of ~~with~~December ~~relevant PRC regulations~~2007.

On June 18, 2003, Forlink Technologies (Hong Kong) Limited (“FTHK”) was incorporated in Hong Kong Special Administrative Region as a limited liability company. In December 2003, FTHK became a wholly owned subsidiary of Forlink. FTHK is an investment holding company set up to take advantage of the favorable business environment in Hong Kong and to facilitate the Company’s investment transactions. Through FTHK, on December 18, 2003, the Company invested $760,870 in All China Logistics Online Co., Ltd. ("All China Logistics"), a privately held PRC company providing logistic services in China, in exchange for a 17.8% equity interest.F-6

~~On June 14, 2004,~~ Forlink ~~Technologies~~Software ~~(Chengdu) Limited ("FTCD") was established as a limited liability company in Chengdu~~Corporation, ~~PRC and subsequently became a wholly owned subsidiary of FTHK in September 2004~~Inc. FTCD is in the business of providing software outsourcing services and software development. The registered capital of FTCD is $5,000,000 and the fully paid up capital was $750,000 as of December 31, 2005. In April 2006, FTHK further invested $130,000 in FTCD. FTCD commenced operations in late 2005. The registered capital of FTCD was reduced to $200,000 in December 2007, which amount was fully paid as of December 2007.

InNotes compliance with China’s foreign investment restrictions on telecom value-added services and other laws and regulations, the Company conducts telecom value-added services and application integration services for government organizations in China via Beijing Forlink Hua Xin Technology Co. Ltd. ("BFHX"). BFHX was established in the PRC on September 19, 2003 as a limited liability company. The registered capital of BFHX is $120,733 (RMB 1,000,000) and was fully paid up as of March 31, 2005. Mr. Yi He and Mr. Wei Li have been entrusted as nominee owners of BFHX to ~~hold~~Consolidated ~~70%~~Financial and 30%, respectively, of the fully paid up capital of BFHX on behalf of the Company as the primary beneficiary. BFHX is considered a Variable Interest Entity ("VIE"), and because the Company is the primary beneficiary, the Company’s consolidated financial statements include BFHX. Upon the request of the Company, Mr. Yi He and Mr. Wei Li are required to transfer their ownership interests in BFHX to the Company or its designees at any time for the amount of the fully paid registered capital of BFHX. Mr. Yi He is the Chief Executive Officer, a director and a major stockholder of the Company. Mr. Wei Li is the administration manager of FTCL.Statements

FNOTE 1 -6 ORGANIZATION AND DESCRIPTION OF BUSINESS (continued)

OnIn ~~October~~compliance ~~24,~~with ~~2005~~China’s foreign investment restrictions on telecom value-added services and other laws and regulations, the Company ~~entered~~conducts ~~into~~telecom avalue-added ~~definitive~~services and ~~agreement~~application tointegration ~~acquire~~services afor ~~17.5%~~government ~~equity~~organizations ~~interest~~in of China ~~Liquid~~via ~~Chemical~~Beijing ~~Exchange~~Forlink ~~Company~~Hua ~~Limited~~Xin Technology Co. Ltd. (~~“CLCE”~~"BFHX"),. BFHX awas established in the PRC on September 19, 2003 as a limited liability company. The registered capital of BFHX is $120,733 (RMB in1,000,000) ~~exchange~~and ~~for~~was ~~deployment~~fully paid up as of ~~the~~March ~~Company’s~~31, ~~For-online~~2005. ~~Electronic~~Mr. ~~Trading~~Yi ~~System~~He and Mr. In ~~early~~Wei ~~2007,~~Li ~~CLCE~~have ~~increased~~been ~~its~~entrusted ~~share~~as ~~capital~~nominee owners of BFHX to ~~$1,708,526~~hold ~~(RMB~~70% 13and 30%,~~000~~ respectively,~~000).~~ Asof the fully paid up capital of BFHX on behalf of the Company ~~did~~as ~~not~~the ~~subscribe~~primary beneficiary. BFHX is considered a Variable Interest Entity ("VIE"), and because the ~~new~~Company ~~shares~~is the primary beneficiary, the Company’s consolidated ~~shareholding~~financial statements include BFHX. Upon the request of ~~CLCE~~the ~~was~~Company, ~~diluted~~Mr. Yi He and asMr. Wei Li are required to transfer their ownership interests in BFHX to the Company or its designees at any time for the amount of ~~December~~the 31fully ~~2007~~paid ~~was~~registered 13capital of BFHX.~~46%~~ Mr. ~~CLCE~~Yi ~~commenced~~He ~~operations~~is ~~fully~~the inChief ~~early~~Executive ~~2007~~Officer, a director and a major stockholder of the Company. Mr. Wei Li is the administration manager of FTCL.

On October 324, ~~2006~~2005, the Company entered into a ~~Transfer~~definitive ofagreement ~~Right~~ to ~~Invest~~acquire ~~and Project Cooperation Agreement (“Statelink Agreement”) with Statelink International Group, Ltd.,~~ a ~~British Virgin Islands company (“Statelink”), pursuant to which the Company acquired 22~~17.735% ~~registered~~equity ~~capital~~interest inof ~~Guangxi~~China ~~Caexpo~~Liquid ~~International~~Chemical ~~Trade~~Exchange ~~and~~Company ~~Logistics~~Limited ~~Co., Ltd.~~ (“~~Guangxi Caexpo~~CLCE”), a PRC limited liability company, in ~~the~~exchange ~~businesses~~for deployment of ~~real~~the ~~estate~~Company’s ~~development,~~For-online ~~advertising~~Electronic ~~and~~Trading ~~computer~~System. ~~distribution~~In ~~for~~early 2007, ~~cash~~CLCE ~~consideration~~increased ofits share capital to $21,~~557~~708,~~545~~526 (RMB 2013,000,000). ~~from~~As ~~BFHX~~the ~~and~~Company ~~stock~~did ~~consideration~~not ofsubscribe ~~13,000,000~~the new shares, of the Company’s shareholding ~~restricted~~of ~~common~~CLCE ~~stock.~~was Ondiluted ~~October~~and ~~26,~~as ~~2006,~~of ~~BFHX~~December ~~established~~31 ~~Forlink~~2007 ~~Technologies~~was ~~(Guangxi)~~13.46%. ~~Limited~~CLCE ~~(“FTGX”),~~commenced aoperations ~~PRC~~fully ~~limited~~in ~~liability~~early ~~company,~~2007. toAs ~~carry~~of ~~out~~December 31, a2011 ~~contract~~and ~~from~~2010, ~~Guangxi~~the ~~Caexpo~~Company’s toshare ~~build~~of anthe ~~“Electronic~~joint ~~Trade~~venture’s ~~and~~profit ~~Logistics Information Platform and Call Center”~~ (~~the “Project”~~loss). Atwas ~~the time of incorporation~~($41,931) ~~BFHX~~and ~~injected RMB 20,000,000 (approximately US~~$27,~~557~~793,~~545)~~ ~~as registered capital to FTGX~~respectively. China OnLiquid ~~August~~Chemical ~~20,~~Exchange ~~2010, the~~ Company ~~transferred~~Limited ~~all~~paused its ~~ownership~~operations ~~interests~~as inof ~~Guangxi~~December ~~Caexpo~~31, ~~to Guangxi Sanqi Investment Co~~2011., ~~Ltd~~The ~~for~~value ~~an amount equivalent to 22.73%~~ of ~~Guangxi~~the ~~Caexpo’s~~investment ~~fully~~was $0 ~~paid~~at upthe ~~capital.~~end ~~The Company received a cash payment~~ of ~~$3,024,355 (RMB 20,000,000)~~2011.

On October 123, 2006, the Company ~~invested~~entered ~~$31,969~~into a Transfer of Right to Invest and Project Cooperation Agreement (~~RMB~~“Statelink ~~250~~Agreement”) with Statelink International Group,~~000~~ Ltd., a British Virgin Islands company (“Statelink”), pursuant to which the Company acquired 22.73% registered capital in ~~Wuxi~~Guangxi ~~Stainless~~Caexpo International ~~Steel~~Trade ~~Exchange~~and Logistics Co., Ltd. (“~~Wuxi~~Guangxi ~~Exchange~~Caexpo”), a PRC limited liability company in the businesses of real estate development, advertising and computer distribution for acash ~~12.5%~~consideration ~~equity~~of ~~interest~~$2,557,545 (RMB 20,000,000) from BFHX and stock consideration of 13,000,000 shares of the Company’s restricted common stock. On ~~January~~October 1426, ~~2007~~2006, ~~the~~BFHX ~~Company~~established Forlink ~~entered~~Technologies ~~into~~(Guangxi) anLimited ~~agreement~~(“FTGX”), ~~with~~a PRC limited liability company, to carry out a ~~major~~contract ~~shareholder~~from Guangxi Caexpo to build an “Electronic Trade and Logistics Information Platform and Call Center” (the “Project”). At the time of ~~Wuxi~~incorporation, ~~Exchange~~BFHX toinjected ~~transfer~~RMB 20,000,000 (approximately US$2,557,545) as registered capital to FTGX.5% ofOn August 20, 2010, the Company’s ~~interest~~transferred all its ownership interests in ~~Wuxi~~Guangxi ~~Exchange~~Caexpo to ~~the~~Guangxi ~~major~~Sanqi ~~shareholder~~Investment Co., Ltd for an amount equivalent to 22.73% of Guangxi Caexpo’s fully paid up capital. The Company received a cash payment of $3,024,355 (RMB ~~500~~20,000,000).

On ~~January~~October 2512, ~~2007~~2006, the ~~board~~Company ofinvested ~~directors~~$31,969 ~~and~~(RMB ~~the~~250,000) in ~~majority~~Wuxi ~~holders~~Stainless ofSteel ~~the~~Exchange ~~Company’s~~Co., ~~common~~Ltd. ~~stock~~(“Wuxi ~~jointly~~Exchange”), ~~approved~~a anPRC ~~amendment~~limited toliability ~~the~~company, ~~Company’s~~for ~~Articles~~a of12.5% ~~Incorporation~~equity interest. byOn ~~written~~January ~~consent~~14, to2007, ~~increase~~ the ~~number~~Company ofentered ~~authorized~~into ~~shares~~an ofagreement ~~common~~with ~~stock~~a ~~from~~major ~~100,000,000~~shareholder toof ~~200,000,000. The~~Wuxi ~~Certificate~~Exchange ofto ~~Amendment~~transfer to2.5% of the ~~Articles~~Company’s ofinterest ~~Incorporation~~in toWuxi ~~effect~~Exchange to the ~~increase~~major ofshareholder ~~the~~for ~~number~~a ofcash ~~the~~payment ~~Company’s~~of ~~authorized~~RMB ~~common~~500,000. ~~shares~~After ~~was~~this ~~filed~~transfer, the ~~with~~Company ~~Nevada’s~~continues ~~Secretary~~to ofhold ~~State~~a on10% ~~April~~equity 4,interest ~~2007~~in Wuxi.

On ~~April~~January 2925, 2007, the ~~Company~~board ~~invested,~~of ~~through~~directors ~~BFHX,~~and ~~$138,158~~the ~~(RMB~~majority holders ~~1,050,000)~~of inthe ~~Beijing~~Company’s ~~GuoXin~~common ~~Forlink~~stock ~~Internet~~jointly ~~Technologies~~approved ~~Limited~~an ~~(“BGXF”),~~amendment ato ~~privately~~the ~~held~~Company’s ~~PRC~~Articles ~~company~~of ~~that~~Incorporation ~~operates~~by ~~a finance study website~~written consent, ~~for~~to aincrease ~~35% equity interest. The investment in BGXF is accounted for under~~ the ~~equity~~number ~~method~~ of ~~accounting~~authorized ~~due~~shares ~~to the Company’s significant influence over the operational and financial policies~~ of ~~BGXF. BGXF~~common ~~commenced~~stock ~~operations~~from on100,000,000 ~~March~~to ~~9 2008~~200,000,000. OnThe ~~October~~Certificate ~~14,~~of ~~2008,~~Amendment to the ~~registered~~Articles ~~capital~~ of ~~BGXF~~Incorporation ~~was increased~~ to ~~RMB~~effect ~~4,285,700,~~the ~~and~~increase ~~since~~of the ~~Company~~number ~~did~~of ~~not~~the ~~invest~~Company’s ~~additional~~authorized ~~funds~~common ~~into~~shares ~~BGFX,~~was ~~the~~filed with ~~ratio~~Nevada’s Secretary of ~~its~~State ~~holding~~on ~~was~~April ~~diluted~~4, ~~to a 24~~2007.~~5% equity interest.~~

On ~~July~~April 1229, 2007, the Company invested, through ~~FTGX~~BFHX, $1138,~~063,830~~ 158 (RMB 81,~~000~~050,000) in ~~Nanning~~Beijing ~~Bulk~~GuoXin ~~Commodities~~Forlink ~~Exchange~~Internet ~~Corporation~~Technologies Limited (“~~NNBCE~~BGXF”), a privately held PRC company that operates a finance study website, for ana 8035% equity interest. ~~NNBCE~~ ~~became~~The ainvestment ~~subsidiary~~in BGXF is accounted for under the equity method of accounting ~~FTGX. NNBCE,~~due ~~set~~to upthe onCompany’s ~~April~~significant ~~29,~~influence ~~2007,~~over ~~commenced~~the operational and financial policies of BGXF. BGXF commenced operations on March 289 2008. On October 14, 2008, the registered capital of BGXF was increased to RMB 4,285,700, and ~~provides~~since ~~logistical~~the Company ~~e-commerce~~did ~~service~~not invest additional funds into BGFX, the ratio of its holding was diluted to a 24.5% equity interest. On March 15, 2011 the Company transferred all its ownership interests in BGXF to Beijing Guo Xin XinChuang Investment Co., Ltd. for the amount of BGXF’s 24.5% fully paid up capital. The Company received a cash payment of RMB 95,741.

On September 5, 2007, the Company invested $465,425 (RMB 3,500,000), through NNBCE, in Guangxi Bulk Sugar & Ethanol Exchange Corporation Limited (“GBSEE”), a PRC limited liability company established on September 12, 2007, for a 35% equity interest. Concurrently, All China Logistics was entrusted as nominee owner of GBSEE to hold 20% of the fully paid up capital of GBSEE on behalf of NNBCE as the primary beneficiary. Upon the request of NNBCE, All China Logistics is required to transfer its ownership interests in GBSEE to NNBCE or its designees at any time for the amount of the 20% fully paid up capital. In accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46R “Consolidation of Variable Interest Entities F- An Interpretation of ARB No. 51” (“FIN 46R”), NNBCE is deemed to hold the primary beneficial interest of 55% equity interest in GBSEE. GBSEE was established to provide logistical e-commerce service, but it was dissolved on December 16, 2007 before it commenced any operations and NNBCE received payments back of its investment in GBSEE of $410,397 (RMB 3,000,000) in December 2007; $66,211 (RMB 484,000) in February 2008, and $2,189 (RMB 16,000) in September 2008.7

OnForlink ~~December~~Software 24Corporation, 2007, the board of directors and the majority holders of the Company’s common stock jointly approved an amendment to the Company’s Articles of Incorporation by written consent, to effect a 1-for-20 reverse stock splitInc. ~~The Certificate of Amendment to the Articles of Incorporation to effect the reverse split was filed with Nevada’s Secretary of State on February 21, 2008.~~

~~F-7~~Notes to Consolidated Financial Statements

OnNOTE ~~March~~1 ~~20,~~- ~~2008,~~ORGANIZATION ~~the~~AND ~~Company~~DESCRIPTION ~~invested~~OF ~~$71,124~~BUSINESS (~~RMB 500,000~~continued), through BFHX, in Shandong LongDong Internet Technologies Limited (“SDLD”), a PRC limited liability company established on October 24, 2007, for a 5% equity interest. SDLD, which commenced operations in December 2007, is in the business of providing of providing primary products e-commerce services. The purpose of this investment is to gain cash dividends from SDLD.

On ~~February~~July 812, ~~2010~~2007, the Company ~~transferred~~invested ~~all~~through ~~its~~FTGX, ~~ownership~~$1,063,830 (RMB ~~interests~~8,000,000) in ~~FTCL~~Nanning toBulk ~~BFHX~~Commodities ~~for~~Exchange ~~the~~Corporation ~~amount~~Limited of(“NNBCE”), ~~FTCL’s~~a ~~100~~privately held PRC company, for an 80% ~~fully~~equity ~~paid~~interest. NNBCE became a subsidiary of FTGX. NNBCE, set up ~~capital~~on April 29, 2007, commenced operations on March 28, 2008, and provides logistical e-commerce service.

~~The~~On ~~principal~~September ~~activities~~5, of2007, the Company ~~are~~invested ~~the~~$465,425 ~~development~~(RMB ~~and~~3,500,000), through ~~sale~~NNBCE, in Guangxi Bulk Sugar & Ethanol Exchange Corporation Limited (“GBSEE”), a PRC limited liability company established on September 12, 2007, for a 35% equity interest. Concurrently, All China Logistics was entrusted as nominee owner of ~~network~~GBSEE ~~software~~to ~~systems~~hold ~~and~~20% of the ~~provision~~fully paid up capital of ~~enterprise~~GBSEE ~~application~~on ~~system~~behalf ~~integration~~of ~~services~~NNBCE inas the ~~PRC~~primary beneficiary. ~~The~~ ~~Company~~Upon the request of NNBCE, All China Logistics is ~~also~~required ~~engaged~~to transfer its ownership interests in GBSEE to NNBCE or its designees at any time for the ~~sale~~amount of ~~computer~~the ~~hardware~~20% fully paid up capital. ~~Set~~ ~~forth~~In ~~below~~accordance with Financial Accounting Standards Board (“FASB”) Interpretation No. 46R “Consolidation of Variable Interest Entities - An Interpretation of ARB No. 51” (“FIN 46R”), NNBCE is adeemed ~~diagram~~to ~~illustrating~~hold ~~our~~the ~~corporate~~primary ~~structure~~beneficial asinterest of 55% equity interest in GBSEE. GBSEE was established to provide logistical e-commerce service, but it was dissolved on December 3116, ~~2010:~~2007 before it commenced any operations and NNBCE received payments back of its investment in GBSEE of $410,397 (RMB 3,000,000) in December 2007; $66,211 (RMB 484,000) in February 2008, and $2,189 (RMB 16,000) in September 2008.

FOn December 24, 2007, the board of directors and the majority holders of the Company’s common stock jointly approved an amendment to the Company’s Articles of Incorporation by written consent, to effect a 1-8for-20 reverse stock split. The Certificate of Amendment to the Articles of Incorporation to effect the reverse split was filed with Nevada’s Secretary of State on February 21, 2008.

FOn March 20, 2008, the Company invested $71,124 (RMB 500,000), through BFHX, in Shandong LongDong Internet Technologies Limited (“SDLD”), a PRC limited liability company established on October 24, 2007, for a 5% equity interest. SDLD, which commenced operations in December 2007, is in the business of providing of providing primary products e-9commerce services. The purpose of this investment is to gain cash dividends from SDLD.

