UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549







**FORM
      10-KSB**









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




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




[ 
                ]
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                [No Fee Required]





For
      the
      transition period from ________ to ________




Commission
      File No. **000-29019**




**CHINA
      ENTERTAINMENT GROUP, INC.**





(Name
      of
      small business issuer as specified in its charter)




NEVADA
            
            22-3617931(State
                or jurisdiction of incorporation or organization)
            
            (I.R.S.
                Employer Identification No.)Unit
                3409 Shun Tak Centre, West Tower,
              168-200
                Connaught Road Central, Hong Kong
            
            n/a(Address
                of principal executive offices)
            
            (Zip
                Code)





Issuer’s
      telephone number, including area code: 011-852-2312-1888




Securities
      registered pursuant to Section 12(b) of the Act:




Title
                of each class
            
            Name
                of each exchange on which registeredNone
            
            None





Securities
                registered pursuant to Section 12(g) of the Act:$.001
                Par Value Common Stock(Title
                of Class)





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





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





Check
      if
      disclosure of delinquent filers in response to Item 405 of Regulation S-B is
      not
      contained in this form, and no disclosure will be contained, to the best of
      registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-KSB or any amendment
      to
      this Form 10-KSB. [ 
      ]




The
      issuer’s revenues for the fiscal year ended December 31, 2005 were
      $1,231,563.




As
      of
      April 10, 2007, the registrant had 19,340,419 common shares outstanding that
      were held by non-affiliates. The aggregate market value of the common shares
      held by non-affiliates was approximately $270,766. This calculation is based
      upon the closing sale price of $0.014 per share as of April 10,
      2007.





As
      of
      April 10, 2007, there were 128,963,425 shares of the issuer’s $0.001 par value
      common stock issued and outstanding.





Documents
      Incorporated By Reference: None.





Transitional
      Small Business Disclosure Format: Yes [__] No [X]









**TABLE
      OF CONTENTS**


**TO
      ANNUAL REPORT ON FORM 10-KSB**


**FOR
      YEAR ENDED DECEMBER 31, 2005**







**PART
                I**
            
            **Page**Item
                1.
            Description
                of Business
            2Item
                2.
            Description
                of Property
            8Item
                3.
            Legal
                Proceedings
            8Item
                4.
            Submission
                of Matters to a Vote of Security Holders
            8




**PART
                II**Item
                5.
            Market
                for Common Equity and Related StockholderMatters
            8Item
                6.
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            11Item
                7.
            Financial
                Statements
            16Item
                8.
            Changes
                in and Disagreements with Accountants on Accounting and Financial
                Disclosure
            17Item
                8A.
            Controls
                and Procedures
            17Item
                8B.
            Other
                Information
            17




**PART
                III**Item
                9.
            Directors,
                Executive Officers, Promoters and Control Persons; Compliance with
                Section
                16(a) of the Exchange Act
            18Item
                10.
            Executive
                Compensation
            19Item
              11.
            Security
              Ownership
              of Certain Beneficial Owners and Management and Related Stockholder
              Matters
            20Item
                12.
            Certain
                Relationships and Related Transactions
            21Item
                13.
            Exhibits
            23Item
                14.
            Principal
                Accountant Fees and Services
            24





**Signatures**
            
            25











(REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK)




i




FORWARD-LOOKING
      STATEMENTS





The
      following discussion, including the discussion regarding our financial condition
      and results of operations, contain forward-looking statements and should be
      read
      in conjunction with the consolidated financial statements and related notes
      thereto. China Entertainment Group, Inc. is referred to herein as "we" or "the
      Company" or "China Entertainment Group" or "our." The words or phrases "would
      be," "will allow," "intends to," "will likely result," "are expected to," "will
      “continue," "is anticipated," "estimate," "project," or similar expressions
      are
      intended to identify "forward-looking statements." Such statements include
      those
      concerning expected financial performance, corporate strategy, and operational
      plans. Actual results could differ materially from those projected in the
      forward-looking statements as a result of a number of risks and uncertainties,
      including: (a) general economic conditions in China; (b) regulatory factors
      in
      China that may lead to additional costs or otherwise negatively affect our
      business; (c) our ability to manage our planned growth efficiently, including
      whether our management will be able to: (i) identify, hire, train, retain,
      motivate and manage required personnel or (ii) successfully manage and exploit
      existing and potential market opportunities; (d) our ability to generate
      sufficient revenues or obtain financing to sustain and grow our operations;
      and
      (e) our ability to successfully fulfill our primary cash requirements which
      are
      explained below under "Liquidity, Capital Resources and Financial Condition".
      Statements made herein are as of the date of the filing of this Form 10-KSB
      with
      the Securities and Exchange Commission and should not be relied upon as of
      any
      subsequent date.





Unless
      otherwise required by applicable law, we do not undertake, and we specifically
      disclaim any obligation, to update any forward-looking statements to reflect
      occurrences, developments, unanticipated events or circumstances after the
      date
      of such statement. The safe harbors for forward-looking statements provided
      by
      the Private Securities Litigation Reform Act of 1995 (the "Reform Act") are
      unavailable to issuers of penny stock. Our shares may be considered penny stock
      and as a result of such safe harbors set forth under the Reform Act are
      unavailable to us.








(REMAINDER
      OF PAGE INTENTIONALLY LEFT BLANK)


1


**PART
      I**





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





INTRODUCTION





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





Our
      Company's Board of Directors and management team is comprised of senior
      management from the group headed by China Star Entertainment Limited ("China
      Star", together with its subsidiaries "China Star Group"), a Hong Kong listed
      company and one of the largest media companies in Asia. As of December 31,
      2005,
      we owned all of the equity interest in Metrolink Pacific Limited ("MPL"), a
      British Virgin Islands corporation. MPL, in turn, owns a 100% equity interest
      in
      Anglo Market International Limited, a corporation incorporated in the British
      Virgin Islands on September 15, 2000, a 100% equity interest in China Star
      Management Limited, a company incorporated in Hong Kong on September 6, 1985,
      and a 100% interest in MPL subsidiary Metrolink Global Limited, a corporation
      incorporated in the British Virgin Islands on September 10, 2004. MPL's
      subsidiaries currently provide artist management, talent development and artist
      brokering services. We plan to form new subsidiaries to operate our new
      businesses in casino marketing and film co-production. Our principal executive
      office is located at Unit 3409 Shun Tak Centre, West Tower, 168-200 Connaught
      Road Central, Hong Kong, China. Our telephone number is 011-852-2313-1888.





HISTORICAL
      BACKGROUND





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





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





On
      November 17, 2004, our Board of Directors unanimously approved, subject to
      shareholder approval, entering into a Share Exchange Agreement (the "Agreement")
      with Metrolink Pacific Limited ("MPL"), an international business company
      organized to do business under the laws of the British Virgin Islands. At that
      time, MPL was wholly owned by Imperial International Limited ("Imperial"),
      a
      company incorporated under the laws of the British Virgin Islands. The parent
      company and 100% owner of Imperial is Together Again Limited ("Together Again").
      On November 17, 2004, the Board also approved, subject to shareholder approval,
      amendments to our Articles of Incorporation to change our corporate name ("Name
      Change") from Interactive Marketing Technology, Inc. to China Artists Agency,
      Inc. ("China Artists"), and to increase the authorized common stock of the
      Company to 200,000,000 shares (the "Authorized Share Increase"). On that same
      date, and also subject to shareholder approval, the Board also approved a 1
      for
      1.69 reverse stock split to accommodate the terms of the Agreement (the "Reverse
      Split"), and a spin-off of the Company's existing business, including its assets
      and liabilities, into a Nevada corporation formed as the Company's wholly owned
      subsidiary into a separate public company by means of pro-rata share dividend
      (the "Spin-off").




2





The
      above-described actions approved by the Board also required approval by a
      majority of the Company's shareholders under Nevada Revised Statutes. Thus,
      on
      November 15, 2004, as authorized by the Nevada Revised Statutes, the majority
      shareholders, who together owned 50.4% of our issued and outstanding shares
      of
      common stock, approved the Agreement, the Authorized Share Increase, the Name
      Change, the Reverse Split, and the Spin-off by action of written consent. On
      November 17, 2004, the Company, as contemplated under the Agreement, issued
      an
      aggregate of 109,623,006 shares of its common stock to Imperial, the sole
      shareholder of MPL, in exchange for 100% of the issued and outstanding shares
      of
      MPL capital stock transferred to China Artists by Imperial at the closing (the
      "Share Exchange"). The acquisition of the 100% interest includes MPL's interests
      in its subsidiaries, Anglo Market International Limited, China Star Management
      Limited, and Metrolink Global Limited (hereinafter MPL and its subsidiaries
      are
      collectively referred to as the "Metrolink Group"). Upon completion of the
      Share
      Exchange, MPL became the Company's wholly owned subsidiary and China Artist's
      former owner subsequently transferred control of China Artists to Imperial.
      We
      relied on Rule 506 of Regulation D of the Securities Act of 1933, as amended
      (the "Act") in regard to the shares that we issued pursuant to the Share
      Exchange. We believe this offering qualified as a "business combination" as
      defined by Rule 501(d). Reliance on Rule 506 requires that there are no more
      than 35 non-accredited purchasers of securities from the issuer in an offering
      under Rule 506. MPL represented to us that they had one stockholder, who has
      certified that it is an `accredited investor' as defined in Rule 501(a) of
      Regulation D. MPL also represented to us that there had been no advertising
      or
      general solicitation in connection with this transaction.





The
      Company's Certificate of Amendment to our Articles of Incorporation to effect
      the Name Change, the Reverse Split, and the Authorized Share Increase was filed
      with the Nevada Secretary of State and became effective on December 21, 2004.
      Concurrent with Name Change, Reverse Split and Authorized Share Increase, the
      Company also obtained a new stock symbol, "CAAY", and a new CUSIP Number. The
      new stock symbol and CUSIP number also became effective on December 21,
      2004.





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





RECENT
      DEVELOPMENTS





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





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





DESCRIPTION
      OF OUR BUSINESS OPERATIONS





HISTORICAL
      FINANCIAL STATEMENTS





As
      a
      result of our recent reverse acquisition, the financial statements of the
      Company become the historical financial statements of the accounting parent.
      In
      summary, the accounting effect of the reverse acquisition results in MPL as
      the
      accounting parent and China Entertainment Group (the former public shell) as
      the
      accounting subsidiary. The consolidated financial statements include the
      operations of the accounting subsidiary from the date of acquisition and reflect
      the historical financial statements of MPL, the accounting acquirer, as adjusted
      for the effects of the exchange of shares on its equity accounts, the inclusion
      of net liabilities of the accounting subsidiary as of the date of the Merger
      (November 17, 2004) on their historical basis, and the inclusion of the
      accounting subsidiary's results of operations from that date. Additionally,
      China Entertainment Group adopted the fiscal year of the accounting parent,
      December 31, effective from December 24, 2004.




3





MPL
      was
      organized on September 10, 2004, for the purpose of reorganizing the group
      structure of its intermediate holding company, Together Again Limited ("TAL").
      Prior to the incorporation of MPL, the current operations of the company were
      conducted through TAL (the "predecessor entity"). The reorganization of TAL's
      group structure was completed in October 2004 by transferring certain assets
      and
      liabilities employed in the operation of the principal activity of TAL ("the
      Business") to Metrolink Global Limited ("MGL"), a company incorporated in the
      British Virgin Islands in consideration of the HK$3,645,820, satisfied by (a)
      the allotment and issue by 99 MGL ordinary shares to MPL, the immediate holding
      company of MGL; (b) the allotment and issue by MPL to Imperial of 99 MPL
      ordinary shares; and (c) the allotment and issue of 98 ordinary shares of
      Imperial to TAL, each issued and credited as fully paid; (d) allotment of 20
      ordinary shares of MPL to Imperial as consideration for acquiring the entire
      issued share capital of China Star Management Limited ("CSML") and Anglo Market
      International Limited ("AMIL") each issued and credited as fully paid. At the
      same time, the Company entered into several deeds of novation with MGL for
      completion of the transfer of the Business as follows: (i) deed of novation
      in
      relation to amounts paid by CSML on behalf of the Company; (ii) deed of novation
      in relation to artist contract entered by the Company; and (iii) deed of
      novation in relation to professional fees contracted to be paid by the
      Company.





Since
      MPL
      succeeded to substantially all of the business and operations of TAL and its
      own
      operations prior to the succession were insignificant relative to the operations
      assumed or acquired in the reorganization, the historical financial statements
      of MPL's predecessor entity become those of MPL.





ARTIST
      MANAGEMENT UNIT





Our
      Company presently derives revenue and income from artist management fees from
      artists that the Company has under contract. Similar to artist management
      companies in the United States such as the Creative Artists Agency or the
      William Morris Agency, our Company is one of the major artist management
      agencies in Asia and currently represents several well-known Chinese film and
      television artists whose work is distributed throughout China and other parts
      of
      Asia. We currently provide artist management services through Metrolink Group,
      which consists of the following entities:




●
            China
                Star Management Limited ("CSML") is a wholly owned subsidiary of
                MPL and
                was incorporated under the laws of the Hong Kong on September 6,
                1985.
                CSML provides talent management and talent brokering services, including
                locating projects, contract negotiations, work scheduling, artist
                training
                and development, image building and improvement, publicity campaigns,
                and
                providing personal assistant services in Hong
                Kong;





●
            Anglo
                Market International Limited ("AMIL") is a wholly owned subsidiary
                of MPL
                that was incorporated under the laws of the British Virgin Islands
                on
                September 15, 2000. AMIL also provides talent management and talent
                brokering services, including locating projects, contract negotiations,
                work scheduling, artist training and development, image building
                and
                improvement, publicity campaigns, and providing personal assistant
                services outside Hong Kong.





●
            Metrolink
                Global Limited ("MGL") is a wholly owned subsidiary of MPL that was
                incorporated under the laws of the British Virgin Islands on September
                10,
                2004. MGL mainly manages one artist's PRC business including locating
                projects, contract negotiations and providing personal assistant
                services.





OTHER
      BUSINESS OPERATIONS ENGAGED IN DURING 2005




Our
      Company is also involved in a number of projects that we believe will become
      active business units within the next two years. These projects are in the
      development stage and are subject to further research, and accordingly, may
      never be completed. These include:





CASINO
      MARKETING BUSINESS





We
      are
      planning to diversify our income stream by expanding into casino gaming
      marketing and promotion in Southern China and Macau. Management believes that
      these casino marketing and promotional projects, will significantly contribute
      to the Company revenues within the next two years. Casino gaming is viewed
      as a
      clear and distinct component of the entertainment industry and the casino gaming
      market in Asia, especially in Southern China and Macau, has seen tremendous
      growth. We intend to capitalize on this growth, especially in the "high roller"
      sector of this market through deployment of a casino marketing business unit
      that will seek strategic alliances with existing casino operators throughout
      Southern Asia and Macau. Our management team is extremely familiar with
      marketing and promotional campaigns that are well suited for the casino gaming
      market. We will leverage our expertise in promotional and entertainment
      endeavors, and our existing relationships with the few powerful individuals
      and
      organizations that tightly control gaming rights in Asia in order to strike
      marketing partnerships with the casino operators for the promotion of casino
      gaming, especially to the "high roller" casino gambling market. Our key
      personnel and management have extensive casino gaming experience and have
      organized gaming tours to Las Vegas and Korea for Asian high rollers.




