PVEG Pacific Vegas Global Strategies Inc (CE)

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United States
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2018

Commission file number 0-49701

PACIFIC VEGAS GLOBAL STRATEGIES, INC.

(Exact name of registrant as specified in its charter)

Room 2, LG/F., Kai Wong Commercial Building
222 Queen’s Road, Central, Hong Kong

(Address of principal executive offices)

(852) 3154-9370

(Registrant’s telephone number, including area code)

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

Common Stock, with No Par Value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.    YES  o         NO  x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.    YES o         NO  x

Indicate by check mark whether the registrant (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 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 has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

YES   o      NO     x

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not 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-K or any amendment to this Form 10-K.

YES   x      NO     o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

YES  x        NO  o

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average of the bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter: US$ 211,293 .

NOTE: The aggregate market value was computed by multiplying the number of outstanding shares of the registrant’s common stock, excluding those shares of record held by officers, directors and greater than five percent stockholders, by US$0.0 063 per share.

Indicate the number of shares outstanding of each of the registrant’s classes of common stock, as of the latest practicable date: 99,963,615 shares of Common Stock with No Par Value, outstanding as at March 29, 201 9.

Documents incorporated by reference:   NONE.

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PART   I

ITEM 1.                                   BUSINESS

1.1                                INTRODUCTION

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.

1.2                                THE 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 become 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 subsequently. The 60,000,000 new shares of common stock were therefore issued on December 22, 2002 as scheduled. 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.

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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 sportsbook business was the only revenue source for the Company during the last fifteen 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 2018 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.

1.4                                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 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.

1.5                                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 incurring non-operating expenses.

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1.6                                EMPLOYEES

Effective from March 2007 and until December 31, 2018, the Company had one (1) full time employee, with no compensation, in the capacities as chief executive officer and chief financial officer.

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, 2018, 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 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.

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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, 2018, there were no outstanding equity compensation plans, options or warrants to be exercised and no equity securities to be issued for such purposes.

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7.2.3                      Liquidity and Capital Resources

As at December 31, 2018, 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.

7.3                                OFF-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 2018 and any interim periods in the current fiscal year.

7.4                                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.

7.5                                ADDITIONAL CAUTIONARY STATEMENTS AND RISK FACTORS

7.5.1                      Going 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, 2018, the Company retained its total assets as minimal as US$10,000, 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. 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.

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7.5.2                      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 24 , 2019, the last reported sale price of our common stock on the Pink Sheets was US$0.0025 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.

7.5.3                      Tax matters

No U.S. Federal tax returns and information forms have 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.

7.5.4                      Due 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, 2018 and 2017. All private loans from the principal stockholder to the Company were unsecured, interest free and not subject to fixed term of repayment.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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The accompanying notes are an integral part of these financial statements.

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Pacific Vegas Global Strategies, Inc.

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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 basis and tax basis 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, 201 8 and 2017, 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, there are no recently issued accounting pronouncements whose adoption would have a material impact on the Company’s financial statements.

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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, 2018 and 2017, the Company had an unused net operating loss carryforward of approximately $3,203,000 and $3,142,000, respectively, for income tax purposes, which expires between 2028 to indefinitely and between 2028 to 2037, respectively. At December 31, 2018 and 2017, these net operating losses carryforward may result in future income tax benefits of approximately $800,900; and $785,600, 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, 2018 and 2017 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:

As a result of the reduction of the corporate income tax rate from 35% to 21% due to the Tax Cuts and Jobs Act which was enacted on December 22, 2017, U.S. GAAP requires companies to remeasure their deferred tax assets and liabilities as of the date of enactment, with resulting tax effects accounted for in the period of enactment. (the change in deferred tax balances would have a corresponding change to valuation allowance thereby resulting in no income tax expense for the year).

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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, 2018, management does not foresee significant tax liabilities arising from the DIIRSP.

The Company’s income tax returns for the years ended December 31, 2018 and 2017 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.

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10 .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 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.

10.4                         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. 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.

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(4)                  All Other Fees. Moore Stephens did not provide any other services to the Company in either of the fiscal years 2018 and 2017.

(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.

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