~~NOTE~~On 2February -8, ~~BASIS~~2010, OFthe ~~PRESENTATION~~Company ~~AND~~transferred ~~SUMMARY~~all OFits ~~SIGNIFICANT~~ownership interests ~~ACCOUNTING~~in ~~POLICIES~~FTCL to BFHX for the amount of FTCL’s 100% fully paid up capital.

~~Basis~~The principal activities of ~~Accounting~~the Company are the development and ~~Principles~~sale of ~~Consolidation~~network software systems and the provision of enterprise application system integration services in the PRC. The Company is also engaged in the sale of computer hardware. Set forth below is a diagram illustrating our corporate structure as of December 31, 2011:

The consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America that include the financial statements of Forlink and its subsidiaries and VIE, namely, FTCL, FTHK, BFHX, FTCD, FTGX, and NNBCE. All interF-~~company transactions and balances have been eliminated.~~8

~~Non-controlling interests at the balance sheet date, being the portion of the net assets of subsidiaries attributable to equity interests that are not owned by~~ Forlink, ~~whether~~Software ~~directly or indirectly through subsidiaries~~Corporation, ~~are presented in the consolidated balance sheet separately from liabilities and the shareholders’ equity~~Inc. ~~Non-controlling interests in the results of the Company for the years are also separately presented in the income statement.~~

~~Use~~Notes ofto ~~Estimates~~Consolidated Financial Statements

~~The~~NOTE ~~preparation~~1 of- ~~financial~~ORGANIZATION ~~statements~~AND inDESCRIPTION ~~accordance~~OF ~~with~~BUSINESS generally accepted accounting principles requires management to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.(continued)

~~Foreign Currency Translation and Transactions~~F-9

~~The functional currency of~~ Forlink isSoftware US Dollar (“US$”) and the financial records are maintained and the financial statements prepared in US$. The functional currency of FTHK is HK Dollar (“HK$”) and its financial records are maintainedCorporation, ~~and its financial statements prepared, in HK$~~Inc. ~~The functional currency of FTCL, BFHX, FTCD, FTGX, and NNBCE is RENMINBI (“RMB”) and their financial records are maintained, and their financial statements are prepared, in RMB.~~

~~Foreign~~Notes ~~currency~~to ~~transactions~~Consolidated ~~during~~Financial the period are translated into each company’s denominated currency at the exchange rates at the transaction dates. Gain and loss resulting from foreign currency transactions are included in the consolidated statement of operations. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into each company’s denominated currency at the yearend exchange rates. All exchange differences are dealt with in the consolidated statements of operations.Statements

~~The~~NOTE ~~financial~~2 statements of the Company’s operations based outside of the United States have been translated into US$ in accordance with ASC 830. Management has determined that the functional currency for each of the Company’s foreign operations is its applicable local currency. When translating functional currency financial statements into US$, year-~~end~~ ~~exchange~~BASIS ~~rates~~OF ~~are~~PRESENTATION ~~applied~~AND toSUMMARY ~~the~~OF ~~consolidated~~SIGNIFICANT ACCOUNTING balance sheets, while average period rates are applied to consolidated statements of operations. Translation gains and losses are recorded in translation reserve as a component of stockholders’ equity.POLICIES

~~The~~Basis ~~value~~ of ~~the~~Accounting ~~RMB is subject to changes in China’s central government policies~~ and toPrinciples ~~international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market. Since 1994, the conversion~~ of RMB into foreign currencies, including US$, has been based on rates set by the People’s Bank of China, which are set daily based on the previous day’s inter-bank foreign exchange market rates and current exchange rates on the world financial markets. Since 1994, the official exchange rate generally has been stable. In July 2005, the Chinese government announced that it will no longer peg its currency exclusively to US$ but will switch to a managed floating exchange rate based on market supply and demand with reference to a basket of currencies which will likely increase the volatility of RMB as compared to US$. The exchange rate of RMB to US$ changed from RMB8.28 to RMB8.11 in late July 2005.Consolidation

The ~~exchange~~consolidated ~~rates~~financial ~~used~~statements asare ofprepared ~~December~~in ~~31,~~accordance with ~~2010~~generally ~~and~~accepted ~~2009~~accounting ~~are~~principles ~~US$1:HK$7.82:RMB6.61~~in ~~and~~the ~~US$1:HK$7.79:RMB6.84,~~United ~~respectively.~~States ~~The~~of ~~weighted~~America ~~average~~that ~~rates~~include ~~ruling~~the ~~for~~financial ~~the~~statements ~~years~~of ~~ended~~Forlink and ~~December~~its 31subsidiaries and VIE, ~~2010~~namely, ~~and~~FTCL, ~~2009~~FTHK, ~~are~~BFHX, ~~US$1:HK$7.80:RMB6.69~~FTCD, FTGX, and ~~US$1:HK$7~~NNBCE.~~78:RMB6.84,~~ ~~respectively~~All inter-company transactions and balances have been eliminated.

FNon-10controlling interests at the balance sheet date, being the portion of the net assets of subsidiaries attributable to equity interests that are not owned by Forlink, whether directly or indirectly through subsidiaries, are presented in the consolidated balance sheet separately from liabilities and the shareholders’ equity. Non-controlling interests in the results of the Company for the years are also separately presented in the income statement.

~~Foreign~~Use ~~Currency~~of ~~Risk~~Estimates

The ~~RMB~~preparation isof ~~not~~financial astatements ~~freely~~in ~~convertible~~accordance ~~currency.~~with ~~The~~generally accepted ~~State~~accounting ~~Administration~~principles ~~for~~requires ~~Foreign~~management ~~Exchange,~~to ~~under~~make ~~the~~estimates ~~authority~~and ofassumptions ~~the~~that ~~People’s~~affect ~~Bank~~reported amounts of ~~China,~~assets ~~controls~~and liabilities ~~the~~and ~~conversion~~disclosure of ~~RMB~~contingent ~~into~~assets ~~foreign~~and ~~currencies.~~liabilities ~~The~~at ~~value~~the date of the ~~RMB~~financial isstatements ~~subject~~and tothe ~~changes~~reported inamounts of ~~central~~revenues ~~government policies~~ and toexpenses ~~international~~during ~~economic~~the ~~and~~reporting ~~political~~period. ~~developments~~Actual ~~affecting~~results ~~supply~~could ~~and~~differ ~~demand~~from inthose ~~the China Foreign Exchange Trading System market~~estimates.

~~The~~Foreign ~~PRC~~Currency ~~subsidiaries~~Translation ~~conduct their business substantially in the PRC,~~ and their financial performance and position are measured in terms of RMB. Any devaluation of the RMB against the US$ would consequently have an adverse effect on the financial performance and asset values of the Company when measured in terms of US$. The PRC subsidiaries’ products are primarily procured, sold and delivered in the PRC for RMB. Thus, their revenues and profits are predominantly denominated in RMB. Should the RMB devalue against US$, such devaluation could have a material adverse effect on the Company’s profits and the foreign currency equivalent of such profits repatriated by the PRC entities to the Company.Transactions

~~Cash~~The functional currency of Forlink is US Dollar (“US$”) and ~~Cash~~the ~~Equivalents~~financial records are maintained and the financial statements prepared in US$. The functional currency of FTHK is HK Dollar (“HK$”) and its financial records are maintained, and its financial statements prepared, in HK$. The functional currency of FTCL, BFHX, FTCD, FTGX, and NNBCE is RENMINBI (“RMB”) and their financial records are maintained, and their financial statements are prepared, in RMB.

~~Cash~~Foreign currency transactions during the period are translated into each company’s denominated currency at the exchange rates at the transaction dates. Gain and ~~cash~~loss ~~equivalents~~resulting ~~include~~from ~~cash~~foreign currency transactions are included in ~~hand~~the consolidated statement of operations. Assets and ~~all~~liabilities ~~highly~~denominated ~~liquid~~in ~~investments~~foreign ~~with~~currencies at anthe ~~original~~balance ~~maturity~~sheet ofdate ~~three~~are ~~months~~translated orinto ~~less~~each company’s denominated currency at the yearend exchange rates. All exchange differences are dealt with in the consolidated statements of operations.

~~Allowance~~The financial statements of the Company’s operations based outside of the United States have been translated into US$ in accordance with ASC 830. Management has determined that the functional currency for ~~Doubtful~~each ~~Accounts~~of the Company’s foreign operations is its applicable local currency. When translating functional currency financial statements into US$, year-end exchange rates are applied to the consolidated balance sheets, while average period rates are applied to consolidated statements of operations. Translation gains and losses are recorded in translation reserve as a component of stockholders’ equity.

WeThe ~~record~~value anof ~~allowance~~the ~~for~~RMB ~~doubtful~~is ~~accounts~~subject ~~based~~to onchanges ~~specifically~~in ~~identified~~China’s central ~~amounts~~government ~~that~~policies ~~the~~and ~~Company believes~~ to beinternational ~~uncollectible.~~economic Weand ~~have~~political adevelopments ~~limited~~affecting ~~number~~supply ofand ~~customers~~demand ~~with~~in ~~individually~~the ~~large~~China ~~amounts~~Foreign Exchange ~~due~~Trading atSystem ~~any~~market. ~~given~~Since ~~balance~~1994, ~~sheet~~the ~~date. Any~~conversion ~~unanticipated~~of ~~change~~RMB ininto ~~one~~foreign ofcurrencies, ~~those~~including ~~customers’~~US$, ~~credit~~has ~~worthiness~~been orbased ~~other~~on ~~matters~~rates set ~~affecting~~by the ~~collectability~~People’s Bank of ~~amounts~~China, ~~due~~which ~~from~~are ~~such~~set ~~customers~~daily ~~could~~based ~~have~~on athe ~~material~~previous ~~effect~~day’s inter-bank foreign exchange market rates and current exchange rates on the ~~results~~world offinancial ~~operations~~markets. inSince 1994, the ~~period~~official inexchange ~~which~~rate ~~such~~generally ~~changes~~has orbeen ~~events occur~~stable. In ~~After~~July ~~all~~2005, ~~attempts~~the Chinese government announced that it will no longer peg its currency exclusively to ~~collect~~US$ but will switch to a managed ~~receivable~~floating ~~have~~exchange ~~failed,~~rate ~~the~~based ~~receivable~~on ismarket ~~written~~supply ~~off~~and ~~against~~demand ~~the~~with ~~allowance~~reference to a basket of currencies.

~~Inventories~~The exchange rates used as of December 31, 2011 and 2010 are US$1:HK$7.80:RMB6.30 and US$1:HK$7.82:RMB6.61, respectively. The weighted average rates ruling for the years ended December 31, 2011 and 2010 are US$1:HK$7.80:RMB6.40, and US$1:HK$7.80:RMB6.69, respectively.

Inventories are stated at the lower of cost or market. For inventory used in system integration services, cost is calculated using the specific identification method. For the sale of computer hardware, cost is calculated using firstF-in, first-out method. Cost includes all costs of purchase, cost of conversion and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business after the balance sheet date or to management estimates based on prevailing market conditions.10

~~Property,~~Forlink ~~Plant~~Software Corporation, ~~Equipment and Depreciation~~Inc.

~~Property,~~Notes ~~plant and equipment are stated at cost. Depreciation is computed using the straight-line method~~ to ~~allocate~~Consolidated ~~the~~Financial ~~cost of depreciable assets over the estimated useful lives of the assets as follows:~~Statements

	Estimated useful life (in years)
Building	20
Computer equipment	3
Office equipment	5
Motor vehicle	10

NOTE 2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

~~Major~~Foreign ~~improvements~~Currency ofRisk property, plant and equipment are capitalized, while expenditures for repair and maintenance and minor renewals and betterments are charged directly to the statements of operations as incurred. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the statement of operations.

~~F-11~~The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMB into foreign currencies. The value of the RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

~~Computer~~The ~~Software~~PRC ~~Development~~subsidiaries ~~Costs~~conduct their business substantially in the PRC, and their financial performance and position are measured in terms of RMB. Any devaluation of the RMB against the US$ would consequently have an adverse effect on the financial performance and asset values of the Company when measured in terms of US$. The PRC subsidiaries’ products are primarily procured, sold, and delivered in the PRC for RMB. Thus, their revenues and profits are predominantly denominated in RMB. Should the RMB devalue against US$, such devaluation could have a material adverse effect on the Company’s profits and the foreign currency equivalent of such profits repatriated by the PRC entities to the Company.

InCash ~~accordance~~and ~~with~~Cash ASC 985-20 “Accounting for the Cost of Computer Software to be Sold, Leased or Otherwise Marketed,” software development costs are expensed as incurred until technological feasibility in the form of a working model has been established. Deferred software development costs will be amortized over the estimated economic life of the software once the product is available for general release to customers. For the current software products, the Company determined that technological feasibility was reached at the point in time it was available for general distribution. Therefore, no costs were capitalized.Equivalents

~~Long~~Cash ~~Term~~and ~~Investments~~cash equivalents include cash in hand and all highly liquid investments with an original maturity of three months or less.

~~The~~Allowance ~~Company’s long term investments consist of (1) equity investments which are accounted~~ for inDoubtful accordance with the equity method and (2) cost investments which are accounted for under the cost method. Under the equity method, each such investment is reported at cost plus the Company’s proportionate share of the income or loss or other changes in stockholders’ equity of each such investee since its acquisition. The consolidated results of operations include such proportionate share of income or loss. See Note 8.Accounts

~~Fair~~We ~~Values~~record an allowance for doubtful accounts based on specifically identified amounts that the Company believes to be uncollectible. We have a limited number of ~~Financial~~customers ~~Instruments~~with individually large amounts due at any given balance sheet date. Any unanticipated change in one of those customers’ credit worthiness or other matters affecting the collectability of amounts due from such customers could have a material effect on the results of operations in the period in which such changes or events occur. After all attempts to collect a receivable have failed, the receivable is written off against the allowance.

The carrying amounts of financial instruments (cash and cash equivalents, investments, accounts receivable and accounts payable) approximate their fair values as of December 31, 2010 and 2009 because of the relatively short-term maturity of these instruments.Inventories

~~Revenue~~Inventories ~~Recognition~~are stated at the lower of cost or market. For inventory used in system integration services, cost is calculated using the specific identification method. For the sale of computer hardware, cost is calculated using first-in, first-out method. Cost includes all costs of purchase, cost of conversion, and other costs incurred in bringing the inventories to their present location and condition. Market value is determined by reference to the sales proceeds of items sold in the ordinary course of business after the balance sheet date or to management estimates based on prevailing market conditions.

~~The Company generally provides services under multiple element arrangements~~Property, ~~which include software license fees~~Plant, ~~hardware~~Equipment and software sales, and the provision of system integration services including consulting, implementation, and software maintenance. The Company evaluates revenue recognition on a contract-by-contract basis as the terms of each arrangement vary. The evaluation of the contractual arrangements often requires judgments and estimates that affect the timing of revenue recognized in the statements of operations. Specifically, the Company may be required to make judgments about:Depreciation

·Property, ~~whether~~plant and equipment are stated at cost. Depreciation is computed using the ~~fees~~straight-line ~~associated~~method ~~with~~to ~~our~~allocate ~~products~~the ~~and~~cost ~~services~~of ~~are~~depreciable ~~fixed~~assets orover ~~determinable;~~the estimated useful lives of the assets as follows:

· whether collection of our fees is reasonably assured;

	Estimated useful life (in years)

Building	20
Computer equipment	3
Office equipment	5
Motor vehicle	10

~~· whether professional services are essential to the functionality of the related software product;~~F-11

·Forlink ~~whether~~Software weCorporation, ~~have the ability to make reasonably dependable estimates in the application of the percentage-of-completion method; and~~Inc.

·Notes ~~whether~~to weConsolidated ~~have~~Financial ~~verifiable objective evidence of fair value for our products and services.~~Statements

~~The~~NOTE ~~Company~~2 ~~recognizes~~- ~~revenues~~BASIS inOF ~~accordance~~PRESENTATION ~~with~~AND ~~the~~SUMMARY ~~provisions~~OF ofSIGNIFICANT ACCOUNTING ~~ASC~~POLICIES 985, “Software Revenue Recognition.” ASC 985 requires among other matters, that there be a signed contract evidencing an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable.(continued)

~~Software~~Major ~~license~~improvements ~~revenue~~of isproperty, ~~recognized~~plant ~~over~~and ~~the~~equipment ~~accounting~~are ~~periods~~capitalized, while ~~contained~~expenditures infor ~~the~~repair ~~terms~~and ofmaintenance ~~the~~and ~~relevant~~minor ~~agreements,~~renewals ~~commencing~~and ~~upon~~betterments ~~the~~are ~~delivery~~charged ofdirectly to the ~~software~~statements ~~provided~~of ~~that~~operations as ~~(1)~~incurred. ~~there~~When isassets ~~evidence~~are ofdisposed ~~an arrangement~~of, ~~(2)~~ the ~~fee~~related iscost ~~fixed~~and oraccumulated ~~determinable,~~depreciation ~~and~~thereon ~~(3)~~are ~~collection~~removed offrom the ~~fee~~accounts and any resulting gain or loss is ~~considered~~included ~~probable~~in the statement of operations.

~~Revenue~~Computer ~~from~~Software ~~non-software,~~Development multiple-element arrangements is recognized in accordance with ASC 605-25, “Revenue Arrangements with Multiple Deliverables”. Under ASC 605-25, the Company recognizes revenue from the multiple-deliverables which has value to the customer on a stand-alone basis. Deliverables in an arrangement that do not meet the separation criteria in ASC 605-25 are treated as one unit of accounting for purposes of revenue recognition.Costs

In ~~the~~accordance ~~case~~with ASC 985-20 “Accounting for the Cost of ~~maintenance~~Computer ~~revenues,~~Software ~~vendor-specific~~to ~~objective~~be ~~evidence~~Sold, Leased or ~~VSOE~~Otherwise Marketed,” software development costs are expensed as incurred until technological feasibility in the form of ~~fair~~a ~~value~~working model has been established. Deferred software development costs will be amortized over the estimated economic life of the software once the product is ~~based~~available onfor ~~substantive~~general ~~renewal~~release ~~prices,~~to ~~and~~customers. For the ~~revenues~~current software ~~are~~products, ~~recognized~~the ~~ratably~~Company ~~over~~determined that technological feasibility was reached at the ~~maintenance~~point ~~period~~in time it was available for general distribution. Therefore, no costs were capitalized.

~~F-12~~Long Term Investments

InThe ~~the~~Company’s ~~case~~long term investments consist of ~~consulting~~(1) equity investments that are accounted for in accordance with the equity method and ~~implementation~~(2) ~~services~~cost ~~revenues~~investments that are accounted for under the cost method. Under the equity method, ~~where~~each ~~VSOE~~such investment is ~~based~~reported onat ~~prices~~cost ~~from~~plus ~~stand-alone~~the ~~sale~~Company’s ~~transactions,~~proportionate share of the ~~revenues~~income ~~are~~or ~~recognized~~loss asor ~~services~~other ~~that~~changes ~~are~~in ~~performed~~stockholders’ ~~pursuant~~equity toof ~~ASC~~each ~~985-605-25~~such investee since its acquisition. The consolidated results of operations include such proportionate share of income or loss. See Note 8.