4





OUR
      MARKET





The
      Metrolink Group is headquartered in Hong Kong and our artists are principally
      based in Hong Kong. Our artists provide services to entities primarily based
      in
      Southern China, including the cities of Hong Kong, Shanghai, Beijing, Guangdong,
      Sichuan and Macau.





COMPETITIVE
      BUSINESS CONDITIONS AND COMPETITIVE POSITION IN THE INDUSTRY





Our
      Company is one of the major artist management agencies in Asia and we currently
      represent well-known Chinese film and television artists whose work is
      distributed throughout China and other parts of Asia. However, we have other
      emerging competitors in the entertainment industry. One of our primary
      competitors is Emperor Entertainment Group ("Emperor"), a Hong Kong based
      entertainment company.





Emperor
      engages in the production and distribution of local and foreign records, artist
      management, and the organization of concerts, stage performances and dramas.
      Our
      Company's talent is comprised mainly of actors and actresses who appear in
      films
      and may also perform as vocalists, although their main talent is in acting.
      In
      contrast, Emperor's artists are mainly local singers who also incidentally
      appear in film and other performances. We are primarily a provider of management
      and related services acting talent, whereas Emperor is a competitor in a
      slightly different market, which is that of vocalists. In addition, our artists
      tend to appear in more international and Asia Pacific films, whereas Emperor's
      artists tend to appear more in productions local to Hong Kong.





For
      casino marketing, promotion, rolling and settlement services, we will face
      competition from a diffuse number of competing casino marketing companies for
      business in a rapidly growing industry. The casino marketing, promotion and
      rolling and settlement service is a highly fragmented space with no clear
      competitive industry leader. As such, the Company hopes to obtain rapid organic
      growth by recruiting agents throughout Southern China, Macau and Hong
      Kong.





SOURCES
      AND AVAILABILITY OF RAW MATERIALS AND NAMES OF PRINCIPAL SUPPLIERS





The
      Company and its subsidiaries' principal activity is the provision of artist
      management services and thus it does not require the purchase of raw
      materials.





SEASONAL
      VARIATIONS





Our
      Company does not experience seasonal variations.





CONCENTRATION
      OF CUSTOMERS





As
      of
      December 31, 2005, all of the Company's revenues were generated by 19 artists,
      and the aggregate revenues from 3 of these artists accounted for more than
      70%
      of the Company’s revenues. The loss of any and/or all of these artists could
      have a material adverse effect on our business.





PATENTS,
      TRADEMARKS, LICENSES, FRANCHISES, CONCESSIONS, ROYALTY AGREEMENTS OR LABOR
      CONTRACTS





We
      do not
      own any patents, trademarks, licenses or other forms of intellectual
      property.





GOVERNMENT
      REGULATIONS





Our
      Company's activities are subject to various governmental and regulations
      concerning the business activities generally in various countries. We believe
      that we are in compliance with all applicable laws and regulations.





EMPLOYEES





As
      of
      December 31, 2005, our Company had approximately 9 full-time employees and
      none
      of our employees are covered by collective bargaining agreements. We have not
      experienced any labor shortages as our operations relied on services generated
      both internally and externally. In addition to services provided by our
      employees, we also relied on management services provided by related companies.
      The breakdown of the number of employees for each of the business units of
      the
      Company is as follows:




5





**Company
                and Subsidiaries**
            **Number
                of Employees**China
                Entertainment Group, Inc.
            0Anglo
                Market International Limited
            0China
                Star Management Limited
            9Metrolink
                Global Limited
            0Metrolink
                Pacific Limited
            0**TOTAL**
            9





CURRENCY
      CONVERSION AND EXCHANGE





Although
      Metrolink Group does derive revenue in Hong Kong Dollars, Renminbi and U.S.
      Dollars, Metrolink Group's revenues, expenses, assets and liabilities are
      primarily denominated in Hong Kong Dollars. The Company does not anticipate
      significant foreign exchange losses as long as the Hong Kong SAR Government's
      policy to peg the Hong Kong dollar to the U.S. dollar remains in effect. The
      Company does not currently engage in any hedging activity in order to minimize
      the effect of exchange rate risks but it will continue to monitor its foreign
      exchange exposure and market conditions to determine if any hedging is required.





POTENTIAL
      FUTURE GROWTH AND OPERATIONS





Feature
      Film Co-Production Business





We
      are
      also developing a feature film co-production business unit. We intend to
      capitalize on Hollywood's growing interest in Chinese films and in the Chinese
      demographic. We are actively pursuing strategic alliances with film production
      and distribution firms in China that are interested in establishing partnerships
      with Hollywood filmmakers, whose interest in Asian and Chinese co-productions
      and distribution rights continue to grow. We also seek direct partnerships
      with
      Hollywood film producers to co-produce and finance Asian and Hollywood films
      through the provision of lower cost post-production services in Asia. We will
      also pursue global media partnerships seeking international advertising
      opportunities and the licensing of entertainment related products targeting
      demographics in Asia and China. Our Company's current principle activity is
      artist management. With the Metrolink Group's solid background in the artist
      management industry in Asia and its close association with China Star Group,
      Metrolink Group can use its extensive network to locate projects and negotiate
      performance contracts directly with advertising agencies, film producers,
      television and radio stations, and concert organizers on behalf of contracted
      artists.





**RISK
      FACTORS**





This
      information statement contains "forward looking statements" which can be
      identified by the use of forward-looking words such as "believes", "estimates",
      "could", "possibly", "probably", "anticipates", "estimates", "projects",
      "expects", "may" or "should" or other variations or similar words. No assurances
      can be given that the future results anticipated by the forward-looking
      statements will be achieved. The following matters constitute cautionary
      statements identifying important factors with respect to those forward-looking
      statements, including certain risks and uncertainties that could cause actual
      results to vary materially from the future results anticipated by those
      forward-looking statements. Among the key factors that have a direct bearing
      on
      our results of operations are the effects of various governmental regulations,
      the fluctuation of our direct costs and the costs and effectiveness of our
      operating strategy. Other factors could also cause actual results to vary
      materially from the future results anticipated by those forward-looking
      statements.





RISKS
      RELATED TO OUR BUSINESS





WE
      DEPEND
      ON A LIMITED POOL OF ACTING AND RECORDING TALENT.





Our
      failure to maintain or renew contracts with these individuals will significantly
      hinder our ability to generate revenues. Our Company manages contracts of acting
      talent and recording artists in relation to those artists' engagements with,
      among other things, the film, recording, television and video industry. We
      depend on a pool of individuals willing and able to accept production
      assignments as negotiated. Our ability to succeed will be significantly impaired
      if we are unable to arrange for suitable projects for our talent while providing
      them with attractive compensation packages. The highly personalized nature
      of
      the services contracted for and required in this industry makes it extremely
      difficult to predict the availability of current and future performers, our
      ability to continue to engage that talent and Metrolink's ability arrange for
      suitable engagements for their services. We are materially dependent upon the
      continued availability of such talent and opportunities for their engagement.
      Our failure to continue those operations will significantly hinder our ability
      to conduct business and generate revenues. We cater to the film, television,
      and
      recording and movie industries and thus we are affected by changes or trends
      occurring within those industries.




6





THE
      FILM,
      RECORDING, TELEVISION AND MOVIE INDUSTRIES, AND ENTERTAINMENT INDUSTRY IN
      GENERAL IS A SPECULATIVE VENTURE WHICH INVOLVES SUBSTANTIAL RISKS.





There
      is
      no certainty that the engagements that we arrange, the talent we engage and
      the
      efforts and expenditures we make will continue to result in a commercially
      profitable business. The marketability of our talent will be affected by
      numerous factors that affect the motion picture, recording, television and
      video
      industries, and which are beyond our control. These factors include market
      fluctuations, the general state of the economy, including the rate of inflation,
      consumer tastes and local economic conditions, all of which can affect
      consumers' discretionary spending. These factors or any combination of these
      factors may hinder our ability to generate revenues consistently. Our operating
      results will fluctuate due to a number of factors, including but not limited
      to,
      risks associated with the development, production, and completion of film,
      recording, television or video projects.





DUE
      TO
      THE NUMEROUS FACTORS THAT AFFECT HOW A FILM, TELEVISION PROGRAM, MUSICAL
      RECORDING OR OTHER ARTISTIC PRODUCTION IS DEVELOPED AND PRODUCED, WE CANNOT
      BE
      CERTAIN AS TO HOW SUCCESSFUL OUR OPERATIONS WILL BE AT ANY GIVEN
      TIME.





Additional
      variables that will affect our success include location and timing of film,
      television, recording or video productions and the conditions under which the
      talent that we engage are required to perform. Typically, project production
      dates for larger scale endeavors are well in advance of release dates. Smaller
      scale production endeavors are usually scheduled closer to their release date.
      We anticipate that our operating results will fluctuate as a result of these
      and
      other factors, including overall trends in the economy and client engagement
      patterns, which are characterized by individual engagements from clients rather
      than long-term contracts. As such, we may not be able to anticipate, for more
      than a few months in advance, the number, size and profitability of talent
      engagements in a given period. Consequently, the operating results for one
      quarter are not necessarily indicative of the operating results for future
      quarters.





WE
      MAY BE
      SUBJECT TO LITIGATION IN CONNECTION WITH TALENT WE ENGAGE AND OUR OPERATIONS
      WILL BE ADVERSELY AFFECTED AS A CONSEQUENCE OF SUCH LITIGATION.





Our
      Company may be engaged in litigation from time to time, during the ordinary
      course of business, in connection with disputes as to contract interpretations,
      compensation and other matters. We may not be able to adequately forecast the
      effect such litigation will have on our operations. Any litigation that we
      may
      become involved in may hinder our ability to conduct operations.





OUR
      COMPANY COMPETES WITH EMPEROR ENTERTAINMENT GROUP IN THE HONG KONG MARKET FOR
      TALENT AND MAY NOT SUCCEED IN OBTAINING OR KEEPING ARTISTIC TALENT IN OUR POOL
      OF INDIVIDUALS.





We
      believe that Emperor Entertainment Group is one of our primary competitors.
      Emperor Entertainment Group is based in Hong Kong, and engages in the production
      and distribution of local and foreign records, artist management, and
      organization of concerts, stage performances and dramas. Emperor may be able
      to
      maintain or increase its market share by negotiating more favorable terms with
      artists and obtaining a greater pool of talent with which to operate. Our
      Company expects ongoing competition and pricing pressure from Emperor. We cannot
      guarantee that we will be able to obtain market share or
      profitability.





RISKS
      RELATED TO OWNING OUR COMMON STOCK:





Our
      Company's principal security holder, Imperial International Limited, owns a
      majority of our outstanding common stock, allowing this shareholder to control
      matters requiring approval of our shareholders. Our principal security holder
      owns approximately 85% of our outstanding shares of our common stock. Such
      concentrated control of the company may adversely affect the price of our common
      stock. Our principal security holder will control matters requiring approval
      by
      our security holders, including the election of directors. Such concentrated
      control may also make it difficult for our shareholders to receive a premium
      for
      their shares of our common stock in the event we merge with a third party or
      enter into different transactions which require shareholder approval. In
      addition, certain provisions of the Nevada Revised Statutes could have the
      effect of making it more difficult or more expensive for a third party to
      acquire, or of discouraging a third party from attempting to acquire, control
      of
      us in the future. Because our common stock will be subject to the "penny stock"
      rules, the level of trading activity in our stock may be reduced, which may
      make
      it difficult for investors in our common stock to sell their shares.
      Broker-dealer practices in connection with transactions in "penny stocks" are
      regulated by certain penny stock rules adopted by the Securities and Exchange
      Commission. Penny stocks, like shares of our common stock, generally are equity
      securities with a price of less than $5.00, other than securities registered
      on
      certain national securities exchanges or quoted on NASDAQ. The penny stock
      rules
      require a broker-dealer, prior to a transaction in a penny stock not otherwise
      exempt from the rules, to deliver a standardized risk disclosure document that
      provides information about penny stocks and the nature and level of risks in
      the
      penny stock market. The broker-dealer also must provide the customer with
      current bid and offer quotations for the penny stock, the compensation of the
      broker-dealer and its salesperson in the transaction, and, if the broker-dealer
      is the sole market maker, the broker-dealer must disclose this fact and the
      broker-dealer's presumed control over the market, and monthly account statements
      showing the market value of each penny stock held in the customer's account.
      In
      addition, broker-dealers who sell these securities to persons other than
      established customers and "accredited investors" must make a special written
      determination that the penny stock is a suitable investment for the purchaser
      and receive the purchaser's written agreement to the transaction. Consequently,
      these requirements may have the effect of reducing the level of trading
      activity, if any, in the secondary market for a security subject to the penny
      stock rules, and investors in our common stock may find it difficult to sell
      their shares.




7





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





Effective
      August 15, 2006, our principal executive offices are located in a facility
      consisting of approximately 2,683 square feet located at Unit 3409 Shun Tak
      Centre, West Tower, 168-200 Connaught Road Central, Hong Kong. We do not own
      this property and we have not entered into a lease of this office space because
      it is shared with other affiliated companies.





We
      believe that the current facilities occupied by the Company and its subsidiaries
      will be able to meet the Company's operational needs for the coming two to
      three
      years.





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





Lang,
        et al. v. Welch, et al. (China
        Entertainment Group, Inc.) (United States District Court, Central District
        California, Case No. CV 07-1068-GHK-PJWx).**** On **** December
        20, 2006, Plaintiffs Sanford Lang and Martin Goldrod (collectively,
“Plaintiffs”) initiated a lawsuit in the Los Angeles Superior Court, Central
        District, alleging claims for fraud, breach of contract, violations of RICO,
        and
        civil conspiracy against several parties, including the Company.  The
        Company was provided with a copy of Plaintiffs’ Complaint on or about February
        28, 2007, after the matter was removed to United States District Court.
        However, the Company maintains that service of process was improper as no
        federal summons was included. According to the Complaint, the Company is
“a
        nominal Defendant” as Plaintiffs purport to assert claims derivatively on its
        behalf. Accordingly, it appears that no relief is being sought against the
        Company itself. Notwithstanding, the Company denies Plaintiffs’ alleged claims
        and will vigorously defend against such claims.


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





None.





