UnitedStates

**SECURITIES AND EXCHANGE COMMISSION**

Washington,D.C. 20549

 

**FORM 10-KSB**

 

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

 

Forthe Fiscal Year Ended December 31, 2003

 

CommissionFile Number 0-49701

 

 

**PACIFIC VEGAS GLOBAL STRATEGIES, INC.**

(Nameof small business issuer in its charter)

 

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

 

**41/F, Unit4112-4113**

**Office Tower, ConventionPlaza**

**No. 1, Harbour Road, Wanchai,Hong Kong**

(Address of Principal Executive Offices)

 

**(011) (852) 2802-2118**

(Issuer’s Telephone Number, Including AreaCode)

 

Securitiesregistered under Section 12(g) of the Exchange Act:

 

**Common Stock, with No ParValue**

(Title of Class)

 

Checkwhether the issuer (1) filed all reports required to be filed bySection 13 or 15 (d) of the Exchange Act during the past 12 months (or forsuch shorter period that the registrant was required to file such reports), and(2) has been subject to such filing requirements for the past 90 days.

          YES  [X]          NO  [   ]

 

Checkif disclosure of delinquent filers in response to Item 405 of Regulation S-B isnot contained in this form, and no disclosure will be contained, to the best ofregistrant’s knowledge, in definitive proxy or information statementsincorporated by reference in Part III of this Form 10-KSB or any amendment tothis Form 10-KSB.  [X]

 

Stateissuer’s revenues for its most recent fiscal year:  **US$1,702,762**.

 

Statethe aggregate market value of the voting and non-voting common equity held bynon-affiliates: **US$18,337,440**.*

 

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Statethe number of shares outstanding of each of the issuer’s classes of commonequity, as of the latest practicable date: **99,963,615**shares of Common Stock with No Par Value as of March 31, 2004.

 

Documentsincorporated by reference:  NONE

 

TransitionalSmall Business DisclosureFormat:          YES  [  ]          NO  [X]

 

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*                 Theaggregate market value was determined by multiplying the number of outstandingshares (excluding those shares held of record by officers, directors andgreater than five percent shareholders) by **US$0.40**,the average bid and asked price of the registrant’s common stock as ofMarch 31, 2004, such date being within 60 days prior to the date of filing.

 

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**PART I**

 

**ITEM 1.****                                                    ****DESCRIPTION OF BUSINESS**

 

**1.****             ****Introduction**

 

Allstatements other than statements of historical fact included in this annualreport regarding our financial position and operating and strategic initiativesand addressing industry developments are forward-looking statements. Where, inany forward-looking statement, we or our management expresses an expectation orbelief as to future results, such expectation or belief is expressed in goodfaith and believed to have a reasonable basis, but there can be no assurancethat the statement of expectation or belief will result or be achieved oraccomplished. Factors which could cause actual results to differ materiallyfrom those anticipated include but are not limited to general economic, financialand business conditions; competition in the industry of sports gaming andparticularly, online sports gaming; the business abilities and judgment ofpersonnel; the impacts of unusual items resulting from ongoing evaluations ofbusiness strategies; and changes in business strategies.

 

Ourprincipal executive office is located at 41/F, Unit 4112-4113, Office Tower,Convention Plaza, No. 1, Harbour Road, Wanchai, Hong Kong, telephone (852)2802-2118.

 

**2.****             ****Acquisition of Cyber Technology Group Holdings Ltd. (“CTGH”)**

 

OnNovember 25, 2002, Pacific Vegas Global Strategies, Inc., formerly knownas Goaltimer International, Inc. (the “Company”), entered into an agreement forshare exchange with Cyber Technology Group Holdings Ltd. (“CTGH”) for theCompany to acquire CTGH through a plan of share exchange under the laws ofColorado. Pursuant to the share exchange agreement, the Company would acquire100% of the issued and outstanding shares of CTGH, in exchange for 60,000,000new shares of common stock of the Company. On December 12, 2002, ourshareholders approved the plan of share exchange.

 

Theclosing of this transaction was proposed to take place on December 22,2002; however, the transaction was actually executed and concluded onJanuary 8, 2003, at which time control of the Company passed to theshareholders of CTGH, and CTGH became a wholly owned subsidiary of the Company.

 

CTGHwas incorporated in the British Virgin Islands as an investment holding companyin June 2000. CTGH owns 100% of the capital stock of Pacific VegasDevelopment Ltd. (“PVD”).

 

PVDis an IT company incorporated in Samoa in April 2000, engaged in thebusiness of system and software solutions development and technical supportingservices for e-business, especially e-gaming business. PVD is the soleshareholder of Pacific Vegas International Ltd. (“PVI”).

 

PVIis a company incorporated and located in the Commonwealth of Dominica sinceApril 2000, operating an off-shore business of international sportsbookunder a legitimate International Gaming License granted by the Government ofthe Commonwealth of Dominica.

 

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Sincethe Company was a non-operating public shell before its acquisition of CTGH,the nature of the acquisition has been treated as a capital transaction orrecapitalization in substance, rather than a business combination. Theacquisition did not result in any purchase accounting adjustments or creationof goodwill.

 

**3.****             ****Description of Corporate Structure and Business Operations**

 

TheCompany was a non-operating public shell with no subsidiaries, associates oraffiliates and no active business operations prior to its acquisition of CTGH.The acquisition of CTGH has restructured the Company into an incorporated groupand switched the Company into active business operations, upon which theCompany has become one of a few listed companies engaged in e-gaming business.

 

•                  **CTGH – The Financial Operation Center for the Group**

 

CTGHhas been incorporated as an investment holding company primarily for acquiringestablished licensed e-gaming operators and e-gaming related softwaredevelopers through capital transactions. It has acquired and currently holds100% of the equity shares of PVD, which in turn owns 100% of the equity sharesof PVI. As an investment holding company, CTGH operates at the corporate levelas a financial operation center for the Group, focusing primarily on theGroup’s strategic financial planning and financial resources allocation,investment control, capital raising and capital transactions for businessacquisition, and capitalization of its subsidiary companies, while providinggeneral administration for the Group as well.

 

•                  **PVD – The Technical Operation Center for the Group**

 

PVDis the 100% shareholder of PVI, but it does not run nor is it involved in anygaming or wagering business operations of PVI. At the corporate level, PVD hasbeen operated as the technical operation center for the Group.

 

PVDhas been established as an IT specialist in system and software solutionsdevelopment and technical supporting services for e-business, especiallye-gaming business, with its expertise in the areas of turn-key projects fore-business operation systems, WAN/LAN/VPN network architecture and engineering,internet traffic management and security control, customized data center development,website design and development, comprehensive e-gaming system solutions andmulti-language platforms for e-gaming systems, and VoIP solutions for callcenter operations. PVD has not yet commercialized its products and services tothe market, and its operations have been so far primarily for supporting thetechnical needs of PVI.

 

PVDdelivered a turn-key project, which is an integrated system and networksolution with a full suite of integrated technical supporting programs, inestablishing the fully computerized e-gaming operation systems for PVI.

 

PVDhas been providing a full range of technical support to PVI since it startedoperations, including systems audit, backup, diagnoses, upgrades andmaintenance, websites maintenance and upgrades, on-going development of newoperating platforms, installations and integrations of new system components,applications of new technical enhancements, monitoring of systems security anddiagnosis of systems efficiency on a real-time basis, trouble-shooting and emergency

 

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respondingon a full time 24 hour/7 day per week basis, to ensure the best technicalenvironment for PVI’s business operations.

 

PVDhas been recently focusing on developing a new comprehensive software andnetwork solution for online sportsbook operations for soccer events toaccommodate PVI’s needs for expansion of its business.

 

•                  **PVI – The Revenue Operation Center for the Group**

 

Incorporatedand located in the Commonwealth of Dominica as an e-gaming company sinceApril 2000, PVI has been granted an International Gaming License by theGovernment of Dominica to conduct an off-shore business of internationalsportsbook and cyber casino by way of telecommunications and the Internet. Suchlicense is subject to annual renewal under the laws of Dominica, and PVI hasbeen able to renew its International Gaming License every year since it hasbeen granted. PVI’s current International Gaming License is posted at itswebsite (*http://www.pacificvegas.com/license.html*)for public information.

 

Aftera one year trial of operations by a contracted professional operator under amanagement agreement, PVI commenced its own operations in February 2002.PVI’s current e-gaming business operation consists of an internationalsportsbook, and all PVI’s revenue is derived from its operations of asportsbook.

 

Sportsbookoperations set out and offer various wagering options at various prices, or asknown more commonly, odds or lines, for wagering on sports events (games) andtake wagers at such prices, to earn a percentage of total wagers after payoutof players winnings. The principal rule in sportsbook operations is to avertrisks of an open position on a game to ensure earnings by achieving a balancedposition on the wager book of the game. A balanced position means that half ofthe total wagers is on one side and the other half is on the opposite side.This could be achieved by monitoring and changing the prices as necessary todivert wagering demands until the wagers in dollar amount line up on both sidesof the book. This has been the principal guideline for PVI’s sportsbookoperations.

 

PVI’ssportsbook currently offers wagering options on the following selected sportsevents:

 

ProBaseball (Major League Baseball, MLB) games,

ProBasketball (National Basketball Association, NBA) games,

ProFootball (National Football League, NFL) games,

CollegeBasketball (National Collegiate Athletic Association, NCAA) games,

CollegeFootball (National Collegiate Athletic Association, NCAA) games, and

ProHockey (National Hockey League, NHL) games.

 

PVIoperates its sportsbook by a fully computerized call center for telephonebetting and a web-based sportsbook system for internet online wagering. Thecall center supports international telephone betting and complete customerservices in multi-language (English and Asian languages), while the web-basedsportsbook system supports live odds updating and internet online wagering onlyin English.

