ITEM 1.BUSINESS
1.1INTRODUCTION
All statements other than statements of historical fact presented in this annual report regarding our financial position and operating and strategic initiatives and addressing industry developments 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 statements of such expectation or belief will result or be achieved or accomplished. Actual results of operations may differ materially.
Our principal executive office is located at Room 2, LG/F., Kai Wong Commercial Building, 222 Queen’s Road, Central, Hong Kong, telephone (852) 3154-9370.
1.2THE CORPORATION AND ACQUISITION OF CTGH
Pacific Vegas Global Strategies, Inc. (the “Company” or “PVGS”), formerly known as Goaltimer International, Inc., was incorporated in Colorado on December 19, 1990. Prior to the acquisition of Cyber Technology Group Holdings Ltd. (“CTGH”), the Company entered into and operated a business of development and sales of time and personal management products. The Company had discontinued such business and became a non-operating public shell since 1994, and remained as a shell company with its only activities of accruing loan interest on notes payable and looking for a merger candidate.
On November 20, 2002, the Company entered into an agreement for share exchange with CTGH under the laws of Colorado. Pursuant to the share exchange agreement, and subject to its stockholders’ approval, the Company was to acquire 100% of the issued and outstanding equity shares of CTGH, in exchange for 60,000,000 new shares of common stock of the Company. This transaction was approved by the stockholders of the Company at the special meeting of stockholders held on December 12, 2002.
The closing of the transaction was scheduled to take place on December 22, 2002. However, the transaction was delayed and eventually closed on January 8, 2003, upon which control of the Company passed to the stockholders of CTGH, and CTGH became a wholly owned subsidiary of the Company.
CTGH was incorporated in the British Virgin Islands in June 2000, operated as an investment holding company, holding 100% of the capital stock 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.
1.3BUSINESS 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 that resulted from such business.
Revenue from operations of sportsbook business was the only revenue source for the Company during the last twelve 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 2016 since the operations of sportsbook business were ceased and then discontinued.
The operations of 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.
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.
1.4DISPOSITION OF CTGH
In light of the significant financial losses that 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 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 ASC Topic 360-10-40 “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.
1.5CURRENT 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 incurring non-operating expenses.
1.6EMPLOYEES
Effective from March 2007 and until December 31, 2019, the Company had one (1) full time employee, with no compensation, in the capacities as chief executive officer and chief financial officer.
1.7ADDITIONAL INFORMATION
1.7.1Compliance 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.
1.7.2Other 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, 2019, there were no patents, trademarks, licenses, franchises, concessions, and/or royalty agreements owned or possessed by the Company.
1.7.3Reports 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 Exchange Act.
The Company has been reporting as a Development Stage Entity under FASB Accounting Standard Codification Topic 915 - Development Stage Entities since January 1, 2006.
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.
ITEM 1A.
ITEM 1A.RISK FACTORS
Not applicable.
ITEM 1B.
ITEM 1B.UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 2.
ITEM 2.PROPERTIES
2.1OPERATING LEASE
Currently the Company maintains its principal office in Hong Kong, which has been provided by our principal stockholder, with no rental charges to the Company. However, the principal stockholder retains her right to discontinue this arrangement at her own discretion, and there can be no assurance that this arrangement by the principal stockholder will not be discontinued at any time.
2.2INVESTMENT POLICIES
The Company does not invest in, and has not adopted any policy with respect to investments in, real estate or interests in real estate, real estate mortgages or securities of or interests in persons primarily engaged in real estate activities. It is not the Company’s policy to acquire assets primarily for possible capital gain or primarily for income.
ITEM 3.
ITEM 3.LEGAL PROCEEDINGS
No material legal proceedings to which the Company is a party or to which any of its property is the subject are pending and, to our knowledge, no such proceedings are contemplated.
The Company is not presently a party to any litigation or administrative proceedings with respect to our 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 and, to our knowledge, no such proceedings are contemplated.
There has been no material legal proceeding to which any of our officers, directors or stockholders of greater than five percent of our outstanding common shares is a party adverse to the Company or has a material interest adverse to the Company.
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.
ITEM 4.
ITEM 4.MINE SAFETY DISCLOSURES
Not applicable.
PART II
ITEM 5.
ITEM 5.MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES
5.1OUTSTANDING SHARES AND STOCKHOLDERS
As at December 31, 2019, there were 99,963,615 shares of PVGS common stock with no par value issued and outstanding, and there were approximately 1,150 beneficial holders of PVGS common stock.
