<PAGE>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                   FORM 10-QSB

(X)  QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
     OF 1934 FOR THE QUARTERLY PERIOD ENDED: JUNE 30, 2005

(_)  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: 0-29019

                         CHINA ENTERTAINMENT GROUP, INC.
        -----------------------------------------------------------------
        (Exact name of small business issuer as specified in its charter)

                NEVADA                                 22-3617931
                ------                                 ----------
  (State or other jurisdiction of         (I.R.S. Employer Identification No.)
   incorporation or organization)

        UNIT 503C, MIRAMAR TOWER, 132 NATHAN ROAD, TSIMSHATSUI, HONG KONG
        -----------------------------------------------------------------
                    (Address of principal executive offices)

                                011-852-2313-1888
                                -----------------
                           (Issuer's Telephone Number)

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 [_] No [X]

Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act). Yes [_]   No [X]

                APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
                   PROCEEDINGS DURING THE PRECEDING FIVE YEARS

Check whether the registrant filed all documents and reports required to be
filed by Section l2, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by a court. Yes [_] No [_]

                      APPLICABLE ONLY TO CORPORATE ISSUERS

State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practical date. As of March 31, 2006, there were
approximately 128,963,425 shares of the issuer's $.001 par value common stock
issued and outstanding.

Transitional Small Business Disclosure Format (Check one): Yes [_] No [X]
<PAGE>

                                TABLE OF CONTENTS
                       TO QUARTERLY REPORT ON FORM 10-QSB
                         FOR PERIOD ENDED JUNE 30, 2005

                                                                            PAGE
                                                                            ----

PART I       FINANCIAL INFORMATION

Item 1.      Financial Statements
                Consolidated Balance Sheets                                    3
                Consolidated Statements of Income                              4
                Consolidated Statements of Cash Flows                          5
                Condensed Notes to Consolidated Financial Statements           6
Item 2.      Management's Discussion and Analysis or Plan of Operation        12
Item 3.      Controls and Procedures                                          17

PART II      OTHER INFORMATION

Item 1.      Legal Proceedings                                                18
Item 2.      Unregistered Sales of Equity Securities and Use of Proceeds      18
Item 3.      Defaults Upon Senior Securities                                  18
Item 4.      Submission of Matters to a Vote of Security Holders              18
Item 5.      Other Information                                                18
Item 6.      Exhibits and Reports on Form 8-K                                 18

Signatures                                                                    20

<PAGE>

<TABLE>
                               PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                      CHINA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                            CONDENSED CONSOLIDATED BALANCE SHEET
                                        JUNE 30, 2005

--------------------------------------------------------------------------------------------
(EXPRESSED IN U.S. DOLLARS)                                       JUNE 30,      DECEMBER 31,
                                                                    2005            2004
--------------------------------------------------------------------------------------------
                                                                (Unaudited)      (Audited)
<S>                                                            <C>             <C>
ASSETS
--------------------------------------------------------------------------------------------
Current Assets
   Cash and cash equivalents                                   $    129,643    $     79,120
   Accounts receivable                                              140,239         180,226
   Deposits paid, prepayments and other receivables               3,491,723       2,836,268
   Amounts due from related companies                             1,259,499       1,082,917
--------------------------------------------------------------------------------------------
   Total current assets                                           5,021,104       4,178,531

Fixed assets, net                                                       801             666
--------------------------------------------------------------------------------------------

Total Assets                                                   $  5,021,905    $  4,179,197
============================================================================================

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY)
--------------------------------------------------------------------------------------------
Current Liabilities
   Accounts payable and accrued liabilities                    $    179,488    $    166,376
   Accruals, deposits received and other payables                 2,816,124       2,263,036
   Bank loan and overdraft                                          193,907               -
   Amounts due to related companies                               1,581,388       1,777,911
   Tax payable                                                       18,999          45,679
--------------------------------------------------------------------------------------------
   Total current liabilities                                      4,789,906       4,253,002

Commitments and contingencies                                             -               -

Stockholder's Deficiency
   Share capital: $0.001 par value; 200,000,000 shares
      authorized;                                                   128,963         128,963
        128,963,402 shares issued and outstanding
   Additional paid-in capital                                      (202,768)       (202,768)
   Retained earnings                                                305,804               -
--------------------------------------------------------------------------------------------
   Total stockholders' equity/ (deficiency)                         231,999         (73,805)
--------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity (deficiency)        $  5,021,905    $  4,179,197
============================================================================================

         The accompanying notes are an integral part of these condensed
                       consolidated financial statements.


                                             3
</TABLE>
<PAGE>

<TABLE>
                                   CHINA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                                 CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED)
                           FOR THE THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2005 AND 2004

--------------------------------------------------------------------------------------------------------------------
                                                          THREE MONTHS ENDED                SIX MONTHS ENDED
                                                                JUNE 30                          JUNE 30
--------------------------------------------------------------------------------------------------------------------
(EXPRESSED IN U.S. DOLLARS)                              2005            2004             2005             2004
--------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>              <C>              <C>
Revenues, net                                       $     385,265    $     438,860    $     844,221    $   1,639,351

Other revenue                                                  62                -              256                6

General and administrative expenses                      (268,533)        (266,970)        (538,673)        (544,234)
--------------------------------------------------------------------------------------------------------------------

Net earnings before income taxes                          116,794          171,890          305,804        1,095,123

Provision for income taxes                                      -                -                -                -
--------------------------------------------------------------------------------------------------------------------

Net earnings                                        $     116,794    $     171,890    $     305,804    $   1,095,123
====================================================================================================================

Basic and diluted earnings per share                $       0.001    $       0.001    $       0.002    $       0.009
                                                    ================================================================

Basic and diluted weighted shares outstanding         128,963,402      119,940,465      128,963,402      119,940,465
                                                    ================================================================

Dividends                                           $           -    $           -    $           -    $           -
                                                    ================================================================

          The accompanying notes are an integral part of these condensed consolidated financial statements.


