May 22, 2024

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Form S-1/A Pacific Ventures Group,

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As
filed with the Securities and Exchange Commission on March 4, 2021

Registration
No. 333-253846

 

 

UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549

 

FORM
S- 1/A

 Amendment
No. 1

 

REGISTRATION
STATEMENT

UNDER

THE
SECURITIES ACT OF 1933

 

PACIFIC
VENTURES GROUP, INC.

(Exact
name of registrant as specified in its charter)

 

Delaware   2080   75-2100622

(State
or other jurisdiction of

incorporation
or organization)

 

(Primary
Standard Industrial

Classification
Code Number)

 

(I.R.S.
Employer

Identification
Number)

 

117
West 9th Street Suite 316

Los
Angeles California 90015

310-392-5606

(Address,
including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

Shannon
Masjedi

Chief
Executive Officer

117
West 9th Street Suite 316

Los
Angeles California 90015

310-392-5606

(Name,
address, including zip code, and telephone number, including area code, of agent for service)

 

Copies
of communications to:

JDT
Legal, PLLC

Jeff
Turner, Esq.

897
Baxter Drive

South
Jordan, Utah 84095

(801)
810-4465

 

Approximate
date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration
statement.

 

If
any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under
the Securities Act of 1933 check the following box. [X]

 

If
this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please
check the following box and list the Securities Act registration statement number of the earlier effective registration statement
for the same offering. [  ]

 

If
this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

If
this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list
the Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

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

 

Large
accelerated filer
[  ] Accelerated
filer [  ]
Non-Accelerated
filer
[  ] Smaller
reporting company [X]
    Emerging
growth company [X]

 

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 to Section 7(a)(2)(B) of the Securities Act. [  ]

 

CALCULATION
OF REGISTRATION FEE

 

Title
of Each Class of Securities to be Registered
  Amount
to be
Registered (1)
    Proposed
Maximum
Offering Price
per Share
    Estimated
Proposed
Maximum Aggregate
Offering Price
    Amount
of
Registration Fee (2)
 
                                 
Common Stock, $0.001 par value per share         $ [●]     $ 10,000,000 (1)   $ 1,091  

 

(1) Estimated
solely for the purpose of calculating the registration fee pursuant to Rule 457(a) under the Securities Act of 1933, as amended.
   
(2) Calculated
pursuant to Rule 457(a) based on an estimate of the proposed maximum aggregate offering price.

 

The
Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until
the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become
effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective
on such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

The
information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell
these securities and we are not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not
permitted.

 

SUBJECT
TO COMPLETION, DATED FEBRUARY __, 2021

 

Pacific
Ventures Group, Inc.

[●]
Shares of Common Stock

$[●]
Per Share

 

We
are offering to the public on a “best-efforts” basis a total of [●] shares of our Common Stock, par value $0.001(the
“Offering”). There is no minimum number of shares of Common Stock required in order the close the Offering.

 

This
Offering will be conducted on a “best-efforts” basis, which means our officers will use their commercially reasonable
best efforts in an attempt to offer and sell the Shares. Our officers will not receive any commission or any other remuneration
for these sales.

 

If
we sell all ____ shares of Common Stock subject to the Offering pursuant to this prospectus, at the Offering price of $____ per
share, we will receive approximately $10,000,000 in gross proceeds and approximately $9,900,000 in net proceeds, after deducting
estimated offering expenses of $100,000 payable by us, assuming all of the ______ shares of Common Stock are sold, and estimated
offering expenses payable by us.

 

Our
Common Stock is quoted on the OTC Markets’ Pink Tier, under the trading symbol “PACV.” There is no established
trading market for the Common Stock, nor can there be any assurance that a trading market will develop or be sustained for the
shares of Common Stock subject to the Offering.

 

As
of September 30, 2020, the executive officers and directors beneficially own 1,582,828 of the outstanding shares of our Common
Stock, 6,000,000 shares of the Series E Preferred Shares, and 10,000 shares Series F Preferred Stock representing approximately
90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the outstanding voting shares.

 

The
Company intends to use the proceeds of this offering for general working capital purposes to fund the growth of its business.
See “Use of Proceeds” in this prospectus.

 

Investing
in our Common Stock involves significant risks. You should carefully consider the risk factors beginning on page 6 of this
prospectus before purchasing any of the Common Stock offered by this prospectus.

 

NEITHER
THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

 

    Per
Share
 
Public Offering price   $      
Proceeds,
before expenses, to Pacific Ventures
  $  

 

The
date of this prospectus is February____, 2021

 

 

 

You
should rely only on the information contained or incorporated into this prospectus. We have not authorized anyone to provide any
information or to make any representations other than those contained in this prospectus or in any free writing prospectuses we
have prepared. We take no responsibility for and can provide no assurance as to the reliability of, any other information that
others may give you. This prospectus is an offer to sell only the shares offered hereby, but only under circumstances and in jurisdictions
where it is lawful to do so. The information contained in this prospectus is current only as of its date. You should also read
this prospectus together with the additional information described under “Where You Can Find More Information” and
“Incorporation of Information by Reference.”

 

Unless
the context otherwise requires, we use the terms “PACV,” “we,” “us,” the “Company,”
the “Registrant” and “our” to refer to Pacific Ventures Group, Inc. and its wholly-owned subsidiaries.

 

 

SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS

 

This
prospectus, including the sections entitled “Prospectus Summary,” “Risk Factors” and “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,” contains forward-looking statements within the
meaning of the federal securities laws. These statements often include words such as “believe,” “expect,”
“project,” “anticipate,” “intend,” “plan,” “outlook,” “estimate,”
“target,” “seek,” “will,” “may,” “would,” “should,” “could,”
“forecast,” “mission,” “strive,” “more,” “goal,” or similar expressions
and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and
expected future developments. However, you should understand that these statements are not guarantees of performance or results,
and there are a number of risks, uncertainties and other important factors that could cause our actual results to differ materially
from those expressed in the forward-looking statements, including, among others:

 

any
declines in the consumption of food prepared away from home;
the
extent and duration of the negative impact of the COVID-19 pandemic on us;
cost
inflation/deflation and commodity volatility;
competition;
reliance
on third-party suppliers and interruption of product supply or increases in product costs;
changes
in our relationships with customers and group purchasing organizations;
our
ability to increase or maintain the highest margin portions of our business;
effective
integration of acquired businesses;
achievement
of expected benefits from cost savings initiatives;
increases
in fuel costs;
economic
factors affecting consumer confidence and discretionary spending;
changes
in consumer eating habits;
reputation
in the industry;
labor
relations and costs and continued access to qualified and diverse labor;
cost
and pricing structures;
changes
in tax laws and regulations and resolution of tax disputes;
environmental,
health and safety and other government regulation, including actions taken by national, state and local governments to contain
the COVID-19 pandemic, such as travel restrictions or bans, social distancing requirements, and required closures of non-essential
businesses;
product
recalls and product liability claims;
adverse
judgments or settlements resulting from litigation;
disruption
of existing technologies and implementation of new technologies;
cybersecurity
incidents and other technology disruptions;
management
of retirement benefits and pension obligations;
extreme
weather conditions, natural disasters and other catastrophic events, including pandemics and the rapid spread of contagious
illnesses;
risks
associated with intellectual property, including potential infringement; indebtedness and restrictions under agreements governing
indebtedness; and
interest
rate increases.

 

These
forward-looking statements are only predictions, are uncertain and involve substantial known and unknown risks, uncertainties
and other factors which may cause our (or our industry’s) actual results, levels of activity or performance to be materially
different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
The “Risk Factors” section of this prospectus sets forth detailed risks, uncertainties and cautionary statements regarding
our business and these forward-looking statements. Moreover, we operate in a very competitive and rapidly changing regulatory
environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all of the risks and
uncertainties that could have an impact on the forward-looking statements contained in this prospectus.

 

We
cannot guarantee future results, levels of activity or performance. You should not place undue reliance on these forward-looking
statements, which speak only as of the date of this prospectus. These cautionary statements should be considered with any written
or oral forward-looking statements that we may issue in the future. Except as required by applicable law, including the securities
laws of the U.S., we do not intend to update any of the forward-looking statements to conform these statements to reflect actual
results, later events or circumstances or to reflect the occurrence of unanticipated events. Our forward-looking statements do
not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or other investments or strategic
transactions we may engage in.

 

 

THE
OFFERING

 

The
following summary contains basic terms about this Offering and the Common Stock and is not intended to be complete. It may not
contain all of the information that is important to you. For a more complete description of the terms of the Common Stock, see
“Description of the Common Stock.”

 

Issuer   Pacific
Ventures Group, Inc.
     
Common
Stock to be outstanding after this Offering if the maximum number of shares are sold
  _____________
shares of Common Stock, Par Value $.001 per share (the “Common Stock”).
     
Offering
Price
  $______
per share of Common Stock.
     
Common
Stock Outstanding Before the Offering
  6,871,351
(as of September 30, 2020).
     
Quotation   Our
Common Stock is currently subject to quotation on the OTC Market under the symbol “PACV.”
     
Use
of Proceeds
  The
Company intends to use the proceeds of this offering for general working capital purposes to fund the growth of its business.
See “Use of Proceeds” in this prospectus. Reference is made to the disclosure in the section entitled “Use
of Proceeds.”
     
Risk
Factors
  Please
read the section entitled “Risk Factors” beginning on page 6 for a discussion of some of the factors you should
carefully consider before deciding to invest in our Common Stock.
     
Transfer
Agent
  The
registrar and transfer agent with respect to the Common Stock is VStock Transfer LLC, 18 Lafayette Place, Woodmere, NY 11598.

 

Material
U.S. Federal Income Tax Considerations
  For
a discussion of the federal income tax consequences of purchasing, owning and disposing of the Common Stock, please see the
section entitled “Material U.S. Federal Income Tax Considerations.” You should consult your tax advisor with respect
to the U.S. federal income tax consequences of owning the Common Stock in light of your own particular situation and with
respect to any tax consequences arising under the laws of any state, local, foreign or other taxing jurisdiction.

 

 

PROSPECTUS
SUMMARY

 

This
summary highlights selected information contained elsewhere in this Prospectus. This summary does not contain all the information
that you should consider before investing in the Common Stock. You should carefully read the entire Prospectus, including “Risk
Factors”, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and
the Financial Statements, before making an investment decision. In this Prospectus, the terms “Pacific Ventures Group, Inc.,”
“Company,” “Registrant,” “we,” “us” and “our” refer to Pacific Ventures
Group, Inc., a Delaware corporation.

 

Business

 

Pacific
Ventures was incorporated under the laws of the State of Delaware on October 3, 1986, under the name AOA Corporation. On November
12, 1991, the Company changed its name to American Eagle Group, Inc. On October 22, 2012, the Company changed its name to Pacific
Ventures Group, Inc.

 

The
current structure of Pacific Ventures resulted from a share exchange with Snöbar Holdings, Inc. (“Snöbar”),
which was treated as a reverse merger for accounting purposes. As the result of the Share Exchange, Snöbar Holdings became
Pacific Venture’s wholly owned operating subsidiary and the business of Snöbar Holdings became the Company’s
sole business operations, and Snöbar Holdings’ majority owned subsidiary, MAS Global Distributors, Inc., a California
corporation (“MGD”), became indirect subsidiary of Pacific Ventures.

 

Snöbar
Holdings was formed under the laws of the State of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary
of Snöbar Trust, a California trust (“Trust”), which was formed on June 1, 2013. The current trustee that holds
legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi, who is the Company’s President, Chief
Executive Officer and majority stockholder. The Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of International Production Impex Corporation, a
California corporation (“IPIC”), which was formed on August 2, 2001. IPIC is in the business of selling alcohol-infused
ice cream and ice-pops and holds all of the rights to the liquor licenses to sell such products and trade names “SnöBar”.
As such, the Trust holds all ownership interest of IPIC and its liquor licenses, permitting IPIC to sell its product to distributors,
with all income, expense, gains and losses rolling up to the Trust, of which Snöbar Holdings is the sole beneficiary. Snöbar
Holdings also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of MAS Global Distributors, Inc., a California corporation (“MGD”). MGD is
in the business of selling and leasing freezers and providing marketing services. As a result of the foregoing, Snöbar Holdings
is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust and IPIC through
the Trust and is the parent company of MGD.

 

MGD,
a majority owned subsidiary of Snöbar Holdings, is the sole marketer for SnöBar ice cream and SnöBar ice pops.
MGD handles all the marketing and promotional aspect for the SnöBar product line.

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc., a California Corporation. San Diego Farmers
Outlet provides primarily restaurants customers in southern California’s three largest counties with quality food and produce
and does business under the name of Farmers Outlet and San Diego Farmers Outlet.

 

On
December 17, 2019, the Company completed an asset acquisition of Seaport Meat Company, (Seaport Meat), a California Corporation
with over thirty (30) years in business servicing restaurant and retail, and institutional customers in Southern California and
Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods, dairy and produce. Seaport
Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley, California. Seaport operates
out of a facility is HACCP-compliant and is a USDA Licensed processing facility with on-site daily inspections.
HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical
hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished
product. Having a USDA certified facility allows consumers to be confident that the Food Safety and Inspection Service (FSIS),
the public health agency in the USDA, ensured that meat and poultry products are safe, wholesome, and correctly labeled and packaged.

 

 

The
Company’s customers range from a wide variety of restaurants, including many well known in Southern CA, to institutions,
schools (UCSD, SDSU, etc.) and re-distributors such as US Foods and Sysco as well as to local distributors. They supply wholesale
food and restaurant supplies to San Diego, Los Angeles, Orange and Riverside and offer same day service. In addition, they have
clients in Arizona and Colorado that come to their facility to pick up their orders.

 

Operations

 

As
of the date of this S-1 Registration, Snöbar products are currently being sold in the east coast of United States by the
Company’s distributor. The Company’s management has been actively constructing an online platform that will allow
Snöbar distribution on a national level.

 

The
Company’s San Diego Farmers Outlet (SDFO) acquisition has increased sales of its wholesale business, and still plan on expanding
our current delivery territory from 25 miles to a 40-mile radius. SDFO is also in the process of obtaining 2 new delivery trucks
to add to the current fleet of trucks. The Company has begun marketing to new restaurants in the area, most notably Asian and
Italian restaurants, and have let restaurants know that SDFO can deliver the finest produce in market. SDFO installed new signage
around the retail market, added additional landscaping to enhance the appearance of the market, and purchased a new Point of Sale
system to improve efficiency and ordering processes.

 

Due
to the impact that the COVID-19 pandemic had on our customers, particularly our larger customers have been forced to close. Some
of these accounts remain closed such as Petco Park the Major League ballpark “Padre Stadium” and the LA, San Diego,
and Del Mar County Fairs. Despite these customer closures, Seaport Meat Company has expanded its customer base and maintained
at or above the same revenue for the three months ended September 2020 as for the same quarter in 2019.

 

Because
Seaport Meat Company can efficiently add new product lines, they can easily expand the distribution of Pacific Ventures’
San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures’ revenue growth. The combination
of a distribution and product company is unique in the San Diego area and will position the company for rapid growth.

 

They
manufacture and wholesale custom processed beef, pork, chicken, lamb, veal and seafood. In addition, they are redistributors of
a wide variety of dry goods, frozen foods, disposables and janitorial products. Their sales, distribution and finance processes
are very efficient and can be expanded to add new product lines, including fresh produce and dairy.

 

Summary
of Risk Factors

 

This
offering involves substantial risk. Our ability to execute our business strategy is also subject to certain risks. The risks described
under the heading “Risk Factors” included elsewhere in this prospectus may cause us not to realize the full benefits
of our business plan and strategy or may cause us to be unable to successfully execute all or part of our strategy.

 

There
are a number of potential difficulties that we might face, including the following:

 

  Competitors
may develop alternatives that render our products redundant or unnecessary;
  We
may not obtain and maintain sufficient protection of our SnöBar product line;
  Our
products may not become widely accepted by consumers and merchants; and
  Strict,
new government regulations and inappropriate policies, especially in food and beverages business, may hinder the growth of
our business; and
  We
may not be able to raise sufficient additional funds to operate and grow our business.

 

During
the years ended December 31, 2019 and 2018, we borrowed $ 9,284,769 and we may be expected to require up to an additional $__
million in capital during the next 12 months to fund our operations.

 

 

Some
of the most significant challenges and risks include the following:

 

  Our
Auditor has expressed substantial doubt as to our ability to continue as a going concern.
  Our
limited operating history does not afford investors a sufficient history on which to base an investment decision.
  Our
revenues will be dependent upon acceptance of our SnöBar product line by consumers and distributors. The failure of such
acceptance will cause us to curtail or cease operations.
  We
are seeking to market and advertise alcohol infused frozen products and may not be able to accomplish our goal; the alcohol
and dessert industries are highly competitive and if we are unable to compete successfully, our business will be harmed.
  We
rely on the performance of wholesale distributors and other marketing arrangements and could be adversely affected by consolidation,
poor performance or other disruptions in our distribution channels and customers.
  Our
business is subject to extensive regulatory requirements regarding distribution, production, labeling, and marketing. Changes
to regulation of the alcohol industry could include increased limitations on advertising and promotional activities or other
non-tariff measures that could adversely impact our business.
  The
availability of a large number of authorized but unissued shares of Common Stock may, upon their issuance, lead to dilution
of existing stockholders.
  Our
stock is thinly traded, sale of your holding may take a considerable amount of time.

 

Before
you invest in our common stock, you should carefully consider all the information in this prospectus, including matters set forth
under the heading “Risk Factors.”

 

Where
You Can Find Us

 

The
Company’s principal executive office and mailing address is at 117 West 9th Street Suite 316, Los Angeles California
90015.

 

Telephone:
310-392-5606.

 

 

Our
Filing Status as a “Smaller Reporting Company”

 

We
are a “smaller reporting company,” meaning that we are not an investment company, an asset-backed issuer, or a majority-owned
subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual
revenues of less than $50 million during the most recently completed fiscal year. As a “smaller reporting company,”
the disclosure we will be required to provide in our SEC filings are less than it would be if we were not considered a “smaller
reporting company.” Specifically, “smaller reporting companies” are able to provide simplified executive compensation
disclosures in their filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act of 2002 requiring that
independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial
reporting; are not required to conduct say-on-pay and frequency votes until annual meetings occurring on or after January 21,
2013; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, being permitted
to provide two years of audited financial statements in annual reports rather than three years. Decreased disclosures in our SEC
filings due to our status as a “smaller reporting company” may make it harder for investors to analyze the Company’s
results of operations and financial prospects.

 

Implications
of Being an Emerging Growth Company

 

We
qualify as an emerging growth company as that term is used in the JOBS Act. An emerging growth company may take advantage of specified
reduced reporting and other burdens that are otherwise applicable generally to public companies. These provisions include:

 

  A
requirement to have only two years of audited financial statements and only two years of related MD&A;
     
  Exemption
from the auditor attestation requirement in the assessment of the emerging growth company’s internal control over financial
reporting under Section 404 of the Sarbanes-Oxley Act of 2002 (“SOX”);
     
  Reduced
disclosure about the emerging growth company’s executive compensation arrangements; and
     
  No
non-binding advisory votes on executive compensation or golden parachute arrangements.

 

We
have already taken advantage of these reduced reporting burdens in this Prospectus, which are also available to us as a smaller
reporting company as defined under Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

In
addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition
period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended (the “Act”) for complying with new
or revised accounting standards. We have elected to take advantage of the extended transition period for complying with new or
revised accounting standards, which allows us to delay the adoption of new or revised accounting standards that have different
effective dates for public and private companies until those standards apply to private companies. As a result of this election,
our financial statements contained in this Form S-1 may not be comparable to companies that comply with public company effective
dates. The existing scaled executive compensation disclosure requirements for smaller reporting companies will continue to apply
to our filings for so long as our Company is an emerging growth company, regardless of whether the Company remains a smaller reporting
company.

 

We
could remain an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year
in which our annual gross revenues exceed $1 billion, (ii) the date that we become a “large accelerated filer” as
defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Common Stock that is held by non-affiliates
exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which
we have issued more than $1 billion in non-convertible debt during the preceding three year period.

 

For
more details regarding this exemption, see “Management’s Discussion and Analysis of Financial Condition and Results
of Operations – Critical Accounting Policies.”

 

 

RISK
FACTORS

 

An
investment in our securities involves a high degree of risk. You should carefully consider the risks and uncertainties described
in this prospectus and the documents incorporated by reference into this prospectus. The risks and uncertainties described in
this prospectus are not the only ones we face. Additional risks and uncertainties that we do not presently know about or that
we currently believe are not material may also adversely affect our business, business prospects, results of operations or financial
condition. If any of the risks and uncertainties described in this prospectus or the documents incorporated by reference into
this prospectus actually occurs, then our business, results of operations and financial condition could be adversely affected
in a material way. This could cause the market price of the Common Stock to decline, perhaps significantly, and you may lose part
or all of your investment.

 

Risks
Related to this Offering and Ownership of Shares of Our Common Stock

 

Risks
Relating to Our Business and Industry

 

COVID-19
Impact

 

In
March 2020, the World Health Organization characterized a novel strain of coronavirus (“COVID-19”) as a pandemic amidst
a rising number of confirmed cases and thousands of deaths worldwide. As of December 28, 2019, the COVID-19 pandemic had not had
a significant impact on our business. However, since mid-March 2020, our business has been significantly impacted. Beginning in
mid-March2020, many countries, including the United States, took steps to restrict travel, temporarily close or enforce capacity
restrictions in businesses, schools and other public gathering spaces. Restrictions on public gatherings and attendance at retail
or other establishments, including restaurants, and recreational, sporting and other similar venues, continue to evolve and are
expected to continue to remain in effect in some capacity for the near-term. It remains unclear when and to what extent the COVID-19
pandemic will fully abate. Since mid-March2020, the operations of our restaurant, hospitality and education customers (and our
operations that are dependent upon these customers) have been significantly disrupted by the spread of COVID-19 and the corresponding
sudden and significant decline in consumer demand for food prepared away from home.

 

We
are seeking to market and advertise alcohol infused frozen products and may not be able to accomplish our goal.

 

A
key feature of our growth strategy is to engage in the marketing and advertising of alcohol infused frozen products. Doing so
presents significant challenges and subjects our business to significant risks. For example, we face substantial competition in
these areas, and do not have as extensive a history of operating in these areas as some of our competitors. If we are unsuccessful
in marketing and advertising alcohol infused frozen products, our ability to grow our business could be significantly limited.

 

The
alcohol and dessert industries are highly competitive and if we are unable to compete successfully, our business will be harmed.

 

The
alcoholic beverage industry and the dessert industry are extremely competitive. If we are unable to compete successfully against
current or future competitors in such industries, our revenues, margins and market share could be adversely affected, any of which
could significantly harm our business, operating results or financial condition.

 

Our
success depends on certain key personnel.

 

Our
performance to date has been and will continue to be largely dependent on the talents, efforts and performance of our senior management
and key technical personnel. It is anticipated that our executive officers will enter into employment agreements. However, while
it is customary to use employment agreements as a method of retaining the services of key personnel, these agreements do not guarantee
us the continued services of such employees. In addition, we have not entered into employment agreements with most of our key
personnel. The loss of our executive officers or our other key personnel, particularly with little or no notice, could cause delays
on projects and could have an adverse impact on our client and industry relationships, our business, operating results or financial
condition.

 

 

We
rely on highly skilled and qualified personnel, and if we are unable to continue to attract and retain such qualified personnel
it will adversely affect our businesses.

 

Our
success depends to a significant extent on our ability to identify, attract, hire, train and retain qualified creative, technical
and managerial personnel. We expect competition for personnel with the specialized creative and technical skills needed to create
our products and provide our services will continue to intensify. We often hire individuals on a project-by-project basis, and
individuals who work on one or more projects for us may not be available to work on future projects. If we have difficulty identifying,
attracting, hiring, training and retaining such qualified personnel, or incur significant costs in order to do so, our business
and financial results could be negatively impacted.

 

Risks
associated with commodity price volatility and energy availability could adversely affect our business.

 

We
are exposed to risks associated with commodity price volatility arising from supply conditions, geopolitical and economic variables,
weather, and other unpredictable external factors. We buy commodities such as fresh produce for the production, packaging and
distribution of our products. Availability increases and volatility in the prices of these commodities, as well as products sourced
from third parties and energy used in making, distributing and transporting our products, could increase the manufacturing and
distribution costs of our products. While in the past we have been able to mitigate the impact of these cost increases through
productivity improvements and pricing adjustments, there is no assurance that we will be able to offset such cost increases in
the future.

 

The
Common Stock ranks junior to all of our indebtedness and other liabilities.

 

In
the event of our bankruptcy, liquidation, dissolution or winding-up of our affairs, our assets will be available to pay obligations
on the Common Stock only after all of our indebtedness and other liabilities have been paid. The rights of holders of the Common
Stock to participate in the distribution of our assets will rank junior to the prior claims of our current and future creditors
and any future series or class of preferred stock we may issue that ranks senior to the Common Stock. Also, the Common Stock effectively
ranks junior to all existing and future indebtedness and to the indebtedness and other liabilities of our existing subsidiaries
and any future subsidiaries. Our existing subsidiaries are, and future subsidiaries would be, separate legal entities and have
no legal obligation to pay any amounts to us in respect of dividends due on the Common Stock. If we are forced to liquidate our
assets to pay our creditors, we may not have sufficient assets to pay amounts due on any or all of the Common Stock then outstanding.
We have incurred and may in the future incur substantial amounts of debt and other obligations that will rank senior to the Common
Stock. At December 31, 2019, we had total liabilities of $13,386,354.

 

Certain
of our existing or future debt instruments may restrict the authorization, payment or setting apart of dividends on the Common
Stock. There can be no assurance that we will always remain in compliance with certain of our existing or future debt instruments,
and if we default, we may be contractually prohibited from paying dividends on the Common Stock. Also, future offerings of debt
or senior equity securities may adversely affect the market price of the Common Stock. If we decide to issue debt or senior equity
securities in the future, it is possible that these securities will be governed by an indenture or other instruments containing
covenants restricting our operating flexibility. Additionally, any convertible or exchangeable securities that we issue in the
future may have rights, preferences and privileges more favorable than those of the Common Stock and may result in dilution to
owners of the Common Stock. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such securities.
Because our decision to issue debt or equity securities in any future offering will depend on market conditions and other factors
beyond our control, we cannot predict or estimate the amount, timing or nature of our future offerings. The holders of the Common
Stock will bear the risk of our future offerings, which may reduce the market price of the Common Stock and will dilute the value
of their holdings in us.

 

 

Our
stock price has been extremely volatile, and our common stock is not listed on a national stock exchange; as a result, stockholders
may not be able to resell their shares at or above the price paid for them.

 

The
market price of our common stock has been historically volatile and could be subject to significant fluctuations due to changes
in sentiment in the market regarding our operations or business prospects, among other factors. Further, our common stock is not
listed on a national stock exchange; we intend to list the common stock on a national stock exchange once we meet the entry criteria.
An active public market for our common stock currently exists on the OTC Markets (www.otcmarkets.com) but may not be sustained.
Therefore, stockholders may not be able to sell their shares at or above the price they paid for them.

 

Among
the factors that could affect our stock price are:

 

  Industry
trends and the business situation of our suppliers
     
  Actual
or anticipated fluctuations in our quarterly financial and operating results and operating results that vary from the expectations
of our management or of securities analysts and investors
     
  our
failure to meet the expectations of the investment community and changes in investment community recommendations or estimates
of our future operating results
     
  Announcements
of strategic developments, acquisitions, dispositions, financings, product developments and other materials events by us or
our competitors
     
  Regulatory
and legislative developments
     
  Litigation
     
  General
market conditions
     
  Other
domestic and international macroeconomic factors unrelated to our performance
     
  Changes
in key personnel

 

We
may issue additional shares of Common Stock and additional series of preferred stock that rank senior to the Common Stock as to
dividend rights, rights upon liquidation or voting rights.

 

We
are allowed to issue additional shares of Common Stock and additional series of preferred stock that would rank equally to or
above the Common Stock as to dividend payments and rights upon our liquidation, dissolution or winding up of our affairs pursuant
to our articles of incorporation and the articles of amendment relating to the Common Stock without any vote of the holders of
the Common Stock. The issuance of additional shares of Common Stock and additional series of preferred stock could have the effect
of reducing the amounts available to the Common Stock issued in this offering upon our liquidation or dissolution or the winding
up of our affairs.

 

Also,
although holders of Common Stock are entitled to voting rights, as described in “Description of the Common Stock —
Voting Rights,” with respect to the circumstances under which the holders of Common Stock are entitled to vote, the Common
Stock will vote separately as a class along with all other series of our preferred stock that we may issue upon which like voting
rights have been conferred and are exercisable. As a result, the voting rights of holders of Common Stock may be significantly
diluted, and the holders of such other series of preferred stock that we may issue may be able to control or significantly influence
the outcome of any vote.

 

Future
issuances and sales of senior or pari passu preferred stock to that already issued, or the perception that such issuances and
sales could occur, may cause prevailing market prices for our Common Stock to decline and may adversely affect our ability to
raise additional capital in the financial markets at times and prices favorable to us.

 

We
do not expect to pay any cash dividends in the foreseeable future.

 

We
intend to retain our future earnings, if any, in order to reinvest in the development and growth of our business and, therefore,
do not intend to pay dividends on our common stock for the foreseeable future. Any future determination to pay dividends will
be at the discretion of our board of directors and will depend on our financial condition, results of operations, capital requirements,
and such other factors as our board of directors deems relevant. Accordingly, investors may need to sell their shares of our common
stock to realize a return on their investment, and they may not be able to sell such shares at or above the price paid for them.

 

 

Our
revenues, operating results and cash flows may fluctuate in future periods and we may fail to meet investor expectations, which
may cause the price of our Common Stock to decline.

 

Variations
in our quarterly and year-end operating results are difficult to predict and our income and cash flow may fluctuate significantly
from period to period, which may impact our board of directors’ willingness or legal ability to declare a monthly dividend.
If our operating results fall below the expectations of investors or securities analysts, the price of our Common Stock could
decline substantially. Specific factors that may cause fluctuations in our operating results include:

 

  competition;
     
  need
for acceptance of our products;
     
  ability
to develop a brand identity;
     
  ability
to anticipate and adapt to a competitive market;
     
  ability
to effectively manage rapidly expanding operations;
     
  amount
and timing of operating costs and capital expenditures relating to expansion of our business, operations, and infrastructure;
and
     
  dependence
upon key personnel to market our product and the loss of one of our key managers may adversely affect the marketing of our
product.

 

We
can sell additional shares of common stock without consulting stockholders and without offering shares to existing stockholders,
which would result in dilution of existing stockholders’ interests in the Company and could depress our stock price.

 

Our
Articles of Incorporation authorize 900,000,000 shares of common stock, of which 6,871,351 were outstanding as of September 30,
2020 (reflecting the 1-for-500 reverse stock split that occurred on April 13, 2020); 6,000,000 shares of Series E Preferred Stock,
of which 6,000,000 shares were outstanding as of September 30, 2020; and 10,000 shares of Series F Preferred Stock of which 10,000
shares were outstanding as of September 30, 2020. Moreover, our Board of Directors is authorized to issue additional shares of
our common stock and preferred stock. Although our Board of Directors intends to utilize its reasonable business judgment to fulfill
its fiduciary obligations to our then existing stockholders in connection with any future issuance of our capital stock, the future
issuance of additional shares of our common stock or preferred stock convertible into common stock would cause immediate, and
potentially substantial, dilution to our existing stockholders, which could also have a material effect on the market value of
the shares.

