UNITED
STATES

SECURITIES
AND EXCHANGE COMMISSION

Washington,
D.C. 20549



FORM
10-Q



(Mark
One)



[X]
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



For
the quarterly period ended June 30, 2020



[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT



For
the transition period from ___________ to _____________



Commission
File Number 000-54584



PACIFIC
VENTURES GROUP, INC.

(Exact
name of registrant as specified in its charter)



|Delaware                                                 |  | 75-2100622             
|-------------------------------------------------------- |  | -----------------------
|(State
    or other jurisdiction                         |  | (I.R.S.
    Employer   
|of
    incorporation or organization)                    |  | Identification
    No.)
|                                                         |  |                        
|117
    West 9th Street Suite 316 Los Angeles California |  | 90015                  
|(Address
    of principal executive offices)             |  | (Zip
    Code)         



310-392-5606

(Registrant’s
telephone number, including area code)



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



|Title
    of each class |  | Trading
    Symbol(s) |  | Name
    of each exchange on which registered
|----------------------- |  | --------------------- |  | ---------------------------------------------
|None                    |  | None                  |  | None                                         



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



Common
Stock, $0.001 par value

(Title
of class)



Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]



Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit and post such files). Yes [X] No [  ]



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]
|(Do
    not check if smaller reporting company) |  | Emerging
    growth company [  ] 



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



Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]



As
of June 30, 2020, there were 1,142,781 shares of the registrant’s common stock, $0.001 par value per share, issued and outstanding,
which reflects the 1-for-500 reverse stock split that occurred on April 13, 2020.


















PACIFIC
VENTURES GROUP, INC.



TABLE
OF CONTENTS



|PART I. – FINANCIAL INFORMATION                                                               |   
|--------------------------------------------------------------------------------------------- | --
|                                                                                              |   
|Item 1. Financial Statements                                                                  | 1 
|                                                                                              |   
|Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | 17
|                                                                                              |   
|Item 3. Quantitative and Qualitative Disclosures about Market Risk                            | 22
|                                                                                              |   
|Item 4. Controls and Procedures                                                               | 23
|                                                                                              |   
|PART II. – OTHER INFORMATION                                                                  |   
|                                                                                              |   
|Item 1. Legal Proceedings                                                                     | 24
|                                                                                              |   
|Item 2. Unregistered Sales of Equity Securities and Use of Proceeds                           | 24
|                                                                                              |   
|Item 3. Defaults Upon Senior Securities                                                       | 24
|                                                                                              |   
|Item 4. Mine Safety Disclosures                                                               | 24
|                                                                                              |   
|Item 5. Other Information                                                                     | 24
|                                                                                              |   
|Item 6. Exhibits                                                                              | 25
|                                                                                              |   
|Signatures                                                                                    | 28















PART
I – FINANCIAL INFORMATION



Item
1. Financial Statements



|Condensed Consolidated Balance Sheets as of June 30, 2020 (unaudited) and December 31, 2019 (audited)       | 2
|----------------------------------------------------------------------------------------------------------- | -
|                                                                                                            |  
|Condensed Consolidated Statements of Operations for the six months ended June 30, 2020 and 2019 (unaudited) | 3
|                                                                                                            |  
|Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2020 and 2019 (unaudited) | 4
|                                                                                                            |  
|Notes to the condensed consolidated financial statements (unaudited)                                        | 5



1







PACIFIC
VENTURES GROUP, INC.

