United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1933
Date of Report: March 11, 2003
Commission File Number: 000-49701
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
formerly
GOALTIMER INTERNATIONAL, INC.
Colorado 84-1159783
(Jurisdiction of Incorporation) (I.R.S. Employer Identification No.)
231 West Jamison Circle #5, Littleton CO 80120
(Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code: (303) 734-0235
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act: Common Stock
ITEM 1. CHANGE OF CONTROL OF REGISTRANT.
Please refer to Schedule 14C and 14F/14F-1/A filed in the last 60 days, and
to Form 8-K dated January 24, 2003.
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS. Please refer to the 8K filed on
January 24, 2003, incorporated by reference.
ITEM 3. BANKRUPTCY OR RECEIVERSHIP. None.
ITEM 4. CHANGES IN REGISTRANT'S CERTIFYING ACCOUNTANT. Please refer to our 8K
filed on January 24, 2003.
ITEM 5. OTHER EVENTS. None.
ITEM 6. CHANGES OF REGISTRANT'S DIRECTORS. None.
1
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS. The consolidated financial
statements are presented in United States dollars and have been prepared in
accordance with accounting principles generally accepted in United States of
America.
Before the restructuring (see Note 11), the Company, Pacific Vegas
Development Limited ("PVD") and Pacific Vegas International Limited ("PVI") were
wholly owned by the same shareholder. In April 2002, as a result of
restructuring, PVD and PVI became subsidiaries of the Company with no
substantive change in the shareholder's interest.
Therefore, under the "continuity of interests" method of accounting, the
consolidated financial statements reflect the financial position and results of
operations as if the current group structure had always been in existence.
The consolidated statement of operations and cash flows includes the
results of the companies comprising the Group as if the current group structure
had been in existence throughout the period, or since the dates of incorporation
of the individual companies where this is a shorter period.
The consolidated balance sheet as at December 31, 2000, 2001 and 2002 have
been prepared to present the assets and liabilities of the companies comprising
the Group as at that date, as if the current group structure had been in
existence as at that date.
ITEM 8. CHANGE IN FISCAL YEAR. None
ITEM 9. REGULATION FD DISCLOSURE. None
SIGNATURES
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 date indicated.
PACIFIC VEGAS GLOBAL STRATEGIES, INC.
formerly GOALTIMER INTERNATIONAL, INC.
Dated: March 11, 2003
by
/s/Raymond Chien Hua Chou
Raymond Chien Hua Chou
Sole Officer and Director
2
- --------------------------------------------------------------------------------
EXHIBIT 16.1
AUDITED FINANCIAL STATEMENTS
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
- --------------------------------------------------------------------------------
3
REPORT OF INDEPENDENT AUDITORS
To the Stockholders and Board of Directors
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
(incorporated in the British Virgin Islands with limited liability)
We have audited the accompanying consolidated balance sheet of Cyber Technology
Group Holdings Limited as of December 31, 2000 and 2001, and the related
consolidated statements of operations, changes in stockholders' equity (deficit)
and cash flows for the periods then ended. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the consolidated financial statements present fairly, in all
material respects, the consolidated financial position of Cyber Technology
Group Holdings Limited as of December 31, 2000 and 2001, and the consolidated
results of its operations and its cash flows for the periods then ended in
conformity with accounting principles generally accepted in the United States of
America.
/s/Moores Rowland
Moores Rowland
Chartered Accountants
Certified Public Accountants
Hong Kong
March 11, 2003
4
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF OPERATIONS
- --------------------------------------------------------------------------------
April 10,
2000 to Year ended Year ended
December December December
Note 31, 2000 31, 2001 31, 2002
US$ US$ US$
(Unaudited)
- ------------------------------------------------------------------------------------------
TURNOVER. . . . . . . . 4 - 950,000 2,497,027
EXPENSES
Selling, general and administrative (299,021) (1,154,512) (1,774,557)
Depreciation. . . . . . . . . . . . - (167,423) (361,625)
-------------------------------------------------------
(299,021) (1,321,935) (2,136,182)
-------------------------------------------------------
Operating (loss)/profit . . . . . . (299,021) (371,935) 360,845
-------------------------------------------------------
Interest income . . . . . . . . . . 2,832 238 11,753
Interest expense. . . . . . . . . . - - -
-------------------------------------------------------
2,832 238 11,753
-------------------------------------------------------
(Loss)/Profit before income taxes . (296,189) (371,697) 372,598
Income tax expense. . . . . . . . . - - -
-------------------------------------------------------
Net (loss)/profit . . . . . . . . . (296,189) (371,697) 372,598
=======================================================
The accompanying notes are an integral part of these financial statements.