 

The
market price of the Common Stock could be substantially affected by various factors.

 

The
market price of the Common Stock depends on many factors, which may change from time to time, including:

 

  prevailing
interest rates, increases in which may have an adverse effect on the market price of the Common Stock;
     
  trading
prices of similar securities;
     
  our
history of timely dividend payments;
     
  the
annual yield from dividends on the Common Stock as compared to yields on other financial instruments;
     
  general
economic and financial market conditions;
     
  government
action or regulation;
     
  the
financial condition, performance and prospects of us and our competitors;
     
  changes
in financial estimates;
     
  our
issuance of additional preferred equity or debt securities; and
     
  actual
or anticipated variations in quarterly operating results of us and our competitors.

 

As
a result of these and other factors, investors who purchase the Common Stock in this offering may experience a decrease, which
could be substantial and rapid, in the market price of the Common Stock, including decreases unrelated to our operating performance
or prospects.

 

As
a holder of Common Stock, you will have extremely limited voting rights.

 

Your
voting rights as a holder of Common Stock will be limited. Mrs. Shannon Masjedi, our Chief Executive Officer, beneficially owns
shares equivalent to approximately 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of our outstanding voting shares. As a result, Mrs. Masjedi exercises a significant level
of control over all matters requiring stockholder approval, including the election of directors, amendment of our certificate
of incorporation, and approval of significant corporate transactions. This control could have the effect of delaying or preventing
a change of control of our company or changes in management and will make the approval of certain transactions difficult or impossible
without his support, which in turn could reduce the price of our Common Stock.

 

 

If
our common stock is delisted, your ability to transfer or sell your shares of the Common Stock may be limited and the market value
of the Common Stock will likely be materially adversely affected.

 

If
our common stock ceased to be subject to quotation on OTC Markets, your ability to transfer or sell your shares of the Common
Stock may be limited and the market value of the Common Stock will likely be materially adversely affected.

 

We
will have broad discretion in using the proceeds of this offering, and we may not effectively spend the proceeds.

 

We
intend to use the net proceeds of this offering for working capital and general corporate purposes, which may include, developing
new products and funding capital expenditures and investments. We will have significant flexibility and broad discretion in applying
the net proceeds of this offering, and we may not apply these proceeds effectively. Our management might not be able to yield
a significant return, if any, on any investment of these net proceeds, and you will not have the opportunity to influence our
decisions on how to use our net proceeds from this offering.

 

Delaware
law contains provisions that could discourage, delay or prevent a change in control of our Company, prevent attempts to replace
or remove current management and reduce the market price of our stock.

 

Provisions
in our certificate of incorporation and bylaws may discourage, delay or prevent a merger or acquisition involving us that our
stockholders may consider favorable. For example, our certificate of incorporation authorizes our board of directors to issue
up to ten million shares of “blank check” preferred stock without further stockholder approval. The board of directors
has the authority to attach special rights, including voting and dividend rights, to this preferred stock. With these rights,
preferred stockholders could make it more difficult for a third party to acquire us.

 

We
are also subject to the anti-takeover provisions of the DGCL. Under these provisions, if anyone becomes an “interested stockholder,”
we may not enter into a “business combination” with that person for three years without special approval, which could
discourage a third party from making a takeover offer and could delay or prevent a change in control of us. An “interested
stockholder” is, generally, a stockholder who owns 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of our outstanding voting stock or an affiliate of ours who
has owned 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of our outstanding voting stock during the past three years, subject to certain exceptions as described
in the DGCL.

 

We
are required to comply with certain provisions of Section 404 of the Sarbanes-Oxley Act of 2002 and if we fail to comply in a
timely manner, our business could be adversely affected and the price of our Preferred Stock could decline.

 

Rules
adopted by the SEC pursuant to Section 404 of the Sarbanes-Oxley Act of 2002 require an annual assessment of internal controls
over financial reporting, and for certain issuers an attestation of this assessment by the issuer’s independent registered
public accounting firm. The standards that must be met for management to assess the internal controls over financial reporting
as effective are evolving and complex, and require significant documentation, testing, and possible remediation to meet the detailed
standards.

 

We
expect to incur expenses and to devote resources to Section 404 compliance on an ongoing basis. It is difficult for us to predict
how long it will take or costly it will be to complete the assessment of the effectiveness of our internal control over financial
reporting for each year and to remediate any deficiencies in our internal control over financial reporting. As a result, we may
not be able to complete the assessment and remediation process on a timely basis. In addition, although attestation requirements
by our independent registered public accounting firm are not presently applicable to us, we could become subject to these requirements
in the future and we may encounter problems or delays in completing the implementation of any resulting changes to internal controls
over financial reporting. In the event that our Chief Executive Officer or Chief Financial Officer determine that our internal
control over financial reporting is not effective as defined under Section 404, we cannot predict how the market prices of our
shares will be affected; however, we believe that there is a risk that investor confidence and share value may be negatively affected.

 

 

If
we fail to maintain effective internal controls over financial reporting, the price of our Common Stock may be adversely affected.

 

Our
internal control over financial reporting may have weaknesses and conditions that could require correction or remediation, the
disclosure of which may have an adverse impact on the price of our Common Stock. We are required to establish and maintain appropriate
internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established,
could adversely affect our public disclosures regarding our business, financial condition or results of operations. In addition,
management’s assessment of internal controls over financial reporting may identify weaknesses and conditions that need to
be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any actual
or perceived weaknesses that need to be addressed in our internal control over financial reporting or disclosure of management’s
assessment of our internal controls over financial reporting may have an adverse impact on the price of our Common Stock.

 

The
JOBS Act allows us to postpone the date by which we must comply with certain laws and regulations and to reduce the amount of
information provided in reports filed with the SEC. We cannot be certain if the reduced disclosure requirements applicable to
emerging growth companies will make our Common Stock less attractive to investors.

 

We
are and we will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal
year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day
of the fiscal year following the fifth anniversary of our IPO (iii) the date on which we have, during the previous three-year
period, issued more than $1 billion in non-convertible debt, or (iv) the date on which we are deemed a “large accelerated
filer” under the Securities and Exchange Act of 1934, as amended, or the Exchange Act. For so long as we remain an “emerging
growth company” as defined in the JOBS Act, we may take advantage of certain exemptions from various reporting requirements
that are applicable to other public companies that are not “emerging growth companies” including, but not limited
to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure
obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements
of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not
previously approved.

 

Under
the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards
apply to private companies. We have irrevocably elected not to avail ourselves of this exemption and, will therefore be subject
to the same new or revised accounting standards at the same time as other public companies that are not emerging growth companies.

 

We
cannot predict if investors will find our Common Stock less attractive because we rely on some of the exemptions available to
us under the JOBS Act. If some investors find our Common Stock less attractive as a result, there may be a less active trading
market for our Common Stock and our stock price may be more volatile. If we avail ourselves of certain exemptions from various
reporting requirements, our reduced disclosure may make it more difficult for investors and securities analysts to evaluate us
and may result in less investor confidence.

 

Risks
Associated With Our Business

 

Our
Independent Registered Public Accounting Firm expressed substantial doubt as to our ability to continue as a going concern.

 

The
audited financial statements have been prepared assuming that we will continue as a going concern and do not include any adjustments
that might result if we cease to continue as a going concern.

 

As
noted in our consolidated financial statements, we had an accumulated stockholders’ deficit of $10,040,367 and recurring
losses from operations as of December 31, 2019 and an accumulated deficit of $13,936,898 as of September 30, 2020. Our net loss
for the fiscal year ended December 31, 2019 was $2,652,626 and our net loss for the nine (9) months ended September 30, 2020 was
$3,896,531. We also had a working capital deficit of approximately $1,118,654 as of December 31, 2019 and a working capital deficit
of $2,640,489, as of September 30, 2020. We have and continue to fund operations through raising additional capital through debt
financing and/or equity issuances and increased lending activities which may have been insufficient to fund our capital expenditures,
working capital or other cash requirements for the year ending December 31, 2020 and may be insufficient on a going-forward basis.
We are continuing to seek additional funds to finance our immediate and long-term operations. The successful outcome of future
financing activities cannot be determined at this time and there is no assurance that if achieved, we will have sufficient funds
to execute our intended business plan or generate positive operating results. These factors, among others, raise substantial doubt
about our ability to continue as a going concern. The audit report for the fiscal years ended December 31, 2019 and 2018, and
the nine months ended September 30, 2020 contain a paragraph that emphasizes the substantial doubt as to our continuance as a
going concern. This is a significant risk that we may not be able to remain operational for an indefinite period of time.

 

 

We
are seeking to market and advertise alcohol infused frozen products and may not be able to accomplish our goal.

 

A
key feature of our growth strategy is to engage in the marketing and advertising of alcohol infused frozen products. Doing so
presents significant challenges and subjects our business to significant risks. For example, we face substantial competition in
these areas, and do not have as extensive a history of operating in these areas as some of our competitors. If we are unsuccessful
in marketing and advertising alcohol infused frozen products, our ability to grow our business could be significantly limited.

 

The
alcohol and dessert industries are highly competitive and if we are unable to compete successfully, our business will be harmed.

 

The
alcoholic beverage industry and the dessert industry are extremely competitive. If we are unable to compete successfully against
current or future competitors in such industries, our revenues, margins and market share could be adversely affected, any of which
could significantly harm our business, operating results or financial condition.

 

Our
success depends on certain key personnel.

 

Our
performance to date has been and will continue to be largely dependent on the talents, efforts and performance of our senior management
and key technical personnel. It is anticipated that our executive officers will enter into employment agreements. However, while
it is customary to use employment agreements as a method of retaining the services of key personnel, these agreements do not guarantee
us the continued services of such employees. In addition, we have not entered into employment agreements with most of our key
personnel. The loss of our executive officers or our other key personnel, particularly with little or no notice, could cause delays
on projects and could have an adverse impact on our client and industry relationships, our business, operating results or financial
condition.

 

We
rely on highly skilled and qualified personnel, and if we are unable to continue to attract and retain such qualified personnel
it will adversely affect our businesses.

 

Our
success depends to a significant extent on our ability to identify, attract, hire, train and retain qualified creative, technical
and managerial personnel. We expect competition for personnel with the specialized creative and technical skills needed to create
our products and provide our services will continue to intensify. We often hire individuals on a project-by-project basis, and
individuals who work on one or more projects for us may not be available to work on future projects. If we have difficulty identifying,
attracting, hiring, training and retaining such qualified personnel, or incur significant costs in order to do so, our business
and financial results could be negatively impacted.

 

Risks
associated with commodity price volatility and energy availability could adversely affect our business.

 

We
are exposed to risks associated with commodity price volatility arising from supply conditions, geopolitical and economic variables,
weather, and other unpredictable external factors. We buy commodities such as corn and other grains, molasses, grapes, sticks
and plastic for the production, packaging and distribution of our products. Availability, increases and volatility in the prices
of these commodities, as well as products sourced from third parties and energy used in making, distributing and transporting
our products, could increase the manufacturing and distribution costs of our products. While in the past we have been able to
mitigate the impact of these cost increases through productivity improvements and pricing adjustments, there is no assurance that
we will be able to offset such cost increases in the future.

 

 

We
rely on the performance of wholesale distributors and other marketing arrangements and could be adversely affected by consolidation,
poor performance or other disruptions in our distribution channels and customers.

 

Our
alcohol-infused popsicles and ice cream products are sold principally through wholesale distributors for resale to retail outlets.
The replacement, poor performance or financial default of a major distributor or one of its major customers could adversely affect
our business. Industry consolidation could also adversely affect our margins and profitability. Though large customers can offer
efficiencies and unique opportunities, they can also seek to make significant changes in their volume of purchases, represent
a large number of competing products, negotiate more favorable terms and seek price reductions, which could negatively impact
our financial results.

 

Our
operations may be adversely affected by failure to maintain or renegotiate distribution, supply, manufacturing or license agreements
on favorable terms.

 

We
have a number of distribution, supply, manufacturing and license agreements for our supplies and products. These agreements vary
depending on the particular supply and/or product, but tend to be for a fixed number of years. There can be no assurance that
we will be able to renew these agreements on favorable terms or that these agreements will not be terminated. Termination of these
agreements or failure to renew these agreements on favorable terms could have a negative effect on our results of operations and
financial condition.

 

If
we are unable to effectively manage organizational productivity and global supply chain efficiency and flexibility, then our business
could be adversely affected.

 

We
need to continually evaluate our organizational productivity and supply chains and assess opportunities to reduce costs. We must
also enhance quality, speed and flexibility to meet changing and uncertain market conditions. Our success also depends in part
on refining our cost structure and supply chains so that we have flexibility and are able to respond to market pressures to protect
profitability and cash flow or ramp up quickly and effectively to meet demand. Failure to achieve the desired level of quality,
capacity or cost reductions could adversely affect our financial results. Despite our efforts to control costs and increase efficiency
in our facilities, increased competition could still cause us to realize lower operating margins and profitability.

 

Our
operating results may fluctuate significantly, which may cause the market price of our common stock to decrease significantly.

 

Our
operating results may fluctuate as a result of a number of factors, many of which are outside of our control. As a result of these
fluctuations, financial planning and forecasting may be more difficult and comparisons of our operating results on a period-to-period
basis may not necessarily be meaningful. Accordingly, you should not rely on our annual and quarterly results of operations as
any indication of future performance. Each of the risk factors described in this “Risks Related to Our Business” section,
and the following factors, may affect our operating results:

 

  our
ability to continue to attract clients for our services and products;
     
  the
amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our businesses,
operations and infrastructure;
     
  our
focus on long-term goals over short-term results;
     
  the
results of our investments in high risk products;
     
  general
economic conditions and those economic conditions specific to our industries;
     
  changes
in business cycles that affect the markets in which we sell our products and services; and
     
  geopolitical
events such as war, threat of war or terrorist actions.

 

In
response to these fluctuations, the value of our common stock could decrease significantly in spite of our operating performance.
In addition, our business, and the alcoholic beverage business, has historically been cyclical and seasonal in nature, reflecting
overall economic conditions as well as client budgeting and buying patterns.

 

The
cyclicality and seasonality in our business could become more pronounced and may cause our operating results to fluctuate more
widely.

 

 

We
have a history of losses, have generated limited revenue to date, and may continue to suffer losses in the future.

 

We
have a history of losses and have generated limited revenue to date. We expect to continue to incur losses for the foreseeable
future. If we cannot become profitable, our financial condition will deteriorate, and we may be unable to achieve our business
objectives, including without limitation, having to cease operations due to a lack of capital.

 

We
will require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not available
may require us to delay, scale back or cease our marketing or product development activities and operations.

 

We
will require substantial additional capital in order to continue the marketing of our existing products and complete the development
of our contemplated products. Raising funds in the current economic climate may be difficult and additional funding may not be
available on acceptable terms, or at all.

 

The
amount and timing of our future funding requirements, both near- and long-term, will depend on many factors, including, but not
limited to:

 

  the
number and characteristics of products that we pursue;
     
  our
potential need to expand operations, including the hiring of additional employees;
     
  the
costs of licensing, acquiring or investing in complimentary businesses, products and technologies;
     
  the
effect of any competing technological or market developments;
     
  the
need to implement additional internal systems and infrastructure, including financial and reporting systems;
     
  obtaining
market acceptance of our alcohol-infused popsicles and ice cream; and
     
  the
economic and other terms, timing of and success of our co-branding, licensing, collaboration or marketing relationships into
which we have entered or may enter in the future.

 

Some
of these factors are outside of our control. We will require an additional capital infusion in order to expand the marketing of
our alcohol-infused popsicles and ice cream to all 50 states. Such additional fundraising efforts may divert our management from
our day-to-day activities, which may adversely affect our ability to develop and market our alcohol-infused products. In addition,
we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. If
we are unable to raise additional capital when required or on acceptable terms, we may be required to significantly delay, scale
back or discontinue the development or marketing of one or more of our products or product candidates or curtail our operations,
which will have a Material Adverse Effect on our business, operating results and prospects.

 

We
may sell additional equity or debt securities or enter into other arrangements to fund our operations, which may result in dilution
to our stockholders and impose restrictions or limitations on our business.

 

We
may seek additional funding through a combination of equity offerings, debt-financings, or other third-party funding or other
collaborations, strategic alliances or licensing arrangements. These financing activities may have an adverse impact on our stockholders’
rights as well as our operations. For instance, any debt financing may impose restrictive covenants on our operations or otherwise
adversely affect the holdings or the rights of our stockholders. In addition, if we seek funds through arrangements with partners,
these arrangements may require us to relinquish rights to some of our technologies, products or product candidates or otherwise
agree to terms unfavorable to us.

 

Acquisitions
we pursue in our industry and related industries could result in operating difficulties, dilution to our stockholders and other
consequences harmful to our business.

 

As
part of our growth strategy, we may selectively pursue strategic acquisitions in our industry and related industries. We may not
be able to consummate such acquisitions, which could adversely impact our growth. If we do consummate acquisitions, integrating
an acquired company, business or technology may result in unforeseen operating difficulties and expenditures, including:

 

  increased
expenses due to transaction and integration costs;
     
  potential
liabilities of the acquired businesses;
     
  potential
adverse tax and accounting effects of the acquisitions;

 

 

  diversion
of capital and other resources from our existing businesses;
     
  diversion
of our management’s attention during the acquisition process and any transition periods;
     
  loss
of key employees of the acquired businesses following the acquisition; and
     
  inaccurate
budgets and projected financial statements due to inaccurate valuation assessments of the acquired businesses.

 

Foreign
acquisitions also involve unique risks related to integration of operations across different cultures and languages, currency
risks and the particular economic, political and regulatory risks associated with specific countries.

 

Our
evaluations of potential acquisitions may not accurately assess the value or prospects of acquisition candidates, and the anticipated
benefits from our future acquisitions may not materialize. In addition, future acquisitions or dispositions could result in potentially
dilutive issuances of our equity securities, including our common stock, the incurrence of debt, contingent liabilities or amortization
expenses, or write-offs of goodwill, any of which could harm our financial condition.

 

Interruption
or failure of our information technology systems could impair our ability to effectively and timely provide our services and products,
which could damage our reputation and have an adverse impact on our operating results.

 

Our
systems are vulnerable to damage or interruption from earthquakes, hurricanes, terrorist attacks, floods, fires, power loss, telecommunications
failures, computer viruses or other attempts to harm our systems, and similar events. Our facilities are located in areas with
a high risk of major earthquakes and are also subject to break-ins, sabotage and intentional acts of vandalism. Some of our systems
are not fully redundant, and our disaster recovery planning cannot account for all eventualities. The occurrence of a natural
disaster or other unanticipated problems at our Santa Monica, California facility or manufacturing facility located in Orange
County, California could result in lengthy interruptions in our projects and our ability to deliver services. An error or defect
in the software, a failure in the hardware, a failure of our backup facilities could delay our delivery of products and services
and could result in significantly increased production costs, hinder our ability to retain and attract clients and damage our
brand if clients believe we are unreliable. Given our reliance on our industry relationships, it could also result in a decrease
in our revenues and otherwise adversely affect our business and operating results.

 

We
cannot predict the effect that rapid changes in consumer taste may have on our business or industry.

 

The
alcoholic beverage and dessert industries are rapidly evolving, primarily due to changing consumer preferences and technological
developments. The rapid growth of technology and shifting consumer tastes prevent us from being able to accurately predict the
overall effect that changing consumer preferences may have on our potential revenue and profitability. If we are unable to develop
and effectively market new products that adequately or competitively address the needs of these changing consumer preferences,
it could have an adverse effect on our business and growth prospects.

 

Changes
in regulatory standards could adversely affect our business.

 

Our
business is subject to extensive domestic and international regulatory requirements regarding distribution, production, labeling,
and marketing. Changes to regulation of the alcohol industry could include increased limitations on advertising and promotional
activities or other non-tariff measures that could adversely impact our business. In addition, we face government regulations
pertaining to the health and safety of our employees and our consumers as well as regulations addressing the impact of our business
on the environment, domestically as well as internationally. Compliance with these health, safety and environmental regulations
may require us to alter our manufacturing processes and our sourcing. Such actions could adversely impact our results of operations,
cash flows and financial condition, and our inability to effectively and timely comply with such regulations could adversely impact
our competitive position.

 

 

Changes
in excise taxes, incentives and customs duties related to products containing alcohol could adversely affect our business.

 

Products
containing alcohol are subject to excise taxation in many markets at the federal, state and/or local level. Any increase in federal,
state or local excise taxes could have an adverse effect on our business by increasing prices and reducing demand, particularly
if excise tax levels increase substantially relative to those for beer and wine. In addition, products containing alcohol are
the subject of customs duties in many countries around the world. An unanticipated increase in customs duties in the markets where
we may sell our products could also adversely affect our results of operations and cash flows.

 

Our
insurance policies are expensive and only protect us from some business risks, which will leave us exposed to significant uninsured
liabilities.

 

We
do not carry insurance for all categories of risk that our business may encounter. Some of the policies that we generally maintain
include general liability, automobile and property insurance. We do not know, however, if we will be able to maintain insurance
with adequate levels of coverage. In addition, we do not know if we will be able to obtain and maintain coverage for the business
in which we engage. No assurance can be given that an insurance carrier will not seek to cancel or deny coverage after a claim
has occurred. Any significant uninsured liability may require us to pay substantial amounts, which would adversely affect our
business, financial condition and business results.

 

We
face potential product liability and, if successful claims are brought against us, we may incur substantial liability costs. If
the use of our products harm customers or third parties or is perceived to harm such persons even when such harm is unrelated
to our products, our regulatory approvals could be revoked or otherwise negatively impacted and we could be subject to costly
and damaging product liability claims.

 

The
sale and use of our products may expose us to the risks of product liability claims. Product liability claims may be brought against
us by consumers or other third parties. In addition, there is a risk that the use of our products could cause our customers to
have an adverse health event. If we cannot successfully defend our product liability claims, we could incur substantial liability
and costs. In addition, regardless of merit or eventual outcome, product liability claims may result in: impairment of our business
reputation; costs due to related litigation; distraction of management’s attention from our primary business; substantial
monetary awards to customers or other claimants; the inability to commercialize our products; and/or decreased demand for our
products.

 

We
believe our product liability insurance coverage as supplemented by our umbrella insurance policy is sufficient in light of our
current financial condition; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient
amounts to protect us against losses due to liability.

 

We
rely on a third-party copacker, with whom we co-developed our proprietary freezing technology, to manufacture our alcohol infused
frozen products.

 

The
Company developed its proprietary technology with a third party who is also solely responsible for manufacturing all of our products.
The Company is subject to all of the risks inherent in relying upon a third party for all of its products, including the fact
that the manufacturer only has facilities in Southern California and is subject to the risk of earthquakes and other disasters.
We do not have any other supplier for our products and if anything were to happen to this supplier, including such supplier’s
business failure, our own business could be materially adversely affected.

 

Our
business is subject to the risks of earthquakes, fires, floods, power outages and other catastrophic events, and to interruption
by manmade problems such as terrorism. A disruption at our production facility could adversely impact our results of operations,
cash flows and financial condition.

 

All
of our products are produced in one location, which is located in Southern California. A significant natural disaster, such as
an earthquake, fire or a flood or a significant power outage could have a material adverse impact on our business, financial condition
or operating results. If there were a catastrophic failure at our major production facility, our business would be adversely affected.
The loss of a substantial amount of inventory – through fire, other natural or man-made disaster, contamination, or otherwise
– could result in a significant reduction in supply of the affected product or products. Similarly, if we experienced a
disruption in the supply of our products, our business could suffer. A consequence of any of these supply disruptions could be
our inability to meet consumer demand for the affected products for a period of time. In addition, there can be no assurance that
insurance proceeds would cover the replacement value of our products or other assets if they were to be lost. In addition, if
a catastrophe such as an earthquake, fire, flood or power loss should affect one of the third parties on which we rely, our business
prospects could be harmed. Moreover, acts of terrorism could cause disruptions in our business or the business of our third-party
service providers, partners, customers or the economy as a whole.

 

 

Others
may assert intellectual property infringement claims against us.

 

We
use alcohol products from other companies in the making of our alcohol infused frozen desserts. Infringement or misappropriation
claims (or claims for indemnification resulting from such claims) against us may be asserted or prosecuted, regardless of their
merit, and any such assertions or prosecutions may adversely affect our business and/or our operating results. Irrespective of
the validity or the successful assertion of such claims, we would incur significant costs and diversion of resources relating
to the defense of such claims, which could have an adverse effect on our business and/or our operating results.

 

The
inability to successfully manage the growth of our business may have an adverse effect on our operating results.

 

We
expect to experience growth in the number of employees and the scope of our operations. Such growth will result in increased responsibilities
for our management. If our management is unable to successfully manage expenses in a manner that allows us to both improve operations
and at the same time pursue potential market opportunities, the growth of our business could be adversely impacted, which may,
in turn, negatively affect our operating results or financial condition. In addition, we believe that a critical contributor to
our success has been our creative culture. As we attempt to grow, we may find it difficult to maintain important aspects of our
corporate culture, which could negatively affect our future success.

 

We
operate in a highly regulated area.

 

The
alcohol industry is highly regulated on the national and state levels. These regulations are highly complex and, at times, may
even be contradictory. Our failure to comply with these overlapping regulatory structures could materially adversely affect our
business, financial condition and results of operation.

 

Changes
in U.S., regional or global economic conditions could adversely affect our profitability and COVID-19 has had an effect as well.

 

A
decline in economic conditions in the United States or in other regions of the world could lead to a decrease in discretionary
consumer spending, which in turn could adversely affect alcoholic type products. In addition, an increase in price levels generally,
or in price levels in a particular sector such as the energy sector, could result in a shift in consumer demand away from alcohol
type products. Further, we cannot fully predict the effects of COVID-19 on our business in the US. We supply food products to
retail and institutional customers. In particular, due to the various “stay at home” orders precipitated by the spread
of COVID-19 in California and specifically in Southern California, where our customers are located, we expect a significant decline
in sales as many of these clients are not currently in operation as result of such orders. It is impossible for us to predict
the effect this will have on our long-term operations as the duration of the “stay at home” orders is unknown.

 

Current
global economic challenges may continue, including COVID-19 and a recovery may be slow or reverse, adversely impacting our results
of operations, cash flows and financial condition.

 

Stable
economic conditions globally, including strong employment, consumer confidence and credit availability, are important not only
to the basic health of our consumer markets, but also to our own financial condition. There are presently significant challenges
in the global economy, including high unemployment rates, low consumer confidence, record budget deficits and levels of government
debt, a fragile credit and housing markets and the effects of COVID-19. In addition, instability due to COVID-19, instability
in the global credit markets, and any instability in the geopolitical environment in many parts of the world and other disruptions,
may continue to put pressure on global economic conditions. As a result, consumers’ increased price consciousness may endure,
which may affect consumers’ willingness to pay for premium brands as well as the overall level of consumption of products
containing alcohol, particularly in bars, restaurants, nightclubs and other public environments where consumers drink spirits,
since COVID-19 has limited social gatherings. Furthermore, our suppliers and customers could experience cash flow problems, increased
costs or reduced availability of financing, credit defaults, and other financial hardships. These factors may increase our bad
debt expense, cause us to reduce the levels of unsecured credit that we may provide to customers and otherwise adversely impact
our results of operations, cash flows and financial condition. A prolonged global economic stagnation may impact our access to
capital markets, result in increased interest rates on debt that we may take on to expand operations, and weaken operating cash
flow and liquidity. Decreased cash flow and liquidity could potentially impact our ability to finance operations.

 

 

Demand
for our alcohol-infused products may be adversely affected by many factors, including changes in consumer preferences and trends.

 

Consumer
preferences may shift due to a variety of factors including changes in demographic and social trends, public health initiatives,
product innovations, changes in travel, vacation or leisure activity patterns and a downturn in economic conditions, which may
reduce consumers’ willingness to purchase products that contain alcohol or cause a shift in consumer preferences toward
non-alcoholic alternatives. In addition, concerns about health issues relating to alcohol consumption, dietary effects, regulatory
action or any litigation against companies in the industry may have an adverse effect on our business. Our success depends in
part on fulfilling available opportunities to meet consumer needs and anticipating changes in consumer preferences with successful
new products and product innovations. While we devote significant focus to the development of new products, we may not be successful
in their development or these new products may not be commercially successful. In addition, global economic conditions or market
trends could cause consumer preferences to trend away from our premium alcohol-infused popsicles and ice cream alternatives, which
may also adversely impact our results of operations and cash flows.

 

We
face substantial competition in our industry and many factors may prevent us from competing successfully.

 

We
compete on the basis of product taste and quality, brand image, price, service and ability to innovate in response to consumer
preferences. It is possible that our competitors may either respond to industry conditions or consumer trends more rapidly or
effectively or resort to price competition to sustain market share, both of which could adversely affect our sales and profitability.
Further, while we believe that our scale, portfolio breadth and entrepreneurial organization relative to that of our competitors
gives us the ability to outperform our market, we nevertheless face a risk that a continuing consolidation of the large distilled
spirits companies could cause us to experience competitive disadvantages. Our inability to manage these and other competitive
factors successfully could adversely affect our results of operations, cash flows and financial condition.

 

Future
tax law changes and/or interpretation of existing tax laws may adversely affect our effective income tax rate and the resolution
of unrecognized tax benefits.

 

We
are subject to income taxation in the U.S. It is possible that future income tax legislation may be enacted that could have a
material impact on our income tax provision. We believe that our tax estimates are reasonable and appropriate, however, there
are inherent uncertainties in these estimates. As a result, the ultimate outcome from any potential audit could be materially
different from amounts reflected in our income tax provisions and accruals. Future settlements of income tax audits may have a
material effect on earnings between the period of initial recognition of tax estimates in the financial statements and the timing
of ultimate tax audit settlement.

 

Some
provisions of our charter documents and Delaware law may have anti-takeover effects that could discourage an acquisition of us
by others, even if an acquisition would be beneficial to our stockholders.

 

Provisions
in our charter documents, as well as provisions of Delaware law, could make it more difficult for a third-party to acquire us,
even if doing so would benefit our stockholders.

 

Potential
liabilities and costs from litigation and other legal proceedings could adversely affect our business.

 

From
time to time we may be subject to various lawsuits, claims, disputes and investigations in the normal conduct of our operations.
These include, but are not limited to, commercial disputes, including purported class actions, employment claims, actions by tax
and customs authorities, and environmental matters. Some of these legal proceedings may include claims for substantial or unspecified
damages. It is possible that some of the actions could be decided unfavorably and could adversely affect our results of operations,
cash flows or financial condition. In addition, because litigation and other legal proceedings can be costly to defend, even actions
that are ultimately decided in our favor could have a negative impact on our results of operations and cash flows. If Tara Spencer
enforces the Labor Commission judgment against the Company for the amount owed, this may result in a material adverse effect on
our financial condition.

 

 

Historical
financial statements may not be reflective of our future results of operations, cash flows, and financial condition.

 

Although
we believe that you have been provided access to all material information necessary to make an informed assessment of our assets
and liabilities, financial position, profits and losses and prospects, historical financial statements do not represent what our
results of operations, cash flows, or financial position will be in the future.