5.2MARKET FOR PVGS COMMON STOCK
Our common stock was traded publicly on the OTC Bulletin Board under the symbol “PVEG.OB” from January 8, 2003 until September 26, 2003, at which time it was moved from the OTC Bulletin Board to the OTC Non-Bulletin Board for failure to comply with certain reporting requirements (NASD Rule 6530). Our common stock has been since then traded on the Pink Sheets under the symbol “PVEG.PK”.
The nature of the market for common stocks trading on the Pink Sheets is generally limited, sporadic and highly volatile, and the absence of an active market may have an effect upon the high and low prices as reported. The following information sets forth the high and low last sale prices per share of our common stock for the periods indicated as reported by the Pink Sheets:
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.
5.3RELATED 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, 2019, there were no outstanding equity compensation plans, options or warrants to be exercised and no equity securities to be issued for such purposes.
ITEM 6.
ITEM 6.SELECTED FINANCIAL DATA
Not applicable.
ITEM 7.
ITEM 7.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Our presentation in this Management’s Discussion and Analysis of Financial Condition and Results of Operations contains a number of forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on management’s current projections or expectations with regard to the future operations of business. Such projections or expectations are expressed in good faith and believed to have a reasonable basis, but there can be no assurance that such projections or expectations will prove to be correct or accurate, and as a result of certain risks and uncertainties, actual results of operations may differ materially.
7.1CRITICAL 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.
7.2RESULTS OF OPERATIONS
7.2.1Revenue 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, 2019 and 2018.
Total expenses for the fiscal year ended December 31, 2019 were US$65,502 against US$61,124 a year before. Expenses were for professional fees and miscellaneous administrative expenses in the two fiscal years.
7.2.2Net Loss
Net loss for the fiscal year ended December 31, 2019 was US$65,502 against a net loss of US$61,124 a year before.
7.2.3Liquidity and Capital Resources
As at December 31, 2019, the balance of cash 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.
7.3OFF-BALANCE SHEET ARRANGEMENTS
There were no off-balance sheet arrangements as defined in Item 303(c) of Regulation S-K, as at the end of the fiscal year 2019 and any interim periods in the current fiscal year.
7.4PLAN 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.
7.5ADDITIONAL CAUTIONARY STATEMENTS AND RISK FACTORS
7.5.1Going Concern
The financial statements presented in this annual report have been prepared in conformity with generally accepted accounting principles in the United States of America, 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 that as at December 31, 2019, the Company had minimal assets of US$12,500, none of which were 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. The 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 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.
7.5.2Limited 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 30, 2020, 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.
7.5.3Tax matters
No U.S. Federal tax returns and information forms had been filed for numerous years. The Company, however, has completed its delinquent filings current through the Delinquent International Information Return Submission Procedures (“DIIRSP”) in 2019. Since the Company incurred losses for most of the years, we do not foresee significant tax liabilities arising from the DIIRSP.
7.5.4Due to stockholder
There were no related party transactions other than the private financing by loans to us from our principal stockholder, who is also the sole director of the Company, during the last two fiscal years ended December 31, 2019 and 2018. All private loans from the principal stockholder to the Company were unsecured, interest free and not subject to fixed term of repayment.
ITEM 7A.
ITEM 7A.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not applicable.
ITEM 8.
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Report of Independent Registered Public Accounting Firm
To the Shareholders and the Sole Director of
Pacific Vegas Global Strategies, Inc.
(incorporated in Colorado with limited liability)
Opinion on the Financial Statements
We have audited the accompanying balance sheets of Pacific Vegas Global Strategies, Inc. (the “Company”) as of December 31, 2019 and 2018, and the related statements of operations and comprehensive loss, changes in stockholders’ deficit and cash flows for each of the two years in the period ended December 31, 2019, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial positions of Pacific Vegas Global Strategies, Inc. as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.
Material Uncertainty related to Going Concern
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in note 2(b) to the financial statements, the Company has suffered recurring losses from operations of US$65,502 and has a net capital deficit US$768,951, that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regards to these matters are also described in note 2(b) including, but not limited to, continued financial support by the principal stockholder, which can be discontinued at her own discretion. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audits of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/ MOORE STEPHENS CPA LIMITED
Moore Stephens CPA Limited
Certified Public Accountants
We have served as the Company’s auditor since 2017.
Hong Kong
March 30, 2020
Pacific Vegas Global Strategies, Inc.
Statements of Operations and Comprehensive Loss
The accompanying notes are an integral part of these financial statements.
Pacific Vegas Global Strategies, Inc.
Balance Sheets
The accompanying notes are an integral part of these financial statements.
