<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: SEPTEMBER 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 [x]

                      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 SEPTEMBER 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
                                       SEPTEMBER 30, 2005

------------------------------------------------------------------------------------------------
(EXPRESSED IN U.S. DOLLARS)                                       SEPTEMBER 30,    DECEMBER 31,
                                                                      2005            2004
------------------------------------------------------------------------------------------------
                                                                  (Unaudited)       (Audited)
<S>                                                              <C>              <C>
ASSETS
------------------------------------------------------------------------------------------------
Current Assets
   Cash and cash equivalents                                     $     291,730    $      79,120
   Accounts receivable                                                 162,047          180,226
   Deposits paid, prepayments and other receivables                  2,080,153        2,836,268
   Amounts due from related companies                                1,266,206        1,082,917
------------------------------------------------------------------------------------------------
   Total current assets                                              3,800,136        4,178,531

Fixed assets, net                                                       51,288              666
------------------------------------------------------------------------------------------------

Total Assets                                                         3,851,424    $   4,179,197
================================================================================================

LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIENCY)
------------------------------------------------------------------------------------------------
Current Liabilities
   Accounts payable                                              $     126,901    $     166,376
   Accruals, deposits received and other payables                    1,792,555        2,263,036
   Bank loan and overdraft                                             298,739                -
   Amounts due to related companies                                  1,562,292        1,777,911
   Tax payable                                                          18,999           45,679
------------------------------------------------------------------------------------------------
   Total current liabilities                                         3,799,486        4,253,002

Commitments and contingencies                                                -                -

Stockholder's Equity (Deficiency)
   Share capital: $0.001 par value; 200,000,000 shares
     authorized; 124,153,903 shares issued and outstanding             124,154          128,963
   Additional paid-in capital                                         (197,959)        (202,768)
   Retained earnings                                                   125,743                -
------------------------------------------------------------------------------------------------
   Total stockholders' equity (deficiency)                              51,938          (73,805)
------------------------------------------------------------------------------------------------

Total liabilities and stockholders' equity (deficiency)          $   3,851,424    $   4,179,197
================================================================================================

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


                                               3
</TABLE>
<PAGE>

<PAGE>

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

---------------------------------------------------------------------------------------------------------------------
                                                          THREE MONTHS ENDED               NINE MONTHS ENDED
                                                             SEPTEMBER 30                     SEPTEMBER 30
---------------------------------------------------------------------------------------------------------------------
(EXPRESSED IN U.S. DOLLARS)                              2005             2004             2005            2004
---------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>              <C>              <C>              <C>
Revenues, net                                       $      87,142    $     874,190    $     931,363    $   2,513,541

Other revenue                                                 114               75              370               81

General and administrative expenses                      (267,317)        (272,380)        (805,990)        (816,613)
---------------------------------------------------------------------------------------------------------------------

Net (losses) / earnings before income taxes              (180,061)         601,885          125,743        1,697,009

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

Net (losses) / earnings                             $    (180,061)   $     601,885    $     125,743    $   1,697,009
=====================================================================================================================

Basic and diluted earnings per share                $      (0.001)   $       0.005    $      0.0001    $       0.014
                                                    =================================================================

Basic and diluted weighted shares outstanding         127,708,769      119,940,465      127,708,769      119,940,465
                                                    =================================================================

Dividends                                           $           -    $   1,410,256    $           -    $   1,410,256
                                                    =================================================================


          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 NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004