 

Risks
Related to Our Common Stock

 

There
currently is only a minimal public market for our common stock. Failure to develop or maintain a trading market could negatively
affect the value of our common stock and make it difficult or impossible for you to sell your shares.

 

There
currently is only a minimal public market for shares of our common stock and an active market may never develop. Our common stock
is currently subject to quotation on the OTC Pink Market operated by the OTC Market’s Group, Inc. under the symbol “PACV”.
While we plan to apply to the NASDAQ Capital Market for listing our Common Stock, we may not be able to satisfy the listing requirements
for our Common Stock to be listed on the NASDAQ Capital Market which are often more widely traded and liquid markets. Some, but
not all, of the factors which may delay or prevent the listing of our Common Stock on a more widely-traded and liquid market include
the following: our stockholders’ equity may be insufficient; the market value of our outstanding securities may be too low;
our net income from operations may be too low; our common stock may not be sufficiently widely held; we may not be able to secure
market makers for our common stock; and we may fail to meet the rules and requirements mandated by, any of the several exchanges
and markets to have our common stock listed.

 

The
market price for our common stock is particularly volatile given our status as a relatively unknown company with a small and thinly
traded public float, limited operating history and lack of profits which could lead to wide fluctuations in our share price. You
may be unable to sell your common stock at or above your conversion price, which may result in substantial losses to you.

 

The
market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect
that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our
share price is attributable to a number of factors. First, as noted above, our common stock is sporadically and thinly traded.
As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately
influence the price of those shares in either direction. We cannot make any predictions or projections as to what the prevailing
market price for our common stock will be at any time, including as to whether our common stock will sustain their current market
prices, or as to what effect that the sale of shares or the availability of common stock for sale at any time will have on the
prevailing market price.

 

The
application of the “penny stock” rules could adversely affect the market price of our common stock and increase your
transaction costs to sell those shares.

 

The
SEC has adopted rule 3a51-1 which establishes the definition of a “penny stock,” for the purposes relevant to us,
as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share,
subject to certain exceptions. For any transaction involving a penny stock, unless exempt, Rule 15g-9 requires:

 

  that
a broker or dealer approve a person’s account for transactions in penny stocks, and
  the
broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity
of the penny stock to be purchased.

 

 

In
order to approve a person’s account for transactions in penny stocks, the broker or dealer must:

 

  obtain
financial information and investment experience objectives of the person, and
  make
a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient
knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

 

The
broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating
to the penny stock market, which, in highlight form:

 

  sets
forth the basis on which the broker or dealer made the suitability determination, and
  that
the broker or dealer received a signed, written agreement from the investor prior to the transaction.

 

Generally,
brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make
it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.

 

The
application of Rule 144 creates some investment risk to potential investors; for example, existing shareholders may be able to
rely on Rule 144 to sell some of their holdings, driving down the price of the shares you purchased.

 

The
SEC adopted amendments to Rule 144 which became effective on February 15, 2008 that apply to securities acquired both before and
after that date. Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least
six months would be entitled to sell their securities provided that: (i) such person is not deemed to have been one of our affiliates
at the time of, or at any time during the three months preceding a sale, (ii) we are subject to the Exchange Act periodic reporting
requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period,
we provide current information at the time of sale.

 

We
are dependent upon our ability to successfully complete acquisitions to grow our business.

 

We
intend to continue to build our business through strategic acquisitions. During the second quarter of 2018, we closed the acquisition
of San Diego Farmers Outlet, Inc., a California corporation (“SDFO”) and in the fourth quarter of 2019 we acquired
the assets of Seaport Meat Company. Reference is made to the disclosure under “Description of Business — Recent Developments
and Initiatives,” below.

 

We
also intend to pursue and consummate one or more additional acquisitions and to use part of the Offering Proceeds from the sale
of our Common Stock as well as other funding sources, which have not yet been determined, if any, to fund any cash portion of
the consideration we will pay in connection with those acquisitions. However, such additional acquisitions may also be subject
to conditions and other impediments to closing, including some that are beyond our control, and we may not be able to close any
of them successfully, in a timely manner. In addition, our future acquisitions will be required to be closed within certain timeframes
as negotiated between us and the acquisition target, and if we are unable to meet the closing deadlines for a given transaction,
we may be required to forfeit payments we have made, if any, be forced to renegotiate the transaction on less advantageous terms
and could fail to consummate the transaction at all.

 

While
we were able to close the SDFO and Seaport acquisitions, there can be no assurance that we will be able to successfully close
any planned or future acquisitions. This could significantly alter our business strategy and impede our prospects for growth.
Further, we may not be able to identify suitable acquisition candidates to replace these acquisitions, and even if we were to
do so, we may only be able to consummate them on less advantageous terms. In addition, some of the businesses we acquire may incur
significant losses from operations, which, in turn, could have a material and adverse impact on our business, results of operations
and financial condition.

 

We
may face unforeseen difficulties in the future in fully-integrating the operations of SDFO, Seaport or any other businesses we
have acquired and may acquire in the future. As shown by our acquisition of Snöbar Holdings, acquisitions have been and will
continue to be an important component of our growth strategy; however, we will need to integrate these acquired businesses successfully
in order for our growth strategy to succeed and for us to become profitable. We expect that the management teams of the acquired
businesses will adopt our policies, procedures and best practices, and cooperate with each other in scheduling events, booking
talent and in other aspects of their operations. We may face difficulty with the integration of SDFO, Seaport, and any other business
we acquire, such as coordinating geographically dispersed organizations, integrating personnel with disparate business backgrounds
and combining different corporate cultures, the diversion of management’s attention from other business concerns, the inherent
risks in entering markets or lines of business in which we have either limited or no direct experience; and the potential loss
of key employees, individual service providers, customers and strategic partners of acquired companies.

 

 

Further,
we expect that future target companies may have material weaknesses in internal controls relating to the proper application of
accrual based accounting under the accounting principles generally accepted in the United States of America (“GAAP”)
prior to our acquiring them. The Public Company Accounting Oversight Board (the “PCAOB”) defines a material weakness
as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable
possibility that a material misstatement of annual or interim financial statements will not be prevented or detected on a timely
basis. We will be relying on the proper implementation of our policies and procedures to remedy any such material weaknesses and
prevent any potential material misstatements in our financial reporting. Any such misstatement could adversely affect the trading
price of our common stock, cause investors to lose confidence in our reported financial information, and subject us to civil and
criminal fines and penalties. If our acquired companies fail to integrate in these important ways, or we fail to adequately understand
the business operations of our acquired companies, our growth and financial results could suffer.

 

We
may enter into acquisitions and take actions in connection with such transactions that could adversely affect our business and
results of operations.

 

Our
future growth rate depends in part on our selective acquisition of additional businesses and assets. We may be unable to identify
suitable targets for acquisition or make further acquisitions at favorable prices. If we identify a suitable acquisition candidate,
our ability to successfully complete the acquisition would depend on a variety of factors and may include our ability to obtain
financing on acceptable terms and requisite government approvals. In addition, any credit agreements or credit facilities that
we may enter into in the future may restrict our ability to make certain acquisitions. In connection with future acquisitions,
we could take certain actions that could adversely affect our business, including:

 

  using
a significant portion of our available cash;
  issuing
equity securities, which would dilute current stockholders’ percentage ownership;
  incurring
substantial debt;
  incurring
or assuming contingent liabilities, known or unknown;
  incurring
amortization expenses related to intangibles; and
  incurring
large accounting write-offs or impairments.

 

We
may also enter into joint ventures, which involve certain unique risks, including, among others, risks relating to the lack of
full control of the joint venture, potential disagreements with our joint venture partners about how to manage the joint venture,
conflicting interests of the joint venture, requirement to fund the joint venture and its business not being profitable.

 

Persons
who have beneficially owned restricted shares of our common stock for at least six months but who are our affiliates at the time
of, or at any time during the three months preceding a sale, would be subject to additional restrictions, by which such person
would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of either
of the following:

 

  1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
of the total number of securities of the same class then outstanding (shares of common stock as of the date of this Report);
or
  the
average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144
with respect to the sale;

 

provided,
in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale.
Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

 

 

Shannon
Masjedi, our majority stockholder, director and chief executive officer, owns a large percentage of our voting stock, which allows
her to exercise significant influence over matters subject to stockholder approval.

 

Shannon
Masjedi, our majority stockholder, director and executive officer, will have substantial influence over the outcome of corporate
actions requiring shareholder approval, including the election of directors, any merger, consolidation or sale of all or substantially
all of our assets or any other significant corporate transaction. In particular, because our President, Chief Executive Officer,
Interim Chief Financial Officer, Treasurer, Secretary and a director, Mrs. Masjedi, who owns 10,000,000 shares of our common stock,
6,000,000 shares of Series E Preferred Stock (with 10 votes per share) and 10,000 shares of Series F Preferred Stock as of September
30, 2020 will be able to exert such influence. This shareholder may also delay or prevent a change of control or otherwise discourage
a potential acquirer from attempting to obtain control of us, even if such a change of control would benefit our other shareholders.
This significant concentration of stock and voting ownership may adversely affect the value of our common stock due to investors’
perception that conflicts of interest may exist or arise.

 

We
do not intend to pay dividends on our common stock.

 

We
do not anticipate paying any cash dividends on our common stock in the foreseeable future. We currently anticipate that we will
retain all of our available cash, if any, for use as working capital and for other general corporate purposes. Any payment of
future dividends will be at the discretion of our Board of Directors and will depend upon, among other things, our earnings, financial
condition, capital requirements, level of indebtedness, statutory and contractual restrictions applying to the payment of dividends
and other considerations that the Board of Directors deems relevant. Investors must rely on sales of their common stock after
price appreciation, which may never occur, as the only way to realize a return on their investment. Investors seeking cash dividends
should not purchase our common stock.

 

Compliance
with changing regulations concerning corporate governance and public disclosure may result in additional expenses.

 

In
recent years, there have been several changes in laws, rules, regulations and standards relating to corporate governance and public
disclosure, including the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”), the Sarbanes-Oxley
Act of 2002 (“Sarbanes-Oxley”) and various other new regulations promulgated by the SEC and rules promulgated by the
national securities exchanges. The Dodd-Frank Act, enacted in July 2010, expands federal regulation of corporate governance matters
and imposes requirements on publicly-held companies, including us, to, among other things, provide stockholders with a periodic
advisory vote on executive compensation and also adds compensation committee reforms and enhanced pay-for-performance disclosures.
While some provisions of the Dodd-Frank Act were effective upon enactment, others will be implemented upon the SEC’s adoption
of related rules and regulations. The scope and timing of the adoption of such rules and regulations is uncertain and accordingly,
the cost of compliance with the Dodd-Frank Act is also uncertain.

 

In
addition, Sarbanes-Oxley specifically requires, among other things, that we maintain effective internal control over financial
reporting and disclosure of controls and procedures.

 

These
and other new or changed laws, rules, regulations and standards are, or will be, subject to varying interpretations in many cases
due to their lack of specificity. As a result, their application in practice may evolve over time as new guidance is provided
by regulatory and governing bodies, which could result in continuing uncertainty regarding compliance matters and higher costs
necessitated by ongoing revisions to disclosure and governance practices. Our efforts to comply with evolving laws, regulations
and standards are likely to continue to result in increased general and administrative expenses and a diversion of management
time and attention from revenue-generating activities to compliance activities. Further, compliance with new and existing laws,
rules, regulations and standards may make it more difficult and expensive for us to maintain director and officer liability insurance,
and we may be required to accept reduced coverage or incur substantially higher costs to obtain coverage. Members of our board
of directors and our principal executive officer and principal financial officer could face an increased risk of personal liability
in connection with the performance of their duties. As a result, we may have difficulty attracting and retaining qualified directors
and executive officers, which could harm our business. We continually evaluate and monitor regulatory developments and cannot
estimate the timing or magnitude of additional costs we may incur as a result.

 

 

USE
OF PROCEEDS

 

Because
the offering is a best-efforts offering, we are presenting this information assuming that we sell 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, 75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the
shares offered hereby. For purposes of this table, we used [___], the per-share offering price.

 

The
net proceeds of the maximum offering, after deducting total offering expenses of up to $100,000, assuming the maximum number of
Offered Shares are sold, would be approximately $9,900,000. The following table sets forth the use of proceeds given each funding
level.

 

Because
the offering is a “best efforts” offering without a minimum offering amount, we may close the offering without sufficient
funds for all the intended purposes set out above, or even to cover the costs of this offering.

 

The
Company reserves the right to change the above use of proceeds if management believes it is in the best interests of the Company.
The allocations of the proceeds of this offering presented above constitute the current estimates of our management and are based
on our current plans, assumptions made with respect to the industry, general economic conditions and our future revenue and expenditure
estimates.

 

Investors
are cautioned that expenditures may vary substantially from the estimates presented above. Investors must rely on the judgment
of our management, who will have broad discretion regarding the application of the proceeds of this offering. The amounts and
timing of our actual expenditures will depend upon numerous factors, including market conditions, cash generated by our operations
(if any), business developments and the rate of our growth. We may find it necessary or advisable to use portions of the proceeds
of this offering for other purposes.

 

In
the event we do not obtain the entire offering amount hereunder, we may attempt to obtain additional funds through private offerings
of our securities or by borrowing funds. Currently, we do not have any committed sources of financing.

 

   

Maximum

Offering

   

Seventy-Five
Percent (75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3})

of
Offering

   

Fifty

Percent
(50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3})

of
Offering

   

Twenty-Five

Percent
(25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3})

of
Offering

 
Offering expense   $ 500,000     $ 375,000     $ 250,000     $ 125,000  
Product development   $ 2,000,000     $ 1,400,000     $ 750,000     $ 375,000  
Operations/Inventory   $ 2,000,000     $ 1,400,000     $ 750,000     $ 375,000  
Marketing   $ 200,000     $ 95,000     $ 75,000     $ 37500  
Sales and business development   $ 200,000     $ 90,000     $ 87,500     $ 45,000  
Customer training and support   $ 100,000     $ 90,000     $ 87,500     $ 42,500  
Debt (1)   $ 5,000,000     $ 4,000,000     $ 3,000,000     $ 1,500,000  
TOTAL
PROCEEDS
  $ 10,000,000     $ 7,500,000     $ 5,000,000     $ 2,500,000  

 

 

DETERMINATION
OF OFFERING PRICE

 

Our
common stock is quoted by the OTC Markets Group under the symbol “PACV.” On [DATE], the closing price of our common
stock was $[__] per share. Nonetheless, there is a limited public market for our Common Stock. Accordingly, the price of the Offered
Shares in this Offering was determined by the Company. The principal factors we considered in determining such price include:

 

  § the
information set forth in this Offering Circular and otherwise available;

 

  § our
history and prospects and the history of and prospects for the industry in which we compete;

 

  § our
past and present financial performance;

 

  § our
prospects for future earnings and the present state of our development;

 

  § the
general condition of the securities markets at the time of this Offering;

 

  § the
recent market prices of, and demand for, publicly traded common stock of generally comparable companies; and

 

  § other
factors deemed relevant by us.

 

 

DILUTION

 

If
you invest in the Shares, your ownership interest in PACV will be immediately diluted equal to the difference between the initial
public offering price per share and the adjusted net tangible book value per share of our common stock after this Offering. The
price of the current offering is fixed at $[__] per common share. This price is significantly higher than the tangible book value
of the stocks which was $(1.89) as at September 30, 2020.

 

“Dilution”
represents the difference between the offering price of the shares of common stock hereby being offered and the net book value
per share of common stock immediately after completion of this Offering.

 

“Net
book value” is the amount that results from subtracting total liabilities from total assets. In this Offering, the level
of dilution is increased as a result of the relatively low net book value of our issued and outstanding common stock and because
the proceeds of the offering are substantially less than our estimated costs.

 

If
you invest in our Shares, your interest will be diluted to the extent of the difference between the initial public offering price
per share of our common stock and the pro forma as adjusted net tangible book value per share of our common stock immediately
after this Offering. Pro forma net tangible book value per share represents the amount of our total tangible assets less total
liabilities, divided by the number of shares of common stock outstanding at September 30, 2020.

 

The
following table illustrates the per share dilution to new investors discussed above, assuming the sale of, respectively, 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3},
75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, 50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and 25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares offered for sale in this offering (after our estimated offering expenses of up to $500,000, assuming
the maximum offering amount is sold):

 

Funding
Level
    100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}       75{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}       50{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}       25{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}  
Offering Price   $     $     $     $  
Pro forma net tangible book value per
common stock share before the Offering
  $ (1.89 )   $ (1.89 )   $ (1.89 )   $ (1.89 )
Increase per common
share attributable to investors in this Offering
  $

[_____]

    $     $     $  
Pro forma net tangible
book value per common stock share after the Offering
  $     $     $     $  
Dilution to investors   $ )   $ )   $ )   $ )
Dilution as a percentage of Offering Price     {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}     {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}     {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}     {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

 

MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

You
should read the following discussion of our financial condition and results of operations together with the audited consolidated
financial statements and notes to the financial statements included elsewhere in this registration statement. This discussion
contains forward-looking statements that involve risks and uncertainties. The forward-looking statements are not historical facts,
but rather are based on current expectations, estimates, assumptions and projections about our industry, business and future financial
results. Our actual results could differ materially from the results contemplated by these forward-looking statements due to a
number of factors, including those discussed under “Risk Factors” and other sections in this registration statement.

 

This
registration statement and other written and oral statements that we make from time to time contain such forward-looking statements
that set out anticipated results based on management’s plans and assumptions regarding future events or performance. We
have tried, wherever possible, to identify such statements by using words such as “anticipate,”“estimate,”“expect,”“project,”“intend,”“plan,”“believe,”“will”
and similar expressions in connection with any discussion of future operating or financial performance. In particular, these include
statements relating to future actions, future performance or results of current and anticipated sales efforts, expenses, the outcome
of contingencies, such as legal proceedings, and financial results.

 

We
caution that the factors described herein, and other factors could cause our actual results of operations and financial condition
to differ materially from those expressed in any forward-looking statements we make and that investors should not place undue
reliance on any such forward-looking statements. Further, any forward-looking statement speaks only as of the date on which such
statement is made, and we undertake no obligation to update any forward-looking statement to reflect events or circumstances after
the date on which such statement is made or to reflect the occurrence of anticipated or unanticipated events or circumstances.
New factors emerge from time to time, and it is not possible for us to predict all of such factors. Further, we cannot assess
the impact of each such factor on our results of operations or the extent to which any factor, or combination of factors, may
cause actual results to differ materially from those contained in any forward-looking statements.

 

General

 

The
Company was incorporated under the laws of the State of Delaware on October 3, 1986, under the name “AOA Corporation”.
On October 22, 2012, the Company changed its name to “Pacific Ventures Group, Inc.”. Prior to the Share Exchange described
below, the Company operated as an insurance holding company and through its subsidiaries, marketed and underwrote specialized
property and casualty coverage in the general aviation insurance marketplace.

 

The
current structure of the Company resulted from a share exchange with Snöbar Holdings, Inc. (“Snöbar”), which
was treated as a reverse merger for accounting purposes. On August 14, 2015, the Company entered into a share exchange agreement
(the “Share Exchange Agreement”) with Snöbar Holdings, Inc. (“Snöbar Holdings”), pursuant to
which the Company acquired 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued and outstanding shares of Snöbar Holdings’ Class A and Class B common
stock in exchange for 22,500,000 restricted shares of the Company’s common stock, as well as issuing 2,500,000 restricted
shares of the Company’s common stock to certain other persons (the “Share Exchange”). As the result of the Share
Exchange, Snöbar Holdings. became the Company’s wholly owned operating subsidiary and the business of Snöbar Holdings
became the Company’s sole business operations. In addition, Snöbar Holdings’ majority owned subsidiary, MAS Global
Distributors, Inc., a California corporation (“MGD”), became an indirect subsidiary of the Company.

 

International
Production Impex Corporation, a California corporation (“IPIC”), which was formed on August 2, 2001. IPIC is in the
business of selling alcohol-infused ice cream and ice-pops and holds all of the rights to the liquor licenses to sell such products
and trade names “SnöBar”. Accordingly, the Trust holds all ownership interest of IPIC and its liquor licenses,
permitting IPIC to sell its product to distributors, with all income, expense, gains and losses rolling up to the Trust, of which
Snöbar Holdings is the sole beneficiary. Snöbar Holdings also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of MAS Global Distributors, Inc.,
a California corporation (“MGD”). As a result of the foregoing structure, Snöbar Holdings is the primary beneficiary
of all assets, liabilities and any income received from the business of the Trust and IPIC through the Trust and is the parent
company of MGD.

 

 

Description
of the Business Operations of Snöbar Holdings

 

Snöbar
Holdings is the trustor and sole beneficiary of the Trust. The Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of IPIC. IPIC is the owner of liquor
licenses and the trade name “SnöBar” and is in the business of selling and distributing alcohol-infused ice creams
and ice-pops through its distributors. As a result of the foregoing,

 

IPIC
is a food, beverage and alcohol distribution company that is in the business of selling alcohol-infused ice cream and ice-pops
and holds all of the rights to the liquor licenses to sell such products and trade names “SnöBar”. IPIC is initially
marketing two products: SnöBar alcohol infused ice pops, and SnöBar alcohol infused ice cream and sorbet. SnöBar
ice pops are original frozen alcohol beverage bars, similar to popsicles on a stick, but made with premium liquor such as premium
tequila and vodka and are currently manufactured in three flavors, Margarita, Cosmopolitan and Mojito. The alcohol freezing technology
used to produce these beverage bars can be applied to almost any alcohol type and mixture, presenting significant market potential
and an almost unlimited variety of flavors and employment of premium brands. Each ice pop is the equivalent of a full cocktail.

 

SnöBar
ice cream is an additional innovative product that the Company is marketing using proprietary formulas and technology. These products
are premium ice cream and sorbets that are distilled spirit cocktails containing up to 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} quality liqueurs and liquors. Currently,
there are four flavors available: Brandy Alexander; Brandy Alexander with chocolate chips; Grasshopper; and Pink Squirrel. There
are also numerous different liquor ice cream flavors in development in classic ice cream drink styles such as Coffee Liqueur Ice
Cream, Piña Colada Sorbet, Sherry Ice Cream, and Strawberry Margarita Sorbet. The product contains ultra-premium dairy
and the highest quality of ingredients.

 

The
SnöBar brand is fully trademarked within the USA and is currently seeking worldwide trademark rights.

 

As
of June 30, 2020, Snöbar products are currently being sold in the east coast by our distributor. The Company’s management
has been actively constructing an online platform that will allow Snöbar distribution on a national level. Please see “Plan
of Operations” below for further detail.

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc. (SDFO), a California Corporation. San Diego
Farmers Outlet was started over thirty-five years ago to provide primarily restaurant customers in southern California’s
three largest counties with quality food and produce and does business under the name of Farmers Outlet and San Diego Farmers
Outlet.

 

On
December 17, 2019, the Company completed an asset acquisition of Seaport Meat Company, (Seaport Meat), a California Corporation
with over thirty (30) years in business servicing restaurant and retail, and institutional customers in Southern California and
Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods, dairy and produce. Seaport
Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley, California and owns the land
and the building. their 17,000 square foot facility is HACCP-compliant and is a USDA Licensed processing facility with on-site
daily inspections. HACCP is a management system in which food safety is addressed through the analysis and control of biological,
chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption
of the finished product. Having a USDA certified facility allows consumers to be confident that the Food Safety and Inspection
Service (FSIS), the public health agency in the USDA, ensured that meat and poultry products are safe, wholesome, and correctly
labeled and packaged.

 

On
April 13, 2020, the Company effected a 500 for 1 reverse split of its common stock. The number of authorized common shares remained
900,000,000. All share numbers reported herein have taken the reverse split into account.

 

 

Operations

 

Snobar

 

As
of the date of this registration statement, Snöbar products are currently being sold in the east coast of United States by
the Company’s distributor. The Company’s management has been actively constructing an online platform that will allow
Snöbar distribution on a national level. The Company’s platform is complete and ready to “go live” and,
with the aim of purchasing inventory as well as increasing sales and marketing efforts.

 

The
Company has recently signed an agreement with a new co-packer to produce and manufacture the Snobar Product Line. The new factory
will produce the Snobar Product Line for a reduced price which will allow for greater profitability for the company. The new factory
has all of the necessary licensing in place required to manufacture the Snobar Product Line. The company expects to place its
first order with the new copacker in early 2020. The company will launch the state of California and be looking to expand sales
across the nation.

 

In
addition, the Company is planning to offer distribution rights throughout the country which will allow the Snöbar Product
Line to expand its footprint very rapidly. The distribution rights will also bring in additional revenue to the Company.

 

The
Company will need to access the capital markets or in order to sustain its operations for the next 12 months. The Company’s
plan of action in the next 12 months is to continue development of the Snöbar Product Line and fulfill the current orders
that the brand has in hand from the Company’s distributor in South Carolina as well as from other accounts. The Snöbar
Product Line will have two fulfillment centers to ship the online orders, one in California to service west of the Mississippi
and another fulfillment center in South Carolina to service east of the Mississippi. These fulfillment centers are established
and ready to proceed as soon as inventory is purchased.

 

The
Company’s anticipated general and administrative costs can be expected to increase due to additional marketing costs associated
with online sales. Specifically, the Company expects to utilize marketing and promotions through social media, radio and other
avenues to create more brand awareness. The Company expects to continue to utilize independent contractors and not increase the
number of employees.

 

Seaport
Meat Company

 

Seaport
Meat Company, (Seaport Meat), a California Corporation with over thirty (30) years in business servicing restaurant and retail,
and institutional customers in Southern California and Arizona. Seaport Meat is a USDA meat processing plant that supplies quality
meats, seafood, dry goods, dairy and produce. Seaport Meat Company built a state-of-the-art food distribution and manufacturing
facility in Spring Valley, California and owns the land and the building. their 17,000 square foot facility is HACCP-compliant
and is a USDA Licensed processing facility with on-site daily inspections. HACCP is a management system in which food safety is
addressed through the analysis and control of biological, chemical, and physical hazards from raw material production, procurement
and handling, to manufacturing, distribution and consumption of the finished product. Having a USDA certified facility allows
consumers to be confident that the Food Safety and Inspection Service (FSIS), the public health agency in the USDA, ensured that
meat and poultry products are safe, wholesome, and correctly labeled and packaged.

 

The
Company’s customers range from a wide variety of restaurants, including many well known in Southern CA, to institutions,
schools (UCSD, SDSU, etc.) and re-distributors such as US Foods and Sysco as well as to local distributors. They supply wholesale
food and restaurant supplies to San Diego, Los Angeles, Orange and Riverside and offer same day service. In addition, they have
clients in Arizona and Colorado that come to their facility to pick up their orders.

 

Due
to the impact that the COVID-19 pandemic had on our customers, particularly our larger customers have been forced to close. Some
of these accounts remain closed such as Petco Park the Major League ballpark “Padre Stadium” and the LA, San Diego,
and Del Mar County Fairs. Despite these customer closures, Seaport Meat Company has expanded its customer base and maintained
at or above the same revenue for the three months ended September 2020 as for the same quarter in 2019.

 

Because
Seaport Meat Company of America can efficiently add new product lines, it is expected that this will expand the distribution of
Pacific Ventures’ San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures’ revenue
growth. We believe the combination of a distribution and product company is unique in the San Diego area and will position the
company for rapid growth.

 

 

Seaport
Meat Company manufactures and wholesales custom processed beef, pork, chicken, lamb, veal and seafood. In addition, they are redistributors
of a wide variety of dry goods, frozen foods, disposables and janitorial products. Their sales, distribution and finance processes
are very efficient and can be expanded to add new product lines, including fresh produce and dairy.

 

Overview

 

Overview
2017 —
During 2017, the South Carolina distributor expanded the account base for SnöBar and has many successful
placements for the brand. Furthermore, additional funding has also been unavailable to pursue additional geographic markets, both
domestic and international. Despite such challenges, during 2017, the Company continued development of the Snobar Product Line
with the goal to fulfill the current orders that the brand has in hand from the Company’s distributor in South Carolina
as well as from other accounts. In addition, the Company further continued with its strategy of selectively pursue strategic acquisitions
in its industry and related industries, culminating in the execution of the Asset Purchase Agreement with San Diego Farmers Outlet,
Inc. The Company is currently working on satisfying the closing conditions under the Asset Purchase Agreement, including obtaining
the necessary Financing, and hope to close the transaction during the second quarter of 2018. There can be no assurance, however,
that the Financing and the asset acquisition will be consummated or as to the date by which the asset acquisition may be consummated,
if at all.

 

Overview
2018 —
During the 2018 fiscal year, the Company completed an asset acquisition of San Diego Farmers Outlet, Inc.
(SDFO), a California Corporation with over thirty-five (35) years in business servicing restaurant and retail produce customers
in southern California’s three largest counties, supplying quality food and produce. SDFO does business under the name of
Farmers Outlet and San Diego Farmers Outlet. On Sept. 24, 2018, the Company announced the signing of a definitive Asset Purchase
Agreement to acquire a food and beverage distribution company that is involved in the sale of food, beverages and general merchandise
to retailers, households, hotels, restaurants, “mom and pop” markets, liquor stores, gas stations and other retail
outlets.

 

Overview
2019 —
During the 2019 fiscal year, the Company completed an asset acquisition of Seaport Meat Company, (Seaport
Meat), a California Corporation with over thirty (30) years in business servicing restaurant and retail, and institutional customers
in Southern California and Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods,
dairy and produce. Seaport Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley,
California and owns the land and the building. their 17,000 square foot facility is HACCP-compliant and is a USDA Licensed processing
facility with on-site daily inspections. HACCP is a management system in which food safety is addressed through the analysis and
control of biological, chemical, and physical hazards from raw material production, procurement and handling, to manufacturing,
distribution and consumption of the finished product. Having a USDA certified facility allows consumers to be confident that the
Food Safety and Inspection Service (FSIS), the public health agency in the USDA, ensured that meat and poultry products are safe,
wholesome, and correctly labeled and packaged.

 

The
Company’s customers range from a wide variety of restaurants, including many well known in Southern CA, to institutions,
schools (UCSD, SDSU, etc.) and re-distributors such as US Foods and Sysco as well as to local distributors. They supply wholesale
food and restaurant supplies to San Diego, Los Angeles, Orange and Riverside and offer same day service. In addition, they have
clients in Arizona and Colorado that come to their facility to pick up their orders.

 

Due
to the impact that the COVID-19 pandemic had on our customers, particularly our larger customers have been forced to close. Some
of these accounts remain closed such as Petco Park the Major League ballpark “Padre Stadium” and the LA, San Diego,
and Del Mar County Fairs. Despite these customer closures, Seaport Meat Company has expanded its customer base and maintained
at or above the same revenue for the three months ended September 2020 as for the same quarter in 2019.

 

Because
Seaport Meat Company of America can efficiently add new product lines, they can easily expand the distribution of Pacific Ventures’
San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures’ revenue growth. The combination
of a distribution and product company is unique in the San Diego area and will position the company for rapid growth.

 

 

They
manufacture and wholesale custom processed beef, pork, chicken, lamb, veal and seafood. In addition, they are redistributors of
a wide variety of dry goods, frozen foods, disposables and janitorial products. Their sales, distribution and finance processes
are very efficient and can be expanded to add new product lines, including fresh produce and dairy.

