United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR
15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006
Commission file number: 000-49701
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
(Exact name of small business issuer as specified in its charter)
|
COLORADO |
|
84-1159783 |
|
(State or other jurisdiction of incorporation) |
|
(IRS Employer Identification No.) |
16/F, Winsome House
73 Wyndham Street, Central, Hong Kong
(Address of principal executive offices)
(011) (852) 3154-9370
(Issuer’s telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES x NO o
Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). YES x NO o
State the number of shares outstanding of each of the issuer’s classes of common equity, as of the latest practicable date: 99,963,615 shares of Common Stock, with no par value, issued and outstanding as at the date of September 30, 2006.
Transitional Small Business Disclosure Format (check one): YES o NO x
TABLE OF CONTENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CERTIFICATIONS |
|
2
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For Three and Nine Months Ended September 30, 2006 and 2005
|
|
|
|
|
Three months ended |
|
Nine months ended |
|
||||
|
|
|
Note |
|
2006 |
|
2005 |
|
2006 |
|
2005 |
|
|
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
|
|
US$ |
|
US$ |
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Continuing operation |
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
|
(10,151 |
) |
(36,700 |
) |
(60,874 |
) |
(57,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income taxes |
|
|
|
(10,151 |
) |
(36,700 |
) |
(60,874 |
) |
(57,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense |
|
|
|
— |
|
— |
|
— |
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operation |
|
|
|
(10,151 |
) |
(36,700 |
) |
(60,874 |
) |
(57,607 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operation |
|
|
|
|
|
|
|
|
|
|
|
|
Loss from discontinued operation |
|
4 |
|
— |
|
(7,497 |
) |
— |
|
(98,251 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
|
|
(10,151 |
) |
(44,197 |
) |
(60,874 |
) |
(155,858 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per share - Basic |
|
5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss from continuing operation |
|
|
|
(0.0001 |
) |
(0.0004 |
) |
(0.0006 |
) |
(0.0006 |
) |
|
Net loss from discontinued operation |
|
|
|
— |
|
(0.0001 |
) |
— |
|
(0.0010 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common stock outstanding |
|
|
|
99,963,615 |
|
99,963,615 |
|
99,963,615 |
|
99,963,615 |
|
3
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
As at September 30, 2006 and December 31, 2005
|
|
|
|
|
September |
|
December 31, |
|
|
|
|
Note |
|
30, 2006 |
|
2005 |
|
|
|
|
|
|
(Unaudited) |
|
(Audited) |
|
|
|
|
|
|
US$ |
|
US$ |
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Deposits and prepayments |
|
|
|
12,946 |
|
— |
|
|
Other current assets |
|
|
|
— |
|
70,548 |
|
|
|
|
|
|
|
|
|
|
|
Total current assets |
|
|
|
12,946 |
|
70,548 |
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accrued expenses |
|
|
|
40,495 |
|
37,223 |
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities |
|
|
|
40,495 |
|
37,223 |
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Common stock |
|
|
|
|
|
|
|
|
Authorized: 500,000,000 shares of common stock with no par value, as of September 30, 2006 and December 31, 2005 |
|
|
|
|
|
|
|
|
Issued and outstanding: 99,963,615 shares of common stock with no par value, as of September 30, 2006 and December 31, 2005 |
|
|
|
— |
|
— |
|
|
Additional paid-in capital |
|
|
|
2,500,000 |
|
2,500,000 |
|
|
Accumulated losses |
|
|
|
(2,527,549 |
) |
(2,466,675 |
) |
|
|
|
|
|
|
|
|
|
|
Total stockholders’ equity |
|
|
|
(27,549 |
) |
33,325 |
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders’ equity |
|
|
|
12,946 |
|
70,548 |
|
4
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
for Nine Months Ended September 30, 2006 and 2005
|
|
|
Nine months ended |
|
||
|
|
|
2006 |
|
2005 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
US$ |
|
US$ |
|
|
|
|
|
|
|
|
|
Cash flows from operating activities |
|
|
|
|
|
|
Net loss |
|
(60,874 |
) |
(155,858 |
) |
|
Adjustment to reconcile net income to net cash used in operating activities |
|
|
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
Deposits and prepayments |
|
(12,946 |
) |
15,761 |
|
|
Other current assets |
|
70,548 |
|
— |
|
|
Accrued expenses |
|
3,272 |
|
(73,058 |
) |
|
|
|
|
|
|
|
|
Net cash used in operating activities |
|
— |
|
(213,155 |
) |
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
Due to a shareholder |
|
— |
|
183,126 |
|
|
|
|
|
|
|
|
|
Net cash provided by financing activities |
|
— |
|
183,126 |
|
|
|
|
|
|
|
|
|
Net decrease in cash and cash equivalents |
|
— |
|
(30,029 |
) |
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period |
|
— |
|
40,506 |
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
|
— |
|
10,477 |
|
5
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
for Nine Months Ended September 30, 2006 and 2005
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. Prior to its reorganization with Cyber Technology Group Holdings Ltd. (“CTGH”) on January 8, 2003 (as described in Note 2 to the Company’s audited financial statements for the fiscal year ended December 31, 2005), the Company entered into and operated a business of development and sales of time and personal management products. The Company discontinued such business and became a non-operating public shell in 1994 and since then remained as a shell company with its only activities of accruing loan interest on notes payable and looking for a merger candidate.