**PART
      II**





**ITEM
      5.**  **MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS**





We
      are
      subject to the informational requirements of the Securities Exchange Act of
      1934. Accordingly, we file annual, quarterly and other reports and information
      with the Securities and Exchange Commission. You may read and copy these reports
      and other information we file at the Securities and Exchange Commission's public
      reference rooms in Washington, D.C., New York, New York, and Chicago, Illinois.
      Our filings are also available to the public from commercial document retrieval
      services and the Internet worldwide website maintained by the Securities and
      Exchange Commission at www.sec.gov .





MARKET
      FOR COMMON EQUITY





Our
      Common Stock is traded over-the-counter and quoted on the National Quotation
      Bureau's Pink Sheets under the symbol "CGRP". Until April 17, 2000, our common
      stock was listed on the OTC Electronic Bulleting Board under the symbol
      "IAMK.OB". After entering into the Agreement, we changed our symbol from
      "IAMK.OB" to "CAAY.OB" with CUSIP Number 16936W 10 4, and these changes became
      effective on December 21, 2004. The following table sets forth the range of
      the
      high and low bid prices of our stock as reported by the Nasdaq Trading and
      Market Services for each fiscal quarter for the last two years ending December
      31, 2005 and December 31, 2004. The bid prices represent inter-dealer
      quotations, without adjustments for retail mark-ups, markdowns or commissions
      and may not necessarily represent actual transactions.




8




**Bid
                Prices****High**
            **Low**Fiscal
                Year Ended December 31, 2005Fourth
                Quarter (ended December 31, 2005)
            0.09
            0.02Third
                Quarter (ended September 30, 2005)
            0.11
            0.03Second
                Quarter (ended June 30, 2005)
            0.14
            0.05First
                Quarter (ended March 31, 2005)
            0.25
            0.14Fiscal
                Year Ended December 31, 2004Fourth
                Quarter (ended December 31, 2004)
            0.16
            0.02Third
                Quarter (ended September 30, 2004)
            0.06
            0.02Second
                Quarter (ended June 30, 2004)
            0.20
            0.05First
                Quarter (ended March 31, 2004)
            0.23
            0.06





**Stockholders
      Of Record** ****





As
      of
      April 10, 2007, the number of record holders of our common stock was
      approximately 81.





**Dividends**





We
      have
      not declared or paid, and do not anticipate declaring or paying in the near
      future, any dividends on our common stock. We intend to reinvest in our business
      operations any funds that could be used to pay a cash dividend.




**Recent
      Sales Of Unregistered Securities; Use Of Proceeds From Registered
      Securities**





The
      following issuances were made during the year ended December 31, 2004, all
      pursuant to Section 4(2) of the Securities Act of 1933 and pursuant to
      Regulation D promulgated thereunder:





During
      2004, we issued 121,123,897 shares of common stock. The issuances of these
      unregistered shares (the "Unregistered Shares") were made under exemptions
      from
      registration and prospectus delivery requirements of the Securities Act of
      1933
      ("the 1933 Act"), as amended, and as specified in Section 4(2) of the 1933
      Act.
      The details of the share issuances consist of:





(1)
            1,183,432
                (equivalent to 2,000,000 shares of ordinary stock prior the Reverse
                Split)
                Unregistered Shares were issued to former affiliate Sandy Lang, and
                former
                officer and director Marty Goldrod prior the Reverse Split as payment
                in
                full for accrued salaries, accrued travel and entertainment expenses
                (Sandy and Marty), shareholder advances (by Marty), and a note payable
                issued to shareholder (Sandy) during the third quarter of the fiscal
                year
                2004. The details regarding the issuance of the 1,183,432 shares
                of the
                Company's common stock were previously disclosed in a Current Report
                on
                Form 8-K filed by the Company on November 19, 2004 and thus no further
                information required under Item 701 of Regulation S-B will be included
                herein.





(2)
            Pursuant
                to Section 1.02(a) and Section 3.01(q) of the Agreement dated November
                17,
                2004, the Company issued 109,623,006 shares, 6,809,522 shares and
                3,507,937 shares of the Unregistered Shares to Imperial, Oriental
                Financial Services Limited ("Orient"), and Emerging Growth Partners,
                Inc.
                ("Emerging"), respectively, with an aggregate issuance of 119,940,465
                shares. The table below sets forth the details of the issuance of
                the
                119,940,465 shares:





**Name
                of Party**
            **Number
                of Shares**
              **Issued
                and Date of****Issuance**
            **Nature
                of Transaction**
            **Amount
                Received**
              **from
                the Transaction**Imperial
                International Limited
            109,623,006
                shares issued
              on
                December 22, 2004
            Share
                exchange with shareholder Metrolink Pacific Ltd.
            $146,475.98Orient
                Financial Service Ltd.
              (“Orient
                Financial”)
            6,809,522
                shares issued
              on
                December 22, 2004
            Services
                rendered related to Share Exchange
            $6,809.52Emerging
                Growth Partners, Inc.
              (“Emerging
                Growth”)
            3,507,937
                shares issued
              on
                December 22, 2004
            Services
                rendered related to Share Exchange
            $3,507.94




9




The
      amount paid for services rendered by Orient and Emerging was based on the number
      of Unregistered Shares issued in relation to the services rendered for the
      Share
      Exchange and the $0.001 par value of the Unregistered Shares. Fair market value
      of such shares is not applicable in determining the amount of the transaction
      as
      the Unregistered Shares have not been registered under the Securities Act of
      1933, as amended and may not be offered for sales, sold, or otherwise disposed
      of, except in compliance with the registration provisions in the Act, or
      pursuant to an exemption from such registration provisions, the availability
      of
      which is to be established to the satisfaction of the Company.





During
      2005, we cancelled and issued 4,809,522 shares of common stock. The issuances
      of
      these unregistered shares (the "Unregistered Shares") were made under exemptions
      from registration and prospectus delivery requirements of the Securities Act
      of
      1933 ("the 1933 Act"), as amended, and as specified in Section 4(2) of the
      1933
      Act. The Company's Board of Directors approved the cancellation of 4,809,522
      shares of common stock previously issued to Orient Financial Services Limited,
      an unrelated party, for services provided in connection with the Company's
      merger agreement in November 2004. These shares were subsequently re-issued
      in
      November 2005 in the name of Emerging Growth Partners, Inc., an unrelated party,
      pursuant to an Advisory Services Agreement dated June 10, 2005 and to Sandy
      Lang, a former officer, pursuant to a verbal agreement reached in May 2005
      (the
      "Verbal Agreement"). Under the Verbal Agreement, in exchange for the shares
      issued to him, Mr. Lang agreed to settle, forebear to litigate, and release
      any
      and all actions or claims (whether directly or indirectly and in whichever
      jurisdiction) that he has or may have against the Company arising out of, in
      connection with, or leading to the Share Exchange discussed under the section
      above titled “Description of Business” and in Note 1 to our Financial
      Statements.





DESCRIPTION
      OF CAPITAL STOCK





Our
      authorized capital stock consists of 200,000,000 shares of $0.001 par value
      common stock, of which 128,963,425 shares are issued and outstanding as of
      April
      10, 2007. Holders of the shares of our common stock are entitled to receive
      dividends when and as declared by our Board of Directors from funds legally
      available. All the shares of our common stock have equal voting rights and,
      according to the opinion of our legal counsel, are nonassessable. Each
      shareholder of our common stock is entitled to share ratably in any assets
      available for distribution to holders of our equity securities upon our
      liquidation. Holders of our common stock do not have preemptive rights.





EQUITY
      COMPENSATION PLANS





We
      have
      no securities authorized for issuance under any equity compensation
      plans.




PENNY
      STOCK REGULATION





Shares
      of
      our common stock are subject to rules adopted by the Securities and Exchange
      Commission that regulate broker-dealer practices in connection with transactions
      in "penny stocks". Penny stocks are generally equity securities with a price
      of
      less than $5.00 (other than securities registered on certain national securities
      exchanges or quoted on the Nasdaq system, provided that current price and volume
      information with respect to transactions in those securities is provided by
      the
      exchange or system). The penny stock rules require a broker-dealer, prior to
      a
      transaction in a penny stock not otherwise exempt from those rules, deliver
      a
      standardized risk disclosure document prepared by the Securities and Exchange
      Commission, which contains the following:


●
              a
                  description of the nature and level of risk in the market for penny
                  stocks
                  in both public offerings and secondary
                  trading;
 
 ●
              a
                  description of the broker's or dealer's duties to the customer
                  and of the
                  rights and remedies available to the customer with respect to violation
                  to
                  such duties or other requirements of securities'
                  laws;
 
 ●
              a
                  brief, clear, narrative description of a dealer market, including
                  "bid"
                  and "ask" prices for penny stocks and the significance of the spread
                  between the "bid" and "ask" price;
 
 ●
              a
                  toll-free telephone number for inquiries on disciplinary
                  actions;
 
 ●
              definitions
                  of significant terms in the disclosure document or in the conduct
                  of
                  trading in penny stocks; and
 
 ●
              such
                  other information and is in such form (including language, type,
                  size and
                  format), as the Securities and Exchange Commission shall require
                  by rule
                  or regulation.
  10
  Prior
        to
        effecting any transaction in penny stock, the broker-dealer also must provide
        the customer the following:
 
 ●
              the
                  bid and offer quotations for the penny
                  stock;
 
 ●
              the
                  compensation of the broker-dealer and its salesperson in the
                  transaction;
 
 ●
              the
                  number of shares to which such bid and ask prices apply, or other
                  comparable information relating to the depth and liquidity of the
                  market
                  for such stock; and
 
 ●
              monthly
                  account statements showing the market value of each penny stock
                  held in
                  the customer's account.


In
      addition, the penny stock rules require that prior to a transaction in a penny
      stock not otherwise exempt from those rules, the broker-dealer must make a
      special written determination that the penny stock is a suitable investment
      for
      the purchaser and receive the purchaser's written acknowledgment of the receipt
      of a risk disclosure statement, a written agreement to transactions involving
      penny stocks, and a signed and dated copy of a written suitably statement.
      These
      disclosure requirements may have the effect of reducing the trading activity
      in
      the secondary market for a stock that becomes subject to the penny stock rules.
      Holders of shares of our common stock may have difficulty selling those shares
      because our common stock is currently subject to the penny stock
      rules.





**ITEM
      6.**  **MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS**





This
      following information specifies certain forward-looking statements of management
      of the Company. Forward-looking statements are statements that estimate the
      happening of future events are not based on historical fact. Forward-looking
      statements may be identified by the use of forward-looking terminology, such
      as
      "may", "shall", "could", "expect", "estimate", "anticipate", "predict",
      "probable", "possible", "should", "continue", or similar terms, variations
      of
      those terms or the negative of those terms. The forward-looking statements
      specified in the following information have been compiled by our management
      on
      the basis of assumptions made by management and considered by management to
      be
      reasonable. Our future operating results, however, are impossible to predict
      and
      no representation, guaranty, or warranty is to be inferred from those
      forward-looking statements.





The
      assumptions used for purposes of the forward-looking statements specified in
      the
      following information represent estimates of future events and are subject
      to
      uncertainty as to possible changes in economic, legislative, industry, and
      other
      circumstances. As a result, the identification and interpretation of data and
      other information and their use in developing and selecting assumptions from
      and
      among reasonable alternatives require the exercise of judgment. To the extent
      that the assumed events do not occur, the outcome may vary substantially from
      anticipated or projected results, and, accordingly, no opinion is expressed
      on
      the achievability of those forward-looking statements. No assurance can be
      given
      that any of the assumptions relating to the forward-looking statements specified
      in the following information are accurate, and we assume no obligation to update
      any such forward-looking statements.





**CRITICAL
      ACCOUNTING POLICIES**





Our
      Management's Discussion and Analysis of Financial Condition and Results of
      Operations section discusses our financial statements, which have been prepared
      in accordance with accounting principles generally accepted in the United States
      of America. This discussion and analysis should be read in conjunction with
      the
      accompanying Consolidated Financial Statements and related notes. An accounting
      policy is deemed to be critical if it requires an accounting estimate to be
      made
      based on assumptions about matters that are highly uncertain at the time the
      estimate is made, and if different estimates that reasonably could have been
      used or changes in the accounting estimate that are reasonably likely to occur
      could materially change the financial statements. We believe the following
      critical accounting policies reflect our more significant estimates and
      assumptions used in the preparation of our financial statements:





Use
      of
      Estimates





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




11





Revenue
      recognition and provision for losses:





Service
      fee income from provision of artist management services is recognized when
      services are rendered. In accordance with SEC Staff Accounting Bulletin No.
      101,
      "Revenue Recognition in Financial Statements," the Company presents its revenue
      on a net basis as it acts as an agent for the artists. Provisions for losses
      are
      determined on the basis of loss experience and current economic conditions.
      These financial statements do not include any provision for losses.





Contingencies
      and litigation:





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





The
      Company has failed to comply with substantially all of the obligations imposed
      upon it by the Securities Exchange Act of 1934 Act (the "1934 Act") and is
      delinquent in filing its annual report on Form 10-KSB for the period ended
      December 31, 2005 and its quarterly reports on Form 10-QSB for the quarterly
      periods ended in 2006. As a result, the Company and its officers and directors
      could be subject to substantial civil and criminal penalties due to such
      non-compliance. There can be no assurance that substantial civil and criminal
      penalties will not be imposed.





**RECENT
      ACCOUNTING PRONOUNCEMENTS**




In
      December 2004, the Financial Accounting Standards Board (“FASB”) issued
      Statement of Financial Accounting Standards (“SFAS”) 123-R, *Share-Based
      Payment* (“SFAS
      123(R)”). SFAS 123(R) replaces SFAS 123, *Accounting
      for Stock-Based Compensation* ,
      and
      supersedes the Accounting Principles Board (“APB”) APB Opinion 25, *Accounting
      for Stock Issued to Employees* (“APB
      25”). SFAS 123(R) requires, among other things, that all share-based payments
      to
      employees, including grants of stock options, be measured based on their
      grant-date fair value and recognized as expense. The Company does not expect
      there to be any significant impact of adopting SFAS 123(R) on its consolidated
      financial position, cash flows and results of operations.




On
      June
      7, 2005, the FASB issued Statement 154, *Accounting
      Changes and Error Corrections* , *a
      replacement of APB Opinion 20 and FASB Statement 3* ,
      (“SFAS
      154”). SFAS 154 changes the requirements for the accounting for and reporting of
      a change in accounting principle. Previously, most voluntary changes in
      accounting principles were required recognition via a cumulative effect
      adjustment within net income (loss) of the period of the change. SFAS 154
      requires retrospective application to prior periods’ financial statements,
      unless it is impracticable to determine either the period-specific effects
      or
      the cumulative effect of the change. SFAS 154 is effective for accounting
      changes made in fiscal years beginning after December 15, 2005. The Company
      does
      not expect there to be any significant impact of adopting SFAS 154 on its
      consolidated financial position, cash flows and results of operations.