~~For~~Fair ~~hardware~~Values ~~transactions where software is incidental, the Company does not apply separate accounting guidance to the hardware and software elements. The Company applies the provisions~~ of ~~ASC~~Financial 985-605-15. Per ASC 985-605-15, if the software is considered not essential to the functionality of the hardware, then the hardware is not considered “software related” and is excluded from the scope of ASC 985-605-15. Such sale of computer hardware is recognized as revenue on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and title has passed.Instruments

~~Remote~~The ~~hosting~~carrying ~~services,~~amounts ~~where~~of ~~VSOE~~financial isinstruments ~~based~~(cash ~~upon consistent pricing charged to customers based on volumes~~ and ~~performance~~cash equivalents, ~~requirements~~investments, onaccounts areceivable, ~~stand-alone basis~~ and ~~substantive~~accounts ~~renewal~~payable) ~~terms,~~approximate ~~are~~their ~~recognized~~fair ~~ratably~~values ~~over the contract term~~ as ~~the~~of ~~services~~December ~~are~~31, ~~performed. The~~2011 ~~remote hosting arrangements generally require the Company to perform one-time set-up activities~~ and 2010 ~~include~~because ~~a one-time set-up fee. This one-time set-up fee is generally paid by the customer at contract execution. The Company has determined that these set-up activities do not constitute a separate unit~~ of ~~accounting, and accordingly,~~ the ~~related~~relatively ~~set~~short-~~up fees are recognized protractedly over the~~ term maturity of ~~the~~these ~~contract~~instruments.

~~The~~Revenue Company is considering the applicability of ASC 985-605-55, “Application of AICPA Statement of SOP 97-2 to Arrangements That Include the Right to Use Software Stored on Another Entity’s Hardware,” to the hosting services arrangements on a contract-by-contract basis. If the Company determines that the customer does not have the contractual right to take possession of the Company’s software at any time during the hosting period without significant penalty, ASC 985-605 would not apply to these contracts in accordance with ASC 985-605-55.Recognition

~~Stock~~The ~~Based~~Company ~~Compensation~~generally provides services under multiple element arrangements, which include software license fees, hardware and software sales, and the provision of system integration services including consulting, implementation, and software maintenance. The Company evaluates revenue recognition on a contract-by-contract basis as the terms of each arrangement vary. The evaluation of the contractual arrangements often requires judgments and estimates that affect the timing of revenue recognized in the statements of operations. Specifically, the Company may be required to make judgments about:

~~Effective~~· ~~January~~whether ~~1, 2006, we adopted “Statement of Financial Accounting Standards ASC 718, Share-Based Payment”, using~~ the ~~modified~~fees ~~prospective~~associated ~~application transition method. Before we adopted ASC 718, we accounted for share-based compensation in accordance~~ with ~~“Accounting~~our ~~Principles~~products ~~Board~~and ~~Opinion~~services ~~No.~~are ~~25,~~fixed ~~Accounting~~or ~~for Stock Issued to Employees.”~~determinable;

~~ASC~~· ~~718~~whether ~~requires~~collection ~~the Company to record the cost~~ of ~~stock~~our ~~options~~fees ~~and~~is ~~other~~reasonably equity-based compensation in its income statement based upon the estimated fair value of those rewards. The Company elected to use the modified prospective method for adoption, which requires compensation expense to be recorded for all unvested stock options and other equity-based compensation beginning in the first quarter of adoption. Accordingly, prior periods have not been restated to reflect stock based compensation. On January 1, 2006, the Company adopted ASC 718 using the modified prospective method, and the adoption of this standard did not have a material impact on the Company’s consolidated financial statements because most of the Company’s outstanding stock options were vested as of December 31, 2005 and the unvested portion of the stock options was considered immaterial.assured;

~~ASC~~· ~~718~~whether ~~also~~professional ~~requires~~services ~~the~~are ~~Company~~essential to ~~estimate forfeitures in calculating~~ the ~~expense~~functionality relating to share-based compensation as opposed to recognizing forfeitures as an expense reduction as they incur. The adjustment to apply estimated forfeitures to previously share-based compensation was considered immaterial by the Company and as such was not classified as a cumulative effect of ~~a change in accounting principle. As of January 1, 2006,~~ the ~~Company~~related ~~had~~software no unrecognized compensation cost remaining associated with existing stock option grants. Also, the Company made no modifications to outstanding stock option grants prior to the adoption of ASC 718, and there were no changes in valuation methodologies or assumptions compared to those used by the Company prior to January 1, 2006.product;

In· ~~November~~whether ~~2005,~~we have the ~~FASB~~ability ~~issued FSP No. 123(R)-3, “Transition Election Related~~ to ~~Accounting~~make ~~for~~reasonably ~~the~~dependable ~~Tax~~estimates ~~Effects of Share-Based Payment Awards.” The Company adopted the alternative transition method provided~~ in the ~~FSP~~application ~~for calculating the tax effects~~ of ~~share-based compensation pursuant to ASC 718 in~~ the ~~fourth quarter of fiscal 2006. The alternative transition method includes simplified methods to establish the beginning balance of the Additional Paid~~percentage-~~in Capital (“APIC”) pool related to the tax effects~~ of ~~employee share~~-~~based~~completion ~~compensation,~~method; and to determine the subsequent impact on the APIC pool and Consolidated Statements of Cash Flows of the tax effects of employee share-based compensation awards that are outstanding upon adoption of ASC 718. The adoption did not have a material impact on the Company’s results of operations and financial position.

~~F-13~~· whether we have verifiable objective evidence of fair value for our products and services.

InThe ~~February~~Company ~~2006,~~recognizes ~~the~~revenues ~~FASB~~in ~~issued~~accordance ~~FASB~~with the provisions of ASC ~~718-10-35~~985, “~~Classification~~Software ofRevenue ~~Options and Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event~~Recognition.” ~~This~~ ~~position amended~~ ASC ~~718~~985 torequires ~~incorporate~~among ~~that~~other amatters, ~~cash settlement feature~~ that ~~can~~there be ~~exercised~~a ~~only~~signed ~~upon~~contract ~~the~~evidencing an ~~occurrence~~arrangement ofexists, adelivery ~~contingent~~has ~~event~~occurred, ~~that is outside~~ the ~~employee’s~~fee ~~control~~is ~~does~~fixed ~~not~~or ~~meet~~determinable, ~~certain~~and ~~conditions~~collectability inis ~~ASC 718 until it becomes~~ probable ~~that the event will occur~~. ~~The guidance in this FASB Staff Position was required to be applied upon initial adoption of ASC 718. The Company does not have any option grants that allow for cash settlement.~~

~~The Company did not adopt any new share~~F-~~based compensation plans in 2010. 200,000 stock options issued under the Company’s 2002 Stock Plan were exercised during the year 2008.~~12

~~Advertising~~Forlink ~~Costs~~Software Corporation, Inc.

~~All~~Notes ~~advertising~~to ~~costs~~Consolidated ~~incurred~~Financial ~~in the promotion of the Company’s products and services are expensed as incurred. Advertising expenses were insignificant for 2010 and 2009.~~Statements

~~Income~~NOTE ~~Taxes~~2 - BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

~~The~~Software ~~Company~~license ~~accounts~~revenue ~~for~~is ~~income~~recognized ~~taxes~~over inthe ~~accordance~~accounting ~~with~~periods contained ~~ASC~~in ~~740~~the ~~“Accounting~~terms ~~for~~of ~~Income~~the ~~Taxes.”~~relevant ~~Under ASC 740~~agreements, ~~deferred~~commencing ~~tax~~upon ~~liabilities or assets at~~ the ~~end~~delivery of ~~each period are determined using~~ the ~~tax~~software ~~rate~~provided ~~expected~~that to(1) bethere inis ~~effect~~evidence of ~~when~~an ~~taxes~~arrangement, ~~are~~(2) ~~actually~~the ~~paid~~fee ~~or recovered. Valuation allowances are established when it~~ is ~~more~~fixed ~~likely~~or ~~than~~determinable, ~~not~~and ~~that~~(3) ~~some~~collection ~~or all~~ of the ~~deferred~~fee ~~tax~~is ~~assets~~considered ~~not be realized~~probable.

InRevenue ~~July,~~from ~~2006~~non-software, ~~the FASB ASC 740~~multiple-~~10-25,~~element ~~“Accounting~~arrangements ~~for~~is recognized ~~Uncertainty~~ in ~~Income~~accordance ~~Taxes-an~~with ~~interpretation of FASB Statement No. 109”. This Interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in~~ ASC ~~740~~605-25, “~~Accounting~~Revenue ~~for~~Arrangements ~~Income~~with ~~Taxes~~Multiple Deliverables.” Under ASC ~~740~~605-~~10-~~25, ~~prescribes~~the Company arecognizes ~~threshold~~revenue ~~condition~~from ~~that~~the amultiple-deliverables ~~tax~~that ~~position~~has ~~must~~value ~~meet~~to ~~for~~the ~~any~~customer ofon ~~the~~a ~~benefit~~stand-alone ofbasis. ~~the~~Deliverables ~~uncertain~~in an ~~tax~~arrangement ~~position~~that todo benot ~~recognized~~meet in the ~~financial~~separation ~~statements. Guidance~~criteria isin ~~also~~ASC ~~provided~~605-25 ~~regarding~~are ~~derecognition,~~treated ~~classification~~as ~~and~~one ~~disclosure~~unit of ~~these~~accounting ~~uncertain~~for ~~tax~~purposes ~~positions~~of revenue recognition.

~~Earnings~~In ~~Per~~the ~~Common~~case ~~Share~~of maintenance revenues, vendor-specific objective evidence, or VSOE, of fair value is based on substantive renewal prices, and the revenues are recognized ratably over the maintenance period.

~~The~~In ~~Company computes net earnings per share in accordance with ASC 260, “Earnings per Share” and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under~~ the ~~provisions~~case of ~~ASC~~consulting ~~260~~ and ~~SAB~~implementation 98services revenues, where ~~basic~~VSOE ~~net earnings per share~~ is ~~computed~~based byon ~~dividing~~prices ~~the~~from ~~net~~stand-alone ~~earnings~~sale available to common shareholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net earnings per share gives effect to common stock equivalentstransactions, ~~however, potential common stock in~~ the ~~diluted~~revenues ~~EPS computation~~ are ~~excluded~~recognized inas ~~net~~services ~~loss~~that ~~periods,~~are asperformed ~~their~~pursuant to ~~effect~~ASC ~~is anti~~985-~~dilutive~~605-25.

~~Recent~~For ~~Accounting~~hardware ~~Pronouncements~~transactions where software is incidental, the Company does not apply separate accounting guidance to the hardware and software elements. The Company applies the provisions of ASC 985-605-15. Per ASC 985-605-15, if the software is considered non-essential to the functionality of the hardware, then the hardware is not considered “software related” and is excluded from the scope of ASC 985-605-15. Such sale of computer hardware is recognized as revenue on the transfer of risks and rewards of ownership, which generally coincides with the time when the goods are delivered to customers and title has passed.

OnRemote ~~October~~hosting 27services, ~~2010,~~where ~~the~~VSOE ~~FASB~~is ~~clarified~~based ~~that~~upon ~~the~~consistent pricing ~~disclosures~~charged ~~proposed~~to ascustomers ~~part~~based ofon ~~its~~volumes ~~project~~and performance requirements on ~~disclosures~~a ofstand-alone ~~certain~~basis ~~loss~~and ~~contingencies~~substantive ~~will~~renewal ~~not~~terms, are berecognized ~~effective~~ratably ~~for~~over the ~~2010~~contract ~~annual~~term ~~financial~~as ~~statements~~the ofservices ~~public~~are ~~calendar~~performed. The remote hosting arrangements generally require the Company to perform one-~~year~~time set-~~end~~up ~~entities~~activities asand ~~originally~~include ~~proposed~~a one-time set-up fee. This one-time set-up fee is generally paid by the customer at the time the contract is executed. The ~~Board~~Company ~~will~~has ~~discuss~~determined that these set-up activities do not constitute a ~~revised~~separate ~~effective~~unit ~~date~~of ~~during~~accounting, ~~redeliberations~~and onaccordingly, the ~~project~~related set-up fees are recognized protractedly over the term of the contract.

OnThe ~~October~~Company ~~19,~~is ~~2010,~~considering the ~~FASB~~applicability ~~and~~of ~~IASB~~ASC ~~issued~~985-605-55, “Application aof DPAICPA toStatement ~~obtain~~of ~~feedback~~SOP ~~from~~97-2 ~~the~~to ~~FASB’s~~Arrangements ~~and~~That ~~IASB’s~~Include ~~stakeholders on (1)~~ the ~~time~~Right ~~and effort they would need~~ to ~~adopt~~Use ~~several~~Software ~~new~~Stored ~~and~~on ~~significant~~Another ~~accounting~~Entity’s Hardware,” ~~and~~to ~~reporting~~the ~~standards~~hosting ~~and~~services ~~(2)~~arrangements ~~the dates~~ on ~~which~~a ~~those~~contract-by-contract ~~new~~basis. ~~standards~~If ~~should~~the beCompany ~~effective.~~determines Onthat the ~~basis~~customer does ofnot ~~the~~have ~~responses,~~ the ~~FASB~~contractual ~~and~~right ~~IASB plan~~ to ~~develop~~take anpossession ~~implementation~~of ~~plan~~the ~~whose~~Company’s ~~main~~software ~~objective~~at ~~will~~any betime toduring ~~help stakeholders properly manage~~ the ~~cost~~hosting ~~and~~period ~~pace~~without significant ofpenalty, ~~these~~ASC ~~changes.~~985-605 ~~Comments~~would onnot ~~the~~apply DPto ~~are~~these ~~due~~contracts byin ~~January~~accordance ~~31,~~with ~~2011~~ASC 985-605-55.

OnStock-Based August 17, 2010, the FASB and IASB issued an ED on lease accounting. The ED, released by the FASB as a proposed ASU, creates a new accounting model for both lessees and lessors and eliminates the concept of operating leases. The proposed ASU, if finalized, would converge the FASB’s and IASB’s accounting for lease contracts in most significant areas.Compensation

FEffective January 1, 2006, we adopted “Statement of Financial Accounting Standards ASC 718, Share-14Based Payment,” using the modified prospective application transition method. Before we adopted ASC 718, we accounted for stock-based compensation in accordance with “Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees.”

InASC ~~January~~718 ~~2010,~~requires the ~~FASB~~Company ~~issued guidance~~ to ~~amend~~record the ~~disclosure~~cost ~~requirements~~of ~~related~~stock ~~to recurring~~ options and ~~nonrecurring~~other ~~fair~~equity-based ~~value~~compensation ~~measurements. The~~in ~~guidance~~its ~~requires~~income ~~new~~statement ~~disclosures~~based onupon the ~~transfers~~estimated offair ~~assets~~value ~~and~~of ~~liabilities~~those ~~between~~rewards. ~~Level~~The 1Company ~~(quoted~~elected to ~~prices~~use inthe ~~active~~modified ~~market~~prospective method for ~~identical~~adoption, ~~assets~~which orrequires ~~liabilities)~~compensation ~~and~~expense ~~Level~~to 2be ~~(significant~~recorded ~~other~~for ~~observable~~all ~~inputs)~~unvested ofstock options ~~the~~and ~~fair~~other ~~value~~equity-based ~~measurement~~compensation ~~hierarchy,~~beginning ~~including~~in the ~~reasons~~first ~~and~~quarter ~~the timing~~ of ~~the transfers~~adoption. ~~Additionally~~ Accordingly, ~~the~~prior ~~guidance~~periods ~~requires~~have anot ~~roll~~been restated ~~forward~~to ofreflect ~~activities~~stock-based oncompensation. ~~purchases,~~On ~~sales~~January 1, ~~issuance~~2006, ~~and settlements of~~ the ~~assets~~Company ~~and~~adopted ~~liabilities~~ASC ~~measured~~718 using ~~significant~~the ~~unobservable~~modified ~~inputs~~prospective ~~(Level 3 fair value measurements)~~method. The ~~guidance~~adoption ~~became~~of ~~effective~~this ~~for~~standard usdid ~~with~~not ~~the~~have ~~reporting~~a ~~period~~material ~~beginning~~impact ~~January 1, 2010, except for the disclosure~~ on the ~~roll~~Company’s ~~forward~~consolidated ~~activities~~financial ~~for~~statements ~~Level~~because 3most of ~~fair~~the ~~value~~Company’s ~~measurements,~~outstanding ~~which~~stock ~~will~~options ~~become~~were ~~effective~~vested ~~for~~as usof ~~with~~December ~~the~~31, ~~reporting period beginning July 1~~2005, ~~2011.~~and ~~Other~~the ~~than~~unvested ~~requiring~~portion ~~additional disclosures, adoption~~ of ~~this~~the ~~new~~stock ~~guidance~~options was ~~did~~considered ~~not have a material impact on our financial statements~~immaterial.

In September 2009, FASB introduced new guidance addressing the accounting for revenue arrangements with multiple elements and certain revenue arrangements that include software. The guidance allows companies to allocate consideration in a multiple element arrangement in a way that better reflects the economics of the transaction and eliminates the residual method. In addition, tangible products that have software components that are “essential to the functionality” of the tangible product will be scoped out of the software revenue guidance. The new guidance became effective on January 1, 2011 and it is not expected to have a material impact on our financial statements.F-13

~~NOTE~~Forlink 3Software -Corporation, ~~ACCOUNTS RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS~~Inc.

~~Accounts~~Notes ~~receivable~~to ~~are~~Consolidated ~~customer~~Financial ~~obligations due under normal trade terms. The Company performs continuing credit evaluations of the customers’ financial conditions and the Company generally does not require collateral.~~Statements

~~Senior~~NOTE ~~management~~2 ~~reviews~~- ~~accounts~~BASIS ~~receivable~~OF ~~from~~PRESENTATION ~~time~~AND toSUMMARY ~~time~~OF toSIGNIFICANT ACCOUNTING ~~determine~~POLICIES if any receivables will potentially be uncollectible. The Company included any accounts receivable balances that are determined to be uncollectible in the allowance for doubtful accounts. After all attempts to collect a receivable have failed, the receivable is written off against the allowance. Based on the information available to the Company, $0 for doubtful accounts as of December 31, 2010 (~~$0 for 2009~~continued) ~~is required.~~

~~NOTE~~ASC 4718 also requires the Company to estimate forfeitures in calculating the expense relating to stock-based ~~OTHER~~compensation ~~RECEIVABLES~~as opposed to recognizing forfeitures as an expense reduction as they incur. The adjustment to apply estimated forfeitures to previously stock-based compensation was considered immaterial by the Company and as such was not classified as a cumulative effect of a change in accounting principle. As of January 1, ~~DEPOSITS~~2006, ~~AND~~the ~~PREPAYMENTS~~Company had no unrecognized compensation cost remaining associated with existing stock option grants. Also, the Company made no modifications to outstanding stock option grants prior to the adoption of ASC 718, and there were no changes in valuation methodologies or assumptions compared to those used by the Company prior to January 1, 2006.