5
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
CONSOLIDATED BALANCE SHEET
- --------------------------------------------------------------------------------
As of As of As of
December December December
Notes 31, 2000 31, 2001 31, 2002
US$ US$ US$
(Unaudited)
- --------------------------------------------------------------------------------------------------
ASSETS
Current assets
Cash and cash equivalents . . . . . . . . . . . . 47,429 9,731 124,453
Accounts receivable, net of provision of bad and
doubtful debts of Nil in 2001 and 2002. . . . . . 3(a) - 950,000 311,961
Deposits. . . . . . . . . . . . . . . . . . . . . 109,103 126,676 113,233
Due from a shareholder. . . . . . . . . . . . . . - - 339,434
Other current asset . . . . . . . . . . . . . . . 1,681 - 50,896
-------------------------------------------------
Total current assets. . . . . . . . . . . . . . . 158,213 1,086,407 939,977
Property, plant and equipment, net. . . . . . . . 5 524,098 1,580,460 1,305,676
Deferred offering costs . . . . . . . . . . . . . 2(g) - 100,000 190,000
-------------------------------------------------
Total assets. . . . . . . . . . . . . . . . . . . 682,311 2,766,867 2,435,653
=================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable - trade. . . . . . . . . . . . . - 300,000 59,493
Accrued expenses. . . . . . . . . . . . . . . . . - 94,419 134,326
Due to a shareholder. . . . . . . . . . . . . . . - - 22,962
Other payable . . . . . . . . . . . . . . . . . . - 1,124 14,160
-------------------------------------------------
Total current liabilities . . . . . . . . . . . . - 395,543 230,941
Due to a shareholder, non-current . . . . . . . . 7 478,498 2,539,208 -
-------------------------------------------------
478,498 2,934,751 230,941
-------------------------------------------------
Commitments and contingencies . . . . . . . . . . 9
Stockholders' equity
Common stock,
Authorized :
U$1 par value, 10,000,000 shares of common
stock as of December 31, 2000 and 2001 and
US$0.05 par value, 200,000,000 shares of
common stock as of December 31, 2002 (Note 11)
Issued and outstanding :
US$1 par value, 1 share of common stock as of
December 31, 2000 and 2001
US$0.05 par value, 50,000,000 shares of common
stock as of December 31, 2002. . . . . . . . . . 1 1 2,500,000
Additional paid-in capital. . . . . . . . . . . . 8 500,001 500,001 -
Accumulated losses. . . . . . . . . . . . . . . . (296,189) (667,886) (295,288)
-------------------------------------------------
Total stockholders' equity (deficit). . . . . . . 203,813 (167,884) 2,204,712
-------------------------------------------------
Total liabilities and stockholders' equity. . . . 682,311 2,766,867 2,435,653
=================================================
The accompanying notes are an integral part of these financial statements.
6
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)
- --------------------------------------------------------------------------------
Additional
Common Stock Paid In Accumulated
Number of Amount capital losses Total
Shares US$ US$ US$ US$
- -----------------------------------------------------------------------------------------
Common stock issued . . . . . . 1 1 500,001 - 500,002
Net loss. . . . . . . . . . . . - - - (296,189) (296,189)
---------------------------------------------------------
Balance as of December 31, 2000 1 1 500,001 (296,189) 203,813
Net loss. . . . . . . . . . . . - - - (371,697) (371,697)
---------------------------------------------------------
Balance as of December 31, 2001 1 1 500,001 (667,886) (167,884)
Stock split . . . . . . . . . . 19 - - - -
Group restructuring . . . . . . - - (500,001) - (500,001)
Issue of capital. . . . . . . . 49,999,980 2,499,999 - - 2,499,999
Net profit . . . . . . . . . . - - - 372,598 372,598
---------------------------------------------------------
Balance as of December 31, 2002 50,000,000 2,500,000 - (295,288) 2,204,712
=========================================================
The accompanying notes are an integral part of these financial statements.
