**United States****SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

 

**FORM 10-KSB**

 

**ý     ****ANNUAL****REPORT UNDER SECTION 13OR 15(d) OFTHE SECURITIES EXCHANGE ACT OF 1934**

 

**For the fiscal year ended December 31,2005**

 

**Commission file number 0-49701**

 

**PACIFIC VEGAS GLOBAL STRATEGIES, INC.**

(Name of small business issuer in itscharter)

 

| **COLORADO**                                   | ** ** | **84-1159783**                    |
|------------------------------------------------|------------|-----------------------------------|
| (State or Other Jurisdiction of Incorporation) |       | (IRS Employer Identification No.) |

 

**16/F,Winsome House73 Wyndham Street, Central, Hong Kong**

(Address of principal executive offices)

 

**(001) (852)3154-9370**

(Issuer’s telephone number)

 

Securities registered under Section 12(g) ofthe Exchange Act:**Common Stock, with No Par Value**

(Title of class)

 

Check whether the issuer is not required to file reports pursuant to Section 13or 15(d) of the Exchange Act.         o

 

Checkwhether the issuer (1) filed all reports required to be filed by Section 13or 15(d) of the Exchange Act during the past 12 months (or for suchshorter period that the registrant was required to file such reports), and (2) hasbeen subject to such filing requirements for the past 90 days. YES ý       NO  o

 

Check if there is no disclosure of delinquent filers in response toItem 405 of Regulation S-B contained in this form, and no disclosure will becontained, to the best of registrant’s knowledge, in definitive proxy orinformation statements incorporated by reference in Part III of this Form 10-KSBor any amendment to this Form 10-KSB.    ý

 

Indicate by check mark whether the registrant is a shell company (asdefined in Rule 12b-2 of the Exchange Act). YES  ý       NO o

 

State issuer’s revenues for its most recent fiscal year: **NIL**.

 

State the aggregate market value of the voting and non-voting commonequity held by non-affiliates: **US$824,698**.

 

NOTE: The aggregate market value was computed by multiplying the numberof outstanding shares of the issuer’s common stock, excluding those shares ofrecord held by officers, directors and greater than five percent shareholders,by **US$0.016**, the average bid and askedprice of the issuer’s common stock as at March 15, 2006, such date beingwithin 60 days prior to the date of filing.

 

State the number of shares outstanding of each of the issuer’s classesof common equity, as of the latest practicable date: **99,963,615**shares of Common Stock with No Par Value, outstanding as at March 15,2006.

 

Documents incorporated by reference:  NONE.

 

Transitional Small Business Disclosure Format:  YES  o       NO  ý

 

 

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**PART   I**

 

**ITEM 1.     DESCRIPTION OF ORGANIZATION AND BUSINESS**

 

**1.1****                             ****INTRODUCTION**

 

Allstatements other than statements of historical fact presented in this annualreport regarding our financial position and operating and strategic initiativesand addressing industry developments are forward-looking statements, where weor our management express(es) an expectation or belief as to future results.Such expectation or belief is expressed in good faith and believed to have areasonable basis, but there can be no assurance that the statements of suchexpectation or belief will result or be achieved or accomplished. Actualresults of operations may differ materially.

 

Our principal executive office is located at 16/F, Winsome House, 73Wyndham Street, Central, Hong Kong, telephone (011) (852) 3154-9370.

 

**1.2****                             ****THE CORPORATION ANDACQUISITION OF CTGH**

 

Pacific Vegas Global Strategies, Inc. (the “Company” or “PVGS”),formerly known as Goaltimer International, Inc., was incorporated inColorado on December 19, 1990. Prior to the acquisition of CyberTechnology Group Holdings Ltd. (“CTGH”) as described herein, the Companyentered into and operated a business of development and sales of time andpersonal management products. The Company had discontinued such business andbecome a non-operating public shell since 1994, and remained as a shell companywith its only activities of accruing loan interest on notes payable and lookingfor a merger candidate.

 

On November 20, 2002, the Company entered into an agreement for atransaction of share exchange with CTGH for the Company to acquire CTGH througha plan of share exchange under the laws of Colorado. Pursuant to the shareexchange agreement, and subject to its shareholders’ approval, the Company wasto acquire 100% of the issued and outstanding equity shares of CTGH, inexchange for 60,000,000 new shares of common stock of the Company. Thistransaction was approved by the shareholders of the Company at the specialmeeting of shareholders held on December 12, 2002.

 

The closing of the transaction was scheduled to take place on December 22,2002 subsequently. The 60,000,000 new shares of common stock were thereforeissued on December 22, 2002 as scheduled. However, the transaction wasdelayed and eventually closed on January 8, 2003, upon which control ofthe Company passed to the shareholders of CTGH, and CTGH became a wholly ownedsubsidiary of the Company.

 

CTGH was incorporated in the British Virgin Islands in June 2000,operated as an investment holding company, holding 100% of the capital stock ofPacific Vegas Development Ltd. (“PVD”).

 

PVDwas incorporated in Samoa in April 2000, operated as an IT company,engaged in a business of system development and technical supporting servicesfor e-business, especially e-gaming related business, whilst holding 100% ofthe equity shares of Pacific Vegas International Ltd. (“PVI”).

 

PVI was incorporated in the Commonwealth of Dominica in April 2000,established and operated as an international gaming company, conducting anoffshore business of international sportsbook by way of telecommunications andthe Internet, under an International Gaming License granted by the governmentof the Commonwealth of Dominica.

 

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As the Company was a non-operating public shell before its acquisitionof CTGH, the nature of this acquisition was defined and treated as a capitaltransaction or recapitalization in substance, rather than a businesscombination. The acquisition did not result in any purchase accountingadjustments or creation of goodwill.

 

**1.3****                             ****BUSINESS OPERATIONS**

 

Upon completion of the reorganization with CTGH in January 2003,CTGH became the operating entity of the Company to conduct business operations.The Company adopted CTGH’s business of international sportsbook as itsprincipal business and operated such business, through CTGH and itssubsidiaries, from the Commonwealth of Dominica by way of telecommunicationsand the Internet, under an International Gaming License granted by thegovernment of the Commonwealth of Dominica, until December 6, 2004, whenthe Board of Directors of the Company resolved to cease the operations of suchbusiness due to the significant financial losses resulted from such business.

 

Revenue from operations of sportsbook business was the only revenuesource for the Company in the last three fiscal years. The Company recorded atotal revenue of US$1.70 million for the fiscal year 2003, and a total revenueof US$0.03 million for the fiscal year 2004. No revenue was recorded for thefiscal year 2005 since the operations of sportsbook business were ceased andthen discontinued.

 

Theoperations of sportsbook business resulted in significant financial losses forthe Company, particularly for the fiscal year 2004. The Company incurred a netloss of US$0.39 million for the fiscal year 2003, and a net loss of US$2.35million for the fiscal year 2004.

 

Our annual report on Form 10-KSB for the fiscal year ended December 31,2004 filed with the SEC, incorporated by reference hereto as Exhibit 13.1,presented a detailed analysis of the factors that caused the adverse results ofour operations of the sportsbook business.

 

In the last three fiscal years there was no business other than theaforementioned sportsbook business operated by the Company.

 

**1.4****                             ****DISPOSITION OF CTGH**

 

In light of the significant financial losses resulted from thesportsbook business and the factors that caused such adverse results ofoperations, effective as of December 6, 2004, the Board of Directors ofthe Company resolved to cease the operations of sportsbook business, as animmediate remedial action to prevent further losses.

 

Having reviewed the financial position and re-evaluated the businessstructure of the Company, the Board of Directors further decided to terminatethe sportsbook business and dispose of CTGH. On July 8, 2005, the Companyentered into a Stock Purchase Agreement (the “Agreement”) with an independentthird party (the “Buyer”), pursuant to which, and subject to its shareholders’approval, the Company was to sale its entire 100% equity interest in CTGHthrough disposition of all equity shares of CTGH for a consideration ofUS$125,000 in cash together with a non-cash settlement that the Buyer was toassume and pay all liabilities of CTGH as shown in the consolidated balancesheet of CTGH as at June 30, 2005 and to cancel and release the Companyfrom its liabilities due to CTGH in the amount of US$549,288 or such otheramount not exceeding US$549,288 as may be amended at the closing of thetransaction. This Agreement was approved by our shareholders at the specialmeeting of shareholders held on October 14, 2005, and the transaction wassubsequently executed and closed on November 18, 2005.

 

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Details of this transaction were disclosed in theCompany’s earlier reports on Form 8-K, Form 10-QSB and definitiveproxy statement on Schedule 14A filed with the SEC dated July 11, August 15,August 26, and November 18, 2005 respectively.

 

In accordance with SFAS 144 “Accounting for the Impairment or Disposalof Long-Lived Assets”, the Company reported CTGH as a discontinued operationduring the year, and the audited financial results for the fiscal year 2004 hadbeen restated and presented in the consolidated financial statements on thesame basis accordingly.

 

**1.5****                             ****CURRENT STATUS**

 

The Company has been in an inactive or non-operating status since December 6,2004, and currently remained as a shell company with its only activities ofaccruing non-operating expenses.

 

**1.6****                             ****EMPLOYEES**

 

For the fiscal year 2005 and as at December 31, 2005, the Companyhad 2 employees, both full time, with no compensation, whether in cash or inkind, in the capacities as chief executive officer and chief financial officerrespectively.

 

**1.7****                             ****ADDITIONAL INFORMATION**

 

**1.7.1****                   ****Compliance with EnvironmentalLaws**

 

Compliance with federal, state and local provisions which have beenenacted regarding the discharge of materials into the environment or otherwiserelating to the protection of the environment has not had, and is not expectedto have, any adverse effect upon operations, capital expenditures, earnings orcompetitive position of the Company. The Company is not presently a party toany litigation or administrative proceedings, whether federal, state or local,with respect to its compliance with such environmental standards. The Companydoes not anticipate being required to expend any significant capital funds inthe near future for environmental protection in connection with its operations.

 

**1.7.2****                   ****Other Information**

 

There was no expenses incurred by the Company on any research anddevelopment activities in the last two fiscal years.