Pacific Vegas Global Strategies, Inc.
Statements of Changes in Stockholders’ Deficit
The accompanying notes are an integral part of these financial statements.
Pacific Vegas Global Strategies, Inc.
Statements of Cash Flows
The accompanying notes are an integral part of these financial statements.
Pacific Vegas Global Strategies, Inc.
Notes to the Financial Statements
1.ORGANIZATION AND PRINCIPAL ACTIVITIES
Pacific Vegas Global Strategies, Inc. (the “Company” or “PVGS”), formerly known as Goaltimer International, Inc., was incorporated in Colorado on December 19, 1990.
Upon the expiry of an International Gaming License granted by the government of the Commonwealth of Dominica on December 6, 2004, the Board of Directors of the Company resolved to cease the then business due to significant losses incurred. After the full discontinuance of such business in 2005, the Company became a shell company since January 1, 2006.
The Company has been in an inactive or non-operating status since December 6, 2004, and remained as a shell company with its only activities of incurring non-operating expenses.
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a)Basis of accounting
These financial statements are presented in United States dollars (“US$” or “US dollars”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
(b)Preparation of financial statements
The Company had a negative working capital and a stockholders’ deficit of US$768,951 as of December 31, 2019. The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern as the Company had total liabilities in excess of its total assets and maintained no revenue-generating operations since December 6, 2004. In light of the situation, the Company has been contemplating practical plans for a business restructuring and/or possible arrangements to raise additional capital funds to support its continuation as a going concern, but there can be no assurance that the Company will be successful in procuring any of such efforts.
The principal stockholder, who is also the sole director of the Company, has undertaken to finance the Company for a “reasonable” period of time for the Company to continue as a going concern, assuming that in such period of time the Company would be able to restructure its business and restart a revenue-generating operation and/or raise additional capital funds to support its continuation as a going concern. However, the principal stockholder of the Company retains the right to discontinue such financing at her own discretion in case the Company is unable to accomplish so in such period of time. It is uncertain as for how long or to what extent such period of time would be “reasonable” to the discretion of the principal stockholder, and there can be no assurance that the financing from the principal stockholder will not be discontinued at any time.
These uncertainties may result in adverse effects on continuation of the Company as a going concern. The accompanying financial statements do not reflect any adjustments that might result from the outcome of these uncertainties.
Pacific Vegas Global Strategies, Inc.
Notes to the Financial Statements
2.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c)Income taxes
The Company recognizes deferred tax liabilities and assets for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax liabilities and assets are determined based on the difference between the financial statement bases and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The Company estimates the degree to which tax assets and credit carryforwards will result in a benefit based on expected profitability by tax jurisdiction. A valuation allowance for such tax assets and loss carryforwards is provided when it is determined to be more likely than not that the benefit of such deferred tax asset will not be realized in future periods. Tax benefits of operating loss carryforwards are evaluated on an ongoing basis, including a review of historical and projected future operating results, the eligible carryforward period, and other circumstances. If it becomes more likely than not that a tax asset will be used, the related valuation allowance on such assets would be reduced.
The Company recognizes tax benefits from uncertain tax positions only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. Once this threshold has been met, the Company's measurement of its expected tax benefits is recognized in its financial statements. The Company accrues interest on unrecognized tax benefits as a component of income tax expense. Penalties, if incurred, would be recognized as a component of income tax expense.
At December 31, 2019 and 2018, the Company had not incurred liability for the payment of tax related interest and there was no tax interest or penalties recognized in the statements of operations.
(d)Foreign currency translation
Foreign currency transactions during the year are translated into US dollars at approximately the market exchange rates existing at the transaction dates. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at approximately the market exchange rates ruling at the balance sheet date. The effect on the statements of operations of transaction gains and losses is insignificant for all periods presented.
(e)Use of estimates
The preparation of the financial statements in accordance with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported amounts of expense during the reporting period. Estimates are used when accounting for certain items such as accounting for income tax valuation allowances. Estimates are based on historical experience, where applicable, and assumptions that management believes are reasonable under the circumstances. Due to the inherent uncertainty involved with estimates, actual results may differ.
(f)Fair value of financial instruments
ASC Topic 825, “Financial Instruments”, requires disclosing fair value to the extent practicable for financial instruments which are recognized or unrecognized in the balance sheets. The fair values of the financial instruments are not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax prepayments and accrued expenses, the fair values were determined based on the near term maturities of such the asset and obligations.
(g)Recently issued accounting standards
As of the date that this annual report is filed, due to the Company being inactive, there are no recently issued accounting pronouncements whose adoption would have a material impact on the Company’s financial statements.