 

Although
the Company has been able to extend the maturity dates as well as repayment terms of a substantial amount of its existing debt,
there is no assurance that the Company will be able to further extend such repayments or maturity dates to avoid a default, as
such further extension depends on the consent of the holders of such debt. If the Company is unable to make such payments and
repayments and unable to extend and delay required payments or maturities of such debt, the holders of such debt will have the
right to take legal action seeking enforcement of the debt. If any legal action is taken against it, the Company would face the
risk of having to deplete our limited cash resources to defend against such suit or face the entry of a default judgment. In either
event, such action would have grave impact on the Company’s operations. The Company’s ability to continue operations
will be dependent upon the successful completion of additional long-term or permanent equity financing, the support of creditors
and shareholders, and, ultimately, the achievement of profitable operations. There can be no assurances that the Company will
be successful, which would in turn significantly affect our ability to be successful in its business plan. If not, the Company
will likely be required to reduce operations or liquidate assets. The Company will continue to evaluate its projected expenditures
relative to its available cash and to seek additional means of financing in order to satisfy the Company’s working capital
and other cash requirements.

 

San
Diego Farmers Outlet

 

SDFO
covers a large market area servicing Los Angeles, Orange County and San Diego, which we have estimated to be a $2.5 billion addressable
market.

 

Unlike
some larger distributors who make their customers receive products on a day and time convenient to the distributor, SDFO delivers
daily and pays attention to what the customer wants. Farmers Outlet added products to meet the needs of restaurants, Hotels, Clubs
and bars, Resorts, food trucks and caterers. Free delivery was added to demonstrate that Farmers Outlet had customers interest
first in mind.

 

Farmers
Outlet provides a wide array of products to serve customers of all types. However, they do have a niche in providing fresh produce
and food products. Farmers Outlet provides specialty produce that the larger distributors do not carry on a daily basis.

 

Farmers
Outlet covers a large market area servicing Los Angeles, Orange County and San Diego, which we have estimated to be a $2.5 billion
addressable market. Farmers Outlet currently services the San Diego territory and has over 125 active customers, and no customer
represents more than five percent of Farmers Outlet gross revenues.

 

The
company services customers in high, middle and low-income communities with a specialty in providing food and fresh produce to
customers serving small to medium size restaurants of all nationalities, including Chinese, Korean, Mexican, American, Japanese
and Thai.

 

Pacific
Ventures intends to expand its business through the acquisition of other food manufacturing and distribution companies that serve
the Los Angeles, Orange County and San Diego area, thereby combining and expanding upon a combined customer base with an expanding
range of products and services.

 

Results
of Operations

 

Nine
Months ended September 30, 2020, as Compared to Nine Months Ended September 30, 2019

 

Revenues
– The Company recorded $22,929,026 sales revenue for the nine months ended September 30, 2020 as compared to$3,600,317
for the same period of September 30, 2019. The Company had $1,703,162 inventory of saleable merchandise as of September 30, 2020
as compared to $830,504 for the period ending December 31, 2019.

 

 

Operating
Expenses
– Total operating expenses for the nine months ended September 30, 2020 was $5,147,716 as compared to$1,544,119
in the same period in, 2019, due to increased operating activities during the period ended September 30, 2020, and an increase
in selling, general and administrative expenses.

 

Selling,
General and Administrative Expenses –
Selling, general and administrative expenses for the nine months ended
September 30, 2020 increased by $2,854,285 to $3,636,326 from $782,041 in the same period in 2019, which was due to an
increase in various expenses and business expansion.

 

Marketing
and Advertising Expenses –
Marketing and advertising expenses for the nine (9) months ended September 30, 2020 was$27,698
compared to $98,885 in September 30, 2019.

 

Professional
fees
– Professional fees expense for the nine (9) months ended September 30, 2020 was $752,723, which includes accounting,
legal fees and consulting services compared to $419,961 during the same period in 2019.

 

Depreciation
and Amortization Expenses –
Depreciation and Amortization expenses for the nine (9) months ended September 30,2020 and
2019 were $505,969 and $18,231, respectively.

 

Salaries
and Wages –
Salaries and wages expense, in the form of payroll expenses, which is included under selling & general
expenses for the nine (9) months ended September 30, 2020 was $1,919,238, as compared to $365,050 for the prior same period.

 

Other
Non-Operating Income and Expenses –
For the nine (9) months period ended September 30, 2020, the Company recorded interest
and penalty expenses in the amount of $1,261,273 for a non-operating loss in the same amount. In the nine (9) months ended September
30, 2019 the Company recorded other non-operating expenses of $537,673 in interest expense for a non-operating loss in the same
amount.

 

Net
Loss –
Net loss for nine (9) months ended September 30, 2020 was $3,896,531, as compared to net loss of $1,088,193 for
the nine (9) months ended September 30, 2019.

 

Financial
Condition, Liquidity and Capital Resources

 

Nine
Months ended September 30, 2020

 

As
of September 30, 2020, the Company had a working capital deficit of $2,640,489, consisting of, $1,399,236 in accounts receivable,
$1,703,162 in inventory, $231,897 in other assets and $16,845 in deposits, offset by an overdraft cash balance of $34,861, by
accounts payable of $2,556,896, accrued expenses of $1,202,372, equipment of $94,527 and $2,102,971 in the current portion of
notes payable.

 

For
the nine (9) months period ended September 30, 2020, the Company used $2,651,613 of cash in operating activities, used cash of
$177,590 for investing activities and obtained $2,478,385 cash from financing activities, resulting in a decrease in total cash
of $350,819and an overdraft cash balance of $34,861 for the period. For the nine (9) months period ended September 30, 2019, the
Company used cash of 579,908 in operating activities, used cash of $75,525 for investing activities and obtained cash of $517,952
from financing activities, resulting in a decrease in cash of $137,481 and a cash balance of $13,577 at the end of such period.

 

Total
current assets as of September 30, 2020 was $3,316,279, while current liabilities were $5,956,767. The Company has incurred an
operating loss of $3,896,531 for the nine (9) months period ended September 30, 2020, largely due the increase in operating expenses,
business expansion and increase in interest and penalty fees. During the nine (9) months period ended September 30, 2020, the
Company had an accumulated deficit of $13,936,898. These factors raise substantial doubt about our ability to continue as a going
concern.

 

 

Changes
in the composition of our Notes Payable and Notes Payable-Related Parties are presented in the table below:

 

    As of September 30, 2020     As of December 31, 2021  
    $ Current     $ Long-Term     $ Current     $ Long Term  
Notes Payable     1,474,122       10,546,942       1,022,364       8,627,129  
Notes Payable – Related     433,849       42,000       340,241       42,000  
    $ 1,907,971     $ 10,588,942     $ 1,362,605     $ 8,669,129  

 

Total
Notes Payable for related and unrelated parties increased by $2,465,179 from the fiscal year ended December 31, 2019 from $10,031,734
to $12,496,913 in the nine (9) months period ended September 30, 2020.

 

As
of September 30, 2020, total stockholders’ equity deficit increased to $8,386,037 from $4,617,321 as of December 31, 2019.
Accumulated deficit increased from $10,040,367 in the fiscal year ended December 31, 2019 to $13,936,898 for the nine (9) months
period ended September 30, 2020.

 

As
of September 30, 2020, the Company had an overdraft cash balance of $34,861 (i.e. cash is used to fund operations). The Company
does not believe our current cash balances will be sufficient to allow us to fund our operating plan for the next twelve months.
Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become
profitable. If we are unable to obtain adequate capital, we could be forced to cease operations or substantially curtail its drug
development activities. These conditions raise substantial doubt as to our ability to continue as a going concern. The accompanying
financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts
and classification of liabilities should we be unable to continue as a going concern.

 

Our
principal sources of liquidity in the past has been cash generated by issuing new shares of the Company’s common stock and
cash generated from loans to us. In order to be able to achieve our strategic goals, we need to further expand our business and
financing activities. Expanding market awareness of the SnöBar products and our international distribution networks, together
with further improvement of the SnöBar products will require future capital and liquidity expansion. Since our inception
in January 2013, our shareholders have contributed a significant amount of capital making it possible for us to develop and market
the SnöBar products. To continue to develop our product offerings and generate sales, significant capital has been and will
continue to be required. Management intends to fund future operations through additional private or public equity and/or debt
offerings. We continue to engage in preliminary discussions with potential investors and broker-dealers, but no terms have been
agreed upon. There can be no assurances, however, that additional funding will be available on terms acceptable to us, or at all.
Any equity financing may be dilutive to existing shareholders. We do not currently have any contractual restrictions on our ability
to incur debt and, accordingly we could incur significant amounts of indebtedness to finance operations. Any such indebtedness
could contain covenants which would restrict our operations.

 

Off-Balance
Sheet Arrangements

 

There
are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
that is material to investors.

 

Critical
Accounting Policies and Estimates

 

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying
notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal
of the company’s financial condition and results of operations, and which require the company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

 

 

Based
on this definition, we have identified the critical accounting policies and judgments addressed which are described in Note 2
to our condensed consolidated financial statements for the foregoing accounting periods included or referenced elsewhere in this
registration statement. Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon
information presently available. Actual results may differ significantly from these estimates under different assumptions, judgments
or conditions.

 

Year
ended December 31, 2019, as compared to the year ended December 31, 2018

 

Revenues
and Cost of Goods Sold.
Revenue for the fiscal year ended December 31, 2019 increased to $5,918,337 from $3,211,573 during
the comparable period as a result of the acquisition of San Diego Market Outlet, Inc. and Seaport Meat Company.

 

Cost
of goods sold (“COGS”) is comprised of production costs, shipping and handling and handling costs. For the fiscal
year ended December 31, 2019, we had costs of goods sold of $5,070,322, as compared to $2,392,329 in the comparable period ended
December 31, 2018. The percentage of COGS against sales was 74{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the fiscal year ended December 31, 2018 to 86{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} in the fiscal
year ended December 31, 2019.

 

Operating
Expenses.
Our Selling, General and Administrative (“SG&A”) expenses consist of sales and marketing, professional
services, rents, and general office expenses (including wages for non-officer personnel). During the fiscal year ended December
31, 2019 our SG&A expenses increased to $2,322,524 from $1,732,109 in the comparable prior period, an increase of $590,415.
These increases were the result of increases in general office expenses, professional services and marketing expenses. In December
31, 2019, total general office expense was $1,365,942, marketing expenses was $100,508. Depreciation expenses increased from $17,626
to $229,036 for the fiscal years December 31, 2018 and December 31, 2019, respectively, due to the addition of depreciable assets
in the second quarter of 2019 related to the acquisition of San Diego Market Outlet, Inc and Seaport Meat Company.

 

Total
operating expenses for the fiscal year ended December 31, 2019 were $2,551,560 representing an increase of $801,825, as compared
to $1,749,735 for the comparable prior period ended December 31, 2018.

 

Other
Non-Operating Income and Expenses
. Non-operating expenses for the fiscal year ended December 31, 2019 were $970,488, consisting
all in interest expense compared to a non-operating expense of $617,368, consisting of also all in interest expense, in the comparable
prior period ended December 31, 2018.

 

Net
Loss.
Net loss for the fiscal year ended December 31, 2019 was $2,652,626, an increase of $1,105,029 from $1,547,598 in the
comparable prior period ended December 31, 2018.

 

Financial
Condition, Liquidity and Capital Resources

 

Fiscal
years ended December 31, 2019 and 2018

 

As
of December 31, 2019, we had a working capital deficit of $1,118,654 comprised of $315,957 in cash and cash equivalents, $1,290,637
of accounts receivable, $830,504 inventory assets, other current assets of $283,379 (includes current portion of Rent to Use Asset)
and $16,845 in deposits which were offset by accounts payable of $1,409,420, $714,962 in accrued expenses, $119,988 in lease payables,
$1,362,605 in current note payables and $249,000 in lease liability. For the fiscal year ended December 31, 2019 we used $2,620,665
in operating activities. Cash used in investing activities totaled $4,202,000, consisting of purchase of equipment, building and
improvement and fixed assets for $1,384,382 and for goodwill and intangible assets $2,783,239, all of which related to the recent
acquisition of Seaport Meat Company. Cash provided in financing activities totaled $6,987,564, consisting of $2,960,899 in proceeds
from notes payable, $3,461,606 in proceeds from long term loans, of which $3,015,780 was for the acquisition and working capital
of Seaport Meat Company, $119,542 from proceeds from note payables from related parties, $166,000 for debt conversion, $60,000
for issuance of preferred “E” shares, $446,711 in common shares issued for debt conversion and $111,304 in prior year
adjustments.

 

 

In
the comparable prior period in 2018, we had working capital deficit of $1,355,944 comprised of $151,058 in cash and cash equivalents,
$280,142 of accounts receivable, $160,858 inventory assets, and $1,500 in deposits which were offset by accounts payable of $597,888,
$286,598 in accrued expenses, $772,334 in current notes payable, $203,786 in current note payable to a related party and $88,896
in lease payable. For the fiscal year ended December 31, 2018 we used $1,597,563 in operating activities. Cash used in investing
activities totaled $1,101,839, consisting of purchase of computers of $10,426, purchase of equipment, building and improvement
for $141,413 and for goodwill and intangible assets $950,000, all of which related to the acquisition of San Diego Farmers Market
in 2018. Cash provided in financing activities totaled $2,850,389, consisting of $2,742,721 in proceeds from notes payable, $432,641
in common shares issued for debt conversion and $324,973 in repayment of notes payable.

 

At
December 31, 2019, we had cash and cash equivalents of $315,957 as compared to $118,579 at December 31, 2018.

 

Cash
used in operations for the fiscal year ended December 31, 2019 was $2,620,665 as compared to $1,597,563 in the comparable prior
fiscal year ended December 31, 2018. Cash used increased by $1,023,102 between periods.

 

For
the fiscal year ended December 31, 2019, cash used in investing totaled $4,202,000, all of which is related to the recent acquisition
of Seaport Meat Company in December 2019. We had no cash from investing activities December 31, 2019.

 

Cash
provided from financing activities at December 31, 2019 was $6,987,564 as compared to $2,850,390 at December 31, 2018.

 

As
of December 31, 2019, we had total current liabilities of $3,855,976 and total liabilities were $13,386,354 as compared to $1,949,502
and $4,250,582, respectively, for December 31, 2018.

 

Off-Balance
Sheet Arrangements

 

There
are no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition,
changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources
that is material to investors.

 

Critical
Accounting Policies and Estimates

 

The
preparation of financial statements in conformity with accounting principles generally accepted in the United States of America
(“U.S. GAAP”) requires estimates and assumptions that affect the reported amounts of assets and liabilities, revenues
and expenses, and related disclosures of contingent assets and liabilities in the consolidated financial statements and accompanying
notes. The SEC has defined a company’s critical accounting policies as the ones that are most important to the portrayal
of the company’s financial condition and results of operations, and which require the company to make its most difficult
and subjective judgments, often as a result of the need to make estimates of matters that are inherently uncertain.

 

Based
on this definition, we have identified the critical accounting policies and judgments addressed which are described in Note 2
to our condensed consolidated financial statements for the foregoing periods included elsewhere in this registration statement.
Although we believe that our estimates, assumptions and judgments are reasonable, they are based upon information presently available.
Actual results may differ significantly from these estimates under different assumptions, judgments or conditions.

 

 

DESCRIPTION
OF BUSINESS

 

Unless
the context requires otherwise or unless otherwise stated, references to “our Company,” “Pacific Ventures,”
“PACV,” “we,” “us,” “our” and similar references refer to Pacific Ventures Group,
Inc. and its consolidated subsidiaries.

 

Overview

 

Pacific
Ventures was incorporated under the laws of the State of Delaware on October 3, 1986, under the name AOA Corporation. On November
12, 1991, the Company changed its name to American Eagle Group, Inc. On October 22, 2012, the Company changed its name to Pacific
Ventures Group, Inc.

 

The
current structure of Pacific Ventures resulted from a share exchange with Snöbar Holdings, Inc. (“Snöbar”),
which was treated as a reverse merger for accounting purposes. On August 14, 2015, Pacific Ventures and its stockholders entered
into a share exchange agreement (the “Share Exchange Agreement”) with Snöbar Holdings, Inc. (“Snöbar
Holdings”), pursuant to which Pacific Ventures acquired 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued and outstanding shares of Snöbar Holdings’
Class A and Class B common stock in exchange for 22,500,000 restrictedfde shares of Pacific Ventures’ common stock, while
simultaneously issuing 2,500,000 shares of Pacific Ventures’ restricted common stock to certain other persons, including
for services provided and to a former officer of the Company (the “Share Exchange”).As the result of the Share Exchange,
Snöbar Holdings. became Pacific Venture’s wholly owned operating subsidiary and the business of Snöbar Holdings
became the Company’s sole business operations, and Snöbar Holdings’ majority owned subsidiary, MAS Global Distributors,
Inc., a California corporation (“MGD”), became indirect subsidiary of Pacific Ventures.

 

Prior
to the Share Exchange, the Company operated as an insurance holding company and through its subsidiaries, marketed and underwrote
specialized property and casualty coverage in the general aviation insurance marketplace. However, in 1997, after selling several
of its divisions, the Company’s remaining insurance operations were placed into receivership and the Company ceased operating
its insurance business.

 

Since
the Share Exchange represented a change in control of the Company and a change in business operations, the business operations
changed to that of Snöbar Holdings and the discussions of business operations accompanying this filing are solely that of
Snöbar Holdings and its affiliates and subsidiaries comprising of Snöbar Trust, IPIC, and MGD.

 

Snöbar
Holdings was formed under the laws of the State of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary
of Snöbar Trust, a California trust (“Trust”), which was formed in June 1, 2013. The current trustee that holds
legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi, who is the Company’s President, Chief
Executive Officer, Interim Chief Financial Officer, Treasurer, Secretary and majority stockholder. The Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the
shares of International Production Impex Corporation, a California corporation (“IPIC”), which was formed on August
2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops and holds all of the rights to the liquor licenses
to sell such products and trade names “SnöBar”. As such, the Trust holds all ownership interest of IPIC and its
liquor licenses, permitting IPIC to sell its product to distributors, with all income, expense, gains and losses rolling up to
the Trust, of which Snöbar Holdings is the sole beneficiary. Snöbar Holdings also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of MAS Global
Distributors, Inc., a California corporation (“MGD”). MGD is in the business of selling and leasing freezers and providing
marketing services. As a result of the foregoing, Snöbar Holdings is the primary beneficiary of all assets, liabilities and
any income received from the business of the Trust and IPIC through the Trust and is the parent company of MGD.

 

The
Trust and IPIC are considered variable interest entities (“VIEs”) and Snöbar Holdings is identified as the primary
beneficiary of the Trust and IPIC. Under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 810, Snöbar Holdings performs ongoing reassessments of whether it is the primary beneficiary of a VIE.
As the assessment of Snöbar Holdings’ management is that Snöbar Holdings has the power to direct the activities
of a VIE that most significantly impact the VIE’s activities (it is responsible for establishing and operating IPIC), and
the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits
from the VIE that could potentially be significant to the VIE’s economic performance, it was therefore concluded by management
that Snöbar Holdings is the primary beneficiary of the Trust and IPIC. As such, the Trust and IPIC were consolidated in the
financial statements of Snöbar Holdings since the inception of the Trust, in the case of the Trust, and since the inception
of Snöbar Holdings, in the case of IPIC.

 

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc. (SDFO), a California Corporation. San Diego
Farmers Outlet was started in over thirty-five years ago to provide primarily restaurants customers in southern California’s
three largest counties with quality food, produce, and dairy and does business under the names of Farmers Outlet and San Diego
Farmers Outlet.

 

On
December 17, 2019, the Company completed an asset acquisition of Seaport Meat Company, (Seaport Meat), a California Corporation
with over thirty (30) years in business servicing restaurant and retail, and institutional customers in Southern California and
Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods, dairy and produce. Seaport
Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley, California. Seaport operates
out of a facility is HACCP-compliant and is a USDA Licensed processing facility with on-site daily inspections.
HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical
hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished
product. Having a USDA certified facility allows consumers to be confident that the Food Safety and Inspection Service (FSIS),
the public health agency in the USDA, ensured that meat and poultry products are safe, wholesome, and correctly labeled and packaged.

 

Our
principal executive office is located at 117 West 9th Street, Suite 316, Los Angeles, California. Our main telephone number is
(310) 392-5606.

 

Description
of Operations of Pacific Ventures Group, Inc.

 

General

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc. (SDFO), a California Corporation. San Diego
Farmers Outlet was started in over thirty-five years ago to provide primarily restaurants customers in southern California’s
three largest counties with quality food and produce and does business under the name of Farmers Outlet and San Diego Farmers
Outlet.

 

Farmers
Outlet provides a wide array of products to serve customers of all types. However, they do have a niche in providing fresh produce
and food products. Farmers Outlet provides specialty produce that the larger distributors do not carry on a daily basis. Unlike
some larger distributors who make their customers receive products on a day and time convenient to the distributor, Farmers Outlet
delivers daily and pays attention to what the customer wants. Farmers Outlet added products to meet the needs of Restaurants,
Hotels, Clubs and Bars, Resorts, Food Trucks and Caterers. Free delivery was added to demonstrate that Farmers Outlet had customers
interest first in mind.

 

Since
the acquisition, SDFO has increased sales of its wholesale business, and still plan on expanding our current delivery territory
from 25 miles to a 40-mile radius. SDFO has obtained 2 new delivery trucks to add to the current fleet of trucks. The Company
has begun marketing to new restaurants in the area, most notably Asian and Italian restaurants, and have let restaurants know
that SDFO can deliver the finest produce in market.

 

SDFO
installed new signage around the retail market, added additional landscaping to enhance the appearance of the market, and purchased
a new Point of Sale system to improve efficiency and ordering processes.

 

The
Company will continue to evaluate its projected expenditures relative to its available cash and to seek additional means of financing
in order to satisfy the Company’s working capital and other cash requirements.

 

 

Market
and Strategy

 

SDFO
covers a large market area servicing Los Angeles, Orange County and San Diego, which we have estimated to be a $2.5 billion addressable
market.

 

Unlike
some larger distributors who make their customers receive products on a day and time convenient to the distributor, SDFO delivers
daily and pays attention to what the customer wants. Farmers Outlet added products to meet the needs of restaurants, Hotels, Clubs
and bars, Resorts, food trucks and caterers. Free delivery was added to demonstrate that Farmers Outlet had customers interest
first in mind.

 

Farmers
Outlet provides a wide array of products to serve customers of all types. However, they do have a niche in providing fresh produce
and food products. Farmers Outlet provides specialty produce that the larger distributors do not carry on a daily basis.

 

Farmers
Outlet covers a large market area servicing Los Angeles, Orange County and San Diego, which we have estimated to be a $2.5 billion
addressable market. Farmers Outlet currently services the San Diego territory and has over 125 active customers, and no customer
represents more than five percent of Farmers Outlet gross revenues.

 

The
company services customers in high, middle and low-income communities with a specialty in providing food and fresh produce to
customers serving small to medium size restaurants of all nationalities, including Chinese, Korean, Mexican, American, Japanese
and Thai.

 

Pacific
Ventures intends to expand its business through the acquisition of other food manufacturing and distribution companies that serve
the Los Angeles, Orange County and San Diego area, thereby combining and expanding upon a combined customer base with an expanding
range of products and services.

 

Pacific
Ventures will continue to market its SnöBar product line, which include proprietary premium ice cream and sorbets that are
distilled spirit cocktails containing up to 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} quality liqueurs and liquors. Currently, there are four flavors available: Brandy
Alexander; Brandy Alexander with chocolate chips; Grasshopper; and Pink Squirrel. There are also numerous different liquor ice
cream flavors in development in classic ice cream drink styles such as Coffee Liqueur Ice Cream, Piña Colada Sorbet, Sherry
Ice Cream, and Strawberry Margarita Sorbet. Pacific Ventures is establishing a new production relationship with a wholesale frozen
food co-packing company that can meet our volume production and HAACP quality control requirements.

 

During
the 2019 fiscal year, the Company completed an asset acquisition of Seaport Meat Company, (Seaport Meat), a California Corporation
with over thirty (30) years in business servicing restaurant and retail, and institutional customers in Southern California and
Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods, dairy and produce. Seaport
Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley, California and owns the land
and the building. their facility is HACCP-compliant and is a USDA Licensed processing facility with on-site
daily inspections. HACCP is a management system in which food safety is addressed through the analysis and control of biological,
chemical, and physical hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption
of the finished product. Having a USDA certified facility allows consumers to be confident that the Food Safety and Inspection
Service (FSIS), the public health agency in the USDA, ensured that meat and poultry products are safe, wholesome, and correctly
labeled and packaged.

 

The
Company’s customers range from a wide variety of restaurants, including many well known in Southern CA, to institutions,
schools (UCSD, SDSU, etc.) and re-distributors such as US Foods and Sysco as well as to local distributors. They supply wholesale
food and restaurant supplies to San Diego, Los Angeles, Orange and Riverside and offer same day service. In addition, they have
clients in Arizona and Colorado that come to their facility to pick up their orders.

 

Due
to the impact that the COVID-19 pandemic had on our customers, particularly our larger customers have been forced to close. Some
of these accounts remain closed such as Petco Park the Major League ballpark “Padre Stadium” and the LA, San Diego,
and Del Mar County Fairs. Despite these customer closures, Seaport Meat Company has expanded its customer base and maintained
at or above the same revenue for the three months ended September 2020 as for the same quarter in 2019.

 

 

Because
Seaport Meat Company of America can efficiently add new product lines, it is expected that this will expand the distribution of
Pacific Ventures’ San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures’ revenue
growth. We believe the combination of a distribution and product company is unique in the San Diego area and will position the
company for rapid growth.

 

Seaport
Meat Company manufactures and wholesales custom processed beef, pork, chicken, lamb, veal and seafood. In addition, they are redistributors
of a wide variety of dry goods, frozen foods, disposables and janitorial products. Their sales, distribution and finance processes
are very efficient and can be expanded to add new product lines, including fresh produce and dairy.

 

Trademarks

 

IPIC
sells the SnöBar products under a number of trademarks, brand names and trade names that are important to its continued success.
The SnöBar brand is fully trademarked within the United States. IPIC’s business could be adversely affected by the
loss of any major brand or by material infringement of its intellectual property rights. The SnöBar products are also subject
to intellectual property risks because existing trademark laws offer only limited protection, and the laws of some countries in
which the SnöBar products are or may be developed, manufactured or sold may not fully protect the SnöBar products from
infringement by others.

 

Employees

 

As
of December 31, 2019, Pacific Ventures comprised five (5) employees who managed the affairs of the parent corporation and the
operations of its subsidiaries. On an as needed basis, the Company hires independent contractors to perform specific tasks related
to the Company’s business interests.

 

Property

 

The
Company does not own real property but owns equipment and has several real property operating leases.

 

The
Company is currently obligated under two operating leases for office spaces and associated building expenses. Both leases are
on a month-to-month basis at a monthly rate of $450 and $330, respectively.

 

SDFO
operations are located at 10407 Friars Rd, San Diego, CA 92110, where they occupy an aggregate of approximately 10,000 square
feet pursuant to leases. The 5-year leases are on an annual basis at a monthly rate of $6,000 per month.

 

Seaport
Group Enterprise LLC is located at 2533 Folex Way, Spring Valley CA 91978, where they occupy an aggregate of approximately 17,000
square feet pursuant to the lease. The 5-year leases are on an annual basis starting at a monthly rate of $14,750.00 per month.

 

San
Diego Farmers Outlet and Seaport Meat Company also have Operating Leases. The Company in May 1, 2018 assumed a lease agreement
for a facility site and entered into a lease agreement for office space for San Diego Farmers Outlet. The lease has a term of
five years expiring on April 30, 2023. The minimum annual lease payments for this space are $72,000 for years 2020, 2021 and 2022
and $24,000 for year 2023.

 

The
Company on December 1, 2019 entered into a lease agreement for a facility site for office space for Seaport Meat Company. The
lease has a term of five years expiring on November 30, 2024. For years 2020-2023, the minimum annual lease payments for this
space is $177,000 and for year 2024 is $162,250.

 

 

Legal
Proceedings

 

The
Company is not aware of any other pending legal proceedings or recently settled legal proceedings except what is listed below.

 

On
September 25, 2020 Pacific Ventures Group entered into a settlement agreement with BNA/TRA for a combined amount of $400,000 to
be in monthly cash installments to be paid as follows. On or before October 10, 2020, PACV will pay the sum of thirty thousand
dollars ($30,000); On or before November 1st, 2020, PACV will pay the sum of thirty thousand ($30,000); On or before December
1, 2020, and continuing through and including May 1st, 2023, PACV shall pay twenty-nine (29) consecutive monthly payments of eleven
thousand five hundred ($11,500); On or before June 1st, 2023, PACV will pay the sum of six thousand five hundred ($6,500).

 

On
or about May 13, 2020, SGE filed a lawsuit against PNC in Los Angeles Superior Court, based on PNC’s material breaches of
the Asset Purchase Agreement and the Consulting and Covenant Not to Compete Agreement (the “Consulting Agreement”),
as well material misrepresentations that PNC made to SGE. SGE’s complaint alleges causes of action against PNC for including
but not limited to fraud. We intend to vigorously defend against this lawsuit. There is no assurance, however, that we will be
successful in the defense. Moreover, we are unable to predict the outcome or reasonably estimate a range of possible losses at
this time. Management does not believe that an adverse ruling would have any material effect on the operations of the Company.

 

Transfer
Agent

 

Our
stock transfer agent is VStock Transfer LLC, 18 Lafayette Place, Woodmere, NY 11598. Their telephone number is (503) 227 2950,
their fax number is (212) 828-8436, and their website is: www.vstocktransfer.com.

 

 

DIRECTORS,
EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS

 

Officers
and Board of Directors

 

The
following individuals serve as executive officers and directors of Pacific Ventures as of September 30, 2020:

 

Name   Age   Positions
Shannon
Masjedi
  48   President,
Chief Executive Officer, Interim Chief Financial Officer, Secretary and Director
Marc
Shenkman
  60   Chairman
of the Board of Directors

 

 

Marc
Shenkman
. Mr. Shenkman has served as a director of Snöbar Holdings since January 2013. From 2000 to present, Mr.
Shenkman worked as the President of Priority Financial Network. Priority Financial Network is a mortgage brokerage company. Mr.
Shenkman graduated from the University of Vermont with a Bachelor of Arts in Economics and a Bachelor of Arts in Political Science.
Mr. Shenkman brings knowledge and experience in the banking and financial industries. Mr. Shenkman does not hold, and has not
previously held, any directorships in any other reporting companies.

 

Shannon
Masjedi
. Mrs. Masjedi has served as a director and Chairman of the Board of Directors, Chief Executive Officer, President,
Vice President, Treasurer, Chief Financial Officer, Secretary of Snöbar Holdings since January 2013. From June 1, 2010 to
present, Mrs. Masjedi worked as a director of operations for IPIC, where she implemented all current operating platforms including
development of SnöBar product line, packaging and research and development and oversaw all day-to-day operations of IPIC
as well as managing all the contractors of IPIC. Mrs. Masjedi was in charge of all compliance and regulatory issues for IPIC and
obtained all necessary licenses for IPIC to distribute and export products worldwide. Mrs. Masjedi attended Arizona State University
where she studied Aeronautical Technology. Mrs. Masjedi also attended flight school and obtained her pilots license. Mrs. Masjedi
has had extensive experience with creating the distribution platform for the SnöBar product line in the alcohol industry.
Her knowledge in the frozen ice cream category and alcohol category combined make her indispensable to Pacific Ventures. Mrs.
Masjedi has long standing relationships within these industries which allow Snöbar products to be distributed efficiently.