 

As at December 31, 2005, there was no patents, trademarks,licenses, franchises, concessions, and/or royalty agreements owned or possessedby the Company.

 

**1.7.3****                   ****Reports and Availability ofInformation**

 

The Company files its annual reports, quarterly reports, currentreports, proxy statements, and other reports required to be filed with the SECunder the Security Exchange Act.

 

TheCompany is not required to deliver an annual report to our shareholders. Ourshareholders and the public may obtain any reports and other informationmaterials that the Company filed with the SEC by visiting the SEC’s website athttp://www.sec.gov or SEC’s Public Reference Room at 450 Fifth Street,N.W., Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330.

 

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**ITEM 2.         DESCRIPTION OF PROPERTY**

 

**2.1****                             ****OPERATING LEASE**

 

There was a leased space for business operations in the Commonwealth ofDominica under the name of PVI, which was a space of approximately 180 squaremeters, at a monthly rental of US$775. This lease was terminated as of May 1,2005. No rental fees charged to the Company for this leased space for thefiscal year 2005.

 

The Company leased its executive offices in Hong Kong, which was aspace of approximately 311 square meters, pursuant to a lease of two years at amonthly rental of US$6,410. This lease was terminated upon its expiration on January 23,2005.

 

Currently the Company maintains its executive offices in Hong Kong,which consist of a space of approximately 60 square meters. This office spacehas been provided by our principal shareholder, who is also the sole directorof the Company, for the Company to use as its executive offices, initially fora period of six months commencing January 24, 2005, with no rental chargesto the Company. This arrangement was extended to a “reasonable” period of timewhen its initial period of six months completed. However, the principal shareholderretains his right to discontinue this arrangement at his own discretion. It isuncertain as for how long or to what extent such a period of time would be “reasonable”to the discretion of the principal shareholder, and there can be no assurancethat this arrangement by the principal shareholder will not be discontinued atany time.

 

**2.2****                             ****INVESTMENT POLICIES**

 

The Company does not invest in, and has not adopted any policy withrespect to investments in, real estate or interests in real estate, real estatemortgages or securities of or interests in persons primarily engaged in realestate activities. It is not the Company’s policy to acquire assets primarilyfor possible capital gain or primarily for income.

 

**ITEM 3.         LEGAL PROCEEDINGS**

 

No material legal proceedings to which the Company is a party or towhich any of its property is the subject are pending and as to our knowledge nosuch proceedings are to be contemplated.

 

The Company is not presently a party to any litigation oradministrative proceedings with respect to our compliance with federal, stateand local provisions which have been enacted regarding the discharge ofmaterials into the environment or otherwise relating to the protection of theenvironment and as to our knowledge no such proceedings are to be contemplated.

 

There has been no material legal proceedings to which any of ourofficers, directors or shareholders of greater than five percent of ouroutstanding common shares is a party adverse to the Company or has a materialinterest adverse to the Company.

 

No material proceedings or legal actions are pending or contemplatednor judgments entered against any of our officers, directors or shareholders ofgreater than five percent of our outstanding common shares concerning anymatter involving our business.

 

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**ITEM 4.         SUBMISSION OF MATTERS TO A VOTE OFSECURITY HOLDERS**

 

**4.1****                             ****MATTERS SUMMITTED**

 

During the fourth quarter of the fiscal year covered by this report,the following matters were submitted to a vote of our shareholders at a specialmeeting of shareholders:

 

(1)                    The Authorization of Securities Proposal.

This proposal was to approve an amendment to our Articles ofIncorporation to increase the aggregate number of authorized shares of common stockof the Company from 100,000,000 shares to 500,000,000 shares; and

 

(2)                    The Sale of CTGH Proposal.

This proposal was to ratify and approve the Stock Purchase Agreementdated July 8, 2005 covering our sale of all of the outstanding capitalstock of CTGH to the Buyer.

 

Detailsof the above listed two proposals were presented in our proxy statements on Schedule 14Afiled with the SEC on August 9, 2005 (preliminary) and August 26,2005 (definitive) respectively, pursuant to section 14(a) of theSecurity Exchange Act of 1934.

 

OurPresident’s notice of meeting and the proxy materials containing detailedinformation of the two proposals were furnished by mail to our shareholders ofrecord on September 2, 2005.

 

There was no other matters submitted to the special meeting ofshareholders, and there was no other matters submitted to a vote of ourshareholders during the fourth quarter of the fiscal year covered by thisreport.

 

**4.2****                             ****SPECIAL MEETING OF SHAREHOLDERS**

 

The special meeting of shareholders was held at 5445 DTC Parkway, Suite 520,Greenwood Village, Colorado 80111, on October 14, 2005.

 

Areport of The Altman Group, Inc., the Company’s proxy solicitor, waspresented to the meeting, according to which, of the 99,963,615 issued andoutstanding shares of the Company’s common stock as at August 24, 2005,the record date fixed by the Board of Directors of the Company as the recorddate for determination of shareholders entitled to vote at the meeting, therewere 63,931,184 shares represented at the meeting in person or by proxy. Therepresented shares constituted 63.95% of our issued and outstanding votingshares, satisfying the required quorum for the meeting to lawfully proceed.

 

**4.3****                             ****APPROVALS AND VOTES CAST**

 

The Board of Directors of the Company recommended the approval of theforegoing two proposals. Approval of both of the two proposals had passed by avote in excess of a majority. Detailed results of the votes cast by theshareholders on the two proposals were as follows:

 
| ** **                                   | ** ** | **FOR**    | ** ** | **AGAINST** | ** ** | **ABSTAIN** | ** ** |
|----------------------------------------------|------------|------------|------------|-------------|------------|-------------|------------|
| On the Authorization of  Securities Proposal |       | 63,848,344 |       | 50,940      |       | 31,900      |       |
| On the Sale of CTGH  Proposal                |       | 54,425,417 |       | 28,640      |       | 21,000      |       |

 

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**4.4****                             ****RIGHTS OF DISSENTINGSHAREHOLDERS**

 

With respect to the Sale of CTGH Proposal, all shareholders wereadvised of the statutory rights of dissenting shareholders and the proceduresfor exercise of such rights pursuant to Article 113 of the ColoradoBusiness Corporation Act. No claims exercising such rights of dissenting shareholderswere asserted or raised by any of the shareholders who did not vote forapproval of this proposal.

 

**PART   II**

 

**ITEM 5.****                           ****MARKET FOR COMMON EQUITY ANDRELATED STOCKHOLDER MATTERS**

 

**5.1****                             ****OUTSTANDING SHARES ANDSHAREHOLDERS**

 

As at March 15, 2006, there were 99,963,615 shares of PVGS commonstock with no par value issued and outstanding, and there were approximately742 holders of record and beneficial holders of PVGS common stock.

 

**5.2****                             ****MARKET FOR PVGS COMMON STOCK**

 

Our common stock was traded publicly on the OTC Bulletin Board underthe symbol “PVEG.OB” from January 8, 2003 until September 26, 2003,at which time it was moved from the OTC Bulletin Board to the OTC Non-BulletinBoard for failure to comply with certain reporting requirements (NASD Rule 6530).Our common stock has been since then traded on the Pink Sheets under the symbol“PVEG.PK”.

 

The nature of the market for common stocks trading on the Pink Sheetsis limited, sporadic and highly volatile, and the absence of an active market may havean effect upon the high and low prices as reported. The following informationsets forth the high and low last sale prices per share of our common stock forthe periods indicated as reported by the OTC Bulletin Board or the Pink Sheets:

 
| **QUARTER ENDED**   | ** ** | **HIGH** | ** ** | **LOW** | ** ** |
|--------------------------|------------|----------|------------|---------|------------|
|                     |       |     |       |    |       |
| March 31,  2005     |       | US$      | 0.02       |    | US$        | 0.02 |   |
| June 30,  2005      |       | US$      | 0.065      |    | US$        | 0.06 |   |
| September 30,  2005 |       | US$      | 0.025      |    | US$        | 0.025 |   |
| December 31,  2005  |       | US$      | 0.016      |    | US$        | 0.016 |   |
|                     |       |     |       |    |       |   |   |
| March 31,  2004     |       | US$      | 0.41       |    | US$        | 0.41 |   |
| June 30,  2004      |       | US$      | 0.12       |    | US$        | 0.12 |   |
| September 30,  2004 |       | US$      | 0.05       |    | US$        | 0.05 |   |
| December 31,  2004  |       | US$      | 0.03       |    | US$        | 0.03 |   |
|                     |       |     |       |    |       |   |   |
| March 31,  2003     |       | US$      | 1.35       |    | US$        | 1.30 |   |
| June 30,  2003      |       | US$      | 0.60       |    | US$        | 0.55 |   |
| September 30,  2003 |       | US$      | 0.12       |    | US$        | 0.10 |   |
| December 31,  2003  |       | US$      | 0.15       |    | US$        | 0.12 |   |

 

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The quotations listed in this table reflect inter-dealer prices,without retail mark-ups, mark-downs, or commissions, and may notnecessarily represent actual transactions.

 

**5.3****                             ****RELATED MATTERS**

 

The Company has not declared or paid any dividends since itsreorganization with CTGH in January 2003.

 

The Company did not sell any equity securities thatwere not registered under the Securities Act of 1933, as amended, and did notrepurchase any of our equity securities, in the last three fiscal years.

 

There was no previously authorized equity compensation plans carriedforward upon the Company’s reorganization in January 2003, and there hasbeen no equity compensation plans adopted and no equity securities issued forany equity compensation plans since the Company’s reorganization in January 2003.As at December 31, 2005, there was no outstanding equity compensationplans, options or warrants to be exercised and no equity securities to beissued for such purposes.

 

**ITEM 6.        ****MANAGEMENT’S****DISCUSSION AND ANALYSIS OR PLAN OF OPERATION**

 

Our presentation in this Management’s Discussion and Analysis or Planof Operation contains a number of forward-looking statements within the meaningof Section 27 A of the Securities Act of 1933, as amended, and Section 21Eof the Securities Exchange Act of 1934, as amended. These forward-lookingstatements are based on management’s current projections or expectations withregard to the future operations of business. Such projections or expectationsare expressed in good faith and believed to have a reasonable basis, but therecan be no assurance that such projections or expectations will prove to becorrect or accurate, and as a result of certain risks and uncertainties, actualresults of operations may differ materially.