7
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------------------------------------
April 10,
2000 to Year ended Year ended
December December December
31, 2000 31, 2001 31, 2002
US$ US$ US$
(Unaudited)
- --------------------------------------------------------------------------------------------
Cash flows from operating activities
Net (loss)/profit. . . . . . . . . . . . . . . . . . (296,189) (371,697) 372,598
Adjustment to reconcile net income to net cash
(used in) provided by operating activities
Depreciation of property, plant and equipment. . . . - 167,423 361,625
Loss on disposal of fixed assets . . . . . . . . . . - 1,451 -
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . - (950,000) 638,039
Deposits. . . . . . . . . . . . . . . . . . . . . . (109,103) (17,573) 13,443
Other current asset . . . . . . . . . . . . . . . . (1,681) 1,681 (50,896)
Accounts payable-trade. . . . . . . . . . . . . . . - 300,000 (240,507)
Accrued expenses. . . . . . . . . . . . . . . . . . - 94,419 39,907
Other payable . . . . . . . . . . . . . . . . . . . - 1,124 13,036
--------------------------------------
Net cash (used in) provided by operating activities. (406,973) (773,172) 1,147,245
--------------------------------------
Cash flows from investing activities
Purchases of property, plant and equipment . . . . . (524,098) (1,226,285) (86,841)
Sales of property, plant and equipment . . . . . . . - 1,049 -
--------------------------------------
Net cash used in investing activities. . . . . . . . (524,098) (1,225,236) (86,841)
--------------------------------------
Cash flows from financing activities
Due to/from a shareholder. . . . . . . . . . . . . . 478,498 2,060,710 (355,681)
Common stock issued. . . . . . . . . . . . . . . . . 1 - -
Additional paid-in-capital . . . . . . . . . . . . . 500,001 - (500,001)
Deferred offering costs. . . . . . . . . . . . . . . - (100,000) (90,000)
--------------------------------------
Net cash provided by (used in) financing activities. 978,500 1,960,710 (945,682)
--------------------------------------
Net increase in cash and cash equivalents. . . . . . 47,429 (37,698) 114,722
Cash and cash equivalents, as of beginning of period - 47,429 9,731
--------------------------------------
Cash and cash equivalents, as of end of period . . . 47,429 9,731 124,453
======================================
Supplemental disclosure of cash flow information
Cash paid for interest . . . . . . . . . . . . . . . - - -
Cash paid for income taxes . . . . . . . . . . . . . - - -
======================================
Major non-cash transaction
Capitalization of amount due to shareholder for
issuance of common stock. . . . . . . . . . . . . . - - 2,499,999
======================================
The accompanying notes are an integral part of these financial statements.
8
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
1. ORGANIZATION AND PRINCIPAL ACTIVITIES
The Company was incorporated in the British Virgin Islands on June 22, 2000
as a limited liability company under the name "CenturyWorld International
Corporation". On November 2, 2000, the name of the Company was changed to Cyber
Technology Group Holdings Limited. The Company was considered to be in the
development stage, due to its limited operations and lack of core business
revenues, prior to and including January 31, 2002, at which time operations
commenced. Activities from inception to that date included organization matters
and raising equity.
The principal business activities of the Company are conducting Internet
sportsbook and cyber - casino business from the Commonwealth of Dominica by way
of telecommunications and/or the Internet.
Details of the Company's subsidiaries (see Note 11) and their
principal activities are as follows:
NAME OF COMPANY DATE OF PLACE OF PERCENTAGE OF SHARE PRINCIPAL ACTIVITIES
FORMATION INCORPORATION HELD BY THE COMPANY
Direct Indirect
- ---------------------------------------------------------------------------------------------------
Pacific Vegas
Development Limited April 26, 2000 Samoa 100% - Investment holding,
provision of management
services and information
technology support
Pacific Vegas
International Limited April 10, 2000 The Commonwealth
of Dominica - 100% Conduction of Internet
sportsbook and cyber-casino
business
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of accounting
The consolidated financial statements are presented in United States
dollars and have been prepared in accordance with accounting principles
generally accepted in United States of America.
Before the restructuring (see Note 11), the Company, Pacific Vegas
Development Limited ("PVD") and Pacific Vegas International Limited ("PVI") were
wholly owned by the same shareholder. In April 2002, as a result of
restructuring, PVD and PVI became subsidiaries of the Company with no
substantive change in the shareholder's interest.
Therefore, under the "continuity of interests" method of accounting, the
consolidated financial statements reflect the financial position and results of
operations as if the current group structure had always been in existence.
The consolidated statement of operations and cash flows includes the
results of the companies comprising the Group as if the current group structure
had been in existence throughout the period, or since the dates of incorporation
of the individual companies where this is a shorter period.
