PVEG Pacific Vegas Global Strategies Inc (CE)

PART   I

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

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

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

As the Company was a non-operating public shell before its acquisition of CTGH, the nature of this acquisition was defined and treated as a capital transaction or recapitalization in substance, rather than a business combination. The acquisition did not result in any purchase accounting adjustments or creation of goodwill.

1.3          BUSINESS OPERATIONS

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

Revenue from operations of the sportsbook business was the only revenue source for the Company in the last five fiscal years. The Company recorded a total revenue of US$1.70 million for the fiscal year 2003, and a total revenue of US$0.03 million for the fiscal year 2004. No revenue was recorded for the fiscal years 2005 through 2007 since the operations of the sportsbook business were ceased and then discontinued.

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

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Our annual report on Form 10-KSB for the fiscal year ended December 31, 2004 presented a detailed analysis of the factors that caused the adverse results of our operations of the sportsbook business.

There was no business other than the aforementioned sportsbook business operated by the Company since 2003.

1.4          DISPOSITION OF CTGH

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

Having reviewed the financial position and re-evaluated the business structure of the Company, the Board of Directors further decided to terminate the sportsbook business and dispose of CTGH. On July 8, 2005, the Company entered into a Stock Purchase Agreement (the “Agreement”) with an independent third party (the “Buyer”), pursuant to which, and subject to its stockholders’ approval, the Company was to sell its entire 100% equity interest in CTGH through disposition of all equity shares of CTGH for a consideration of US$125,000 in cash together with a non-cash settlement that the Buyer was to assume and pay all liabilities of CTGH as shown in the consolidated balance sheet of CTGH as at June 30, 2005 and to cancel and release the Company from its liabilities due to CTGH in the amount of US$549,288 or such other amount not exceeding US$549,288 as may be amended at the closing of the transaction. This Agreement was approved by our stockholders at the special meeting of stockholders held on October 14, 2005, and the transaction was subsequently executed and closed on November 18, 2005.

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

In accordance with SFAS 144 “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company reported CTGH as a discontinued operation in 2005, and the audited financial results for the fiscal year 2004 had been restated and presented in the consolidated financial statements on the same basis accordingly.

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1.5          CURRENT STATUS

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

1.6          EMPLOYEES

Effective from March 2007, the Company had 1 full time employee, with no compensation, in the capacities as chief executive officer and chief financial officer. Prior to March 2007, the Company had 2 employees, both full time, with no compensation, in the capacities as chief executive officer and chief financial officer, respectively.

1.7          ADDITIONAL INFORMATION

1.7.1       Compliance with Environmental Laws

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

1.7.2       Other Information

There was no expense incurred by the Company on any research and development activities in the last three fiscal years.

As at December 31, 2007, there were no patents, trademarks, licenses, franchises, concessions, and/or royalty agreements owned or possessed by the Company.

1.7.3       Reports and Availability of Information

The Company files its annual reports, quarterly reports, current reports, proxy statements, and other reports required to be filed with the SEC under the Securities Exchange Act of 1934, as amended.

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The Company is not required to deliver an annual report to our stockholders. Our stockholders and the public may obtain any reports and other information materials that the Company filed with the SEC by visiting the SEC’s website at http://www.sec.gov or SEC’s Public Reference Room at 100 F Street, N.E, Washington, D.C. 20549, or by calling the SEC at 1-800-SEC-0330.

No material proceedings or legal actions are pending or contemplated nor judgments entered against any of our officers, directors or stockholders of greater than five percent of our outstanding common shares concerning any matter involving our business.

The quotations listed in this table reflect inter-dealer prices, without retail mark-ups, mark-downs, or commissions, and may not necessarily represent actual transactions.

5.3          RELATED MATTERS

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

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

There were no previously authorized equity compensation plans carried forward upon the Company’s reorganization in January 2003, and there have been no equity compensation plans adopted and no equity securities issued for any equity compensation plans since the Company’s reorganization in January 2003. As at December 31, 2007, there were no outstanding equity compensation plans, options or warrants to be exercised and no equity securities to be issued for such purposes.