 

**6.1****                             ****CRITICAL ACCOUNTING POLICIESAND ESTIMATES**

 

The preparation of our financial statements in conformity withaccounting principles generally accepted in the United States requires ourmanagement to make estimates and assumptions that affect the amounts reportedin our financial statements and accompanying notes. Actual results could differmaterially from those estimates.

 

Ouraudited consolidated financial statements and the notes thereto under Item 7hereof contain more details of critical accounting policies and otherdisclosures required by generally accepted accounting principles.

 

**6.2****                             ****RESULTS OF OPERATIONS**

 

**6.2.1       Revenueand Expenses**

 

As described in Item 1 hereof, the Company has remained in an inactiveor non-operating status since December 6, 2004. There was no activebusiness operated and no revenue earned by the Company for the fiscal yearended December 31, 2005.

 

Total expenses for the fiscal year ended December 31, 2005 wereUS$100,880, including expenses for office rentals, professional fees,telecommunications, and miscellaneous administrative expenses.

 

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**6.2.2****                   ****Net Income**

 

The Company reported CTGH as a discontinued operation and restated theresults of discontinued operation in accordance with SFAS 144 “Accounting forthe Impairment or Disposal of Long-Lived Assets”, based on which there was aprofit of US$894,290 from the discontinued operation for the fiscal year 2005.Detailed accounts of the discontinued operation have been presented in Note 5to the consolidated financial statements under Item 7 hereof.

 

There was a net income of US$793,410 for the fiscal year ended December 31,2005, mainly gained from disposal of the discontinued operation.

 

**6.2.3****                   ****Liquidity and CapitalResources**

 

For the fiscal year ended December 31, 2005 the Company had a netdecrease of US$40,506 in cash and cash equivalents. Summary of our cash flowsfor the fiscal year 2005 is as follows:

 

Net cash out-flow of US$338,155 in operating activities,

Net cash in-flow of US$114,523 from disposal of the discontinuedoperation, and

Net cash in-flow of US$183,126 by private loans from the principalshareholder of the Company.

 

As at December 31, 2005, the balance of cash and cash equivalentsfor the Company was nil. The Company has currently retained no sources ofliquidity other than the private financing by cash in-flow from the principalshareholder, which is unsecured and could be discontinued at any time.

 

**6.3****                             ****OFF-BALANCE SHEETARRANGEMENTS**

 

There was no such off-balance sheet arrangements as defined in Item 303(c) ofRegulation S-B, as at the end of the fiscal year 2005 and any interim period inthe current fiscal year.

 

**6.4****                             ****PLAN OF OPERATION**

 

All statements presented in this section regarding our financialposition and operating and strategic initiatives are forward-lookingstatements, where we or our management express(es) an expectation or belief asto future results. Such expectation or belief is expressed in good faith andbelieved to have a reasonable basis, but there can be no assurance that thestatement of expectation or belief will result or be achieved or accomplished.Factors which could cause actual results to differ materially from thoseanticipated include, but not limited to, general economic and businessconditions, competition and development in the industries, the businessabilities and judgment of personnel, the impacts of unusual events resultingfrom ongoing evaluations of business strategies, and changes in businessstrategies.

 

The Company has been in an inactive or non-operating status since December 6,2004, and currently remained as a shell company with its only activities ofaccruing minimal non-operating expenses. It is expected that the Company willremain in such status until a reorganization with a selected entity takesplace.

 

Asa part of our plan, we have disposed of CTGH, and we expect our next moveto be a reorganization with a selected entity, for the Company to acquiresufficient capital funds and engage into a selected business. For this purpose,we are seeking for a feasible merger candidate. However, there can be noassurance as to when or whether the Company will be able to accomplish thisplan.

 

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**6.5****                              ****ADDITIONAL CAUTIONARYSTATEMENTS AND RISK FACTORS**

 

**6.51****                       ****Going Concern**

 

Thefinancial statements presented in this annual report have been prepared inconformity with generally accepted accounting principles, which contemplatecontinuation of the Company as a going concern. However, a substantial doubthas been raised with regard to the ability of the Company to continue as agoing concern, in light of that as at December 31, 2005, the Companyretained its total assets as minimal as US$70,548, and particularly, in thisminimal amount of assets the Company retained no cash or cash equivalents tosupport its needs of cash payments for any current expenses which may berequired for its continuation as a going concern.

 

TheCompany has maintained no revenue-generating or cash in-flow operations since December 6,2004 and has relied on the private financing by cash in-flow from the principalshareholder of the Company, who has undertaken to finance the Company in cashfor a “reasonable” period of time for the Company to continue as a goingconcern, assuming that in such a period of time the Company would be able torestructure its business and restart on a revenue-generating operation and/orraise additional capital funds to support its continuation. However, theprincipal shareholder retains his right to discontinue such financing at hisown discretion. It is uncertain as for how long or to what extent such a periodof time would be “reasonable” to the discretion of the principal shareholder,and there can be no assurance that the financing from the principal shareholderwill not be discontinued at any time.

 

Otherthan the private financing by cash in-flow from the principal shareholder,which is unsecured and could be discontinued at any time, the Company hascurrently preserved no sources of liquidity to support its continuation as agoing concern.

 

These uncertainties may result in adverse effects on continuationof the Company as a going concern. The accompanying financial statements do notinclude or reflect any adjustments that might result from the outcome of theseuncertainties.

 

**6.5.2****                    ****Limited Market**

 

Themarket for our stock is limited. Our common stock is currently traded on thePink Sheets under the symbol “PVEG.PK”. On March 15, 2006, the lastreported sale price of our common stock on the Pink Sheets was US$0.016 pershare. However, we consider our common stock to be “thinly traded” and any lastreported sale prices may not be a true market-based valuation of thecommon stock.

 

Ourcommon stock is considered to be a “penny stock” and, as such, the market forour common stock may be further limited by certain SEC rules applicableto penny stocks.

 

Aslong as the price of our common stock remains below US$5.00 per share or wehave net tangible assets of US$2,000,000 or less, our common shares are likelyto be subject to certain “penny stock” rules promulgated by the SEC. Thoserules impose certain sales practice requirements on brokers who sell pennystocks to persons other than established customers and accredited investors (generally,institutions with assets in excess of US$5,000,000 or individuals with a networth in excess of US$1,000,000). For transactions covered by the penny stockrules, the broker must make a special suitability determination for thepurchaser and receive the purchaser’s written consent to the transaction priorto the sale. Furthermore, the penny stock rules generally require, amongother things, that brokers engaged in secondary trading of penny stocks providecustomers with written disclosure

 

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documents,monthly statements of the market value of penny stocks, disclosure of the bidand asked prices and disclosure of the compensation to the brokerage firm anddisclosure of the sales person working for the brokerage firm. These rules andregulations adversely affect the ability of brokers to sell our common sharesand limit the liquidity of our securities.

 

**ITEM 7.         FINANCIAL STATEMENTS**

** **

**Table ofContents**

 
| Report of Independent  Certified Public Accountants              |   |
|------------------------------------------------------------------|--------|
| Financial  Statements:                                           |   |
| Consolidated  Balance Sheets                                     |   |
| Consolidated  Statements of Operations                           |   |
| Consolidated  Statements of Changes in Stockholders’ Equity |   |
| Consolidated  Statements of Cash Flows                           |   |
| Notes to Consolidated Financial  Statements                      |   |

 

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**REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS**

 

To the Stockholders and Board of Directors

**Pacific Vegas Global Strategies, Inc.**

(incorporated in Colorado with limited liability)

 

We have audited the accompanying consolidated balance sheets of PacificVegas Global Strategies, Inc. as of December 31, 2005 and 2004, andthe related consolidated statements of operations, changes in stockholders’equity and cash flows for the years then ended. These consolidated financialstatements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these consolidated financial statementsbased on our audits.

 

Weconducted our audits in accordance with the standards of the Public CompanyAccounting Oversight Board (United States). Those standards require that weplan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includesexamining, on a test basis, evidence supporting the amounts and disclosures inthe financial statements. An audit also includes assessing the accountingprinciples used and significant estimates made by management, as well asevaluating the overall financial statement presentation. We believe that ouraudits provide a reasonable basis for our opinion.

 

Inour opinion, the consolidated financial statements referred to above presentfairly, in all material respects, the consolidated financial position ofPacific Vegas Global Strategies, Inc. as of December 31, 2005 and2004, and the results of its operations and its cash flows for the years thenended, in conformity with accounting principles generally accepted in theUnited States of America.

 

 

CharteredAccountants

CertifiedPublic Accountants

HongKong

 

18April, 2006

 

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PACIFIC VEGAS GLOBAL STRATEGIES, INC.