The consolidated balance sheet as at December 31, 2000, 2001 and 2002 have
been prepared to present the assets and liabilities of the companies comprising
the Group as at that date, as if the current group structure had been in
existence as at that date.
9
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(b) Principles of consolidation
The consolidated financial statements include the accounts of the Company
and its subsidiary companies as if the current group structure had always been
in existence. All material intercompany balances and transactions have been
eliminated on consolidation.
(c) Subsidiaries
A subsidiary is an enterprise in which the Company holds, directly or
indirectly, more than half of the voting power or issued voting share capital or
controls the composition of the board of directors or equivalent governing body.
(d) Development stage company
Prior to February 1, 2002, the Company's activities principally had been
developing a viable cyber casino business and the test run of the gambling
system by an independent operator. During that period, the company had been
relying on the advances from its stockholders for its primary source of cash
flows. Accordingly, the Company's financial statements for all periods prior to
February 1, 2002 were presented as a development stage enterprise, as prescribed
by SFAS No. 7 "Accounting and Reporting by Development Stage Enterprises". On
February 1, 2002 the Company started operating the gambling system itself and
was responsible for all wager revenue and payout respectively. As a result, the
Company exited the development stage in the first quarter ended March 31, 2002.
(e) Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand and deposits with
banks, short-term, highly liquid investments with original maturities of three
months or less.
(f) Property, plant and equipment and depreciation
Property, plant and equipment are stated at cost less accumulated
depreciation. The cost of an asset comprises of its purchase price and any
directly attributable costs of bringing the asset to its present working
condition and location for its intended use. Expenditures incurred after the
property, plant and equipment have been put into operation, such as repairs and
maintenance, are charged to the consolidated statement of operations in the
period in which it is incurred. In situations where it can be clearly
demonstrated that an expenditure has resulted in an increase in the future
economic benefits expected to be obtained from the use of the property, plant
and equipment, the expenditure is capitalized, as an additional cost of
property, plant and equipment.
When assets are sold or retired, their costs and accumulated depreciation
are eliminated from the accounts and any gain or loss resulting from their
disposal is included in the consolidated statement of operations.
Depreciation is provided to write off the cost of property, plant and
equipment, over their estimated useful lives and after taking into account their
estimated residual values, using the straight-line method. The estimated useful
lives of all property, plant and equipment are 5 years.
10
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(g) Deferred offering costs
In connection with the proposed reverse takeover, the Company has and will
continue to incur certain costs associated with the reverse takeover. These
costs will be deferred and offset against the proceeds from the issue of the
securities, if the offering is successful, or expensed in operations, if the
offering is unsuccessful.
(h) Income taxes
The Company accounts for income tax under the provisions of Statement of
Financial Accounting Standards ("SFAS") No. 109, which requires recognition of
deferred tax assets included in the financial statements or tax returns.
Deferred income taxes are provided using the liability method. Under the
liability method deferred income taxes are recognized for all significant
temporary differences between the tax and financial statements based of assets
and liabilities.
(i) Operating leases
Leases where substantially all the rewards and risks of ownership of assets
remain with the leasing company are accounted for as operating leases. Rentals
payable under operating leases are charged to the consolidated statement of
operations on a straight-line basis over the lease terms.
(j) Comprehensive income (loss)
The Company has adopted Statement of Financial Accounting Standards No.
130, which requires the Company to report all changes in equity during a period,
except for those resulting from investment by shareholders and distribution to
shareholders, in the financial statements for the period in which they are
recognized. The Company has no other comprehensive income (loss) and
comprehensive profit (loss) is the net profit (loss) for the period in the
consolidated statements of changes in shareholders' equity.
(k) Related parties
Parties are considered to be related if one party has the ability to
control the other party or exercise significant influence over the other party
in making financial and operating decisions.
(l) Revenue recognition
Revenue is recognized when it is probable that the economic benefits will
flow to the Company and when the revenue can be measured reliably.
Management fee receivable under operating management contract is recognized in
the consolidated statement of operations in equal instalments over the
accounting periods covered by the contract.
11
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(m) Impairment of long-lived assets
The Company has adopted SFAS No. 121, "Accounting for Impairment of
Long-Lived Assets". In the event that facts and circumstances indicate that the
carrying value of long-lived assets may be impaired, an evaluation of
recoverability would be performed. If an evaluation is required, the estimated
future undiscounted cash flows associated with the asset would be compared to
the asset's carrying amount to determine if a write-down to market value or
discounted cash flow value is required.