                                                          4
</TABLE>
<PAGE>

<TABLE>
                                 CHINA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
                           CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
                                 FOR THE SIX MONTHS ENDED JUNE 30, 2005 AND 2004

-----------------------------------------------------------------------------------------------------------------
                                                                                           SIX MONTHS ENDED
                                                                                                JUNE 30
(EXPRESSED IN U.S. DOLLARS)                                                                2005          2004
-----------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings                                                                           $   305,804    $ 1,095,123
   Adjustments to reconcile net earnings to net
        cash flows provided by operating activities
   Depreciation                                                                                 96             52
   Changes in assets and liabilities
       (Increase) decrease in accounts receivable                                           39,987        (65,644)
       (Increase) decrease in deposits paid, prepayments and other receivables            (655,456)     1,004,303
        Increase (decrease) in accounts payable, deposits and accrued liabilities          566,200     (1,198,537)
        Increase (decrease) in income taxes payable                                        (26,679)             -
-----------------------------------------------------------------------------------------------------------------
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES                                            229,952        835,297
-----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of fixed assets                                                                   (231)             -
-----------------------------------------------------------------------------------------------------------------
  NET CASH FLOWS USED IN INVESTING ACTIVITIES                                                 (231)             -
-----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from bank loan                                                                 193,907              -
   Related party repayments                                                               (373,105)      (918,805)
-----------------------------------------------------------------------------------------------------------------
  NET CASH FLOWS USED IN FINANCING ACTIVITIES                                             (179,198)      (918,805)
-----------------------------------------------------------------------------------------------------------------

Increase (decrease) in cash and cash equivalents                                            50,523        (83,508)

Cash and cash equivalents, beginning of period                                              79,120        269,740
                                                                                       -----------  -------------

Cash and cash equivalents, end of period                                               $   129,643  $     186,232
                                                                                       ===========  =============

CASH PAID FOR INTEREST AND INCOME TAXES                                                $         -  $           -
                                                                                       ===========  =============

        The accompanying notes are an integral part of these condensed consolidated financial statements.


                                                        5
</TABLE>
<PAGE>

CHINA ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 2005
(EXPRESSED IN U.S. DOLLARS)

--------------------------------------------------------------------------------

STATEMENT OF INFORMATION FURNISHED
----------------------------------

THE ACCOMPANYING UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF CHINA
ENTERTAINMENT GROUP, INC. HAVE BEEN PREPARED IN ACCORDANCE WITH GENERALLY
ACCEPTED ACCOUNTING PRINCIPLES FOR INTERIM FINANCIAL INFORMATION AND THE
INSTRUCTIONS TO FORM 10-QSB. ACCORDINGLY, THEY DO NOT INCLUDE ALL THE
INFORMATION AND FOOTNOTES REQUIRED BY GENERALLY ACCEPTED ACCOUNTING PRINCIPLES
FOR COMPLETE FINANCIAL STATEMENTS. IN THE OPINION OF MANAGEMENT, ALL ADJUSTMENTS
(WHICH INCLUDE ONLY NORMAL RECURRING ADJUSTMENTS) NECESSARY TO PRESENT FAIRLY
THE FINANCIAL POSITION, RESULTS OF OPERATIONS AND CASH FLOWS FOR ALL PERIODS
PRESENTED HAVE BEEN MADE. PREPARING FINANCIAL STATEMENTS REQUIRES MANAGEMENT TO
MAKE ESTIMATES AND ASSUMPTIONS THAT AFFECT THE REPORTED AMOUNTS OF ASSETS,
LIABILITIES, REVENUE AND EXPENSES. ACTUAL RESULTS MAY DIFFER FROM THESE
ESTIMATES. THE RESULTS OF OPERATIONS FOR THE PERIOD ENDED JUNE 30, 2005 ARE NOT
NECESSARILY INDICATIVE OF THE OPERATING RESULTS THAT MAY BE EXPECTED FOR THE
ENTIRE YEAR ENDING DECEMBER 31, 2005. THESE FINANCIAL STATEMENTS SHOULD BE READ
IN CONJUNCTION WITH THE MANAGEMENT'S DISCUSSION AND ANALYSIS INCLUDED IN THE
COMPANY'S FINANCIAL STATEMENTS AND ACCOMPANYING NOTES THERETO AS OF AND FOR THE
YEAR ENDED DECEMBER 31, 2004, FILED WITH THE COMPANY'S ANNUAL REPORT ON FORM
10-KSB.


1.   BUSINESS FORMATION AND OPERATIONS

China Entertainment Group, Inc. (formerly known as Interactive Marketing
Technology, Inc. and referred to herein as "CGRP") was incorporated in Nevada on
August 14, 1997 with limited liability.

On November 17, 2004, CGRP completed a merger (the "Merger") with Metrolink
Pacific Limited ("MPL"), an International Business Company organized to do
business under the laws of the British Virgin Islands ("BVI"), whereby MPL
agreed to transfer all of its issued and outstanding shares in exchange for
109,623,006 shares of common stock of CGRP. As a result of the Merger, MPL
became a wholly-owned subsidiary of CGRP and the sole stockholder of MPL,
Imperial International Limited ("Imperial"), received an aggregate number of
shares of CGRP common stock representing approximately 85% of the total number
shares of CGRP's common stock outstanding after the Merger. In addition, the
Board and management of CGRP are now controlled by members of the Board of
Directors and the management of Imperial prior to the merger.

Accordingly, the Merger has been accounted for as a reverse acquisition, with
MPL being the accounting parent and CGRP being the accounting subsidiary. The
consolidated financial statements include the operations of CGRP, the accounting
subsidiary, from the date of acquisition. Since the Merger was accounted for as
a reverse acquisition, the accompanying consolidated financial statements
reflect the historical financial statements of MPL, the accounting acquirer, as
adjusted for the effects of the exchange of shares on its equity accounts, the
inclusion of net liabilities of the accounting subsidiary as of the date of the
Merger (November 17, 2004) on their historical basis and the inclusion of the
accounting subsidiary's results of operations from that date. Additionally, CGRP
adopted the December 31 fiscal year end of the accounting parent, effective
December 24, 2004.

To effect the reverse acquisition and comply with the terms of the Merger, the
Company effectuated a reverse split of its issued and outstanding common stock
on a 1.69 to 1 basis, increased the authorized number of shares of its common
stock, $0.001 par value per share, from 60,000,000 to 200,000,000, and changed
its name to China Artists Agency, Inc. (now known as China Entertainment Group,
Inc.). The Company's articles were amended with the State of Nevada on December
21, 2004. On June 27, 2005, the Company's Board of Directors authorized a name
change to China Entertainment Group, Inc. The Company's articles were amended
with the State of Nevada on August 4, 2005.

The Company, through its wholly-owned subsidiaries, is engaged in the provision
of artist management services.

The consolidated financial statements and accompanying notes are prepared in
accordance with accounting principles generally accepted in the United States of
America and unless the context otherwise requires, references to the "Company"
shall collectively refer to both CGRP and MPL, including all of its subsidiaries
(see Note 2).


                                       6
<PAGE>

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION - The condensed consolidated financial statements
include the accounts of the Company and its wholly-owned subsidiary, MPL. All
significant intercompany transactions and balances have been eliminated in
consolidation. MPL's wholly-owned subsidiaries include China Star Management
Limited ("CSML"), Anglo Market International Limited ("AMIL"), and Metrolink
Global Limited ("MGL"). The principal activities of MPL's subsidiaries are the
provision of artist management services.

USE OF ESTIMATES - The preparation of condensed financial statements in
conformity with generally accepted accounting principles in the United States of
America requires management to make estimates and assumptions that affect the
reported amounts of the 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 required.