	December 31,		December 31,
	2010		2009
Other receivables	$	490,760	$	675,801
Deposits		6,033		3,661
Prepayments		66,775		7,951
	$	563,568	$	687,413

In November 2005, the FASB issued FSP No. 123(R)-3, “Transition Election Related to Accounting for the Tax Effects of Share-Based Payment Awards.” The Company adopted the alternative transition method provided in the FSP for calculating the tax effects of stock-based compensation pursuant to ASC 718 in the fourth quarter of fiscal 2006. The alternative transition method includes simplified methods to establish the beginning balance of the Additional Paid-in Capital (“APIC”) pool related to the tax effects of employee stock-based compensation, and to determine the subsequent impact on the APIC pool and Consolidated Statements of Cash Flows of the tax effects of employee stock-based compensation awards that are outstanding upon adoption of ASC 718. The adoption did not have a material impact on the Company’s results of operations and financial position.

~~Other~~In ~~receivables~~February ~~include~~2006, ~~deposits~~the ~~for~~FASB ~~operating~~issued ~~leases~~FASB ASC 718-10-35, “Classification of Options and ~~advances~~Similar Instruments Issued as Employee Compensation That Allow for Cash Settlement upon the Occurrence of a Contingent Event.” This position amended ASC 718 to incorporate that a cash settlement feature that can be exercised only upon the occurrence of a contingent event that is outside the employee’s control does not meet certain conditions in ASC 718 until it becomes probable that the event will occur. The guidance in this FASB Staff Position was required to be applied upon initial adoption of ASC 718. The Company does not have any option grants that allow for ~~traveling~~cash ~~outlays~~settlement.

~~NOTE~~The 5Company did not adopt any new stock-based ~~INVENTORIES~~compensation plans in 2010. 200,000 stock options issued under the Company’s 2002 Stock Plan were exercised during the 2008 year.

	December 31,		December 31,
	2010		2009
Computer hardware and software	$	47,014	$	23,784
Work-in-progress		713,641		911,782
	$	760,655	$	935,566

Advertising Costs

All advertising costs incurred in the ~~inventories~~promotion of the Company’s products and services are expensed as incurred. Advertising expenses were ~~purchased~~insignificant for ~~identified~~2011 ~~system~~and ~~integration contracts~~2010.

~~Work-in-progress~~Income ~~includes payroll and other operating expenses associated with various contracts in progress.~~Taxes

~~F-15~~The Company accounts for income taxes in accordance with ASC 740 “Accounting for Income Taxes.” Under ASC 740, deferred tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered. Valuation allowances are established when it is more likely than not that some or all of the deferred tax assets not be realized.

~~NOTE~~In 6July 2006, the FASB ASC 740-10-25, ~~RELATED~~“Accounting ~~PARTY~~for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109.” This interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in ASC 740, “Accounting for Income Taxes.” ASC 740-10-25 prescribes a threshold condition that a tax position must meet for any of the benefit of the uncertain tax position to be recognized in the financial statements. Guidance is also provided regarding derecognition, classification, and disclosure of these uncertain tax positions.

The Company has had and expects to have transactions in the ordinary course of business with its stockholders, directors, senior officers and other affiliates (and their associates) on substantially the same terms as those prevailing for comparable transactions with others. Listed below is a summary of material relationships or transactions with the Company’s stockholders, directors, senior officers and other affiliates:F-14

~~Amounts~~Forlink ~~Due~~Software toCorporation, ~~Stockholders~~Inc.

~~The~~Notes ~~Company, from time~~ to ~~time,~~Consolidated ~~received~~Financial from or made repayment to one major stockholder who is also a member of management of the Company. The amounts due to stockholders do not bear any interest and do not have clearly defined terms of repayment.Statements

AsNOTE of2 ~~December~~- ~~31,~~BASIS ~~2010~~OF ~~and~~PRESENTATION ~~2009,~~AND ~~the~~SUMMARY ~~amounts~~OF ~~due~~SIGNIFICANT ACCOUNTING toPOLICIES ~~stockholders represented advances from stockholders with the amount of $524,668 and $415,078, respectively.~~(continued)

~~Related~~Earnings ~~Party~~per ~~Transactions~~Common Share

	Sales				Receivable				Customer Deposit
	Year Ended Dec 31,				As of Dec 31,				As of Dec 31,
Related party	2010		2009		2010		2009		2010		2009
All China		7,474		-		151,213		12,140		13,609		61,385
Guangxi Caexpo		1,683,246		2,218,118		3,543,155		1,779,550		-		-
SDLD		29,894		223,059		-		-		-		7,311
Total	$	1,720,614	$	2,441,177	$	3,694,368	$	1,791,690	$	13,609	$	68,696

The Company computes net earnings per share in accordance with ASC 260, “Earnings per Share” and SEC Staff Accounting Bulletin No. 98 (“SAB 98”). Under the provisions of ASC 260 and SAB 98, basic net earnings per share is computed by dividing the net earnings available to common shareholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net earnings per share gives effect to common stock equivalents, however, potential common stock in the diluted EPS computation are excluded in net loss periods, as their effect is anti-dilutive.

~~NOTE~~Recent 7Accounting ~~- PROPERTY, PLANT AND EQUIPMENT, NET~~Pronouncements

	December 31,			December 31,
	2010			2009
Building	$	213,705		$	213,705
Computer and office equipment		1,221,478			1,061,915
Motor vehicles		211,698			211,698
		1,646,881			1,487,318
Less: Accumulated depreciation		(1,276,472	)		(1,095,647	)
	$	370,409			391,671

In May 2011, the FASB issued an authoritative pronouncement on fair value measurement. The guidance is the result of joint efforts by the FASB and the International Accounting Standards Board to develop a single, converged fair value framework. The guidance is largely consistent with existing fair value measurement principles in GAAP. The guidance expands the existing disclosure requirements for fair value measurements and makes other amendments, mainly including:

~~The~~· ~~building~~Highest-and-best-use ~~is located in Chengdu, PRC~~ and ~~was~~valuation-premise ~~purchased~~concepts onfor ~~behalf~~nonfinancial of assets—the ~~Company~~guidance byindicates ~~Mr.~~that Yithe ~~He,~~highest-and-best-use ~~a Company director~~ and ~~stockholder.~~valuation-premise Byconcepts aonly ~~stockholders’~~apply ~~resolution passed on March 8, 1999, it was ratified that the title~~ to ~~the~~measuring ~~building belonged to~~ the ~~Company.~~fair Invalue ~~2005,~~of ~~the~~nonfinancial ~~title to the building was transferred to the Company~~assets.

~~NOTE~~· 8Application -to ~~LONG~~financial ~~TERM~~assets ~~INVESTMENTS~~and financial liabilities with offsetting positions in market risks or counterparty credit risk—the guidance permits an exception to fair value measurement principles for financial assets and financial liabilities (and derivatives) with offsetting positions in market risks or counterparty credit risk when several criteria are met. When the criteria are met, an entity can measure the fair value of the net risk position.

	December 31,			December 31,
	2010			2009
Equity investments		$	54,418		$	3,766,876
Cost investments			1,129,167			940,260
		$	1,183,585			4,707,136

Premiums or discounts in fair value measure—the guidance provides that premiums or discounts that reflect size as a characteristic of the reporting entity’s holding (specifically, a blockage factor that adjusts the quoted price of an asset or a liability because the market’s normal daily trading volume is not sufficient to absorb the quantity held by the entity) rather than as a characteristic of the asset or liability (for example, a control premium when measuring the fair value of a controlling interest) are not permitted in a fair value measurement.

~~F-16~~· Fair value of an instrument classified in a reporting entity’s stockholders’ equity—the guidance prescribes a model for measuring the fair value of an instrument classified in stockholders’ equity; this model is consistent with the guidance on measuring the fair value of liabilities.

In· ~~December~~Disclosures ~~2003,~~about ~~the~~fair ~~Company~~value ~~invested~~measurements—the ~~$760,870~~guidance inexpands adisclosure ~~privately held PRC company~~requirements, ~~All~~particularly ~~China Logistics Online Co., Ltd.,~~ for aLevel ~~17.8%~~3 ~~equity interest~~inputs. ~~The~~Required ~~Company~~disclosures ~~has recorded the investment at cost because it does not have the ability to exercise significant influence over the investee.~~include:

On(i) ~~October~~For ~~24,~~fair ~~2005,~~value ~~the~~measurements ~~Company~~categorized ~~set~~in upLevel ~~China~~3 ~~Liquid~~of ~~Chemical~~the ~~Exchange~~fair ~~Company~~value ~~Limited,~~hierarchy: (1) a ~~limited~~quantitative ~~liability~~disclosure ~~company~~of ~~in PRC, and shares~~ the ~~risk~~unobservable inputs and ~~rewards~~assumptions upused toin the ~~equity~~measurement, ~~interest~~(2) ofa ~~13.46%. The~~description ~~consideration is made in form~~ of the ~~Company-developed~~valuation ~~“For-Online~~process ~~Electronic~~in ~~Trading~~place ~~System” without any cash outflow~~(e. ~~Therefore~~g., how the ~~Company~~entity ~~recorded~~decides ~~the~~its ~~contribution~~valuation ofpolicies ~~software~~and atprocedures, ~~the~~as ~~lower~~well ofas ~~its~~changes ~~carrying~~in ~~amount~~its oranalyses of fair value measurements, ~~and~~from ~~accounted~~period ~~for~~to ~~under~~period), ~~the~~and ~~equity~~(3) ~~method~~a ~~under~~narrative ~~SOP~~description ~~78-9. As~~ of ~~December 31, 2010 and 2009,~~ the ~~Company’s~~sensitivity ~~share~~ of the ~~joint~~fair ~~venture’s~~value ~~profit~~to ~~(loss)~~changes ~~was~~in ~~$7,793~~unobservable inputs and ~~$119,746,~~interrelationships ~~respectively~~between those inputs.

~~On October 3, 2006, the Company entered into a Transfer of Right to Invest and Project Cooperation Agreement~~ (~~“Statelink Agreement”~~ii) ~~with~~The ~~Statelink~~level ~~International Group, Ltd., a British Virgin Islands company (“Statelink”), pursuant to which the Company acquired 22.73% registered capital~~ in ~~Guangxi Caexpo International Trade and Logistics Co., Ltd. (“Guangxi Caexpo”), a PRC limited liability company in~~ the ~~businesses~~fair ofvalue ~~real~~hierarchy ~~estate development, advertising and computer distribution for cash consideration~~ of ~~$2,557,545~~items ~~(RMB~~that ~~20,000,000)~~are ~~from~~not ~~BFHX~~measured ~~and~~at ~~stock~~fair ~~consideration~~value ofin ~~13,000,000 shares of~~ the ~~Company’s~~statement restricted common stock. On October 26, 2006, BFHX established Forlink Technologies (Guangxi) Limited (“FTGX”), a PRC limited liability company, to carry out a contract from Guangxi Caexpo to build an “Electronic Trade and Logistics Information Platform and Call Center” (the “Project”). At the time of ~~incorporation,~~financial ~~BFHX~~position ~~injected~~but ~~RMB~~whose ~~20,000,000~~fair ~~(approximately~~value ~~US$2,557,545)~~must asbe ~~registered capital to FTGX~~disclosed. On August 20, 2010, the Company transferred all its ownership interests in Guangxi Caexpo to Guangxi Sanqi Investment Co., Ltd for an amount equivalent to 22.73% of Guangxi Caexpo’s fully paid up capital. The Company received a cash payment of $3,024,355 (RMB 20,000,000). The loss of this disposition was $627,561.

On October 12, 2006, the Company entered into a definitive agreement to acquire 12.5% of registered capital in Wuxi Stainless Steel Exchange Co., Ltd. (“Wuxi”), a private held PRC company. In exchange for the 12.5% registered capital, the Company was to deploy a proprietary, integrated software solution (“software”), estimated at RMB 1,000,000, by reference to the similar products sold to third parties in 2006, to support Wuxi’s operations, plus RMB 250,000 cash payment to Wuxi. In 2006, the Company contributed cash of $31,969 (RMB 250,000), the software been deployed to Wuxi in December 2006. The Company recorded the investment at cost because it does not have the ability to exercise significant influence over Wuxi. On January 14, 2007, the Company entered into a Share Transfer Agreement with a major shareholder of Wuxi to transfer 2.5% interest in Wuxi held by the Company to the major shareholder for a cash payment of RMB 500,000. After this transfer, the Company continues to hold a 10% equity interest in Wuxi.F-15

~~On April 29, 2007, the Company invested $138,158 in a privately held PRC company, Beijing GuoXin~~ Forlink ~~Internet~~Software ~~Technologies Limited (“BGXF”)~~Corporation, ~~for a 35% equity interest~~Inc. The Company’s investment was made through BFHX. The investment in BGXF is accounted for under the equity method of the accounting due to the Company’s significant influence over the operational and financial policies of BGXF. On March 9, 2008, BGXF commenced operations.

OnNotes September 17, 2007, the Company invested $99,734 in a privately held PRC Company, Ningbo Bulk Commodities Exchange Corporation Limited (“NBBCE”), for a 25% equity interest. The Company’s investment was made through BFHX. The Company recorded the investment at cost as the Company does not have the ability to ~~exercise~~Consolidated ~~significant~~Financial ~~influence over NBBCE because NBBCE’s strategic and business decisions are dominated by another major shareholder.~~Statements

OnNOTE ~~March~~2 ~~20,~~- ~~2008,~~BASIS ~~Forlink~~OF ~~invested~~PRESENTATION ~~$71,124~~AND ~~(500,000~~SUMMARY ~~RMB),~~OF ~~through~~SIGNIFICANT ACCOUNTING ~~BFHX,~~POLICIES ~~in Shandong LongDong Internet Technologies Limited~~ (~~“SDLD”~~continued), a PRC limited liability company, established on October 24, 2007, for a 5% equity interest. SDLD, which commenced operations in December 2007, is in the business of providing of providing primary products e-commerce services. The purpose of this investment is to gain cash dividends from SDLD.

OnThe ~~October~~guidance 8,is ~~2010,~~to ~~the~~be ~~Company~~applied ~~invested~~prospectively and ~~$151,213~~is ~~(RMB~~effective ~~1,000,000),~~for ~~through~~interim ~~BFHX,~~and inannual ~~Shanghai~~periods ~~Shipping~~beginning ~~Freight~~after ~~Exchange Co.~~December 15, ~~LTD~~2011 ~~(“SSFE”), a PRC limited liability company, established on October 8, 2010,~~ for apublic ~~5% equity interest~~entities. ~~Till~~Early ~~March~~application ~~25,~~by public ~~2011,~~entities ~~SSFE~~is ~~has~~ not ~~commenced its operations~~permitted. ~~The~~We ~~Company~~do ~~has~~not ~~recorded~~expect the ~~investment~~adoption atof ~~cost~~this ~~because~~guidance itto ~~does not~~ have ~~the~~a ~~ability to exercise~~ significant ~~influence~~effect ~~over~~on ~~the~~our ~~investee~~consolidated financial statements.

~~F-17~~In June 2011, the FASB issued an authoritative pronouncement to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. In both choices, an entity is required to present each component of net income along with total net income, each component of other comprehensive income along with a total for other comprehensive income, and a total amount for comprehensive income. The guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. The guidance does not change the items that must be reported in other comprehensive income or when an item of other comprehensive income must be reclassified to net income. The guidance should be applied retrospectively. For public entities, the guidance is effective for fiscal years and interim periods within those years, beginning after December 15, 2011. Early adoption is permitted. In December 2011, the FASB issued an authoritative pronouncement related to deferral of the effective date for amendments to the presentation of reclassifications of items out of accumulated other comprehensive income. This guidance allows the FASB to redeliberate whether to present on the face of the financial statements the effects of reclassifications out of accumulated other comprehensive income on the components of net income and other comprehensive income for all periods presented. While the FASB is considering the operational concerns about the presentation requirements for reclassification adjustments and the needs of financial statement users for additional information about reclassification adjustments, entities should continue to report reclassifications out of accumulated other comprehensive income consistent with the presentation requirements in effect before the pronouncement update was issued in June 2011. We do not expect the adoption of this guidance to have a significant effect on our consolidated financial statements.

~~NOTE~~In 9September 2011, the FASB issued an authoritative pronouncement related to testing goodwill for impairment. The guidance is intended to simplify how entities, both public and nonpublic, test goodwill for impairment. The guidance permits an entity to first assess qualitative factors to determine whether it is “more likely than not” that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step ~~OTHER~~goodwill ~~PAYABLES~~impairment ~~AND~~test. ~~ACCRUED~~The ~~EXPENSES~~guidance is effective for annual and interim goodwill impairment tests performed for fiscal years beginning after December 15, 2011. Early adoption is permitted, including for annual and interim goodwill impairment tests performed as of a date before September 15, 2011 if a public entity’s financial statements for the most recent annual or interim period have not yet been issued. We do not expect the adoption of this pronouncement to have a significant effect on our consolidated financial statements.

	December 31,			December 31,
	2010			2009
Other payables		$	196,412		$	221,972
Accrued salaries & wages			173,906			313,696
Other accrued expenses			-			-
		$	370,318		$	535,668

In December 2011, the FASB has issued an authoritative pronouncement related to Disclosures about Offsetting Assets and Liabilities. The guidance requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. An entity is required to apply the amendments for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the disclosures required by those amendments retrospectively for all comparative periods presented. We are in the process of evaluating the effect of adoption of this guidance on our consolidated financial statements.

~~NOTE 10 – NON~~F-~~CONTROLLING INTEREST~~16

~~The~~Forlink ~~non-controlling~~Software ~~interest balance of $99~~Corporation,~~560~~ ~~represents cash provided by minority shareholders of NNBCE~~Inc.

~~NOTE~~Notes 11to -Consolidated ~~INCOME~~Financial ~~TAX~~Statements

~~According~~NOTE to3 ~~the~~- ~~relevant~~ACCOUNTS ~~PRC~~RECEIVABLE ~~tax~~AND ~~rules~~ALLOWANCE ~~and~~FOR ~~regulations,~~DOUBTFUL ~~FTCL, which is recognized as a New Technology Enterprise operating within a New and High Technology Development Zone, is entitled to an Enterprise Income Tax (“EIT”) rate of 15%.~~ACCOUNTS

~~Pursuant~~Accounts toreceivable ~~approval~~are ~~documents~~customer ~~dated~~obligations ~~September~~due ~~23,~~under ~~1999~~normal trade ~~and August 2, 2000 issued by the Beijing Tax Bureau and State Tax Bureau respectively, FTCL was fully exempted from EIT for fiscal years 1999, 2000, 2001 and 2002~~terms. ~~FTCL~~The ~~received~~Company aperforms ~~50%~~continuing ~~EIT~~credit ~~reduction~~evaluations atof the ~~rate~~customers’ offinancial ~~7.5%~~conditions ~~for fiscal years 2003, 2004~~ and ~~2005. As~~the ofCompany ~~December~~generally does ~~31,~~not ~~2010,~~require ~~FTCL was entitled to an EIT rate of 15%~~collateral.