----------------------------------------------------------------------------------------------------------------
                                                                                          NINE MONTHS ENDED
                                                                                             SEPTEMBER 30
(EXPRESSED IN U.S. DOLLARS)                                                               2005          2004
----------------------------------------------------------------------------------------------------------------
<S>                                                                                    <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings                                                                           $  125,743    $  286,753
   Adjustments to reconcile net earnings to net
        cash flows provided by operating activities
   Depreciation                                                                             2,811            78
   Changes in assets and liabilities
       (Increase) decrease in accounts receivable                                          18,179      (103,071)
       Decrease (Increase) in deposits paid, prepayments and other receivables            756,114       541,164
       (Decrease) increase in accounts payable, deposits and accrued liabilities         (509,956)     (124,728)
       Decrease in income taxes payable                                                   (26,679)            -
----------------------------------------------------------------------------------------------------------------
NET CASH FLOWS PROVIDED BY OPERATING ACTIVITIES                                           366,212       600,196
----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
   Purchase of fixed assets                                                               (53,432)            -
----------------------------------------------------------------------------------------------------------------
  NET CASH FLOWS USED IN INVESTING ACTIVITIES                                             (53,432)            -
----------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
   Proceeds from bank loan                                                                298,739             -
   Related party repayments                                                              (398,909)     (598,571)
----------------------------------------------------------------------------------------------------------------
  NET CASH FLOWS USED IN FINANCING ACTIVITIES                                            (100,170)     (598,571)
----------------------------------------------------------------------------------------------------------------

Increase in cash and cash equivalents                                                     212,610         1,625

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

Cash and cash equivalents, end of period                                               $  291,730    $  271,365
                                                                                ===============================


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 CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 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 SEPTEMBER 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
          September 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
          were generated by two artists, that each 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       NINE MONTHS ENDED
                                    SEPTEMBER 30             SEPTEMBER 30
                                   2005        2004        2005         2004
                             -------------------------------------------------
People's Republic of China           21%          4%         41%           7%
Hong Kong                            12%         94%         52%          91%
USA                                    -          1%           -           1%
Taiwan                               67%          1%          7%           1%
Others                                 -           -           -            -
                             -------------------------------------------------
                                    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 September 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.

2.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 September 30 was $2,715 (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
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. Revenues on a gross basis for the
three months ended September 30, 2005 were approximately $399,554 (2004:
$1,384,616). 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 September 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 September 30, 2005 and 2004.

RECENT ACCOUNTING PRONOUNCEMENTS - The Financial Accounting Standards Board
issued the following pronouncement during the nine months ended September 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 do not
believe adoption of SFAS 154 will have a material effect on our financial
position, results of operations or cash flows.


                                       8
<PAGE>

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:

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

Together Again Limited     Intermediate holding        Amount receivable in relation              739,928
("TAL")                    company, 51% owned by       to service income and funds
                           Colima and 49% owned by     transferred between entities
                           China Star Entertainment    for working capital purposes
                           Limited
                                                                                        ------------------
                                                                                            $   1,266,206
                                                                                        ==================

Imperial International     Intermediate holding        Funds transferred between            $   (672,951)
Limited                    company, ultimately owned   entities for working capital
                           by Colima                   purposes

China Star HK              Related company,            Amount receivable in relation            (889,341)
Distribution Limited       subsidiary of China Star    to service income and funds
                           Entertainment Limited       transferred between entities
                           which owns 49% of TAL       for working capital purposes
                           together with Colima,
                           which owns 51% of TAL
                                                                                        ------------------
                                                                                            $ (1,562,292)
                                                                                        ==================
</TABLE>

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

<TABLE>
                           NATURE OF
                          RELATIONSHIP         DESCRIPTION OF           THREE MONTHS ENDED          NINE MONTHS ENDED
   RELATED PARTY          AND CONTROL            TRANSACTION               SEPTEMBER 30               SEPTEMBER 30
--------------------------------------------------------------------------------------------------------------------------
                                                                          2005         2004         2005         2004
                                                                      (Unaudited)   (Unaudited)  (Unaudited)  (Unaudited)
<S>                   <C>                      <C>                     <C>           <C>          <C>          <C>
China Star HK         Related company,         Service income,
Distribution Limited  subsidiary of China      net
                      Star Entertainment
                      Limited which owns 49%
                      of TAL together with
                      Colima, which owns 51%                           $       -     $ 766,859    $ 377,821    $2,147,821
                      of TAL
                                                                  ========================================================

China Star            Related company, owns    Management fee
Entertainment         49% of TAL together      paid
Limited               with Colima, which
                      owns 51% of TAL                                  $  26,923     $  26,923    $  80,769    $   80,769
                                                                  ========================================================