RELATED PARTY TRANSACTION - Parties are considered to be related if one party
has the ability, directly or indirectly, to control the other party or exercise
significant influence over the other party in making financial and operating
decisions. Parties are also considered to be related if they are subject to
common control or common significant influence. Related parties may be
individuals or corporate entities. A transaction is considered to be a related
party transaction when there is a transfer of resources or obligations between
related parties (see Note 3).

FAIR VALUE OF FINANCIAL INSTRUMENTS - The Company considers the carrying amount
of cash, accounts receivable and accounts payable, deposits paid and received,
other receivables and payables, and amounts due to and from related parties to
approximate fair values due to their short maturities.

CONCENTRATION OF CREDIT RISK - The Company is subject to certain concentrations
of credit risk as follows:

     o    DUE TO ACCOUNTS RECEIVABLE - The balance in trade receivables at June
          30, 2005 includes two customers that each accounted for more than 10%
          of the total accounts receivable balance.

     o    DUE TO REVENUES AND MAJOR CUSTOMERS - All of the Company's revenues
          for the three months ended June 30, 2005 were generated by one artist,
          that accounted for more than 10% of its revenues.

     o    DUE TO GEOGRAPHIC SALES - The Company's percentage of revenues by
          geographic area follows:

                               THREE MONTHS ENDED         SIX MONTHS ENDED
                                     JUNE 30                   JUNE 30
                                 2005         2004         2005         2004
                              -------------------------------------------------
People's Republic of China           82%          19%          43%           9%
Hong Kong                            16%          77%          56%          89%
United States of America               -           2%            -           1%
Taiwan                                 -           2%           1%           1%
Others                                2%            -            -            -
                              -------------------------------------------------
                                    100%         100%         100%         100%
                              =================================================

EARNINGS PER SHARE - Basic earnings per share ("EPS") is computed by dividing
net earnings (numerator) by the weighted average number of common shares
outstanding (denominator) during the period. Diluted EPS is computed by dividing
net earnings (numerator) by the weighted average number of common shares
outstanding plus dilutive common stock equivalents. There were no common stock
equivalents for any of the periods presented. All per share and per share
information are adjusted retroactively to reflect stock splits and changes in
par value.

STOCK-BASED COMPENSATION - The Company adopted the disclosure requirements of
Statement of Financial Accounting Standard No. 123, "Accounting for Stock-Based
Compensation" ("SFAS 123) and SFAS 148 with respect to pro forma disclosure of
compensation expense for options issued. For purposes of the pro forma
disclosures, the fair value of each option grant is estimated on the grant date
using the Black-Scholes option-pricing model. There were no stock options issued
or outstanding as of June 30, 2005.

The Company applies APB No. 25 in accounting for its stock option plans and,
accordingly, no compensation cost would be recognized in the Company's financial
statements for stock options under any of the stock plans which on the date of
grant the exercise price per share was equal to or exceeded the fair value per
share. However, compensation cost would be recognized for warrants and options
granted to non-employees for services provided. There were no options or
warrants granted for the period presented.


                                       7
<PAGE>

FOREIGN CURRENCY TRANSLATION - The reporting currency of the Company is United
States dollars ("US$"). The functional and reporting currency of the Company's
subsidiaries is their local currency, Hong Kong dollars. Results of operations
and cash flow are translated at average exchange rates during the period, and
assets and liabilities are translated at the end of period exchange rates.
Translation adjustments resulting from this process are included in accumulated
other comprehensive income in the stockholders' equity statement. Transaction
gains and losses that arise from exchange rate fluctuations on transactions
denominated in a currency other than the functional currency are included in the
results of operations as incurred. These amounts are immaterial to the financial
statements.

CASH AND CASH EQUIVALENTS - Cash and cash equivalents represent all highly
liquid investments with original maturities of three months or less.

FIXED ASSETS - Fixed assets consist of furniture, fixtures and equipment and are
stated at cost less accumulated depreciation. The Company records depreciation
using accelerated methods over an estimated useful life of five years.
Depreciation expense for the three months ended June 30, 2005 was $50 (2004:
$26). Gains or losses on disposal of fixed assets are included in the income
statement based on the difference between the net sales proceeds and the
carrying amount of the relevant asset. Repairs and maintenance are expensed as
incurred.

IMPAIRMENT OF LONG-LIVED ASSETS - The Company periodically assesses the
recoverability of the carrying amounts of long-lived assets. A loss is
recognized when expected undiscounted future cash flows are less than the
carrying amount of the asset. The impairment loss is the amount by which the
carrying amount of the asset exceeds its fair value.

REVENUE RECOGNITION AND PROVISIONS FOR LOSSES - Service fee income from
providing artist management services is recognized when services are rendered.
In accordance with SEC Staff Accounting Bulletin No. 101, "Revenue Recognition
in Financial Statements," the Company presents its revenue on a net basis as it
acts as an agent for the artists. Revenues on a gross basis for the three months
ended June 30, 2005 were approximately $808,018 (2004: $2,211,389). Provisions
for losses are determined on the basis of loss experience and current economic
conditions. These financial statements do not include any provision for losses.

ADVERTISING COSTS - Advertising costs are expensed as incurred. The advertising
costs for the three months ended June 30, 2005 were immaterial to the overall
financial statements.

INCOME TAXES - The Company has adopted SFAS 109, "Accounting for Income Taxes".
SFAS 109 requires the recognition of deferred income tax liabilities and assets
for the expected future tax consequences of temporary differences between income
tax basis and financial reporting basis of assets and liabilities. Provision for
income taxes consist of taxes currently due plus deferred taxes. The charge for
taxation is based on the results for the year as adjusted for items, which are
non-assessable or disallowed. It is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date. Deferred tax is
accounted for using the balance sheet liability method in respect of temporary
differences arising from differences between the carrying amount of assets and
liabilities in the financial statements and the corresponding tax basis used in
the computation of assessable tax profit. In principle, deferred tax liabilities
are recognized for all taxable temporary differences, and deferred tax assets
are recognized to the extent that it is probable that taxable profit will be
available against which deductible temporary differences can be utilized. There
are no deferred tax amounts at June 30, 2005 and 2004.

RECENT ACCOUNTING PRONOUNCEMENTS - The Financial Accounting Standards Board
issued the following pronouncement during the three months ended June 30, 2005:

In June 2005, the FASB issued Statement 154, ACCOUNTING CHANGES AND ERROR
CORRECTIONS ("SFAS 154"), a replacement of APB Opinion 20, ACCOUNTING CHANGES,
and Statement 3, REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS.
SFAS 154 changes the requirements for the accounting for and reporting of a
change in accounting principle. Previously, most voluntary changes in accounting
principles were required recognition via a cumulative effect adjustment within
net income of the period of the change. SFAS 154 requires retrospective
application to prior periods' financial statements, unless it is impracticable
to determine either the period-specific effects or the cumulative effect of the
change. SFAS 154 is effective for accounting changes made in fiscal years
beginning after December 15, 2005; however, the Statement does not change the
transition provisions of any existing accounting pronouncements. We believe the
adoption of SFAS 154 will have no material effect on our financial position,
results of operations or cash flows.