 

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Sincemost of PVI’s clients are from Asian countries, the call center has beenhandling more than 90% of PVI’s sportsbook business due to language limitationsof the online wagering platform.

 

Boththe computerized call center and the web-based sportsbook system have beenoperated using one integrated sports wagering software system, IQ-SOFTECH undera license agreement, which is one of the best certified integrated sportswagering solutions developed by IQ-Ludorum PLC, a leading developer andprovider of sports wagering software solutions which is listed on the LondonStock Exchange (AIM), on a customized branding platform jointly developed byPVD. The call center has also been using a customized VoIP (IAD) voicemessaging solution developed by PVD for recording and retrieving customer callsfor transaction research and audit purposes.

 

PVI’sfully computerized sports wagering system is powerful and highly efficient. Thesystem processes immediate information on the wagers of each game that havebeen entered either from the call center ticketing or the web-based onlineticketing and calculates aggregate odds and wager positions on a real timebasis. Such immediate information of aggregate odds and wager positions iscritical for adjusting price quotations toward balancing the wager book. Thesystem also calculates the betting result of each wager and updates the balanceof each account automatically once the game result has been posted.

 

Inyear 2002, PVI’s sportsbook also offered wagering options and took wagers onthe FIFA World Cup 2002, which is the biggest event of soccer sport takingplace once every four years. Since the IQ-SOFTECH wagering system does notsupport wagering operations on soccer, the operation was on a manual basis, andPVI’s sportsbook operation on soccer events was discontinued when the World Cup2002 finished.

 

Forthe period of February 1 through December 31, 2002, PVI’s sportsbookoperations recorded a total turnover of sports wagers of approximately US$94.10million, including approximately US$34.96 million on the FIFA World Cup 2002and approximately US$59.14 million on other sports events, and generated asportsbook revenue (net wager earnings from sportsbook, which is the net amountof total sports wagers less related payout) of US$2.23 million, includingUS$0.27 million from operations on the FIFA World Cup 2002 and US$1.96 millionfrom operations on other sports events.

 

Forthe fiscal year ended December 31, 2003, PVI’s sportsbook operationsachieved a total turnover of sports wagers (gross wagers) of US$94.47 millionand a total revenue of approximately US$1.70 million.

 

**4.****             ****Sales and Marketing**

 

PVI’ssales and marketing efforts have been focused on Asia and Europe, withapproximately 90% of its business originating from Asian countries in terms ofdollar amount and number of clients.

 

Overthe past three years, PVI has successfully established its own brand name of“Pacific Vegas”, which is now well known, particularly in Asia, as one of theleading profiles in the e-gaming industry, with excellent credibility. “PacificVegas” as the trademark of PVI has been registered in the Commonwealth ofDominica.

 

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PVIis one of the earliest sportsbook operators that introduced the major Americansports (NBA, NFL, MLB, NCAA College Basketball and College Football, and NHL)events into the Asian sportsbook market and conducted a series of marketingactivities to promote the business. During 2003, PVI made a strategic change ofits pricing approaches in its sportsbook operations to attract more business toincrease its market share, and the result has been positive and encouraging.

 

Havingrealized the tremendous potential of the Asian sportsbook market for soccerevents, PVI has planned to re-launch its sportsbook operations on soccerevents, and  has been working togetherwith PVD to use today’s best technology available to build up a web-basedintegrated operation platform supporting a wide range of wagering options onsoccer events.

 

Ithas been PVI’s policy that players with PVI’s sportsbook must be over 18 yearsold and PVI does not accept clients from the United States, Canada, Hong Kongand Dominica. PVI has posted such policy at its website (*http://www.pvsportsbook.com/signup*) andimplemented in its computerized system an effective mechanism of AgeVerification by credit card authorization (or ID verification) and Location Verificationby IP address authentication, which meets the standards of the e-gamingindustry, to ensure the compliance of this policy. The compliance of thispolicy has been monitored by the regulatory authorities of Dominica to satisfythe statutory criteria under the laws of Dominica for annual renewal of ourInternational Gaming License.

 

**5.****             ****Competition**

 

Weface competition from other sportsbook operators throughout the world. Therecan be no assurance that competition from other sportsbooks that also retaininternational operations whether by way of telephone betting services or onlinewagering facilities will not have a material adverse effect on our operatingresults. The possible deregulation of the gaming industry may reduce thedistinction between various forms of gaming and may also increase competitionfrom operators in other gaming sectors. We intend to seek underlying growth forour business through the further development of our products and channels andthrough continued investment in our facilities. There can be no assurance,however, that such initiatives will result in improved operating profits forus. In addition, there can be no assurance that any further development orinvestment by us will not be matched by our competitors.

 

**6.****             ****Employees**

 

AtDecember 31, 2003, we had a total of 23 employees, including 1 part timeand 22 full-time employees. Currently, we have 2 employees for sales, marketingand customer relations, 12 for operations in Dominica, 4 (including 1 parttime) for systems and technical supporting, and 5 for administration.

 

**7.****             ****Additional Information**

 

Compliancewith federal, state and local provisions which have been enacted regarding thedischarge of materials into the environment or otherwise relating to theprotection of the environment has not had, and is not expected to have, anyadverse effect upon our capital expenditures, earnings or competitive position.We are not presently a party to any litigation or administrative proceedingswith respect to our compliance with such environmental standards. In

 

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addition,we do not anticipate being required to expend any significant capital funds inthe near future for environmental protection in connection with our operations.

 

**ITEM 2.****                                                    ****DESCRIPTION OF PROPERTY**

 

Welease our executive offices in Hong Kong, consisting of 311 square meters,pursuant to a lease of 2 years at a monthly rent of US$6,410 which expiresJanuary 23, 2005. We lease our operations offices in Dominica, consistingof 180 square meters, pursuant to a lease of 3 years with automatic annualrenewal at a monthly rent of US$775.

 

Wedo not invest in, and have not adopted any policy with respect to investmentsin, real estate or interests in real estate, real estate mortgages orsecurities of or interests in persons primarily engaged in real estateactivities. It is not our policy to acquire assets primarily for possiblecapital gain or primarily for income.

 

**ITEM 3.****                                                    ****LEGAL PROCEEDINGS.**

 

Nomaterial legal proceedings to which we are a party or to which any of ourproperty is the subject are pending, and no such proceedings are known by us tobe contemplated. We are 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 no such proceedings are known by us to be contemplated. Nolegal actions are contemplated nor judgments entered against any of ourofficers or directors concerning any matter involving our business.

 

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

 

Nomatter was submitted during the fourth quarter of the fiscal year covered bythis report to a vote of security holders through the solicitation of proxiesor otherwise.

 

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**PART II**

 

**ITEM 5.****                                                    ****MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND SMALL BUSINESSISSUER PURCHASES OF EQUITY SECURITIES**

 

Ourcommon stock was traded on the OTC Bulletin Board under the symbol “PVEG.OB”from January 8, 2003 until September 26, 2003, at which time it wasmoved from OTC Bulletin Board to OTC Non- Bulletin Board for failure to complywith certain reporting requirements (NASD Rule 6530). It has since then tradedon the Pink Sheets under the symbol “PVEG.PK”. The nature of the market forcommon stocks trading on the Pink Sheets is limited, sporadic and highlyvolatile, and the absence of an active market may have an effect upon the highand low prices as reported. We are currently seeking to have our common stockre-listed for trading on the OTC Bulletin Board. The following information setsforth the high and low bid prices per share of our common stock for the periodsindicated as reported by the OTC Bulletin Board or the Pink Sheets:

 
| Quarter  Ended          |   | High     |   | Low      |   |
|-------------------------|--------|----------|--------|----------|--------|
|                    |   |     |   |     |   |
| March 31, 2003     |   | US$1.35  |   | US$1.3   |   |
| June 30, 2003      |   | US$0.60  |   | US$0.55  |   |
| September 30, 2003 |   | US$0.122 |   | US$0.105 |   |
| December 31, 2003  |   | US$0.150 |   | US$0.125 |   |

 

Thequotations set forth herein reflect inter-dealer prices, without retailmark-ups, mark-downs, or commissions, and may not necessarily represent actualtransactions.

 

Asof December 31, 2003, there were approximately 94 record and beneficialholders of our common stock.

 

Wehave not declared or paid any dividends to date.

 

Duringthe fiscal year ended December 31, 2003, we did not sell any equitysecurities that were not registered under the Securities Act of 1933, asamended, except as follows:

 

OnNovember 25, 2002, we entered into an agreement for share exchange withCyber Technology Group Holdings Ltd. (“CTGH”) for us to acquire CTGH through aplan of share exchange under the laws of Colorado. Pursuant to the shareexchange agreement, we acquired 100% of the issued and outstanding shares ofCTGH in exchange for 60,000,000 new shares of our common stock. OnDecember 12, 2002, our shareholders approved this plan of share exchange.The closing of this transaction was concluded on January 8, 2003, at whichtime we delivered the 60,000,000 shares and control passed to the shareholdersof CTGH, and CTGH became a wholly owned subsidiary of us.

 

Wedid not repurchase any of our equity securities within the fourth quarter ofthe fiscal year covered by this report.

 

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

 

TheManagement’s Discussion and Analysis or Plan of Operations in this reportcontains a number of forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933, as amended, andSection 21E of the Securities Exchange Act of 1934, as amended.  Such forward-looking statements are based onmanagement’s current projections or expectations with regard to the futureoperations of business. Although management believes that the assumptions madeand expectations reflected in such forward-looking statements are reasonable,there is no assurance that such assumptions or expectations will prove to becorrect and/or accurate, and as a result of certain risks and uncertainties,actual results of operations may differ materially.

 

**1.****             ****Critical Accounting Policies and Estimates**

 

Thepreparation of our financial statements in conformity with accountingprinciples generally accepted in the United States requires our management tomake estimates and assumptions that affect the amounts reported in ourfinancial statements and accompanying notes. Actual results could differ materially from those estimates.