~~Pursuant~~Senior management reviews accounts receivable from time to time anto ~~approval~~determine ~~document~~if ~~dated~~any ~~January~~receivables ~~19,~~will ~~2004~~potentially ~~issued~~be byuncollectible. ~~the~~The ~~State~~Company ~~Tax~~included ~~Bureau,~~any ~~BFHX~~accounts ~~was~~receivable ~~fully~~balances that ~~exempted~~are ~~from~~determined ~~EIT~~to be uncollectible in the allowance for ~~fiscal~~doubtful ~~years~~accounts. ~~2004~~After all attempts to collect a receivable have failed, ~~2005~~the ~~and~~receivable ~~2006~~is written off against the allowance. As ofFor the year ended December 31, ~~2010~~2011, ~~BFHX~~the ~~was~~Company’s ~~entitled~~management determined, after numerous failed attempts to ancollect, ~~EIT~~to ~~rate~~write ofoff ~~25%~~as bad debt two major accounts from Accounts Receivable.

~~Hong~~NOTE ~~Kong~~4 ~~profits~~- ~~tax~~OTHER ~~is calculated at 16.5% on the estimated assessable profits of FTHK for the period. The EIT rate for FTCD~~RECEIVABLES, ~~FTGX~~DEPOSITS ~~and~~AND ~~NNBCE is 25%. No provision for EIT and Hong Kong profits tax were made for FTCL, FTCD, FTGX, NNBCE and FTHK as they have not gained taxable income for the periods.~~PREPAYMENTS

On January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (“FIN 48”). This Interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in ASC 740, Accounting for Income Taxes. FIN 48 prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. Guidance is also provided regarding derecognition, classification and disclosure of these uncertain tax positions. The Company classified all interest and penalties related to tax uncertainties as income tax expense. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to our liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of September 30, 2010, the Company does not have any liability for uncertain tax positions. The adoption of FIN 48 did not have a material impact on the Company’s results operations, financial position or liquidity.

	December 31,		December 31,
	2011		2010

Other receivables	$	487,330	$	490,760
Deposits		8,247		6,033
Prepayments		34,441		66,775

	$	530,018	$	563,568

OnOther ~~March~~receivables ~~16,~~include ~~2007,~~deposits ~~the~~for ~~5th~~operating ~~Plenary~~leases ~~Session~~and advances of the 10th National People's Congress passed the Corporate Income Tax Law of the PRC ("the New Corporate Income Tax Law"), which took effect on January 1, 2008. Beginning on that date, the EIT rate is expected to ~~gradually~~employee increase to the standard rate of 25% over a five-year transition period. However, the New Corporate Income Tax Law does not specify how the existing preferential tax rate will gradually increase to the standard rate of 25%. Also, under the New Corporate Income Tax Law, certain high technology enterprises will continue to be entitled to a reduced tax rate of 15%. However, the implementation rules regarding the preferential tax policies (e.g. the details on how the taxpayer can qualify as a high-tech enterprise under the New Corporate Income Tax Law) have yet to be made public. Consequently, the Company is not able to make an estimate of the expected financial effect of the New Corporate Income Tax Law on its deferred tax assets and liabilities. The enactment of the New Corporate Income Tax Law did not have any financial effect on the provision for ~~income~~traveling ~~tax for the year ended December 31, 2010 and on the amounts accrued in the balance sheet in respect of current tax payable~~outlays.

FNOTE 5 -18 INVENTORIES

Reconciliation between the provision for income taxes computed by applying the statutory tax rate in Mainland China to income before income taxes and the actual provision for income taxes is as follows:

	December 31,		December 31,
	2011		2010

Computer hardware and software	$	90,851	$	47,014
Work-in-progress		1,067,083		586,984

	$	1,157,934	$	633,998

	YE 2010			YE 2009
	USD			USD
Provision of income taxes at statutory tax rate of 15%		(299,985	)		11,457
Tax holidays and concessions		-			-
Effect of different tax rate of a subsidiary operating in Hong Kong		(103,851	)		135,645
Permanent difference		436,195			(165,528	)
Increase in valuation allowance		-			-
Timing different on revenue recognition & FA, etc.		(32,359	)		(39,882	)
Others		-			-
Effective tax		-			(58,308	)

All the inventories were purchased for identified system integration contracts.

~~NOTE~~Work-in-progress 12includes -payroll ~~OTHER~~and ~~TAXES~~other ~~RECOVERABLE/(PAYABLE)~~operating expenses associated with various contracts in progress.

~~Other~~NOTE ~~taxes~~6 ~~payable comprise mainly of the Valued~~-~~Added~~ ~~Tax~~RELATED ~~(“VAT”)~~PARTY and Business Tax (“BT”). The Company is subject to output VAT levied at the rate of 17% of its operating revenue. The input VAT paid on purchases of materials and other direct inputs can be used to offset the output VAT levied on operating revenue to determine the net VAT payable or recoverable. BT is charged at a rate of 5% on the revenue from other services.

AsThe ~~part~~Company ofhas ~~the PRC government’s policy of encouraging software development in the PRC~~had, ~~companies that fulfill certain criteria set by the relevant authorities,~~ and ~~which~~expects ~~develop~~to ~~their own software products and~~ have ~~the software products registered with the relevant authorities~~ in the ~~PRC~~future, ~~are~~transactions in ~~entitled to a refund of VAT equivalent to~~ the ~~excess~~ordinary ~~over~~course 3% of ~~revenue~~business ~~paid~~with inits ~~the~~stockholders, ~~month~~directors, ~~when~~senior ~~output~~officers, ~~VAT~~and ~~exceeds~~other ~~input~~affiliates ~~VAT~~ (~~excluding~~and ~~export~~their ~~sales~~associates)~~. The~~ on ~~excess~~substantially ~~portion of~~ the ~~VAT~~same isterms ~~refundable~~as ~~and~~those isprevailing ~~recorded~~for bycomparable ~~the~~transactions ~~Company~~with ~~on an accrual basis~~others. ~~The~~Listed ~~VAT~~below ~~rebate~~is ~~included~~a insummary ~~other~~of ~~income~~material relationships ~~was~~or ~~$719,678~~transactions ~~and~~with ~~$298,254 for~~ the ~~years~~Company’s ~~ended~~stockholders, ~~December 31~~directors, ~~2010~~senior officers, and ~~2009,~~other ~~respectively.~~affiliates:

~~NOTE~~Amounts 13Due -to ~~COMMITMENTS AND CONTINGENCIES~~Stockholders

~~Operating~~The ~~Lease~~Company, ~~Commitment~~from time to time, received from or made repayment to one major stockholder who is also a member of management. The amounts due to stockholders do not bear any interest and do not have clearly defined terms of repayment.

During the years ended December 31, 2010 and 2009, the Company incurred lease expenses amounting to $472,277 and $361,336 respectively. As of December 31, 2010 and 2009, the Company had commitments under nonF-~~cancelable operating leases, requiring annual minimum rentals as follows:~~17

	December 31,		December 31,
	2010		2009
January 1, 2010 to December 31, 2010	$	472,277	$	475,522
January 1, 2011 to December 31, 2011		130,580		97,726
January 1, 2012 to December 31, 2012		-		-
	$	602,857	$	573,248

Forlink Software Corporation, Inc.

~~NOTE~~Notes 14to -Consolidated ~~STOCK~~Financial ~~PLAN~~Statements

OnNOTE ~~August~~6 ~~16,~~- ~~2002,~~RELATED ~~the~~PARTY ~~Company established the “Forlink Software Corporation, Inc. 2002 Stock Plan”~~ (~~the “2002 Plan”~~continued), and reserved 8,000,000 shares of common stock for issuance under the 2002 Plan either directly as stock awards or underlying options . The board of directors would determine the terms and conditions of each option granted under the 2002 Plan, which terms and conditions would be in writing and may vary from one eligible participant to another. On August 15, 2007, the 2002 Plan expired pursuant to its terms.

~~F-19~~As of December 31, 2011 and 2010, the amounts due to stockholders represented advances from stockholders with the amount of $260,470 and $524,668, respectively.

~~The~~Related ~~following~~Party ~~table summarizes the activities of stock options granted under the 2002 Plan prior to its expiration:~~Transactions

	Number of shares			Weighted average exercise price
	Sales						Receivable				Customer Deposit
Granted on September 7, 2004		3,315,000		$	0.10
	Year Ended December 31,						As of December 31,				As of December 31,
Exercised		(15,000	)	$	(0.10	)
Related party	2011			2010			2011		2010		2011		2010
Forfeited or Cancelled		0		$	0.00
All China		-		$	7,474		$	158,748	$	151,213	$	14,287	$	13,609
Outstanding at December 31, 2004		3,300,000		$	0.10
Guangxi Caexpo		-		$	1,683,246			-	$	3,543,155		-		-
Exercised		(136,500	)	$	(0.10	)
SDLD		-		$	29,894			-		-		-		-
Forfeited or Cancelled		(132,500	)	$	(0.10	)
Total		-		$	1,720,614		$	158,748	$	3,694,368	$	14,287	$	13,609
Outstanding at December 31, 2005		3,031,000		$	0.10
Exercised		0		$	0.00
Forfeited or Cancelled		(1,734,000	)	$	(0.10	)
Outstanding at December 31, 2006		1,297,000		$	0.10
Exercised		(897,000	)	$	(0.10	)
Forfeited or Cancelled		0		$	0.00
Outstanding at December 31, 2007		400,000		$	0.10
Exercised		200,000			0.00
Forfeited or Cancelled		200,000			0.00
Outstanding at December 31, 2008		0			0.10
Fully vested and exercisable at December 31, 2010		0		$	0.10

OnNOTE ~~September~~ 7, 2004, 3,315,000 options were granted to the Company’s employees to purchase the Company’s shares of common stock, $0.001 par value, at an exercise price of $0.10 per share. Of the 3,315,000 options, 800,000 options with a 5-~~year~~ ~~vesting period were granted to an employee~~PROPERTY, ~~and~~PLANT ~~2,515,000~~AND ~~options with a 3-year vesting period were granted to selected employees. Of the 2~~EQUIPMENT,~~515,000~~ ~~options~~NET with the 3-year vesting period, 2,385,000 options was to expire on December 30, 2006 (the “December 2006 Options”), while the remaining 130,000 options expired on June 30, 2007 (the “June 2007 Options”). The expiration date for 800,000 options with the 5-year vesting period is June 30, 2009 (the “June 2009 Options”). On September 7, 2004, January 1, 2005, January 1, 2006 and January 1, 2007, 854,500 (the “December 2006 Options”), 904,500, 1,156,000 (400,000 of “June 2009 Options”; 130,000 of “June 2007 Options”; and 626,000 of “December 2006 Options”) and 200,000 (the “June 2009 Options”) options were vested to employees respectively. The market price of the stock as of September 7, 2004 and January 1, 2005 was $0.10 per share. In December 2006, the Company extended the expiration date of the December 2006 Options by one month to the end of January 2007, but there was no additional compensation expense as the Company considered the amount was immaterial. On January 29, 2007, 367,000 options of the “December 2006 Options” and 400,000 of the “June 2009 options” were exercised. On July 6, 2007, 130,000 options of the “June 2007 Options” were exercised.

The following table summarizes the cumulative activities up to December 31, 2010 of the options issued under the 2002 Plan with different expiration dates:

	December 31,			December 31,
	2011			2010

Building	$	180,137		$	213,705
Computer and office equipment		1,066,908			1,221,478
Motor vehicles		149,657			211,698
		1,396,702			1,646,881
Less: Accumulated depreciation		(1,134,362	)		(1,276,472	)

	$	262,340			370,409

	Granted		Exercised		Forfeited or Cancelled		Outstanding at December 31, 2010
December 2006 Options		2,385,000		518,500		1,866,500		0
June 2007 Options		130,000		130,000		0		0
June 2009 Options		800,000		600,000		200,000		0
		3,315,000		1,248,500		2,066,500		0

The building is located in Chengdu, PRC and was purchased on behalf of the Company by Mr. Yi He, the CEO and a director and stockholder. By a stockholders’ resolution passed on March 8, 1999, it was ratified that the title to the building belonged to the Company. In 2005, the title to the building was transferred to the Company.

~~The~~NOTE ~~weighted~~8 ~~average~~- ~~fair~~LONG ~~value~~TERM of the December 2006 Options, the June 2007 Options and the June 2009 Options granted on the date of grant, were $0.042, $0.046 and $0.058 per option, respectively. At December 31, 2010, all future compensation expenses were recognized.INVESTMENTS

There was no aggregate intrinsic value of options outstanding and exercisable as of December 31, 2010 and December 31, 2009. The aggregate intrinsic value represents the intrinsic value, based on options with an exercise price less than the market value of the Company’s stock on December 31, 2010 and December 31, 2009 which would have been received by the option holders had those option holders exercised those options at of that date.

	December 31,		December 31,
	2011		2010

Equity investments	$	-	$	54,418
Cost investments		1,074,531		1,129,167

	$	1,074,531		1,183,585

~~F-20~~In December 2003, the Company invested $760,870 in a privately held PRC company, All China Logistics Online Co., Ltd., for a 17.8% equity interest. The Company recorded the investment at cost because it does not have the ability to exercise significant influence over the investee.

~~The Company calculated the fair value of each option award on the date of grant using the Black~~F-~~Scholes option pricing model. The following assumptions were used for each respective option.~~18

	The value of Options
	December 2006 Options			June 2007 Options			June 2009 Options
Risk-free interest rate		2.17	%		2.28	%		2.66	%
Expected lives (in years)		1.167			1.417			2.417
Dividend yield		0	%		0	%		0	%
Expected volatility		100	%		100	%		100	%

Forlink Software Corporation, Inc.

~~NOTE~~Notes 15to -Consolidated ~~CONCENTRATION~~Financial ~~OF CUSTOMERS~~Statements

~~During~~NOTE ~~the~~8 ~~year,~~- ~~the~~LONG ~~following~~TERM ~~customers~~INVESTMENTS ~~accounted for more than 10% of total sales:~~(continued)

	Years Ended
	December 31,
	2010			2009
Net sales derived from - Customer A		1,083,241			880,266
- Customer B		1,683,246			2,218,118
- Customer C		*			*
-Customer D		*			*
- Customer E		*			*
% to total net sales - Customer A		22	%		14	%
- Customer B		33	%		35	%
- Customer C		*			*
-Customer D		*			*
- Customer E		*			*
Account receivable from - Customer A		*			*
- Customer B		*			1,779,550
- Customer C		*			267,112
-Customer D		*			*
- Customer E		*			*
% to total accounts receivable- Customer A		*			*
- Customer B		*			73	%
- Customer C		*			11	%
-Customer D		*			*
- Customer E		*			*

On October 24, 2005, the Company set up China Liquid Chemical Exchange Company Limited, a limited liability company in PRC, and shares the risk and rewards up to the equity interest of 13.46%. The consideration is made in form of the Company-developed “For-Online Electronic Trading System” without any cash outflow. Therefore, the Company recorded the contribution of software at the lower of its carrying amount or fair value, and accounted for under the equity method under SOP 78-9. As of December 31, 2011 and 2010, the Company’s share of the joint venture’s profit (loss) was ($41,931) and $7,793, respectively. China Liquid Chemical Exchange Company Limited paused its operations as of December 31, 2011. The value of the investment was $0 at the end of 2011.

*On ~~less~~October ~~than~~3, 102006, the Company entered into a Transfer of Right to Invest and Project Cooperation Agreement (“Statelink Agreement”) with Statelink International Group, Ltd., a British Virgin Islands company (“Statelink”), pursuant to which the Company acquired 22.73% registered capital in Guangxi Caexpo International Trade and Logistics Co., Ltd. (“Guangxi Caexpo”), a PRC limited liability company in the businesses of real estate development, advertising and computer distribution for cash consideration of $2,557,545 (RMB 20,000,000) from BFHX and stock consideration of 13,000,000 shares of the Company’s restricted common stock. On October 26, 2006, BFHX established Forlink Technologies (Guangxi) Limited (“FTGX”), a PRC limited liability company, to carry out a contract from Guangxi Caexpo to build an “Electronic Trade and Logistics Information Platform and Call Center” (the “Project”). At the time of incorporation, BFHX injected RMB 20,000,000 (approximately US$2,557,545) as registered capital to FTGX. On August 20, 2010, the Company transferred all its ownership interests in Guangxi Caexpo to Guangxi Sanqi Investment Co., Ltd for an amount equivalent to 22.73% of Guangxi Caexpo’s fully paid up capital. The Company received a cash payment of $3,024,355 (RMB 20,000,000). The loss of this disposition was $627,561.

~~F-21~~On October 12, 2006, the Company entered into a definitive agreement to acquire 12.5% of registered capital in Wuxi Stainless Steel Exchange Co., Ltd. (“Wuxi”), a private held PRC company. In exchange for the 12.5% registered capital, the Company was to deploy a proprietary, integrated software solution (“software”), estimated at RMB 1,000,000, by reference to the similar products sold to third parties in 2006, to support Wuxi’s operations, plus RMB 250,000 cash payment to Wuxi. In 2006, the Company contributed cash of $31,969 (RMB 250,000), the software been deployed to Wuxi in December 2006. The Company recorded the investment at cost because it does not have the ability to exercise significant influence over Wuxi. On January 14, 2007, the Company entered into a Share Transfer Agreement with a major shareholder of Wuxi to transfer 2.5% interest in Wuxi held by the Company to the major shareholder for a cash payment of RMB 500,000. After this transfer, the Company continues to hold a 10% equity interest in Wuxi.

~~Note~~On 16April –29, ~~GAIN~~2007, the Company invested $138,158 in a privately held PRC company, Beijing GuoXin Forlink Internet Technologies Limited (~~LOSS~~“BGXF”), ~~PER~~for ~~SHARE~~a 35% equity interest. The Company’s investment was made through BFHX. The investment in BGXF is accounted for under the equity method of the accounting due to the Company’s significant influence over the operational and financial policies of BGXF. On March 15, 2011, the Company transferred all its ownership interests in BGXF to Beijing Guo Xin XinChuang Investment Co., Ltd. for the amount of BGXF’s 24.5% fully paid up capital. The Company received a cash payment of RMB 95,741. On March 9, 2008, BGXF commenced operations.