**CONSOLIDATED STATEMENTS OF OPERATIONS**

For the Year Ended December 31, 2005 and2004

 
| ** **                                           | ** ** | ** ** | ** ** | **Year Ended December 31,** | ** ** |
|------------------------------------------------------|------------|------------|------------|----------------------------------|------------|
| ** **                                           | ** ** | **Note**   | ** ** | **2005**                         | ** ** | **2004** | ** ** |
| ** **                                           | ** ** | ** ** | ** ** | **US$**                          | ** ** | **US$** | ** ** |
| ** **                                           | ** ** | ** ** | ** ** | ** **                       | ** ** | **(See Note 1)** | ** ** |
|                                                 |       |       |       |                             |       |   |   |
| **Revenue**                                          |       |       |       | **—**                       | ** ** | — |   |
|                                                 |       |       |       |                             | ** ** |   |   |
| **Continuing operation**                             |       |       |       |                             | ** ** |   |   |
| Expenses (general and  administrative expenses)      |       |       | ** ** | **(100,880**                     | **)**      | (120,200 | ) |
| Loss before income tax                               |       |       | ** ** | **(100,880**                     | **)**      | (120,200 | ) |
| Income tax expense                                   |       |       |       | **—**                       | ** ** | — |   |
| Loss from continuing  operation                      |       |       | ** ** | **(100,880**                     | **)**      | (120,200 | ) |
|                                                 |       |       |       |                             | ** ** |   |   |
| **Discontinued operation**                           |       |       |       |                             | ** ** |   |   |
| Profit (loss) from  discontinued operation           |       | 5          | ** ** | **894,290**                      | ** ** | (2,226,901 | ) |
|                                                 |       |       |       |                             | ** ** |   |   |
| **Net profit (loss)**                                |       |       | ** ** | **793,410**                      | ** ** | (2,347,101 | ) |
|                                                 |       |       |       |                             | ** ** |   |   |
| **Earnings (loss) per share -  Basic**               |       |       |       |                             | ** ** |   |   |
| Net loss from  continuing operation                  |       | 4          | ** ** | **(0.00**                        | **)**      | (0.00 | ) |
| Net earnings (loss)  from discontinued operation     |       | 4          | ** ** | **0.01**                         | ** ** | (0.02 | ) |
| Weighted average number  of common stock outstanding |       |       | ** ** | **99,963,615**                   | ** ** | 99,963,615 |   |

 

The accompanying notesare an integral part of these consolidated financial statements.

 

13

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PACIFIC VEGAS GLOBAL STRATEGIES, INC.

**CONSOLIDATED BALANCE SHEETS**

As at December 31, 2005 and 2004

 
| ** **                                                                             | ** ** | ** ** | ** ** | **As at December 31,** | ** ** |
|----------------------------------------------------------------------------------------|------------|------------|------------|-----------------------------|------------|
| ** **                                                                             | ** ** | **Note**   | ** ** | **2005**                    | ** ** | **2004** | ** ** |
| ** **                                                                             | ** ** | ** ** | ** ** | **US$**                     | ** ** | **US$** | ** ** |
| **Assets**                                                                             |       |       |       |                        | ** ** |   |   |
| **Current assets**                                                                     |       |       |       |                        | ** ** |   |   |
| Cash and cash  equivalents                                                             |       |       |       | **—**                  | ** ** | 40,506 |   |
| Other current asset                                                                    |       |       | ** ** | **70,548**                  | ** ** | — |   |
| **Total current assets**                                                               |       |       | ** ** | **70,548**                  | ** ** | 40,506 |   |
|                                                                                   |       |       |       |                        | ** ** |   |   |
| Property, plant and  equipment, net                                                    |       | 6          |       | **—**                  | ** ** | — |   |
| Deposits                                                                               |       | 7          |       | **—**                  | ** ** | 15,761 |   |
|                                                                                   |       |       |       | **—**                  | ** ** | 15,761 |   |
| **Total Assets**                                                                       |       |       | ** ** | **70,548**                  | ** ** | 56,267 |   |
|                                                                                   |       |       |       |                        | ** ** |   |   |
| **Liabilities and Stockholders’ Equity**                                          |       |       |       |                        | ** ** |   |   |
| **Current liabilities**                                                                |       |       |       |                        | ** ** |   |   |
| Accrued expenses                                                                       |       |       | ** ** | **37,223**                  | ** ** | 141,607 |   |
| Due to a director                                                                      |       | 9          |       | **—**                  | ** ** | 674,745 |   |
| Other payables                                                                         |       | 11         |       | **—**                  | ** ** | 74,012 |   |
| **Total current liabilities**                                                          |       |       | ** ** | **37,223**                  | ** ** | 890,364 |   |
|                                                                                   |       |       |       |                        | ** ** |   |   |
| Commitments and  contingencies                                                         |       | 12         |       |                        | ** ** |   |   |
| **Stockholders’ equity (deficit)**                                                |       |       |       |                        | ** ** |   |   |
| Common stock                                                                           |       |       |       |                        | ** ** |   |   |
| Authorized:                                                                            |       |       |       |                        | ** ** |   |   |
| No  par value, 100,000,000 shares of common stock as at December 31, 2004         |       |       |       |                        | ** ** |   |   |
| No  par value, 500,000,000 shares of common stock as at December 31, 2005         |       | 10         |       |                        | ** ** |   |   |
| Issued  and outstanding:                                                               |       |       |       |                        | ** ** |   |   |
| No  par value, 99,963,615 share of common stock as at December 31, 2005 and  2004 |       |       |       | —                      | ** ** | — |   |
| Additional paid-in  capital                                                            |       | 11         | ** ** | **2,500,000**               | ** ** | 2,425,988 |   |
| Accumulated losses                                                                     |       |       | ** ** | **(2,466,675**              | **)**      | (3,260,085 | ) |
| **Total stockholders’ equity  (deficit)**                                         |       |       | ** ** | **33,325**                  | ** ** | (834,097 | ) |
| **Total Liabilities and  Stockholders’ Equity**                                   |       |       | ** ** | **70,548**                  | ** ** | 56,267 |   |

 

The accompanying notes are an integral part of these consolidatedfinancial statements.

 

14

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PACIFIC VEGAS GLOBAL STRATEGIES, INC.

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

For the Year Ended December 31, 2005 and2004

 
| ** **                                                                           | ** ** | **Year Ended December 31,** | ** ** |
|--------------------------------------------------------------------------------------|------------|----------------------------------|------------|
| ** **                                                                           | ** ** | **2005**                         | ** ** | **2004** | ** ** |
| ** **                                                                           | ** ** | **US$**                          | ** ** | **US$** | ** ** |
| **Cash flows from (used in)  operating activities**                                  |       |                             | ** ** |   |   |
| Net profit (loss)                                                                    | ** ** | **793,410**                      | ** ** | (2,347,101 | ) |
| Adjustment to reconcile  net profit (loss) to net cash used in operating activities: |       |                             | ** ** |   |   |
| Depreciation of  property, plant and equipment                                       | ** ** | **—**                       | ** ** | 268,365 |   |
| Impairment loss on  property, plant and equipment                                    | ** ** | **—**                       | ** ** | 643,864 |   |
| Provision for  irrecoverable deposits                                                | ** ** | **—**                       | ** ** | 108,442 |   |
| Profit on disposal of  discontinued operation                                        | ** ** | **(985,519**                     | **)**      | — |   |
| Changes in operating  assets and liabilities:                                        |       |                             | ** ** |   |   |
| Accounts  receivable                                                                 | ** ** | **—**                       | ** ** | 162,406 |   |
| Deposits                                                                             | ** ** | **15,761**                       | ** ** | — |   |
| Other  current asset                                                                 | ** ** | **(70,548**                      | **)**      | 50,916 |   |
| Accounts  payable                                                                    | ** ** | **—**                       | ** ** | (10,419 | ) |
| Accrued  expenses                                                                    | ** ** | **(91,259**                      | **)**      | (70,604 | ) |
| **Net cash used in operating  activities**                                           | ** ** | **(338,155**                     | **)**      | (1,194,131 | ) |
|                                                                                 |       |                             | ** ** |   |   |
| **Cash flows from (used in)  investing activities**                                  |       |                             | ** ** |   |   |
| Purchases of property,  plant and equipment                                          | ** ** | **—**                       | ** ** | (1,154 | ) |
| Disposal of  discontinued operation                                                  | ** ** | **114,523**                      | ** ** | — |   |
| **Net cash from (used in)  investing activities**                                    | ** ** | **114,523**                      | ** ** | (1,154 | ) |
|                                                                                 |       |                             | ** ** |   |   |
| **Cash flows from financing  activities**                                            |       |                             | ** ** |   |   |
| Due to a director                                                                    | ** ** | **183,126**                      | ** ** | 674,745 |   |
| **Net cash from financing  activities**                                              | ** ** | **183,126**                      | ** ** | 674,745 |   |
|                                                                                 |       |                             | ** ** |   |   |
| **Net decrease in cash and cash  equivalents**                                       | ** ** | **(40,506**                      | **)**      | (520,540 | ) |
| Cash and cash  equivalents, as at beginning of year                                  | ** ** | **40,506**                       | ** ** | 561,046 |   |
| Cash and cash  equivalents, as at end of year                                        | ** ** | **—**                       | ** ** | 40,506 |   |

 

The accompanying notes are an integral part of these consolidatedfinancial statements.

 

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PACIFIC VEGAS GLOBAL STRATEGIES, INC.

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY**

As at December 31, 2005 and 2004

 
| ** **                            | ** ** | **Common stock** | ** ** | ** ** | ** ** | ** **          | ** ** | ** **      | ** ** |
|---------------------------------------|------------|------------------|------------|------------|------------|---------------------|------------|-----------------|------------|
| ** **                            | ** ** | **Number of**    | ** ** | ** ** | ** ** | **Additional**      | ** ** | **Accumulated** | ** ** | ** ** | ** ** |
| ** **                            | ** ** | **shares**       | ** ** | **Amount** | ** ** | **paid-in capital** | ** ** | **losses**      | ** ** | **Total** | ** ** |
| ** **                            | ** ** | ** **       | ** ** | **US$**    | ** ** | **US$**             | ** ** | **US$**         | ** ** | **US$** | ** ** |
|                                  |       |             |       |       |       |                |       |            |       |   |   |
| As at January 1,  2004           |       | 99,963,615       |       | —     |       | 2,425,988           |       | (912,984        | )          | 1,513,004 |   |
| Net loss for fiscal  2004             |       |             |       |       |       |                |       | (2,347,101      | )          | (2,347,101 |   |
| As at December 31,  2004         |       | 99,963,615       |       | —     |       | 2,425,988           |       | (3,260,085      | )          | (834,097 | ) |
| Reversal of other  payables (Note 11) |       |             |       |       |       | 74,012              |       |            |       | 74,012 |   |
| Net profit for fiscal  2005           |       |             |       |       |       |                |       | 793,410         |       | 793,410 |   |
| **As at December 31, 2005**      | ** ** | **99,963,615**   |       | **—** | ** ** | **2,500,000**       | ** ** | **(2,466,675**  | **)**      | **33,325** | ** ** |

 

The accompanying notes are an integral part of these consolidatedfinancial statements.