Pacific Vegas Global Strategies, Inc.
Notes to the Financial Statements
3.DEPOSITS AND PREPAYMENTS
The amount represents retainer fee paid in advance to the Company’s lawyer.
4.INCOME TAXES
At December 31, 2019 and 2018, the Company had an unused net operating loss carryforward of approximately US$3,269,000 and US$3,203,000, respectively, for income tax purposes. Of these losses, US$3,142,000 expire between 2028 to 2037, and US$127,000 have no expiration date. At December 31, 2019 and 2018, these net operating losses carryforward may result in future income tax benefits of approximately US$817,000; and US$800,900, respectively, however, because realization is uncertain at this time, a valuation allowance in the same amount has been established. Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes.
Significant components of the Company’s deferred tax liabilities and assets of December 31, 2019 and 2018 are as follows:
Movement of valuation allowance:
A reconciliation of the income tax expense to the amount computed by applying the current statutory tax rate to the loss before income taxes in the consolidated statements of comprehensive loss is as follows:
Pacific Vegas Global Strategies, Inc.
Notes to the Financial Statements
5.LOSS PER SHARE
Basic loss per common share is calculated based on the weighted average number of common stock outstanding during each period presented.
The Company had no potential common stock instruments with a dilutive effect for any period presented and therefore basic and diluted earnings per share are the same.
6.DUE TO A STOCKHOLDER
The amount due is unsecured, interest-free and repayable on demand.
7.COMMITMENTS AND CONTINGENCIES
The Company is delinquent in filing its U.S. Federal tax returns and information forms for numerous years. Although for most of such years the Company incurred losses and would not owe taxes except for minimum fees to Colorado, the failure to file could result in interest and penalties imposed upon the Company which would have a material adverse effect upon the Company’s financial condition. The Company has completed its delinquent filings through the DIIRSP for the past due U.S. Federal tax returns and information forms as per the 2012 Offshore Voluntary Disclosure Program. As of December 31, 2019, management does not foresee significant tax liabilities arising from the DIIRSP.
The Company’s income tax returns for all the lapsed years are subject to examination by the Internal Revenue Service and State tax authorities, generally for three years after they are due or filed, whichever is later.
ITEM 9.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
In our two most recent fiscal years and any later interim period, there were no changes in and no disagreements with our principal independent accountant on any matters with regard to our accounting and financial disclosure.
ITEM 9A.
ITEM 9A.CONTROLS AND PROCEDURES
(a)Disclosure controls and procedures
As of the end of the period covered by this report, our management, with the participation of our chief financial officer, has performed an evaluation of the effectiveness of our disclosure controls and procedures within the meaning of Rules 13a-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
Based upon that evaluation, our management has concluded that, as of December 31, 2019, our disclosure controls and procedures were effective.
(b)Management’s annual report on internal control over financial reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) under the Exchange Act. Our management evaluated the effectiveness of our internal control over financial reporting based on criteria established in the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management has concluded that our internal control over financial reporting was effective as of December 31, 2019.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. In addition, projections of any evaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies and procedures may deteriorate.
(c)Attestation report of the registered public accounting firm
Not applicable.
(d)Changes in internal control over financial reporting
There were no changes in our internal controls over financial reporting identified in connection with the evaluation that occurred during our fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B.
ITEM 9B.OTHER INFORMATION
None
PART III
ITEM 10.
ITEM 10.DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
10.1DIRECTORS AND EXECUTIVE OFFICERS
Information about our directors and executive officers during the year ended and as of December 31, 2019 is set forth as follows:
(1)The business address is Room 2, LG/F., Kai Wong Commercial Building, 222 Queen’s Road, Central, Hong Kong.
(2)The term of office of each officer is at the discretion of the sole director.
(3)Appointed to serve as Director, Chief Executive Officer and Chief Financial Officer effective from August 23, 2007.
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. Ms. Kwan, being a well connected and low profile investor, took over the control of the Company after the acquisition with the intention to re-organize by merging or acquisition.
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 director and/or executive officer holds any positions as director or officer in any other reporting companies.
None of our existing director and/or executive officer has been involved in any legal proceedings or such events as required to be disclosed under Item 4.01(d) of Regulation S-K.
There has been no material changes to the procedures by which our stockholders may recommend nominees to our sole director 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-K.
10.2COMPLIANCE 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.
10.3AUDIT 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 sole director 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 audit committee financial expert serving on our audit committee or our sole director 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.
10.4CODE 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. However, since the Company is no longer engaged in or related to the business of sportsbook, certain sections thereof specifically related to the business of sportsbook are no longer applicable or relevant.