3.   RELATED PARTY TRANSACTIONS

AMOUNTS DUE FROM (TO) RELATED PARTIES ARE UNSECURED, INTEREST-FREE AND DUE ON
DEMAND. THE FOLLOWING TABLE SUMMARIZES SIGNIFICANT RELATED PARTY TRANSACTIONS:


                                       8
<PAGE>

<TABLE>
   RELATED PARTY           NATURE OF RELATIONSHIP AND       DESCRIPTION OF TRANSACTION       JUNE 30,
                                     CONTROL                                                   2005
--------------------------------------------------------------------------------------------------------
                                                                                            (Unaudited)
<S>                      <C>                              <C>                               <C>
Colima Enterprises       Ultimate holding company         Funds transferred between         $    526,278
Holdings, Inc.                                            entities for working capital
("Colima")                                                purposes

Together Again           Intermediate holding company,    Amount receivable in relation          733,221
Limited ("TAL")          51% owned by Colima and 49%      to service income and funds
                         owned by China Star              transferred between entities
                         Entertainment Limited            for working capital purposes
                                                                                          ---------------
                                                                                            $  1,259,499
                                                                                          ===============

Imperial                 Intermediate holding company,    Funds transferred between         $  (676,156)
International            ultimately owned by Colima       entities for working capital
Limited                                                   purposes

China Star HK            Related company, subsidiary of   Amount receivable in relation        (905,232)
Distribution             China Star Entertainment         to service income and funds
Limited                  Limited which owns 49% of TAL    transferred between entities
                         together with Colima, which      for working capital purposes
                         owns 51% of TAL
                                                                                          ---------------
                                                                                            $(1,581,388)
                                                                                          ===============
</TABLE>

SIGNIFICANT RELATED PARTY AMOUNTS INCLUDED IN THE CONDENSED CONSOLIDATED INCOME
STATEMENT FOR THE PERIODS PRESENTED INCLUDE THE FOLLOWING:

<TABLE>
    RELATED         NATURE OF RELATIONSHIP       DESCRIPTION OF          THREE MONTHS ENDED              SIX MONTHS ENDED
     PARTY                AND CONTROL             TRANSACTION                  JUNE 30                        JUNE 30
-------------------------------------------------------------------------------------------------------------------------------
                                                                         2005           2004            2005           2004
                                                                      (Unaudited)    (Unaudited)     (Unaudited)    (Unaudited)
<S>                <C>                          <C>                    <C>             <C>            <C>          <C>
China Star HK      Related company,             Service income,
Distribution       subsidiary of China Star     net
Limited            Entertainment Limited
                   which owns 49% of TAL
                   together with Colima,
                   which owns 51% of TAL
                                                                                -      $ 319,808      $ 377,821    $ 1,380,962
                                                                  =============================================================

China Star         Related company, owns 49%    Management fee
Entertainment      of TAL and Colima owns 51%   paid
Limited            of TAL                                              $   26,923      $  26,923      $  53,846      $  53,846
                                                                  =============================================================

China Star Laser   Related company,             Management fee
Disc Company       subsidiary of China Star     paid
Limited            Entertainment Limited
                   which owns 49% of TAL
                   together with Colima,
                   which owns 51% of TAL                               $  126,923      $ 126,923      $ 253,846      $ 253,846
                                                                  =============================================================
</TABLE>


4.   DEPOSITS PAID, PREPAYMENTS AND OTHER RECEIVABLES

Deposits paid [1]               $ 3,487,130
Prepayments                           1,654
Other receivables                     2,939
                                -----------
                                  3,491,723
                                ===========


                                       9
<PAGE>

[1] Deposits paid represent amounts paid per a signed contract with various
famous artists. As the services are performed, the amount is recognized as
services charges on the proportion of number of performances performed to the
total number of performances contracted. The contract periods range from one
year to three years, and the artists are required under such contracts to
provide services for a fixed number of performances.


5.   ACCRUALS, DEPOSITS RECEIVED AND OTHER PAYABLES

Accruals [1]                   $    252,781
Deposits received [2]             2,563,198
Other payables                          145
                               ------------
                                  2,816,124
                               ============

[1] Accruals primarily consisted of the following: accrued service charges
($130,089) and accrued professional fees ($102,821).

[2] Deposits received represent amounts advanced from customers for artist
performance in advertisement, drama, films and concerts. As the services are
performed, the amount is reclassified and recognized as revenues. The contract
period ranges from one year to three years and the performances contracted were
either fixed in term of number of performance or in periods to be performed.


6.   COMMITMENTS AND CONTINGENCIES

Operating lease - The Company leases office space under a non-cancelable
operating lease through August 31, 2006 at $3,528 per month. At June 30, 2005,
future minimum rental payments due under operating leases were as follows:

2006                           $     42,342
2007                                  7,056
                               ------------
                                     49,398
                               ============

SEC Filings - The Company has failed to timely comply with its period reporting
obligations imposed upon it by the Securities Exchange Act of 1934. As a result,
the Company and its officers and directors could be subject to substantial civil
and criminal penalties due to such non-compliance. There can be no assurance
that substantial civil and criminal penalties will not be imposed.


7.   SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which
separate financial information is available that is evaluated regularly by the
chief operation decision maker, or decision-making group, in deciding how to
allocate resources and in assessing performance. MPL's wholly-owned subsidiaries
are as follows: Anglo Market International Limited ("AMIL"), China Star
Management Limited ("CSML"), and Metrolink Global Limited ("MGL"). The principal
activities of MPL's subsidiaries are the provision of artist management
services.