 

Committees
of our Board of Directors.

 

Our
securities are not quoted on an exchange that has requirements that a majority of our Board members be independent and we are
not currently otherwise subject to any law, rule or regulation requiring that all or any portion of our Board of Directors include
“independent” directors, nor are we required to establish or maintain an Audit Committee or other committee of our
Board of Directors.

 

We
have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee
performing a similar function. The functions of those committees are being undertaken by Board of Directors as a whole. Because
we have only three directors, none of whom are independent, we believe that the establishment of these committees would be more
form over substance.

 

We
do not have a policy regarding the consideration of any director candidates which may be recommended by our stockholders, including
the minimum qualifications for director candidates, nor has our Board of Directors established a process for identifying and evaluating
director nominees. We have not adopted a policy regarding the handling of any potential recommendation of director candidates
by our stockholders, including the procedures to be followed. Our Board has not considered or adopted any of these policies as
we have never received a recommendation from any stockholder for any candidate to serve on our Board of Directors. Given our relative
size and lack of directors and officers insurance coverage, we do not anticipate that any of our stockholders will make such a
recommendation in the near future. While there have been no nominations of additional directors proposed, in the event such a
proposal is made, all members of our Board will participate in the consideration of director nominees. In considering a director
nominee, it is likely that our Board will consider the professional and/or educational background of any nominee with a view towards
how this person might bring a different viewpoint or experience to our Board.

 

 

None
of our directors is an “audit committee financial expert” within the meaning of Item 401(e) of Regulation S-K. In
general, an “audit committee financial expert” is an individual member of the audit committee or Board of Directors
who:

 

  understands
generally U.S. GAAP and financial statements,
  is
able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,
  has
experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our
financial statements,
  understands
internal controls over financial reporting, and
  understands
audit committee functions.

 

Family
Relationships.

 

There
are no family relationships between or among any of our directors or executive officers or persons nominated or chosen by us to
become directors or executive officers.

 

Section
16(a) Compliance.

 

Section
16(a) of the Securities and Exchange Act of 1934 requires that directors and executive officers, and persons who own beneficially
more than ten percent (10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}) of the Registrant’s Common Stock, to file reports of ownership and changes of ownership with
the Securities and Exchange Commission. Copies of all filed reports are required to be furnished to the Registrant pursuant to
Section 16(a). Based solely on the reports received by the Registrant and on written representations from reporting persons, the
Registrant was informed that our CEO has filed reports as required under Section 16(a). Based solely on the reports received by
the Registrant and on written representations from reporting persons, the Registrant was informed that its officers and directors
have not filed all reports as required under Section 16(a).

 

NASDAQ
Rule 4200.

 

The
NASDAQ Rule 4200, which sets forth several tests to determine whether a director of a listed company is independent. Rule 4200
provides that a director would not be considered independent if the director or an immediate family member accepted any compensation
from the listed company in excess of $120,000 during any period of 12 consecutive months within the three years preceding the
determination of independence (excluding compensation for board or board committee service, compensation paid to an immediate
family member as a non-executive employee, benefits paid under a tax-qualified retirement plan and non-discretionary compensation).

 

Director
Independence.

 

In
determining whether or not our directors are considered independent, the Company used the definition of independence as defined
in NASDAQ Rule 4200. Our board of directors has determined that neither of the members of our board of directors qualifies as
an “independent” director under Nasdaq’s definition of independence.

 

Directors’
Term of Office.

 

Our
directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until
removed from office in accordance with our bylaws. All directors listed above will remain in office until the next annual meeting
of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to
the election of Directors.

 

 

Compensation
of Directors.

 

We
have not established standard compensation arrangements for our directors and the compensation payable to each individual for
their service on our Board is determined from time to time by our Board of Directors based upon the amount of time expended by
each of the directors on our behalf. During the 2017 fiscal year, none of our directors received any compensation specifically
for their services as a director.

 

Audit
Committee and Financial Expert, Compensation Committee, Nominations Committee.

 

We
do not have any of the above-mentioned standing committees because our corporate financial affairs and corporate governance are
simple in nature at this stage of development and each financial transaction is approved by our sole officer or director.

 

Potential
Conflicts of Interest.

 

Since
we do not have an audit or compensation committee comprised of independent Directors, the functions that would have been performed
by such committees are performed by our Board of Directors. Thus, there is a potential conflict of interest in that our Directors
have the authority to determine issues concerning management compensation, in essence their own, and audit issues that may affect
management decisions. We are not aware of any other conflicts of interest with any of our Executives or Directors.

 

Board’s
Role in Risk Oversight.

 

The
Board assesses on an ongoing basis the risks faced by the Company. These risks include financial, technological, competitive,
and operational risks. In addition, since the Company does not have an Audit Committee, the Board is also responsible for the
assessment and oversight of the Company’s financial risk exposures.

 

Involvement
in Certain Legal Proceedings.

 

There
are no legal proceedings that have occurred within the past ten years concerning our directors or officers which involved a criminal
conviction, a criminal proceeding, an administrative or civil proceeding limiting one’s participation in the securities
or banking industries, or a finding of securities or commodities law violations. Except for Mrs. Masjedi, who filed for Chapter
7 personal bankruptcy in 2010, which was discharged in August 2011, and Mr. Shenkman, who filed for Chapter 11 business bankruptcy
in 2010, which was dismissed in May 2012, none of our directors or officers have filed for or have been affiliated with any company
that has filed for bankruptcy within the last ten years.

 

 

EXECUTIVE
COMPENSATION

 

The
following table sets forth certain compensation information for: (i) Pacific Ventures’ principal executive officer serving
in such capacity during fiscal years ended December 31, 2019 and 2018; (ii) our two most highly compensated executive officers
other than our principal executive officer who were serving as executive officers at December 31, 2019 and 2018; and (iii) up
to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving
as an executive officer at December 31, 2019 and 2018. Compensation information is shown for the fiscal years ended December 31,
2019 and 2018:

 

Name
and Principal Position
  Year     Salary

($)
   

Bonus

($)

    Stock

Awards
($) *
    Option
Awards
($) *
    All
Other
Compensation
($)
    Total

($)
 
    2020                                                  
Shannon Masjedi, CEO   2019       60,000       -0-       -0-       -0-       -0-       60,000  
    2018       -0-       -0-       -0-       -0-       -0-       -0-  

 

Snöbar
Holdings Compensation

 

The
following table sets forth certain compensation information for: (i) Snöbar Holdings ‘ principal executive officer
serving in such capacity during the fiscal years ended December 31, 2019 and 2018; (ii) Snöbar Holdings ‘ two most
highly compensated executive officers other than its principal executive officer who were serving as executive officers at December
31, 2019 and 2018; and (iii) up to two additional individuals for whom disclosure would have been required but for the fact that
the individual was not serving as an executive officer at December 31, 2019 and 2018. Compensation information is shown for the
fiscal years ended December 31, 2019 and 2018:

 

Name
and Principal Position
  Year    

Salary

($)

   

Bonus

($)

   

Stock

Awards

($)
*

   

Option

Awards

($)
*

   

All
Other

Compensation
($)

    Total
($)
 
    2020     $ -0-       -0-       -0-       -0-       -0-       -0-  
Shannon Masjedi, CEO/President   2019     $ -0-       -0-       -0-       -0-             -0-     $ -0-  
    2018     $ -0-       -0-       -0-       -0-       -0-     $ -0-  

 

Employment
Agreements

 

We
have no written employment agreements or other formal compensation agreements with our officers or directors.

 

Compensation
of Directors

 

We
have not established standard compensation arrangements for our directors and the compensation payable to each individual for
their service on our Board is determined from time to time by our Board of Directors based upon the amount of time expended by
each of the directors on our behalf. During the 2019 fiscal year, none of our directors received any compensation specifically
for their services as a director.

 

Compensation
Committee Interlocks and Insider Participation

 

We
have no compensation committee of our board of directors, and during the year ended December 31, 2019, our directors and officers
participated in deliberations of our board of directors regarding officer compensation. During the year ended December 31, 2019,
no executive officer of our Company (i) served as a member of the compensation committee (or other committee performing equivalent
functions or, in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers
served on our board of directors, (ii) served as a director of another entity, one of whose executive officers served on our board
of directors, or (iii) served as a member of the compensation committee (or other committee performing equivalent functions or,
in the absence of any such committee, the entire board of directors) of another entity, one of whose executive officers served
as a director of our Company.

 

 

Narrative
Disclosure of Compensation Policies and Practices as They Relate to the Company’s Risk Management

 

We
believe that our compensation policies and practices for all employees and other individual service providers, including executive
officers, do not create risks that are reasonably likely to have a material adverse effect on us.

 

Securities
Authorized for Issuance Under Equity Compensation Plans

 

On
November 3, 2017, the Company’s Board of Directors adopted, by written consent, in accordance with the General Corporation
Law of the State of Delaware, the Company’s 2017 Equity Incentive Plan (the “2017 Plan”), which reserves a total
of 1,500,000 shares of the Company’s Common Stock for issuance under the 2017 Plan. Incentive awards authorized under the
2017 Plan include, but are not limited to, incentive stock options within the meaning of Section 422 of the Internal Revenue Code
of 1986, as amended (the “Code”). If an incentive award granted under the 2017 Plan expires, terminates, is unexercised
or is forfeited, or if any shares are surrendered to us in connection with the exercise of an incentive award, the shares subject
to such award and the surrendered shares will become available for further awards under the 2017 Plan.

 

Outstanding
Equity Awards

 

None
of our Directors or executive officers holds stock that has not vested or equity incentive plan awards.

 

Option
Grants

 

There
were no individual grants of stock options to purchase our Common Stock made to our executive officers.

 

Aggregated
Option Exercises and Fiscal Year-End Option Value

 

There
were no stock options exercised during the year ending December 31, 2019 and 2018 and the Nine Months Ended September 20, 2020
by the executive officers.

 

Long-Term
Incentive Plan (“LTIP”) Awards

 

There
were no awards made to a named executive officers in the last completed fiscal year under any LTIP.

 

Disclosure
of Commission Position on Indemnification of Securities Act Liabilities

 

Our
directors and officers are indemnified as provided by the Delaware corporate law and our Bylaws. We have agreed to indemnify each
of our directors and certain officers against certain liabilities, including liabilities under the Securities Act of 1933, as
amended. Insofar as indemnification for liabilities arising under the Securities Act of 1933, as amended may be permitted to our
directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised that
in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities
Act of 1933, as amended and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities
being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to
a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the
Act and will be governed by the final adjudication of such issue.

 

We
have been advised that in the opinion of the Securities and Exchange Commission indemnification for liabilities arising under
the Act is against public policy as expressed in the Act, and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities is asserted by one of our directors, officers, or controlling persons in connection with the securities
being registered, we will, unless in the opinion of our legal counsel the matter has been settled by controlling precedent, submit
the question of whether such indemnification is against public policy to a court of appropriate jurisdiction. We will then be
governed by the court’s decision.

 

 

Indemnification
of Directors and Officers

 

Section
145 of the Delaware Corporation Law provides in relevant parts as follows:

 

(1)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action
by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the
corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines,
and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation,
and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit, or proceeding by judgment, order, settlement, conviction, or on a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable
cause to believe that his conduct was unlawful.

 

(2)
A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened,
pending, or completed action or suit by or in the right of the corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise
against expenses (including attorneys’ fees) actually and reasonably incurred by him in connection with the defense or settlement
of such action or suit if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation and except that no indemnification shall be made in respect of any claim, issue, or matter as to which such
person shall have been adjudged to be liable for negligence or misconduct in the performance of his duty to the corporation unless
and only to the extent that the court in which such action or suit was brought shall determine on application that, despite the
adjudication of liability but in view of all circumstances of the case, such person is fairly and reasonably entitled to indemnity
for such expenses which such court shall deem proper.

 

(3)
To the extent that a director, officer, employee, or agent of a corporation has been successful on the merits or otherwise in
defense of any action, suit, or proceeding referred to in (1) or (2) of this subsection, or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses (including attorneys’ fees) actually and reasonably incurred by
him in connection therewith.

 

(4)
The indemnification provided by this section shall not be deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any bylaws, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such office, and shall continue as to a person who has
ceased to be a director, officer, employee, or agent and shall inure to the benefit of the heirs, executors, and administrators
of such a person.

 

The
foregoing discussion of indemnification merely summarizes certain aspects of indemnification provisions and is limited by reference
to the above discussed sections of the Delaware Corporation Law.

 

The
Company’s Certificate of Incorporation and Bylaws provide that the Company “may indemnify” to the full extent
of its power to do so, all directors, officers, employees, and/or agents. The Company indemnifies its officer and director to
the full extent permitted by the above-quoted statute.

 

Insofar
as indemnification by the Company for liabilities arising under the Securities Act may be permitted to officers and directors
of the Company pursuant to the foregoing provisions or otherwise, the Company is aware that in the opinion of the U.S. Securities
and Exchange Commission (the “SEC”), such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable.

 

 

SECURITIES
OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

 

The
following table lists the number of shares of Common Stock of our Company as of September 30, 2020 that are beneficially owned
by (i) each person or entity known to our Company to be the beneficial owner of more than 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the outstanding Common Stock;
(ii) each officer and director of our Company; and (iii) all officers and directors as a group. Information relating to beneficial
ownership of Common Stock by our principal stockholders and management is based upon information furnished by each person using
“beneficial ownership” concepts under the rules of the Securities and Exchange Commission. Under these rules, a person
is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or
direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security.
The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership
within sixty (60) days. Under the rules of the SEC, more than one person may be deemed to be a beneficial owner of the same securities,
and a person may be deemed to be a beneficial owner of securities as to which he/she may not have any pecuniary beneficial interest.
Except as noted below, each person has sole voting and investment power. As of September 30, 2020, the Company had 6,871,351 shares
of Common Stock outstanding.

 

COMMON
STOCK

 

   

Amount
and

Nature
of

Beneficial

Ownership
(1)

   

Percentage
of

Class
Common (2)

 
Executive
Officers and Directors
               
                 
Shannon Masjedi     183,000 (3)     2.7 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Marc Shenkman     1,502,828       21.82 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
All officers and directors a group (2
persons)
    1,502,828       24.5 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
                 
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Shareholders                
Azita Davidyan     3,000,000       43.65 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

(1) Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the
shares. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of our common stock held by them.
   
(2) Applicable
percentage ownership is based on 6,871,351 shares of our common stock outstanding.
   
(3) Includes
103,000 shares held by ACD Trust.

 

PREFERRED
STOCK

 

   

Amount
and

Nature
of

Beneficial
Ownership(1)

    Percentage
of
Class
 
    Series
E
    Series
F
   

Preferred(1)

 
Executive Officers
and Directors
                       
                         
Shannon Masjedi     6,000,000       10,000       100.0 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
Marc Shenkman             0       0.0 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
All officers and directors a group (2
persons)
    6,000,000 (2)     10,000 (3)     100.0 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}
                         
5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} Shareholders                        
None             0       0 {14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}

 

(1) Beneficial
ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the
shares. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have
sole voting and investment power with respect to all shares of our preferred stock held by them. Applicable percentage ownership
is based on 6,000,000 shares of our Series E Preferred Stock and 10,000 of our Series F Preferred Stock issued and outstanding.
   
(2)

Each
share of Series E Preferred Stock has a 10-to-1 voting preference where everyone share
of Series E Preferred Stock is equivalent in votes to ten shares of Common Stock, resulting
in the equivalent of 60,000,000 voting shares of common stock or 89.7{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of our issued
and outstanding shares on a fully diluted basis, excluding the Series F Preferred Shares.

 

(3) Represents
10,000 shares of our Series F Preferred Stock owned directly by Mrs. Masjedi. Each share of Series F Preferred Stock is convertible
into 0.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued and outstanding stock at the time of conversion and has voting rights equivalent to the conversion
rights for a total of 6,871.351 common stock voting share equivalents representing 90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the voting power on fully diluted
basis, excluding the Series E Preferred Shares.

 

 

TRANSACTIONS
WITH RELATED PERSONS, PROMOTERS AND CERTAIN CONTROL PERSONS

 

The
following includes a summary of transactions since January 1, 2017 to which we have been a party, in which the amount involved
in the transaction exceeded $120,000 , and in which any of our directors, executive officers or, to our knowledge, beneficial
owners of more than 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of our capital stock or any member of the immediate family of any of the foregoing persons had or will
have a direct or indirect material interest, other than equity and other compensation arrangement, which are described above under
“Executive Compensation.”

 

We
believe that all purchases from or transactions with affiliated parties were on terms and at prices substantially similar to those
available from unaffiliated third parties.

 

The
Snöbar Trust

 

The
Snobar Trust (the “Trust”) a California Trust formed on June 1, 2013. Snöbar Holdings is the trustor and sole
beneficiary of Trust. The current trustee that holds legal title to the Trust is Clark Rutledge, who is the father of Shannon
Masjedi, who is the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, Treasurer, Secretary
and majority stockholder. So long as the trustor is in existence, on demand of the trustor or the beneficiary, the trustee shall
distribute to the trustor any or all of the property contained in the beneficiary. Subject to the terms of the Trust, the trustor
may remove any acting trustee, or designate one or more successor trustees. Any trustee may resign at any time. The Trust shall
terminate upon the earlier of (i) withdrawal or distribution of all assets from the Trust or the date upon which the trustor ceases
to be in existence. As of the date of this annual report, the Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of IPIC and its liquor licenses, permitting
IPIC to sell its product to distributors, with all income, expense, gains and losses rolling up to the Trust. Snöbar Holdings
also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of MGD, which is in the business of selling and leasing freezers and providing marketing services.
As a result of the foregoing, Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received
from the business of the Trust and IPIC through the Trust and is the parent company of MGD. The Trust and IPIC are considered
variable interest entities.

 

There
have been no other related party transactions, or any other transactions or relationships required to be disclosed pursuant to
Item 404 of Regulation S-K.

 

With
regard to any future related party transaction, we plan to fully disclose any and all related party transactions, including, but
not limited to, the following:

 

  disclose
such transactions in prospectuses where required;
  disclose
in any and all filings with the Securities and Exchange Commission, where required;
  obtain
disinterested directors’ consent; and
  obtain
shareholder consent where required.

 

Indemnification
Agreements

 

Our
Bylaws provide that none of our officers or directors shall be personally liable for any obligations of our Company or for any
duties or obligations arising out of any acts or conduct of said officer or director performed for or on behalf of our Company,
including without limitation, acts of negligence or contributory negligence. In addition, our Bylaws provide that we shall indemnify
and hold harmless each person and their heirs and administrators who shall serve at any time hereafter as a director or officer
of our Company from and against any and all claims, judgments and liabilities to which such persons shall become subject by reason
of their having heretofore or hereafter been a director or officer of our Company, or by reason of any action alleged to have
heretofore or hereafter taken or omitted to have been taken by him or her as such director or officer, and that we shall reimburse
each such person for all legal and other expenses reasonably incurred by him or her in connection with any such claim, judgment
or liability, including our power to defend such persons from all suits or claims as provided for under the provisions of the
Delaware General Corporation Law; provided, however, that no such persons shall be indemnified against, or be reimbursed for,
any expense incurred in connection with any claim or liability arising out of his (or her) own willful misconduct. In addition,
in the future, we may enter into indemnification agreements with our directors and officers and some of our executives may have
certain indemnification rights arising under their employment agreements with us. We believe that these bylaw provisions and indemnification
agreements are necessary to attract and retain qualified persons as directors and officers.

 

The
limitation of liability and indemnification provisions in our Bylaws may discourage stockholders from bringing a lawsuit against
our directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors
and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may
be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification
provisions.

 

Policies
and Procedures for Transactions with Related Persons

 

We
have not yet adopted a written related-person transactions policy that sets forth our policies and procedures regarding the identification,
review, consideration and oversight of “related-person transactions.”

 

 

DESCRIPTION
OF OUR CAPITAL STOCK

 

General

 

We
are authorized to issue an aggregate number of 910,000,000 shares of capital stock, $0.001 par value per share, consisting of
10,000,000 shares of Preferred Stock and 900,000,000 shares of Common Stock.

 

Common
Stock

 

We
are authorized to issue 900,000,000 shares of Common Stock, $0.001 par value per share. As of September 30, 2020, we had 6,871,351
shares of the Company’s common stock issued and outstanding, $0.001 par value (which reflects the 1 for 500 reverse split
effected by the Company on April 13, 2020). Prior to the reverse stock split, on December 31, 2019, we had outstanding 570,859,333
shares of common stock, and as of May 22, 2020, we had 1,142,781 shares of common stock outstanding.

 

Our
Common Stock is subject to quotation on the OTC Pink Market under the trading symbol: “PACV.”

 

Each
share of Common Stock has one (1) vote per share for all purposes. Our Common Stock does not provide a preemptive, subscription
or conversion rights and there are no redemption or sinking fund provisions or rights. Our Common Stockholders are not entitled
to cumulative voting for election of Board of Directors.

 

Dividends

 

We
have not paid any cash dividends to our shareholders. The declaration of any future cash dividends is at the discretion of our
board of directors and depends upon our earnings, if any, our capital requirements and financial position, our general economic
conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future,
but rather to reinvest earnings, if any, in our business operations.

 

Transfer
Agent and Registrar

 

The
transfer agent of our Common Stock is VStock Transfer LLC, 18 Lafayette Place, Woodmere, NY 11598, Phone: (212) 828-8436.

 

Preferred
Stock

 

Our
board of directors is authorized, subject to limitations prescribed by Delaware law, to issue preferred stock in one or more series,
to establish from time to time the number of shares to be included in each series, and to fix the designation, powers, preferences
and rights of the shares of each series and any of its qualifications, limitations or restrictions, in each case without further
vote or action by our stockholders. Our board of directors can also increase (but not above the total number of authorized shares
of the class) or decrease (but not below the number of shares then outstanding) the number of shares of any series of preferred
stock, without any further vote or action by our stockholders. Our board of directors may authorize the issuance of preferred
stock with voting or conversion rights that could adversely affect the voting power or other rights of the holders of our common
stock or other series of preferred stock. The issuance of preferred stock, while providing flexibility in connection with possible
financings, acquisitions and other corporate purposes, could, among other things, have the effect of delaying, deferring or preventing
a change in our control of our company and might adversely affect the market price of our common stock and the voting and other
rights of the holders of our common stock.

 

Series
E Convertible Preferred Stock

 

In
October 2016, the Company designated 1,000,000 shares of preferred stock as Series E Preferred Stock (the “Series E Preferred
Stock”), subsequently amended to increase the number of authorized Series E Preferred to 6,000,000 shares. Under the rights,
preferences and privileges of the Series E Preferred Stock, for every share of Series E Preferred Stock held, the holder thereof
has the voting rights equal to 10 shares of common stock. The Series E Preferred Stock is not convertible into any class of stock
of the Company and has no preferences to dividends or liquidation rights. As of December 31, 2019, there were 6,000,000 shares
of Series E Preferred Stock issued and outstanding.

 

 

Shannon
Masjedi, our Chief Executive Officer and principal common stockholder, is the record and beneficial owner of all of the issued
and outstanding shares of Series E Preferred Stock having ten (10) votes per share on all matters subject to the vote of the Company’s
holders of Common Stock.

 

Series
F Convertible Preferred Stock

 

Each
share of Series F Preferred Stock is convertible into 0.1{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued and outstanding stock at the time of conversion and has
voting rights equivalent to the conversion rights for a total of 6,871.351 common stock voting share equivalents representing
90{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the voting power on fully diluted basis, excluding the Series E Preferred Shares.

 

Anti-Takeover
Provisions

 

The
provisions of Delaware law, our amended and restated certificate of incorporation and our amended and restated bylaws may have
the effect of delaying, deferring or discouraging another person from acquiring control of our company. These provisions, which
are summarized below, may have the effect of discouraging takeover bids. They are also designed, in part, to encourage persons
seeking to acquire control of us to negotiate first with our board of directors. We believe that the benefits of increased protection
of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantages of discouraging a
proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

 

Delaware
Law

 

We
are governed by the provisions of Section 203 of the Delaware General Corporation Law, or DGCL. In general, Section 203 prohibits
a public Delaware corporation from engaging in a “business combination” with an “interested stockholder”
for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner. A “business combination” includes mergers, asset sales or
other transactions resulting in a financial benefit to the stockholder. An “interested stockholder” is a person who,
together with affiliates and associates, owns, or within three years of the date on which it is sought to be determined whether
such person is an “interested stockholder,” did own, 15{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or more of the corporation’s outstanding voting stock.
These provisions may have the effect of delaying, deferring or preventing a change in our control.

 

 

MATERIAL
U.S. FEDERAL INCOME TAX CONSIDERATIONS

 

The
following discussion summarizes the material U.S. federal income tax considerations that may be applicable to “U.S. holders”
and “non-U.S. holders” (each as defined below) with respect to the purchase, ownership and disposition of the Common
Stock offered by this prospectus. This discussion only applies to purchasers who purchase and hold the Common Stock as a capital
asset within the meaning of Section 1221 of the Internal Revenue Code of 1986, as amended (the “Code”) (generally
property held for investment). This discussion does not describe all of the tax consequences that may be relevant to each purchaser
or holder of the Common Stock in light of its particular circumstances.

 

This
discussion is based upon provisions of the Code, Treasury regulations, rulings and judicial decisions as of the date hereof. These
authorities may change, perhaps retroactively, which could result in U.S. federal income tax consequences different from those
summarized below. This discussion does not address all aspects of U.S. federal income taxation (such as the alternative minimum
tax) and does not describe any foreign, state, local or other tax considerations that may be relevant to a purchaser or holder
of the Common Stock in light of their particular circumstances. In addition, this discussion does not describe the U.S. federal
income tax consequences applicable to a purchaser or a holder of the Common Stock who is subject to special treatment under U.S.
federal income tax laws (including, a corporation that accumulates earnings to avoid U.S. federal income tax, a pass-through entity
or an investor in a pass-through entity, a tax-exempt entity, pension or other employee benefit plans, financial institutions
or broker-dealers, persons holding the Common Stock as part of a hedging or conversion transaction or straddle, a person subject
to the alternative minimum tax, an insurance company, former U.S. citizens or former long-term U.S. residents). We cannot assure
you that a change in law will not significantly alter the tax considerations that we describe in this discussion.

 

If
a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds the Common Stock, the
U.S. federal income tax treatment of a partner of that partnership generally will depend upon the status of the partner and the
activities of the partnership. If you are a partnership or a partner of a partnership holding the Common Stock, you should consult
your tax advisors as to the particular U.S. federal income tax consequences of holding and disposing of the Common Stock.

 

You
should consult your own tax advisor concerning the U.S. federal income tax consequences to you of acquiring, owning, and disposing
of these securities, as well as any tax consequences arising under the laws of any state, local, foreign, or other tax jurisdiction
and the possible effects of changes in U.S. federal or other tax laws.

 

U.S.
Holders

 

Subject
to the qualifications set forth above, the following discussion summarizes the material U.S. federal income tax considerations
that may relate to the purchase, ownership and disposition of the Common Stock by “U.S. holders.” You are a “U.S.
holder” if you are a beneficial owner of Common Stock and you are for U.S. federal income tax purposes;

 


an individual citizen or resident of the United States;

 

-a
corporation (or other entity treated as a corporation for U.S. federal income tax purposes) created or organized in or under the
laws of the United States, any state thereof or the District of Columbia;

 


an estate the income of which is subject to U.S. federal income taxation regardless of its source; or

 


a trust if it (i) is subject to the primary supervision of a court within the United States and one or more United States persons
have the authority to control all substantial decisions of the trust or (ii) has a valid election in effect under applicable United
States Treasury regulations to be treated as a United States person.

 

A
redemption payment will be treated as “not essentially equivalent to a dividend” if it results in a “meaningful
reduction” in a U.S. holder’s aggregate stock interest in the company, which will depend on the U.S. holder’s
particular facts and circumstances at such time. If the redemption payment is treated as a dividend, the rules discussed above
in “Material U.S. Federal Income Tax Considerations — U.S. Holders: Distributions in General” apply.

 

 

Satisfaction
of the “complete redemption” and “substantially disproportionate” exceptions is dependent upon compliance
with the objective tests set forth in Section 302(b)(3) and Section 302(b)(2) of the Code, respectively. A redemption will result
in a “complete redemption” if either all of the shares of our stock actually and constructively owned by a U.S. holder
are exchanged in the redemption or all of the shares of our stock actually owned by the U.S. holder are exchanged in the redemption
and the U.S. holder is eligible to waive, and the U.S. holder effectively waives, the attribution of shares of our stock constructively
owned by the U.S. holder in accordance with the procedures described in Section 302(c)(2) of Code. A redemption does not qualify
for the “substantially disproportionate” exception if the stock redeemed is only non-voting stock, and for this purpose,
stock which does not have voting rights until the occurrence of an event is not voting stock until the occurrence of the specified
event. Accordingly, any redemption of the Common Stock generally will not qualify for this exception because the voting rights
are limited as provided in the “Description of Common Stock-Voting Rights.” For purposes of the “redemption
from non-corporate shareholders in a partial liquidation” test, a distribution will be treated as in partial liquidation
of a corporation if the distribution is not essentially equivalent to a dividend (determined at the corporate level rather than
the shareholder level) and the distribution is pursuant to a plan and occurs within the taxable year in which the plan was adopted
or within the succeeding taxable year. For these purposes, a distribution is generally not essentially equivalent to a dividend
if the distribution results in a corporate contraction. The determination of what constitutes a corporate contraction is factual
in nature, and has been interpreted under case law to include the termination of a business or line of business. Each U.S. holder
of the Common Stock should consult its own tax advisors to determine whether a payment made in redemption of the Common Stock
will be treated as a dividend or a payment in exchange for the Common Stock. If the redemption payment is treated as a dividend,
the rules discussed above in “Material U.S. Federal Income Tax Considerations — U.S. Holders: Distributions in General”
apply. Under proposed Treasury regulations, if any amount received by a U.S. holder in redemption of Common Stock is treated as
a distribution with respect to such holder’s Common Stock, but not as a dividend, such amount will be allocated to all shares
of the Common Stock held by such holder immediately before the redemption on a pro rata basis. The amount applied to each share
will reduce such holder’s adjusted tax basis in that share and any excess after the basis is reduced to zero will result
in taxable gain. If such holder has different bases in shares of the Common Stock, then the amount allocated could reduce a portion
of the basis in certain shares while reducing all of the basis, and giving rise to taxable gain, in other shares. Thus, such holder
could have gain even if such holder’s aggregate adjusted tax basis in all shares of the Common Stock held exceeds the aggregate
amount of such distribution.