Consolidated
Balance Sheets



|                                                                                                                                                                                                    |  | For the six months  |             |   |                   |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------- | ----------- | - | ----------------- | -
|                                                                                                                                                                                                    |  | ended June 30, 2020 |             |   | December 31, 2019 |  
|                                                                                                                                                                                                    |  | (unaudited)         |             |   | (audited)         |  
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|ASSETS                                                                                                                                                                                              |  |                     |             |   |                   |  
|Current Assets:                                                                                                                                                                                     |  |                     |             |   |                   |  
|Cash and cash equivalents                                                                                                                                                                           |  | $                   | 457,096     |   |                   | $
|Accounts receivable                                                                                                                                                                                 |  |                     | 1,849,842   |   |                   |  
|Inventory Asset                                                                                                                                                                                     |  |                     | 1,700,470   |   |                   |  
|Other Current Asset                                                                                                                                                                                 |  |                     | 51,879      |   |                   |  
|Right to Use Asset                                                                                                                                                                                  |  |                     | 213,000     |   |                   |  
|Deposits                                                                                                                                                                                            |  |                     | 16,845      |   |                   |  
|Total Current Assets                                                                                                                                                                                |  |                     | 4,289,132   |   |                   |  
|Fixed Assets                                                                                                                                                                                        |  |                     |             |   |                   |  
|Fixed assets, net                                                                                                                                                                                   |  | $                   | 1,280,441   |   |                   | $
|Total Fixed Assets                                                                                                                                                                                  |  |                     | 1,280,441   |   |                   |  
|Other Assets                                                                                                                                                                                        |  |                     |             |   |                   |  
|Intangible Assets                                                                                                                                                                                   |  | $                   | 3,589,263   |   |                   | $
|Right to Use Asset                                                                                                                                                                                  |  |                     | 817,000     |   |                   |  
|Rent Deposit and Employee Advances                                                                                                                                                                  |  |                     | 12,901      |   |                   |  
|                                                                                                                                                                                                    |  |                     | 4,419,164   |   |                   |  
|TOTAL ASSETS                                                                                                                                                                                        |  | $                   | 9,988,737   |   |                   | $
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|LIABILITIES AND STOCKHOLDERS’ EQUITY                                                                                                                                                                |  |                     |             |   |                   |  
|Current Liabilities:                                                                                                                                                                                |  |                     |             |   |                   |  
|Accounts payable                                                                                                                                                                                    |  | $                   | 2,926,497   |   |                   | $
|Accrued expenses                                                                                                                                                                                    |  |                     | 957,868     |   |                   |  
|Lease Liability                                                                                                                                                                                     |  |                     | 213,000     |   |                   |  
|Current portion, notes payable                                                                                                                                                                      |  |                     | 827,048     |   |                   |  
|Current portion, notes payable - related party                                                                                                                                                      |  |                     | 401,515     |   |                   |  
|Current portion, leases payable                                                                                                                                                                     |  |                     | 102,081     |   |                   |  
|Total Current Liabilities                                                                                                                                                                           |  | $                   | 5,428,009   |   |                   | $
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|Long-Term Liabilities:                                                                                                                                                                              |  |                     |             |   |                   |  
|Notes payable                                                                                                                                                                                       |  | $                   | 10,175,696  |   |                   | $
|Notes payable - related party                                                                                                                                                                       |  |                     | 42,000      |   |                   |  
|Lease Liability                                                                                                                                                                                     |  |                     | 817,000     |   |                   |  
|Total Long-Term Liabilities                                                                                                                                                                         |  |                     | 11,034,696  |   |                   |  
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|Total Liabilities                                                                                                                                                                                   |  | $                   | 16,462,705  |   |                   | $
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|STOCKHOLDERS’ EQUITY (DEFICIT)                                                                                                                                                                      |  |                     |             |   |                   |  
|Preferred stock, $.001 par value, 10,000,000 shares authorized, 6,000,000 Series E, issued and outstanding                                                                                          |  | $                   | 6,000       |   |                   | $
|10,000 Series F, issued and outstanding                                                                                                                                                             |  |                     | 10          |   |                   |  
|Common stock, $.001 par value, 900,000,000 shares authorized, and 1,142,781 issued and outstanding at June 30, 2020, which reflects the 1-for-500 reverse stock split that occurred on Apr 13, 2020 |  |                     | 570,033     |   |                   |  
|Additional paid in capital                                                                                                                                                                          |  |                     | 4,852,003   |   |                   |  
|Accumulated deficit                                                                                                                                                                                 |  |                     | (11,902,013 | ) |                   |  
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|Total Stockholders’ Equity (Deficit)                                                                                                                                                                |  | $                   | (6,473,968  | ) |                   | $
|                                                                                                                                                                                                    |  |                     |             |   |                   |  
|Total Liabilities and Stockholders’ Equity (Deficit)                                                                                                                                                |  | $                   | 9,988,737   |   |                   | $



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



2







PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Operations

(unaudited)