~~The~~On September 17, 2007, the Company ~~reported~~invested $99,734 in a ~~loss~~privately held ofPRC $Company, Ningbo Bulk Commodities Exchange Corporation Limited (~~0.07~~“NBBCE”), ~~per~~for ~~share~~a ~~for~~25% equity interest. The Company’s investment was made through BFHX. The Company recorded the ~~year~~investment ~~2010~~at ~~but~~cost aas ~~profit~~the Company does not have the ability to exercise significant influence over NBBCE because NBBCE’s strategic and business decisions are dominated by another major shareholder. NBBCE paused its operations as of $0December 31, 2011.13 ~~per~~The ~~share~~value ~~for~~of the ~~year~~investment ~~2009~~was $0 at the end of 2011.

~~Note~~On 17March –20, ~~SUBSEQUENT~~2008, ~~EVENT~~Forlink invested $71,124 (500,000 RMB), through BFHX, in Shandong LongDong Internet Technologies Limited (“SDLD”), a PRC limited liability company, established on October 24, 2007, for a 5% equity interest. SDLD, which commenced operations in December 2007, is in the business of providing of providing primary products e-commerce services. The purpose of this investment is to gain cash dividends from SDLD.

~~None~~On October 8, 2010, the Company invested $151,213 (RMB 1,000,000), through BFHX, in Shanghai Shipping Freight Exchange Co., LTD (“SSFE”), a PRC limited liability company, established on October 8, 2010, for a 5% equity interest. SSFE has commenced operations on March 25, 2011. The Company has recorded the investment at cost because it does not have the ability to exercise significant influence over the investee.

F-2219

~~Item~~Forlink ~~9. Changes~~Software inCorporation, ~~and Disagreements with Accountants on Accounting and Financial Disclosure~~Inc.

~~None.~~Notes to Consolidated Financial Statements

~~Item~~NOTE ~~9A(T). Controls~~9 ~~and~~– ~~Procedures.~~SHORT TERM BORROWINGS

~~Evaluation~~On October 20, 2011, the Company signed a bank loan finance contract with China Mingsheng Bank Ltd. The Company received a credit of ~~Disclosure~~$317,496 ~~Controls~~(RMB 2,000,000) to meet its working capital. The bank loan has a term of 6 months and ~~Procedures~~an annual rate of 7.93%. As of December 31, 2011, the balance of this loan was $317,496 (RMB 2,000,000).

~~Our~~NOTE ~~management evaluated our disclosure controls and procedures (as defined in Rule 13a~~10 -~~15(e)~~ orOTHER ~~Rule~~PAYABLES ~~15a-15(e)~~AND ~~under~~ACCRUED the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) and internal control over financial reporting. The evaluation was conducted under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report. In addition, no change in internal control over financial reporting occurred during the year ended December 31, 2010, that has materially affected, or is reasonably likely to materially affect, such internal control over financial reporting. It should be noted that any system of controls is based in part upon certain assumptions designed to obtain reasonable (and not absolute) assurance as to its effectiveness, and there can be no assurance that any design will succeed in achieving its stated goals. Notwithstanding this caution, the CEO and CFO have reasonable assurance that the disclosure controls and procedures were effective as of December 31, 2010.EXPENSES

Management’s Report on Internal Control Over Financial Reporting

	December 31,		December 31,
	2011		2010

Other payables	$	258,912	$	196,412
Accrued salaries & wages		192,552		173,906
Other accrued expenses		-		-

	$	451,464	$	370,318

~~Our~~NOTE ~~management~~11 is– ~~responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a~~NON-~~15(f)~~CONTROLLING and 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is a process designed 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 in the United States of America.INTEREST

~~Because~~The ofnon-controlling ~~its~~interest ~~inherent~~balance ~~limitations,~~of ~~internal control over financial reporting may not prevent or detect misstatements. Also~~$49,125 represents ~~projections~~cash ofprovided ~~any~~by ~~evaluation~~minority ofshareholders ~~effectiveness to future periods are subject to the risk that controls may become inadequate because~~ of ~~changes in conditions, or that the degree of compliance with internal control policies or procedures may deteriorate~~NNBCE.

~~Management~~NOTE ~~assessed~~12 the effectiveness of the Company’s internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - ~~Integrated~~INCOME ~~Framework. Management’s~~TAX assessment included evaluating the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of the Company’s internal control over financial reporting. Based on our assessment, we concluded that, as of December 31, 2010, the Company’s internal control over financial reporting was effective based on the criteria issued by COSO in Internal Control – Integrated Framework.

~~This~~According ~~Form~~to ~~10-K~~relevant ~~does~~PRC ~~not~~tax ~~include~~rules anand ~~attestation~~regulations, ~~report~~FTCL, ofwhich is ~~our~~recognized ~~registered~~as ~~public~~a ~~accounting~~New ~~firm~~Technology ~~regarding~~Enterprise ~~internal~~operating ~~control~~within ~~over~~a ~~financial~~New ~~reporting. Management’s~~and ~~report~~High ~~was~~Technology ~~not~~Development ~~subject~~Zone, tois ~~attestation~~entitled byto ~~our~~an ~~registered~~Enterprise Income ~~public~~Tax ~~accounting~~(“EIT”) ~~firm~~rate ~~pursuant to temporary rules~~ of ~~the Securities and Exchange Commission that permit us to provide only management’s report in this Form 10-K~~15%.

~~Changes~~Pursuant into ~~Internal~~approval ~~Controls~~documents dated September 23, 1999 and August 2, 2000 issued by the Beijing Tax Bureau and State Tax Bureau respectively, FTCL was fully exempted from the EIT for fiscal years 1999 through 2002. FTCL received a 50% EIT reduction at the rate of 7.5% for fiscal years 2003 through 2005. As of December 31, 2011, FTCL was entitled to an EIT rate of 15%.

~~There~~Pursuant ~~were~~to noan ~~changes~~approval indocument ~~our~~dated ~~internal~~January ~~control~~19, ~~over~~2004 ~~financial~~issued by ~~reporting~~the ~~(as~~State ~~defined~~Tax inBureau, ~~Rules~~BFHX ~~13a-15(f)~~was ~~and~~fully ~~15d-15(f)~~exempted ~~under~~from ~~the~~EIT ~~Securities~~for ~~Exchange~~fiscal ~~Act~~years ~~of 1934~~2004, as2005 ~~amended)~~and ~~during~~2006. ~~the~~As ~~quarter~~of ~~ended~~ December 31, ~~2010 that have materially affected~~2011, orBFHX ~~are~~was entitled ~~reasonably likely~~ to ~~materially~~an ~~affect,~~EIT ~~our~~rate ~~international~~of ~~control over financial reporting~~25%.

~~Item~~The 9BHong Kong profits tax is calculated at 16. ~~Other~~5% ~~Information~~on the estimated assessable profits of FTHK. The EIT rate for FTCD, FTGX and NNBCE is 25%. No provision for EIT and Hong Kong profits tax were made for FTCL, FTCD, FTGX, NNBCE, and FTHK as they did not have taxable income during relevant periods.

~~None~~On January 1, 2007, the Company adopted FASB Interpretation No. 48, Accounting for Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109 (“FIN 48”). This interpretation provides guidance for recognizing and measuring uncertain tax positions, as defined in ASC 740, Accounting for Income Taxes. FIN 48 prescribes a threshold condition that a tax position must meet for any of the benefits of the uncertain tax position to be recognized in the financial statements. Guidance is also provided regarding derecognition, classification, and disclosure of these uncertain tax positions. The Company classified all interest and penalties related to tax uncertainties as income tax expense. The Company’s liability for income taxes includes the liability for unrecognized tax benefits, interest and penalties which relate to tax years still subject to review by taxing authorities. Audit periods remain open for review until the statute of limitations has passed. The completion of review or the expiration of the statute of limitations for a given audit period could result in an adjustment to our liability for income taxes. Any such adjustment could be material to the Company’s results of operations for any given quarterly or annual period based, in part, upon the results of operations for the given period. As of December 31, 2011, the Company does not have any liability for uncertain tax positions. The adoption of FIN 48 did not have a material impact on the Company’s results operations, financial position, or liquidity.

23F-20

~~PART~~Forlink ~~III~~Software Corporation, Inc.

~~Item~~Notes ~~10.~~to ~~Directors,~~Consolidated ~~Executive~~Financial ~~Officers, and Corporate Governance~~Statements

AsNOTE of12 ~~December 31, 2010 and as of the date of the filing of this Form 10~~-K, ~~the~~INCOME ~~directors~~TAX and executive officers of the Company, their ages, positions in the Company, the dates of their initial election or appointment as director or executive officer, and the expiration of the terms as directors (~~if applicable~~continued) ~~were as follows:~~

Name	Age	Position	Since
Yi He	44	Chief Executive Officer, Chairman of the board of directors	August 2001
Hongkeung Lam	58	Chief Financial Officer, Chief Accounting Officer, Secretary and Director	August 2001
Guoliang Tian	71	Director	May 2003
Yu Fang	64	Director	May 2003
Zhenying Sun	54	Director	November 2006

On March 16, 2007, the 5th Plenary Session of the 10th National People's Congress passed the Corporate Income Tax Law of the PRC ("the New Corporate Income Tax Law"), which took effect on January 1, 2008. Beginning on that date, the EIT rate is expected to gradually increase to the standard rate of 25% over a five-year transition period. The New Corporate Income Tax Law, however, does not specify how the existing preferential tax rate will gradually increase to the standard rate of 25%. Also, under the New Corporate Income Tax Law, certain high technology enterprises will continue to be entitled to a reduced tax rate of 15%. But the implementation rules regarding the preferential tax policies (e.g. the details on how the taxpayer can qualify as a high-tech enterprise under the New Corporate Income Tax Law) have yet to be made public. Consequently, the Company is not able to make an estimate of the expected financial effect of the New Corporate Income Tax Law on its deferred tax assets and liabilities. The enactment of the New Corporate Income Tax Law did not have any financial effect on the provision for income tax for the year ended December 31, 2011 and on the amounts accrued in the balance sheet in respect of current tax payable.

~~The~~Reconciliation ~~Company's~~between ~~directors~~the ~~hold~~provision ~~office~~for ~~until~~income ~~their~~taxes ~~successors~~computed by ~~are~~applying ~~elected~~the ~~and~~statutory ~~qualified. The~~tax ~~Company's~~rate ~~officers~~in ~~are~~China ~~appointed~~to ~~annually~~income bybefore ~~the~~income ~~board~~taxes ofand ~~directors~~the ~~(“Board”)~~actual ~~and~~provision ~~serve~~for atincome ~~the~~taxes ~~pleasure~~is ofas ~~the Board.~~follows:

Yi He has been a director of the Company since August 2001, and the Chief Executive Officer since May 2003. Mr. He is the founder of Beijing SLAIT Science & Technology Development Limited Co., where he served as Chairman and President from January 1998 to August of 2001. From March 1993 to January 1998, Mr. He was the President of Beijing Sunny Computer System Engineering Co. Mr. He has a Master Degree in Computer Science from Peking University.

	Year Ended December 31, 2011			Year Ended December 31, 2010
	USD			USD
Provision of income taxes at statutory tax rate of 15%	$	(5,190	)	$	(299,985	)
Tax holidays and concessions		-			-
Effect of different tax rate of a subsidiary operating in Hong Kong		-		$	(103,851	)
Permanent difference		-		$	436,195
Increase in valuation allowance		-			-
Timing different on revenue recognition & FA, etc.	$	98,696		$	(32,359	)
Others		-			-
Effective tax	$	93,506			-

~~Hongkeung~~NOTE ~~Lam~~13 ~~has~~- ~~been~~OTHER ~~the~~TAXES Chief Financial Officer, Chief Accounting Officer, Secretary and a director of the Company since August 2001. From July 2000 to August 2001, Mr. Lam was the Chairman of Beijing Hi Sun In Soft Information Technology Ltd. From June 1998 to June 2000, Mr. Lam was the Chairman and President of Beijing Jinshili Information Technology Ltd. From 1992 to February 1998, Mr. Lam was the Manager of Beijing office of Taiwan Acer Computer RECOVERABLE/(~~Far East~~PAYABLE) ~~Co.~~

~~Guoliang~~Other ~~Tian~~taxes ~~has~~payable ~~been~~comprise amainly ~~director~~ of the ~~Company~~Valued-Added ~~since~~Tax (“VAT”) ~~May~~and ~~2003. Currently,~~Business MrTax (“BT”). ~~Tian~~The Company is asubject ~~professor~~to ~~with~~output ~~the~~VAT ~~Institute~~levied ~~of Remote Sensing Applications~~ at the ~~Chinese~~rate ~~Academy~~ of ~~Sciences,~~17% ~~where~~of heits operating ~~has~~revenue. ~~been~~The ~~employed~~input ~~since~~VAT ~~1986,~~paid ~~and~~on hepurchases ~~is in charge~~ of ~~the~~materials ~~study of natural disaster monitoring~~ and ~~assessment. His~~other ~~areas~~direct ofinputs ~~expertise~~can ~~and~~be ~~studies~~used ~~involve~~to offset the ~~use~~output ofVAT ~~remote~~levied on ~~sensing~~operating ~~data~~revenue to ~~research~~determine ~~and~~the ~~monitor~~net ~~geographic~~VAT ~~and~~payable ~~atmospheric~~or ~~changes~~recoverable. He ~~has~~BT ~~published~~is ~~105~~charged ~~papers~~at ~~and~~a 4rate ~~books. In~~of ~~1965,~~5% ~~Mr.~~on ~~Tian~~the ~~received~~revenue ~~a degree in physics~~ from ~~Jilin~~other ~~University of China~~services.

YuAs ~~Fang~~part ~~has been a director~~ of the ~~Company~~PRC ~~since~~government’s ~~May~~policy ~~2003. Currently~~of ~~Mr.~~encouraging software ~~Fang~~development isin athe ~~professor at Peking University~~PRC, ~~where~~companies hethat ~~has~~fulfill ~~been~~certain ~~employed~~criteria ~~since~~set ~~1987. He~~by ~~has served as~~ the ~~Vice~~relevant ~~Director~~authorities ofand ~~the~~that ~~Institute~~develop oftheir own ~~Remote~~software ~~Sensing~~products and ~~Geographic~~have ~~Information~~the ~~System~~software atproducts ~~Peking~~registered ~~University~~with ~~since~~the ~~2001. From~~relevant ~~1982~~authorities ~~until 2000, he worked~~ in the ~~Department~~PRC ofare ~~Computer~~entitled ~~Science~~to &a ~~Technology~~refund of atVAT ~~Peking~~equivalent ~~University,~~to ~~and~~the ~~served~~excess asover ~~Vice~~3% ~~Chairman~~ of ~~the~~revenue ~~Department~~paid ofin ~~Computer~~the ~~Science~~month &when ~~Technology~~output atVAT ~~Peking~~exceeds ~~University~~input ~~from~~VAT ~~1987~~(excluding toexport ~~1999~~sales). ~~His~~ The ~~areas~~excess portion of ~~expertise~~the ~~and~~VAT ~~studies~~is ~~are~~refundable ~~software engineering, geographic information systems, management information systems,~~ and ~~parallel~~is ~~processing~~recorded ~~and~~by ~~distribution~~the ~~systems. He~~Company ~~has~~on ~~written~~an 68accrual ~~articles and 5 books~~basis. In ~~1982,~~The ~~Mr.~~VAT ~~Fang~~rebate ~~received~~included ~~a Masters Degree~~ in ~~Computer~~other income ~~Science~~was at$25,561 ~~Peking~~and ~~University~~$728,107 ~~after~~for ~~graduating from~~ the ~~Department~~years ofended ~~Mathematics~~December at31, ~~Peking~~2011 ~~University~~and in2010, ~~1968~~respectively.

24F-21

~~Zhenying~~Forlink ~~Sun~~Software ~~has been a director of the Company since November 2006. Ms. Sun is currently the President of New West International~~Corporation, Inc., a real estate development and trading company, and she has held this position since 2001. Ms. Sun is also a director of Statelink International Group, Inc. From 2003 until the present, Ms. Sun has also served as the Finance Director of Nanning New West Property & Investment Ltd. Ms. Sun graduated with a degree in accounting from Beijing Xicheng Finance & Trade School in 1990. Ms. Sun also graduated with a degree in accounting from the Machine Industry Management Staff College, which she attended from 1990 to 1992.

~~Family~~Notes ~~Relationships~~to Consolidated Financial Statements

~~There~~NOTE ~~are~~14 no- ~~family~~COMMITMENTS ~~relationships~~AND between or among any of our current directors, executive officers or persons nominated or charged by the Company to become directors or executive officers. There are no family relationships among our officers and directors and the officers and directors of our direct and indirect subsidiaries.CONTINGENCIES

~~Involvement~~Operating inLease ~~Certain Legal Proceedings~~Commitment

~~None~~During the years ended December 31, 2011 and 2010, the Company incurred lease expenses amounting to $528,762 and $472,277, respectively. As of December 31, 2011 and 2010, the Company had commitments under non-cancelable operating leases requiring annual minimum rentals as follows:

Audit Committee and Audit Committee Financial Expert Disclosure

	December 31,2011		December 31, 2010
January 1, 2011 to December 31, 2011	$	528,762	$	472,277
January 1, 2012 to December 31, 2012		506,088		130,580
January 1, 2013 to December 31, 2013		167,527		-

	$	1,202,377	$	602,857

~~The~~NOTE ~~Company~~15 ~~does~~- ~~not~~STOCK ~~have a separately designated standing audit committee at this time because it is not required to do so. Accordingly, the Company does not have an audit committee financial expert.~~PLAN

~~Material~~On ~~Changes~~August to16, 2002, the ~~Procedures~~Company byestablished ~~which~~the ~~Security~~“Forlink Software ~~Holders~~Corporation, ~~May~~Inc. ~~Recommend~~2002 ~~Nominees~~Stock toPlan” (the “2002 Plan”), and reserved 8,000,000 shares of common stock for issuance under the 2002 Plan either directly as stock awards or underlying options. The board of directors would determine the terms and conditions of each option granted under the 2002 Plan, which terms and conditions would be in writing and may vary from one eligible participant to another. On August 15, 2007, the 2002 Plan expired pursuant to its terms.

~~There~~The ~~have~~following ~~been~~table nosummarizes ~~material changes to~~ the ~~procedures~~activities byof ~~which~~stock ~~security~~options granted ~~holders~~under ~~may~~the ~~recommend~~2002 ~~nominees~~Plan prior to ~~the~~its ~~board of directors.~~expiration:

Code of Ethics

	Number of shares			Weighted average exercise price
Granted on September 7, 2004		3,315,000		$	0.10
Exercised		(15,000	)	$	(0.10	)
Forfeited or Cancelled		0		$	0.00
Outstanding at December 31, 2004		3,300,000		$	0.10
Exercised		(136,500	)	$	(0.10	)
Forfeited or Cancelled		(132,500	)	$	(0.10	)
Outstanding at December 31, 2005		3,031,000		$	0.10
Exercised		0		$	0.00
Forfeited or Cancelled		(1,734,000	)	$	(0.10	)
Outstanding at December 31, 2006		1,297,000		$	0.10
Exercised		(897,000	)	$	(0.10	)
Forfeited or Cancelled		0		$	0.00
Outstanding at December 31, 2007		400,000		$	0.10
Exercised		200,000			0.00
Forfeited or Cancelled		200,000			0.00
Outstanding at December 31, 2008		0			0.10
Fully vested and exercisable at December 31, 2011		0		$	0.10

On August 3, 2004, the board of directors established a written code of ethics that applies to the Company’s senior executive and financial officers. A copy of the code of ethics is posted on the Corporation’s webF-~~site at www.forlink.com.~~22

~~Compliance~~Forlink ~~With~~Software ~~Section~~Corporation, ~~16(a) of the Securities Exchange Act of 1934~~Inc.