 

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PACIFIC VEGAS GLOBAL STRATEGIES, INC.

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

 

**1.****                                    ****ORGANIZATION AND PRINCIPALACTIVITIES**

 

PacificVegas Global Strategies, Inc. (the “Company” or “PVGS”), formerly known asGoaltimer International, Inc., was incorporated in Colorado on December 19,1990. Prior to the reorganization with Cyber Technology Group Holdings Limited(“CTGH”) on January 8, 2003, as described in Note 2 hereof, the principalbusiness of PVGS was the development and selling of time and personalmanagement products. PVGS had discontinued such operations since 1994 and itsonly activity had been accruing loan interest on notes payable and looking fora merger candidate.

 

Upon completion of the reorganization, the principal businessactivities of PVGS had been, through CTGH and its subsidiaries, conducting aninternational sportsbook business from the Commonwealth of Dominica by way oftelecommunications and the Internet, until December 6, 2004, when theBoard of Directors of PVGS resolved to cease the operations of such business.

 

The Company has been in an inactive or non-operating status since December 6,2004, and remained as a shell company with its only activities of incurringnon-operating expenses.

 

On July 8, 2005, the Company entered into a Stock PurchaseAgreement (the “Agreement”) with an independent third party (the “Buyer”),pursuant to which, and subject to its shareholders’ approval, the Company wasto sale its entire 100% equity interest in CTGH for a consideration ofUS$125,000 in cash together with a non-cash settlement that the Buyer was toassume and pay all liabilities of CTGH as shown in the consolidated balancesheet of CTGH as at June 30, 2005 and to cancel and release the Companyfrom its liabilities due to CTGH in the amount of US$549,288 or such otheramount not exceeding US$549,288 as may be amended at the closing of thetransaction. This Agreement was approved by the shareholders of PVGS at thespecial meeting of shareholders held on October 14, 2005, and thetransaction was subsequently closed on November 18, 2005.

 

In accordance with SFAS 144 “Accounting for the Impairment or Disposalof Long-Lived Assets”, the Company reported CTGH as a discontinued operationduring the year, and the audited financial results for the fiscal year 2004 hadbeen presented herein on the same basis accordingly (see Note 5).

 

**2.****                                    ****REORGANIZATION**

 

In November 2002, PVGS entered into a share exchange agreement(the “Agreement”) with CTGH for the Company to acquire CTGH through a plan ofshare exchange under the laws of Colorado. Pursuant to this Agreement, andsubject to its shareholders’ approval, PVGS was to acquire 100% of the issuedand outstanding equity shares of CTGH, all in exchange for 60,000,000 newinvestment shares of common stock in PVGS. This Agreement was approved by theshareholders of PVGS on December 12, 2002. The closing of the transactionwas scheduled to take place on December 22, 2002. The 60,000,000 newshares were issued on December 22, 2002 as scheduled, but the closing wasdelayed until January 8, 2003.

 

Foraccounting purposes, the transaction was treated as a recapitalization of CTGHwith PVGS being the legal survivor and CTGH being the accounting survivor andthe operating entity. The SEC Staff’s  Training Manual, Division of Corporate Finance- Accounting Disclosure Rules and Practices, indicates that thesetransactions are considered as capital transactions in substance rather thanbusiness combinations. That is, the historical financial statements prior to January 8,2003 are those

 

17

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ofCTGH, even though they were labeled as those of PVGS. Operations prior to therecapitalization are those of the accounting survivor, CTGH, of whichaccumulated losses was carried forward after the recapitalization and earningsper share for the periods prior to the recapitalization were restated toreflect the equivalent number of shares. Upon completion of the transaction,the financial statements became those of the operating company, CTGH, withappropriate adjustments to reflect the changes in equity structure and receiptof the assets and liabilities of the public shell, PVGS. Accordingly, theCompany’s shareholders’ equity as at January 1, 2003 was recapitalized andrestated to properly disclose and reflect its issuance of 60,000,000 new sharesof common stock for the shares exchange.

 

Following the recapitalization, PVGS took over and held 100% of theissued and outstanding equity shares of CTGH and CTGH became a wholly-ownedsubsidiary of PVGS.

 

**3.****                                     ****SUMMARY OF SIGNIFICANTACCOUNTING POLICIES**

 

**(a)****                                ****Basis of Accounting**

 

The consolidated financial statements are presented in United Statesdollars and have been prepared in accordance with accounting principlesgenerally accepted in the United States of America.

 

**(b)****                                ****Principles of Consolidation**

 

The consolidated financial statements include the accounts of PVGS andits subsidiaries up to the date of disposition. All material intercompanybalances and transactions have been eliminated on consolidation.

 

**(c)****                                ****Preparation of FinancialStatements**

 

The accompanying financial statements have been prepared in conformitywith generally accepted accounting principles, which contemplate continuationof the Company as a going concern. However, a substantial doubt has been raisedwith regard to the ability of the Company to continue as a going concern, inlight of that as at December 31, 2005, the Company retained its totalassets as minimal as US$70,548, and particularly, in this minimal amount ofassets the Company retained no cash or cash equivalents to support its needs ofcash payments for any current expenses which may be required for itscontinuation as a going concern.

 

The Company has maintained no revenue-generating or cash in-flowoperations since December 6, 2004 and has relied on the private financingby cash in-flow from the principal shareholder of the Company, who hasundertaken to finance the Company in cash for a “reasonable” period of time forthe Company to continue as a going concern, assuming that in such a period oftime the Company would be able to restructure its business and restart on arevenue-generating operation and/or raise additional capital funds to supportits continuation. However, the principal shareholder retains his right todiscontinue such financing at his own discretion. It is uncertain as for howlong or to what extent such a period of time would be “reasonable” to thediscretion of the principal shareholder, and there can be no assurance that thefinancing from the principal shareholder will not be discontinued at any time.

 

Other than the private financing by cash in-flow from the principalshareholder, which is unsecured and could be discontinued at any time, theCompany has currently preserved no sources of liquidity to support itscontinuation as a going concern.

 

18

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These uncertainties may result in adverse effects on the Company’scontinuation as a going concern. The accompanying financial statements do notinclude or reflect any adjustments that might result from the outcome of theseuncertainties.

 

**(d)****                                 ****Cash and Cash Equivalents**

 

Cash and cash equivalents are defined as cash on hand, deposits withbanks, and short-term, highly liquid investments with original maturities ofthree months or less.

 

**(e)****                                 ****Property, Plant and Equipmentand Depreciation**

 

Property,plant and equipment are stated at cost, less accumulated depreciation.Maintenance and repairs are charged to current operations as incurred. Uponsale, retirement, or other disposition of these assets, the cost and relatedaccumulated depreciation are removed from the respective accounts, and any gainor loss is included in the consolidated statement of operations.

 

**(f)****                                   ****Income Taxes**

 

TheCompany accounts for income tax under the provisions of SFAS No. 109,which requires recognition of deferred tax assets or liabilities. Deferredincome taxes are provided using the liability method, under which deferredincome taxes are recognized for all significant temporary differences betweenthe tax and financial statements bases of assets and liabilities.

 

**(g)**                                 **Operating Leases**

 

Leases where substantially all the rewards and risks of ownership ofassets remain with the leasing entity are accounted for as operating leases.Rentals payable under operating leases are charged to the consolidated statementof operations on a straight-line basis over the lease terms.

 

**(h)****                                ****Related Parties**

 

Parties are considered to be related if one party has the ability tocontrol the other party or exercise significant influence over the other partyin making financial and operational decisions.

 

**(i)****                                   ****Impairment of Long-lived****Assets**

 

Thelong-lived assets held and used by the Company are reviewed for impairmentwhenever events or changes in circumstances indicate that the carrying amountof assets may not be recoverable. It is reasonably possible that theseassets could become impaired as a result of technology or other industrychanges. Determination of recoverability of assets to be held and used is bycomparing the carrying amount of an asset to future net undiscounted cash flowsto be generated by the assets. If such assets are considered to be impaired,the impairment to be recognized is measured by the amount by which the carryingamount of the assets exceeds the fair value of the assets. Assets to bedisposed of are reported at the lower of the carrying amount or fair value lesscosts to sell.

 

**(j)****                                   ****Foreign Currency Translation**

 

PVGSand its subsidiary in the Commonwealth of Dominica maintained their books andrecords in United States dollars, and its subsidiaries in the British VirginIslands and in Samoa maintained their books and records in Hong Kong dollars.The financial statements of those subsidiaries denominated

 

19

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inHong Kong dollars have been translated into United States dollars in accordancewith SFAS No. 52, “Foreign Currency Translation”. Transactions denominatedin foreign currencies during the year are translated into United States dollarsat approximately the market exchange rates existing at the transaction dates.Monetary assets and liabilities denominated in foreign currencies aretranslated into United States dollars at approximately the market exchangerates ruling at the balance sheet date. The effect on the statements ofoperations of transaction gains and losses is insignificant for all periodspresented.

 

**(k)****                               ****Use of Estimates**

 

The preparation of the consolidated financial statements in conformitywith accounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect certain reportedamounts and disclosures. Accordingly, actual amounts could differ from thoseestimates.

 

**(l)****                                   ****Fair Value of FinancialInstruments**

 

Theestimated fair values for financial instruments under SFAS No. 107, “Disclosuresabout Fair Value of Financial Instruments”, are determined at discrete pointsin time based on relevant market information. These estimates involveuncertainties and cannot be determined with precision. The estimated fairvalues of the Company’s financial instruments, which includes cash and otherpayables approximate their carrying values in the consolidated financialstatements because of the short-term maturity of those instruments.

 

**(m)****                             ****Recently Issued AccountingStandards**

 

There are no new accounting pronouncements for which adoption isexpected to have a material effect on the Company’s consolidated financialstatements.

 

**4.****                                     ****EARNINGS (LOSS) PER****SHARE**

 

Basicearnings (loss) per common share for the periods presented is based on theweighted average number of shares of common stock outstanding during eachperiod as restated as a result of the recapitalization, as described in Note 2hereof. The 60,000,000 shares of common stock in connection with therecapitalization were included in computation of earnings (loss) per share asif outstanding at the beginning of each period presented.