|                                                |  | For the three months |            |   | For the six months |  
|----------------------------------------------- |  | -------------------- | ---------- | - | ------------------ | -
|                                                |  | ended June 30,       |            |   | ended June 30,     |  
|                                                |  | 2020                 |            |   | 2019               |  
|                                                |  |                      |            |   |                    |  
|Sales, net of discounts                         |  | $                    | 8,688,557  |   |                    | $
|Cost of Goods Sold                              |  |                      | 7,682,194  |   |                    |  
|Gross Profit                                    |  |                      | 1,006,363  |   |                    |  
|Operating Expenses                              |  |                      |            |   |                    |  
|Selling, general and administrative             |  |                      | 1,162,266  |   |                    |  
|Marketing and Advertising                       |  |                      | 4,425      |   |                    |  
|Amortization and Depreciation expense           |  |                      | 162,130    |   |                    |  
|Professional fees                               |  |                      | 263,366    |   |                    |  
|Officer Compensation                            |  |                      | 75,000     |   |                    |  
|Operating Expenses/(Loss)                       |  |                      | 1,667,187  |   |                    |  
|Income/(Loss) from Operations                   |  |                      | (660,824   | ) |                    |  
|Other Non-Operating Income and Expenses         |  |                      |            |   |                    |  
|Interest expense                                |  |                      | (418,134   | ) |                    |  
|Net Income/(Loss) before Income Taxes           |  |                      | (1,078,958 | ) |                    |  
|Provision for income taxes                      |  |                      |            |   |                    |  
|Net Ordinary Income/(Loss)                      |  |                      | (1,078,958 | ) |                    |  
|Other Income / Expense                          |  |                      |            |   |                    |  
|Other Income - Other                            |  |                      | 4,868      |   |                    |  
|Net Income/(Loss)                               |  | $                    | (1,074,090 | ) |                    |  
|Basic and Diluted Loss per Share - Common Stock |  | $                    | (0.93989   | ) |                    | $
|                                                |  |                      |            |   |                    |  
|Weighted Average Number of Shares Outstanding:  |  |                      |            |   |                    |  
|Basic and Diluted Class A Common Stock          |  |                      | 1,142,781  |   |                    |  



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.



3







PACIFIC
VENTURES GROUP, INC.

Consolidated
Statements of Cash Flows

(unaudited)



|                                                                            |  | For the six months |           
|--------------------------------------------------------------------------- |  | ------------------ | ----------
|                                                                            |  | ended June 30,     |           
|                                                                            |  | 2020               |           
|                                                                            |  |                    |           
|OPERATING ACTIVITIES                                                        |  |                    |           
|Net loss                                                                    |  | $                  | (1,861,646
|Adjustments to reconcile net loss to net cash used in operating activities: |  |                    |           
|Shares issued for services                                                  |  |                    | (5,000    
|Accumulated Depreciation                                                    |  |                    |           
|Depreciation & Amortization Expense                                         |  |                    | 324,022   
|Changes in operating assets and liabilities                                 |  |                    |           
|Accounts receivable                                                         |  |                    | (630,596  
|Inventory                                                                   |  |                    | (869,967  
|Other Current Assets                                                        |  |                    | 53,412    
|Other Assets                                                                |  |                    | -         
|Accounts payable                                                            |  |                    | 1,647,070 
|Accrued expenses                                                            |  |                    | 96,954    
|Other Current liabilities                                                   |  |                    | (63,556   
|Capitalized interest or penalty fees                                        |  |                    | 121,086   
|                                                                            |  |                    |           
|Net Cash Provided by / (Used in) Operating Activities                       |  |                    | (1,188,222
|INVESTING ACTIVITIES                                                        |  |                    |           
|Receivable - Related                                                        |  |                    | -         
|Purchase of equipment, building & improvements & fixed assets               |  |                    | (35,687   
|Goodwill and Intangible Assets                                              |  |                    | -         
|Net Cash Provided by / (Used In) Investing Activities                       |  |                    | (35,687   
|                                                                            |  |                    |           
|FINANCING ACTIVITIES                                                        |  |                    |           
|Proceeds from notes payable                                                 |  |                    | 669,600   
|Proceeds from notes payable - Related                                       |  |                    | -         
|Repayment of notes payable                                                  |  |                    | (188,395  
|Repayment of notes payable - Related                                        |  |                    | (125      
|Proceeds from long-term loans                                               |  |                    | 2,838,868 
|Repayment of long-term loans                                                |  |                    | (1,959,900
|Repayment of debt by Shares                                                 |  |                    | -         
|Common Shares Issued for Cash                                               |  |                    | -         
|Shares Issued for Debt                                                      |  |                    | -         
|Preferred Stocks issued                                                     |  |                    | 5,000     
|Prior period adjustment to retained earnings                                |  |                    | -         
|Net Cash Provided by / (Used in) Financing Activities                       |  |                    | 1,365,048 
|                                                                            |  |                    |           
|NET INCREASE (DECREASE) IN CASH                                             |  |                    | 141,139   
|CASH AT BEGINNING OF PERIOD                                                 |  |                    | 315,956   
|                                                                            |  |                    |           
|CASH AT END OF PERIOD                                                       |  | $                  | 457,096   
|                                                                            |  |                    |           
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                           |  |                    |           
|                                                                            |  |                    |           
|CASH PAID FOR:                                                              |  |                    |           
|Interest and penalty fees                                                   |  | $                  | 203,672   
|NON CASH FINANCING ACTIVITIES:                                              |  |                    |           
|Issuance of shares for debt conversion                                      |  | $                  | -         



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



4







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% 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% 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% 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.



5







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



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.



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



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.