(n) Foreign currency translation
The books and records of the Company and the subsidiary in Samoa are
maintained in Hong Kong dollars. The Company's subsidiary in the Commonwealth
of Dominica maintains its books and records in United States dollars. The
financial statements of the Company and its subsidiary have been translated into
United States dollars in accordance SFAS No. 52, "Foreign Currency Translation".
Foreign currency transactions during the period are translated into US dollars
at approximately the market exchange rates ruling at the transaction dates.
Monetary assets and liabilities denominated in foreign currencies are translated
into US 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.
(o) Use of estimates
The preparation of the consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual amounts could differ from
those estimates.
(p) Fair value of financial statements
The estimated fair values for financial instruments under SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments", are determined at
discrete points in time based on relevant market information. These estimates
involve uncertainties and cannot be determined with precision. The estimated
fair values of the Company's financial instruments, which includes cash and
other payables approximate their carrying values in the consolidated financial
statements because of the short term maturity of those instruments.
12
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
3. OPERATING RISKS
(a) Concentration of major customers
Credit risk represents the accounting loss that would be recognized at the
reporting date if counterparties failed completely to perform as contracted.
Concentration of credit risk (whether on or off balance sheet) that arise from
financial instruments exist for the Company's customers or counterparties when
there are similar economic characteristics that would cause their ability to
meet contractual obligation to be similarly affected by changes in economic or
other conditions. The major concentration of credit risk arises from the
Company's receivables. Even though the Company does have a significant
receivable, it does not consider itself exposed to significant credit risk with
regards to collection of the related receivable. The trade receivable of
US$950,000 as of December 31, 2001 has been partly settled by netting off with
other payable of US$300,000 and by cash of US$120,000 on May 9, 2002.
(b) Cash and time deposits
The Company maintains its cash balances with various banks and financial
institutions located in Hong Kong. In common with local practice, such amounts
are not insured or otherwise protected should the financial institutions be
unable to meet their liabilities. There has been no history of credit losses.
4. TURNOVER
Turnover represents the net wagers and management fee received by the Company.
The amount of each category of revenue recognized in turnover during the period
is as follows:
April 10,
2000 to Year ended Year ended
December December December
31, 2000 31, 2001 31, 2001
US$ US$ US$
(Unaudited)
- -----------------------------------------------------------------------------
Gross wager - - 94,562,489
Payout - - (92,315,462)
-----------------------------------------
- - 2,247,027
Management fee - 950,000 250,000
-----------------------------------------
- 950,000 2,497,027
=========================================
The gross wager and payout for the period from April 10, 2000 to December 31,
2000, the year ended December 31, 2001, and the period from April 10, 2000 to
January 31, 2002 were nil. During these periods, the independent operator (Note
2(d)) was responsible for all wager revenue and payout and the company received
a management fee from the operator.
13
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
5. PROPERTY, PLANT AND EQUIPMENT, NET
As of December 31, 2000 Accumulated Net
Cost Depreciation Amount
US$ US$ US$
- --------------------------------------------------------------------------------
Network system 128,457 - 128,457
Telecommunication system 7,064 - 7,064
Office equipment 12,543 - 12,543
Furniture and fixtures 1,603 - 1,603
Website development 374,431 - 374,431
--------------------------------------
524,098 - 524,098
======================================
As of December 31, 2001 Accumulated Net
Cost Depreciation Amount
US$ US$ US$
- --------------------------------------------------------------------------------
Network system 829,413 78,616 750,797
Telecommunication system 56,708 5,671 51,037
Office equipment 23,988 1,924 22,064
Leasehold improvement 1,573 157 1,416
Furniture and fixtures 1,301 130 1,171
Website development 834,900 80,925 753,975
--------------------------------------
1,747,883 167,423 1,580,460
======================================
As of December 31, 2002 Accumulated Net
Cost Depreciation Amount
US$ US$ US$
- --------------------------------------------------------------------------------
( Unaudited )
Network system 831,405 244,706 586,699
Telecommunication system 56,708 17,013 39,695
Office equipment 47,721 8,766 38,955
Leasehold improvement 13,651 1,277 12,374
Furniture and fixtures 1,301 390 911
Website development 883,938 256,896 627,042
---------------------------------------
1,834,724 529,048 1,305,676
=======================================
14
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
6. INCOME TAXES
Under the current laws of the British Virgin Islands, the Company and its
subsidiaries are not subject to tax on income or capital gains, and no British
Virgin Islands withholding tax will be imposed upon payments of dividends of the
Company to its stockholders. Subsidiaries are not subject to any tax in Samoa
and the Commonwealth of Dominica.