 

The
proposed Treasury regulations permit the transfer of basis in the redeemed shares of the Common Stock to the holder’s remaining,
unredeemed Common stock (if any), but not to any other class of stock held, directly or indirectly, by the holder. Any unrecovered
basis in the Common Stock would be treated as a deferred loss to be recognized when certain conditions are satisfied. The proposed
Treasury regulations would be effective for transactions that occur after the date the regulations are published as final Treasury
regulations. There can, however, be no assurance as to whether, when and in what particular form such proposed Treasury regulations
are ultimately finalized.

 

Information
Reporting and Backup Withholding.
Information reporting and backup withholding may apply with respect to payments of dividends
on the Common Stock and to certain payments of proceeds on the sale or other disposition of the Common Stock. Certain non-corporate
U.S. holders may be subject to U.S. backup withholding (currently at a rate of 28{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}) on payments of dividends on the Common Stock
and certain payments of proceeds on the sale or other disposition of the Common Stock unless the beneficial owner thereof furnishes
the payor or its agent with a taxpayer identification number, certified under penalties of perjury, and certain other information,
or otherwise establishes, in the manner prescribed by law, an exemption from backup withholding. U.S. backup withholding tax is
not an additional tax. Any amounts withheld under the backup withholding rules may be allowed as a refund or a credit against
a U.S. holder’s U.S. federal income tax liability, which may entitle the U.S. holder to a refund, provided the U.S. holder
timely furnishes the required information to the Internal Revenue Service.

 

 

Non-U.S.
Holders

 

Subject
to the qualifications set forth above under the caption “Material U.S. Federal Income Tax Considerations,” the following
discussion summarizes the material U.S. federal income tax consequences of the purchase, ownership and disposition of the Common
Stock by certain “Non-U.S. holders.” You are a “Non-U.S. holder” if you are a beneficial owner of the
Common Stock and you are not a “U.S. holder.”

 

Distributions
on the Common Stock.
If distributions are made with respect to the Common Stock, such distributions will be treated as
dividends to the extent of our current and accumulated earnings and profits as determined under the Code and may be subject to
withholding as discussed below. Any portion of a distribution that exceeds our current and accumulated earnings and profits will
first be applied to reduce the Non-U.S. holder’s basis in the Common Stock and, to the extent such portion exceeds the Non-U.S.
holder’s basis, the excess will be treated as gain from the disposition of the Common Stock, the tax treatment of which
is discussed below under “Material U.S. Federal Income Tax Considerations — Non-U.S. Holders: Disposition of Common
Stock, Including Redemptions.” In addition, if we are a U.S. real property holding corporation, i.e. a “USRPHC,”
and any distribution exceeds our current and accumulated earnings and profits, we will need to choose to satisfy our withholding
requirements either by treating the entire distribution as a dividend, subject to the withholding rules in the following paragraph
(and withhold at a minimum rate of 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or such lower rate as may be specified by an applicable income tax treaty for distributions
from a USRPHC), or by treating only the amount of the distribution equal to our reasonable estimate of our current and accumulated
earnings and profits as a dividend, subject to the withholding rules in the following paragraph, with the excess portion of the
distribution subject to withholding at a rate of 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} or such lower rate as may be specified by an applicable income tax treaty
as if such excess were the result of a sale of shares in a USRPHC (discussed below under “Material U.S. Federal Income Tax
Considerations — Non-U.S. Holders: Disposition of Common Stock, Including Redemptions”), with a credit generally allowed
against the Non-U.S. holder’s U.S. federal income tax liability in an amount equal to the amount withheld from such excess.

 

Foreign
Account Tax Compliance Act.
Sections 1471 through 1474 of the Code (provisions which are commonly referred to as “FATCA”),
generally impose a 30{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} withholding tax on dividends on Common Stock paid on or after July 1, 2014 and the gross proceeds of a
sale or other disposition of Common Stock paid on or after January 1, 2017 to: (i) a foreign financial institution (as that term
is defined in Section 1471(d)(4) of the Code) unless that foreign financial institution enters into an agreement with the U.S.
Treasury Department to collect and disclose information regarding U.S. account holders of that foreign financial institution (including
certain account holders that are foreign entities that have U.S. owners) and satisfies other requirements; and (ii) specified
other foreign entities unless such an entity certifies that it does not have any substantial U.S. owners or provides the name,
address and taxpayer identification number of each substantial U.S. owner and such entity satisfies other specified requirements.
Non-U.S. holders should consult their own tax advisors regarding the application of FATCA to them and whether it may be relevant
to their purchase, ownership and disposition of Common Stock.

 

 

PLAN
OF DISTRIBUTION

 

This
is a self-underwritten (“best-efforts”) offering. This prospectus is part of a registration statement that permits
our officers and directors to sell the shares being offered by the Company directly to the public, with no commission or other
remuneration payable to them for any shares they may sell. Presently, we expect that our officers and directors will personally
contact existing shareholders, friends, family members and business acquaintances and inform them about the offering. In addition,
we may market the offering to institutional investors through our officers and directors. We may also offer our shares of common
stock through brokers, dealers or agents, although we have no current plans or arrangements to do so. The company has been contacted
by multiple financial institutions, as well as fielded interest from existing shareholders that give the Company assurance as
to the marketability of its shares to these identified parties. This offering will terminate on the date which is 180 days from
the effective date of this prospectus, although we may close the offering on any date prior if the offering is fully subscribed
or upon the vote of our board of directors.

 

In
offering the securities on our behalf, our officers and directors will rely on the safe harbor from broker dealer registration
set forth in Rule 3a4-1 under the Exchange Act. The officers and directors will not register as broker-dealers pursuant to Section
15 of the Exchange Act, in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an
issuer may participate in the offering of the Issuer’s securities and not be deemed to be a broker-dealer. In that regard,
we confirm that:

 

a.None
of our officers or directors are subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange
Act;

 

b.None
of our officers or directors will be compensated in connection with their participation by the payment of commissions or other
remuneration based either directly or indirectly on transactions in the common stock;

 

c.None
of our officers or directors is or will be, at the time of his participation in the offering, an associated person of a broker-dealer;
and

 

D.
Our officers and directors meet the conditions of paragraph (a)(4)(ii) of Rule 3a4-1 of the Exchange Act, in that each (A) primarily
perform substantial duties for or on our behalf, other than in connection with transactions in securities, and (B) is not a broker
or dealer, or has been an associated person of a broker or dealer, within the preceding 12 months, and (C) has not participated
in selling and offering securities for any issuer more than once every 12 months other than in reliance on Paragraphs (a)(4)(i)
or (a)(4)(iii) of Rule 3a4-1.

 

None
of our officers or directors, control persons or affiliates intend to purchase any shares in this offering.

 

 

LEGAL
MATTERS

 

No
counsel named in this Prospectus as having prepared or certified any part of this Prospectus or having given an opinion upon the
validity of the securities being registered or upon other legal matters in connection with the registration or Offering of the
Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the Offering, a substantial interest,
direct or indirect, in the Registrant. Nor was any such person connected with the registrant as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.

 

The
validity of the Common Stock being offered hereby, and other certain legal matters will be passed upon for us by JDT Legal,
PLLC

 

EXPERTS

 

No
expert named in this Prospectus as having prepared or certified any part of this Prospectus or having given an opinion upon the
validity of the securities being registered or upon other legal matters in connection with the registration or Offering of the
Common Stock was employed on a contingency basis, or had, or is to receive, in connection with the Offering, a substantial interest,
direct or indirect, in the registrant. Nor was any such person connected with the registrant as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.

 

The
audited financial statements for the years ended December 31, 2019 and 2018 included in this Prospectus and the Registration Statement
have been audited by Albert Garcia, CPA of DylanFloyd Accounting & Consulting, an independent registered public accounting
firm, to the extent and for the periods set forth in their report appearing elsewhere herein and in the Registration Statement,
and are included in reliance upon such report given upon the authority of said firm as experts in auditing and accounting.

 

 

WHERE
YOU CAN FIND MORE INFORMATION

 

We
file annual reports, quarterly and current reports, proxy statements and other information with the SEC. The public may read and
copy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Room 1580, Washington,
DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC0330. The SEC
maintains an Internet website that contains reports, proxy and information statements, and other information regarding issuers
that file electronically with the SEC at www.sec.gov

 

All
of our reports filed with the SEC (including Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form
8-K and proxy statements) are accessible through the Investor Relations section of our website, free of charge, as soon as reasonably
practicable after electronic filing. The reference to our website in this prospectus is an inactive textual reference only and
is not a hyperlink. The contents of our website are not part of this prospectus, and you should not consider the contents of our
website in making an investment decision with respect to our securities.

 

We
have filed with the SEC a registration statement under the Securities Act of 1933, as amended (the “Securities Act”),
that registers the distribution of the securities offered hereby. The registration statement, including the attached exhibits
and schedules, contains additional relevant information about us and the securities being offered. This prospectus, which forms
part of the registration statement, omits certain of the information contained in the registration statement in accordance with
the rules and regulations of the SEC. Reference is hereby made to the registration statement and related exhibits for further
information with respect to us and the securities offered hereby. Statements contained in this prospectus concerning the provisions
of any document are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an
exhibit to the registration statement or otherwise filed with the SEC. Each such statement is qualified in its entirety by such
reference.

 

DISCLOSURE
OF COMMISSION POSITION ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES

 

Our
directors and officers are indemnified as provided by Section 145 of the General Corporation Law of Delaware and our amended and
restated bylaws. We have agreed to indemnify each of our directors and certain officers against certain liabilities, including
liabilities under the Securities Act. Insofar as indemnification for liabilities arising under the Securities Act may be permitted
to our directors, officers and controlling persons pursuant to the provisions described above, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other
than our payment of expenses incurred or paid by our director, officer or controlling person in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being
registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.

 

 

Pacific
Ventures Group, Inc.

 

_____________
Shares of Common Stock

 

$________
Per Share

 

PROSPECTUS

 

_________________________________

 

___________,
2021

 

 

 

PART
II

 

INFORMATION
NOT REQUIRED IN PROSPECTUS

 

Item
13. Other Expenses of Issuance and Distribution.

 

The
following table shows the costs and expenses, payable in connection with the issuance and distribution of the Common Stock being
registered.

 

Securities and Exchange
Commission registration fee
  $ 1,298.00  
         
Transfer agent and registrar fees and
expenses
  $ 5,000.00  
Accounting fees and expenses   $ 26,000.00  
Legal fees and expense   $ 25,000.00  
Miscellaneous   $ 12,702.00  
Total   $ 70.000.00  

 

All
amounts are estimates other than the Commission’s registration fee. We are paying all expenses of the Offering listed above.

 

Item
14. Indemnification of Directors and Officers.

 

Our
Bylaws provide that none of our officers or directors shall be personally liable for any obligations of our Company or for any
duties or obligations arising out of any acts or conduct of said officer or director performed for or on behalf of our Company,
including without limitation, acts of negligence or contributory negligence. In addition, our Bylaws provide that we shall indemnify
and hold harmless each person and their heirs and administrators who shall serve at any time hereafter as a director or officer
of our Company from and against any and all claims, judgments and liabilities to which such persons shall become subject by reason
of their having heretofore or hereafter been a director or officer of our Company, or by reason of any action alleged to have
heretofore or hereafter taken or omitted to have been taken by him or her as such director or officer, and that we shall reimburse
each such person for all legal and other expenses reasonably incurred by him or her in connection with any such claim, judgment
or liability, including our power to defend such persons from all suits or claims as provided for under the provisions of the
Delaware General Corporation Law; provided, however, that no such persons shall be indemnified against, or be reimbursed for,
any expense incurred in connection with any claim or liability arising out of his (or her) own willful misconduct. In addition,
in the future, we may enter into indemnification agreements with our directors and officers and some of our executives may have
certain indemnification rights arising under their employment agreements with us. We believe that these bylaw provisions and indemnification
agreements are necessary to attract and retain qualified persons as directors and officers.

 

The
limitation of liability and indemnification provisions in our Bylaws may discourage stockholders from bringing a lawsuit against
our directors for breach of their fiduciary duties. They may also reduce the likelihood of derivative litigation against our directors
and officers, even though an action, if successful, might benefit us and our stockholders. A stockholder’s investment may
be harmed to the extent we pay the costs of settlement and damage awards against directors and officers pursuant to these indemnification
provisions.

 

The
Registrant has entered into indemnification agreements with its directors and executive officers, in addition to the indemnification
provided for in its amended and restated certificate of incorporation and bylaws, and intends to enter into indemnification agreements
with any new directors and executive officers in the future.

 

The
Registrant has purchased and intends to maintain insurance on behalf of each and any person who is or was a director or officer
of the Registrant against any loss arising from any claim asserted against him or her and incurred by him or her in any such capacity,
subject to certain exclusions.

 

 

See
also the undertakings set out in response to Item 17 herein.

 

Item
15. Recent Sales of Unregistered Securities.

 

During
the last two fiscal years, the Registrant issued and/or sold the following restricted securities.

 

Unregistered
Securities Issued in 2020

 

During
the nine (9) months ended September 30, 2020, the Company issued 5,728,570 shares of its common stock.

 

Unregistered
Securities Issued in 2019

 

During
the year ended December 31, 2019, the Company issued 333,521,888 shares of its common stock to various investors for cash and
other considerations.

 

During
the year ended December 31, 2019, the Company issued 332,888,888 for repayment of debt (i.e. note conversion) and issued 633,000
shares of its common stock.

 

Unregistered
Securities Issued in 2018

 

During
the year ended December 31, 2019, the Company issued a total of 15,511,164 shares of its Common Stock in consideration of services
valued at $7,500 and repayment of debt in the amount of $119,621.

 

The
Company believes that the offers, sales and issuances of the securities described above were exempt from registration under the
Securities Act of 1933, as amended (the “Securities Act”), in reliance on Section 4(a)(2) of the Securities Act and/or
Rule 506 promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in
each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any
distribution thereof. Each of the recipients of securities in these transactions was an accredited investor within the meaning
of Rule 501 of Regulation D under the Securities Act and had adequate access, through employment, business or other relationships,
to information about us. The sales of these securities were made without any general solicitation or advertising.

 

 

Item
16. Exhibits and Financial Statement Schedules.

 

Exhibit
Number
  Description
2.1   Share Exchange Agreement, dated August 14, 2015, by and among the Company, Snöbar Holdings, Inc., and certain shareholders of Snöbar Holdings, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, filed with the SEC on August 14, 2015).
2.2   Amendment No. 1 to Share Exchange Agreement, dated August 21, 2015, by and among the Company, Snöbar Holdings, Inc., and certain shareholders of Snöbar Holdings, Inc. (Incorporated by reference to Exhibit 2.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2015).
2.3††   Asset Purchase Agreement, dated as of January 31, 2018, by and among the Company, Royalty Foods, LLC and San Diego Farmers Outlet, Inc. (Incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on February 5, 2018).
3.1   Fourth Amended and Restated Certificate of Incorporation of the Company. (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on November 16, 2017).
3.2   By-laws of the Company (Incorporated by reference to Exhibit 3.2 to the Company’s Registration Statement on Form S-1/A, as filed with the SEC on June 14, 2017).
3.3   Amended and Restated Series F Preferred Stock
5.1*   Opinion of JDT Legal, PLLC, filed herewith
10.1   Co-Packaging Letter Agreement dated April 24, 2013, by and between International Production Impex Corporation and Brothers International Desserts, Inc. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.2   Distribution Agreement, dated March 16, 2015, by and between International Production Impex Corporation and Spectrum Entertainment & Events LLC (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.3   Distribution Agreement, dated June 5, 2015, by and between International Production Impex Corporation and Eddie Holman (Incorporated by reference to Exhibit 10.3 tothe Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.4   Exclusive Distribution Agreement, dated February 3, 2015, by and between International Production Impex Corporation and Yes Consolidated, LLC (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.5   Distribution Agreement, dated May 1, 2015, by and between International Production Impex Corporation and Dejako Trading Company (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.6   Form of Lock-Up/Leak-Out Agreement between the Company and certain Snöbar Shareholders party thereto (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.7   Anti-Dilution Agreement, dated September 25, 2015, by and among the Company and Brett Bertolami and Danzig Ltd. (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.8   Piggyback Registration Rights Agreement, dated September 25, 2015, by and among the Company, Snöbar Shareholders and other persons thereto (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report Form 8-K, as filed with the SEC on September 25, 2015).
10.9   Trust Agreement, dated June 1, 2013, by and between Snobar Holding, Inc. and Azizollah Masjedi (Incorporated by reference to Exhibit 10.9 to the Company’s Annual Report on Form 10-K/A, as filed with the SEC on October 16, 2017).
10.10   Form of Promissory Note by and between the Company and certain related parties (Incorporated by reference to Exhibit 10.10 to the Company’s Annual Report on Form 10-K/A, as filed with the SEC on October 16, 2017).
10.11†   Pacific Ventures Group, Inc. 2017 Equity Incentive Plan. (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, as filed with the SEC on November 8, 2017).

 

 

10.12†   Form of Pacific Ventures Group, Inc. Incentive Stock Option Agreement (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on November 8, 2017).
10.13†   Form of Pacific Ventures Group, Inc. Nonqualified Stock Option Agreement (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on November 8, 2017).
16.1   Letter from Anderson Bradshaw PLLC, dated April 20, 2016, addressed to the Securities and Exchange Commission (incorporated by reference from the Company’s Current Report on Form 8-K, as filed on April 20, 2016, Exhibit 16).
21.1   List of subsidiaries of the Company, filed as Exhibit 21.1 to the Company’s Form 10-K for the year-ended December 31, 2017 on April 2, 2018.
23.1*   Consent of Independent Registered Public Accounting Firm, filed herewith.
23.2*   Consent of JDT Legal, PLLC (contained in Exhibit 5.1)

 

Management
contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to the requirements of Item 15(a)(3)
of Form 10-K.
†† Schedules
have been omitted pursuant to Item 601(b)(ii) of Regulation S-K. A copy of any omitted schedule will be furnished supplementally
to the SEC upon request.
* Filed
herewith.
** Furnished
herewith.

 

 

INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS

 

PACIFIC
VENTURES GROUP, INC.

 

December
31, 2019

 

 

 

 

Report
of Independent Registered Public Accounting Firm

 

To the
Shareholders
and the Board of Directors

Pacific
Ventures
Group Inc.

 

Opinion on the Financial
Statements

 

We
have audited
the accompanying
consolidated
balance
sheets of
Pacific Ventures
Group Inc.
(the Company)
as of December
31, 2019
and 2018,
the related
statements
of operations,
changes
in stockholders’
deficit,
for each
of the
two years
in the period
ended
December
31, 2019,
and the related
notes
[and
schedules]
(collectively
referred
to as the
financial
statements).
In our
opinion,
the financial
statements
present
fairly,
in all material
respects,
the financial
position of the
Company
as of December
31, 2019
and 2018,
and the results
of its operations
and its cash
flows for
each of
the three
years in the
period
ended
December 31,
2019,
in conformity
with accounting
principles
generally
accepted
in the United
States
of America.

 

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 audit
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 audit
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.

 

The
Company’s financial
statements
are prepared
using the generally
accepted
accounting
principles
applicable
to a going concern,
which contemplates
the realization
of assets
and liquidation
of liabilities
in the normal
course of business.
The Company
has an accumulated
deficit
of $ 10,040,367
and a negative
cash flow
from operations
amounting
to $2,652,626
for the
year ended
December
31, 2019.
These factors
as discussed
in Note 3 of
the financial
statements
raise substantial
doubt
about
the Company’s
ability
to continue
as a going
concern. Management’s
plans in regard
to these matters
are also described
in Note 3. The
consolidated
financial
statements
do not include
any adjustments
that might
result from
the outcome
of these
uncertainties.

 

DylanFloyd
Accounting
& Consulting

 

We
have
served
as the
Company’s
auditor since
2016.
Newhall,
California

May
7, 2020

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Balance Sheets

 

    December 31,     December 31,  
    2019     2018  
             
ASSETS                
Current Assets:                
Cash and cash equivalents   $ 315,957     $ 118,579  
Accounts receivable     1,290,637       280,142  
Inventory Asset     830,504       160,858  
Other Current Asset     34,379       32,479  
Right to Use Asset     249,000          
Deposits     16,845       1,500  
Total Current Assets     2,737,322       593,558  
Fixed Assets                
Fixed assets, net   $ 1,477,668     $ 112,793  
Total Fixed Assets     1,477,668       112,793  
Other Assets                
Intangible Assets   $ 3,680,371     $ 950,000  
Right to Use Asset     861,250          
Rent Deposit and Employee Advances     12,421       11,520  
      4,554,042       961,520  
TOTAL ASSETS   $ 8,769,032     $ 1,667,871  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities:                
Accounts payable     1,409,420       597,888  
Accrued expenses     714,962       286,598  
Lease Liability     249,000          
Current portion, notes payable     1,022,364       772,334  
Current portion, notes payable – related party     340,241       203,786  
Current portion, leases payable     119,988       88,896  
Total Current Liabilities     3,855,975       1,949,502  
                 
Long-Term Liabilities:                
Notes payable   $ 8,627,129     $ 2,259,081  
Notes payable – related party     42,000          
Lease Liability     861,250       42,000  
Total Long-Term Liabilities     9,530,379       2,301,081  
                 
Total Liabilities   $ 13,386,354     $ 4,250,582  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)                
Preferred stock, $.001 par value, 10,000,000 shares authorized, 6,000,000
Series E, issued and outstanding
  $ 6,000     $ 1,000  
Common stock, $.001 par value, 900,000,000 shares authorized, and 570,859,333 issued and outstanding,
respectively.
    570,033       236,511  
Additional paid in capital     4,847,013       4,678,823  
Accumulated deficit     (10,040,367 )     (7,499,045 )
                 
Total Stockholders’ Equity (Deficit)   $ (4,617,321 )   $ (2,582,711 )
                 
Total Liabilities and Stockholders’ Equity (Deficit)   $ 8,769,032     $ 1,667,871  

 

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

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Operations

 

    For
the period ended,
 
    December
31,
 
    2019     2018  
             
Sales,
net of discounts
  $ 5,918,337     $ 3,211,573  
Cost
of Goods Sold
    5,070,322       2,392,329  
Gross
Profit
    848,015       819,244  
Operating
Expenses
               
Selling,
general and administrative
    1,365,942       929,023  
Marketing
and Advertising
    100,508       130,851  
Penalty
on Payroll Taxes
               
Amortization
& Depreciation expense
    229,036       17,626  
Financing
Cost
               
Professional
fees
    556,074       672,235  
Salaries
and wages
    300,000          
Operating
Expenses/(Loss)
    2,551,560       1,749,735  
Income/(Loss)
from Operations
    (1,703,545 )     (930,492 )
Other
Non-Operating Income and Expenses  
               
Gain
on shares issued for services
           
Interest
expense
    (970,488 )     (617,368 )
Forgiveness
of Debt
               
Extraordinary
Items
               
Net
Income/(Loss) before Income Taxes
    (2,674,033 )     (1,547,860 )
Provision
for income taxes
           
Net
Ordinary Income/(Loss)
    (2,674,033 )     (1,547,860 )
Other
Income / Expense
               
Other
Income – Other
    21,407       262  
Net
Income/(Loss)
  $ (2,652,626 )     (1,547,598 )
Basic
and Diluted Loss per Share –  Common Stock
  $ (0.00465 )   $ (0.00652 )
                 
Weighted
Average Number of Shares Outstanding:
               
Basic
and Diluted Class A Common Stock
    570,859,333       237,337,445  

 

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

 

 

Statement
of Stockholders’ Equity (Deficit)

For
the Years Ended December 31, 2018 and 2019

 

    Class
A Common Stock
    Series E Preferred
Stock
    Additional Paid-in     Accumulated     Total Stockholders’  
    Shares     Amount     Shares     Amount     Capital     Deficit     Equity  
                                           
Reversal of prior period adjustment 2016                                             (34,286.00 )     (34,286.00 )
Reversal of prior period adjustment 2017                                             52,863       52,863  
Prior period adjustment                                                        
Note conversion     135,230,803       135,231                       297,409               432,640  
Shares Issued     71,350,098       71,350                       106,900               178,250  
Cancelled shares     (6,500,000 )     (6,500 )                     (26,000 )             (32,500 )
Reverse split     826,296                                                  
Net loss for the year ended December 31,
2018
                                            (1,547,598 )     (1,547,598 )
                                                         
Balance, December 31, 2018     237,337,445     $ 236,511       1,000,000     $ 1,000     $ 4,678,823     $ (7,499,045 )   $ (2,582,711 )
                                                         
Note conversion     332,888,888       332,889                       107,322               440,211  
Shares Issued     633,000       633       5,000,000       5,000       60,867               66,500  
Cancelled shares                                                        
Reverse split                                                        
Prior Period Adjustment                                             111,304       111,304  
Net loss for the year ended December 31,
2019
                                            (2,652,626 )     (2,652,626 )
                                                         
Balance, December 31, 2019     570,859,333     $ 570,033       6,000,000     $ 6,000     $ 4,847,012     $ (10,040,367 )   $ (4,617,321 )

 

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

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Cash Flows

 

    For
the period ended
 
    December
31,
 
    2019     2018  
             
OPERATING
ACTIVITIES
               
Net
loss
  $ (2,652,626 )   $ (1,547,598 )
Adjustments
to reconcile net loss to net cash used in operating activities:
               
Shares
issued for services
    6,500       145,750  
Accumulated
Depreciation
    3,989       (18,818 )
Changes
in operating assets and liabilities
               
Accounts
receivable
    (939,104 )     (279,953 )
Inventory     (669,646 )     (160,858 )
Other
Changes in Assets
    (87,638 )        
Trucks     31,092       88,896  
Amortization
& Depreciation
    68,386          
Deposits           (11,520 )
Accounts
payable
    1,205,383       340,236  
Accrued
expenses
    101,122       (30,905 )
Repayment
of Notes Payable
            (208,500 )
Capitalized
interest or penalty fees
    311,877          
Retirement
of fixed assets
          85,706  
Net
Cash Used in Operating Activities
    (2,620,665 )     (1,597,563 )
INVESTING
ACTIVITIES
               
Receivable
– Related
    (34,379 )        
Computers             (10,426 )
Purchase
of equipment, building & improvements, & fixed assets
    (1,384,382 )     (141,413 )
Goodwill
and Intangible Assets
    (2,783,239 )     (950,000 )
Net
Cash Used In Investing Activities
    (4,202,000 )     (1,101,839 )
                 
FINANCING
ACTIVITIES
               
Proceeds
from notes payable
    2,960,900       2,742,721  
Proceeds
from notes payable – Related
    119,542          
Proceeds
from long-term loans
    3,461,606       (175,000 )
Repayment
of notes payable
            (149,973 )
Debt
Conversion
    (166,000 )        
Shares
issued for debt conversion
    440,211       432,641  
Preferred
stocks issued
    60,000          
Common
stocks issued for cash
               
Prior
period adjustment to retained earnings
    111,304          
Net
Cash Provided by Financing Activities
    6,987,564       2,850,390  
                 
NET
INCREASE (DECREASE) IN CASH
    164,898       150,988  
CASH
AT BEGINNING OF PERIOD
    151,058       69  
                 
CASH
AT END OF PERIOD
  $ 315,957     $ 151,058  
                 
SUPPLEMENTAL
DISCLOSURES OF CASH FLOW INFORMATION
               
                 
CASH
PAID FOR:
               
Interest
and penalty fees
  $ 142,695     $ 185,884  
NON
CASH FINANCING ACTIVITIES:
               
Issuance
of shares for debt conversion
  $ 440,211     $ 432,641  

 

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

 

 

Pacific
Ventures Group, Inc.

Notes
to Condensed Consolidated Financial Statements

For
the years ended December 31, 2019 and 2018

 

 

The
Company and Nature of Business

 

Pacific
Ventures Group, Inc. (the “Company,” “we,” “us” or “our”) was incorporated under
the laws of the state of Delaware on October 3, 1986, under the name AOA Corporation. On November 12, 1991, the Company changed
its name to American Eagle Group, Inc. On October 22, 2012, the Company changed its name to “Pacific Ventures Group, Inc.”.

 

The
current structure of the Company resulted from a share exchange with Snöbar Holdings, Inc. (“Snöbar Holdings”),
which was treated as a reverse merger for accounting purposes. On August 14, 2015, the Company entered into a share exchange agreement
(the “Share Exchange Agreement”) with Snöbar Holdings, pursuant to which the Company acquired 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued
and outstanding shares of Snöbar Holdings’ Class A and Class B common stock in exchange for 22,500,000 restricted shares
of the Company’s common stock, while simultaneously issuing 2,500,000 restricted shares of the Company’s common stock
to certain other persons, including for services provided and to a former officer of the Company (the “Share Exchange”).

 

As
the result of the Share Exchange, Snöbar Holdings became the Company’s wholly owned operating subsidiary and the business
of Snöbar Holdings became the Company’s sole business operations and MAS Global Distributors, Inc., a California corporation
(“MGD”), became an indirect subsidiary of the Company.

 

Prior
to the Share Exchange, the Company operated as an insurance holding company and through its subsidiaries, which marketed and underwrote
specialized property and casualty coverage in the general aviation insurance marketplace. However, in 1997, after selling several
of its divisions, the Company’s remaining insurance operations were placed into receivership and the Company ceased operating
its insurance business.

 

Since
the Share Exchange represented a change in control of the Company and a change in business operations, the Company’s business
operations changed to that of Snöbar Holdings and the discussions of business operations accompanying this filing are solely
that of Snöbar Holdings and its affiliates and subsidiaries comprising of Snöbar Trust , International Production Impex
Corporation, a California corporation (“IPIC”) , and MGD.

 

Snöbar
Holdings was formed under the laws of the State of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary
of Snöbar Trust, a California trust (“Trust”), which was formed in June 1, 2013. The current trustee that holds
legal title to the Trust is Clark Rutledge, the father of Shannon Masjedi, the Company’s President, Chief Executive Officer,
Interim Chief Financial Officer, Treasurer, and majority stockholder. The Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of IPIC, which was formed
on August 2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops and holds all of the rights to the
liquor licenses to sell such products and trade names “Snöbar”. As such, the Trust holds all ownership interest
of IPIC and its liquor licenses, permitting IPIC to sell its product to distributors, with all income, expense, gains and losses
rolling up to the Trust, of which Snöbar Holdings is the sole beneficiary. Snöbar Holdings also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares
of MGD. MGD is in the business of selling and leasing freezers and providing marketing services. As a result of the foregoing,
Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust
and IPIC through the Trust and is the parent company of MGD.

 

The
Trust and IPIC are considered variable interest entities (“VIEs”) and Snöbar Holdings is identified as the primary
beneficiary of the Trust and IPIC. Under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 810, Snöbar Holdings performs ongoing reassessments of whether it is the primary beneficiary of a VIE.
As the assessment of Snöbar Holdings’ management is that Snöbar Holdings has the power to direct the activities
of a VIE that most significantly impact the VIE’s activities (it is responsible for establishing and operating IPIC), and
the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits
from the VIE that could potentially be significant to the VIE’s economic performance, it was therefore concluded by management
that Snöbar Holdings is the primary beneficiary of the Trust and IPIC. As such, the Trust and IPIC were consolidated in the
financial statements of Snöbar Holdings since the inception of the Trust, in the case of the Trust, and since the inception
of Snöbar Holdings, in the case of IPIC.

 

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc. (SDFO), a California Corporation. San Diego
Farmers Outlet was started in over thirty-five years ago to provide primarily restaurants customers in southern California’s
three largest counties with quality food and produce and does business under the name of Farmers Outlet and San Diego Farmers
Outlet.