 

Webelieve that the following are some of the more critical judgement areas in theapplication of our accounting policies that currently affect our financialcondition and results of operations.

 

Werecognize wagers revenue on a net basis in the consolidated statement ofoperations after a wager is accepted and the outcome of the bet is certain.

 

Wemaintain allowances for doubtful accounts for estimated losses resulting fromthe inability of our customers to make required payments. If the financialcondition of our customers were to deteriorate, resulting in an impairment oftheir abilities to make payments, additional allowances may be required whichwould result in an additional general and administrative expense in the periodof such determination was made.

 

Theabove listing is not intended to be a comprehensive list of all of ouraccounting policies. In many cases, the accounting treatment of a particulartransaction is specifically dictated by generally accepted  accounting principles, with no need formanagement’s judgment in their application. There are also areas in which  management’s judgment in selecting anyviable alternative would not produce a materially different result. See ouraudited financial statements and notes thereto which begin at “Item 7.Financial Statements” of this Annual Report on Form 10-KSB which containaccounting policies and other disclosures required by generally acceptedaccounting principles.

 

**2.****             ****Results of Operations**

 

•                  **Revenue**

 

TheCompany’s revenue for the fiscal year ended December 31,  2003 was US$1.70 million, all from thesportsbook operations of Pacific Vegas International Ltd. (“PVI”), the Company’swholly owned subsidiary incorporated and located in the Commonwealth ofDominica and conducting a business of international sportsbook under the lawsof the Commonwealth of Dominica.

 

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Thesportsbook operations for 2003 achieved total gross wagers of US$94.47 million.

 

Ascompared to the total gross wagers of US$94.81 million for the fiscal year2002, our total gross wagers for the fiscal year 2003 were decreased by US$0.34million or 0.36%. However, taking into account that in June 2002 there wasa total of gross wagers of US$34.97 million from PVI’s sportsbook operations onthe event of FIFA World Cup 2002, the biggest soccer event taking place onceevery four years, and for technical reasons PVI has suspended its sportsbookoperations on soccer events since the World Cup 2002 finished, the gross wagersfrom PVI’s sportsbook operations on non-soccer sports events for the fiscalyear 2003 had in fact grown up by US$34.63 million or 57.87%, which confirmsthe success of our change of pricing approaches in PVI’s sportsbook operationsto attract more business to increase our market share.

 

Ourrevenue for the fiscal year 2003 decreased by US$0.79 million or 31.80%,comparing to the revenue of US$2.5 million for the fiscal year of 2002, mainlydue to (1) in January 2002 there was a management fee income of US$0.25million from the prior contracted operator of PVI and such management fee wasterminated when PVI took over the operations as of February 1, 2002 uponcompletion of the management contract, and (2) the ratio of net wager earnings(net wager earnings against total wagers) on sportsbook operations for thefiscal year 2003 was 1.80%, while it was 3.31% (excluding net wager earnings onthe event of FIFA World Cup 2002) for the fiscal year 2002, as a result of ourchange of pricing approaches in PVI’s sportsbook operations to attract morebusiness to increase our market share and to minimize risks of open positionsin our wager books.

 

Throughour change of pricing approaches, our sportsbook business volume and marketshare in terms of gross wagers had grown up to a major sportsbook in the Asianmarket, and our ratio of net wager earnings had been adjusted to a conservativelevel of the industry, indicating a success in expansion of our business and ahealthy control of open position risks in sportsbook operations. As explainedearlier, sportsbook operations set out and offer various wagering options atvarious prices, or as known more commonly, odds or lines, for wagering onsports events (games) and take wagers at such prices, to earn a percentage oftotal wagers after payout of players winnings. The principal rule in sportsbookoperations is to avert risks of an open position on a game to ensure theearnings by achieving a balanced position on the wager book of the game. Abalanced position means that half of the total wagers is on one side and theother half is on the opposite side. A sportsbook could possibly achieve such abalanced position by monitoring and changing the prices as necessary to divertwagering demands until the wagers in dollar amount line up on both sides of thebook, and a sportsbook could possibly achieve such a balanced position onlywhen it has sufficient market share in terms of gross wagers in dollar amount.

 

Managementbelieves that through out the fiscal year 2003, we have restructured oursportsbook operations by fine-tune of our operational strategies, and as ashort-term result of such strategic changes, we experienced a decrease inrevenue for the fiscal year 2003, but the long-term result of such strategicchanges will benefit the Company by faster growth, lower open position risks,and better profitability in its sportsbook business.

 

•                  **Expenses**

 

Totalexpenses for the fiscal year 2003 was US$2.10 million, including US$1.74million for operating expenses (selling, general and administrative expenses)and US$0.36 million for

 

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depreciation.Comparing to fiscal year 2002, total expenses was less by US$0.27 million or11.30%, mainly due to our better control of expenses for manpower cost, networkand system expenses, and telecommunication expenses.

 

•                  **Loss**

 

TheCompany encountered a net loss of US$0.39 million for the fiscal year 2003,mainly due to the decrease in our revenue, while there was a net profit ofUS$0.14 million for the fiscal year 2002.

 

•                  **Liquidity and Capital Resources**

 

Atend of fiscal year 2003 the Company had a net increase of US$0.44 million inits cash flows.

 

Thefollowing major factors affected our cash flows for 2003:

(1)  net cash decrease: US$0.39 million for 2003net loss in operations, and

(2)  net cash increase: US$0.36 million fromdepreciation of fixed assets, US$0.15 million from collection of accountsreceivable, and US$0.32 million from repayment of due from a stockholder.

 

•                  **Forward-Looking Statements**

 

Allstatements other than statements of historical fact included in this AnnualReport regarding our financial position and operating and strategic initiativesand addressing industry developments are forward-looking statements.  Where, in any forward-looking statement, weor our management expresses an expectation or belief as to future results, suchexpectation or belief is expressed in good faith and believed to have areasonable basis, but there can be no assurance that the statement of expectationor belief will result or be achieved or accomplished.  Factors which could cause actual results to differ materiallyfrom those anticipated include but are not limited to general economic,financial and business conditions; competition in the online sports gamingindustry; the business abilities and judgement of personnel; the impacts ofunusual items resulting from ongoing evaluations of business strategies; andchanges in business strategy.  We do notintend to update these forward-looking statements.  You are advised to review the “Additional Cautionary Statements”section below for more information about risks that could affect ourfinancial results.

 

Asmentioned above, management believes that through out the fiscal year 2003, wehave restructured our sportsbook operations by fine-tune of our operationstrategies, and as a short-term result of such strategic change, we experienceda decrease of our revenue for the fiscal year 2003, but the long-term result ofsuch strategic change will benefit the Company by faster growth, lower openposition risk, and better profitability in its sportsbook business.

 

Managementexpects that in the fiscal year 2004 our business volume and market share interms of gross wagers in dollar amount will continue the momentum of rapidgrowth, our approaches to pricing and wager options offering will be moreflexible and more effective in diverting wager demands, our wager bookbalancing will be further improved towards optimization of wager bookpositions, and our ratio of net wager earning will provide betterprofitability.

 

InJune 2004, there will be an event of UEFA Euro 2004, one of the biggestsoccer events in the world taking place once every four years. Managementbelieves this will provide a good timing

 

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forPVI to re-launch its sportsbook operations on soccer events. As we haveplanned, our sportsbook operation team has been getting prepared for thisoperation, and we expect to achieve a positive result from this operation.

 

**3.****             ****Additional Cautionary Statements and Risk Factors**

 

•                  **The Gaming Licence**

 

Theoperation of our sportsbook business in the Commonwealth of Dominica is subjectto statutory licensing procedures and extensive governmental regulation.

 

Regulatoryauthorities typically require various permits, licences, findings ofsuitability and approvals to be held by sportsbook operators. The regulatoryauthorities in Dominica have discretion in the granting, renewing andcancellation of sportsbook permits and licences and require that such permitsand licences be renewed annually.

 

Eachof our relevant subsidiaries, and our applicable key personnel, currently holdall requisite permits, licences and approvals in Dominica. No assurance can begiven, however, that any new, renewed or subsequent permits, licences orapprovals that may be required of us or our key personnel in the future will begranted or that existing permits, licences or approvals will be renewed or willnot be cancelled.

 

•                  **Bad Debts**

 

Undercurrent law, gambling debts may not be enforced in certain countries and,therefore, we may be unable to collect accounts receivable from our customersin certain circumstances.  While wecarry out our business in such a manner so as to minimize this risk, there canbe no assurance that we will be able to recover all accounts receivable fromour customers in the future.

 

•                  **Laws and Regulations on Sports Gaming Activities in Various Jurisdictions**

 

Mostcountries regulate or, in some cases, prohibit sports gaming activities.Historically, the regulation of the gaming industry has been arranged at anational level and there is no international gaming regulatory regime.Accordingly, while we are satisfied that we comply with the laws andregulations in the Commonwealth of Dominica, the question of whether, or theextent to which, existing domestic legislation in other countries applies toour international sports wagering operations is uncertain. In certain countrieslegislation has been recently adopted or proposed to prohibit sports gamingwith offshore sportsbooks. In May 2002, the Hong Kong Legislative Councilapproved certain amendments to the Gambling Ordinance prohibiting Hong Kongresidents from placing wagers with offshore sportsbooks.

 

Dueto legal concerns, we do not accept wagers from persons registered in theUnited States, Canada, Hong Kong and Dominica. However, we cannot guaranteethat individuals may not evade the controls that we use to prevent this fromoccurring.

 

Althoughour operations comply with the relevant regulations in Dominica in which ouroperations are established, we have not considered the gaming laws andregulations in every jurisdiction where our wagering business come from.Accordingly, there can be no assurance that the

 

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applicationof existing or potential future laws and regulations, or the payment of licencefees or levies in jurisdictions from which we accept wagers, will not have amaterial adverse effect on the development or operation of our internationalactivities or have a material adverse effect on our results of operations.