                                       10
<PAGE>

The Company's segment information follows:

<TABLE>
THREE MONTHS ENDED JUNE 2005:         AMIL           CSML           MGL           TOTAL
------------------------------------------------------------------------------------------
<S>                                <C>             <C>           <C>            <C>
Revenues, net                      $    36,990        68,830       279,445        385,265
Net earnings/losses                $    32,932     (191,720)       275,582        116,794
Total assets                       $   142,268     3,691,478     1,188,159      5,021,905


THREE MONTHS ENDED JUNE 2004:         AMIL           CSML           MGL           TOTAL
------------------------------------------------------------------------------------------

Revenues, net                      $   397,128        41,732             -        438,860
Net earnings/losses                $   393,827     (221,937)             -        171,890
Total assets                       $   356,206     1,605,095             -      1,961,301


SIX MONTHS ENDED JUNE 2005:           AMIL           CSML           MGL           TOTAL
------------------------------------------------------------------------------------------

Revenues, net                      $    79,553       485,223       279,445        844,221
Net earnings/losses                $    71,454      (37,386)       271,736        305,804
Total assets                       $   142,268     3,691,478     1,188,159      5,021,905


SIX MONTHS ENDED JUNE 2004:           AMIL           CSML           MGL           TOTAL
------------------------------------------------------------------------------------------

Revenues, net                      $   409,028     1,230,323             -      1,639,351
Net earnings/losses                $   359,076       736,047             -      1,095,123
Total assets                       $   356,206     1,605,095             -      1,961,301
</TABLE>


8.   SUBSEQUENT EVENTS - COMMON STOCK TRANSACTIONS

During the quarter ended September 30, 2005, the Company's Board of Directors
approved the cancellation of 4,809,522 shares of common stock previously issued
to Orient Financial Services Limited, an unrelated party, for services provided
in connection with the Company's merger agreement in November 2004 (see Note 1).
These shares were subsequently re-issued in November 2005 in the name of
Emerging Growth Partners, Inc., an unrelated party, pursuant to an Advisory
Services Agreement dated June 10, 2005 and to Sandy Lang, a former officer,
pursuant to a verbal agreement reached in May 2005 (the "Verbal Agreement").
Under the Verbal Agreement, in exchange for the shares issued to him, Mr. Lang
agreed to settle, forebear to litigate, and release any and all actions or
claims (whether directly or indirectly and in whichever jurisdiction) that he
has or may have against the Company arising out of, in connection with, or
leading to the Merger described in Note 1 above.


                                       11
<PAGE>

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS.

THIS FOLLOWING INFORMATION SPECIFIES CERTAIN FORWARD-LOOKING STATEMENTS OF
MANAGEMENT OF THE COMPANY. FORWARD-LOOKING STATEMENTS ARE STATEMENTS THAT
ESTIMATE THE HAPPENING OF FUTURE EVENTS AND ARE NOT BASED ON HISTORICAL FACT.
FORWARD-LOOKING STATEMENTS MAY BE IDENTIFIED BY THE USE OF FORWARD-LOOKING
TERMINOLOGY, SUCH AS "MAY", "SHALL", "COULD", "EXPECT", "ESTIMATE",
"ANTICIPATE", "PREDICT", "PROBABLE", "POSSIBLE", "SHOULD", "CONTINUE", OR
SIMILAR TERMS, VARIATIONS OF THOSE TERMS OR THE NEGATIVE OF THOSE TERMS. THE
FORWARD-LOOKING STATEMENTS SPECIFIED IN THE FOLLOWING INFORMATION HAVE BEEN
COMPILED BY OUR MANAGEMENT ON THE BASIS OF ASSUMPTIONS MADE BY MANAGEMENT AND
CONSIDERED BY MANAGEMENT TO BE REASONABLE. OUR FUTURE OPERATING RESULTS,
HOWEVER, ARE IMPOSSIBLE TO PREDICT AND NO REPRESENTATION, GUARANTY, OR WARRANTY
IS TO BE INFERRED FROM THOSE FORWARD-LOOKING STATEMENTS.

THE ASSUMPTIONS USED FOR PURPOSES OF THE FORWARD-LOOKING STATEMENTS SPECIFIED IN
THE FOLLOWING INFORMATION REPRESENT ESTIMATES OF FUTURE EVENTS AND ARE SUBJECT
TO UNCERTAINTY AS TO POSSIBLE CHANGES IN ECONOMIC, LEGISLATIVE, INDUSTRY, AND
OTHER CIRCUMSTANCES. AS A RESULT, THE IDENTIFICATION AND INTERPRETATION OF DATA
AND OTHER INFORMATION AND THEIR USE IN DEVELOPING AND SELECTING ASSUMPTIONS FROM
AND AMONG REASONABLE ALTERNATIVES REQUIRES THE EXERCISE OF JUDGMENT. TO THE
EXTENT THAT THE ASSUMED EVENTS DO NOT OCCUR, THE OUTCOME MAY VARY SUBSTANTIALLY
FROM ANTICIPATED OR PROJECTED RESULTS, AND, ACCORDINGLY, NO OPINION IS EXPRESSED
ON THE ACHIEVABILITY OF THOSE FORWARD-LOOKING STATEMENTS. WE CANNOT GUARANTEE
THAT ANY OF THE ASSUMPTIONS RELATING TO THE FORWARD-LOOKING STATEMENTS SPECIFIED
IN THE FOLLOWING INFORMATION ARE ACCURATE, AND WE ASSUME NO OBLIGATION TO UPDATE
ANY SUCH FORWARD-LOOKING STATEMENTS.

INTRODUCTION

China Entertainment Group, Inc. (together with our direct and indirect
subsidiaries, and their respective predecessors, unless the context otherwise
requires, (the "Company") is a multi-faceted entertainment company with
historically profitable operations in film, television, print and music artist
management fees comprised of talent development fees, artist casting, booking
and brokering commissions, and artist promotional fees. In addition, as a result
of managing nearly every major film and television celebrity in southern China,
the Company has recently leveraged its talent under contract to penetrate the
lucrative casino gaming industry's marketing and promotional business throughout
Southern China and Macau. The recent shift by management to focus the Company's
efforts towards becoming the leading casino marketing and promotional service
provider in southern China and Macau represents the Company's greatest
opportunity for rapid growth. Lastly, the Company plans to leverage its
entertainment industry clout and experience to develop a global media company
targeting nearly every demographic in the southern China region, with a focus on
feature film co-production and development, broadcast television media,
advertising and licensing ventures, film library acquisition and artist
management. Our Company's Board of Directors and management team is comprised of
senior management from the group headed by China Star Entertainment Limited
("China Star", together with its subsidiaries "China Star Group"), a Hong Kong
listed company and one of the largest media companies in Asia.

As of June 30, 2005, we owned all of the equity interest in Metrolink Pacific
Limited ("MPL"), a British Virgin Islands corporation. MPL, in turn, owns a 100%
equity interest in Anglo Market International Limited, a corporation
incorporated in the British Virgin Islands on September 15, 2000, a 100% equity
interest in China Star Management Limited, a company incorporated in Hong Kong
on September 6, 1985, and a 100% interest in MPL subsidiary Metrolink Global
Limited, a corporation incorporated in the British Virgin Islands on September
10, 2004. MPL's subsidiaries currently provide artist management, talent
development and artist brokering services. We plan to form new subsidiaries to
operate our new businesses in casino marketing and film co-production.

Our principal executive office is located at Unit 503C Miramar Tower, 132 Nathan
Road, Tsimshatsui, Hong Kong, China. Our telephone number is 011-852-2313-1888.