In
      February 2006, the FASB issued SFAS 155, *Accounting
      for Certain Hybrid Financial Instruments - an amendment of FASB Statements
      133
      and 140* ,
      (“SFAS
      155”). SFAS will be effective for the Company beginning January 1, 2007. The
      statement permits interests in hybrid financial instruments that contain an
      embedded derivative that would otherwise require bifurcation, to be accounted
      for as a single financial instrument at fair value, with changes in fair value
      recognized in earnings. This election is permitted on an
      instrument-by-instrument basis for all hybrid financial instruments held,
      obtained, or issued as of the adoption date. The
      Company does not expect there to be any significant impact of adopting SFAS
      155
      on its consolidated financial position, cash flows and results of operations.




In
      June
      2006, the FASB issued Interpretation 48, *Accounting
      for Uncertainty in Income Taxes — an Interpretation of FASB Statement
      No. 109* (“FIN
      48”), which clarifies the accounting for uncertainty in tax positions. This
      Interpretation requires that the Company recognize in its financial statements
      the impact of a tax position if that position is more likely than not of being
      sustained on audit, based on the technical merits of the position. The
      provisions of FIN 48 are effective for the Company on January 1, 2007, with
      the cumulative effect of the change in accounting principle, if any, recorded
      as
      an adjustment to opening retained earnings. The Company does not expect there
      to
      be any significant impact of adopting FIN 48 on its consolidated financial
      position, cash flows and results of operations.




12




In
      September 2006, the FASB issued SFAS 157, *Fair
      Value Measurements* (“SFAS
      157”), which provides guidance about how to measure assets and liabilities that
      use fair value. SFAS 157 will apply whenever another US GAAP standard requires
      (or permits) assets or liabilities to be measured at fair value but does not
      expand the use of fair value to any new circumstances. This standard also will
      require additional disclosures in both annual and quarterly reports. SFAS 157
      will be effective for financial statements issued for fiscal years beginning
      after November 15, 2007, and will be adopted by us beginning in the first
      quarter of 2008. The
      Company does not expect there to be any significant impact of adopting SFAS
      157
      on its consolidated financial position, cash flows and results of operations.




In
      September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) 108, *Considering
      the Effects of Prior Year Misstatements when Quantifying Misstatements in
      Current Year Financial Statements* (“SAB
      108”). SAB 108 was issued to eliminate the diversity of practice in how public
      companies quantify misstatements of financial statements, including
      misstatements that were not material to prior years’ financial statements. The
      Company will apply the provisions of SAB 108 to its annual financial statements
      for the year ending December 31, 2006. The
      Company does not expect there to be any significant impact of adopting SAB
      108
      on its consolidated financial position, cash flows and results of operations.





Other
      recent accounting pronouncements issued by the FASB (including its Emerging
      Issues Task Force (“EITF”)), the American Institute of Certified Public
      Accountants (“AICPA”), and the SEC did not or are not believed by management to
      have a material impact on the Company's present or future financial
      statements.





**BUSINESS
      OVERVIEW**





Through
      the Share Exchange that resulted in our acquisition of MPL, our principal
      activity became the provision of artist management services. Our Company
      operates under a similar business model to the U.S. based Creative Artists
      Agency ("CAA") and International Creative Management ("ICM") by managing, on
      a
      turnkey basis, all of our clients film and recording contract commitments as
      well as their product endorsements and advertising commitments.  We
      provide training, management and agency services to both new and established
      artists, and we are actively engaged in image management promotion and the
      marketing of our clients. To maintain our competitiveness, we continue to
      maintain good relationships with our senior artists. In addition, we continue
      to
      search for and foster talented artists, and we are actively seeking more artists
      from the People's Republic of China ("PRC"), Hong Kong and Taiwan. The infusion
      of new talent will enhance our Company's competitiveness and bring fresh input
      into the entertainment industry.





Given
      the
      success of Hong Kong stars such as Jackie Chan and Michelle Yeoh, our Company
      recently began making our artists available for U.S. based productions. It
      is
      possible that U.S. based revenues will become a significant contributor to
      our
      operating income in the future, but to date the Company has made no progress
      in
      this direction. Our Company intends to utilize the entertainment industry
      experience of the  Company's
      management and resources in developing opportunities for joint productions
      with
      U.S. and Asian artists, including a "fusion" of U.S. and Chinese film projects
      and joint distribution of movie libraries.  With
      China's accession to the World Trade Organization, Beijing's successful bid
      for
      the 2008 Olympic Games, and the implementation of the Closer Economic
      Partnership Arrangement trade pact with Hong Kong, industry projections indicate
      advertising expenditures will increase significantly in 2005 and onwards. As
      China transitions to a market-based customer driven economy, advertising and
      entertainment expenditures are expected to increase.  Our
      Company holds a significant advantage in that our soft assets (i.e., our talent)
      may be used in these film and television productions and for advertising and
      promotional campaigns. Our Company, through our wholly owned subsidiary MPL,
      is
      one of the top artist management agencies in Asia and we believe that we are
      positioned to generate  revenue
      growth as both demand for and the fees for our entertainment talent may
      increase. Our management hopes that growth in the China market alone will
      underwrite enormous increases in the number of film and television productions,
      and a corresponding increase in the demand for our talent.





Although
      management remains optimistic for future growth, current conditions and
      financial results reflect a significant slow down in film and television
      production in Hong Kong, China and other parts of Asia, and the hiring and
      use
      of our artists.  This
      slow
      down is the result of piracy and copyright infringements in China and other
      parts of Asia that have a material impact on revenue the Company might otherwise
      receive from sales of film and television productions, and the related royalties
      and fees paid to our artists. Until issues of piracy and copyright infringement
      are resolved between the production companies that hire our artists, and the
      central governments in regions in which productions featuring our artists are
      sold, the Company will be stymied in its plans for future growth and increased
      profitability. The Company is uncertain about the timing, strategy and
      resolution to resolve the piracy and copyright infringement issues, as well
      as
      the return to increased film and television production featuring our artists,
      and can make no assurance that such a resolution to these matters will ever
      occur.





**RESULTS
      OF OPERATIONS**





YEAR
      ENDED DECEMBER 31, 2005 COMPARED TO THE YEAR ENDED DECEMBER 31,
      2004




13





Revenues





Revenues
      recognized from the provision of artist management services decreased 53% to
      $1,231,563 for the year ending December 31, 2005 from $2,599,721 for the same
      period in 2004. The decreased resulted primarily from the decreased demand
      for
      artists’ services. The entertainment industry, particularly the film industry in
      Hong Kong encountered greater challenges in the year 2005. The industry
      continued to suffer from the issue of infringements on intellectual property
      rights. In addition to the popularity of copied compact discs, the advances
      of
      information technology, especially the improvement in BT (bit torrent) point
      to
      point technology and the rapid growth of peer-to-peer sharing activity on the
      Internet, have caused decreased revenues in the film industry. The immediate
      impact of these advances was the production of less films during the
      year.




General
      and Administrative Expenses





General
      and administrative expenses incurred for the year ended December 31,
      2005 increased $89,736, or 7%, to $1,415,163 compared to $1,325,427 for the
      same period in 2004. General and administrative expenses mainly consisted of
      management fees, wages, rent, and professional fees. During 2005, we recorded
      an
      impairment for amounts due from our ultimate holding company, Colima Enterprises
      Holdings, Inc.





Provision
      For Income Taxes





The
      provision for income taxes represents the aggregate taxes provided on the
      assessable profits for the consolidated entities. No provision of income taxes
      was provided for the year ended December 31, 2005 as the Company incurred a
      tax
      loss for the year ended December 31, 2005.




Net
      Loss




Net
      loss
      for the year ended December 31, 2005 were $708,958 versus net earnings
      $1,148,576 for the same period in 2004. The loss resulted from a 52% decrease
      in
      revenues, a 7% increase in general and administrative expenses and provision
      for
      impairment for amounts due from related entity of $526,278 recognized for the
      year.





**LIQUIDITY,
      CAPITAL RESOURCES AND FINANCIAL CONDITION**





Liquidity





We
      had
      negative working capital at December 31, 2005 of $712,571. We regularly review
      our cash funding requirements and attempt to meet those requirements through
      a
      combination of cash on hand, cash provided by operations, deposits received
      and
      possible future public and private equity offerings. We evaluate possible
      acquisitions of, or investments in, businesses that our complementary to ours,
      which transactions may require the use of cash. We believe that our cash, other
      liquid assets, operating cash flows, credit arrangements, access to equity
      capital markets, taken together, provide adequate resources to fund ongoing
      operating expenditures. In the event that they do not, we may require additional
      funds in the future to support our working capital requirements or for other
      purposes and may seek to raise such additional funds through the sale of public
      or private equity as well as other sources.





Cash
      flows from operating activities:





For
      the
      year ended December 31, 2005, net cash flows provided by operating activities
      was $284,735, primarily resulting from our net loss from operations offset
      by a
      provision for impairment losses, a decrease in working capital accounts. Net
      cash provided by operating activities for the same period in 2004 of $1,271,907,
      which primarily resulted from net earnings from operations offset by an increase
      in deposits paid and deposits received for contracts awarded at year end, but
      for which the services have not yet been provided.





Cash
      flows from investing activities:





For
      the
      years ended December 31, 2005 and 2004, net cash flows used in investing
      activities were $53,431, and $391, respectively. The increase in cash flow
      used
      in investing activities primarily resulted from purchases of fixed
      assets .




Cash
      flows from financing.




Net
      cash flows used in financing activities for the
      year ended December 31, 2005 and 2004 were $40,664 and $1,462,136, respectively.
      The decrease was mainly due to the decrease in repayments to related
      parties.





Expected
      Material Capital Commitments





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




14





Expected
      Significant Changes in Number of Employees





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





EFFECTS
      OF INFLATION





The
      Company believes that the effect of inflation has not been material during
      the
      years ended December 31, 2004 and December 31, 2005. The countries in which
      the
      Metrolink Group conducts the majority of its operations, which include Hong
      Kong, PRC and the United States, were subject to moderate degree of
      inflations.





EFFECT
      OF
      FLUCTUATION IN FOREIGN EXCHANGE RATES





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





OFF-BALANCE
      SHEET ARRANGEMENTS





There
      are
      no off-balance sheet arrangements that have or are reasonably likely to have
      a
      current or future effect on our financial condition, changes in financial
      condition, revenues or expenses, results of operations, liquidity, capital
      expenditures or capital resources that are material to investors.





CONTRACTUAL
      OBLIGATIONS





**CONTRACTUALOBLIGATIONS**
            
            **PAYMENT
                DUE BY PERIOD******
            
            **TOTAL**
            
            **LESS
                THAN**
              **1
                YEAR**
            
            **1-3**
              **YEARS**
            
            **3-5**
              **YEARS**
            
            **MORE
                THAN**
              **5
                YEARS**Long-Term
                Debt Obligations
            
            
            None
            
            
            --
            
            
            --
            
            
            --
            
            
            --Capital
                Lease Obligations
            
            
            None
            
            
            --
            
            
            --
            
            
            --
            
            
            --Operating
                Lease Obligations (1)
            
            $
            28,228
            
            $
            28,228
            
            
            --
            
            
            -
            
            
            --Purchase
                Obligations
            
            
            None
            
            
            --
            
            
            --
            
            
            --
            
            
            --Other
                Long-Term Liabilities
              Reflected
                on the Registrant's
              Balance
                Sheet under GAAP
            
            
            None
            
            
            --
            
            
            --
            
            
            --
            
            
            --Total
            
            $
            28,228
            
            $
            28,228
            
            
            --
            
            
            --
            
            
            --


_______________


(1)
      This
      obligation arises under the Operating Lease Agreement for MPL subsidiary China
      Star Management Limited's lease of their offices located at Unit 611 Miramar
      Tower, 132 Nathan Road, Tsimshatsui, Hong Kong. This lease expired on August
      31,
      2006.




15




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






**CHINA
          ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **INDEX
          TO CONSOLIDATED FINANCIAL STATEMENTS**
 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
                    FIRM
                F-1CONSOLIDATED
                  BALANCE SHEET
                F-2CONSOLIDATED
                  STATEMENTS OF OPERATIONS
                F-3CONSOLIDATED
                  STATEMENTS OF CHANGES IN STOCKHOLDERS’ DEFICIENCY
                F-4CONSOLIDATED
                  CASH FLOW STATEMENTS
                F-5NOTES
                  TO CONSOLIDATED FINANCIAL STATEMENTS
                F-6
                    - F-13
   16
  **REPORT
          OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**
 
 
 To
          the
          Board of Directors and Stockholders of
 China
          Entertainment Group, Inc. and Subsidiaries
 
 We
          have
          audited the accompanying consolidated balance sheet of China Entertainment
          Group, Inc., a Nevada limited liability company, and its subsidiaries
          (collectively referred to as the “Company”) as of December 31, 2005, and the
          related consolidated statements of operations, changes in stockholders’
deficiency, and cash flows for the years ended December 31, 2005 and 2004.
          These
          consolidated financial statements are the responsibility of the Company’s
          management. Our responsibility is to express an opinion on the consolidated
          financial statements based on our audits.
 
 We
          conducted our audits in accordance with the standards of the Public Company
          Accounting Oversight Board (United States). Those standards require that
          we plan
          and perform the audit to obtain reasonable assurance about whether the
          consolidated financial statements are free of material misstatement. An
          audit
          includes examining, on a test basis, evidence supporting the amounts and
          disclosures in the financial statements. An audit also includes assessing
          the
          accounting principles used and significant estimates made by management,
          as well
          as evaluating the overall financial statement presentation. We believe
          that our
          audits provide a reasonable basis for our opinion.
 
 In
          our
          opinion, the consolidated financial statements referred to above present
          fairly,
          in all material respects, the consolidated financial position of the Company
          as
          of December 31, 2005, and the consolidated results of their operations
          and their
          cash flows for the years ended December 31, 2005 and 2004, in conformity
          with
          generally accepted accounting principles in the United States of
          America.
 