 

•                  **Short-term Losses in Wagering Operations**

 

Incommon with other major sportsbook operators, we are not a “pool” bettingoperation. Our primary products involve fixed-odds wagering where winnings arepaid on the basis of the stake placed and the odds quoted, rather than derivedfrom a pool of stake money received from all customers. Consequently, there ispotentially no upper limit on the losses that could be incurred to us inrelation to each wagering event. A sportsbook’s odds are determined so as toprovide an average return to the sportsbook over a large number of events.There is an inherently high level of variation in gross win percentageevent-by-event and day-by-day. In the long-term the gross win percentage hasremained fairly constant, while in the short-term there is less certainty ofprofitability and we have from time to time experienced significant losses withrespect to individual events. The effect of future fluctuations andsingle-event losses on our operating results could be material in theshort-term.

 

•                  **Competition from Other Sportsbooks throughout the World.**

 

Therecan be no assurance that competition from other telephone and onlinesportsbooks that also retain offshore operations will not have a materialadverse effect on our operating results. The possible deregulation of the sports gaming industry may reduce thedistinction between various forms of sports gaming and may also increase thecompetition from operators in other gaming sectors. We intend to seekunderlying growth for our business through the further development of ourproducts and channels and through continued investment in our facilities. Therecan be no assurance, however, that such initiatives will result in improvedoperating profits for us. In addition, there can be no assurance that anyfurther development or investment by us will not be matched by our competitors.

 

•                  **Network Security, System Failure and Internet Connectivity**

 

Securetransmission of confidential information over internet is a critical element ofour operations.

 

Wehave experienced in the past no significant internet security problems.However, there can be no guarantee that our networks will not be vulnerable tounauthorized access, computer viruses and other security problems. Persons thatcircumvent security measures could use our confidential information orcustomers’ confidential information wrongfully or cause interruptions ormalfunctions in our operations. We may be required to expend significantadditional resources to protect against the threat of security breaches or toalleviate problems caused by any breaches. We may not be able to implementsecurity measures that will protect sufficiently against all known and unknownpresent and future security risks.

 

Ouroperations, including telephone wagering and our online wagering operations,are highly dependent on technology and advanced information systems, and thereis a risk that such technology or systems could fail or be hacked.

 

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Therecan be no assurance that any procedures will prevent or mitigate any materialadverse effect of such failure on our financial condition or operations.Similarly, there can be no assurance that the technology currently used by andbeing developed by us will be successful, or that it will not be renderedobsolete by new technologies introduced in the industry or adopted by ourcompetitors.

 

Ifwe fail to transmit customer information and payment details online in asecured manner, or if we otherwise fail to protect customer privacy in onlinetransactions, there is a risk that our current customers would stop accessingour online sites or that potential customers would be deterred from using ouronline sites. In addition, there can be no assurance that our sites will not besubject to disruption by hackers or other security breaches. These types ofevents could expose us to potential liability and could materially adverselyaffect our results of operations.

 

Internetconnectivity is critical to our operations, since our entire operations arebased on the internet - our web sites and online sportsbook wagering systemsare connected to and operated over the internet, our telephone wagering systemare operated by VoIP over the internet, and all wagering transaction data aretransmitted through the internet. There can be no assurance that our IDCprovided by local ISP in Dominica and connected to the continental backbone forglobal access will not be down or badly jammed, particularly during thehurricane season every year, and result in halt of our operations which couldmaterially adversely affect our financial performance.

 

•                  **Business Seasonality and Economic Climate**

 

Ourbusiness and operating results are affected by seasonality and, in particular,the schedule of sports events on which we offer wagering options and takewagers.

 

Theprofessional basketball and football tournament, from which a high proportionof our turnover and net wager earnings are derived, are weighted towards thefall and winter months. As a result, we have historically recorded higherturnover in the fall and winter months.

 

Ouroperating results are also affected by the schedules of other significantsporting events which may occur at regular but infrequent intervals, such asthe FIFA World Cup and UEFA European Championship taking place once every 4years. Cancellation of one or more significant sporting events, due to adverseweather conditions for example, or the curtailment of sporting events for anyother reasons would also impact on our operating results.

 

Inaddition, demand for our products, like those of other participants in thesports gaming industry, is influenced to a certain degree by general economictrends. There can be no assurance that our operating results will not beaffected by general economic trends in the future.

 

•                  **Protection of Proprietary Rights**

 

Wemay not be able to protect our proprietary rights and we may incur significantcosts in attempting to do so.

 

Oursuccess and ability to compete are dependent to a significant degree on ourtechnology and know-how. We rely on a combination of copyright, trade secretand trademark laws, as well as confidentiality and licensing agreements toprotect our proprietary rights. However, it may be

 

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possiblefor a third party to copy or otherwise obtain and use our software andnetworking system solutions, know-how or other proprietary information withoutauthorization or to develop similar software and networking systemsindependently. In addition, litigation may be necessary in the future toenforce our intellectual property rights, to protect our trade secrets, todetermine the validity and scope of the proprietary rights of others, or todefend against claims of infringement or invalidity. Such litigation, whethersuccessful or unsuccessful, could result in substantial costs and diversions ofresources, either of which could have a material adverse effect on ourbusiness, financial condition and operating results.

 

•                  **Adverse Changes Affecting the Sports Gaming Industry**

 

Adversechanges affecting the sports gaming industry, such as a change in sports gamingregulations or a decrease in the rate of growth and popularity of internetgaming, will negatively impact our profitability and our potential for growth.

 

Ourability to grow our business and operate profitably is substantially dependentupon the expansion of the sports gaming particularly e-gaming industry andfactors that are beyond our control. These factors include, among others:

 

-  thepace of development;

- changes in sports gaming regulation; and

-  thecontinued popularity of sports gaming as a leisure activity.

 

Anadverse change in any of these political, legal and other factors maynegatively impact our results of operations.

 

•                  **The Market for Our Stock**

 

TheMarket for Our Stock is Limited. Our common stock is currently traded on thePink Sheets under the symbol “PVEG.PK”. On April 30, 2004, the lastreported sale price of our common stock on the Pink Sheets was US$0.14 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 the commonstock. There can be no assurance that an active market for our common stockwill develop or be sustained. In addition, the stock market in general, andinternet and technology companies in particular, have experienced extreme priceand volume fluctuations that have often been unrelated or disproportionate tothe operating performance of such companies.

 

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 applicable topenny 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.  Those rules impose certain sales practicerequirements on brokers who sell penny stocks to persons other than establishedcustomers and accredited investors (generally institutions with assets in excessof US$5,000,000 or individuals with a net worth in excess of US$1,000,000). Fortransactions covered by the penny stock rules, the broker must make a specialsuitability determination for the purchaser and receive the purchaser’s writtenconsent to the transaction prior to the sale. Furthermore, the penny stockrules generally

 

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require,among other things, that brokers engaged in secondary trading of penny stocksprovide customers with written disclosure documents, monthly statements of themarket value of penny stocks, disclosure of the bid and asked prices anddisclosure of the compensation to the brokerage firm and disclosure of thesales person working for the brokerage firm. These rules and regulationsadversely affect the ability of brokers to sell our common shares and limit theliquidity of our securities.

 

**ITEM 7.****                                                    ****FINANCIAL STATEMENTS**

 

**TABLE OF CONTENTS**

 
| Independent Auditors’  Report                               |   |
|------------------------------------------------------------------|--------|
| 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 OFINDEPENDENT AUDITORS**

 

 

To the Stockholders and Board of Directors

Pacific Vegas Global Strategies, Inc.

(incorporated in Colorado with limitedliability)

 

 

We have audited the accompanying consolidatedbalance sheets of Pacific Vegas Global Strategies, Inc. as of December 31,2003 and 2002, and the related consolidated statements of operations,stockholders’ equity and cash flows for the years then ended.  These consolidated financial statements arethe responsibility of the Company’s management. Our responsibility is toexpress an opinion on these consolidated financial statements based on ouraudits.

 

We conducted our audits in accordance withauditing standards generally accepted in the United States of America.  Those standards require that we plan andperform the audit to obtain reasonable assurance about whether the financialstatements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting theamounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles usedand significant estimates made by management, as well as evaluating the overallfinancial statement presentation.  Webelieve that our audits provide a reasonable basis for our opinion.

 

In our opinion, the consolidated financialstatements referred to above present fairly, in all material respects, theconsolidated financial position of Pacific Vegas Global Strategies, Inc. as ofDecember 31, 2003 and 2002, and the results of its operations and its cashflows for the years then ended, in conformity with accounting principlesgenerally accepted in the United States of America.