~~Section~~Notes ~~16(a) of the Securities Exchange Act of 1934 requires the Company's officers and directors, and persons who own more than 10% of a registered class of the Company's equity securities,~~ to ~~file~~Consolidated ~~reports~~Financial of ownership and changes in ownership with the Securities and Exchange Commission (“SEC”). Officers, directors, and greater than 10% shareholders are required by SEC regulation to furnish the Company with copies of all Section 16(a) forms they file. Based solely on review of copies of such reports received or written representations from certain reporting persons, the Company believes that, during the year ended December 31, 2010, all Section 16(a) filing requirements applicable to its officers, directors and ten percent shareholders were in compliance with SEC regulations.Statements

~~Item~~NOTE ~~11. Executive~~15 ~~Compensation.~~- STOCK PLAN (continued)

~~The~~On ~~following~~September ~~summary~~7, ~~compensation~~2004, ~~table~~3,315,000 ~~indicates~~options were granted to the Company’s ~~cash~~employees to purchase the Company’s shares of common stock, $0.001 par value, at an exercise price of $0.10 per share. Of the 3,315,000 options, 800,000 options with a 5-year vesting period were granted to an employee, and ~~non~~2,515,000 options with a 3-~~cash~~year ~~compensation~~vesting ~~earned~~period ~~for~~were ~~years~~granted ~~ended~~to selected employees. Of the 2,515,000 options with the 3-year vesting period, 2,385,000 options was to expire on December 31 30, ~~2010~~2006 ~~and~~(the “December 2006 Options”), while the remaining 130,000 options expired on June 30, 2007 (the “June 2007 Options”). The expiration date for 800,000 options with the 5-year vesting period is June 30, 2009 by(the ~~our~~“June ~~Chief~~2009 ~~Executive~~Options”). ~~Officer~~On September 7, 2004, January 1, 2005, January 1, 2006 and ~~each~~January 1, 2007, 854,500 (the “December 2006 Options”), 904,500, 1,156,000 (400,000 of ~~our~~“June ~~other~~2009 ~~two~~Options”; ~~highest~~130,000 ~~paid~~of ~~executives~~“June 2007 Options”; and 626,000 ~~whose~~of ~~total~~“December ~~compensation~~2006 ~~exceeded~~Options”) ~~$100~~and 200,000 (ifthe ~~any~~“June 2009 Options”) ~~for~~options were vested to employees, respectively. The market price of the ~~years~~stock ~~ended~~as of September 7, 2004 and January 1, 2005 was $0.10 per share. In December 31 2006, ~~2010~~the Company extended the expiration date of the December 2006 Options by one month to the end of January 2007, but there was no additional compensation expense as the Company considered the amount was immaterial. On January 29, 2007, 367,000 options of the “December 2006 Options” and 400,000 of the “June 2009 options” were exercised. On July 6, 2007, 130,000 options of the “June 2007 Options” were exercised.

SUMMARY COMPENSATION TABLE
Name and Principal Position	Year		Salary ($)	Bonus ($)		Stock Awards ( $)	Option Awards ($)		Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)		All Other Compensation ( $)	Total ($)
Yi He,		2010	43,924		-0-	-0-		-0-	-0-		-0-	-0-		43,924
current CEO (1)		2009	43,924		-0-	-0-		-0-	-0-		-0-	-0-		43,924

The following table summarizes the cumulative activities up to December 31, 2011 of the options issued under the 2002 Plan with different expiration dates:

1 Yi He became the Company’s Chief Executive Officer on May 15, 2003. Mr. He is not compensated for his services as a director of the Company.

	Granted		Exercised		Forfeited or Cancelled		Outstanding at December 31, 2011
December 2006 Options		2,385,000		518,500		1,866,500		0
June 2007 Options		130,000		130,000		0		0
June 2009 Options		800,000		600,000		200,000		0
		3,315,000		1,248,500		2,066,500		0

25The weighted average fair value of the December 2006 Options, the June 2007 Options, and the June 2009 Options granted on the date of grant were $0.042, $0.046, and $0.058 per option, respectively. At December 31, 2011, all future compensation expenses were recognized.

~~Outstanding~~There ~~Equity~~was ~~Awards~~no aggregate intrinsic value of options outstanding and exercisable as of December 31, 2011 and December 31, 2010. The aggregate intrinsic value represents the intrinsic value, based on options with an exercise price less than the market value of the Company’s stock on December 31, 2011 and December 31, 2010, which would have been received by the option holders had those option holders exercised those options at ~~Fiscal~~of ~~Year-End~~that date.

~~There~~The ~~were~~Company nocalculated ~~unexercised~~the ~~options,~~fair ~~unvested~~value ~~stock~~of ~~awards~~each oroption ~~equity~~award ~~incentive~~on the ~~plan~~date ~~awards~~of ~~for~~grant ~~any~~using of the ~~above~~Black-~~named~~Scholes ~~executive~~option ~~officers~~pricing ~~outstanding~~model. asThe offollowing ~~December~~assumptions ~~31,~~were ~~2010~~used for each respective option.

Employment Agreements, Termination of Employment and Change-in-Control Arrangements with our Executive Officers

	The Value of Options
	December 2006 Options			June 2007 Options			June 2009 Options

Risk-free interest rate		2.17	%		2.28	%		2.66	%
Expected lives (in years)		1.167			1.417			2.417
Dividend yield		0	%		0	%		0	%
Expected volatility		100	%		100	%		100	%

We currently have no employment agreements with any of our executive officers, nor any compensatory plans or arrangements resulting from the resignation, retirement or any other termination of any of our executive officers, from a changeF-~~in-control, or from a change in any executive officer’s responsibilities following a change-in-control.~~23

~~Compensation~~Forlink ofSoftware ~~Directors~~Corporation, Inc.

~~The~~Notes ~~Company paid no compensation~~ to ~~its~~Consolidated ~~directors~~Financial for any services provided as a director during the year ended December 31, 2010. There are no other formal or informal understandings or arrangements relating to compensation; however, the directors may be reimbursed for all reasonable expenses incurred by them in conducting the Company’s business. These expenses would include out-of-pocket expenses for such items as travel, telephone, and postage. For the fiscal year 2010, none of the directors received reimbursement payments from the Company.Statements

~~Indemnification~~NOTE of16 ~~Officers~~- ~~and~~CONCENTRATION ~~Directors~~OF CUSTOMERS

WeFor ~~are~~the aperiods ~~Nevada~~presented ~~corporation~~below, ~~and accordingly, we are subject to~~ the ~~corporate~~following ~~laws~~customers ~~under~~accounted for ~~the~~more ~~Nevada~~than ~~Revised~~10% ~~Statutes. Article XII~~ of ~~our~~total ~~articles of incorporation contains the following indemnification provision for our directors and officers~~sales:

No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damage for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation to acts or omissions prior to such repeal or modification.

	Years Ended
	December 31,
	2011			2010
Net sales derived from - Customer A		1,060,918			1,083,241
- Customer B		*			1,683,246
- Customer C		338,360			*
-Customer D		481,190			*
- Customer E		*			*

% to total net sales - Customer A		31	%		22	%
- Customer B		10	%		33	%
- Customer C		14	%		*
-Customer D		*			*
- Customer E		*			*

Account receivable from - Customer A		*			*
- Customer B		*			*
- Customer C		*			*
-Customer D		*			*
- Customer E		126,998			*

% to total accounts receivable- Customer A		*			*
- Customer B		*			*
- Customer C		*			*
-Customer D		*			*
- Customer E		62	%		*

~~Such~~* ~~indemnification~~less ~~provision~~than ~~may be sufficiently broad to permit indemnification of our executive officers and directors for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933.~~10%

~~Insofar~~NOTE as17 ~~indemnification~~– ~~for~~GAIN ~~liabilities~~(LOSS) ~~arising~~PER under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provision, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. No pending material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification by any of our directors or executive officers.SHARE

WeThe doCompany ~~not~~reported ~~currently~~a ~~carry~~loss ~~directors’~~of ~~and officers’ liability insurance covering our directors and officers, nor do we have plans to do so~~$(1.06) ~~Insofar~~per asshare ~~indemnification~~ for ~~liabilities under~~ the ~~Securities~~2011 year ~~Act~~compared ~~may~~with bea ~~permitted~~loss ~~to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, we have been informed that, in the opinion~~ of ~~the~~$(0.07) ~~Commission,~~per ~~such~~share ~~indemnification~~for ~~is against public policy as expressed in~~ the ~~Securities~~2010 ~~Act and is therefore unenforceable~~year.

26NOTE 18 – SUBSEQUENT EVENT

~~Item 12~~None. ~~Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.~~

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 22, 2011, by: (i) each person known to beneficially own more than five percent of our common stock; (ii) each of our officers, directors and nominees for election as director; and (iii) all of our directors and executive officers as a group.F-24

~~The~~Item number of shares beneficially owned by each director or executive officer is determined under rules of the SEC, and the information is not necessarily indicative of beneficial ownership for any other purpose9. ~~Under~~Changes ~~the~~in SEC rules, beneficial ownership includes any shares as to which the individual has the sole or shared voting power or investment power. In addition, beneficial ownership includes any shares that the individual has the right to acquire within 60 days. Unless otherwise indicated, each person listed below has sole investment and ~~voting~~Disagreements ~~power (or shares such powers~~ with ~~his~~Accountants oron ~~her~~Accounting ~~spouse).~~and InFinancial certain instances, the number of shares listed includes (in addition to shares owned directly), shares held by the spouse or children of the person, or by a trust or estate of which the person is a trustee or an executor or in which the person may have a beneficial interest.Disclosure

Title of Class	Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership3			Percentage Owned Beneficially5
Common Stock	Yi He1		1,290,001			27.8	%
Common Stock	Hongkeung Lam1		525,000			11.3	%
Common Stock	Guoliang Tian1		-0-			—
Common Stock	Yu Fang1		-0-			—
Common Stock	Zhenying Sun1		650,000	4		14.0	%
Common Stock	Jing Zeng2		288,000			6.2	%
Common Stock	Statelink International Group, Ltd.2		650,000	4		14.0	%
Common Stock	All officers and directors of the Company as a group (five persons)		2,465,001			53.1	%

None.

1Item ~~An officer and/or director of the Company~~9A. ~~The~~ ~~address~~Controls ~~for each officer~~ and ~~director is in care of the Company at 9/F Shenzhou Mansion, No. 31 Zhongguancun Street, Haidian District, Beijing, China.~~Procedures

2Evaluation ~~A beneficial owner~~ of ~~more~~Disclosure ~~than~~Controls ~~five~~and ~~percent~~Procedures ~~of the Company’s common stock. The address for each such beneficial owner is in care of the Company at 9/F Shenzhou Mansion, No. 31 Zhongguancun Street, Haidian District, Beijing, China.~~

3Our ~~Unless~~management ~~otherwise~~evaluated ~~indicated~~our disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15a-15(e) under the Securities Exchange Act of 1934, ~~all~~as ~~shares~~amended ~~are~~(the ~~directly~~“Exchange ~~owned~~Act”)) and internal control over financial reporting. The evaluation was conducted, under the supervision and ~~investing~~with ~~power~~the isparticipation ~~held~~of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the ~~persons~~Exchange ~~named~~Act. inBased on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the ~~table~~end of the period covered by this report.

4Management’s ~~These~~Report ~~shares~~on ofInternal ~~common~~Control ~~stock~~Over ~~are~~Financial Reporting ~~held directly by Statelink International Group, Ltd., of which Ms. Sun is the controlling person and has both voting and dispositive power over these shares.~~

5Our ~~Based~~management ~~upon~~is ~~4,651,173~~responsible ~~shares~~for ofestablishing ~~Common~~and ~~Stock~~maintaining adequate ~~outstanding~~internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of ~~March~~financial ~~22,~~reporting and ~~2011~~the preparation of financial statements for external purposes in accordance with generally accepted accounting principles in the United States of America.

~~Equity~~Because ~~Compensation~~of ~~Plan~~its ~~Information~~inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with internal control policies or procedures may deteriorate.

AsManagement assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, ~~2010~~2011. In making this assessment, wemanagement ~~did~~used ~~not~~the ~~have~~criteria ~~any~~set forth ~~equity~~by ~~compensation~~the ~~plan~~Committee of Sponsoring Organizations of the Treadway Commission (COSO) in ~~effect.~~Internal ~~The~~Control ~~Company~~- Integrated Framework. Management’s ~~2002~~assessment ~~Stock~~included ~~Plan,~~evaluating ~~which~~the ~~was~~design ~~adopted~~of our internal control over financial reporting and testing of the operational effectiveness of our internal control over financial reporting. Based on ~~August~~that 16assessment, ~~2002,~~our ~~expired~~management concluded that, as of ~~August~~December 1531, ~~2007~~2011, ~~pursuant~~our tointernal ~~the~~control ~~terms~~over offinancial ~~such~~reporting ~~plan.~~was ~~The~~effective ~~plan~~based ~~had~~on ~~not~~the ~~been~~criteria ~~approved~~issued by ~~our~~COSO in ~~shareholders~~Internal ~~prior~~Control to– ~~its~~Integrated ~~expiration~~Framework.

~~Item~~Changes ~~13. Certain~~in ~~Relationships~~Internal ~~and Related Transactions, and Director Independence.~~Controls

~~Transactions~~There ~~with~~were ~~Related~~no ~~Person~~changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the quarter ended December 31, 2011 that have materially affected, or are reasonably likely to materially affect, our international control over financial reporting.

~~The~~Item ~~Company, from time to time, received from or made repayments to Mr~~9B. YiOther He, who is a major stockholder and our Chief Executive Officer. The amounts due from/to stockholders do not bear any interest and do not have clearly defined terms of repayment. The amounts due to stockholders as of December 31, 2010 and December 31, 2009, which were $524,668 and $415,078, respectively, represented advances from stockholders.Information

27None.

Other than the transactions described above, we have not entered into any transactions with our officers, directors, persons nominated for these positions, beneficial owners of 5% or more of our common stock, or family members of these persons since the beginning of our last fiscal year wherein the amount involved in the transaction or a series of similar transactions exceeded $120,000.21

~~Director~~PART ~~Independence~~III

~~The~~Item ~~Company has determined that the following directors are independent under Rule IM-5605(a)(2) of the Nasdaq Listing rules: Guoliang Tian, Yu Fang and Zhengying Sun~~10. In ~~determining independence~~Directors, ~~the~~Executive ~~Board~~Officers ~~reviews~~ and ~~seeks~~Corporate to determine whether directors have any material relationship with the Company, direct or indirect, which would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The Board reviews business, professional, charitable and familial relationships of the independent directors in determining independence.Governance

~~Item~~Our ~~14. Principal~~directors ~~Accountant~~and ~~Fees~~executive officers, their ages, positions with the Company, dates of their initial election or appointment as a director or executive officer, and ~~Services.~~the expiration of the Board terms (if applicable) are as follows:

Audit Fees

Name	Age	Position	Since

Yi He	45	Chief Executive Officer Chairman of the board of directors	May 2003 August 2001
Hongkeung Lam	60	Chief Financial Officer, Chief Accounting Officer, Secretary and Director	August 2001
Guoliang Tian	72	Director	May 2003

Yu Fang	65	Director	May 2003

~~The~~Set ~~aggregate~~forth ~~fees~~below ~~billed~~is ~~for~~a ~~professional~~summary ~~services~~of ~~rendered~~our byexecutive ~~Kenne~~officers’ and ~~Ruan,~~directors’ ~~CPA,~~business ~~P.C.~~experience ~~(“Kenne Ruan”)~~ for the ~~audit~~past of5 ~~our~~years. ~~2010~~The ~~annual~~experience ~~financial statements~~ and ~~the~~background ~~reviews~~of each of the ~~financial~~directors, ~~statements~~as ~~included~~summarized below, inwere ~~our~~significant ~~Quarterly~~factors ~~Reports~~in ontheir ~~Form 10-Q~~previously ~~(“Form~~being ~~10-Q”)~~nominated ~~for~~as ~~fiscal~~directors ~~year~~of ~~2010~~the ~~were $100,000~~Company. ~~The~~Our directors ~~aggregate~~hold ~~fees~~office ~~billed~~until ~~for~~their ~~professional~~successors ~~services~~are ~~rendered~~elected byand ~~Kenne~~qualified. ~~Ruan~~Our ~~for~~officers ~~the~~are ~~audit~~appointed ofannually ~~our~~by ~~2009 annual financial statements and~~ the ~~reviews~~board of ~~the financial statements included in our Form 10-Q for fiscal year 2009 were $100,000~~directors.

~~Audit-Related~~Yi ~~Fees~~He has been a director of the Company since August 2001, and the Chief Executive Officer since May 2003. Mr. He is the founder of Beijing SLAIT Science & Technology Development Limited Co., where he served as Chairman and President from January 1998 to August of 2001. From March 1993 to January 1998, Mr. He was the President of Beijing Sunny Computer System Engineering Co. Mr. He has a Master Degree in Computer Science from Peking University.

~~There~~Hongkeung ~~were~~Lam nohas ~~other~~been ~~fees~~the ~~billed~~Chief byFinancial Officer, ~~Kenne~~Chief ~~Ruan~~Accounting ~~during~~Officer, Secretary and a director of the ~~last~~Company ~~two~~since ~~fiscal~~August ~~years~~2001. ~~for~~From ~~assurance~~July ~~and~~2000 ~~related~~to ~~services~~August ~~that~~2001, ~~were~~Mr. Lam ~~reasonably~~was ~~related~~the Chairman of Beijing Hi Sun In Soft Information Technology Ltd. From June 1998 to June 2000, Mr. Lam was the ~~performance~~Chairman and President of ~~the~~Beijing ~~audit~~Jinshili orInformation ~~review~~Technology ofLtd. From 1992 to February 1998, Mr. Lam was the ~~Company’s~~Manager ~~financial~~of ~~statements~~the ~~and~~Beijing office ~~not~~of ~~reported~~Taiwan ~~under~~Acer ~~“Audit~~Computer ~~Fees”~~(Far ~~above~~East) Co.