 

Basicand diluted earnings (loss) per share for the periods presented were identical,as the Company had no potential common stock instruments with a dilutive effectduring the periods.

 

**5.****                                     ****DISCONTINUED OPERATION**

 

OnJuly 8, 2005, the Company entered into a Stock Purchase Agreement with anindependent third party (the “Buyer”), pursuant to which, and subject to itsshareholders’ approval, the Company was to sale its entire 100% equity interestin CTGH for a consideration of US$125,000 in cash together with a non-cashsettlement that the Buyer was to assume and pay all liabilities of CTGH asshown in the consolidated balance sheet of CTGH as at June 30. 2005 and tocancel and release the Company from its liabilities due to CTGH in the amountof US$549,288 or such other amount not exceeding US$549,288 as may beamended at the closing of the transaction. This agreement was approved by theshareholders of PVGS at the special meeting of shareholders held on October 14,2005, and the transaction was subsequently closed on November 18, 2005.

 

20

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TheCompany reported CTGH as a discontinued operation during the year and the auditedfinancial results of the discontinued operation for the fiscal year 2004 havebeen restated in the consolidated financial statements on the same basisaccordingly, in accordance with SFAS 144 “Accounting for the Impairment orDisposal of Long-Lived Assets”.

 

Resultsof the discontinued operation, which have been included in the consolidatedfinancial statements, were as follows:

 
| ** **                                                                                              | ** ** | **2005**    | ** ** | **2004**   | ** ** |
|---------------------------------------------------------------------------------------------------------|------------|-------------|------------|------------|------------|
| ** **                                                                                              | ** ** | **US$**     | ** ** | **US$**    | ** ** |
|                                                                                                    |       | ** **  | ** ** |       |       |
| Revenue                                                                                                 |       | **—**  | ** ** | 30,211     |       |
| Other  income                                                                                           |       | **4**       | ** ** | 8,465      |       |
| Operating  costs                                                                                        |       | **(91,233** | **)**      | (2,256,580 | )          |
| Operating  loss from discontinued operation                                                             |       | **(91,229** | **)**      | (2,226,901 | )          |
|                                                                                                    |       | ** **  | ** ** |       |       |
| Cash  consideration from disposal of CTGH as per Stock Purchase Agreement                               |       | **125,000** | ** ** | —     |       |
|                                                                                                    |       | ** **  | ** ** |       |       |
| Non-cash  consideration from disposal of CTGH – amount due from PVGS to CTGH assumed by  the Buyer |       | **539,288** | ** ** | —     |       |
| Total  consideration from disposal of CTGH                                                              |       | **664,288** | ** ** | —     |       |
| Gain  from disposal of capital deficiency of CTGH                                                       |       | **321,231** | ** ** | —     |       |
| Total  gain on disposal of discontinued operation                                                       |       | **985,519** | ** ** | —     |       |
|                                                                                                    |       | ** **  | ** ** |       |       |
| Net  income (loss) from discontinued operation                                                          |       | **894,290** | ** ** | (2,226,901 | )          |

 

Assetsand liabilities of the discontinued operation, which have been included in theconsolidated financial statements, were as follows:

 
| ** **                | ** ** | **As at December 31,** | ** ** |
|---------------------------|------------|-----------------------------|------------|
| ** **                | ** ** | **2005**                    | ** ** | **2004** | ** ** |
| ** **                | ** ** | **US$**                     | ** ** | **US$** | ** ** |
|                      |       | ** **                  | ** ** |   |   |
| Cash and cash equivalents |       | **10,477**                  | ** ** | 40,506 |   |
| Due from holding  company |       | **539,288**                 | ** ** | 530,081 |   |
| Deposits                  |       | **—**                  | ** ** | 15,761 |   |
| Total assets              |       | **549,765**                 | ** ** | 586,348 |   |
|                      |       | ** **                  | ** ** |   |   |
| Accrued expenses          |       | **13,125**                  | ** ** | 141,607 |   |
| Due to a director         |       | **857,871**                 | ** ** | 674,745 |   |
| Total liabilities         |       | **870,996**                 | ** ** | 816,352 |   |
| Net liabilities           |       | **(321,231**                | **)**      | (230,004 | ) |

 

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**6.****                                     ****PROPERTY, PLANT ANDEQUIPMENT, NET**

 

Summaryof property, plant and equipment is as follows:

 
| ** **                          | ** ** | **Cost**   | ** ** | **Accumulated** | ** ** | **Net carrying** | ** ** |
|-------------------------------------|------------|------------|------------|-----------------|------------|------------------|------------|
| ** **                          | ** ** | **US$**    | ** ** | **US$**         | ** ** | **US$**          | ** ** |
| **As at December 31, 2005**    |       |       |       |            |       |             |       |
| Network system                      |       | 536,128    |       | 536,128         |       | —           |       |
| Telecommunication  system           |       | 36,860     |       | 36,860          |       | —           |       |
| Office equipment                    |       | 25,864     |       | 25,864          |       | —           |       |
| Leasehold improvement               |       | 6,056      |       | 6,056           |       | —           |       |
| Furniture and fixtures              |       | 845        |       | 845             |       | —           |       |
| Website development                 |       | 540,121    |       | 540,121         |       | —           |       |
|                                |       | 1,145,874  |       | 1,145,874       |       | —           |       |
| Disposal of  discontinued operation |       | (1,145,874 | )          | (1,145,874      | )          | —           |       |
|                                |       | —     |       | —          |       | —           |       |
| **As at December 31, 2004**    |       |       |       |            |       |             |       |
| Network system                      |       | 536,128    |       | 536,128         |       | —           |       |
| Telecommunication  system           |       | 36,860     |       | 36,860          |       | —           |       |
| Office equipment                    |       | 25,864     |       | 25,864          |       | —           |       |
| Leasehold improvement               |       | 6,056      |       | 6,056           |       | —           |       |
| Furniture and fixtures              |       | 845        |       | 845             |       | —           |       |
| Website development                 |       | 540,121    |       | 540,121         |       | —           |       |
|                                |       | 1,145,874  |       | 1,145,874       |       | —           |       |

 

**7.****                                     ****DEPOSITS**

 

Summaryof deposits is as follows:

 
| ** **                                  | ** ** | **As at December31,** | ** ** |
|---------------------------------------------|------------|-----------------------|------------|
| ** **                                  | ** ** | **2005**              | ** ** | **2004** | ** ** |
| ** **                                  | ** ** | **US$**               | ** ** | **US$** | ** ** |
| Deposit for gaming  license                 |       | —                |       | 100,000 |   |
| Utilities                                   |       | —                |       | 24,203 |   |
|                                        |       | —                |       | 124,203 |   |
| Less: Provision for  irrecoverable deposits |       | —                |       | (108,442 | ) |
|                                        |       | —                |       | 15,761 |   |

 

**8.****                                     ****INCOME TAXES**

 

PVGSand its subsidiaries are subject to income taxes on an entity basis on incomearising in or derived from the tax jurisdictions in which each entity isdomiciled.

 

Noprovision for withholding or United States federal or state income taxes or taxbenefits on the undistributed earnings and/or losses of PVGS’s subsidiaries hasbeen provided as the earnings of

 

22

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thesesubsidiaries, in the opinion of the management, will be reinvestedindefinitely. Determination of the amount of unrecognized deferred taxes onthese earnings is not practical, however, unrecognized foreign tax creditswould be available to reduce a portion of the tax liability.

 

Underthe laws of the British Virgin Islands, Samoa, and the Commonwealth ofDominica, as at the time of disposition of CTGH, the Company’s subsidiarieswere not subject to any tax on income or capital gains in their domiciledjurisdictions, and no withholding tax was to be imposed upon payments ofdividends to their stockholders.

 

**9.****                                     ****RELATED PARTY TRANSACTIONS**

 

Theprivate financing by loans from the principal shareholder, who is also the soledirector of the Company, during the last two fiscal years ended December 31,2005 and 2004 was defined and treated as related party transactions, and reportedas due to a director. Such private loans from the principal shareholder to theCompany were unsecured, interest free and not subject to fixed term ofrepayment.

 

Summaryof related party transactions is as follows:

 
| ** **                  | ** ** | **As at December 31,** | ** ** |
|-----------------------------|------------|-----------------------------|------------|
| ** **                  | ** ** | **2005**                    | ** ** | **2004** | ** ** |
| ** **                  | ** ** | **US$**                     | ** ** | **US$** | ** ** |
| Due to a director,  current |       | —                      |       | 674,745 |   |

 

**10.****                              ****AUTHORIZED COMMON STOCK**

 

Approvedby the shareholders at the special meeting of shareholders held on October 14,2005, the Company increased its aggregate number of authorized shares of commonstock from 100,000,000 shares with no par value to 500,000,000 shares with nopar value.

 

**11.****                              ****OTHER PAYABLES AND ADDITIONALPAID-IN CAPITAL**

 

Asa result of the reorganization with CTGH, as described in Note 2 hereof, thepaid-in capital of CTGH became the additional paid-in capital of PVGS underaccounting rules for that event.

 

Uponclosing of the reorganization, a balance of other payables of PVGS in theamount of US$74,012 incurred and recorded prior to the reorganization wasbrought forward and a debit in the same amount was made to additional paid-incapital consequently. At the end of June 2005, it was determined that suchbalance of other payables was brought forward in error, and the previousentries were reversed accordingly.

 

**12.****                              ****COMMITMENTS AND CONTINGENCIES**

 

Asat December 31, 2005 and 2004, the Company had commitments undernon-cancelable operating lease payments in respect of land and buildings asfollows:

 

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| ** ** | ** ** | **As at December 31,** | ** ** |
|------------|------------|-----------------------------|------------|
| ** ** | ** ** | **2005**                    | ** ** | **2004** | ** ** |
| ** ** | ** ** | **US$**                     | ** ** | **US$** | ** ** |
| 2005       |       | **—**                  |       | 4,756 |   |
| 2006       |       | **—**                  |       | — |   |
|       |       | **—**                  |       | 4,756 |   |

 

Other than the operatinglease commitments listed above, there were no material outstanding capitalcommitments.