6.1          CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of our financial statements in conformity with accounting principles generally accepted in the United States requires our management to make estimates and assumptions that affect the amounts reported in our financial statements and accompanying notes. Actual results could differ materially from those estimates.  Our audited financial statements and the notes thereto contain more details of critical accounting policies and other disclosures required by generally accepted accounting principles.

6.2          RESULTS OF OPERATIONS

6.2.1       Revenue and Expenses

As described in Item 1 hereof, the Company has remained in an inactive or non-operating status since December 6, 2004. There was no active business operated and no revenue earned by the Company for the fiscal years ended December 31, 2007 and 2006.

Total expenses for the fiscal year ended December 31, 2007 were US$50,280 against US$79,720 a year before. Expenses were for professional fees and miscellaneous administrative expenses in the two fiscal years.

6.2.2       Net Loss

Net Loss for the fiscal year ended December 31, 2007 was US$50,280 against a net loss of US$79,720 a year before.

6.2.3       Liquidity and Capital Resources

As at December 31, 2007, the balance of cash and cash equivalents for the Company was nil. The Company has currently retained no sources of liquidity other than the private financing by cash in-flow from the principal stockholder, which is unsecured and could be discontinued at any time.

6.3          OFF-BALANCE SHEET ARRANGEMENTS

There were no off-balance sheet arrangements as defined in Item 303(c) of Regulation S-B, as at the end of the fiscal year 2007 and any interim period in the current fiscal year.

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6.4          PLAN OF OPERATION

All statements presented in this section regarding our financial position and operating and strategic initiatives are forward-looking statements, where we or our management express(es) an expectation or belief as to future results. Such expectation or belief is expressed in good faith and believed to have a reasonable basis, but there can be no assurance that the statement of expectation or belief will result or be achieved or accomplished. Factors which could cause actual results to differ materially from those anticipated include, but not limited to, general economic and business conditions, competition and development in the industries, the business abilities and judgment of personnel, the impacts of unusual events resulting from ongoing evaluations of business strategies, and changes in business strategies.

The Company has been in an inactive or non-operating status since December 6, 2004, and currently remains as a shell company with its only activities of accruing minimal non-operating expenses. It is expected that the Company will remain in such status until a re-organization with a selected entity takes place.

As a part of our plan, we expect our next move to be a re-organization with a selected entity, for the Company to acquire sufficient capital funds and engage into a selected business. However, there can be no assurance as to when or whether the Company will be able to accomplish this plan.

6.5          ADDITIONAL CAUTIONARY STATEMENTS AND RISK FACTORS

6.5.1       Going Concern

The financial statements presented in this annual report have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, substantial doubt has been raised with regard to the ability of the Company to continue as a going concern, in light of the fact that as at December 31, 2007, the Company retained its total assets as minimal as US$10,875, and particularly, in this minimal amount of assets the Company retained no cash or cash equivalents to support its needs of cash payments for any current expenses which may be required for its continuation as a going concern.

The Company has maintained no revenue-generating or cash in-flow operations since December 6, 2004 and has relied on the private financing by cash in-flow from the principal stockholder of the Company. During the period, there was a change in principal stockholder, the new principal stockholder has undertaken to finance the Company in cash for a “reasonable” period of time for the Company to continue as a going concern, assuming that in such a period of time the Company would

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be able to restructure its business and restart on a revenue-generating operation and/or raise additional capital funds to support its continuation. However, it is uncertain as for how long or to what extent such a period of time would be “reasonable”, and there can be no assurance that the financing from the principal stockholder will not be discontinued.

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

These uncertainties may result in adverse effects on continuation of the Company as a going concern. The accompanying financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.

6.5.2       Limited Market

The market for our stock is limited. Our common stock is currently traded on the Pink Sheets under the symbol “PVEG.PK”. On January 31, 2008, the last reported sale price of our common stock on the Pink Sheets was US$0.006 per share. However, we consider our common stock to be “thinly traded” and any last reported sale prices may not be a true market-based valuation of the common stock.

Our common stock is considered to be a “penny stock” and, as such, the market for our common stock may be further limited by certain SEC rules applicable to penny stocks.