China Star Laser      Related company,         Management fee
Disc Company Limited  subsidiary of China      paid
                      Star Entertainment
                      Limited which owns
                      49% of TAL together
                      with Colima, which
                      owns 51% of TAL                                  $ 126,923     $ 126,923    $ 380,769    $  380,769
                                                                  ========================================================
</TABLE>


                                       9
<PAGE>

4.   DEPOSITS PAID, PREPAYMENTS AND OTHER RECEIVABLES

Deposits paid [1]                  $    2,074,468
Prepayments                                 2,746
Other receivables                           2,939
                                   --------------
                                        2,080,153
                                   ==============

[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]                       $      300,815
Deposits received [2]                   1,491,595
Other payables                                145
                                   --------------
                                        1,792,555
                                   ==============

[1] Accruals primarily consisted of the following: accrued services charges
($186,537) and accrued professional fees ($90,000).

[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
periods range from one year to three years and the performances contracted were
either fixed in term of number of performances or in periods to be performed.

6.   STOCKHOLDERS' EQUITY (INCLUDING SUBSEQUENT EVENT)

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.

Common shares outstanding reflect a fractional adjustment roundup of 25 shares
resulting from the reverse split (see Note 1).


7.   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 September 30,
2005, future minimum rental payments due under operating leases were as follows:

2006                               $       42,342
2007                                        3,528
                                   --------------
                                           45,870
                                   ==============

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.


                                       10
<PAGE>

8.   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. The "other" column represents unallocated corporate-related costs of
the parent company.

The Company's segment information follows:

<TABLE>
THREE MONTHS ENDED SEPTEMBER 2005:         AMIL            CSML           MGL          OTHER        TOTAL
------------------------------------------------------------------------------------------------------------
<S>                                    <C>               <C>           <C>              <C>       <C>
Revenues, net                          $     64,429         22,713             -                     87,142
Net earnings/losses                    $     60,249      (242,861)       (3,846)        6,397     (180,061)
Total assets                           $     73,874      2,454,671     1,322,879            -     3,851,424


THREE MONTHS ENDED SEPTEMBER 2004:         AMIL            CSML           MGL          OTHER        TOTAL
------------------------------------------------------------------------------------------------------------

Revenues, net                          $     51,200        822,990             -            -       874,190
Net earnings/losses                    $     45,757        556,128             -            -       601,885
Total assets                           $    364,708      2,713,881             -            -     3,078,589


NINE MONTHS ENDED SEPTEMBER 2005:          AMIL            CSML           MGL          OTHER        TOTAL
------------------------------------------------------------------------------------------------------------

Revenues, net                          $    143,982        507,936       279,445            -       931,363
Net earnings/losses                    $    131,703      (280,247)       267,890        6,397       125,743
Total assets                           $     73,874      2,454,671     1,322,879            -     3,851,424


NINE MONTHS ENDED SEPTEMBER 2004:          AMIL            CSML           MGL          OTHER        TOTAL
------------------------------------------------------------------------------------------------------------

Revenues, net                          $    460,228      2,053,313             -            -     2,513,541
Net earnings/losses                    $    404,833      1,292,176                                1,697,009
Total assets                           $    364,708      2,713,881             -            -     3,078,589
</TABLE>


                                       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, GUARANTEE, 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 REQUIRE 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 GUARANTY
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 toward 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 September 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 also 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 regard 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 certified
that it was 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 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.


                                       13
<PAGE>

We are currently authorized to issue 200,000,000 shares of common stock, $0.001
par value, of which 128,963,425 shares of common stock are issued and
outstanding as of March 31, 2006. We are currently not authorized to issue
preferred stock.

RECENT ACCOUNTING PRONOUNCEMENTS

The Financial Accounting Standards Board issued the following pronouncement
during the nine months ended September 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 do not
believe adoption of SFAS 154 will have a 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 months ended September 30, 2004 and
September 30, 2005 and for the nine months ended September 30, 2004 and
September 30, 2005 are summarized as follows:

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

Revenues                                  $    87,256   $   874,265     (90.0)%
General and Administrative expenses           267,317       272,380      (1.9)%
                                          -----------   -----------
Net (Losses) Earnings before income taxes   (180,061)       601,885    (129.9)%
Provision for income taxes                          -             -          -%
                                          -----------   -----------
Net (Losses) Earnings                       (180,061)       601,885    (129.9)%