HISTORICAL BACKGROUND

We were originally incorporated in the state of Nevada as Shur De Cor, Inc.
("Shur De Cor") on August 14, 1987. By 1999, Shur De Cor was a public company
with no operations searching for a business opportunity. In April 1999, Shur De
Cor merged with Interactive Marketing Technology, Inc., a New Jersey corporation
("Interactive New Jersey"), in an arm's length transaction. Interactive New
Jersey was engaged in the business of direct marketing of consumer products and
desired to become a public company. Shur De Cor was the surviving corporation
and changed its name to Interactive Marketing Technology, Inc. Shur De Cor's
management resigned and the management of Interactive New Jersey filled the
vacancies.


                                       12
<PAGE>

Through our then wholly owned subsidiary, IMT's Plumber, Inc., we produced,
marketed, and sold a licensed product called the Plumber's Secret, which was
discontinued during fiscal 2001. In May 2002, we discontinued our former
business and actively sought to either acquire a third party, merge with a third
party or pursue a joint venture with a third party in order to re-enter our
former business of direct marketing of proprietary consumer products in the
United States and worldwide.

RECENT DEVELOPMENTS

On November 17, 2004, our Board of Directors unanimously approved, subject to
shareholder approval, entering into a Share Exchange Agreement (the "Agreement")
with Metrolink Pacific Limited ("MPL"), an international business company
organized to do business under the laws of the British Virgin Islands. At that
time, MPL was wholly owned by Imperial International Limited ("Imperial"), a
company incorporated under the laws of the British Virgin Islands. The parent
company and 100% owner of Imperial is Together Again Limited ("Together Again").

On November 17, 2004, the Board also approved, subject to shareholder approval,
amendments to our Articles of Incorporation to change our corporate name ("Name
Change") from Interactive Marketing Technology, Inc. to China Artists Agency,
Inc. ("China Artists"), and to increase the authorized common stock of the
Company to 200,000,000 shares (the "Authorized Share Increase"). On that same
date, and also subject to shareholder approval, the Board approved a 1 for 1.69
reverse stock split to accommodate the terms of the Agreement (the "Reverse
Split"), and a spin-off of the Company's existing business, including its assets
and liabilities, into a Nevada corporation formed as the Company's wholly owned
subsidiary into a separate public company by means of pro-rata share dividend
(the "Spin-off").

The above-described actions approved by the Board also required approval by a
majority of the Company's shareholders under Nevada Revised Statutes. Thus, on
November 15, 2004, as authorized by the Nevada Revised Statutes, the majority
shareholders, who together owned 50.4% of our issued and outstanding shares of
common stock, approved the Agreement, the Authorized Share Increase, the Name
Change, the Reverse Split, and the Spin-off by action of written consent.

On November 17, 2004, the Company, as contemplated under the Agreement, issued
an aggregate of 109,623,006 shares of its common stock to Imperial, the sole
shareholder of MPL, in exchange for 100% of the issued and outstanding shares of
MPL capital stock transferred to China Artists by Imperial at the closing (the
"Share Exchange"). The acquisition of the 100% interest includes MPL's interests
in its subsidiaries, Anglo Market International Limited, China Star Management
Limited, and Metrolink Global Limited (hereinafter MPL and its subsidiaries are
collectively referred to as the "Metrolink Group"). Upon completion of the Share
Exchange, MPL became the Company's wholly owned subsidiary and China Artist's
former owner subsequently transferred control of China Artists to Imperial. We
relied on Rule 506 of Regulation D of the Securities Act of 1933, as amended,
(the "Act") in regards to the shares that we issued pursuant to the Share
Exchange. We believe this offering qualified as a "business combination" as
defined by Rule 501(d). Reliance on Rule 506 requires that there are no more
than 35 non-accredited purchasers of securities from the issuer in an offering
under Rule 506. MPL represented to us that it had one stockholder, who has
certified that it is an `accredited investor' as defined in Rule 501(a) of
Regulation D. MPL also represented to us that there had been no advertising or
general solicitation in connection with this transaction. The Company's
Certificate of Amendment to our Articles of Incorporation to effect the Name
Change, the Reverse Split, and the Authorized Share Increase was filed with the
Nevada Secretary of State and became effective on December 21, 2004. Concurrent
with Name Change, Reverse Split and Authorized Share Increase, the Company also
obtained a new stock symbol, "CAAY", and a new CUSIP Number. The new stock
symbol and CUSIP number also became effective on December 21, 2004.

The Spin-off, which was approved by both the Board and the majority shareholders
prior to the closing of the Agreement, resulted in the formation of a separate
public company, All Star Marketing, Inc. ("All Star"). All Star is a Nevada
corporation and it was formed as a wholly owned subsidiary of the Company. The
Spin-off was satisfied by means of a pro-rata share dividend to the Company's
shareholders of record as of December 10, 2004. The purpose of the Spin-Off was
to allow the subsidiary to operate as a separate public company and raise
working capital through the sale of its own equity. This allows our management
to focus exclusively on our business after the Share Exchange, while at the
same time, allowing the spun-off company to have greater exposure by trading as
an independent public company. Additionally, the shareholders and the market can
then more easily identify the results and performance of the Company as a
separate entity from that of All Star.

On June 27, 2005, the Company's Board of Directors and the Company's majority
shareholder approved and authorized a name change to China Entertainment Group,
Inc. The Certificate of Amendment to our Articles of Incorporation to effect our
name change to China Entertainment Group, Inc. was filed with the Nevada
Secretary of State and became effective on August 4, 2005. Concurrent with Name
Change, the Company also obtained a new stock symbol, "CGRP", and a new CUSIP
Number. The new stock symbol and CUSIP number became effective on August 9,
2005.


                                       13
<PAGE>

We are currently authorized to issue 200,000,000 shares of common stock, $0.001
par value, of which 128,963,402 shares of common stock are issued and
outstanding as of June 30, 2005. We are currently not authorized to issue
preferred stock.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board issued the following pronouncement
during the three months ended June 30, 2005:

In June 2005, the FASB issued Statement 154, ACCOUNTING CHANGES AND ERROR
CORRECTIONS ("SFAS 154"), a replacement of APB Opinion 20, ACCOUNTING CHANGES,
and Statement 3, REPORTING ACCOUNTING CHANGES IN INTERIM FINANCIAL STATEMENTS.
SFAS 154 changes the requirements for the accounting for and reporting of a
change in accounting principle. Previously, most voluntary changes in accounting
principles were required recognition via a cumulative effect adjustment within
net income of the period of the change. SFAS 154 requires retrospective
application to prior periods' financial statements, unless it is impracticable
to determine either the period-specific effects or the cumulative effect of the
change. SFAS 154 is effective for accounting changes made in fiscal years
beginning after December 15, 2005; however, the Statement does not change the
transition provisions of any existing accounting pronouncements. We believe
adoption of SFAS 154 will have no material effect on our financial position,
results of operations or cash flows.