As long as the price of our common stock remains below US$5.00 per share or we have net tangible assets of US$2,000,000 or less, our common shares are likely to be subject to certain “penny stock” rules promulgated by the SEC. Those rules impose certain sales practice requirements on brokers who sell penny stocks to persons other than established customers and accredited investors (generally, institutions with assets in excess of US$5,000,000 or individuals with a net worth in excess of US$1,000,000). For transactions covered by the penny stock rules, the broker must make a special suitability determination for the purchaser and receive the purchaser’s written consent to the transaction prior to the sale. Furthermore, the penny stock rules generally require, among other things, that brokers engaged in secondary trading of penny stocks provide customers with written disclosure documents, monthly statements of the market value of penny stocks, disclosure of the bid and asked prices and disclosure of the compensation to the brokerage firm and disclosure of the sales person working for the brokerage firm. These rules and regulations adversely affect the ability of brokers to sell our common shares and limit the liquidity of our securities.

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Kwan Sin Yee , Director, Chief Executive Officer and Chief Financial Officer of the Company, was the second largest major shareholder prior to acquiring 36,500,000 shares from Raymond Chou. During the past five years, Ms. Kwan has not been involved in or associated with any business nor the management of any company.  Ms. Kwan does not have any family relationships with any other directors, executive officers, or persons nominated or chosen to become directors or executive officers of the Company.  Further, Ms. Kwan was not a party to any transaction with the Company during the last two years, nor is she a party to any proposed transaction with the Company, in which she had or is to have a direct or indirect material interest.  Ms. Kwan does not have any employment agreement with the Company.

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

Richard Wang , Executive Vice President and Chief Financial Officer. Mr. Wang holds a master degree in economics from Fudan University. Mr. Wang has been in his current positions since January 2003. He also served as a director for the period of June 2000 through November 2005 for CTGH, which was a wholly owned subsidiary of the Company for the period of January 2003 through November 2005. Mr. Wang was in the position as the general manager for Shanghai HYD Industries Ltd. for the period of June 1996 through June 2000.

Prior to the appointment of Ms Kwan Sin Yee in August 23, 2007, Mr. Raymond Chou and Mr. Richard Wang were the only two executive officers and the only two employees of the Company since January 1, 2005.

Other than the appointment of Ms Kwan Sin Yee as director, Chief Executive Officer and Chief Financial Officer in August 23, 2007, there was no other person nominated or chosen to any positions as directors or executive officers for the Company during the period covered by this report.

None of our existing directors and/or executive officers holds any positions as director or officer in any other reporting companies.

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None of our existing directors and/or executive officers has been involved in any legal proceedings or such events as required to be disclosed under Item 4.01(d) of Regulation S-B.

There has been no material change to the procedures by which our stockholders may recommend nominees to our board of directors since our last disclosure in response to the requirements of Item 7(d)(2)(ii)(G) of Schedule 14A and Item 4.01(g) of Regulation S-B.

9.2          COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT

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

9.3          AUDIT COMMITTEE AND AUDIT COMMITTEE FINANCIAL EXPERT

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

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

9.4          CODE OF ETHICS

The Company has adopted a code of ethics that applies to all of our employees, including our chief executive officer and chief financial officer, and has filed a copy of such code of ethics with the SEC as Exhibit 14.1 to our annual reports on Form 10-KSB for the fiscal years ended December 31, 2003 and 2004, respectively, pursuant to Item 4.06 of Regulation S-B. However, since the Company is no

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longer engaged in or related to the business of sportsbook, certain sections thereof specifically related to the business of sportsbook are to be amended accordingly.

10.2        SUMMARY OF OPTION GRANTS

There has been no grant of any stock options made to any executive officers or any employees of the Company or its subsidiaries in the last four fiscal years since the Company’s reorganization with CTGH in January 2003.

                The 36,500,000 shares represented 36.5% of the total shares of the Company issued and outstanding on August 23, 2007.  In addition to her existing ownership of 5,700,000 shares of the Company’s common stock, Ms. Kwan now owns 42,200,000 shares, or 42.2% of the total shares of the Company issued and outstanding on August 23, 2007.

The Company has filed a Form 8-K on August 24, 2007 reporting the resignation of Raymond Chou and the appointment of Kwan Sin Yee as the Company’s sole director and Chairwoman, Chief Executive Officer and Chief Financial Officer.