NINE MONTHS ENDED SEPTEMBER 30                2005          2004       CHANGE
--------------------------------------------------------------------------------

Revenues                                  $   931,733   $ 2,513,622     (62.9)%
General and Administrative expenses           805,990       816,613      (1.3)%
                                          -----------   -----------
Net Earnings before income taxes              125,743     1,697,009     (92.6)%
Provision for income taxes                          -             -          -%
                                          -----------   -----------
Net Earnings                                  125,743     1,697,009     (92.6)%


REVENUES

Our consolidated revenues decreased 90.0% to $87,256 for the three months ended
September 30, 2005 from $874,265 for the same period in 2004 and our
consolidated revenues decreased 62.9% to $931,733 for the nine months ended
September 30, 2005 from $2,513,622 for the same period in 2004. The decrease in
consolidated revenues was a result of decreased number of performances by our
artists. Rampant piracy and the downturn of Hong Kong made movies affected the
overall revenues of all movies in Hong Kong. Accordingly, movie investors were
more cautious in producing movies, thereby decreasing the opportunities for
performances by our artists.

General and administrative expenses incurred for the three months ended
September 30, 2005 decreased $5,063, or 1.9%, to $267,317 compared to $272,380
for the same period in 2004 and general and administrative expenses incurred for
the nine months ended September 30, 2005 decreased $10,623, or 1.3%, to $805,990
compared to $816,613 for the same period in 2004. General and administrative
expenses mainly consisted of management fees, wages, rent, and professional
fees. The fluctuation was insignificant.

PROVISION FOR INCOME TAXES

The provision for income taxes represents the aggregate taxes provided on the
assessable profits for the consolidated entities. No provision of income taxes
was provided for the three and nine months ended September 30, 2005 as the
Company incurred a tax loss for the period. No provision of income taxes was
provided for the three and nine months ended September 30, 2004 because no
income tax was required under the local jurisdiction at where the income was
derived and there were tax losses brought forward from previous years which can
be utilized to offset the assessable profits for the periods presented.

NET EARNINGS

Net earnings before income taxes for the three months ended September 30, 2005
decreased $781,946, or 129.9%, to a negative $180,061 compared to $601,885 for
the same period in 2004. The decrease in net earnings resulted from a 90.0%
decrease in revenues offset by a decrease in general and administrative
expenses.

Net earnings before income taxes for the nine months ended September 30, 2005
decreased $1,571,266, or 92.6%, to $125,743 compared to $1,697,009 for the same
period in 2004. The decrease in net earnings resulted from a 62.9% decrease in
revenues offset by a decrease in general and administrative expenses.


                                       15
<PAGE>

FINANCIAL CONDITION, LIQUIDITY, CAPITAL RESOURCES


NINE MONTHS ENDED SEPTEMBER 30                  2005         2004         CHANGE
--------------------------------------------------------------------------------

Net cash provided by operating activities    $ 366,212      600,196      (39.0)%

Net cash used in investing activities        $  53,432            -         100%

Net cash used in financing activities        $ 100,170      598,571      (83.3)%


LIQUIDITY

Our working capital at September 30, 2005 was $650. 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 nine months ended September 30, 2005, net cash flows provided by
operating activities was $366,212 (2004: $600,196) primarily resulting from net
earnings from operations offset by a decrease in deposits paid and a decrease in
deposits received.

CASH FLOWS FROM INVESTING ACTIVITIES:

For the nine months ended September 30, 2005 and 2004, net cash flows used in
investing activities were $53,432 as compared to $Nil for the same period in
2004. The increase was attributable to additions of fixed assets.

CASH FLOWS FROM FINANCING ACTIVITIES:

Net cash flows used in financing activities for the nine months ended September
30, 2005 was $100,170. The cash flows were mainly used for repayments to certain
related parties and certain operating expenses financed by increase in bank
loan. Net cash flows used in financing activities for the nine months ended
September 30, 2004 was $598,571, representing 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

     None.

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.

----------------------------
(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.


                                       18
<PAGE>

(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

     None.


                            [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