 

On
December 8, 2019, Seaport Group Enterprises LLC—a California Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc.—complete an asset acquisition of Seaport Meat Company, a California Corporation. Seaport Meat Company was started
in over thirty years ago and is a USDA inspected fresh meat processing company. Seaport Meat Company delivers to all of Southern
California as well as Arizona, customers include US Foods, SYSCO, and large restaurant chains.

 

Principles
of Consolidation

 

The
consolidated financial statements include the accounts of the Company, Snöbar Holdings and its subsidiaries, in which Snöbar
Holdings has a controlling voting interest and entities consolidated under the variable interest entities (“VIE”)
provisions of ASC 810, “Consolidation” (“ASC 810”). Inter-company balances and transactions have been
eliminated upon consolidation.

 

The
Company applies the provisions of ASC 810 which provides a framework for identifying VIEs and determining when a company should
include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements.

 

In
general, a VIE is a corporation, partnership, limited-liability corporation, trust, or any other legal structure used to conduct
activities or hold assets that either (1) has an insufficient amount of equity to carry out its principal activities without additional
subordinated financial support, (2) has a group of equity owners that is unable to make significant decisions about its activities,
(3) has a group of equity owners that does not have the obligation to absorb losses or the right to receive returns generated
by its operations or (4) the voting rights of some investors are not proportional to their obligations to absorb the expected
losses of the entity, their rights to receive the expected residual returns of the entity, or both and substantially all of the
entity’s activities (for example, providing financing or buying assets) either involve or are conducted on behalf of an
investor that has disproportionately fewer voting rights.

 

ASC
810 requires a VIE to be consolidated by the party with an ownership, contractual or other financial interest in the VIE (a variable
interest holder) that has both of the following characteristics: a) the power to direct the activities of a VIE that most significantly
impact the VIE’s economic performance and b) the obligation to absorb losses of the VIE that could potentially be significant
to the VIE, or the right to receive benefits from the VIE that could potentially be significant to the VIE.

 

A
variable interest holder that consolidates the VIE is called the primary beneficiary. If the primary beneficiary of a variable
interest entity (VIE) and the VIE are under common control, the primary beneficiary shall initially measure the assets, liabilities,
and non-controlling interests of the VIE at amounts at which they are carried in the accounts of the reporting entity that controls
the VIE (or would be carried if the reporting entity issued financial statements prepared in conformity with generally accepted
accounting principles). ASC 810 also requires disclosures about VIEs in which the variable interest holder is not required to
consolidate but in which it has a significant variable interest.

 

 

2. SUMMARY
OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles
of Consolidation

 

The
consolidated financial statements include the Company, Snöbar Holdings, San Diego Farmers Outlet, Seaport Meat Company, MGD,
IPIC and the Trust, which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been
eliminated during consolidation. See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC.

 

Use
of Estimates

 

The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities,
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

 

Revenue
Recognition

 

The
Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 606, Revenue from Contracts with Customers, which requires that five basic steps be followed
to recognize revenue: (1) a legally enforceable contract that meets criteria standards as to composition and substance is identified;
(2) performance obligations relating to provision of goods or services to the customer are identified; (3) the transaction price,
with consideration given to any variable, noncash, or other relevant consideration, is determined; (4) the transaction price is
allocated to the performance obligations; and (5) revenue is recognized when control of goods or services is transferred to the
customer with consideration given, whether that control happens over time or not. Determination of criteria (3) and (4) are based
on our management’s judgments regarding the fixed nature of the selling prices of the products and services delivered and
the collectability of those amounts. The adoption of ASC 606 did not result in a change to the accounting for any of the in-scope
revenue streams; as such, no cumulative effect adjustment was recorded.

 

Unearned
Revenue

 

Certain
amounts are received pursuant to agreements or contracts and may only be used in the conduct of specified transactions or the
related services are yet to be performed. These amounts are recorded as unearned or deferred revenue and are recognized as revenue
in the year/period the related expenses are incurred, or services are performed. As of December 31, 2019, and December 31, 2018,
the Company had $0 in deferred revenue.

 

Leases

 

ASC
842, Leases, was required to be adopted for all financial years beginning after December 15, 2018 and requires long term leases
(longer than 12 month) to be capitalized with a corresponding liability for the term of the lease and expensed over that term.
Currently the Company has 2 long-term leases SDFO & Seaport .

 

Shipping
and Handling Costs

 

The
Company’s shipping costs are all recorded as operating expenses for all periods presented.

 

Disputed
Liabilities

 

The
Company is involved in a variety of disputes, claims, and proceedings concerning its business operations and certain liabilities.
We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and
can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available
information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters,
which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments
in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a
material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they
could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods
in which such change in determination, judgment or settlement occurs. As of December 31, 2019, the Company has $0 in disputed
liabilities on its balance sheet.

 

 

Cash
Equivalents

 

The
Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents. As of December
31, 2019, the Company had a cash balance of $315,957 in cash and cash equivalents, compared to $118,579 at December 31, 2018.

 

Accounts
Receivable

 

Accounts
receivable are stated at net realizable value of $1,290,637. This value includes an appropriate allowance for estimated uncollectible
accounts. The allowance is calculated based upon the level of past due accounts and the relationship with and financial status
of our customers. As of December 31, 2019, the Company wrote off $323 of bad debt expense. The Company write off $3,820 during
the year ended December 31, 2018.

 

Inventories

 

Inventories
are stated at the lower of cost or market value. Cost has been determined using the first-in, first-out method. Inventory quantities
on-hand are regularly reviewed, and where necessary, reserves for excess and unusable inventories are recorded. Inventory consists
of finished goods and includes ice cream, popsicles and the related packaging materials. As of December 31, 2019, the Company
had total inventory assets of $830,504 consisting of $53,207 of San Diego Farmers Outlet, Inc.’s inventory assets of fresh
produce and food products and $777,297 of Seaport Meat Company’s inventory assets of fresh and frozen proteins and seafood
and all other restaurants supply items. As of December 31, 2018, the Company has $160,858 in inventories.

 

Income
Taxes

 

Deferred
taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences
and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.

 

Net
Income/(Loss) Per Common Share

 

Income/(loss)
per share of common stock is calculated by dividing the net income/(loss) by the weighted average number of shares of common stock
outstanding during the period. The Company has no potentially dilutive securities. Accordingly, basic and dilutive income/(loss)
per common share are the same.

 

Property
and Equipment

 

Property
and equipment are carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful
lives of existing property and equipment. Maintenance, repairs, and minor renovations are expensed as incurred. Upon sale or retirement
of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting
gain or loss is included in the results of operations. The Company provides for depreciation of property and equipment using the
straight-line method over the estimated useful lives or the term of the lease, as appropriate. The estimated useful lives are
as follows: vehicles, five years; office furniture and equipment, three to fifteen years; equipment, three years.

 

 

Identifiable
Intangible Assets

 

As
of December 31, 2019, the Company’s Identifiable Intangible Assets are as follows:

 

Intangible
Assets

 

Identifiable
Intangible Assets

 

Trade
Name (San Diego Farmers Outlet) $193,000

Trade
Name (Seaport Meat) $449,000

Wholesale
Customer Relationships (San Diego Farmers Outlet) $226,100

Wholesale
Customer Relationships (Seaport Meat) $2,321,271

Total
Identifiable Intangible Assets $3,189,371

 

Goodwill

 

Assembled
Workforce $21,000

Unidentified
Intangible Value $470,000

Total
Goodwill $491,000

 

Total
Intangible Assets $3,680,371

 

Management
does not believe that there is an impairment as of 2019.

 

Fair
Value of Financial Instruments

 

The
carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, accounts payable, and
accrued expenses are representative of their fair values due to the short-term maturity of these instruments.

 

Concentration
of Credit Risk

 

Financial
instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable.
The Company maintains cash balances at financial institutions within the United States which are insured by the Federal Deposit
Insurance Corporation (“FDIC”) up to limits of approximately $250,000. The Company has not experienced any losses
with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.

 

Critical
Accounting Policies

 

The
Company considers revenue recognition and the valuation of accounts receivable, allowance for doubtful accounts, and inventory
and reserves as its significant accounting policies. Some of these policies require management to make estimates and assumptions
that may affect the reported amounts in the Company’s financial statements.

 

Recent
Accounting Pronouncements

 

In
June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the
source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation
of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”).
Rules and interpretive releases of the Securities and Exchange Commission (the “SEC”) issued under authority of federal
securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the
Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is
organized and presented.

 

In
May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The core principle of this amendment
is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that
reflects the consideration to which the entity expects to be entitled in exchange for those goods and services. This standard
is effective for fiscal years and interim reporting periods beginning after December 15, 2016. In August 2015, the FASB issued
ASU 2015-14, Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date. The amendments in this update
deferred the effective date for implementation of ASU 2014-09 by one year and is now effective for annual reporting periods beginning
after December 15, 2017.

 

 

In
April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-03, “Interest – Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”, to simplify presentation of debt issuance costs
by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction
from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement
guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years
beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.

 

In
April 2015, FASB issued ASU No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical Expedient for
the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, which permits the entity to measure
defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply
that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements
issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is
permitted.

 

In
April 2015, FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic
350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, which provides guidance to customers
about whether a cloud computing arrangement includes a software license. If such includes a software license, then the customer
should account for the software license element of the arrangement consistent with the acquisition of other software licenses.
If the arrangement does not include a software license, the customer should account for it as a service contract. For public business
entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December
15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be
any impact on our results of operations, cash flows or financial condition.

 

In
April 2015, FASB issued ASU No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master
Limited Partnership Dropdown Transactions”, which specifies that, for purposes of calculating historical earnings per unit
under the two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should
be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners
(which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown
transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction
occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal
years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted.

 

In
June 2014, FASB issued ASU No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting
Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes
all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915
from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties
(Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about
the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided
to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which
may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest
in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014,
including interim periods therein. Early application is permitted with the first annual reporting period or interim period for
which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance
(other entities). Our company adopted this pronouncement.

 

 

In
June 2014, FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718); Accounting for Share-Based
Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”.
The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms
of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The
amendments require that a performance target that affects vesting and that could be achieved after the requisite service period
be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards
with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective
for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted.
Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date
or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual
period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted,
the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements
should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition
is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected
to have a material impact on our results of operations, cash flows or financial condition.

 

In
August 2014, the FASB issued ASU 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) –
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance
in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability
to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance.
In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments
require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain
principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial
doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the
mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result
of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is
not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued
(or available to be issued).

 

All
other newly issued accounting pronouncements which are not yet effective have been deemed either immaterial or not applicable.

 

We
reviewed all other recently issued accounting pronouncements and determined these have no current applicability to the Company
or their effect on the financial statements would not have been significant.

 

 

The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown
in the accompanying consolidated financial statements, the Company has incurred a net loss of $2,652,626 for the year ended December
31, 2019 and has an accumulated deficit of $10,040,367 as of December 31, 2019.

 

In
order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is
significantly dependent upon its ability, and will continue to attempt, to secure equity and/or additional debt financing. There
are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to
continue as a going concern.

 

The
audited consolidated financial statements do not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue
in existence. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These
audited consolidated financial statements do not include any adjustments that might arise from this uncertainty.

 

 

As
of December 31, 2019, the Company had inventory assets for a total of $830,504. Inventory of $160,858 was recorded as of December
31, 2018.

 

 

5. PROPERTY,
PLANT AND EQUIPMENT

 

Property,
plant and equipment at December 31, 2019 and December 31, 2018, consisted of:

 

    December 31, 2019     December 31, 2018  
Computers   $ 11,788     $ 11,788  
Building & Improvement     25,000       25,000  
Forklift 1     3,000       3,000  
Forklift 2     2,871       2,871  
Truck 2004 Hino 1           10,000  
Truck 2004 Hino 2           10,000  
Truck 2018 Hino 155 5347     30,181       30,181  
Truck 2018 Hino 155 5647     30,181       30,181  
Truck 2018 Hino 155 5680     30,181       30,181  
Truck 2019 Hino 155 3710     24,865          
Truck 2019 Hino 155 7445     34,213          
Machinery & Equipment     913,696          
Office Equipment     62,400          
Vehicles     409,108          
Accumulated Depreciation     (99,815 )     (40,408 )
                 
    $ 1,477,668     $ 112,793  

 

Depreciation
and Amortization expense for the year ended December 31, 2019 was $229,036 compared to $17,626 for the same period of December
31, 2018.

 

 

As
of December 31, 2019, the Company had accrued expenses of $714,962 compared to $286,598 for the year ended December 31, 2018.

 

 

The
Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under
this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse.

 

 

8. RELATED
PARTY TRANSACTIONS

 

The
following table presents a summary of the Company’s promissory notes issued to related parties as of December 31, 2019:

 

Noteholder   Note Amount     Issuance Date   Unpaid
Amount
 
S. Masjedi   $ 150,000     12/10/2010   $ 75,692  
A. Masjedi     500,000     6/1/2013     264,550  
M. Shenkman     10,000     2/21/2012     10,000  
M. Shenkman     10,000     2/23/2012     10,000  
M. Shenkman     10,000     3/14/2013     6,000  
M. Shenkman (Entrust)     16,000     9/9/2014     16,000  
    $ 696,000         $ 382,241  

 

The
following description represent note payable-related party transaction pre-Share Exchange that were assumed by the Company as
a condition to the Share Exchange:

 

In
January 2011, MGD, which is now a majority owned subsidiary of Snöbar Holdings, entered into an unsecured promissory note
with Mrs. Masjedi, who is now the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, director
and majority stockholder. The note had a principal balance of $150,000 with an interest rate of 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and has a maturity date of
December 31, 2022. The balance of the note at December 31, 2019 was $75,692.

 

On
February 21, 2012, Snöbar Holdings entered into an unsecured promissory note with Mr. Shenkman, who is Chairman of the Board
of Directors and a shareholder of the Company. The note had a principal balance of $10,000 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and is
due on demand. The note’s maturity date has subsequently been extended to December 31, 2022. Interest against the note was
extinguished in a subsequent extension of the term. The note had a principal balance of $10,000 as of December 31, 2019.

 

On
February 23, 2012, Snöbar Holdings entered into a promissory note with Mr. Shenkman for $10,000, maturing in one year at
an interest of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The note has subsequently been extended to December 31, 2022. Interest under the note was extinguished in a
subsequent extension of the term. The note had an outstanding balance of $10,000 as of December 31, 2019.

 

On
March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a Mr. Shenkman, the Company’s Chairman
of the Board of Directors. The note had a principal balance of $10,000 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and an original maturity date
of March 14, 2014, subsequently extended to December 31, 2022 with a lower interest rate of 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}/year. Mr. Shenkman also agreed
to make all interest retroactive and deferred. The note had an outstanding balance of $6,000 as of December 31, 2019.

 

On
June 1, 2013, Snöbar Holdings entered into a promissory note with Azizollah Masjedi, father-in-law to Shannon Masjedi who’s
the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, director and majority stockholder, in
an amount of $500,000 to purchase all the shares and interests of IPIC. The note matured on June 31, 2017. As of December 31,
2018, the outstanding balance under this note was $264,550, which includes interest and penalty charges.

 

On
September 9, 2014, Snobar Holdings entered into a second unsecured promissory note with Mr. Shenkman, through his affiliate company
Entrust Group for a total amount of $6,000 and a third unsecured promissory note for a total amount of $10,000, both at an annual
interest rate of 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. No term was provided for in each note, but Mr. Shenkman has agreed to a maturity date of December 31, 2022
and the accrual of interest rates and deferral to maturity. The notes had an aggregate outstanding balance of $16,000 as of December
31, 2019.

 

As
of December 31, 2019, the Company had total short-term notes payable of $1,362,605 and long-term notes payable of $8,669,129.

 

 

9.
NOTES PAYABLE

 

The
following table presents a summary of the Company’s promissory notes issued to unrelated third parties as of December 31,
2019:

 

    Note Amount     Issuance Date   Balance  
A. Rodriguez   $ 86,821     3/14/13   $ 86,821  
A. Rodriguez     15,000     7/22/13     15,000  
A. Rodriguez     10,000     2/21/14     10,000  
Henry Mahgerefteh     144,000     2/15/15     144,000  
TRA Capital     106,112     3 loans     106,112  
BNA Inv     223,499     6 loans     223,499  
Brian Berg     30,000     2/1/12     25,000  
Classic Bev     73,473     5/1/17     277,385  
JSJ, Investments     75,000     7/12/17     53,758  
PowerUp     204,000     various     151,000  
PNC, Inc.     2,876,509     12/19/20     2,876,509  
TCA Global fund     2,150,000     5/1/18     2,664,628  
TCA Global fund 2     3,000,000     12/17/19     3,015,780  
    $ 8,994,414         $ 9,649,492  

 

The
following description represent unrelated notes payable transactions pre-reverse merger between Snöbar and the Company that
were assumed by the Company as a condition to the Share Exchange Agreement:

 

In
February 2012, MGD entered into an unsecured promissory note with a certain unrelated party, now a shareholder of the Company
for a principal balance of $30,000 at in interest rate of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per year and maturity date of August 1, 2014. The note’s maturity
date has been extended to December 31, 2020 and the interest rate under the extinguished as part of the extension. The note had
an outstanding balance of $25,000 as of December 31, 2019.

 

On
March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party, now a shareholder
of the Company. The note had a principal balance of $86,821 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and had a maturity date of March 14, 2014.
The note’s maturity date has subsequently been extended to February 1, 2020. The entire balance is owed and outstanding
as of December 31, 2020.

 

On
July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party. The note had
a principal balance of $15,000 with an original interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Maturity date has been extended to December 31, 2018, and
interest rate has been reduced to 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, and lender agreed to make all interest retroactive and deferred. The balance of the note
was $15,000 as of December 31, 2019.

 

The
following description represents unrelated note payable transactions post-merger between Snöbar and the Company:

  

On
July 12, 2017, the issued a Convertible Promissory Note to JSJ Investments Inc. for total gross proceeds of $75,000. The company
entered into a mutually agreed upon settlement agreement that called out for monthly payments of $3,359.90. All payments are current
and the balance on the note as of December 31, 2019 was $53,758. There is no conversion feature to this settlement an only cash
payment.

 

Effective
September 30, 2017, the Company entered into amended promissory notes with BNA/TRA an unrelated third party in an amount of $372,500,
one for $172,500, and four others for $50,000 each. All of the notes have an interest rate of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and had a maturity date of August
13, 2017 but have been extended to November 15, 2017 for a fee of $15,000. The notes had a principal outstanding balance of $329,611
as of September 30, 2018, including the $15,000 extension fee.

 

In
late July, August, and September of 2017, the Company entered into a financing arrangement with Power Up Lending pursuant to which
the Company borrowed a total principal of $129,000 secured by shares of the Company’s common stock. The notes were subject
to a 6 month hold before any stock was issued. The current balance as of December 31, 2019 is $151,000. 

 

 

Over
the past year Classic Beverage has periodically issued loans to the Company. The Company has agreed to pay interest 10{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per year
and has agreed on penalty fees if late on payments. The note is due on demand. The current balance is $277,385, including capitalized
interest and penalty fees.

 

 On
May 1, 2018, Pacific Ventures Group entered into a secured promissory note with TCA Global Master Fund. The note was secured by
interests in tangible and intangible property of Pacific Ventures Group. The effective interest rate on the note is 16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The outstanding
balance of the notes with TCA Global Fund for San Diego Farmers Outlet is $2,664,628 as of December 31, 2019.

 

On
December 17, 2019 Pacific Ventures Group entered into a secured promissory note with TCA Special Situations Credit Strategies
ICAV. The note was secured by interests in tangible and intangible property of Pacific Ventures Group. The effective interest
rate is 16{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The outstanding balance of the notes for Seaport Meat is $3,015,780 as of December 31, 2019.

 

On
February 13, 2017, Pacific Ventures entered settlement with one of its creditors for $527,333 of its long-term notes payable.
As of December 31, 2019, the balance is $200,000 due on April 15, 2020.

 

As
of December 31, 2018, the Company had total short-term notes payable of $976,120 and long-term notes payable of $2,397,623.

 

As
of December 31, 2019, the Company had short-term notes payable of $1,362,605 and long-term notes payable of $8,669,129.

 

10.
STOCKHOLDERS’ EQUITY

 

Share
Exchange

 

On
August 14, 2015, Snöbar Holdings entered into the Share Exchange Agreement with the Company and Snöbar Holdings’
shareholders (the “Snöbar Shareholders”) who held of record (i) at least 99{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and up to 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the total issued
and outstanding shares of Class A Common Stock and (ii) 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the total issued and outstanding shares of Class B Common Stock,
of Snöbar Holding. In accordance with the terms and provisions of the Share Exchange Agreement, the Company acquired all
of the issued and outstanding shares of Snöbar Holdings’ Class A and Class B Common Stock from Snöbar Shareholders,
with Snöbar Holdings becoming a wholly owned subsidiary of the Company, in exchange for the issuance to the Snöbar Shareholders
of 22,500,000 shares of restricted common stock of the Company and the issuance of 2,500,000 restricted shares of the Company’s
common stock to certain other persons (as set forth below).

 

The
333,521,888 restricted shares of the Company’s common stock issued during the fiscal year ended December 31, 2019 were for
the following: issued 332,888,888 for repayment of stocks and 633,000 issued shares of its common stock for other considerations.

 

Common
Stock and Preferred Stock

 

The
Company is authorized to issue up to 10,000,000 shares of its preferred stock, $0.001 par value per share. The Company designated
6,000,000 shares of preferred stock as Series E Preferred Stock (the “Series E Preferred Stock”). Under the rights,
preferences and privileges of the Series E Preferred Stock, for every share of Series E Preferred Stock held, the holder thereof
has the voting rights equal to 10 shares of common stock. As of December 31, 2019, there were 6,000,000 shares of Series E Preferred
Stock issued and outstanding.

 

From
January 1, 2019 through December 31, 2019, the Company issued 333,521,888 shares of its common stock to various investors for
cash and other considerations.

 

 

From
January 1, 2019 through December 31, 2019, the Company issued 332,888,888 shares of its common stock for repayment of debt issued
633,000 for various considerations.

 

The
Company is authorized to issue up to 900,000,000 shares of its common stock, $0.001 par value per share. Holders of common stock
have one vote per share. As of December 31, 2018, and 2019, there were 237,337,445 and 570,859,333 shares of the Company’s
common stock issued and outstanding, respectively.

 

11.
COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES

 

Operating
Lease

 

The
Company is currently obligated under two operating leases for office spaces and associated building expenses. Both leases are
on a month-to-month basis at a monthly rate of $450 and $330, respectively.

 

SDFO
operations are located at 10407 Friars Rd, San Diego, CA 92110, where they occupy an aggregate of approximately 10,000 square
feet pursuant to leases. The 5-year leases are on an annual basis at a monthly rate of $6,000 per month.

 

Seaport
Group Enterprise LLC is located at 2533 Folex Way, Spring Valley CA 91978, where they occupy an aggregate of approximately 17,000
square feet pursuant to the lease. The 5-year leases are on an annual basis starting at a monthly rate of $14,750.00 per month.

 

San
Diego Farmers Outlet and SeaPort Meat Company Operating Leases 

 

The
Company in May 1, 2018 assumed a lease agreement for a facility site and entered into a lease agreement for office space for San
Diego Farmers Outlet. The lease has a term of five years expiring on April 30, 2023.

 

Future
minimum lease payments, as set forth in the lease, are below:

 

YEAR     AMOUNT  
  2020     $ 72,000  
  2021     $ 72,000  
  2022     $ 72,000  
  2023     $ 24,000  

 

The
Company on December 1, 2019 entered into a lease agreement for a facility site for office space for Seaport Meat Company. The
lease has a term of five years expiring on November 30, 2024.

 

Future
minimum lease payments, as set forth in the lease, are below:

 

YEAR     AMOUNT  
  2020     $ 177,000  
  2021     $ 177,000  
  2022     $ 177,000  
  2023     $ 177,000  
  2024     $ 162,250  

 

12.
EQUITY INCENTIVE PLAN

 

On
November 3, 2017, the Company’s Board of Directors approved the Company’s 2017 Equity Incentive Plan (the “2017
Plan”), which reserves a total of 1,500,000 shares of the Company’s common stock for issuance under the 2017 Plan.
Incentive awards authorized under the 2017 Plan include, but are not limited to, incentive stock options within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, subject to the approval of the 2017 Plan by the Company’s
stockholders. If an incentive award granted under the 2017 Plan expires, terminates, is unexercised or is forfeited, or if any
shares are surrendered to us in connection with the exercise of an incentive award, the shares subject to such award and the surrendered
shares will become available for further awards under the 2017 Plan. All of the shares under the 2017 Plan were registered in
the Company’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on November 21, 2017
(the “Form S-8”).

 

13.
SUBSEQUENT EVENTS

 

ASC
855-16-50-4 establishes accounting and disclosure requirements for subsequent events. ASC 855 details the period after the balance
sheet date during which we should evaluate events or transactions that occur for potential recognition or disclosure in the financial
statements, the circumstances under which we should recognize events or transactions occurring after the balance sheet date in
its financial statements and the required disclosures for such events.

 

The
Company has evaluated all subsequent events through the date these consolidated financial statements were issued, and determined
the following are material to disclose.

 

 

PART
I – FINANCIAL INFORMATION

 

Item
1. Financial Statements

 

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Balance Sheets

 

    For the nine months ended Sept 30, 2020     December 31, 2019  
    (unaudited)     (audited)  
             
ASSETS                
Current Assets:                
Cash and cash equivalents   $ (34,861 )   $ 315,957  
Accounts receivable     1,399,237       1,290,637  
Inventory Asset     1,703,162       830,504  
Other Current Asset     36,897       34,379  
Right to Use Asset     195,000       249,000  
Deposits     16,845       16,845  
Total Current Assets     3,316,279       2,737,322  
Fixed Assets                
Fixed assets, net   $ 1,294,412     $ 1,477,668  
Total Fixed Assets     1,294,412       1,477,668  
Other Assets                
Intangible Assets   $ 3,527,497     $ 3,680,371  
Right to Use Asset     827,752       861,250  
Rent Deposit and Employee Advances     10,732       12,421  
      4,365,981       4,554,042  
TOTAL ASSETS   $ 8,976,671     $ 8,769,032  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
Current Liabilities:                
Accounts payable   $ 2,556,896     $ 1,409,420  
Accrued expenses     1,202,372       714,962  
Lease Liability     195,000       249,000  
Current portion, notes payable     1,474,122       1,022,364  
Current portion, notes payable – related party     433,849       340,241  
Current portion, leases payable     94,528       119,988  
Total Current Liabilities   $ 5,956,767     $ 3,855,976  
                 
Long-Term Liabilities:                
Notes payable   $ 10,546,942     $ 8,627,129  
Notes payable – related party     42,000       42,000  
Lease Liability     817,000       861,250  
Total Long-Term Liabilities     11,405,942       9,530,379  
                 
Total Liabilities   $ 17,362,709     $ 13,386,354  
                 
STOCKHOLDERS’ EQUITY (DEFICIT)                
Preferred stock, $.001 par value, 10,000,000 shares authorized,
6,000,000 Series E, issued and outstanding
  $ 6,000     $ 6,000  
10,000 Series F, issued and outstanding     10        
Common stock, $.001 par value, 900,000,000 shares authorized,
and 6,871,351 issued and outstanding at September 30, 2020, which reflects the 1-for-500 reverse stock split that occurred
on Apr 13, 2020
    3,427,444       570,033  
Additional paid in capital     2,117,407       4,847,013  
Accumulated deficit     (13,936,898 )     (10,040,367 )
                 
Total Stockholders’ Equity (Deficit)   $ (8,386,037 )   $ (4,617,321 )
                 
Total Liabilities and Stockholders’ Equity (Deficit)   $ 8,976,671     $ 8,769,032  

 

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

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Operations

(unaudited)

 

    For
the three months
    For
the nine months
 
    ended
September 30,
    ended
September 30,
 
    2020     2019     2020     2019  
                         
Sales,
net of discounts
  $ 7,540,361     $ 1,098,052     $ 22,929,026     $ 3,600,317  
Cost
of Goods Sold
    7,060,129       903,879       20,429,567       2,627,418  
Gross
Profit
    480,232       194,174       2,499,459       972,899  
Operating
Expenses
                               
Selling,
general and administrative
    1,503,850       259,196       3,636,326       782,041  
Marketing
and Advertising
    8,555       62,014       27,698       98,885  
Amortization
and Depreciation expense
    178,947       5,758       505,969       18,231  
Professional
fees
    299,100       102,524       752,723       419,961  
Officer
Compensation
    75,000               225,000       225,000  
Operating
Expenses/(Loss)
    2,065,453       429,493       5,147,716       1,544,119  
Income/
(Loss) from Operations
    (1,585,221 )     (235,319 )     (2,648,257 )     (571,219 )
Other
Non-Operating Income and Expenses
                               
Interest
expense
    (453,139 )     (180,936 )     (1,261,273 )     (537,673 )
Net
Income/(Loss) before Income Taxes
    (2,038,360 )     (416,255 )     (3,909,530 )     (1,108,891 )
Provision
for income taxes
                               
Net
Ordinary Income/(Loss)
    (2,038,360 )     (416,255 )     (3,909,530 )     (1,108,891 )
Other
Income / Expense
                               
Other
Income – Other
    3,476       10,316       13,000       20,699  
Net
Income/(Loss)
  $ (2,034,885 )     (405,939 )   $ (3,896,531 )     (1,088,193 )
Basic
and Diluted Loss per Share – Common Stock
  $ (0.29614 )   $ (0.00085 )   $ (0.56707 )   $ (0.00228 )
                                 
Weighted Average
Number of Shares Outstanding:
                               
Basic
and Diluted Class A Common Stock
    6,871,351       477,226,000       6,871,351       477,226,000  

 

Common
stock outstanding shares reflect the 1-for-500 reverse stock split that occurred on Apr 13, 2020.

 

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

 

 

PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Cash Flows

(unaudited)

 

    For the nine months  
    ended September 30,  
    2020     2019  
             
OPERATING ACTIVITIES                
Net loss   $ (3,896,531 )   $ (1,088,193 )
Adjustments to reconcile net loss to net cash used in operating activities:                
Shares issued for services     (127,815 )     6,500  
Accumulated Depreciation             18,231  
Depreciation & Amortization Expense     502,969          
Changes in operating assets and liabilities                
Accounts receivable     (179,991 )     87,638  
Inventory     (872,658 )     (299,252 )
Other Current Assets     70,563          
Other Assets              
Accounts payable     1,265,532       473,131  
Accrued expenses     294,476       85,904  
Other Current liabilities     110,624          
Capitalized interest or penalty fees     181,219       136,134  
                 
Net Cash Provided by / (Used in) Operating Activities     (2,651,613 )     (579,908 )
INVESTING ACTIVITIES                
Receivable – Related             (75,525 )
Purchase of equipment, building & improvements & fixed assets     (177,590 )        
Goodwill and Intangible Assets                
Net Cash Provided by / (Used In) Investing Activities     (177,590 )     (75,525 )
                 
FINANCING ACTIVITIES                
Proceeds from notes payable     744,378       204,000  
Proceeds from notes payable – Related           16,100  
Repayment of notes payable     (194,619 )     72,796  
Repayment of notes payable – Related     (125 )        
Proceeds from long-term loans     3,700,936          
Repayment of long-term loans     (1,900,000 )        
Repayment of debt by Shares           (166,000 )
Common Shares Issued for Cash              
Shares Issued for Debt     122,815       387,211  
Preferred Stocks issued     5,000          
Prior period adjustment to retained earnings             3,846  
Net Cash Provided by / (Used in) Financing Activities     2,478,385       517,952  
                 
NET INCREASE (DECREASE) IN CASH     (350,819 )     (137,481 )
CASH AT BEGINNING OF PERIOD     315,956       151,058  
                 
CASH AT END OF PERIOD   $ (34,861 )   $ 13,577  
                 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                
                 
CASH PAID FOR:                
Interest and penalty fees   $ 262,822     $ 127,615  
NON CASH FINANCING ACTIVITIES:                
Issuance of shares for debt conversion   $       $ 387,211

 

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

 

 

Pacific
Ventures Group, Inc.