CRITICAL ACCOUNTING POLICIES

Our Management's Discussion and Analysis of Financial Condition and Results of
Operations section discusses our financial statements, which have been prepared
in accordance with accounting principles generally accepted in the United States
of America. This discussion and analysis should be read in conjunction with the
accompanying Consolidated Financial Statements and related notes.

An accounting policy is deemed to be critical if it requires an accounting
estimate to be made based on assumptions about matters that are highly uncertain
at the time the estimate is made, and if different estimates that reasonably
could have been used or changes in the accounting estimate that are reasonably
likely to occur could materially change the financial statements. We believe the
following critical accounting policies reflect our more significant estimates
and assumptions used in the preparation of our financial statements:

Use of Estimates

The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. On an on-going basis,
management evaluates its estimates and judgments, including those related to
revenue recognition, contingencies and litigation. Management bases its
estimates and judgments on historical experience and on various other factors
that are believed to be reasonable under the circumstances, the results of which
form the basis for making judgments about the carrying value of assets and
liabilities that are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or conditions.

Revenue recognition and provision for losses:

Service fee income from provision of artist management services is recognized
when services are rendered. In accordance with SEC Staff Accounting Bulletin No.
101, "Revenue Recognition in Financial Statements," the Company presents its
revenue on a net basis as it acts as an agent for the artists. Provisions for
losses are determined on the basis of loss experience and current economic
conditions. In the event that our receivables became uncollectible after
exhausting all available means of collection, we would be forced to record
additional adjustments to receivables to reflect the amounts at net realizable
value. The accounting effect of this entry would be a charge to income, thereby
reducing our net earnings. Although we consider the likelihood of this
occurrence to be remote based on past history and the current status of our
accounts, there is a possibility of this occurrence.

Contingencies and litigation:

We may be subject to certain asserted and unasserted claims encountered in the
normal course of business. It is our belief that the resolution of these matters
will not have a material adverse effect on our financial position or results of
operations, however, we cannot provide assurance that damages that result in a
material adverse effect on our financial position or results of operations will
not be imposed in these matters. We account for contingent liabilities when it
is probable that future expenditures will be made and such expenditures can be
reasonably estimated.

The Company has failed to timely comply with its period reporting obligations
imposed upon it by the Securities Exchange Act of 1934. As a result, the Company
and its officers and directors could be subject to substantial civil and
criminal penalties due to such non-compliance. There can be no assurance that
substantial civil and criminal penalties will not be imposed.


                                       14
<PAGE>

RESULTS OF OPERATIONS

General results of operations for the three and six months ended June 30, 2004
and June 30, 2005 are summarized as follows:

THREE MONTHS ENDED JUNE 30                  2005          2004         CHANGE
--------------------------------------------------------------------------------

Revenues                                $   385,327   $    438,860     (12.2)%
General and Administrative expenses         268,533        266,970        0.6%
                                        -----------   ------------
Net Earnings before income taxes            116,794        171,890     (32.1)%
Provision for income taxes                        -              -          -%
                                        -----------   ------------
Net Earnings                                116,794        171,890     (32.1)%

SIX MONTHS ENDED JUNE 30                    2005          2004         CHANGE
--------------------------------------------------------------------------------

Revenues                                $   844,477   $  1,639,357     (48.5)%
General and Administrative expenses         538,673        544,234      (1.0)%
                                        -----------   ------------
Net Earnings before income taxes            305,804      1,095,123     (72.1)%
Provision for income taxes                        -              -          -%
                                        -----------   ------------
Net Earnings                                305,804      1,095,123     (72.1)%


REVENUES

Our consolidated revenues decreased 12.2% to $385,327 for the three months ended
June 30, 2005 from $438,860 for the same period in 2004. Our consolidated
revenues decreased 48.5% to $844,477 for the six months ended June 30, 2005 from
$1,639,357 for the same period in 2004. The decrease in consolidated revenues
was a result of the decreased number of performances by our artists. Rampant
piracy and the downturn in the number of Hong Kong made movies affected the
overall revenues of every movie in Hong Kong. Accordingly, movie investors were
more cautious in producing movies and thus the opportunities available for
performances by our artists decreased.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the three months ended June 30, 2005
increased $1,563, or 0.6%, to $268,533 compared to $266,970 for the same period
in 2004. General and administrative expenses incurred for the six months ended
June 30, 2005 decreased $5,561, or 1.0%, to $538,673 compared to $544,234 for
the same period in 2004. General and administrative expenses mainly consisted of
management fees, wages, rent, and professional fees. The fluctuations were
insignificant.

PROVISION FOR INCOME TAXES

The provision for income taxes represents the aggregate taxes provided on the
accessible profits for the consolidated entities. No provision of income taxes
was provided for the three and six months ended June 30, 2005 as the Company
incurred a tax loss for the period. No provision of income taxes was provided
for the three and six months ended June 30, 2004 because there were tax losses
brought forward from previous years that can be utilized to offset the
assessable profits.

NET EARNINGS

Net earnings before income taxes for the three months ended June 30, 2005
decreased $55,096, or 32.1%, to $116,794 compared to $171,890 for the same
period in 2004. The decrease in net earnings resulted from a 12.2% decrease in
revenues, offset by increases in general and administrative expenses.

Net earnings before income taxes for the six months ended June 30, 2005
decreased $789,319, or 72.1%, to $305,804 compared to $1,095,123 for the same
period in 2004. The decrease in net earnings resulted from a 48.5% decrease in
revenues and a decrease in general and administrative expenses.


                                       15
<PAGE>

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES

SIX MONTHS ENDED JUNE 30                       2005         2004         CHANGE
--------------------------------------------------------------------------------

Net cash provided by operating activities   $  229,952     835,297      (72.5)%

Net cash used in investing activities       $      231           -         100%

Net cash used in financing activities       $  179,198     918,805      (80.5)%


LIQUIDITY

Our working capital at June 30, 2005 was $231,198. We regularly review our cash
funding requirements and attempt to meet those requirements through a
combination of cash on hand, cash provided by operations, deposits received and
possible future public and private equity offerings. We evaluate possible
acquisitions of, or investments in, businesses that our complementary to ours,
which transactions may require the use of cash. We believe that our cash, other
liquid assets, operating cash flows, credit arrangements, access to equity
capital markets, taken together, provide adequate resources to fund ongoing
operating expenditures. In the event that they do not, we may require additional
funds in the future to support our working capital requirements or for other
purposes and may seek to raise such additional funds through the sale of public
or private equity as well as other sources.