 The
          accompanying financial statements have been prepared assuming that the
          Company
          will continue as a going concern. The Company has a negative working
          capital and recent losses from operations, resulting in a net stockholders’
deficiency at December 31, 2005. These factors raise substantial doubt
          about the
          Company’s ability to continue as a going concern. Management’s plans in
          regard to these matters are also described in Note 1. The financial
          statements do not include any adjustments that might result from the outcome
          of
          this uncertainty.
  /s/ Clancy
          and Co.
 Clancy
          and Co., P.L.L.C.
 Scottsdale,
          Arizona
   November
          10, 2006, except for Note 7 which is dated March 21, 2007
  F-1
  **CHINA
        ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        BALANCE SHEET**
 **DECEMBER
        31, 2005**
 
 **(Expressed
                  in U.S. dollars)****ASSETS**Current
                  AssetsCash
                  and cash equivalents
              
              $
              269,760Accounts
                  receivable
              
              
              86,120Deposits
                  paid for artist management services
              
              
              2,064,783Prepaid
                  expenses and other current assets
              
              
              4,409Amounts
                  due from related parties
              
              
              739,928Total
                  current assets
              
              
              3,165,000Fixed
                  assets, net
              
              
              48,570Total
                  Assets
              
              $
              3,213,570L**IABILITIES
                  AND STOCKHOLDER’S DEFICIENCY**Current
                  LiabilitiesAccounts
                  payable
              
              $
              127,877Accrued
                  liabilities
              
              
              320,042Deposits
                  received from customers
              
              
              1,559,116Amounts
                  due to related parties
              
              
              1,870,536Total
                  current liabilities
              
              
              3,877,571Commitments
                  and contingenciesStockholder’s
                  DeficiencyShare
                  capital: $0.001 par value; 200,000,000 shares authorized;
                128,963,425
                  shares issued and outstanding
              
              
              128,963Additional
                  paid-in capital
              
              
              118,762Accumulated
                  deficit
              
              
              (911,726
              )Total
                  stockholders’ deficiency
              
              
              (664,001
              )Total
                  liabilities and stockholders’ deficiency
              
              $
              3,213,570
   **The
        accompanying notes are an integral part of these consolidated financial
        statements.**
  F-2
 
 **CHINA
        ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF OPERATIONS**
 **FOR
        THE YEARS ENDED DECEMBER 31**
 
 **(****Expressed
                  in U.S. dollars)**
              
              **2005**
              
              **2004**Revenues,
                  net
              
              $
              1,231,563
              
              $
              2,599,721General
                  and administrative expenses
              
              
              (1,415,163
              )
              
              (1,325,427
              )Provision
                  for impairment for amounts due from related entity
              
              
              (526,278
              )
              
              -Net
                  (losses)/earnings before income taxes
              
              
              (709,878
              )
              
              1,274,294Benefit
                  (provision) for income taxes
              
              
              920
              
              
              (125,718
              )Net
                  (losses)/earnings
              
              $
              (708,958
              )
              $
              1,148,576Basic
                  and diluted (losses)/earnings per share
              
              $
              (0.006
              )
              $
              0.009Basic
                  and diluted weighted shares outstanding
              
              
              127,896,106
              
              
              128,963,402Dividends
              
              $
              -
              
              $
              1,410,256
 
  **The
        accompanying notes are an integral part of these consolidated financial
        statements.**
  F-3
 
 **CHINA
        ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENT OF CHANGES IN STOCKHOLDERS’ DEFICIENCY**
 **FOR
        THE YEARS ENDED DECEMBER 31, 2005 AND 2004**
  **Common**
                ****
                **Common**
                ****
                **Additional**
                ****
                ****
                ****
                ****
                ********
                ****
                **stock**
                ****
                **stock**
                ****
                **paid-in**
                ****
                **Accumulated**
                ****
                ****
                ******(Expressed
                    in U.S. dollars)**
                ****
                **(shares)**
                ****
                **(par
                    value)**
                ****
                **capital**
                ****
                **Deficit**
                ****
                **Total****Balance
                    - December 31, 2003**
                
                
                **1,000,001**
                
                **$**
                **128,206**
                
                **$**
                **-**
                
                **$**
                **(407,745**
                **)**
                **$**
                **(279,539**
                **)**Effect
                    of reverse acquisition:Reverse
                    merger equity acquired
                
                
                9,022,880
                
                
                9,023
                
                
                (9,023
                )
                
                -
                
                
                -Retire
                    equity of private company
                
                
                (1,000,001
                )
                
                (128,206
                )
                
                595,620
                
                
                -
                
                
                467,414Issuance
                    of new shares to effect reverse acquisition
                
                
                119,940,465
                
                
                119,940
                
                
                (119,940
                )
                
                -
                
                
                -Rounding
                    share adjustment
                
                
                57
                
                
                -
                
                
                -
                
                
                -
                
                
                -Net
                    earnings
                
                
                -
                
                
                -
                
                
                -
                
                
                1,148,576
                
                
                1,148,576Dividend
                    paid
                
                
                
                
                
                
                
                
                (466,657
                )
                
                (943,599
                )
                
                (1,410,256
                )**Balance
                    - December 31, 2004**
                
                
                **128,963,402**
                
                
                **128,963**
                
                
                **-**
                
                
                **(202,768**
                **)**
                
                **(73,805**
                **)**Cancellation
                  of
                  4,809,522 shares originally issuedpursuant
                    to the Merger in 2004
                
                
                (4,809,522
                )
                
                (4,810
                )
                
                4,810
                
                
                -
                
                
                -Issuance
                  of
                  1,809,522 shares to an existing shareholderto
                    settle expenses valued at the fair market value on thedate
                    of issuance
                
                
                1,809,522
                
                
                1,810
                
                
                66,952
                
                
                -
                
                
                68,762Common
                    stock issued for cash
                
                
                3,000,000
                
                
                3,000
                
                
                47,000
                
                
                -
                
                
                50,000Net
                    losses
                
                
                -
                
                
                -
                
                
                -
                
                
                (708,958
                )
                
                (708,958
                )Rounding
                    share adjustment
                
                
                23
                
                
                -
                
                
                -
                
                
                -
                
                
                -**Balance
                    - December 31, 2005**
                
                
                **128,963,425**
                
                **$**
                **128,963**
                
                **$**
                **118,762**
                
                **$**
                **(911,726**
                **)**
                **$**
                **(664,001**
                **)**
 **The
        accompanying notes are an integral part of these consolidated financial
        statements.**
  F-4
 
 **CHINA
        ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        STATEMENTS OF CASH FLOWS**
 **FOR
        THE YEARS ENDED DECEMBER 31**
  **(Expressed
                    in U.S. dollars)**
                
                **2005**
                
                **2004****Cash
                    flows from operating activities**Net
                    (losses)/earnings
                
                $
                (708,958
                )
                
                1,148,576Adjustments
                    to reconcile net earnings (loss) to net cash flowsprovided
                    by operating activitiesDepreciation
                    on fixed assets
                
                
                5,527
                
                
                118Provision
                    for impairment for amounts due from related entity
                
                
                526,278
                
                
                -Expenses
                    settled by the issuance of common stock
                
                
                68,762
                
                
                -Changes
                    in assets and liabilities(Increase)
                    decrease in accounts receivable
                
                
                94,106
                
                
                (115,827
                )(Increase)
                    decrease in deposits paid, prepayments and other
                    receivables
                
                
                767,076
                
                
                91,027Increase
                    (decrease) in accounts payable, deposits and accrued
                    liabilities
                
                
                (422,377
                )
                
                102,334Increase
                    (decrease) in income taxes payable
                
                
                (45,679
                )
                
                45,679**Net
                    cash flows provided by operating activities**
                
                
                **284,735**
                
                
                **1,271,907****Cash
                    flows from investing activities**Purchases
                    of fixed assets
                
                
                (53,431
                )
                
                (391
                )**Net
                    cash flows used in investing activities**
                
                
                **(53,431**
                **)**
                
                **(391**
                **)****Cash
                    flows from financing activities**Common
                    stock issued for cash
                
                
                50,000
                
                
                -Advances
                    from/(repayments to) related parties
                
                
                (90,664
                )
                
                (1,462,136
                )**Net
                    cash flows used in financing activities**
                
                
                **(40,664**
                **)**
                
                **(1,462,136**
                **)**Increase
                    (decrease) in cash and cash equivalents
                
                
                190,640
                
                
                (190,620
                )Cash
                    and cash equivalents, beginning of period
                
                
                79,120
                
                
                269,740Cash
                    and cash equivalents, end of period
                
                $
                269,760
                
                
                79,120**Cash
                    paid for:**Interest
                
                $
                -
                
                
                -Income
                    taxes
                
                $
                45,679
                
                
                -**Supplemental
                    disclosure of noncash operating, investing and financing
                    activities:**Dividends
                    netted against outstanding loans to shareholders
                
                $
                -
                
                
                1,410,256Expenses
                    settled by the issuance of common stock
                
                
                68,762
                
                
                -
  **The
        accompanying notes are an integral part of these consolidated financial
        statements.**
  F-5
  **CHINA
          ENTERTAINMENT GROUP, INC. AND SUBSIDIARIES**
 **NOTES
          TO THE CONSOLIDATED FINANCIAL STATEMENTS**
 **DECEMBER
          31, 2005**
 **(Expressed
          in U.S. dollars)**
 
   **1.** **BUSINESS
          OPERATIONS, LIQUIDITY AND GOING CONCERN**
  *Business
          Operations*
  China
          Entertainment Group, Inc. (“CGRP”), is a Nevada limited liability Company that
          serves as an investment holding company. The Company, through its wholly-owned
          subsidiaries, is engaged in the provision of artist management services.
          Our
          headquarters are located in Hong Kong and we generated revenues in 2005
          primarily from operations within Hong Kong and the People’s Republic of China,
          which accounted for approximately 61% (2004: 91%) and 34% (2004: 8%) of
          our
          consolidated net revenues, respectively.
 
 During
          2004, CGRP completed a merger (the "Merger") with Metrolink Pacific Limited
          ("MPL"), an International Business Company organized to do business under the
          laws of the British Virgin Islands ("BVI"), whereby MPL agreed to transfer
          all
          of its issued and outstanding shares in exchange for 109,623,006 shares
          of
          common stock of CGRP. As a result of the Merger, MPL became a wholly-owned
          subsidiary of CGRP and the sole stockholder of MPL, Imperial International
          Limited ("Imperial"), received an aggregate number of shares of CGRP common
          stock representing approximately 85% of the total number shares of CGRP's
          common
          stock outstanding after the Merger. In addition, the Board and management
          of
          CGRP are now controlled by members of the Board of Directors and management
          of
          Imperial prior to the merger.
 
 Accordingly,
          the Merger has been accounted for as a reverse acquisition, with MPL being
          the
          accounting parent and CGRP being the accounting subsidiary. The consolidated
          financial statements include the operations of CGRP, the accounting subsidiary,
          from the date of acquisition. Since the Merger was accounted for as a reverse
          acquisition, the accompanying consolidated financial statements reflect
          the
          historical financial statements of MPL, the accounting acquirer, as adjusted
          for
          the effects of the exchange of shares on its equity accounts, the inclusion
          of
          net liabilities of the accounting subsidiary as of the date of the Merger
          on
          their historical basis and the inclusion of the accounting subsidiary's
          results
          of operations from that date. Additionally, CGRP adopted the December 31
          fiscal
          year end of the accounting parent.
 
 To
          effect
          the reverse acquisition and comply with the terms of the Merger, the Company
          effectuated a reverse split of its issued and outstanding common stock
          on a 1.69
          to 1 basis, increased the authorized number of shares of its common stock,
          $0.001 par value per share, from 60,000,000 to 200,000,000, and changed
          its name
          to China Artists Agency, Inc. In 2005, the Company changed its name to
          China
          Entertainment Group, Inc. The Company's articles were amended with the
          State of
          Nevada for all of the board authorized actions.
 
 The
          consolidated financial statements and accompanying notes are prepared in
          accordance with accounting principles generally accepted in the United
          States of
          America and unless the context otherwise requires, references to the “Company”
shall collectively refer to CGRP, including all of its subsidiaries (see
          Note
          2).
 
 *Liquidity
          and Going Concern*
 
 As
          of
          December 31, 2005, the Company has a negative working capital and net losses
          from operations for 2005, resulting in a net stockholders’ deficiency. These
          matters raise substantial doubt about the Company’s ability to continue as a
          going concern. Although the Company expects to incur additional losses
          for at
          least the next twelve months, the Company anticipates that its current
          cash and
          cash equivalents and the ability to borrow from related parties will be
          sufficient to fund its operations at least through December 31, 2006. This
          assumes the Company either achieves profitable operations and the cash
          burn rate
          from the results experienced in the recent past does not increase significantly.
          If, however, the Company is unable to realize profitable operations and
          additional resources are required to operate, the Company may be forced
          to
          borrow additional funds, which could increase the risk of operating as
          a going
          concern, or cease operations.  The
          consolidated financial statements do not include any adjustments relating
          to the
          recoverability and classification of recorded asset amounts or the amount
          and
          classification of liabilities or any other adjustment that might be  necessary
          should the Company be unable to continue as a going concern.
  F-6
 
 **2.** **SUMMARY
              OF SIGNIFICANT ACCOUNTING POLICIES**
  **Principles
          of consolidation**  -
          The  consolidated
          financial statements include the accounts of the Company and its wholly-owned
          subsidiary, MPL. All significant intercompany transactions and balances
          have
          been eliminated in consolidation. MPL’s wholly-owned subsidiaries include China
          Star Management Limited ("CSML"), Anglo Market International Limited ("AMIL"),
          and Metrolink Global Limited ("MGL"). The principal activities of MPL’s
          subsidiaries are the provision of artist management services.
 
 **Use
          of estimates** **-** The
          preparation of financial statements in conformity with generally accepted
          accounting principles in the United States of America requires management
          to
          make estimates and assumptions that affect the reported amounts of the
          assets
          and liabilities and disclosure of contingent assets and liabilities at
          the date
          of the financial statements and the reported amounts of revenues and expenses
          during the reporting period. Actual results could differ from those
          required.
 
 **Related
          party transaction** **-** Parties
          are considered to be related if one party has the ability, directly or
          indirectly, to control the other party or exercise significant influence
          over
          the other party in making financial and operating decisions. Parties are
          also
          considered to be related if they are subject to common control or common
          significant influence. Related parties may be individuals or corporate
          entities.
          A transaction is considered to be a related party transaction when there
          is a
          transfer of resources or obligations between related parties (see Note
          3).
 
 **Fair
          value of financial instruments** **-** The
          Company considers the carrying amount of cash, accounts receivable and
          accounts
          payable, deposits paid and received, other receivables and payables, and
          amounts
          due to and from related parties to approximate fair values due to their
          short
          maturities.
 
 **Concentration
          of credit risk** - The
          Company is subject to certain concentrations of credit risk as
          follows:
 
 *·*
              *Due
                  to accounts receivable*-
                  The balance in trade receivables at December 31, 2005 includes
                  3 customers
                  that each accounted for more than 10% of the total accounts receivable
                  balance. *·*
              *Due
                  to revenues and major customers*-
                  For the**year
                  ended December 31, 2005, 3 (2004: 4) artists each accounted for
                  more than
                  10% of the Company’s consolidated net revenues and collectively accounted
                  for approximately 74% (2004: 49%) of the Company’s consolidated net
                  revenues.  **Earnings
          per share** - Basic
          earnings per share (“EPS”) is computed by dividing net earnings/(loss)
          (numerator) by the weighted average number of common shares outstanding
          (denominator) during the period. Diluted EPS is computed by dividing net
          earnings/(loss) (numerator) by the weighted average number of common shares
          outstanding plus dilutive common stock equivalents. There were no common
          stock
          equivalents for any of the periods presented. All per share and per share
          information are adjusted retroactively to reflect stock splits and changes
          in
          par value.
 