 

Summaryof lease expenses is as follows:

 
| ** **      | ** ** | **Year ended December 31,** | ** ** |
|-----------------|------------|----------------------------------|------------|
| ** **      | ** ** | **2005**                         | ** ** | **2004** | ** ** |
| ** **      | ** ** | **US$**                          | ** ** | **US$** | ** ** |
| Rental expenses |       | **9,068**                        |       | 113,980 |   |

 

**13.****                              ****GROUP RESTRUCTURING OF CTGH**

 

CTGH,PVD and PVI were separate entities wholly owned by the same shareholder before April 2002.For the purpose of the reorganization as described in Note 2 hereof, thecorporate restructuring of CTGH took place in April 2002, and as a result,PVD and PVI became wholly owned subsidiaries of CTGH with no substantivechanges in the shareholder’s interest.

 

Thegroup restructuring of CTGH involved transfers among entities under commoncontrol and was accounted for in a manner similar to a pooling of interests.Therefore, the consolidated financial statements of CTGH reflect the financialposition and results of operations as if the group structure had always been inexistence.

 

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| **ITEM 8.** | ** ** | **CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING  AND FINANCIAL DISCLOSURE** |
|-------------|------------|-------------------------------------------------------------------------------------------|

 

The Company has engaged Moores Rowland Mazars, formerly Moores Rowland,Hong Kong, chartered accountants and certified public accountants, as ourprincipal independent accountant to audit our financial statements, since June 23,2003.

 

In our two most recent fiscal years and any later interim period, therewas no changes in and no disagreements with our principal independentaccountant on any matters with regard to our accounting and financialdisclosure.

 

**ITEM 8A.****                   ****CONTROLS AND PROCEDURES**

 

Ourmanagement is responsible for establishing and maintaining adequate disclosurecontrols and procedures. Management carried out an evaluation, under thesupervision and with the participation of our chief executive officer and chieffinancial officer, of the effectiveness of the design and operation of ourdisclosure controls and procedures pursuant to Rule 13a-l5(e) and Rule 15d-15(e)under the Exchange Act. Based upon that evaluation, management concluded thatour disclosure controls and procedures were effective, as at the end of theperiod covered by this annual report on Form l0-KSB.

 

Ourmanagement is responsible for establishing and maintaining adequate internalcontrol over financial reporting. Management carried out an evaluation, underthe supervision and with the participation of our chief executive officer andchief financial officer, of the effectiveness of our internal control overfinancial reporting pursuant to Rule 13a-15(f) and Rule 15d-15(f) underthe Exchange Act. Based on that evaluation, management concluded that ourinternal control over financial reporting was effective, as at the end of theperiod covered by this annual report on Form l0-KSB.

 

Managementcarried out an evaluation, under the supervision and with the participation ofour chief executive officer and chief financial officer, of that whether anychanges in our internal control over financial reporting occurred during thelast quarter of the fiscal year 2005 pursuant to Rule 13a-15(d) and Rule 15d-15(d) underthe Exchange Act. Based on that evaluation, management concluded that there wasno change in our internal controls over financial reporting during the subjectperiod that has materially affected, or is reasonably likely to materiallyaffect, our internal controls over financial reporting.

 

Therequirements to provide an annual report of our management on internal controlsover financial reporting pursuant to Item308(a) of Regulation S-B and an attestation report of our registeredpublic accounting firm on our management’s assessment of internal control overfinancial reporting pursuant to Item 308(b) of Regulation S-B are not yetapplicable to the Company.

 

**ITEM 8B.****              ****OTHER INFORMATION**

 

**8B.1****                     ****COMPLETION OF DISPOSITION OFCTGH**

 

TheCompany filed a current report on Form 8-K with the SEC on November 18,2005, for Item 2.01, Completion of Acquisition or Disposition of Assets, andItem 9.01, Financial Statements and Exhibits, for disclosure of the completionof our disposition of CTGH.

 

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**8B.2****                     ****AMENDMENT TO ARTICLES OF INCORPORATION**

 

During the fourth quarter of the fiscal year covered by this Form 10-KSB,an amendment to our Articles of Incorporation was approved by our shareholdersat the special meeting of shareholders held on October 14, 2005, withregard to the increase of the number of our authorized shares of common stock.This amendment was effective immediately upon approval of our shareholders.

 

Theprovision adopted by amendment is as follows:

 

Attachment to Articles of Amendment to Articles of Incorporation ofPacific Vegas Global Strategies, Inc.:

 

Article V, Sentence One of the Corporation’s Articles ofIncorporation is amended to read as follows:

 

“The aggregate number of shares which the Corporation shall have theauthority to issue is Five Hundred Million (500,000,000) shares of common stockwith no par value.”

 

This amendment to our Articles of Incorporation was also filed withColorado Secretary of State on November 18, 2005, pursuant to sections7-90-301 and 7-110-106 of the Colorado Revised Statutes.

 

**PART   III**

 
| **ITEM 9.** | **DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL  PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT** |
|-------------|--------------------------------------------------------------------------------------------------------------------------------|

 

**9.1****                             ****DIRECTORS AND EXECUTIVEOFFICERS**

 

Information of our directors and executive officers is set forth asfollows:

 
| **Name**      | ** ** | **Age** | ** ** | **Office (1)**                                            | ** ** | **Term Expires ((2)** |
|---------------|------------|---------|------------|----------------------------------------------------------------|------------|---------------------------------|
| Raymond  Chou |       | 45      |       | Director  and Secretary, President and Chief Executive Officer |       | 2006                            |
|          |       |    |       |                                                           |       |                            |
| Richard  Wang |       | 52      |       | Executive  Vice President and Chief Financial Officer          |       |                            |

 

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(1)                                 The business address is 16/F, Winsome House,73 Wyndham Street, Central, Hong Kong.

(2)                                 The term of office of each officer is at thediscretion of the board of directors.

 

**Raymond Chou**,Director and Secretary, President and Chief Executive Officer. Mr. Chouholds a bachelor degree in business administration from the University ofMacau. Mr. Chou has been in his current positions since January 2003.He also served as the managing director for the period of June 2000through November 2005 for CTGH, which was a wholly owned subsidiary of theCompany for the period of January 2003 through November 2005. Mr. Chouwas in the position as the managing director of Shanghai HYD Industries Ltd.for the period of May 1999 through January 2003.

 

**Richard****Wang**, Executive VicePresident and Chief Financial Officer. Mr. Wang holds a master degree ineconomics from Fudan University. Mr. Wang has been in his currentpositions since January 2003. He also served as a director for the periodof June 2000 through November 2005 for

 

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CTGH,which was a wholly owned subsidiary of the Company for the period of January 2003through November 2005. Mr. Wang was in the position as the generalmanager for Shanghai HYD Industries Ltd. for the period of June 1996through June 2000.

 

The above listed persons have been the only two executive officers andonly two employees of the Company since January 1, 2005. There was noother persons nominated or chosen to any positions as directors or executiveofficers for the Company during the period covered by this report..

 

None of our existing directors and/or executive officers holds anypositions as director or officer in any other reporting companies. There is nofamily relationships among our existing directors and executive officers.

 

Noneof our existing directors and/or executive officers has been involved in theirlives in any legal proceedings or such events as required to be disclosed underItem 4.01(d) of Regulation S-B.

 

Therehas been no material changes to the procedures by which our shareholders may recommendnominees to our board of directors since our last disclosure in response to therequirements of Item 7(d)(2)(ii)(G) of Schedule 14A and Item 4.01(g) ofRegulation S-B.

 

**9.2****                              ****COMPLIANCE WITH SECTION 16(A) OFTHE EXCHANGE ACT**

 

Basedsolely upon a review of Forms 3 and 4 and amendments thereto furnished to uspursuant to 17 CFR 240.16a-3(e) during our most recent fiscal year and Form 5and amendments thereto furnished to us with respect to our most recent fiscalyear, and any written representation from the reporting person (as hereinafterdefined) that no Form 5 is required, we are not aware of any person who,at any time during the fiscal year, was a director, officer, beneficial ownerof more than ten percent of any class of our equity securities registeredpursuant to Section 12 of the Exchange Act (“reporting person”) thatfailed to file on a timely basis, as disclosed in the above Forms, reportsrequired by Section 16(a) of the Exchange Act during the most recentfiscal year or prior fiscal years.

 

**9.3****                              ****AUDIT COMMITTEE AND AUDITCOMMITTEE FINANCIAL EXPERT**

 

Currently the Company does not have a separately-designated standingaudit committee established in accordance with section 3(a)(58)(A) of theExchange Act, or an equivalent committee performing similar functions. Ourentire board of directors is acting as the audit committee for the Company asspecified in section 3(a)(58)(B) of the Exchange Act.

 

Currentlythe Company does not have at least one audit committee financial expert servingon our audit committee or our board of directors which is acting as the auditcommittee, due to the status that the Company has remained as a non-operatingpublic shell since December 2004.

 

**9.4****                              ****CODE OF ETHICS**

 

TheCompany has adopted a code of ethics that applies to all of our employees,including our chief executive officer and chief financial officer, and hasfiled a copy of such code of ethics with the SEC as Exhibit 14.1 to ourannual reports on Form 10-KSB for the fiscal years ended December 31,2003 and 2004 respectively, pursuant to Item 4.06 of Regulation S-B. However,since the Company is no longer engaged in or related to the business ofsportsbook, certain sections thereof specifically related to the business ofsportsbook are to be amended accordingly.

 

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**ITEM 10.****                    ****EXECUTIVE COMPENSATION**

 

**10.1****                      ****SUMMARY COMPENSATION TABLE**

 

Effective as of January 1, 2005, based upon a mutual agreementbetween the Company and our chief executive officer and chief financialofficer, the only two executive officers and only two employees of the Company,there has been no compensation or remuneration from the Company, whether incash or in kind, awarded to, earned by and/or paid to our chief executiveofficer and chief financial officer for their services rendered in allcapacities to the Company.