Upon completion of the reorganization with CTGH on January 8, 2003, CTGH became a wholly-owned subsidiary and active operating entity of the Company, and 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 its Board of Directors resolved to cease the operations of such business due to the significant financial losses resulted from such business. The said sportsbook business was the only business that the Company engaged and operated in the last four fiscal years since its reorganization with CTGH.
As described in Note 4 hereof, the Company subsequently disposed of CTGH to a non-related buyer, and the subject transaction was closed on November 18, 2005 upon approval of the shareholders of PVGS.
The Company has been in an inactive or non-operating status since December 6, 2004, and currently remained as a shell company with its only activities of incurring non-operating expenses and seeking a merger candidate.
2. PREPARATION OF INTERIM FINANCIAL STATEMENTS
The accompanying unaudited condensed consolidated financial statements as at September 30, 2006 and for the three-month and nine-month periods ended September 30, 2006 and 2005, have been prepared based upon the Securities and Exchange Commission (the “SEC”) rules that permit reduced disclosure for interim periods and include, in the opinion of management, all adjustments (consisting of normal recurring adjustments and reclassifications) necessary to present fairly the financial position, results of operations and cash flows as at September 30, 2006 and for all periods presented.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“USGAAP”) have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and the notes incorporated thereto by reference in the Company’s annual report on Form 10-KSB for the fiscal year ended December 31, 2005. The results of operations for the three-month and nine-month periods ended September 30, 2006 and 2005 are not necessarily indicative of the operating results to be expected for the full year.
6
The condensed consolidated financial statements and accompanying notes are presented in U.S. dollars and prepared in conformity with USGAAP which requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
The accompanying condensed consolidated financial statements have been prepared in conformity with generally accepted accounting principles, which contemplate continuation of the Company as a going concern. However, in light of that as at September 30, 2006 the Company’s balance of stockholders’ equity was negative and its balance of total current assets was insufficient to meet its current liabilities, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern.
As a non-operating public shell, the Company has maintained no revenue-generating operations since December 6, 2004 and has relied on the private financing from its principal shareholder, who has undertaken to finance the Company by cash injections 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, the principal shareholder retains his right to discontinue such financing at his own discretion. It is uncertain as for how long or to what extent such a period of time would be “reasonable” to the discretion of the principal shareholder, and there can be no assurance that the financing from the principal shareholder will not be discontinued at any time.
Other than the private financing from the principal shareholder, 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.
The Company has planned for a reorganization with a selected entity to acquire sufficient capital funds and engage into a selected business, and for that purpose the Company has been in search of a practical merger candidate. However, there can be no assurance as to when or whether such attempt will be successful.
These uncertainties may result in significant adverse effects on the Company’s continuation as a going concern. The accompanying condensed consolidated financial statements do not include or reflect any adjustments that might result from the outcome of these uncertainties.
3. RECENTLY ISSUED ACCOUNTING STANDARDS
There are no new accounting pronouncements for which adoption is expected to have a material effect on the Company’s condensed consolidated financial statements.
4. DISCONTINUED OPERATION
On July 8, 2005, the Company entered into a Stock Purchase Agreement with an independent third party (the “Buyer”), pursuant to which, and subject to its shareholders’ approval, the Company was to sale its entire 100% equity interest in 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$549,288 as may be amended at the closing of the transaction. This agreement was approved by the shareholders of PVGS at the special meeting of shareholders held on October 14, 2005, and the transaction was subsequently closed on November 18, 2005.
7
In accordance with SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company reported CTGH as a discontinued operation in its audited financial statements for the fiscal year ended December 31, 2005 and accordingly, restated the unaudited financial results of the discontinued operation for the three-month and nine-month periods ended September 30, 2005 in the accompanying condensed consolidated financial statements on the same basis.
Results of the discontinued operation for the three-month and nine-month periods ended September 30, 2005, which have been included in the condensed consolidated financial statements, were as follows:
|
|
|
Three months ended |
|
Nine months ended |
|
|
|
|
September 30, 2005 |
|
September 30, 2005 |
|
|
|
|
(Unaudited) |
|
(Unaudited) |
|
|
|
|
US$ |
|
US$ |
|
|
Discontinued operation |
|
|
|
|
|
|
Revenue |
|
— |
|
— |
|
|
Interest income |
|
— |
|
4 |
|
|
Operating costs |
|
(7,497 |
) |
(98,255 |
) |
|
|
|
|
|
|
|
|
Operating loss from discontinued operations |
|
(7,497 |
) |
(98,251 |
) |
5. LOSS PER SHARE
Basic loss per common share is based on the weighted average number of common shares outstanding during each period.
Basic and diluted losses per share for the periods presented were identical, since the Company had no potential common stock instruments with a dilutive effect during the periods.