ITEM 11.
ITEM 11.EXECUTIVE COMPENSATION
11.1SUMMARY COMPENSATION TABLE
Effective as of January 1, 2005, based upon a mutual agreement between the Company and our chief executive officer and chief financial officer, there has been no compensation or remuneration from the Company, whether in cash or in kind, awarded to, earned by and/or paid to our chief executive officer and chief financial officer for their services rendered in all capacities to the Company.
The following table, and its accompanying explanatory footnotes, presents the information of annual and long-term compensation, including all plan and non-plan compensation, whether in cash or non-cash, awarded to, earned by and/or paid to our chief executive officer and chief financial officer for her services rendered in all capacities to the Company for the last two fiscal years ended December 31, 2019 and 2018. Other than the compensation listed below, there has been no compensation from the Company, whether in cash or non-cash, by plan or non-plan, awarded to, earned by and/or paid to our executive officer.
11.2SUMMARY OF OPTION GRANTS
There has been no grant of any stock options made to any executive officers or any employees of the Company in the last thirteen fiscal years since the Company’s reorganization with CTGH in January 2003.
ITEM 12.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following table sets forth the number of shares of our common stock owned beneficially as at December 31, 2019 by each person known by us to have owned beneficially more than five percent of such shares then outstanding, by each of our directors and officers and by all of our directors and officers as a group. This information gives effect to securities deemed outstanding pursuant to Rule 13d 3(d)(l) under the Securities Exchange Act of 1934, as amended. As to the knowledge of our management, no person owns beneficially more than five percent of the Company’s outstanding shares of common stock as at December 31, 2019 except as set forth below.
(1)The business address is Room 2, LG/F., Kai Wong Commercial Building, 222 Queen’s Road, Central, Hong Kong.
(2)The business address is 7/F Flat B, 110 Soy Street, Kowloon, Hong Kong.
On August 23, 2007, pursuant to a Stock Purchase Agreement dated August 23, 2007 between Raymond Chou (“Chou”) and Kwan Sin Yee (“Kwan”), Kwan purchased 36,500,000 shares of the common stock of the Company from Chou for a purchase price of US$109,500. The 36,500,000 shares represented 36.5% of the total shares of the Company issued and outstanding on August 23, 2007. Kwan owns 42,200,000 shares, or 42.2% of the total shares of the Company issued and outstanding after the above-mentioned stock purchase transaction and on the date of this report.
ITEM 13.
ITEM 13.CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS, AND DIRECTOR INDEPENDENCE
There were no related party transactions other than the private financing by loans to us from our principal stockholder, who is also the sole director of the Company, during the last two fiscal years ended December 31, 2019 and 2018. All private loans from the principal stockholder to the Company were unsecured, interest free and not subject to fixed term of repayment.
ITEM 14.
ITEM 14.PRINCIPAL ACCOUNTANT FEES AND SERVICES
(1) Audit Fees.
The aggregate fees billed for the fiscal year ended December 31, 2019 for professional services rendered by Moore Hong Kong for the audit of the Company’s annual financial statements for the year ended December 31, 2019 and the review of the financial statements included in our quarterly reports on Form 10-Q for the year ended December 31, 2019 were US$14,800 and US$16,500, respectively.
(2) Audit Related Fees. The Company did not pay any audit-related fees to Moore Hong Kong for both fiscal years 2019 and 2018.
(3) Tax Fees. Moore Hong Kong did not provide any tax services to the Company in either of the fiscal years 2019 and 2018.
(4) All Other Fees. Moore Hong Kong did not provide any other services to the Company in either of the fiscal years 2019 and 2018.
(5) We do not currently have a separate audit committee. Rather, our sole director serves as the audit committee. Our sole director approved all of the services described in items (1), (2), (3) and (4) above.
PART IV
ITEM 15.
ITEM 15.EXHIBITS
(a) The following documents are filed as a part of this report
The financial statements as set forth in Item 8 hereof
Exhibit 31.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(a)
Exhibit 31.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(a)
Exhibit 32.1
Certification of Chief Executive Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350
Exhibit 32.2
Certification of Chief Financial Officer pursuant to Rule 13a-14(b) and 18 U.S.C. Section 1350
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
Registrant
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.
NAME
TITLE
DATE
/s/ KWAN SIN YEE
President, Chief Executive Officer, Secretary and Director
March 30, 2020
Kwan Sin Yee
/s/ KWAN SIN YEE
Chief Financial Officer
March 30, 2020
Kwan Sin Yee