~~Tax~~Guoliang ~~Fees~~Tian has been a director of the Company since May 2003. Mr. Tian is a professor with the Institute of Remote Sensing Applications at the Chinese Academy of Sciences, where he has been employed since 1986, and he heads the study of natural disaster monitoring and assessment. His areas of expertise and studies involve the use of remote sensing data to research and monitor geographic and atmospheric changes. He has published 105 papers and 4 books. In 1965, Mr. Tian received a degree in physics from Jilin University of China.

~~There~~Yu ~~were~~Fang nohas ~~fees~~been ~~billed~~a ~~for~~director ~~professional~~of ~~services~~the ~~rendered~~Company bysince ~~Kenne~~May ~~Ruan~~2003. ~~for~~Mr. Fang ~~tax~~is ~~compliance~~a ~~services~~professor at Peking University, where he has been employed since 1987. He has served as the Vice Director of the Institute of Remote Sensing and Geographic Information System at Peking University since 2001. From 1982 until 2000, he worked in ~~fiscal~~the ~~years~~Department of ~~2010~~Computer Science & Technology at Peking University, and ~~2009~~served as Vice Chairman of the Department of Computer Science & Technology at Peking University from 1987 to 1999. His areas of expertise and studies are software engineering, geographic information systems, management information systems, and parallel processing and distribution systems. He has written 68 articles and 5 books. In 1982, Mr. Fang received a Masters Degree in Computer Science at Peking University after graduating from the Department of Mathematics at Peking University in 1968.

~~All~~Audit ~~Other~~Committee ~~Fees~~and Audit Committee Financial Expert Disclosure

~~There~~We ~~were~~do nonot ~~other~~have ~~fees~~a ~~billed~~separately bydesignated ~~Kenne~~standing ~~Ruan~~audit ~~during~~committee or ~~the~~an ~~last~~audit ~~two~~committee ~~fiscal~~financial ~~years~~expert. ~~for~~The ~~products~~entire ~~and~~board ~~services provided by Kenne Ruan outside~~ of ~~those~~directors ~~fees~~acts ~~disclosed~~as ~~above~~our ~~under~~audit ~~“Audit Fees~~committee.”

~~Pre-Approval Policy and Procedures~~22

~~The~~Code Company’s Board reviews and approves audit and permissible non-audit services performed by our auditors, as well as the fees charged for such services. In reviewing the non-audit service fees and appointment of the Company’s auditors, the Board considered whether the provision of such services is compatible with maintaining the auditors’ independence. All of the services provided and fees charged by our auditors were pre-approved by the Board.Ethics

~~Item~~On 15August 3, 2004, the board of directors established a written code of ethics that applies to our senior executive and financial officers. ~~Exhibits~~A copy of the code of ethics is posted on our website at www.forlink.com.

Compliance with Section 16(1a) ~~Financial~~of ~~Statements~~the Securities Exchange Act of 1934

~~The~~Section ~~following~~16(a) ~~consolidated~~of ~~financial~~the ~~statements~~Exchange Act requires our officers and directors and persons who own more than 10% of a registered class of our equity securities to file reports of ownership and changes in ownership with the ~~Company~~Commission. Reporting persons are ~~included~~required into ~~Part~~furnish ~~II,~~the ~~Item~~Company 8with copies of ~~this~~all Section ~~Form~~16(a) forms they file. Based solely on review of copies of such reports received or written representations from certain reporting persons, we believe that, during the year ended December 31, 2011, all Section 16(a) filing requirements applicable to our officers, directors, and 10~~-K:~~% shareholders were timely filed.

~~Report of Kenne Ruan, CPA, P.C., Independent Auditors~~Diversity

28While we do not have a policy regarding diversity of its board members, diversity is one of a number of factors that is typically taken into account in identifying board nominees. We believe that we have a diverse board of directors in terms of previous business experience and educational and personal background of the members of our board.

~~Consolidated~~Item ~~Balance~~11. ~~Sheets~~Executive ~~at December 31, 2010 and 2009~~Compensation

~~Consolidated~~The ~~Statements~~following ofsummary ~~Operations~~compensation ~~and~~table ~~Comprehensive~~indicates ~~Income~~the ~~for~~compensation earned during the ~~Years~~fiscal ~~Ended~~years ~~December~~ended December 31, 2011 and 2010 by (i) our Chief Executive Officer (principal executive officer), (ii) our Chief Financial Officer (principal financial officer), (iii) the three most highly compensated executive officers other than our CEO and ~~2009~~CFO who were serving as executive officers at the end of our last completed fiscal year, whose total compensation exceeded $100,000 during such fiscal year ends, and (iv) up to two additional individuals for whom disclosure would have been provided but for the fact that the individual was not serving as an executive officer at the end of our last completed fiscal year, whose total compensation exceeded $100,000 during such fiscal year ends.

~~Consolidated~~Summary ~~Statements~~Compensation ~~of Stockholders’ Equity for the Years Ended December 31, 2010 and 2009~~Table

Consolidated Statements of Cash Flows for the Years Ended December 31, 2010 and 2009

Name and Principal Position	Year		Salary ($)		Bonus ($)		Stock Awards ($)(1)		Option Awards ($)(2)		Non-equity Incentive Plan Compensation ($)		Non-qualified Deferred Compensation Earnings ($)		All Other Compensation ($)		Total ($)

Yi He,		2011	$	43,924	$	-	$	-	$	-	$	-	$	-	$	-	$	43,924
CEO		2010	$	43,924	$	-	$	-	$	-	$	-	$	-	$	-	$	43,924

Hongkeung Lam,		2011	$	14,789	$	-	$	-	$	-	$	-	$	-	$	-	$	14,789
CFO		2010	$	14,789	$	-	$	-	$	-	$	-	$	-	$	-	$	14,789

~~Notes~~Compensation toof ~~Consolidated Financial Statements~~Directors

~~(2)~~The ~~Financial~~Company ~~Statement~~paid ~~Schedules~~no compensation to its directors for any services provided as a director during the year ended December 31, 2011. There are no other formal or informal understandings or arrangements relating to compensation, but the directors may be reimbursed for all reasonable expenses incurred by them in conducting company business. These expenses would include out-of-pocket expenses for such items as travel, telephone, and postage. For the fiscal year 2011, none of the directors received reimbursement payments from the Company.

~~Schedules~~Indemnification ~~are omitted because the required information is not present or is not present in amounts sufficient to require submission~~ of ~~the~~Officers ~~schedule~~and orDirectors ~~because the information required is given in the consolidated financial statements or the notes thereto.~~

~~(3)~~We ~~Exhibits~~are a Nevada corporation, and we are subject to the corporate laws under the Nevada Revised Statutes. Article XII of our articles of incorporation contains the following indemnification provision for our directors and officers:

Exhibit
Number		Description
2.3		Plan of Organization (Incorporated by reference to Exhibit No. 2.3 of the Form 8-K, and filed on August 31, 2001.)
3.1		Articles of Incorporation, as amended. (Incorporated by reference to Exhibit No. 3.1 of the Form 10-QSB for the quarter ended March 31, 2000, and filed on May 15, 2000.)
3.2		Bylaws (Incorporated by reference to Exhibit No. 3.2 of the Form 10-QSB for the quarter ended March 31, 2000, and filed on May 15, 2000.)
3.3		Text of Amendment to Bylaws of Forlink Software Corporation, Inc. (Incorporated by reference to Exhibit 3.3 of the Company’s Form 8-K filed on January 18, 2007.)
3.2		Certificate of Amendment to Increase Number of Authorized Shares of Common Stock as filed with the Nevada Secretary of State on April 4, 2007 (Incorporated by reference to Exhibit No. 3.2 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)
3.3		Certificate of Amendment to Effect a 1-for-20 Reverse Stock Split as filed with the Nevada Secretary of State on February 21, 2008 (Incorporated by reference to Exhibit No. 3.3 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)
10.1		Forlink Software Corporation, Inc. Stock Plan (Incorporated by reference to Exhibit No. 10.1 of the Form S-8, and filed on July 19, 2000)
10.2		2002 Stock Plan (Incorporated by reference to Exhibit No. 10.2 of the Form S-8, and filed on October 21, 2002.)
10.3		Transfer of “Right to Invest” and Project Cooperation Agreement dated October 3, 2006, by and between the Company and Statelink International Group, Ltd. (Incorporated by reference to Exhibit 10.1 of the Company’s Form 8-K, and filed October 10, 2006.)
10.4		Lease Agreement (Incorporated by reference to Exhibit No. 10.3 of the Form 10-Q for the quarter ended June 30, 2010, and filed on August 5, 2010.)
10.5		Lease Agreement (Incorporated by reference to Exhibit No. 10.4 of the Form 10-Q for the quarter ended June 30, 2010, and filed on August 5, 2010.)

29No director or officer of the Corporation shall be personally liable to the Corporation or any of its stockholders for damage for breach of fiduciary duty as a director or officer involving any act or omission of any such director or officer provided, however, that the foregoing provision shall not eliminate or limit the liability of a director or officer for acts or omissions which involve intentional misconduct, fraud or a knowing violation of law, or the payment of dividends in violation of Section 78.300 of the Nevada Revised Statutes. Any repeal or modification of this Article by the stockholders of the Corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the Corporation to acts or omissions prior to such repeal or modification.

14.1		Code of Ethics (Incorporated by reference to Exhibit No. 14 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)
21.1		List of Subsidiaries (Incorporated by reference to Exhibit No. 21.1 of the Form 10-KSB for the year ended December 31, 2003, and filed on March 30, 2004.)
21.2		Updated List of Subsidiaries (Incorporated by reference to Exhibit No. 21.1 of the Form 10-KSB for the year ended December 31, 2006, and filed on April 6, 2007.)
31.1		Section 302 Certification by the Corporation’s Chief Executive Officer. (Filed herewith.)
31.2		Section 302 Certification by the Corporation’s Chief Financial Officer. (Filed herewith.)
32.1		Section 906 Certification by the Corporation’s Chief Executive Officer. (Filed herewith.)
32.2		Section 906 Certification by the Corporation’s Chief Financial Officer. (Filed herewith.)
99.1		Press Release dated May 15, 2003 (Incorporated by reference to Exhibit No. 99.1 of the Form 8-K, and filed on May 22, 2003.)

Such indemnification provision may be sufficiently broad to permit indemnification of our executive officers and directors for liabilities (including reimbursement of expenses incurred) arising under the Securities Act of 1933.

30Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provision, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. No pending material litigation or proceeding involving our directors, executive officers, employees or other agents as to which indemnification is being sought exists, and we are not aware of any pending or threatened material litigation that may result in claims for indemnification by any of our directors or executive officers.

~~SIGNATURES~~We do not currently carry directors’ and officers’ liability insurance covering our directors and officers, nor do we have plans to do so. Insofar as indemnification for liabilities under the Securities Act may be permitted to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, we have been informed that, in the opinion of the Commission, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

InItem ~~accordance~~12. ~~with~~Security ~~Section~~Ownership ~~13 or 15(d)~~ of ~~the~~Certain ~~Exchange~~Beneficial ~~Act,~~Owners ~~the~~and ~~Registrant~~Management ~~caused~~and ~~this~~Related ~~Form~~Stockholder ~~10-K to be signed on its behalf by the undersigned, thereunto duly authorized.~~Matters

	FORLINK SOFTWARE CORPORATION, INC.
	(Registrant)
Date: March 28, 2011	By:	/s/ Yi He
		Yi He
		Chief Executive Officer
Date: March 28, 2011	By:	/s/ Hongkeung Lam
		Hongkeung Lam
		Chief Financial and Accounting Officer

The following table sets forth certain information with respect to the beneficial ownership of our common stock as of March 22, 2012, by: (i) each person known to beneficially own more than five percent of our common stock; (ii) each of our officers and directors; and (iii) all of our directors and executive officers as a group.

InThe ~~accordance~~number ~~with~~of shares beneficially owned by each director or executive officer is determined under rules of the ~~Exchange~~SEC, ~~Act~~and the information is not necessarily indicative of beneficial ownership for any other purpose. Under the SEC rules, ~~this~~beneficial ~~report~~ownership includes any shares as to which the individual has ~~been~~the ~~signed~~sole or shared voting power or investment power. In addition, beneficial ownership includes any shares that the individual has the right to acquire within 60 days. Unless otherwise indicated, each person listed below has sole investment and voting power (or shares such powers with his or her spouse). In certain instances, the number of shares listed includes (in addition to shares owned directly), shares held by the ~~following~~spouse ~~persons~~or onchildren ~~behalf~~of the person, or by a trust or estate of which the ~~registrant~~person ~~and~~is a trustee or an executor or in which the ~~capacities~~person ~~and~~may onhave ~~the~~a ~~dates~~beneficial ~~indicated~~interest.

Date: March 28, 2011	By:	/s/ Yi He
Title of Class		Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership3			Percentage Owned Beneficially5
		Yi He, Director
Common Stock		Yi He1		1,290,001			27.8	%
Date: March 28, 2011	By:	/s/ Hongkeung Lam
Common Stock		Hongkeung Lam1		525,000			11.3	%
		Hongkeung Lam, Director
Common Stock		Guoliang Tian1		0			—
Date: March 28, 2011	By:	/s/ Guoliang Tian
Common Stock		Yu Fang1		0			—
		Guoliang Tian, Director
Common Stock		Jing Zeng2		288,000			6.2	%
Date: March 28, 2011	By:	/s/ Yu Fang
Common Stock		Statelink International Group, Ltd.2		650,000	4		14.0	%
		Yu Fang, Director
Common Stock		All officers and directors of the Company as a group (4 persons)		2,465,001			39.0	%
Date: March 28, 2011	By:	/s/ Zhenying Sun
		Zhenying Sun, Director

31__________

¹ An officer and/or director of the Company. The address for each officer and director is in care of the Company at 9/F Shenzhou Mansion, No. 31 Zhongguancun Street, Haidian District, Beijing, China.

²A beneficial owner of more than five percent of our common stock. The address for each such beneficial owner is in care of the Company at 9/F Shenzhou Mansion, No. 31 Zhongguancun Street, Haidian District, Beijing, China.

³Unless otherwise indicated, all shares are directly owned and investing power is held by the persons named in the table.

⁴These shares of common stock are held directly by Statelink International Group, Ltd., of which Ms. Zhenying Sun is the controlling person and has both voting and dispositive power over these shares.

⁵Based upon 4,651,173 shares of common stock outstanding as of March 23, 2012.

Transactions with Related Person

The Company, from time to time, received from or made repayments to Mr. Yi He, who is a major stockholder and our Chief Executive Officer. The amounts due from/to stockholders do not bear any interest and do not have clearly defined terms of repayment. The amounts due to stockholders as of December 31, 2011 and December 31, 2010, which were $524,668 and $415,078, respectively, represented advances from stockholders.

Director Independence

We have determined that Guoliang Tian and Yu Fang are independent directors under Nasdaq listing rules. In determining independence, the board reviews and determines whether directors have any material relationship with the Company, direct or indirect, that would interfere with the exercise of independent judgment in carrying out the responsibilities of a director.

Item 14. Principal Accounting Fees and Services

Audit Fees

The aggregate fees billed for professional services rendered by Kenne Ruan, CPA, P.C. (“Kenne Ruan”) for the audit of our 2011 annual financial statements and the reviews of the financial statements included in our Quarterly Reports on Form 10-Q for the 2011 fiscal year was $91,737. The aggregate fees billed for professional services rendered by Kenne Ruan for the audit of our 2010 annual financial statements and the reviews of the financial statements included in our Form 10-Q for 2010 fiscal year was $100,000.

Audit-Related Fees

There were no other fees billed by Kenne Ruan during the last two fiscal years for assurance and related services that were reasonably related to the performance of the audit or review of our financial statements and not reported under “Audit Fees” above.

Tax Fees

There were no fees billed for professional services rendered by Kenne Ruan for tax compliance services during the last two fiscal years.

All Other Fees

There were no other fees billed by Kenne Ruan during the last two fiscal years for products and services provided by Kenne Ruan.

Pre-Approval Policy and Procedures

Our board reviews and approves audit and permissible non-audit services performed by our auditors, as well as the fees charged for such services. In reviewing the non-audit service fees and appointment of our auditors, the board considered whether the provision of such services is compatible with maintaining the auditors’ independence. All of the services provided and fees charged by our auditors were pre-approved by the board.

PART IV

Item 15. Exhibits, Financial Statement Schedules

Financial Statements; Schedules

Our consolidated financial statements for the years ended December 31, 2011 and 2010 begin on page F-1 of this annual report. We are not required to file any financial statement schedules.

Exhibits

Exhibit
Number		Description

3.1		Articles of Incorporation, as amended. (Incorporated by reference to Exhibit No. 3.1 of the Form 10-QSB for the quarter ended March 31, 2000, and filed on May 15, 2000.)

3.2		Bylaws (Incorporated by reference to Exhibit No. 3.2 of the Form 10-QSB for the quarter ended March 31, 2000, and filed on May 15, 2000.)

3.3		Text of Amendment to Bylaws of Forlink Software Corporation, Inc. (Incorporated by reference to Exhibit 3.3 of the Company’s Form 8-K filed on January 18, 2007.)

3.2		Certificate of Amendment to Increase Number of Authorized Shares of Common Stock as filed with the Nevada Secretary of State on April 4, 2007 (Incorporated by reference to Exhibit No. 3.2 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)

3.3		Certificate of Amendment to Effect a 1-for-20 Reverse Stock Split as filed with the Nevada Secretary of State on February 21, 2008 (Incorporated by reference to Exhibit No. 3.3 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)

14.1		Code of Ethics (Incorporated by reference to Exhibit No. 14 of the Form 10-K for the year ended December 31, 2008, and filed on March 30, 2009.)

21.1		List of Subsidiaries (Incorporated by reference to Exhibit No. 21.1 of the Form 10-KSB for the year ended December 31, 2006, and filed on April 2, 2007.)

31.1		Section 302 Certification by the Corporation’s Chief Executive Officer. (Filed herewith.)

31.2		Section 302 Certification by the Corporation’s Chief Financial Officer. (Filed herewith.)

32.1		Section 906 Certification by the Corporation’s Chief Executive Officer. (Filed herewith.)

32.2		Section 906 Certification by the Corporation’s Chief Financial Officer. (Filed herewith.)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.

	FORLINK SOFTWARE CORPORATION, INC.
	(Registrant)

Date: March 28, 2012	By:	/s/ Yi He
		Yi He
		Chief Executive Officer

Date: March 28, 2012	By:	/s/ Hongkeung Lam
		Hongkeung Lam
		Chief Financial and Accounting Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Date: March 28, 2012	By:	/s/ Yi He
		Yi He, Chief Executive Officer
		(principal executive officer), Director

Date: March 28, 2012

By:

/s/ Hongkeung Lam

Hongkeung Lam, Chief Financial

and Chief Accounting Officer

(principal financial and accounting

officer), Director

Date: March 28, 2012	By:	/s/ Guoliang Tian
		Guoliang Tian, Director

Date: March 28, 2012	By:	/s/ Yu Fang
		Yu Fang, Director

Filing Compare · FORLINK SOFTWARE CORP INC