 **Stock-based
          compensation** **-** The
          Company **** adopted
          the disclosure requirements of Statement of Financial Accounting Standard
          No.
          123, “Accounting for Stock-Based Compensation” (“SFAS 123) and SFAS 148 with
          respect to pro forma disclosure of compensation expense for options issued.
          For
          purposes of the pro forma disclosures, the fair value of each option grant
          is
          estimated on the grant date using the Black-Scholes option-pricing model.
          There
          were no stock options issued or outstanding as of December 31,
          2005.
 
 The
          Company applies APB No. 25 in accounting for its stock option plans and,
          accordingly, no compensation cost would be recognized in the Company’s financial
          statements for stock options under any of the stock plans which on the
          date of
          grant the exercise price per share was equal to or exceeded the fair value
          per
          share. However, compensation cost would be recognized for warrants and
          options
          granted to non-employees for services provided. There were no options or
          warrants granted for the period presented.
  **Foreign
          currency translation** **-** The
          functional currencies of our foreign subsidiaries are their local currencies,
          Hong Kong dollars. Revenues and expenses are translated at average exchange
          rates during the period, and assets and liabilities are translated at the
          end of
          period exchange rates. Translation adjustments resulting from this process
          are
          included in accumulated other comprehensive income (loss) in stockholders'
          equity. Transaction gains and losses that arise from exchange rate fluctuations
          on transactions denominated in a currency other than the functional currency
          are
          included in the results of operations as incurred. These amounts are immaterial
          to the financial statements.
  F-7
 **Cash
          and cash equivalents** **-** Cash
          and
          cash equivalents represent all highly liquid investments with original
          maturities of three months or less.
 
 **Fixed
          assets** - Fixed
          assets are stated at cost less accumulated depreciation. The Company provides
          for depreciation using the straight-line method over the estimated useful
          lives
          of the related assets, which is five years. Depreciation expense for 2005
          was
          $5,527 (2004: $118). When assets are retired or disposed of, the cost and
          accumulated depreciation thereon are removed and any resulting gains or
          losses
          are recognized in current operations. Repairs and maintenance are expensed
          as
          incurred.
 
 **Impairment
          of long-lived assets** - The
          Company periodically assesses the recoverability of the carrying amounts
          of
          long-lived assets. A loss is recognized when expected undiscounted future
          cash
          flows are less than the carrying amount of the asset. The impairment loss
          is the
          amount by which the carrying amount of the asset exceeds its fair
          value.
  **Revenue
          recognition and provisions for losses** **-** Service
          fee income from provision of artist management services is recognized when
          services are rendered. In accordance with SEC Staff Accounting Bulletin
          No. 101,
“Revenue Recognition in Financial Statements,” the Company presents its revenue
          on a net basis as it acts as an agent for the artists. Revenues on a gross
          basis
          for 2005 were approximately $3,016,000 (2004: $7,176,000).
 
 **Accounts
          receivable and provisions for losses** - The
          Company establishes an allowance for doubtful accounts to ensure accounts
          receivables are not overstated due to uncollectibility. Provisions for
          losses
          are determined on the basis of loss experience and current economic conditions
          and amounted to $526,278 for the year ended December 31, 2005 (2004: nil).
          Any
          significant changes in any of these criteria would impact management’s estimates
          in establishing our allowance for doubtful accounts.
 
 **Advertising
          costs** -
          Advertising costs are expensed as incurred and were immaterial for both
          periods
          presented.
  **Income
          taxes** **-** The
          Company accounts for income taxes using SFAS 109, “Accounting for Income Taxes”.
          Under SFAS 109, income taxes are accounted for under the asset and liability
          method. The charge for taxation is based on the results for the year as
          adjusted
          for items, which are non-assessable or disallowed and is calculated tax
          rates
          that have been enacted or substantively enacted at the balance sheet date.
          Deferred tax assets and liabilities are recognized for the future tax
          consequences attributable to differences between the financial statement
          carrying amounts of existing assets and liabilities and their respective
          tax
          bases and operating loss and tax credit carryforwards. Deferred tax assets
          and
          liabilities are measured using enacted tax rates expected to apply to taxable
          income in the years in which those temporary differences are expected to
          be
          recovered or settled. The effect on deferred tax assets and liabilities
          of a
          change in tax rates is recognized in current operations in the period that
          includes the enactment date. There are no deferred tax amounts at December
          31,
          2005.
  **Reclassifications**
          - Certain
          accounts have been reclassified to conform to the current periods presentation.
          There was no effect on net earnings/losses or total stockholders' deficiency
          for
          the periods presented.
  **Recent
          Accounting Pronouncements** - The
          following is a summary of recently promulgated accounting
          pronouncements:
  In
          December 2004, the Financial Accounting Standards Board (“FASB”) issued
          Statement of Financial Accounting Standards (“SFAS”) 123-R, *Share-Based
          Payment* (“SFAS
          123(R)”). SFAS 123(R) replaces SFAS 123, *Accounting
          for Stock-Based Compensation* ,
          and
          supersedes the Accounting Principles Board (“APB”) APB Opinion 25, *Accounting
          for Stock Issued to Employees* (“APB
          25”). SFAS 123(R) requires, among other things, that all share-based payments
          to
          employees, including grants of stock options, be measured based on their
          grant-date fair value and recognized as expense. The Company does not expect
          there to be any significant impact of adopting SFAS 123(R) on its consolidated
          financial position, cash flows and results of operations.
  On
          June
          7, 2005, the FASB issued Statement 154, *Accounting
          Changes and Error Corrections* , *a
          replacement of APB Opinion 20 and FASB Statement 3* ,
          (“SFAS
          154”). SFAS 154 changes the requirements for the accounting for and reporting
          of
          a change in accounting principle. Previously, most voluntary changes in
          accounting principles were required recognition via a cumulative effect
          adjustment within net income (loss) of the period of the change. SFAS 154
          requires retrospective application to prior periods’ financial statements,
          unless it is impracticable to determine either the period-specific effects
          or
          the cumulative effect of the change. SFAS 154 is effective for accounting
          changes made in fiscal years beginning after December 15, 2005. The Company
          does
          not expect there to be any significant impact of adopting SFAS 154 on its
          consolidated financial position, cash flows and results of operations.
  F-8
  In
          February 2006, the FASB issued SFAS 155, *Accounting
          for Certain Hybrid Financial Instruments - an amendment of FASB Statements
          133
          and 140* ,
          (“SFAS
          155”). SFAS will be effective for the Company beginning January 1, 2007. The
          statement permits interests in hybrid financial instruments that contain
          an
          embedded derivative that would otherwise require bifurcation, to be accounted
          for as a single financial instrument at fair value, with changes in fair
          value
          recognized in earnings. This election is permitted on an
          instrument-by-instrument basis for all hybrid financial instruments held,
          obtained, or issued as of the adoption date. The
          Company does not expect there to be any significant impact of adopting
          SFAS 155
          on its consolidated financial position, cash flows and results of operations.
  In
          June
          2006, the FASB issued Interpretation 48, *Accounting
          for Uncertainty in Income Taxes — an Interpretation of FASB Statement
          No. 109* (“FIN
          48”), which clarifies the accounting for uncertainty in tax positions. This
          Interpretation requires that the Company recognize in its financial statements
          the impact of a tax position if that position is more likely than not of
          being
          sustained on audit, based on the technical merits of the position. The
          provisions of FIN 48 are effective for the Company on January 1, 2007, with
          the cumulative effect of the change in accounting principle, if any, recorded
          as
          an adjustment to opening retained earnings. The Company does not expect
          there to
          be any significant impact of adopting FIN 48 on its consolidated financial
          position, cash flows and results of operations.
  In
          September 2006, the FASB issued SFAS 157, *Fair
          Value Measurements* (“SFAS
          157”), which provides guidance about how to measure assets and liabilities
          that
          use fair value. SFAS 157 will apply whenever another US GAAP standard requires
          (or permits) assets or liabilities to be measured at fair value but does
          not
          expand the use of fair value to any new circumstances. This standard also
          will
          require additional disclosures in both annual and quarterly reports. SFAS
          157
          will be effective for financial statements issued for fiscal years beginning
          after November 15, 2007, and will be adopted by us beginning in the first
          quarter of 2008. The
          Company does not expect there to be any significant impact of adopting
          SFAS 157
          on its consolidated financial position, cash flows and results of operations.
  In
          September 2006, the SEC staff issued Staff Accounting Bulletin (“SAB”) 108, *Considering
          the Effects of Prior Year Misstatements when Quantifying Misstatements
          in
          Current Year Financial Statements* (“SAB
          108”). SAB 108 was issued to eliminate the diversity of practice in how public
          companies quantify misstatements of financial statements, including
          misstatements that were not material to prior years’ financial statements. The
          Company will apply the provisions of SAB 108 to its annual financial statements
          for the year ending December 31, 2006. The
          Company does not expect there to be any significant impact of adopting
          SAB 108
          on its consolidated financial position, cash flows and results of operations.
 
 Other
          recent accounting pronouncements issued by the FASB (including its Emerging
          Issues Task Force (“EITF”)), the American Institute of Certified Public
          Accountants (“AICPA”), and the SEC did not or are not believed by management to
          have a material impact on the Company's present or future financial
          statements.
 **3. RELATED
              PARTY
              TRANSACTIONS**
  Amounts
              due from (to) related parties are unsecured, interest-free and due
              on demand.
              The following table summarizes significant related party transactions
              as of
              December 31, 2005.
 **Related****party**
                
                **Nature
                    of****relationship****and
                    control**
                
                **Description****of
                    transaction**
                
                **Consolidated**
                  **Balance
                    Sheet**
                  **Balances**Together
                    Again Limited (“TAL”)
                
                Intermediate
                    holding company, 51% owned by Colima and 49% owned by China Star
                    Entertainment Limited
                
                Amount
                    receivable in relation to service income and funds transferred
                    between
                    entities for working capital purposes
                
                $
                    739,928Ms.
                    Chen Ming Yin, Tiffany
                
                Director
                    of the Company
                
                Director
                    compensation
                
                $
                    19,231Mr.
                    Tang Chien Chang
                
                Director
                    of the Company
                
                Funds
                    transferred to theCompany
                    for working capital purposes
                
                292,037Imperial
                    International Limited
                
                Intermediate
                    holding company, ultimately owned by Colima
                
                Funds
                    transferred between entities for working capital purposes
                
                671,028China
                    Star HK Distribution Limited
                
                Related
                    company, subsidiaries of China Star Entertainment Limited which
                    owns 49%
                    of TAL and Colima owns 51%
                
                Amount
                    receivable in relation to service income and funds transferred
                    between
                    entities for working capital purposes
                
                888,240$
                    1,870,536
  F-9
 **Related
          party amounts included in the Consolidated Statement of Operations for
          the
          periods presented include the following:**
 
 **Balances****Related
                  party**
                
                **Nature
                  of relationship and control**
                
                **Description
                  of transaction**
                
                **2005**
                
                **2004**China
                    Star HK Distribution Limited
                
                Related
                    company, subsidiaries of China Star Entertainment Limited which
                    owns 49%
                    of TAL and Colima owns 51%
                
                Service
                    income, net
                
                $
                    931,026
                
                $
                    2,208,846China
                    Star Entertainment Limited
                
                Related
                    company, owns 49% of TAL and Colima owns 51% of TAL
                
                Management
                    fee paid
                
                $
                    107,693
                
                $
                    107,693China
                    Star Laser Disc Company Limited
                
                Related
                    company, subsidiaries of China Star Entertainment Limited which
                    is
                    ultimately owned 49% with Colima
                
                Management
                    fee paid
                
                $
                    507,692
                
                $
                    507,692
  **4.** **BALANCE
          SHEET ITEMS:**
 
 **DEPOSITS
          PAID / DEPOSITS RECEIVED**
 
 Deposits
          paid are an asset that represents amounts paid per a signed contract with
          various famous artists. As the services are performed, the amount is recognized
          as services charges on the proportion of number of performances performed
          to the
          total number of performances contracted. The contract periods range from
          one
          year to three years and the artists are liable to provide services for
          a fixed
          number of performances.
 
 Deposits
          received are a liability that represents amounts advanced from customers
          for
          artist performance in advertisement, drama, films and concerts. As the
          services
          are performed, the amount is reclassified and recognized as revenues. The
          contract period ranges from one year to three years and the performances
          contracted were either fixed in term of number of performance or in periods
          to
          be performed.
  F-10
  **FIXED
        ASSETS, NET**
 
 Office
                  equipment
              
              $
              1,227Motor
                  vehicle
              
              
              53,119Total
              
              
              54,346Less
                  accumulated depreciation
              
              
              5,776Net
                  book value
              
              
              48,570
 
 **ACCRUED
        LIABILITIES**
 
 Accrued
                  services charges
              
              $
              173,987Accrued
                  professional fees
              
              
              116,746Other
                  payables
              
              
              29,309320,042
  **5.** **INCOME
                  TAXES**
 Hong
                  Kong
                  profits tax has been provided at a rate of 17.5% on the estimated
                  assessable
                  profits arising in Hong Kong. A reconciliation of the provision
                  for Hong Kong
                  profits follows:
  **2005**
                          
                          **2004****$**
                          
                          **%**
                          
                          **$**
                          
                          **%**Net
                              (losses)/earnings before income tax
                          
                          
                          (708,958
                          )
                          
                          (100
                          )
                          
                          1,274,294
                          
                          
                          100(Benefit)
                              provision for Hong Kong profits tax
                          
                          
                          124,228
                          
                          
                          17.5
                          
                          
                          (223,002
                          )
                          
                          (17.5
                          )Tax
                              effect of loss incurred at the company level
                          
                          
                          (21,834
                          )
                          
                          (3.1
                          )
                          
                          (38,552
                          )
                          
                          (3.0
                          )Tax
                              effect of earnings not taxable in determining taxable
                              profits
                          
                          
                          51,024
                          
                          
                          7.2
                          
                          
                          16
                          
                          
                          -Tax
                              effect of expenses not deductible in determining taxable
                              profits
                          
                          
                          (152,504
                          )
                          
                          (21.5
                          )
                          
                          (73
                          )
                          
                          -Tax
                              effect of unrecognized temporary differences
                          
                          
                          (914
                          )
                          
                          (0.1
                          )
                          
                          84
                          
                          
                          -Tax
                              effect of tax loss utilized
                          
                          
                          -
                          
                          
                          -
                          
                          
                          135,809
                          
                          
                          10.6Overprovision
                              of income taxes for previous year
                          
                          
                          920
                          
                          
                          0.1
                          
                          
                          -
                          
                          
                          -Provision
                              for income taxes
                          
                          
                          920
                          
                          
                          0.1
                          
                          
                          (125,718
                          )
                          
                          (9.9
                          )
 U.S.
          Income Taxes -
          For the
          years ended December 31, 2005 and 2004, the Company generated U.S. net
          operating
          losses and, therefore, has no tax liability. The cumulative net operating
          loss
          carryforward was approximately $426,000 at December 31, 2005, and is subject
          to
          certain limitations as defined under Section 382 of the Internal Revenue
          Code. The
          valuation allowance increased approximately $74,000 from the year 2004.
          Realization of deferred tax assets is dependent upon the generation of
          sufficient taxable income prior to the expiration of tax loss carryforwards,
          which expire in the year 2025. Management believes it is more likely than
          not
          that the net carrying value of the deferred tax asset will not be realized
          and
          has provided a 100% valuation allowance. Deferred income taxes consist
          of the
          following significant components at U.S. statutory income tax rate of 34%
          at
          December 31, 2005:
 
 Total
                    deferred tax assets arising from net operating loss carryforwards
                    - long
                    term
                
                $
                145,000Less
                    valuation allowance
                
                
                (145,000
                )Net
                    deferred tax assets
                
                
                -
 F-11
  **6. STOCKHOLDERS’
          EQUITY TRANSACTIONS**
 
 Common
          stock
 
 *2004
          -* Prior
          to
          and in connection with the Merger, the Company had the following common
          stock
          related activity:
 
 *
          On
          November 12, 2004, 575,000 shares of common stock were canceled due to
          non-performance.
 