 

 

Moores Rowland Mazars

Chartered Accountants

Certified Public Accountants

Hong Kong

 

April 1, 2004

 

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**PACIFIC VEGAS GLOBALSTRATEGIES, INC.**

CONSOLIDATEDSTATEMENTS OF OPERATIONS

For the Year Ended December 31, 2003 and2002

 
|                                                 |   | Note   |       | Year  Ended December 31, |       |
|------------------------------------------------------|--------|--------|------------|-------------------------------|------------|
| **2003**                                             |   | 2002   |       |
|                                                 |   |   |       | **US$**                       |       | US$ |   |
|                                                 |   |   |       |                          | ** ** |   |   |
| Revenue                                              |   |   |       | **1,702,762**                 | ** ** | 2,497,027 |   |
|                                                 |   |   |       |                          | ** ** |   |   |
| Expenses                                             |   |   |       |                          | ** ** |   |   |
| Selling, general  and administrative expenses        |   |   |       | **(1,741,280**                | **)**      | (2,010,326 | ) |
| Depreciation                                         |   |   |       | **(357,452**                  | **)**      | (355,904 | ) |
|                                                 |   |   |       | **(2,098,732**                | **)**      | (2,366,230 | ) |
|                                                 |   |   |       |                          | ** ** |   |   |
| Operating (loss)  profit                             |   |   |       | **(395,970**                  | **)**      | 130,797 |   |
| Interest income                                      |   |   |       | **8,222**                     | ** ** | 11,753 |   |
| (Loss) Profit  before income tax                     |   |   |       | **(387,648**                  | **)**      | 142,550 |   |
| Income tax  expense                                  |   |   |       | **-**                         | ** ** | - |   |
| Net (loss) profit                                    |   |   |       | **(387,648**                  | **)**      | 142,550 |   |
|                                                 |   |   |       |                          | ** ** |   |   |
| (Loss) Earnings per share –  Basic              |   | 5      | ** ** | **(0.0039**                   | **)**      | 0.0022 |   |
| Weighted average number of  common stock outstanding |   |   |       | **99,963,615**                | ** ** | 63,565,600 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

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**PACIFIC VEGAS GLOBALSTRATEGIES, INC.**

CONSOLIDATEDBALANCE SHEETS

As at December 31, 2003 and 2002

 
|                                                                                                                |   | Note   |       | As  at December 31, |       |
|---------------------------------------------------------------------------------------------------------------------|--------|--------|------------|--------------------------|------------|
| **2003**                                                                                                            |   | 2002   |       |
|                                                                                                                |   |   |       | **US$**                  |       | US$ |   |
| ASSETS                                                                                                              |   |   |       |                     | ** ** |   |   |
| Current assets                                                                                                      |   |   |       |                     | ** ** |   |   |
| Cash and cash  equivalents                                                                                          |   |   |       | **561,046**              | ** ** | 124,453 |   |
| Accounts  receivable, net of allowance for doubtful accounts                                                        |   |   |       | **162,406**              | ** ** | 311,961 |   |
| Due from a  stockholder                                                                                             |   | 9      | ** ** | **-**                    | ** ** | 339,434 |   |
| Other current  asset                                                                                                |   |   |       | **50,916**               | ** ** | 50,896 |   |
| Total current  assets                                                                                               |   |   |       | **774,368**              | ** ** | 826,744 |   |
|                                                                                                                |   |   |       |                     | ** ** |   |   |
| Property, plant  and equipment, net                                                                                 |   | 6      | ** ** | **911,075**              | ** ** | 1,265,628 |   |
| Deposits                                                                                                            |   | 7      | ** ** | **124,203**              | ** ** | 113,233 |   |
|                                                                                                                |   |   |       | **1,035,278**            | ** ** | 1,378,861 |   |
| TOTAL ASSETS                                                                                                        |   |   |       | **1,809,646**            | ** ** | 2,205,605 |   |
|                                                                                                                |   |   |       |                     | ** ** |   |   |
| LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                          |   |   |       |                     | ** ** |   |   |
| Current  liabilities                                                                                                |   |   |       |                     | ** ** |   |   |
| Accounts payable                                                                                                    |   |   |       | **74,012**               | ** ** | 59,493 |   |
| Accrued expenses                                                                                                    |   |   |       | **212,211**              | ** ** | 134,326 |   |
| Due to a  stockholder                                                                                               |   | 9      | ** ** | **-**                    | ** ** | 22,962 |   |
| Other payables                                                                                                      |   |   |       | **10,419**               | ** ** | 14,160 |   |
| Total current  liabilities                                                                                          |   |   |       | **296,642**              | ** ** | 230,941 |   |
|                                                                                                                |   |   |       |                     | ** ** |   |   |
| Commitments and  contingencies                                                                                      |   | 11     |       |                     | ** ** |   |   |
| Stockholders’ equity                                                                                           |   |   |       |                     | ** ** |   |   |
| Common stock                                                                                                        |   |   |       |                     | ** ** |   |   |
| Authorized:  No par value, 100,000,000 shares of common  stock as of December 31, 2003 and 2002           |   |   |       |                     | ** ** |   |   |
| Issued and outstanding:  No par value, 99,963,615 share of common  stock as of December 31, 2003 and 2002 |   |   |       | **-**                    | ** ** | - |   |
| Additional paid-in capital                                                                                          |   | 10     | ** ** | **2,425,988**            | ** ** | 2,500,000 |   |
| Accumulated losses                                                                                                  |   |   |       | **(912,984**             | **)**      | (525,336 | ) |
| Total stockholders’ equity                                                                                     |   |   |       | **1,513,004**            | ** ** | 1,974,664 |   |
| TOTAL LIABILITIES AND  STOCKHOLDERS’ EQUITY                                                                    |   |   |       | **1,809,646**            | ** ** | 2,205,605 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

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**PACIFIC VEGAS GLOBAL STRATEGIES,INC**

CONSOLIDATEDSTATEMENTS OF CASH FLOWS

For the Year Ended December 31, 2003 and2002

 
|                                                                              |   | Year  Ended December 31, |       |
|-----------------------------------------------------------------------------------|--------|-------------------------------|------------|
| **2003**                                                                          |   | 2002                          |       |
|                                                                              |   | **US$**                       |       | US$ |   |
| Cash flows from operating activities                                              |   |                          | ** ** |   |   |
| Net (loss) profit                                                                 |   | **(387,648**                  | **)**      | 142,550 |   |
| Adjustment to reconcile net income to net cash provided by operating  activities: |   |                          | ** ** |   |   |
| Depreciation of property, plant and equipment                                     |   | **357,452**                   | ** ** | 352,635 |   |
| Changes in operating assets and liabilities:                                      |   |                          | ** ** |   |   |
| Accounts receivable                                                               |   | **149,555**                   | ** ** | 638,039 |   |
| Deposits                                                                          |   | **(10,970**                   | **)**      | 13,443 |   |
| Other current asset                                                               |   | **(20**                       | **)**      | (50,896 | ) |
| Accounts payable                                                                  |   | **(59,493**                   | **)**      | (240,507 | ) |
| Accrued expenses                                                                  |   | **77,885**                    | ** ** | 39,907 |   |
| Other payables                                                                    |   | **(3,741**                    | **)**      | 13,036 |   |
| Net cash provided by operating activities                                         |   | **123,020**                   | ** ** | 908,207 |   |
|                                                                              |   |                          | ** ** |   |   |
| Cash flows from investing activities                                              |   |                          | ** ** |   |   |
| Purchases of property, plant and equipment                                        |   | **(2,899**                    | **)**      | (37,803 | ) |
| Net cash provided by (used in) investing activities                               |   | **(2,899**                    | **)**      | (37,803 | ) |
|                                                                              |   |                          | ** ** |   |   |
| Cash flows from financing activities                                              |   |                          | ** ** |   |   |
| Due to/from a stockholder                                                         |   | **316,472**                   | ** ** | (355,681 | ) |
| Additional  paid-in-capital                                                       |   | **-**                         | ** ** | (500,001 | ) |
| Deferred  offering costs                                                          |   | **-**                         | ** ** | 100,000 |   |
| Net  cash provided by (used in) financing activities                              |   | **316,472**                   | ** ** | (755,682 | ) |
|                                                                              |   |                          | ** ** |   |   |
| Net  increase in cash and cash equivalents                                        |   | **436,593**                   | ** ** | 114,722 |   |
| Cash  and cash equivalents, as of beginning of year                               |   | **124,453**                   | ** ** | 9,731 |   |
| Cash  and cash equivalents, as of end of year                                     |   | **561,046**                   | ** ** | 124,453 |   |

 

Theaccompanying notes are an integral part of these consolidated financialstatements.

 

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**PACIFIC VEGAS GLOBALSTRATEGIES, INC.**

CONSOLIDATEDSTATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

As at December 31, 2003 and 2002

 
|                                                      |   | Common  stock      |       |   |       |                        |       |                |   |
|-----------------------------------------------------------|--------|--------------------|------------|--------|------------|-----------------------------|------------|---------------------|--------|
|                                                      |   | Number  of  shares |       | Amount |       | Additional  paid-in capital |       | Accumulated  losses |   | Total |   |
|                                                      |   |               |       | US$    |       | US$                         |       | US$                 |   | US$ |   |
|                                                      |   |               |       |   |       |                        |       |                |   |   |   |
| As of January 1, 2002                                |   | 171,112            |       | -      |       | 500,002                     |       | (667,886            | )      | (167,884 | ) |
| Stock issued for shares exchange with CTGH                |   | 60,000,000         |       | -      |       | -                           |       | -                   |   | - |   |
|                                                      |   |               |       |   |       |                        |       |                |   |   |   |
| As of January 1, 2002, restated                      |   | 60,171,112         |       | -      |       | 500,002                     |       | (667,886            | )      | (167,884 | ) |
|                                                      |   |               |       |   |       |                        |       |                |   |   |   |
| Group restructuring of CTGH (Note 12)                     |   | -                  |       | -      |       | 1,999,998                   |       | -                   |   | 1,999,998 |   |
| Stock issued                                              |   | 39,952,525         |       | -      |       | -                           |       | -                   |   | - |   |
| Rounding                                                  |   | (22                | )          | -      |       | -                           |       | -                   |   | - |   |
| Cancellation                                              |   | (160,000           | )          | -      |       | -                           |       | -                   |   | - |   |
| Net profit for the year                                   |   | -                  |       | -      |       | -                           |       | 142,550             |   | 142,550 |   |
|                                                      |   |               |       |   |       |                        |       |                |   |   |   |
| As of December 31, 2002                              |   | 99,963,615         |       | -      |       | 2,500,000                   |       | (525,336            | )      | 1,974,664 |   |
| Receipt of net liabilities of  PVGS before reorganization |   | -                  |       | -      |       | (74,012                     | )          | -                   |   | (74,012 | ) |
| Net loss for the year                                     |   | -                  |       | -      |       | -                           |       | (387,648            | )      | (387,648 | ) |
|                                                      |   |               |       |   |       |                        |       |                |   |   |   |
| **As of  December 31, 2003**                         |   | **99,963,615**     | ** ** | **-**  | ** ** | **2,425,988**               | ** ** | **(912,984**        | **)**  | **1,513,004** | ** ** |

 

The accompanying notes are anintegral part of these consolidated financial statements.