CASH FLOWS FROM OPERATING ACTIVITIES:

For the six months ended June 30, 2005, net cash flows provided by operating
activities was $229,952 primarily resulting from net earnings from operations
offset by an increase in deposits received and an increase in deposits paid due
to the performances of artist services during the period and the renewal of a
service contract with a major famous artist in Hong Kong. Net cash provided by
operating activities for the same period in 2004 of $835,297 primarily results
from net earnings from operations increased by deposits received and decreased
by deposits paid as the Company recognized revenue from the performances of
artist services during the period.

CASH FLOWS FROM INVESTING ACTIVITIES:

For the six months ended June 30, 2005 and 2004, net cash flows used in
investing activities were insignificant.

CASH FLOWS FROM FINANCING ACTIVITIES:

Net cash flows used in financing activities for the six months ended June 30,
2005 was $179,198. The cash flows were mainly used for repayments to certain
related parties and was also partially financed by an increase in our bank loan.
Net cash flows used in financing activities for the six months ended June 30,
2004 was $918,805, representing the repayments to certain related parties.

EXPECTED MATERIAL CAPITAL COMMITMENTS

The Company has no material commitments for capital expenditures and has no
plans or intention to purchase or sell any plant and/or other significant
equipment.

EXPECTED SIGNIFICANT CHANGES IN NUMBER OF EMPLOYEES

The Company does not anticipate any significant changes in its number of
employees, other than the changes that may arise during the course of normal
business operations.

EFFECTS OF INFLATION

The Company believes that the effect of inflation has not been material during
the periods presented. The countries in which the Metrolink Group conducts the
majority of its operations, which include Hong Kong, PRC and the United States,
were subject to moderate degree of inflations.


                                       16
<PAGE>

EFFECT OF FLUCTUATION IN FOREIGN EXCHANGE RATES

All of the Company's revenues are denominated either in U.S. dollars, Renminbi
or Hong Kong dollars, while its expenses are denominated primarily in Hong Kong
dollars. The value of the Hong Kong dollar-to-United States dollar and other
currencies may fluctuate and is affected by, among other things, changes in
political and economic conditions. Although a devaluation of the Hong Kong
dollar relative to the United States dollar would likely reduce the Company's
expenses (as expressed in United States dollars), any material increase in the
value of the Hong Kong dollar relative to the United States dollar would
increase the Company's expenses, and could have a material adverse effect on the
Company's business, financial condition and results of operations. The Company
has never engaged in currency hedging operations but will continue to monitor
its foreign exchange exposure and market conditions to determine if hedging is
required.


ITEM 3. CONTROLS AND PROCEDURES

(a) Evaluation of disclosure controls and procedures. We maintain controls and
procedures designed to ensure that information required to be disclosed in the
reports that we file or submit under the Securities Exchange Act of 1934 is
recorded, processed, summarized and reported within the time periods specified
in the rules and forms of the Securities and Exchange Commission. Based upon
their evaluation of those controls and procedures performed as of the period
covered by this report, our chief executive officer and the principal financial
officer concluded that our disclosure controls and procedures were inadequate to
ensure that information required to be disclosed by us in reports that we file
or submit under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms. We are developing a
plan to ensure that all information will be recorded, processed, summarized and
reported on a timely basis. This plan is dependent, in part, upon reallocation
of responsibilities among various personnel, possibly hiring additional
personnel and additional funding. It should also be noted that the design of any
system of controls is based in part upon certain assumptions about the
likelihood of future events, and there can be no assurance that any design will
succeed in achieving its stated goals under all potential future conditions,
regardless of how remote..

(b) Changes in internal controls. Other than as mentioned above, there were no
changes in our internal controls or in other factors that could significantly
affect these controls subsequent to the date of the evaluation of those controls
by the chief executive officer and principal financial officer.


                                       17
<PAGE>

                          PART II -- OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

     None.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

     None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

     None.

ITEM 4. SUBMISSION OF MATTERS TO VOTE OF SECURITY HOLDERS

     On June 27, 2005, the Company's Board of Directors and the Company's
majority shareholder approved and authorized a name change to China
Entertainment Group, Inc. The Certificate of Amendment to our Articles of
Incorporation to effect our name change to China Entertainment Group, Inc. was
filed with the Nevada Secretary of State and became effective on August 4, 2005.
Concurrent with the Name Change, we also obtained a new stock symbol, "CGRP",
and a new CUSIP Number. The new stock symbol and CUSIP number became effective
on August 9, 2005. We announced the details of the name change in a Definitive
Information Statement on Schedule 14C filed with the Securities and Exchange
Commission on July 22, 2005 and which we incorporate herein by reference. A
description of this transaction and the matters consented to by the majority of
our shareholders is also discussed above under the "Recent Developments" section
of Item 1 - Description of Business.

ITEM 5. OTHER INFORMATION

     There were no changes to the procedures by which security holders may
recommend nominees to our board of directors.

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

  Exhibit
  Number       Description
  ------       -----------

  2.1          Share Exchange Agreement dated November 17, 2004 by and among,
               inter alia, the Registrant, Metrolink Pacific, and the
               shareholders of Metrolink Pacific (1)

  3.1(i)       Certificate of Amendment to Articles of Incorporation (1)

  3.1(ii)      Articles of Amendment of Articles of Incorporation (2)

  3.1(iii)     Articles of Incorporation (3)

  3.1(iv)      Articles of Merger (3)

  3.2          Bylaws (3)

  31.1         Certification of Chief Executive Officer pursuant to Securities
               Exchange Act Rules 13a-14(a) and 15d-14(a) as adopted pursuant to
               Section 302 of the Sarbanes-Oxley Act of 2002.

  31.2         Certification of Chief Accounting Officer (Principal Accounting
               Officer) pursuant to Securities Exchange Act Rules 13a-14(a) and
               15d-14(a) as adopted pursuant to Section 302 of the
               Sarbanes-Oxley Act of 2002.

  32.1         Certification of the Chief Executive Officer pursuant to 18
               U.S.C. Section 1350 as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.

  32.2         Certification of the Chief Accounting Officer pursuant to 18
               U.S.C. Section 1350 as adopted pursuant to Section 906 of the
               Sarbanes-Oxley Act of 2002.


                                       18
<PAGE>

-----------------------

(1)  Incorporated by reference from the Company's Schedule 14C Information
     Statement filed on November 30, 2004.

(2)  Incorporated by reference from the Company's Form 10-QSB Quarterly Report
     filed on October 23, 2001.

(3)  Incorporated by reference from the Company's Registration Statement on Form
     10-SB filed on January 19, 2000.


(b)  REPORTS ON FORM 8-K

1. 8-K   June 27, 2005


                            [SIGNATURES PAGE FOLLOWS]


                                       19
<PAGE>

                                   SIGNATURES

In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.

Date: April 28, 2006                         CHINA ENTERTAINMENT GROUP, INC.
                                             (Registrant)


                                             By: /s/ Tang Chien Chang
                                                -------------------------------
                                                Tang Chien Chang
                                                Chief Executive Officer


                                       20