 

The following table, and its accompanying explanatory footnotes,presents the information of annual and long-term compensation, including allplan and non-plan compensation, whether in cash or non-cash, awarded to, earnedby and/or paid to our chief executive officer and chief financial officer fortheir services rendered in all capacities to the Company and its subsidiariesfor the last three fiscal years ended December 31, 2005, 2004 and 2003.Other than the compensation listed below, there has been no compensation fromthe Company, whether in cash or non-cash, by plan or non-plan, awarded to,earned by and/or paid to any of our executive officers.

 
| **Name  and  Principal Position** | ** ** | **Fiscal Year** | ** ** | **Basic  Salary** | ** ** | **Bonus** | ** ** | **Options  Granted** | ** ** | **Other Compensation  (1)** | ** ** |
|-----------------------------------|------------|-----------------|------------|-------------------|------------|-----------|------------|----------------------|------------|-----------------------------|------------|
| ** **                        | ** ** | ** **      | ** ** | **US$**           | ** ** | **US$**   | ** ** | **US$**              | ** ** | **US$**                     | ** ** |
| Raymond Chou                      |       | 2005            |       | —            |       | —    |       | —               |       | —                      |       |
| Chief Executive Office            |       | 2004            |       | 83,333            |       | —    |       | —               |       | —                      |       |
|                              |       | 2003            |       | 83,333            |       | —    |       | —               |       | —                      |       |
| Richard Wang                      |       | 2005            |       | —            |       | —    |       | —               |       | —                      |       |
| Chief Financial Officer           |       | 2004            |       | 39,000            |       | —    |       | —               |       | 23,076                      |       |
|                              |       | 2003            |       | 39,000            |       | —    |       | —               |       | 23,076                      |       |

 

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(1)  Other compensation paid tothe chief financial officer for the fiscal years 2003 and 2004 was the director’sfees for his services rendered in the capacity as a director for CTGH, theCompany’s wholly owned subsidiary during that time.

 

**10.2****                      ****SUMMARY OF OPTION GRANTS**

 

There has been no grants of any stock options made to any executiveofficers or any employees of the Company or its subsidiaries in the last threefiscal years since the Company’s reorganization with CTGH in January 2003.

 
| **ITEM 11.** | **SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND****MANAGEMENT** **AND  RELATED STOCKHOLDER MATTERS** |
|--------------|-----------------------------------------------------------------------------------------------------------------|

 

The following table sets forth the number of shares of our common stockowned beneficially as at December 31, 2005 by each person known by us tohave owned beneficially more than five percent of such shares then outstanding,by each of our directors and officers and by all of our directors and officersas a group. This information gives effect to securities deemed outstandingpursuant to Rule 13d 3(d)(l) under the Securities Exchange Act of 1934, asamended. As to the knowledge of our management, no person owns beneficiallymore than five percent of the Company’s outstanding

 

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sharesof common stock as at December 31, 2005 except as set forth below.

 
| **Name  of Beneficial Owner**                        | ** ** | **Amount and Nature of  Beneficial Owner** | ** ** | **Percentage of Class  Beneficially Owned** | ** ** |
|------------------------------------------------------|------------|--------------------------------------------|------------|---------------------------------------------|------------|
|                                                 |       | 42,720,000                                 |       | 42.736                                      | %          |
| Raymond Chou (1)                                     |       | Common Stock                               |       | Common Stock                                |       |
|                                                 |       | 5,700,000                                  |       | 5.702                                       | %          |
| Kwan Sin Yee (2)                                     |       | Common Stock                               |       | Common Stock                                |       |
| Richard Wang (1)                                     |       | —                                     |       | —                                      |       |
|                                                 |       | 42,720,000                                 |       | 42.736                                      | %          |
| All directors and  executive officers as a group (1) |       | Common Stock                               |       | Common Stock                                |       |

 

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(1)          The business address is 16/F, Winsome House, 73 Wyndham Street, Central,Hong Kong.

(2)          The business address is 7/F, Flat B, 110 Soy Street, Kowloon, Hong Kong.

 

**ITEM 12.       CERTAINRELATIONSHIPS AND RELATED TRANSACTIONS**

 

Therewas no related party transactions other than the private financing by loansfrom our principal shareholder, who is also the sole director of the Company,during the last two fiscal years ended December 31, 2005 and 2004. Allprivate loans from the principal shareholder to the Company were unsecured,interest free and not subject to fixed term of repayment.

 

Furtherdetails of related party transactions for the fiscal years 2005 and 2004 areset forth in Note 9 to the consolidated financial statements presented underItem 7 hereof.

 

**ITEM 13.       EXHIBITS**

 

Thefollowing exhibits are incorporated to this annual report on Form 10-KSB:

 
| Exhibit 2.1  |   | Share  Exchange Agreement (dated November 20, 2002, for acquisition of CTGH)  (1)                          |
|-------------------|--------|-----------------------------------------------------------------------------------------------------------------|
| Exhibit 2.2  |   | Stock  Purchase Agreement (dated July 8, 2005, for disposition of CTGH) (2)                                |
| Exhibit 3.1  |   | Articles  of Incorporation (dated December 11, 1990) (3)                                                   |
| Exhibit  3.2      |   | Articles  of Amendment (dated April 21, 1993 and April 19, 1994 respectively)  (3)                    |
| Exhibit 3.3  |   | Articles  of Amendment (dated October 14, 2005)                                                            |
| Exhibit 3.4  |   | Bylaws  (dated January 3, 1991) (3)                                                                        |
| Exhibit 3.5  |   | Amended  Bylaws (dated May 12, 1993) (3)                                                                   |
| Exhibit 13.1 |   | Annual  Report on Form 10-KSB for Fiscal Year 2004 (dated March 31, 2005)  (4)                        |
| Exhibit 14.1 |   | Code  of Corporate and Employee Conduct, as amended (dated June 1, 2004) (5)                               |
| Exhibit 20.1 |   | Proxy  Statement (dated September 2, 2005) (6)                                                             |
| Exhibit 31.1 |   | Certification  of Chief Executive Officer pursuant to Rule 13a-14(a)                                       |
| Exhibit 31.2 |   | Certification  of Chief Financial Officer pursuant to Rule 13a-14(a)                                       |
| Exhibit 32.1 |   | Certification  of Chief Executive Officer pursuant to Rule 13a-14(b) and 18 U.S.C.  Section 1350 |
| Exhibit 32.2 |   | Certification  of Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C.  Section 1350 |

 

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| (1) |   | Incorporated  by reference to Exhibit 2 to the issuer’s amended annual report on Form 10-KSB/A  for the fiscal year ended December 31, 2002, filed with the SEC on October 7,  2003. |
|-----|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2) |   | Incorporated  by reference to Exhibit 99.1 to the issuer’s current report on Form 8-K,  filed with the SEC on July 11, 2005.                                                              |
| (3) |   | Incorporated  by reference to Exhibits 3.1 through 3.5 to the issuer’s amended Form 10-SB/A,  filed with the SEC on May 20, 2002.                                                              |
| (4) |   | Incorporated  by reference to the issuer’s annual report on Form 10-KSB for the fiscal year  ended December 31, 2004, filed with the SEC on March 31, 2005.                                    |
| (5) |   | Incorporated  by reference to Exhibits 14.1 to the issuer’s annual report on Form 10-KSB  for the fiscal year ended December 31, 2004, filed with the SEC on March 31,  2005.             |
| (6) |   | Incorporated  by reference to the issuer’s definitive proxy statement on Schedule 14A,  filed with the SEC on August 26, 2005.                                                                 |

 

**ITEM 14.       PRINCIPAL ACCOUNTANT FEES AND SERVICES**

 

(1)          **Audit Fees.** The aggregate fees billed for each of thelast two fiscal years for professional services rendered by our principalaccountant for the audit of our annual financial statements and review offinancial statements included in our quarterly reports on Form 10-QSB orservices that are normally provided by the accountant in connection withstatutory and regulatory filings or engagements for those fiscal years wereUS$37,000 for fiscal 2005 and US$80,000 for fiscal 2004. 

 

(2)          **Audit Related Fees.** The aggregate fees billed in each of the lasttwo fiscal years for assurance and related services by our principal accountantthat are reasonably related to the performance of the audit or review of ourfinancial statements and are not reported under item (1) above were nilfor fiscal 2005 and US$1,500 for fiscal 2004.

 

(3)          **Tax Fees.** The aggregate fees billed in each of the lasttwo fiscal years for professional services rendered by our principal accountantfor tax compliance, tax advice, and tax planning were nil.

 

(4)          **All Other Fees.** The aggregate fees billed in each of the lasttwo fiscal years for products and services provided by our principal accountantother than the services reported in items (1), (2) and (3) above werenil.

 

(5)          We do not currently have a separate auditcommittee. Rather, our board of directors serves as the audit committee. Ourboard of directors approved all of the services described in items (2), (3) and(4) above.

 

 

**SIGNATURES**

 

In accordance with Section 13 or 15(d) of the Exchange Act,the registrant caused this report to be signed on its behalf by theundersigned, thereunto duly authorized.

 

**PACIFICVEGAS GLOBAL STRATEGIES, INC.**

Registrant

 
| Date:  | March 31,  2006                   |   | By: | /s/  RAYMOND CHOU |   |
|--------|----------------------------------------|--------|-----|-------------------|--------|
|   | Raymond  Chou                          |
|   | President  and Chief Executive Officer |

 

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In accordance with theExchange Act, this report has been signed below by the following persons onbehalf of the registrant and in the capacities and on the dates indicated.

 
| **NAME**          | ** ** | **TITLE**  | ** **                           | **DATE**   |
|-------------------|------------|------------|--------------------------------------|------------|
| ** **        | ** ** | ** ** | ** **                           | ** ** |
| /s/  RAYMOND CHOU |       |       | President,  Chief Executive Officer, |       | March 31,  2006 |
| Raymond  Chou     |       |       | Secretary  and Director              |       |   |
|              |       |       |                                 |       |   |
|              |       |       |                                 |       |   |
| /s/  RICHARD WANG |       |       | Executive  Vice President            |       | March 31,  2006 |
| Richard  Wang     |       |       | and  Chief Financial Officer         |       |   |

 

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