 

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**PACIFIC VEGASGLOBAL STRATEGIES, INC.**

NOTESTO CONSOLIDATED FINANCIAL STATEMENTS

 

**1.****             ****ORGANIZATION AND PRINCIPAL ACTIVITIES**

 

PacificVegas Global Strategies, Inc. (“PVGS”) was incorporated in Colorado onDecember 19, 1990. Prior to the reorganization (as described in Note 2below) with Cyber Technology Group Holdings Limited (“CTGH”) on January 8,2003, PVGS’s principal business was development and selling of time andpersonal management products. PVGS had discontinued operations since 1994 andits only activity had been accruing loan interest on notes payable and lookingfor a merger candidate.

 

Upon completion of the reorganization, theprincipal business activities of PVGS are, through its subsidiaries, conductinga business of international sportsbook from the Commonwealth of Dominica by wayof telecommunications and/or the Internet.

 

Details of PVGS’s subsidiaries and theirprincipal activities are as follows:

 
| Name of company                                            |   | Date of  formation  |   | Place of  incorporation  |   | Percentage of share held  by the Company |   | Principal activities |
|------------------------------------------------------------|--------|---------------------|--------|--------------------------|--------|------------------------------------------|--------|----------------------|
|                                                       |   |                |   |                     |   | Direct                                   |   | Indirect             |   |   |
|                                                       |   |                |   |                     |   |                                     |   |                 |   |   |
| Cyber Technology Group Holdings Limited (“CTGH”) |   | June 22, 2000  |   | British Virgin Islands   |   | 100%                                     |   | -                    |   | Investment holding |
|                                                       |   |                |   |                     |   |                                     |   |                 |   |   |
| Pacific Vegas Development Limited (“PVD”)        |   | April 26, 2000 |   | Samoa                    |   | -                                        |   | 100%                 |   | Investment holding, provision of management services and  information technology support |
|                                                       |   |                |   |                     |   |                                     |   |                 |   |   |
| Pacific Vegas International Limited (“PVI”)      |   | April 10, 2000 |   | Commonwealth of Dominica |   | -                                        |   | 100%                 |   | International sportsbook operations |

 

Inthese consolidated financial statements, PVGS and its subsidiaries arecollectively referred as “the Company”.

 

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

 

InNovember 2002, the Boards of Directors of PVGS and CTGH decided that PVGSwould acquire CTGH through a plan of exchange under the laws of Colorado (the“Share Exchange Agreement”). Pursuant to the Share Exchange Agreement, andsubject to the terms of this agreement PVGS would acquire 100% of the issuedand outstanding shares of CTGH, all in exchange for 60,000,000 new investmentshares of common stock in PVGS. The closing of this agreement was to take placeon December 22, 2002. The shares were issued on December 22, 2002,but the closing was delayed until January 8, 2003.

 

Foraccounting purposes, the transaction has been treated as a recapitalization ofCTGH with PVGS being the legal survivor and CTGH being the accounting survivorand the operating entity. The SEC Staff’s Training Manual (Division ofCorporate Finance – Accounting Disclosure Rules and Practices) indicates thatthese transactions are considered as capital transactions in substance

 

----

 

ratherthan business combinations. That is, the historical financial statements priorto January 8, 2003 are those of CTGH, even though they were labeled asthose of PVGS. Accumulated losses of the accounting survivor, CTGH, is carriedforward after the recapitalization. Operations prior to the recapitalizationare those of the accounting survivor, CTGH. Earnings per share for periodsprior to the recapitalization are restated to reflect the equivalent number ofshares. Upon completion of the transaction, the financial statements becomethose of the operating company, with adjustments to reflect the changes inequity structure and receipt of the assets/liabilities of the public shell,PVGS. Accordingly, the Company’s stockholders’ equity for the year endedDecember 31, 2002 has been recapitalized and restated to properly discloseits issuance of 60,000,000 shares for the shares exchange.

 

Followingthe recapitalization, PVGS held 100% of the issued and outstanding shares ofCTGH and CTGH became a wholly-owned subsidiary of PVGS.

 

**3.****             ****SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

 

(a)          Basis of accounting

 

Theconsolidated financial statements are presented in United States dollars andhave been prepared in accordance with accounting principles generally acceptedin United States of America.

 

(b)         Principles of consolidation

 

Theconsolidated financial statements include the accounts of PVGS and itssubsidiaries. All material intercompany balances and transactions have beeneliminated on consolidation.

 

(c)          Cash and cash equivalents

 

Cashand cash equivalents are defined as cash on hand, deposits with banks, andshort-term, highly liquid investments with original****maturities of three months or less.

 

(d)         Property, plant and equipment anddepreciation

 

Property,plant and equipment are stated at cost, less accumulated depreciation andinclude expenditures that substantially increase the useful lives of existingassets. Maintenance and repairs are charged to current operations as incurred.Upon sale, retirement, or other disposition of these assets, the cost andrelated accumulated depreciation are removed from the respective accounts, andany gain or loss is included in the consolidated statement of operations.

 

Depreciationis provided by using the straight-line method over the estimated useful livesof the related assets. The estimated useful lives of all property, plant andequipment are 5 years.

 

(e)          Provision for doubtful accounts

 

TheCompany provides an allowance for doubtful accounts, which is based upon areview of outstanding receivables, historical collection information andexisting economic conditions.  Accountsreceivable for the net wagers are ordinarily due 10 days after the outcome ofthe bet is certain. No interest is chargeable to customers for accounts thatare unpaid after the due date.

 

----

 

Accountspast due more than one year are considered delinquent. Delinquent receivablesare written off based on individual credit evaluation and specificcircumstances of the customer.

 

Noamount of accounts receivable are past due more than 90 days atDecember 31, 2003 and 2002.  Therewere no accounts receivable written off in any of the periods presented.

 

(f)            Income taxes

 

TheCompany accounts for income tax under the provisions of SFAS No. 109, whichrequires recognition of deferred tax assets or liabilities. Deferred incometaxes are provided using the liability method. Under the liability methoddeferred income taxes are recognized for all significant temporary differencesbetween the tax and financial statements bases of assets and liabilities.

 

(g)         Operating leases

 

Leaseswhere substantially all the rewards and risks of ownership of assets remainwith the leasing company are accounted for as operating leases. Rentals payableunder operating leases are charged to the consolidated statement of operationson a straight-line basis over the lease terms.

 

(h)         Related parties

 

Partiesare considered to be related if one party has the ability to control the otherparty or exercise significant influence over the other party in makingfinancial and operating decisions.

 

(i)             Revenuerecognition

 

Revenueis recognized when it is probable that the economic benefits will flow to theCompany and when the revenue can be measured reliably.

 

Wagerrevenue is recognized on a net basis in the consolidated statement ofoperations after a wager is accepted and the outcome of the bet is certain.

 

(j)             Impairment oflong-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 isreasonably possible that these assets could become impaired as a result oftechnology or other industry changes. Determination of recoverability of assetsto be held and used is by comparing the carrying amount of an asset to futurenet undiscounted cash flows to be generated by the assets. If such assets areconsidered to be impaired, the impairment to be recognized is measured by theamount by which the carrying amount of the assets exceeds the fair value of theassets. Assets to be disposed of are reported at the lower of the carryingamount or fair value less costs to sell.

 

(k)          Foreign currency translation

 

PVGSand its subsidiary in the Commonwealth of Dominica maintains its books andrecords in United States dollars. The books and records of PVGS’s subsidiariesin the British Virgin Islands and in Samoa are maintained in Hong Kong dollars.The financial statements of PVGS’s

 

----

 

subsidiariesdenominated in Hong Kong dollars have been translated into United Statesdollars in accordance with SFAS No. 52, “Foreign Currency Translation”. Foreigncurrency transactions during the year are translated into US dollars atapproximately 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.

 

(l)             Use ofestimates

 

Thepreparation of the consolidated financial statements in conformity withaccounting principles generally accepted in the United States of Americarequires management to make estimates and assumptions that affect certainreported amounts and disclosures. Accordingly, actual amounts could differ fromthose estimates.

 

(m)       Fair value of financial statements

 

Theestimated fair values for financial instruments under SFAS No. 107,“Disclosures about Fair Value of Financial Instruments”, are determined atdiscrete points in time based on relevant market information.  These estimates involve uncertainties andcannot be determined with precision. The estimated fair values of the Company’sfinancial instruments, which includes cash and other payables approximate theircarrying values in the consolidated financial statements because of theshort-term maturity of those instruments.

 

(n)         Recently issued accounting standards

 

Thereare no new accounting pronouncements for which adoption is expected to have amaterial effect on the Company’s consolidated financial statements.

 

**4.****             ****OPERATING RISKS**

 

(a)          Concentration of major customers

 

Creditrisk represents the accounting loss that would be recognized at the reportingdate if counterparties failed completely to perform as contracted.Concentration of credit risk (whether on or off balance sheet) that arise fromfinancial instruments exist for the Company’s customers or counterparties when thereare similar economic characteristics that would cause their ability to meetcontractual obligations to be similarly affected by changes in economic orother conditions. The major concentration of credit risk arises from theCompany’s receivables.

 

(b)         Cash and time deposits

 

TheCompany’s subsidiaries maintain their cash balances with various banks andfinancial institutions located in various locations. Such amounts are notinsured or otherwise protected should the financial institutions be unable to meettheir liabilities. There has been no history of credit losses.