 *
          On
          November 12, 2004, 2,000,000 shares of common stock were issued to two
          former
          officers and directors for debt consisting of $417,733, resulting in a
          reduction
          in $266,142 in accrued expenses, $26,902 in shareholder loans, and $124,689
          in
          notes payable due to shareholders. Other liabilities of the legal acquirer
          of
          $70,315 (accruals) and $110,899 (accounts payable) existing prior to Merger
          were
          assumed by an entity controlled by the former president of the Company
          prior to
          the Merger, by means of a pro-rata dividend to the Company's shareholders
          of
          record on December 10, 2004.
 
 *
          On
          November 15, 2004, the Board of Directors of the Company approved a reverse
          split of the Company's issued and outstanding common stock at 1.69 to 1.
          Additionally, to comply with the terms of the Merger for the issuance of
          109,623,006 shares of the Company's common stock, the Company increased
          the
          authorized shares of its common stock from 60,000,000 to
          200,000,000.
 
 *
          In
          connection with the Merger, in addition to the 109,623,006 new shares of
          the
          Company's common stock issued to effectuate the reverse merger transaction,
          the
          Company issued 3,507,937 and 6,809,522 new shares of the Company's common
          stock
          to Emerging Growth Partners, Inc. and Orient Financial Services Limited,
          respectively, unrelated parties, for services provided in relation to the
          exchange.
 
 *
          In
          connection with the Merger, all previously issued stock options (750,000
          pre-split) outstanding were forfeited.
 
 *2005
          -* The
          Company had the following equity transactions during the year:
 
 *
          In
          September 2005, the Company's Board of Directors approved the cancellation
          of
          4,809,522 shares of common stock previously issued to Orient Financial
          Services
          Limited, an unrelated party, for services provided in connection with the
          Company's merger agreement in November 2004 (see Note 1).
 
 *
          In
          November 2005, the Company sold 3,000,000 shares for cash to Emerging Growth
          Partners, Inc., an unrelated party, pursuant to an Advisory Service Agreement
          dated June 6, 2005.
  *
          In
          November 2005, the Company issued 1,809,522 shares to Sandy Lang, an existing
          shareholder to settle expenses. A “Deed of Settlement” dated June 8, 2005, was
          executed between the Company and certain parties, including Sandy Lang.
          In
          exchange for the shares issued to Sandy Lang, which were approved by the
          Company’s Board of Directors, Sandy Lang agreed to settle, forebear to litigate,
          and release any and all actions or claims (whether directly or indirectly
          and in
          whichever jurisdiction) that he has or may have against the Company arising
          out
          of, in connection with, or leading to the Merger described in Note 1
          above.
 
 Dividends
 
 There
          were no dividends declared or paid by the Company during the year ended
          December
          31, 2005. In previous year, CSML, a wholly-owned subsidiary of MPL, paid
          an
          interim dividend of $1.41 per share ($1,410,256) as a non-cash financing
          activity by netting the dividend payment against related party balances.
  **7.** **COMMITMENTS
          AND CONTINGENCIES**
  *Litigation*
 
 As
            more
            fully described below, the Company is a defendant in a lawsuit filed
            by two of
            its former officers alleging claims for fraud, breach of contract, violations
            of
            RICO, and civil conspiracy against several parties, including the Company.
            According to the Complaint, the Company is "a nominal Defendant" as Plaintiffs
            purport to assert claims derivatively on its behalf. Accordingly, it
            appears no
            damages or relief are being sought against the Company itself. The Company
            believes the suit is completely without merit, denies Plaintiffs’ alleged
            claims, and intends to vigorously defend its position. The details of
            the
            complaint are set out below:
  On
              December 20, 2006, Plaintiffs Sanford Lang and Martin Goldrod (collectively,
              "Plaintiffs") initiated a lawsuit in the Los Angeles Superior Court,
              Central
              District, alleging claims for fraud, breach of contract, violations
              of RICO, and
              civil conspiracy against several parties, including the Company. The
              Company was provided with a copy of Plaintiffs’ Complaint on or about February
              28, 2007, after the matter was removed to United States District Court.
              However, the Company maintains that service of process was improper as no
              federal summons was included. ****  *Lang,
              et al. v. Welch, et al.* *(China Entertainment Group, Inc.) (United States District Court, Central
              District California, Case No. CV 07-1068-GHK-PJWx)*
 *Operating
          leases*
 
 The
          Company leases office space under a non-cancelable operating lease through
          August 31, 2006 at $3,532 per month. The operating lease rental in respect
          of
          office premises of the Company charged for 2005 was $42,342 (2004: $70,570).
          At
          December 31, 2005, future minimum rental payments due under operating leases
          were $28,228.
 F-12
  *SEC
          Filings*
 
 The
          Company has failed to comply with substantially all of the obligations
          imposed
          upon it by the Securities Exchange Act of 1934 Act (the "1934 Act") and
          is
          delinquent in filing its periodic filings including its annual report on
          Form
          10-KSB for 2005 and its 2006 quarterly reports on Form 10-QSB. As a result,
          the
          Company and its officers and directors could be subject to substantial
          civil and
          criminal penalties due to such non-compliance. There can be no assurance
          that
          substantial civil and criminal penalties will not be imposed.
  **8.** **SEGMENT
          INFORMATION**
 
 Operating
          segments are defined as components of an enterprise about which separate
          financial information is available that is evaluated regularly by the chief
          operation decision maker, or decision-making group, in deciding how to
          allocate
          resources and in assessing performance. MPL’s wholly-owned subsidiaries are as
          follows: Anglo Market International Limited ("AMIL"), China Star Management
          Limited ("CSML"), and Metrolink Global Limited ("MGL"). The principal activities
          of MPL’s subsidiaries are the provision of artist management services. The
“other” column represents unallocated corporate-related costs of the parent
          company.
 
 The
          Company’s segment information follows:
 **2005:**
              
              **AMIL**
              
              **CSML**
              
              **MGL**
              
              **OTHER**
              
              **Total**Revenues,
                  net
              
              $
              158,940
              
              
              793,178
              
              
              279,445
              
              
              -
              
              
              1,231,563Net
                  earnings/(losses)
              
              $
              141,958
              
              
              (796,140
              )
              
              164,043
              
              
              (218,819
              )
              
              (708,958
              )Total
                  assets
              
              $
              20,880
              
              
              1,976,513
              
              
              1,216,177
              
              
              -
              
              
              3,213,570
 
 **2004:**
              
              **AMIL**
              
              **CSML**
              
              **MGL**
              
              **OTHER**
              
              **Total**Revenues,
                  net
              
              $
              535,170
              
              
              2,064,551
              
              
              -
              
              
              -
              
              
              2,599,721Net
                  earnings/losses
              
              $
              516,139
              
              
              843,744
              
              
              (3,846
              )
              
              (207,461
              )
              
              1,148,576Total
                  assets
              
              $
              318,072
              
              
              2,971,822
              
              
              889,303
              
              
              -
              
              
              4,179,197
  Geographic
        information is based on the location of the selling service. Revenues from
        external customers by geographic region were as follows:
  Year
                  ended December 31:
              
              **2005**
              
              **2004**People’s
                  Republic of China
              
              
              34
              %
              
              8
              %Hong
                  Kong
              
              
              61
              %
              
              91
              %Other
              
              
              5
              %
              
              1
              %100
              %
              
              100
              %
 F-13


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




As
        described in full detail in our Current Report on Form 8-K filed on June
        27,
        2005, which is incorporated herein by reference, on June 24, 2005, the Company's
        Board of Directors elected to dismiss Malone & Bailey, PC ("Malone") as its
        independent registered public accounting firm (“Independent Accountant”) and
        also elected to retain Clancy and Co., P.L.L.C., ("Clancy") as its new
        Independent Accountant.




As
        described in full detail in our Current Report on Form 8-K filed concurrently
        with this Form 10-KSB and incorporated herein by reference, effective on
        February 15, 2007, Clancy and Co., P.L.L.C. resigned as the Registrant’s
        independent accountant engaged to audit the Registrant’s financial statements.
        As set forth in the Form 8-K, the Registrant is currently engaged in selecting
        a
        replacement independent accountant to perform the independent audits and
        reviews
        of the Registrant’s financial statements.


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





(a)
            *Evaluation
                of disclosure controls and procedures*.
                We maintain controls and procedures designed to ensure that information
                required to be disclosed in the reports that we file or submit under
                the
                Securities Exchange Act of 1934 is recorded, processed, summarized
                and
                reported within the time periods specified in the rules and forms
                of the
                Securities and Exchange Commission. Based upon their evaluation of
                those
                controls and procedures performed as of the period covered by this
                report,
                our chief executive officer and the principal financial officer concluded
                that our disclosure controls and procedures were inadequate to ensure
                that
                information required to be disclosed by us in reports that we file
                or
                submit under the Exchange Act is recorded, processed, summarized
                and
                reported within the time periods specified in SEC rules and forms.
                We are
                developing a plan to ensure that all information will be recorded,
                processed, summarized and reported on a timely basis. This plan is
                dependent, in part, upon reallocation of responsibilities among various
                personnel, possibly hiring additional personnel and additional
                funding.





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








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





None.





17


**PART
      III**





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





The
      following table and text sets forth the names and ages of all directors and
      executive officers of the Company as of December 15, 2006. Ms. Chen Ming Yin,
      Tiffany and Mr. Tang Chien Chang were named as directors of the Company,
      effective December 24, 2004. The members of the board of directors of the
      Company have not yet been named to any board committees. The Board of Directors
      is comprised of only one class. Except as otherwise described below, all of
      the
      directors will serve until the next annual meeting of stockholders and until
      their successors are elected and qualified, or until their earlier death,
      retirement, resignation or removal. Also provided herein are brief descriptions
      of the business experience of each director and executive officer during the
      past five years and an indication of directorships held by each director in
      other companies subject to the reporting requirements under the federal
      securities laws.





**Name**
            **Age**
            **Position(s)**Ms.
                Chen Ming Yin Tiffany
            49
            DirectorMr.
                Tang Chien Chang
            48
            Director
                and Chief Executive OfficerMs.
                Dorothy Wong
            40
            Chief
                Accounting Officer








Biographies
      of Directors and Executive Officers





TIFFANY
      CHEN MING YIN, 49, Director. Ms. Chen has produced a number of blockbuster
      films
      and is the vice chairman and executive director of two Hong Kong listed
      companies in the entertainment and multi-media industries. She has over 15
      years
      of experience in the industries. Ms. Chen is not an officer or director of
      any
      other U.S. reporting company.





TANG
      CHIEN CHANG, 48, Director and Chief Executive Officer. Mr. Tang has been
      self-employed as a businessman and investor in the entertainment industry for
      at
      least the last five years. Mr. Tang is not an officer or director of any other
      U.S. reporting company.





DOROTHY
      WONG, 40, Chief Accounting Officer (Principal Accounting Officer). Ms. Wong
      received her degree in Accountancy from City Polytechnic University in 1990.
      She
      is member of the Hong Kong Institute of Certified Public Accountants. She is
      the
      Financial Controller and Company Secretary of China Star Entertainment Limited
      ("China Star"), a shareholder of the Company. She joined China Star in 2001.
      Prior to her employment with China Star, she worked with an international
      accounting firm for over 10 years.





Family
      Relationships





There
      are
      no family relationships between or among any of the current directors, executive
      officers or persons nominated or charged by the Company to become directors
      or
      executive officers.





Involvement
      in Certain Legal Proceedings




There
      are
      no orders, judgments, or decrees of any governmental agency or administrator,
      or
      of any court of competent jurisdiction, revoking or suspending for cause any
      license, permit or other authority to engage in the securities business or
      in
      the sale of a particular security or temporarily or permanently restraining
      any
      of our officers or directors from engaging in or continuing any conduct,
      practice or employment in connection with the purchase or sale of securities,
      or
      convicting such person of any felony or misdemeanor involving a security, or
      any
      aspect of the securities business or of theft or of any felony. Nor are any
      of
      the officers or directors of any corporation or entity affiliated with us so
      enjoined.





Audit
      Committee and Independent Directors





As
      the
      Company believes that our Board of Directors has the integrity and the resources
      to oversee the control of the operations of the Company, the Company did not
      establish an audit committee, nor do we have a financial expert on our Board
      of
      Directors as that term is defined by Item 401(e)(2).





Section
      16(a) Beneficial Ownership Reporting Compliance:




18





Section
      16(a) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
      requires the Company's directors, executive officers and holders of more than
      10% of the Company's common stock to file with the Securities and Exchange
      Commission ("SEC") initial reports of ownership and reports of changes in
      ownership of common stock and other equity securities of the Company. Such
      executive officers, directors and greater than 10% beneficial owners are
      required by the SEC to furnish us copies of all Section 16(a) forms filed by
      such reporting persons. To our knowledge, based solely on the Company's review
      of copies of Forms 3, 4, and 5 filed with the Securities and Exchange
      Commission, (the "SEC") or written representations from certain reporting
      persons, we believe that during fiscal year ended December 31, 2005, shareholder
      Imperial International Limited, the current CEO and director Tang Chien Chang,
      and current director Tiffany Chen Ming Yin were subject to but have not filed
      the reports they are required to file under Section 16(a) of the Exchange
      Act.