7. RELATED PARTY TRANSACTIONS
As of December 31,
2000 2001 2002
US$ US$ US$
(Unaudited)
- --------------------------------------------------------------------------------
Due from a shareholder, current - - 339,434
Due to a shareholder, current - - 22,962
Due to a shareholder, non-current (Note) 478,498 2,539,208
Note: The amount due to a shareholder (non-current) represents an unsecured
advance made to the Company from time to time. The amount is interest-free and
not repayable within one year. In May 2002, $2,500,000 was converted to share
capital by the issuance of new common stock (see Note 11). The estimated fair
values of the amounts due to shareholder approximate their carrying values
because of the low prevailing borrowing interest rates and the capitalization
for the issue of new common stock in May 2002.
8. ADDITIONAL PAID-IN-CAPITAL
Additional paid-in-capital as of December 31, 2000 and 2001 represents the
aggregate amount of common stock of PVD and PVI and is eliminated as a result of
the restructuring (Note 11).
9. OPERATING LEASES
As of December 31, 2001 and 2002, the Company had commitments under
non-cancelable operating lease payments in respect of land and buildings as
follows:
As of December As of December
31, 2001 31, 2002
US$ US$
(Unaudited)
- -----------------------------------------------------
2002 24,800 -
2003 24,800 9,290
=============================
49,600 9,290
15
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
9. OPERATING LEASES (CONTINUED)
Lease expenses of the Company are as follows:
April 10, Year Year
2000 to ended ended
December December December
31, 2000 31, 2001 31, 2002
US$ US$ US$
(Unauidted)
- --------------------------------------------------------------------------------
Rental expenses 9,460 33,189 91,524
10. NEW ACCOUNTING PRONOUNCEMENT
In August 2001, the Financial Accounting Standards Board ("FASB") issued
SFAS No. 144, "Accounting for the Impairment or Disposal of Long-Lived Assets".
This statement establishes accounting and reporting standards of disposal of
long-lived assets by sale and disposal of segments of a business. This
statement is effective for financial statements for periods beginning after
December 15, 2001 and generally, are to be applied prospectively. The Company
has not estimated the effect of this statement on its financial position,
results of operations, or cash flow.
In addition, during the year 2002 the FASB issued SFAS No. 145, "Rescission
of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No. 13, and
Technical Corrections ", SFAS No. 146, "Accounting for Costs Associated with
Exit or Disposal Activities", SFAS No. 147, "Acquisitions of Certain Financial
Institutions" and SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure - an amendment of FASB Statement No. 123". The
management considers the adoption of these SFASs do not expect to have a
material impact on the Group's financial condition, results of operations or
liquidity.
11. RESTRUCTURING
On February 1, 2002, the Company exchanged one bearer share of US$1 each of PVD
for a registered share of US$1 each of PVD.
On April 16, 2002, PVD issued 499,999 shares of US$1 each to the Company for a
consideration of US$499,999.
On April 16, 2002, the sole shareholder of PVI sold 50,000 shares of US$10 each,
representing 100% equity interest, of Pacific Vegas International Limited (PVI)
to PVD for a consideration of US$500,000.
On May 21, 2002, the Company changed its common stock from US$10,000,000 divided
into 10,000,000 shares with a par value of US$1 to US$10,000,000 divided into
200,000,000 shares with a par value of US$0.05.
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CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
NOTES TO AND FORMING PART OF THE CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
11. RESTRUCTURING (CONTINUED)
On May 25, 2002, 20 shares of US$0.05 each were issued to the shareholder of the
Company in exchange for cancellation of the one issued bearer share of US$1
each.
On May 25, 2002, 49,999,980 shares of US$0.05 each were issued by the Company by
capitalization of the amount due to a shareholder as of that date. 35,600,000
shares of US$0.05 each of the 50,000,000 shares of US$0.05 each were issued to
this shareholder. As of May 25, 2002, this shareholder owned 71% equity
interest of the Company.
The effect of the above transactions is to achieve the group structure as
mentioned in Note 1 and 2(a) whereby PVD becomes a 100% subsidiary of CTG and
PVI a 100% subsidiary of PVD.
Audited Financial Statements
CYBER TECHNOLOGY GROUP HOLDINGS LIMITED
December 31, 2000 and 2001
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