Notes
to Unaudited Condensed Consolidated Financial Statements

(Unaudited)

 

1.
NATURE OF OPERATIONS

 

Pacific
Ventures Group, Inc. (the “Company,” “we,” “us” or “our”) was incorporated under
the laws of the state of Delaware on October 3, 1986, under the name AOA Corporation. On November 12, 1991, the Company changed
its name to American Eagle Group, Inc. On October 22, 2012, the Company changed its name to “Pacific Ventures Group, Inc.”.

 

The
current structure of the Company resulted from a share exchange with Snöbar Holdings, Inc. (“Snöbar Holdings”),
which was treated as a reverse merger for accounting purposes. On August 14, 2015, the Company entered into a share exchange agreement
(the “Share Exchange Agreement”) with Snöbar Holdings, pursuant to which the Company acquired 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the issued
and outstanding shares of Snöbar Holdings’ Class A and Class B common stock in exchange for 22,500,000 restricted shares
of the Company’s common stock, while simultaneously issuing 2,500,000 restricted shares of the Company’s common stock
to certain other persons, including for services provided and to a former officer of the Company (the “Share Exchange”).

 

As
the result of the Share Exchange, Snöbar Holdings became the Company’s wholly owned operating subsidiary and the business
of Snöbar Holdings became the Company’s sole business operations and MAS Global Distributors, Inc., a California corporation
(“MGD”), became an indirect subsidiary of the Company.

 

Prior
to the Share Exchange, the Company operated as an insurance holding company and through its subsidiaries, which marketed and underwrote
specialized property and casualty coverage in the general aviation insurance marketplace. However, in 1997, after selling several
of its divisions, the Company’s remaining insurance operations were placed into receivership and the Company ceased operating
its insurance business.

 

Since
the Share Exchange represented a change in control of the Company and a change in business operations, the Company’s business
operations changed to that of Snöbar Holdings and the discussions of business operations accompanying this filing are solely
that of Snöbar Holdings and its affiliates and subsidiaries comprising of Snöbar Trust, International Production Impex
Corporation, a California corporation (“IPIC”) , and MGD.

 

Snöbar
Holdings was formed under the laws of the State of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary
of Snöbar Trust, a California trust (“Trust”), which was formed in June 1, 2013. The current trustee that holds
legal title to the Trust is Clark Rutledge, the father of Shannon Masjedi, the Company’s President, Chief Executive Officer,
Interim Chief Financial Officer, Treasurer, and majority stockholder. The Trust owns 100{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares of IPIC, which was formed
on August 2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops and holds all of the rights to the
liquor licenses to sell such products and trade names “Snöbar”. As such, the Trust holds all ownership interest
of IPIC and its liquor licenses, permitting IPIC to sell its product to distributors, with all income, expense, gains and losses
rolling up to the Trust, of which Snöbar Holdings is the sole beneficiary. Snöbar Holdings also owns 99.9{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} of the shares
of MGD. MGD is in the business of selling and leasing freezers and providing marketing services. As a result of the foregoing,
Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust
and IPIC through the Trust and is the parent company of MGD.

 

The
Trust and IPIC are considered variable interest entities (“VIEs”) and Snöbar Holdings is identified as the primary
beneficiary of the Trust and IPIC. Under the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 810, Snöbar Holdings performs ongoing reassessments of whether it is the primary beneficiary of a VIE.
As the assessment of Snöbar Holdings’ management is that Snöbar Holdings has the power to direct the activities
of a VIE that most significantly impact the VIE’s activities (it is responsible for establishing and operating IPIC), and
the obligation to absorb losses of the VIE that could potentially be significant to the VIE and the right to receive benefits
from the VIE that could potentially be significant to the VIE’s economic performance, it was therefore concluded by management
that Snöbar Holdings is the primary beneficiary of the Trust and IPIC. As such, the Trust and IPIC were consolidated in the
financial statements of Snöbar Holdings since the inception of the Trust, in the case of the Trust, and since the inception
of Snöbar Holdings, in the case of IPIC.

 

 

On
May 1, 2018, Royalty Foods Partners, LLC – a Florida Limited Liability Corporation and a subsidiary of Pacific Ventures
Group, Inc. – completed an asset acquisition of San Diego Farmers Outlet, Inc. (SDFO), a California Corporation. San Diego
Farmers Outlet was started over thirty-five years ago to provide primarily restaurant customers in southern California’s
three largest counties with quality food and produce and does business under the name of Farmers Outlet and San Diego Farmers
Outlet.

 

On
December 17, 2019, the Company completed an asset acquisition of Seaport Meat Company, (Seaport Meat), a California Corporation
with over thirty (30) years in business servicing restaurant and retail, and institutional customers in Southern California and
Arizona. Seaport Meat is a USDA meat processing plant that supplies quality meats, seafood, dry goods, dairy and produce. Seaport
Meat Company built a state-of-the-art food distribution and manufacturing facility in Spring Valley, California. Seaport operates
out of a 17,000 square foot facility is HACCP-compliant and is a USDA Licensed processing facility with on-site daily inspections.
HACCP is a management system in which food safety is addressed through the analysis and control of biological, chemical, and physical
hazards from raw material production, procurement and handling, to manufacturing, distribution and consumption of the finished
product. Having a USDA certified facility allows consumers to be confident that the Food Safety and Inspection Service (FSIS),
the public health agency in the USDA, ensured that meat and poultry products are safe, wholesome, and correctly labeled and packaged.

 

The
Company’s customers range from a wide variety of restaurants, including many well known in Southern CA, to institutions,
schools (UCSD, SDSU, etc.) and re-distributors such as US Foods and Sysco as well as to local distributors. They supply wholesale
food and restaurant supplies to San Diego, Los Angeles, Orange and Riverside and offer same day service. In addition, they have
clients in Arizona and Colorado that come to their facility to pick up their orders.

 

Due
to the impact that the COVID-19 pandemic had on our customers, particularly our larger customers have been forced to close. Some
of these accounts remain closed such as Petco Park the Major League ballpark “Padre Stadium” and the LA, San Diego,
and Del Mar County Fairs. Despite these cutomer closures Seaport Meat Company has expanded its customer base and maintained at
or above the same revenue as 2019 for the same quarter.

 

Because
Seaport Meat Company can efficiently add new product lines, they can easily expand the distribution of Pacific Ventures’
San Diego Farmers Outlet and SnoBar product line, thereby accelerating Pacific Ventures’ revenue growth. The combination
of a distribution and product company is unique in the San Diego area and will position the company for rapid growth.

 

They
manufacture and wholesale custom processed beef, pork, chicken, lamb, veal and seafood. In addition, they are redistributors of
a wide variety of dry goods, frozen foods, disposables and janitorial products. Their sales, distribution and finance processes
are very efficient and can be expanded to add new product lines, including fresh produce and dairy

 

Principles
of Consolidation

 

The
consolidated financial statements include the accounts of the Company, Snöbar Holdings and its subsidiaries, in which Snöbar
Holdings has a controlling voting interest and entities consolidated under the variable interest entities (“VIE”)
provisions of ASC 810, “Consolidation” (“ASC 810”). Inter-company balances and transactions have been
eliminated upon consolidation.

 

The
Company applies the provisions of ASC 810 which provides a framework for identifying VIEs and determining when a company should
include the assets, liabilities, non-controlling interests and results of activities of a VIE in its consolidated financial statements.

 

2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Principles
of Consolidation

 

The
consolidated financial statements include the Company, Snöbar Holdings, San Diego Farmers Outlet, MGD, IPIC and the Trust,
which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been eliminated during
consolidation. See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC.

 

 

Use
of Estimates

 

The
preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities,
at the date of the financial statements and the reported amount of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

 

Revenue
Recognition

 

The
Company recognizes revenue in accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards
Codification (“ASC”) 606, Revenue from Contracts with Customers, which requires that five basic steps be followed
to recognize revenue: (1) a legally enforceable contract that meets criteria standards as to composition and substance is identified;
(2) performance obligations relating to provision of goods or services to the customer are identified; (3) the transaction price,
with consideration given to any variable, noncash, or other relevant consideration, is determined; (4) the transaction price is
allocated to the performance obligations; and (5) revenue is recognized when control of goods or services is transferred to the
customer with consideration given, whether that control happens over time or not. Determination of criteria (3) and (4) are based
on our management’s judgments regarding the fixed nature of the selling prices of the products and services delivered and
the collectability of those amounts. The adoption of ASC 606 did not result in a change to the accounting for any of the in-scope
revenue streams; as such, no cumulative effect adjustment was recorded.

 

Unearned
Revenue

 

Certain
amounts are received pursuant to agreements or contracts and may only be used in the conduct of specified transactions or the
related services are yet to be performed. These amounts are recorded as unearned or deferred revenue and are recognized as revenue
in the year/period the related expenses are incurred, or services are performed. As of September 30, 2020, the Company has $0
in deferred revenue. As of December 31, 2019, the Company also had $0 deferred revenue.

 

Leases

 

ASC
842, Leases, was required to be adopted for all financial years beginning after December 15, 2018 and requires long term leases
(longer than 12 month) to be capitalized with a corresponding liability for the term of the lease and expensed over that term.
Currently the Company has 2 long-term leases SDFO & Seaport Meat Company.

 

Shipping
and Handling Costs

 

The
Company’s shipping costs are all recorded as operating expenses for all periods presented.

 

Disputed
Liabilities

 

The
Company is involved in a variety of disputes, claims, and proceedings concerning its business operations and certain liabilities.
We determine whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and
can be reasonably estimated. We assess our potential liability by analyzing our litigation and regulatory matters using available
information. We develop our views on estimated losses in consultation with outside counsel handling our defense in these matters,
which involves an analysis of potential results, assuming a combination of litigation and settlement strategies. Should developments
in any of these matters cause a change in our determination as to an unfavorable outcome and result in the need to recognize a
material accrual, or should any of these matters result in a final adverse judgment or be settled for significant amounts, they
could have a material adverse effect on our results of operations, cash flows and financial position in the period or periods
in which such change in determination, judgment or settlement occurs.

 

In
August 2019, Seaport Group Enterprises, LLC (“SGE”) agreed to acquire Seaport Meat Company, a wholesale meat distribution
and processing company that manufactures and supplies various restaurants and food service institutions, from PNC, Inc., Peter
Camarda and Nancy Camarda (collectively, “PNC”). In furtherance of this agreement, the parties entered into an Asset
Purchase Agreement on or about August 15, 2019, whereby SGE agreed to purchase certain assets, properties, and rights belonging
to PNC. In connection with the closing of the transactions contemplated by the asset purchase acquisition, as part of the consideration
for the asset purchase, Seaport Group Enterprises LLC entered into a secured promissory note with PNC INC. in the amount of $850,000
due in three payments over 18 months

 

On
or about May 13, 2020, SGE filed a lawsuit against PNC in Los Angeles Superior Court, based on PNC’s material breaches of
the Asset Purchase Agreement and the Consulting and Covenant Not to Compete Agreement (the “Consulting Agreement”),
as well material misrepresentations that PNC made to SGE. SGE’s complaint alleges causes of action against PNC for including
but not limited to fraud.

 

As
of the date of this report, the note to PNC is past due as the amounts due, if any, are in dispute within the above referenced
action brought by SGE. The Company and SGE intend to vigorously pursue its rights and remedies
against PNC as well as defend the allegations set forth in the counter complaint.
Management does not believe that an adverse
ruling would have a material effect on the operations of the Company.

 

 

Cash
Equivalents

 

The
Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents. As of September
30, 2020, the Company has an overdraft cash balance of $34,861 in cash and cash equivalents, compared to $315,957 at December
31, 2019.

 

Accounts
Receivable

 

As
of Septmeber 30, 2020, Accounts Receivable are stated at net realizable value of $1,399,237. This value includes an appropriate
allowance for estimated uncollectible accounts. The allowance is calculated based upon the level of past due accounts and the
relationship with and financial status of our customers. As of December 31, 2019, the Company wrote off $323 of bad debt expense.
The Company wrote off $6,152 of bad debts during the nine (9) months ended September 30, 2020, and thus has not set an allowance
for doubtful accounts.

 

Inventories

 

Inventories
are stated at the lower of cost or market value. Cost has been determined using the first-in, first-out method. Inventory quantities
on-hand are regularly reviewed, and where necessary, reserves for excess and unusable inventories are recorded. Inventory consists
of finished goods and includes ice cream, popsicles and the related packaging materials. As of September 30, 2020, the Company
had total inventory assets of $1,703,162 consisting of San Diego Farmers Outlet, Inc.’s inventory assets of fresh produce
and food products and of Seaport Meat Company’s inventory assets of fresh and frozen proteins and seafood and all other
restaurants supply items.

 

Income
Taxes

 

Deferred
taxes are provided on an asset and liability method whereby deferred tax assets are recognized for deductible temporary differences
and operating loss carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences
are the difference between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced
by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred
tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates
on the date of enactment.

 

Net
Income/(Loss) Per Common Share

 

Income/(loss)
per share of common stock is calculated by dividing the net income/(loss) by the weighted average number of shares of common stock
outstanding during the period. The Company has no potentially dilutive securities. Accordingly, basic and dilutive income/(loss)
per common share are the same.

 

Property
and Equipment

 

Property
and equipment are carried at cost less accumulated depreciation and includes expenditures that substantially increase the useful
lives of existing property and equipment. Maintenance, repairs, and minor renovations are expensed as incurred. Upon sale or retirement
of property and equipment, the cost and related accumulated depreciation are eliminated from the respective accounts and the resulting
gain or loss is included in the results of operations. The Company provides for depreciation of property and equipment using the
straight-line method over the estimated useful lives or the term of the lease, as appropriate. The estimated useful lives are
as follows: vehicles, five years; office furniture and equipment, three to fifteen years; equipment, three years.

 

 

Identifiable
Intangible Assets

 

As
of September 30, 2020, the Company’s Identifiable Intangible Assets are as follows:

 

Intangible
Assets

 

Identifiable
Intangible Assets

 

Trade
Name (San Diego Farmers Outlet) $193,000

Trade
Name (Seaport Meat) $449,000

Wholesale
Customer Relationships (San Diego Farmers Outlet) $266,000

Wholesale
Customer Relationships (Seaport Meat) $2,334,239

Total
Identifiable Intangible Assets $3,242,239

 

Goodwill

 

Assembled
Workforce $21,000

Unidentified
Intangible Value $470,000

Total
Goodwill $491,000

 

Amortization
Expense
$205,742

 

Total
Intangible Assets $3,527,497

 

Management
does not believe that there is an impairment as of 2020.

 

Fair
Value of Financial Instruments

 

The
carrying amounts of the Company’s financial instruments, which include cash, accounts receivable, accounts payable, and
accrued expenses are representative of their fair values due to the short-term maturity of these instruments.

 

Concentration
of Credit Risk

 

Financial
instruments that potentially subject the Company to concentration of credit risk consist primarily of cash and accounts receivable.
The Company maintains cash balances at financial institutions within the United States which are insured by the Federal Deposit
Insurance Corporation (“FDIC”) up to limits of approximately $250,000. The Company has not experienced any losses
with regard to its bank accounts and believes it is not exposed to any risk of loss on its cash bank accounts.

 

Critical
Accounting Policies

 

The
Company considers revenue recognition and the valuation of accounts receivable, allowance for doubtful accounts, and inventory
and reserves as its significant accounting policies. Some of these policies require management to make estimates and assumptions
that may affect the reported amounts in the Company’s financial statements.

 

Recent
Accounting Pronouncements

 

In
June 2009, the FASB established the Accounting Standards Codification (“Codification” or “ASC”) as the
source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation
of financial statements in accordance with generally accepted accounting principles in the United States (“GAAP”).
Rules and interpretive releases of the Securities and Exchange Commission (the “SEC”) issued under authority of federal
securities laws are also sources of GAAP for SEC registrants. Existing GAAP was not intended to be changed as a result of the
Codification, and accordingly the change did not impact our financial statements. The ASC does change the way the guidance is
organized and presented.

 

In
April 2015, FASB issued Accounting Standards Update (“ASU”) No. 2015-03, “Interest – Imputation of Interest
(Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs”, to simplify presentation of debt issuance costs
by requiring that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction
from the carrying amount of that debt liability, consistent with debt discounts. The ASU does not affect the recognition and measurement
guidance for debt issuance costs. For public companies, the ASU is effective for financial statements issued for fiscal years
beginning after December 15, 2015, and interim periods within those fiscal years. Early application is permitted.

 

 

In
April 2015, FASB issued ASU No. 2015-04, “Compensation – Retirement Benefits (Topic 715): Practical Expedient for
the Measurement Date of an Employer’s Defined Benefit Obligation and Plan Assets”, which permits the entity to measure
defined benefit plan assets and obligations using the month-end that is closest to the entity’s fiscal year-end and apply
that practical expedient consistently from year to year. The ASU is effective for public business entities for financial statements
issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early application is
permitted.

 

In
April 2015, FASB issued ASU No. 2015-05, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic
350-40): Customer’s Accounting for Fees Paid in a Cloud Computing Arrangement”, which provides guidance to customers
about whether a cloud computing arrangement includes a software license. If such includes a software license, then the customer
should account for the software license element of the arrangement consistent with the acquisition of other software licenses.
If the arrangement does not include a software license, the customer should account for it as a service contract. For public business
entities, the ASU is effective for annual periods, including interim periods within those annual periods, beginning after December
15, 2015. Early application is permitted. We are currently reviewing the provisions of this ASU to determine if there will be
any impact on our results of operations, cash flows or financial condition.

 

In
April 2015, FASB issued ASU No. 2015-06, “Earnings Per Share (Topic 260): Effects on Historical Earnings per Unit of Master
Limited Partnership Dropdown Transactions”, which specifies that, for purposes of calculating historical earnings per unit
under the two-class method, the earnings (losses) of a transferred business before the date of a drop down transaction should
be allocated entirely to the general partner. In that circumstance, the previously reported earnings per unit of the limited partners
(which is typically the earnings per unit measure presented in the financial statements) would not change as a result of the dropdown
transaction. Qualitative disclosures about how the rights to the earnings (losses) differ before and after the dropdown transaction
occurs for purposes of computing earnings per unit under the two-class method also are required. The ASU is effective for fiscal
years beginning after December 15, 2015, and interim periods within those fiscal years. Earlier application is permitted.

 

In
June 2014, FASB issued ASU No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting
Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The update removes
all incremental financial reporting requirements from GAAP for development stage entities, including the removal of Topic 915
from the FASB Accounting Standards Codification. In addition, the update adds an example disclosure in Risks and Uncertainties
(Topic 275) to illustrate one way that an entity that has not begun planned principal operations could provide information about
the risks and uncertainties related to the company’s current activities. Furthermore, the update removes an exception provided
to development stage entities in Consolidations (Topic 810) for determining whether an entity is a variable interest entity-which
may change the consolidation analysis, consolidation decision, and disclosure requirements for a company that has an interest
in a company in the development stage. The update is effective for the annual reporting periods beginning after December 15, 2014,
including interim periods therein. Early application is permitted with the first annual reporting period or interim period for
which the entity’s financial statements have not yet been issued (Public business entities) or made available for issuance
(other entities). Our company adopted this pronouncement.

 

In
June 2014, FASB issued ASU No. 2014-12, “Compensation – Stock Compensation (Topic 718); Accounting for Share-Based
Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period”.
The amendments in this ASU apply to all reporting entities that grant their employees share-based payments in which the terms
of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The
amendments require that a performance target that affects vesting and that could be achieved after the requisite service period
be treated as a performance condition. A reporting entity should apply existing guidance in Topic 718 as it relates to awards
with performance conditions that affect vesting to account for such awards. For all entities, the amendments in this ASU are effective
for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted.
Entities may apply the amendments in this ASU either (a) prospectively to all awards granted or modified after the effective date
or (b) retrospectively to all awards with performance targets that are outstanding as of the beginning of the earliest annual
period presented in the financial statements and to all new or modified awards thereafter. If retrospective transition is adopted,
the cumulative effect of applying this Update as of the beginning of the earliest annual period presented in the financial statements
should be recognized as an adjustment to the opening retained earnings balance at that date. Additionally, if retrospective transition
is adopted, an entity may use hindsight in measuring and recognizing the compensation cost. This updated guidance is not expected
to have a material impact on our results of operations, cash flows or financial condition.

 

 

In
August 2014, the FASB issued ASU 2014-15 on “Presentation of Financial Statements Going Concern (Subtopic 205-40) –
Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern”. Currently, there is no guidance
in GAAP about management’s responsibility to evaluate whether there is substantial doubt about an entity’s ability
to continue as a going concern or to provide related footnote disclosures. The amendments in this Update provide that guidance.
In doing so, the amendments are intended to reduce diversity in the timing and content of footnote disclosures. The amendments
require management to assess an entity’s ability to continue as a going concern by incorporating and expanding upon certain
principles that are currently in U.S. auditing standards. Specifically, the amendments (1) provide a definition of the term substantial
doubt, (2) require an evaluation every reporting period including interim periods, (3) provide principles for considering the
mitigating effect of management’s plans, (4) require certain disclosures when substantial doubt is alleviated as a result
of consideration of management’s plans, (5) require an express statement and other disclosures when substantial doubt is
not alleviated, and (6) require an assessment for a period of one year after the date that the financial statements are issued
(or available to be issued).

 

All
other newly issued accounting pronouncements which are not yet effective have been deemed either immaterial or not applicable.

 

We
reviewed all other recently issued accounting pronouncements and determined these have no current applicability to the Company
or their effect on the financial statements would not have been significant.

 

3.
GOING CONCERN

 

The
accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As shown
in the accompanying consolidated financial statements, the Company has incurred a net loss of $3,896,531 for the nine (9) months
ended September 30, 2020 and has an accumulated deficit of $13,936,898 as of September 30, 2020.

 

In
order to continue as a going concern, the Company will need, among other things, additional capital resources. The Company is
significantly dependent upon its ability, and will continue to attempt, to secure equity and/or additional debt financing. There
are no assurances that the Company will be successful and without sufficient financing it would be unlikely for the Company to
continue as a going concern.

 

The
unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of
recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue
in existence. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. These
unaudited consolidated financial statements do not include any adjustments that might arise from this uncertainty.

 

4.
INVENTORIES

 

As
of September 30, 2020, the Company had inventory assets for a total of $1,703,162. The Company had inventory assets of $830,504
as of December 31, 2019.

 

 

5.
PROPERTY, PLANT AND EQUIPMENT

 

Property,
plant and equipment at September 30, 2020 and December 31, 2019, consisted of:

 

    September 30, 2020     December 31, 2019  
Computers   $ 11,788     $ 11,788  
Office Furniture     14,390          
Building & Improvement     29,673       25,000  
Leashold Improvement     66,932          
Forklift 1     3,000       3,000  
Forklift 2     2,871       2,871  
Truck 2018 Hino 155 5347     30,181       30,181  
Truck 2018 Hino 155 5647     30,181       30,181  
Truck 2018 Hino 155 5680     30,181       30,181  
Truck 2019 Hino 155 3710     24,865       24,865  
Truck 2019 Hino 155 7445     34,213       34,213  
Machinery & Equipment     994,540       913,696  
Office Equipment     62,400       62,400  
Vehicles     409,108       409,108  
Accumulated Depreciation     (449,910 )     (99,815 )
                 
    $ 1,294,412     $ 1,477,668  

 

Depreciation
and Amortization expenses for the nine (9) months ended September 30, 2020 was $505,969 compared to $18,231 for the same period
of September 30, 2019.

 

6.
ACCRUED EXPENSE

 

As
of September 30, 2020, the Company had accrued expenses of $1,202,372 compared to $714,962, for the year-end December 31, 2019.

 

7.
INCOME TAX

 

The
Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets
and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under
this method, deferred tax assets and liabilities are determined on the basis of the differences between the financial statement
and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to
reverse.

 

8.
RELATED PARTY TRANSACTIONS

 

The
following table presents a summary of the Company’s promissory notes issued to related parties as of September 30, 2020:

 

Noteholder   Note Amount     Issuance Date   Unpaid Amount  
S. Masjedi   $ 150,000     12/10/2010   $ 75,567  
A. Masjedi     500,000     6/1/2013     358,282  
M. Shenkman     10,000     2/21/2012     10,000  
M. Shenkman     10,000     2/23/2012     10,000  
M. Shenkman     10,000     3/14/2013     6,000  
M. Shenkman (Entrust)     16,000     9/9/2014     16,000  
    $ 696,000         $ 475,849  

 

 

The
following description represent note payable-related party transaction pre-Share Exchange that were assumed by the Company as
a condition to the Share Exchange:

 

In
January 2011, MGD, which is now a majority owned subsidiary of Snöbar Holdings, entered into an unsecured promissory note
with Mrs. Masjedi, who is now the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, director
and majority stockholder. The note had a principal balance of $150,000 with an interest rate of 3{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and has a maturity date of
December 31, 2022. The balance of the note at September 30, 2020 was $75,567.

 

On
February 21, 2012, Snöbar Holdings entered into an unsecured promissory note with Mr. Shenkman, who is Chairman of the Board
of Directors and a shareholder of the Company. The note had a principal balance of $10,000 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and is
due on demand. The note’s maturity date has subsequently been extended to December 31, 2022. Interest against the note was
extinguished in a subsequent extension of the term. The note had a principal balance of $10,000 as of September 30, 2020.

 

On
February 23, 2012, Snöbar Holdings entered into a promissory note with Mr. Shenkman for $10,000, maturing in one year at
an interest of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. The note has subsequently been extended to December 31, 2022. Interest under the note was extinguished in a
subsequent extension of the term. The note had an outstanding balance of $10,000 as of September 30, 2020.

 

On
March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a Mr. Shenkman, the Company’s Chairman
of the Board of Directors. The note had a principal balance of $10,000 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and an original maturity date
of March 14, 2014, subsequently extended to December 31, 2022 with a lower interest rate of 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}/year. Mr. Shenkman also agreed
to make all interest retroactive and deferred. The note had an outstanding balance of $6,000 as of September 30, 2020.

 

On
June 1, 2013, Snöbar Holdings entered into a promissory note with Azizollah Masjedi, father-in-law to Shannon Masjedi who’s
the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, director and majority stockholder, in
an amount of $500,000 to purchase all the shares and interests of IPIC. The note matured on June 31, 2017. As of September 30,
2020, the outstanding balance under this note was $358,282, which includes interest and penalty charges.

 

On
September 9, 2014, Snobar Holdings entered into a second unsecured promissory note with Mr. Shenkman, through his affiliate company
Entrust Group for a total amount of $6,000 and a third unsecured promissory note for a total amount of $10,000, both at an annual
interest rate of 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. No term was provided for in each note, but Mr. Shenkman has agreed to a maturity date of December 31, 2022
and the accrual of interest rates and deferral to maturity. The notes had an aggregate outstanding balance of $16,000 as of September
30, 2020.

 

As
of December 31, 2019, the Company had total short-term notes payable of $1,362,605 and long-term notes payable of $8,669,129.
As of September 30, 2020, the Company had total short-term notes payable of $1,907,971 and long-term notes payable of $10,588,942.

 

9.
NOTES PAYABLE

 

The
following table presents a summary of the Company’s promissory notes issued to unrelated third parties as of September 30,
2020:

 

    Note Amount     Issuance Date   Balance  
A. Rodriguez   $ 86,821     3/14/13   $ 86,821  
A. Rodriguez     15,000     7/22/13     15,000  
A. Rodriguez     10,000     2/21/14     10,000  
Henry Mahgerefteh     144,000     2/15/15     140,503  
TRA Capital     106,112     3 loans     106,112  
BNA Inv     223,499     6 loans     223,499  
Brian Berg     30,000     2/1/12     25,000  
Classic Bev     73,473     5/1/17     348,269  
JSJ, Investments     75,000     7/12/17     30,239  
PowerUp     168,500     8/7/20     168,500  
CapCall     1,000,000     9/20, 11/20     457,000  
PNC, Inc.     850,000     12/19/20     850,000  
PPP     395,600     5/20/20     395,600  
SBA Loan     274,000     4/1/20     274,000  
Dicer     64,678     7/20/20     64,678  
TCA Global fund     2,150,000     5/1/18     2,871,397  
TCA Global fund 2     3,000,000     12/17/19     5,954,446  
    $ 8,666,683         $ 12,021,064  

 

 

The
following description represent unrelated notes payable transactions pre-reverse merger between Snöbar and the Company that
were assumed by the Company as a condition to the Share Exchange Agreement:

 

In
February 2012, MGD entered into an unsecured promissory note with a certain unrelated party, now a shareholder of the Company
for a principal balance of $30,000 at in interest rate of 8{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} per year and maturity date of August 1, 2014. The note’s maturity
date has been extended to December 31, 2020 and the interest rate under the extinguished as part of the extension. The note had
an outstanding balance of $25,000 as of September 30, 2020.

 

On
March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party, now a shareholder
of the Company. The note had a principal balance of $86,821 with an interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3} and had a maturity date of March 14, 2014.
The note’s maturity date has subsequently been extended to February 1, 2020. The entire balance is owed and outstanding
as of September 30, 2020.

 

On
July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party. The note had
a principal balance of $15,000 with an original interest rate of 5{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}. Maturity date has been extended to December 31, 2018, and
interest rate has been reduced to 2{14cc2b5881a050199a960a1a3483042b446231310e72f0dc471a7a1eddd6b0c3}, and lender agreed to make all interest retroactive and deferred. The balance of the note
was $15,000 as of September 30, 2020.

 

The
following description represents unrelated note payable transactions post-merger between Snöbar and the Company:

 

Effective
September 30, 2017, the Company entered into amended promissory notes with BNA/TRA an unrelated third party in an amount of $372,500,
one for $172,500, and four others for $50,000 each. On Septmeber 25, 2020 Pacific Ventures Group entered into a settlement agreement
with BNA/TRA for a combined amount of $400,000 to be in monthly cash installmentsto be paid as follows. On or before October 10,
2020, PACVwill pay the sum of thirty thousand dollars ($30,000); On or before November 1st, 2020, PACV will pay the sum of thirty
thousand ($30,000); On or before December 1, 2020, and continuing through and including May 1st 2023, PACV shall pay twenty-nine
(29) consecutive monthly payments of eleven thousand five hundred($11,500); On or before June 1st, 2023, PACV