 

----

 

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

 

Basic(loss) earnings per common share is based on the weighted average number ofcommon stock outstanding during each period as restated as a result of therecapitalization, as described in Note 2.

 

TheCompany had no potential common stock instruments with a dilutive effect forany period presented, therefore basic and diluted earnings per share are thesame. The 60,000,000 shares , in connection with the recapitalization, asdescribed in Note 2, were included in the computation of (loss) earnings pershare as if outstanding at the beginning of each period presented.

 

**6.****             ****PROPERTY, PLANT AND EQUIPMENT, NET**

 
| **As of December 31, 2003** |   | Cost      |   | Accumulated  depreciation |   | Net  carrying  amount |   |
|----------------------------------|--------|-----------|--------|---------------------------|--------|-----------------------|--------|
|                             |   | US$       |   | US$                       |   | US$                   |   |
| Network system                   |   | 833,392   |   | 411,119                   |   | 422,273               |   |
| Telecommunication system         |   | 56,708    |   | 28,354                    |   | 28,354                |   |
| Office equipment                 |   | 48,631    |   | 18,493                    |   | 30,138                |   |
| Leasehold improvement            |   | 13,652    |   | 4,007                     |   | 9,645                 |   |
| Furniture and fixtures           |   | 1,301     |   | 650                       |   | 651                   |   |
| Website development              |   | 834,900   |   | 414,886                   |   | 420,014               |   |
|                             |   | 1,788,584 |   | 877,509                   |   | 911,075               |   |

 
| As  of December 31, 2002 |   | Cost      |   | Accumulated  depreciation |   | Net  carrying  amount |   |
|-------------------------------|--------|-----------|--------|---------------------------|--------|-----------------------|--------|
|                          |   | US$       |   | US$                       |   | US$                   |   |
| Network system                |   | 831,405   |   | 244,706                   |   | 586,699               |   |
| Telecommunication system      |   | 56,708    |   | 17,013                    |   | 39,695                |   |
| Office equipment              |   | 47,721    |   | 8,766                     |   | 38,955                |   |
| Leasehold improvement         |   | 13,651    |   | 1,277                     |   | 12,374                |   |
| Furniture and fixtures        |   | 1,301     |   | 390                       |   | 911                   |   |
| Website development           |   | 834,900   |   | 247,906                   |   | 586,994               |   |
|                          |   | 1,785,686 |   | 520,058                   |   | 1,265,628             |   |

 

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

 
|                        |   | As  of December 31, |   |
|-----------------------------|--------|--------------------------|--------|
|                        |   | **2003**                 |   | 2002 |   |
|                        |   | **US$**                  |   | US$ |   |
| Deposit  for gaming license |   | **100,000**              |   | 100,000 |   |
| Utilities                   |   | **24,203**               |   | 13,233 |   |
|                        |   | **124,203**              |   | 113,233 |   |

 

----

 

**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 these subsidiaries, in the opinion of themanagement, will be reinvested indefinitely. Determination of the amount ofunrecognized deferred taxes on these earnings is not practical, however,unrecognized foreign tax credits would be available to reduce a portion of thetax liability.

 

Underthe current laws of the British Virgin Islands, PVGS’s subsidiaries are notsubject to tax on income or capital gains, and no British Virgin Islandswithholding tax will be imposed upon payments of dividends to theirstockholders.  Subsidiaries are notsubject to any tax in Samoa and the Commonwealth of Dominica.

 

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

 
|                                    |   | As  of December 31, |   |
|-----------------------------------------|--------|--------------------------|--------|
| **2003**                                |   | 2002                     |   |
|                                    |   | **US$**                  |   | US$ |   |
| Due  from a stockholder, current (Note) |   | **-**                    |   | 339,434 |   |
| Due  to a stockholder, current          |   | **-**                    |   | 22,962 |   |

 

Note:         The amounts represent unsecuredadvances made to a stockholder during the year. The amounts are interest-freeand repayable within one year.

 

**10.****      ****ADDITIONAL PAID-IN-CAPITAL**

 

Asa result of reorganization (Note 2), the paid-in capital of CTGH became theadditional paid-in capital of the Company under accounting rules for thisrecapitalization.

 

**11.****      ****COMMITMENTS**

 

As of December 31, 2003 andDecember 31, 2002, the Company had commitments under non-cancelableoperating lease payments in respect of land and buildings as follows:

 
|   |   | As  of December 31, |   |
|--------|--------|--------------------------|--------|
|   |   | **2003**                 |   | 2002 |   |
|   |   | **US$**                  |   | US$ |   |
| 2003   |   | **-**                    |   | 9,290 |   |
| 2004   |   | **78,394**               |   | - |   |
| 2005   |   | **4,940**                |   | - |   |
|   |   | **83,334**               |   | 9,290 |   |

 

----

 

Otherthan the operating lease commitments mentioned above, there were no materialoutstanding capital commitments.

 

Leaseexpenses of the Company are as follows:

 
|             |   | Year  ended December 31, |   |
|------------------|--------|-------------------------------|--------|
|             |   | **2003**                      |   | 2002 |   |
|             |   | ***US$***                     |   | *US$* |   |
| Rental  expenses |   | **154,483**                   |   | 91,524 |   |

 

 

**12.****                    ****GROUP RESTRUCTURING OF CTGH**

 

Beforethe restructuring discussed in Note 2, CTGH, PVD and PVI were wholly owned bythe same shareholder.  InApril 2002, as a result of restructuring, PVD and PVI became subsidiariesof the CTGH with no substantive change in the shareholder’s interest.

 

Thistransaction involved transfers among entities under common control and has beenaccounted for in a manner similar to a pooling of interests. Therefore, theconsolidated financial statements of CTGH reflect the financial position andresults of operations as if the group structure had always been in existence.

 

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**ITEM 8.****                                                    ****CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIALDISCLOSURE**

 

OnJune 23, 2003, Michael Johnson & Co. LLC, Denver, Colorado, wasdismissed as our principal independent accountant to audit our financialstatements.  Their report on ourfinancial statements for each of the past two years did not contain an adverseopinion or disclaimer of opinion and was not modified as to uncertainty, auditscope or accounting principles.  Thedecision to change accountants was recommended and approved by our Board ofDirectors.

 

Duringour two most recent fiscal years and any later interim period, there were nodisagreements with the former accountant, whether or not resolved, on anymatter of accounting principles or practices, financial statement disclosure orauditing scope or procedure, which, if not resolved to the former accountant’ssatisfaction, would have caused it to make reference to the subject matter ofthe disagreement in connection with its report.

 

OnJune 23, 2003, we engaged Moores Rowland, Hong Kong, certified publicaccountants, as our principal accountant to audit our financialstatements.  During our two most recentfiscal years, and any later interim period prior to engaging Moores Rowland,Hong Kong, we did not consult the new accountant regarding the application ofaccounting principles to a specific completed or contemplated transaction, orthe type of audit opinion that might be rendered on our financial statements,and either written or oral advice was provided that was an important factorconsidered by us in reaching a decision as to the accounting, auditing orfinancial reporting issue.

 

Ourauditors, Moores Rowland, Hong Kong, merged with Mazars, Hong Kong onOctober 1, 2003 and are now practicing under the name of Moores RowlandMazars.

 

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

 

Asof the end of the period covered by this Annual Report on Form10-KSB, wecarried out an evaluation, under the supervision and with the participation ofour management, including our Chief Executive Officer and our Chief FinancialOfficer, of the effectiveness of the design and operation of our disclosurecontrols and procedures pursuant to Exchange Act Rule 13a-14 and 15d-14.  Based upon that evaluation, our ChiefExecutive Officer and our Chief Financial Officer concluded that our disclosurecontrols and procedures are effective in timely alerting them to materialinformation relating to the Company required to be included in our periodic SECfilings.

 

Subsequentto the date of that evaluation, there have been no significant changes in ourinternal controls or in other factors that could significantly affect internalcontrols, nor were any corrective actions required with regard to significantdeficiencies and material weaknesses.

 

Therequirements to provide (i) a report of management on our internal controlsover financial reporting and (ii) our registered public accounting firm’sattestation report on management’s assessment of our internal control overfinancial reporting are not yet applicable to us.

 

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**PART III**

 

**ITEM 9.****                                                    ****DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCEWITH SECTION 16(a) OF THE EXCHANGE ACT**

 

Thenames, addresses, ages and terms of office of our executive officers anddirectors are:

 
| Name (1)     |   | Age    |   | Office                                                       |   | Term Expires |
|--------------|--------|--------|--------|--------------------------------------------------------------|--------|--------------|
|         |   |   |   |                                                         |   |         |
| Raymond Chou |   | 43     |   | President, Chief Executive  Officer, Secretary and  Director |   | 2004         |
|         |   |   |   |                                                         |   |         |
| Richard Wang |   | 50     |   | Executive Vice President  and Chief Financial Officer        |   | (2)          |

 

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(1)                        The businessaddress is 41/F, Unit 4112-4113, Office Tower, Convention Plaza, No. 1, HarbourRoad, Wanchai, Hong Kong.

 

(2)                                  The term ofoffice of each officer is at the discretion of the Board of Directors.

 

**Raymond Chou**, President, Chief Executive Officer,Secretary and Director

 

Mr.Chou graduated from the University of Macau with a bachelor degree in BusinessAdministration. Mr. Chou was the managing director of Shanghai HYD IndustriesCo. Ltd. from May 1999 to January 2003. Prior to that, he was GeneralManager of Shanghai ELAN Chemical Industries Co. Ltd. since May 1992. Mr. Chouspent most of the last three years studying and researching the e-gamingindustry and putting his knowledge to practice by investing his own time andmoney in setting up the business.