6. INCOME TAXES
No provision for withholding or U.S. federal or state income taxes or tax benefits on the undistributed earnings and/or losses of the Company has been provided as its earning, in the opinion of management, will be reinvested indefinitely. Determination of the amount of unrecognized deferred taxes on these earnings is not practical and, however, unrecognized foreign tax credits would be available to reduce a portion of the tax liability.
7. COMMITMENTS
As at September 30, 2006 and December 31, 2005, there was no commitment under non-cancelable operating leases in respect of land and buildings and no material outstanding capital commitment by the Company.
8
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The presentation of management’s discussion and analysis or plan of operations in this report 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 expectation or belief with regard to future results, and expressed in good faith and believed to have a reasonable basis, but there can be no assurance that such expectation or belief will prove to be correct, and there can be no assurance that such forward-looking statements will result or be achieved or accomplished, and as a result of certain risks and uncertainties, actual results of operations may differ materially.
1. REVENUE, EXPENSES AND NET LOSS
There was no active business operated and no revenue or other income earned by the Company for the three-month and nine-month periods ended September 30, 2006.
Total expenses for the subject periods were US$10,151 and US$60,874 respectively, mainly for professional fees and miscellaneous administrative expenses.
As a result, the Company incurred a net loss of US$10,151 and US$60,874 respectively, for the three-month and nine-month periods ended September 30, 2006.
2. CASH FLOWS
There was no change in net cash flows for the period covered by this quarterly report.
3. PLAN OF OPERATIONS
The Company has planned for a reorganization with a selected entity to acquire sufficient capital funds and engage into a selected business, and for that purpose the Company has been in search of a practical merger candidate. However, there can be no assurance as to when or whether such attempt will be successful.
4. GOING CONCERN
As stated in Note 2 to the unaudited condensed consolidated financial statements under Item 1 hereof, in light of that as at September 30, 2006 the Company’s balance of stockholders’ equity was negative and its balance of total current assets was insufficient to meet its current liabilities, a substantial doubt has been raised with regard to the ability of the Company to continue as a going concern.
The Company has maintained no revenue-generating operations since December 6, 2004 and has relied on the private financing from its principal shareholder, who has undertaken to finance the Company by cash injections 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, the principal shareholder retains his right to discontinue such financing at his own discretion. It is uncertain as for how long or to what extent such a period of time would be “reasonable” to the discretion of the principal shareholder, and there can be no assurance that the financing from the principal shareholder will not be discontinued at any time.
9
Other than the private financing from the principal shareholder, 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.
The Company has planned for a reorganization with a selected entity to acquire sufficient capital funds and engage into a selected business, and for that purpose the Company has been in search of a practical merger candidate. However, there can be no assurance as to when or whether such attempt will be successful.
These uncertainties may result in significant adverse effects on the Company’s continuation as a going concern. The unaudited condensed consolidated financial statements presented herein do not include or reflect any adjustments that might result from the outcome of these uncertainties.
Management addressed this particular matter in our annual report on Form 10-KSB for the fiscal year ended December 31, 2005. This quarterly report should be read in conjunction with that annual report on Form 10-KSB, with regard to this particular matter.
ITEM 3. CONTROLS AND PROCEDURES
(a) Evaluation of Disclosure Controls and Procedures
Management has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures as at the end of the quarterly period covered by this report, pursuant to Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act, and concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.
(b) Changes in Internal Controls
Management has evaluated the Company’s internal control over financial reporting as at the end of the quarterly period covered by this report, pursuant to Rule 13a-15(d) and Rule 15d-15(d) under the Exchange Act, and concluded that during the subject period there was no change occurred in the Company’s internal controls over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
10
|
OTHER INFORMATION |
|
|
|
|
|
LEGAL PROCEEDINGS |
|
|
|
None. |
|
|
|
|
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|
|
|
None. |
|
|
|
|
DEFAULTS UPON SENIOR SECURITIES |
|
|
|
None. |
|
|
|
|
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS |
|
|
|
None. |
|
|
|
|
OTHER INFORMATION |
|
|
|
None. |
|
|
|
|
EXHIBITS AND REPORTS ON FORM 8-K |
(a) Exhibits:
31.1 Certification of Chief Executive Officer pursuant to Rule 13(a)-14(a)
31.2 Certification of Chief Financial Officer pursuant to Rule 13(a)-14(a)
32.1 Certification of Chief Executive Officer pursuant to Rule 13(a)-14(b) and 18 U.S.C. Section 1350
32.2 Certification of Chief Financial Officer pursuant to Rule 13(a)-14(b) and 18 U.S.C. Section 1350
(b) Reports on Form 8-K
During the quarterly period for which this Form 10-QSB is filed, no reports on Form 8-K was filed by the Company.
In accordance with the requirements 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)
Dated: November 14, 2006
|
/s/ RAYMOND CHOU |
|
/s/ RICHARD WANG |
|
|
Raymond Chou |
Richard Wang |
||
|
Chief Executive Officer |
Chief Financial Officer |
||
11