Code
      of
      Ethics





We
      have
      adopted a code of ethics that applies to our principal executive officer,
      principal financial officer, principal accounting officer, or controller, or
      persons performing similar functions. We will provide to any person without
      charge, upon request, a copy of such Code of Ethics. Persons wishing to make
      such a request should contact Dorothy Wong at our principal office.




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





**Summary
      Compensation Table**




The
      following tables set forth certain summary information concerning the
      compensation paid or accrued for each of our last three completed fiscal years
      to our directors. Except for those disclosed below, no other executive officers
      received compensation in excess of $100,000 during the year ended December
      31,
      2005. All figures are in US dollars.




**Long
                  Term Compensation****Annual
                  Compensation**
              
              
              
              **Awards**
              
              **Payouts****Other**
              
              **Restricted**
              
              
              
              
              
              **All****Name
                    and Principal Position**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **Annual**
                  **Compensation**
              
              **Stock**
                  **Awards**
              
              **Options**
                  **/SARs**
              
              **LTIP**
                  **Payout**
              
              **Other**
                  **Compensation**Tang
                  Chien Chang(1),
                CEO
                  and Director
              
              
              2005
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -2004
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -Tiffany
                  Chen Ming Yin,
                Director
                  (2)
              
              
              2005
              
              
              15,385
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -2004
              
              
              3,846
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -




(1)
            Mr.
                Tang was appointed as Director on December 24, 2004. For the year
                ended
                December 31, 2005, Mr. Tang did not receive any cash or share-based
                compensation.




(2)
            Ms.
                Chen was appointed as Director on December 24, 2004. For the year
                ended
                December 31, 2005, Ms. Chen received cash compensation of $15,385.
                No
                share-based compensation was received during the year ended December
                31,
                2005.




19




Compensation
      of Directors




The
      Company has not entered into Director's Compensation Agreements with Ms. Tiffany
      Chen Ming Yin or Mr. Tang Chien Chang at this time.





Employee
      Retirement Plans, Long-Term Incentive Plans and Pension Plans





The
      Company does not have any long-term incentive plan to serve as incentive for
      performance to occur over a period longer than one fiscal year.





Employment
      Agreements





The
      Company currently does not have any employment agreements with any of the
      Company's directors. The Company's subsidiary has a services agreement with
      Director, Ms. Tiffany Chen Ming Yin.




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


As
      used
      in this section, the term beneficial ownership with respect to a security is
      defined by Rule 13d-3 under the Securities Exchange Act of 1934, as amended,
      as
      consisting of sole or shared voting power (including the power to vote or direct
      the vote) and/or sole or shared investment power (including the power to dispose
      of or direct the disposition of) with respect to the security through any
      contract, arrangement, understanding, relationship or otherwise, subject to
      community property laws where applicable. As of April 10, 2007, the Company
      had
      a total of approximately 128,963,425 shares of Common Stock, which are the
      only
      issued and outstanding voting equity securities of the Company.





The
      following table sets forth, as of April 10, 2007: (a) the names and addresses
      of
      each beneficial owner of more than five percent (5%) of the Company's Common
      Stock known to the Company, the number of shares of Common Stock beneficially
      owned by each such person, and the percent of the Company's Common Stock so
      owned; and (b) the names and addresses of each director and executive officer,
      the number of shares of Common Stock beneficially owned, and the percentage
      of
      the Company's Common Stock so owned, by each such person, and by all directors
      and executive officers of the Company as a group. Each person has sole voting
      and investment power with respect to the shares of Common Stock, except as
      otherwise indicated. Beneficial ownership consists of a direct interest in
      the
      shares of Common Stock, except as otherwise indicated.





**Name,
                Address and Title**
            
            **Total
                Number**
              **of****Shares****of**
              **Common
                Stock**
            
            **Percentage**
              **Ownership
                of**
              **Common
                Stock (3)**Tiffany
                Chen Ming Yin
              Director
              Unit
                3409 Shun Tak Centre, West Tower,
              168-200
                Connaught Road Central, Hong Kong
            
            0
                (1)(2)
            
            0%Tang
                Chien Chang
              Director
              Unit
                3409 Shun Tak Centre, West Tower,
              168-200
                Connaught Road Central, Hong Kong
            
            0
                (1)(2)
            
            0%Dorothy
                Wong
              Chief
                Accounting Officer
              Unit
                3409 Shun Tak Centre, West Tower,
              168-200
                Connaught Road Central, Hong Kong
            
            0
            
            0%All
                Directors and Executive Officers (3 persons**)**
            
            0
            
            0%**Other
                5% or Greater Owners****:**




20




**Name,
                Address and Title**
            
            **Total
                Number of**
              **Shares
                of**
              **Common
                Stock**
            
            **Percentage**
              **Ownership
                of**
              **Common
                Stock (3)**Imperial
                International Limited
              Unit
                503C, 5/F, Miramar Tower
              132
                Nathan Road, Tsimshatsui
              Hong
                Kong
            
            109,623,006
                (2)
            
            85%Total
                of All Directors and Executive Officers and 5% or Greater
                Owners
            
            109,623,006
            
            85%


______________________


(1)
            Chen
                Ming Yin, Tiffany, is a direct 1.51% shareholder of China Star, which
                is
                an indirect 49% owner of Together Again Limited ("Together Again").
                Tang
                Chien Chang is indirectly a 50% owner of Colima Enterprises Limited
                ("Colima"), a 51% owner of Together Again. Imperial International
                Limited
                is 100% owned by Together Again. Imperial International Limited owns
                approximately 85% of China Entertainment Group.





(2)
            Imperial
                International Limited is 100% owned by Together Again. Together Again
                is
                51% owned by Colima, whose directors are Tang Chien Chang and Kim
                Min Sup,
                Mark. Colima is 50% owned by Stylish Century Enterprises, Inc.,
                ("Stylish") whose director is Kim Min Sup, Mark; Stylish is 100%
                owned by
                Mantex Holdings Limited, whose owner and director is Kim Min Sup,
                Mark.
                Colima is 50% owned by Givon Enterprises Corp., ("Givon") whose director
                is Tang Chien Chang; Givon is 100% owned by Chartwell Overseas Limited
                ("Chartwell"), whose owner and director is Tang Chien Chang. Together
                Again is 49% owned by China Star, listed on the Main Board of The
                Stock
                Exchange of Hong Kong Limited. China Star is 1.51% owned directly
                by Ms.
                Chen Ming Yin, Tiffany; 9.91% owned by Porterstone Limited
                ("Porterstone"), whose owner is Ms. Chen Min Yin, Tiffany; 2.94%
                owned by
                Mr. Heung Wah Keung, and 2.96% owned by Dorest Company Limited ("Dorest").
                Dorest is 100% owned by Glenstone Investments Limited ("Glenstone");
                Glenstone is 40% owned by Mr. Heung Wah Kueng, and 60% owned by
                Porterstone.





(3)
            Figures
                may vary slightly due to rounding.





CHANGE
      IN
      CONTROL





None.




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





Amounts
      due from (to) related parties are unsecured, interest-free and due on demand.
      Our director Tiffany Chen Ming Yin, is a direct 1.51% shareholder of China
      Star
      Entertainment Limited, ("China Star"), which is an indirect 49% owner of
      Together Again Limited ("Together Again"). Our Chief Executive Officer Tang
      Chien Chang is indirectly a 50% owner of Colima Enterprises Limited ("Colima"),
      a 51% owner of Together Again. Imperial International Limited is 100% owned
      by
      Together Again. Imperial International Limited owns approximately 85% of China
      Entertainment Group. The following table summarizes significant related party
      transactions involving the Company and the related parties as of December 31,
      2005:





Amounts
      due from (to) related parties are unsecured, interest-free and due on demand.
      The following table summarizes significant related party transactions as of
      December 31, 2005:




21





**Related
                party**
            
            **Nature
                of relationship**
              **and
                control**
            
            **Description
                of**
              **transaction**
            
            **Consolidated**
              **Balance
                Sheet**
              **Balances****2005**Together
                Again Limited (“TAL”)
            
            Intermediate
                holding company, 51% owned by Colima and 49% owned by China Star
                Entertainment Limited
            
            Amount
                receivable in relation to service income and funds transferred between
                entities for working capital purposes
            
            $
                739,928Ms.
                Chen Ming Yin, Tiffany
            
            Director
                of the Company
            
            Director
                compensation
            
            $
                19,231Mr.
                Tang Chien Chang
            
            Director
                of the Company
            
            Funds
                transferred to the Company for working capital purposes
            
            292,037Imperial
                International Limited
            
            Intermediate
                holding company, ultimately owned by Colima
            
            Funds
                transferred between entities for working capital purposes
            
            671,028China
                Star HK Distribution Limited
            
            Related
                company, subsidiaries of China Star Entertainment Limited which owns
                49%
                of TAL and Colima owns 51%
            
            Amount
                receivable in relation to service income and funds transferred between
                entities for working capital purposes
            
            888,240$
                1,870,536





Related
      party amounts included in the Consolidated Statement of Operations for the
      periods presented include the following:





**Related
                party**
            
            **Nature
                of relationship**
              **and
                control**
            
            **Description
                of**
              **transaction**
            
            **Balances****2005**
            
            **2004**China
                Star HK
              Distribution
                Limited
            
            Related
                company, subsidiaries of China Star Entertainment Limited which owns
                49%
                of TAL and Colima owns 51%
            
            Service
                income, net
            
            $
                931,026
            
            $
                2,208,846China
                Star
              Entertainment
                Limited
            
            Related
                company, owns 49% of TAL and Colima owns 51% of TAL
            
            Management
                fee paid
            
            $
                107,693
            
            $
                107,693China
                Star Laser Disc
              Company
                Limited
            
            Related
                company, subsidiaries of China Star Entertainment Limited which is
                ultimately owned 49% with Colima
            
            Management
                fee paid
            
            $
                507,692
            
            $
                507,692





With
      regard to any future related party transactions, we plan to fully disclose
      any
      and all related party transactions, including, but not limited to, the
      following:





●
            disclose
                such transactions in prospectuses where
                required;


●
            disclose
                in any and all filings with the Securities and Exchange Commission,
                where
                required;


●
            obtain
                disinterested directors consent;
                and


●
            obtain
                shareholder consent where required.




22





**ITEM
      13.**  **EXHIBITS**





**Exhibit**
              **Number**
            **Description**2.1
            Share
                Exchange Agreement dated November 17, 2004 by and among, inter alia,
                the
                Registrant, Metrolink Pacific, and the shareholders of Metrolink
                Pacific(1)3.1(i)
            Certificate
                of Amendment to Articles of Incorporation(1)3.1(ii)
            Articles
                of Amendment of Articles of Incorporation(2)3.1(iii)
            Articles
                of Incorporation(3)3.2
            Bylaws(3)13
            Form
                10-QSB for the Quarter Ended November 30, 2004(4)16.1
            Letter
                on Change of Certifying Accountant(5)16.2
            Letter
                from Clancy and Co., P.L.L.C. dated April 20, 2007
                (8)21
            List
                of Subsidiaries (7)31.1
            Rule
                13a-14(a) Certifications of Chief Executive Officer pursuant to Section
                302 of the Sarbanes-Oxley Act of 200231.2
            Rule
                13a-14(a) Certifications of Chief Accounting Officer pursuant to
                Section
                302 of the Sarbanes-Oxley Act of 200232.1
            Certification
                of the Chief Executive Officer and pursuant to 18 U.S.C. Section
                1350as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.32.2
            Certification
                of the Chief Accounting Officer pursuant to 18 U.S.C. Section 1350as
                adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
                2002.99.1
            Form
                8-K Current Report filed on November 19, 2005(6)99.2
            Schedule
                14C Definitive Information Statement filed on November 30, 2004(1)


_____________________


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


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


(3)
      Incorporated by reference from the Company’s Form 10-QSB filed on January 19,
      2000.


(4)
      Incorporated by reference from the Company’s Form 10-QSB filed on January 3,
      2005.


(5)
      Incorporated by reference from the Company’s Form 8-K filed on July 27,
      2005.


(6)
      Incorporated by reference from the Company’s Form 8-K filed on November 19,
      2005.


(7)
      Incorporated by reference from the Company’s Form 10-KSB filed on January 13,
      2006.


(8)
      Incorporated by reference from the Company’s Form
      8-K filed concurrently with this Form 10-KSB.




23




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





The
      Company`s preceding principal independent auditor was Malone & Bailey, PC
      ("Malone & Bailey"). It audited the Company's financial statements for the
      previous fiscal years ended February 29, 2004 and February 28, 2003, and
      reviewed the Company's unaudited financial statements through the quarter ended
      November 30, 2004. Effective June 24, 2005, we engaged Clancy and Co., P.L.L.C.
      ("Clancy and Co.") to audit the Company's financial statements. The following
      are the services provided and the amount billed.





AUDIT
      FEES ******




The
      aggregate fees billed by Malone & Bailey for professional services rendered
      for the review of the Company's unaudited financial statements through the
      quarter ended November 30, 2004 and the audit of the Company's annual financial
      statements for the year ended February 29, 2004 or services that are normally
      provided by the accountant in connection with statutory and regulatory filing
      or
      engagements for those periods/years were $1,000, and $3,500, respectively.
      The
      aggregate fees billed by the newly appointed auditor, Clancy and Co., for
      professional services rendered for the reviews of the Company’s unaudited
      financial statements and the audit of the Company's annual financial statements
      or services that are normally provided by the accountant in connection with
      statutory and regulatory filing or engagements for 2004 and 2005 were $30,000
      and $52,500, respectively.





AUDIT
      RELATED FEES





There
      were no fees billed for services reasonably related to the performance of the
      audit or review of the financial statements outside of those fees disclosed
      above under "Audit Fees" for the year ended December 31, 2005 or
      2004.





TAX
      FEES





For
      the
      years ended December 31, 2004 and December 31, 2005, there were no fees billed
      for services for tax compliance, tax advice and tax planning work to the
      Company.





PRE-APPROVAL
      POLICIES AND PROCEDURES





Prior
      to
      engaging its accountants to perform particular services, our board of directors
      obtains an estimate for the service to be performed. All of the services
      described above were approved by the board of directors in accordance with
      its
      procedure.








[SIGNATURES
      PAGE FOLLOWS]


24


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.






**CHINA
                ENTERTAINMENT GROUP, INC.**
              (Registrant)Date: April
              23, 2007
            By:
            /s/ Tang
              Chien ChangTang Chien Chang
              Chief Executive
                Officer






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





**Signature**
            **Title**
            **Date**/s/
                Tiffany Chen Ming
                Yin
              Tiffany
                Chen Ming Yin
            Director
            April
                23, 2007/s/
                Tang Chien
                Chang
              Tang
                Chien Chang
            Director
            April
                23, 2007











25