 

**Richard Wang**, Executive Vice President and ChiefFinancial Officer

 

Mr.Wang holds a master degree in Economics from Fudan University of China. Priorto joining CTG in April 2000, he was General Manager of Shanghai HYDIndustries Co. Ltd., a position he had held since June 1996. His  previous experience also includes employmentas the Deputy General Manager of Shanghai ELAN Chemical Industries Co. Ltd.from May 1994 to April 1999. Mr. Wang works full time for the Company,based in the Commonwealth of Dominica.

 

Basedsolely upon a review of Forms 3 and 4 and amendments thereto furnished to uspursuant to § 240.16a-3(e) during our most recent fiscal year and Forms 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 anytime during the fiscal year, was a director, officer, beneficial owner of morethan ten percent of any class of our equity securities registered pursuant toSection 12 of the Exchange Act (“reporting person”) that failed to file ona timely basis, as disclosed in the above Forms, reports required by Section 16(a)of the Exchange Act during the most recent fiscal year or prior fiscal years.

 

----

 

Wehave adopted a code of ethics that applies to all of our employees, includingour chief executive officer and our chief financial officer.

 

Wecurrently do not have at least one audit committee financial expert serving onour audit committee. We expect to identify and retain an audit committeefinancial expert in the future.

 

 

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

 

Thefollowing table, and its accompanying explanatory footnotes, includes annualand long-term compensation information on our Chief Executive Officer and ourChief Financial Officer for services rendered in all capacities during thefiscal years ended December 31, 2003, 2002 and 2001.

 

**SUMMARY COMPENSATION TABLE**

 
| Name  and  Principal Position |   | Fiscal  Year |   | Salary |   | Bonus |   | Options  Granted |   | Other  Compensation |   |
|-------------------------------|--------|--------------|--------|--------|--------|-------|--------|------------------|--------|---------------------|--------|
|                          |   |         |   | US$    |   | US$   |   | US$              |   | US$                 |   |
| Raymond  Chou, CEO            |   | 2003         |   | 83,333 |   | 0     |   | 0                |   | 0                   |   |
|                          |   | 2002         |   | 83,333 |   | 0     |   | 0                |   | 0                   |   |
| Richard  Wang, CFO            |   | 2003         |   | 39,000 |   | 0     |   | 0                |   | 23,076              |   |
|                          |   | 2002         |   | 39,000 |   | 0     |   | 0                |   | 23,076              |   |

 

Thefollowing summary table sets forth information concerning grants of stockoptions made during the fiscal year ended December 31, 2003 to our ChiefExecutive Officer and Chief Financial Officer.

 

**OPTION GRANTS IN LAST FISCAL YEAR**

 
| Name          |   | Options  Granted |   | Percent  of Total  Options Granted  in Fiscal Year |   | Exercise  Price |   | Expiration  Date |   |
|---------------|--------|------------------|--------|----------------------------------------------------|--------|-----------------|--------|------------------|--------|
| Raymond  Chou |   | 0                |   | N/A                                                |   | N/A             |   | N/A              |   |
| Richard  Wang |   | 0                |   | N/A                                                |   | N/A             |   | N/A              |   |

 

**ITEM 11.****                                             ****SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS**

 

Thefollowing table sets forth the number of shares of our common stock ownedbeneficially as of December 31, 2003 by each person known by us to haveowned beneficially more than five percent of such shares then outstanding, byeach of our officers and directors and by all of our officers and directors asa group.  This information gives effectto securities deemed outstanding pursuant to Rule 13d-3(d)(1) under theSecurities Exchange Act of 1934, as amended. As far as is known to

 

----

 

ourmanagement, no person owns beneficially more than five percent of theoutstanding shares of common stock as of December 31, 2003 except as setforth below.

 
| Name  of Beneficial Owner                            |   | Amount  and Nature  of Beneficial Owner |   | Percentage  of Class  Beneficially Owned |   |
|------------------------------------------------------|--------|-----------------------------------------|--------|------------------------------------------|--------|
| Raymond  Chou (1)                                    |   | 42,720,000  Common Stock                |   | 42.736                                   | %      |
| Richard  Wang (1)                                    |   | 0                                       |   | 0                                        |   |
| All  executive officers and Directors as a group (1) |   | 42,720,000                              |   | 42.736                                   | %      |

 

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(1)          The business address is 41/F, Unit4112-4113, Office Tower, Convention Plaza, No. 1, Harbour Road, Wanchai, HongKong.

 

**ITEM 12.****                                             ****CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS**

 

Detailsof related party transactions during the years December 31, 2003 and 2002are set out in note 9 to our consolidated financial statements included in Item7 of this Form 10-KSB.

 

**ITEM 13.****                                             ****EXHIBITS AND REPORTS ON FORM 8-K**

 
| (a)   **Exhibits**             |
|-----------------------------------------------|
|                                          |
| 3.1                                           | Articles of Incorporation** |
| 2.1                                           | Plan of Share Exchange* |
| 3.2                                           | Articles of Amendment |
| 3.3                                           | Bylaws** |
| 10.1                                          | Commonwealth of Dominica International Gaming Licence |
| 14.1                                          | Code of Ethics |
| 21.1                                          | Subsidiaries |
| 31.1                                          | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) |
| 31.2                                          | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) |
| 32.1                                          | Certification of Chief Executive Officer pursuant to Rule 13a-14(b)  and 18 U.S.C. Section 1350 |
|                                          |   |
| 32.2                                          | Certification of Chief Financial Officer pursuant to Rule 13a-14(b)  and 18 U.S.C. Section 1350 |
|                                          |
| (b)   **Reports on  Form 8-K** |

 

Duringthe last quarter of the period covered by this report, we filed Reports on Form8-K/A dated November 6, 2003 and December 19, 2003, both of whichamended the financial information contained in Item 7 of our Report on Form 8-Kdated March 11, 2003.

 

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*                 Incorporatedby reference to our Report on Form 10-KSB/A for the fiscal year endedDecember 31, 2002 which was filed on October 7, 2003 (SEC File No.0-49701).

 

----

 

**          Incorporated by reference to theExhibits to our amended Form 10-SB which was filed on May 20, 2002 (SEC FileNo. 0-49701).

 

 

**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$77,000 for fiscal 2002 and US$75,000 for fiscal 2003.

 

2.               Audit RelatedFees.  The aggregate fees billedin each of the last two fiscal years for assurance and related services by ourprincipal accountant that are reasonably related to the performance of theaudit or review of our financial statements and are not reported under item (1)above were US$51,000 for fiscal 2002 and US$21,000 for fiscal 2003.

 

3.               Tax Fees.  The aggregate fees billed in each of thelast two fiscal years for professional services rendered by our principalaccountant for tax compliance, tax advice, and tax planning were NIL for fiscal2002 and NIL for fiscal 2003.

 

4.               All OtherFees.  The aggregate fees billedin each of the last two fiscal years for products and services provided by ourprincipal accountant, other than the services reported in items (1), (2) and(3) above, were NIL for fiscal 2002 and NIL for fiscal 2003.

 

5.               We do notcurrently have a separate audit committee. Rather, our Board of Directors serves as the audit committee.  Our Board of Directors approved all of theservices described in items (2), (3) and (4) above.

 

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**SIGNATURES**

 

 

Inaccordance with Section 13 or 15(d) of the Exchange Act, the registrantcaused this report to be signed on its behalf by the undersigned, thereuntoduly authorized.

 
| **PACIFIC VEGAS GLOBAL  STRATEGIES, INC.** |
|--------------------------------------------|
| Registrant                                 |
|                                       |   |
|                                       |   |
| Date: May 26, 2004                         | By: | /s/ RAYMOND CHOU |   |
|                                       | Raymond Chou, |
|                                       | President and Chief Executive Officer |

 

 

Inaccordance with the Exchange Act, this report has been signed below by thefollowing persons on behalf of the registrant and in the capacities and on thedates indicated.

 
| NAME             | TITLE                       | DATE                                |
|------------------|-----------------------------|-------------------------------------|
|             |                        |                                |
| /s/ RAYMOND CHOU |                        | President, Chief Executive Officer, | May 26, 2004 |
| Raymond Chou     | Secretary and Director      |                                |
|             |                        |                                |
| /s/ RICHARD WANG |                        | Executive Vice President            | May 26, 2004 |
| Richard Wang     | and Chief Financial Officer |                                |

 

----

 

**EXHIBIT INDEX**

 

 
| **NO.** |   | **DESCRIPTION OF EXHIBIT**                                                                           |
|---------|--------|------------------------------------------------------------------------------------------------------|
|    |   |                                                                                                 |
| 2.1     |   | Plan of Share Exchange*                                                                              |
| 3.1     |   | Articles of Incorporation**                                                                          |
| 3.2     |   | Articles of Amendment                                                                                |
| 3.3     |   | Bylaws**                                                                                             |
| 10.1    |   | Commonwealth of Dominica International Gaming Licence                                                |
| 14.1    |   | Code of Corporate and Employee Conduct                                                               |
| 21.1    |   | Subsidiaries                                                                                         |
| 31.1    |   | Certification of Chief Executive Officer Pursuant to Rule 13a-14(a)                                  |
| 31.2    |   | Certification of Chief Financial Officer Pursuant to Rule 13a-14(a)                                  |
| 32.1    |   | Certification of Chief Executive Officer Pursuant to Rule 13a-14(b)  and 18 U.S.C. Section 1350 |
| 32.2    |   | Certification of Chief Financial Officer Pursuant to Rule 13a-14(b)  and 18 U.S.C. Section 1350 |

 

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*                 Incorporatedby reference to our Report on Form 10-KSB/A for the fiscal year endedDecember 31, 2002 which was filed on October 7, 2003 (SEC File No.0-49701).

 

**          Incorporated by reference to theExhibits to our amended Form 10-SB which was filed on May 20, 2002 (SEC FileNo. 0-49701).

 

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