6







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 June 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. As of June 30, 2020, the Company has $0 in disputed liabilities
on its balance sheet.



7







Cash
Equivalents



The
Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents. As of June
30, 2020, the Company has a cash balance of $457,096 in cash and cash equivalents, compared to $315,957 at December 31, 2019.



Accounts
Receivable



As
of June 30, 2020, Accounts Receivable are stated at net realizable value of $1,849,842. 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 $5,038 of bad debts during the six (6) months ended June 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 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 June 30, 2020, the Company has $1,700,470 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.



8







Identifiable
Intangible Assets



As
of June 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



Total
Intangible Assets $3,733,239



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
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.



9







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.



10







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 $1,861,646 for the six (6) months
ended June 30, 2020 and has an accumulated deficit of $11,902,013 as of June 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 June30, 2020, the Company had inventory assets for a total of $1,700,470. The Company had inventory assets of $830,504 as of
December 31, 2019.



11







5.
PROPERTY, PLANT AND EQUIPMENT



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



|                         |  | June 30, 2020 |           |   | December 31, 2019 |  
|------------------------ |  | ------------- | --------- | - | ----------------- | -
|Computers                |  | $             | 11,788    |   |                   | $
|Office Furniture         |  |               | 14,390    |   |                   |  
|Building & Improvement   |  |               | 25,000    |   |                   |  
|Leashold Improvement     |  |               | 13,000    |   |                   |  
|Forklift 1               |  |               | 3,000     |   |                   |  
|Forklift 2               |  |               | 2,871     |   |                   |  
|Truck 2018 Hino 155 5347 |  |               | 30,181    |   |                   |  
|Truck 2018 Hino 155 5647 |  |               | 30,181    |   |                   |  
|Truck 2018 Hino 155 5680 |  |               | 30,181    |   |                   |  
|Truck 2019 Hino 155 3710 |  |               | 24,865    |   |                   |  
|Truck 2019 Hino 155 7445 |  |               | 34,213    |   |                   |  
|Machinery & Equipment    |  |               | 921,992   |   |                   |  
|Office Equipment         |  |               | 62,400    |   |                   |  
|Vehicles                 |  |               | 409,108   |   |                   |  
|Accumulated Depreciation |  |               | (332,729  | ) |                   |  
|                         |  |               |           |   |                   |  
|                         |  | $             | 1,280,441 |   |                   | $



Depreciation
and Amortization expenses for the six (6) months ended June 30, 2020 was $324,022 compared to $12,473 for the same period of June
30, 2019.



6.
ACCRUED EXPENSE



As
of June 30, 2020, the Company had accrued expenses of $957,868 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 June 30, 2020:



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



12







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% and has a maturity date of
December 31, 2022. The balance of the note at June 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% 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 June 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%. 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 June 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% and an original maturity date
of March 14, 2014, subsequently extended to December 31, 2022 with a lower interest rate of 2%/year. Mr. Shenkman also agreed
to make all interest retroactive and deferred. The note had an outstanding balance of $6,000 as of June 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 June 30, 2020,
the outstanding balance under this note was $325,948, 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%. 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 June
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 June 30, 2020, the Company had total short-term notes payable of $1,228,563 and long-term notes payable of $10,217,696.



9.
NOTES PAYABLE



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



|                      |  | Note
    Amount |           |  | Issuance
    Date |             | Balance |  
|--------------------- |  | --------------- | --------- |  | ----------------- | ----------- | ------- | -
|A.
    Rodriguez      |  | $               | 86,821    |  |                   | 3/14/13     |         | $
|A.
    Rodriguez      |  |                 | 15,000    |  |                   | 7/22/13     |         |  
|A.
    Rodriguez      |  |                 | 10,000    |  |                   | 2/21/14     |         |  
|Henry
    Mahgerefteh |  |                 | 144,000   |  |                   | 2/15/15     |         |  
|TRA
    Capital       |  |                 | 106,112   |  |                   | 3
    loans |         |  
|BNA
    Inv           |  |                 | 223,499   |  |                   | 6
    loans |         |  
|Brian
    Berg        |  |                 | 30,000    |  |                   | 2/1/12      |         |  
|Classic
    Bev       |  |                 | 73,473    |  |                   | 5/1/17      |         |  
|JSJ,
    Investments  |  |                 | 75,000    |  |                   | 7/12/17     |         |  
|PNC,
    Inc.         |  |                 | 2,876,509 |  |                   | 12/19/20    |         |  
|TCA
    Global fund   |  |                 | 2,150,000 |  |                   | 5/1/18      |         |  
|TCA
    Global fund 2 |  |                 | 3,000,000 |  |                   | 12/17/19    |         |  
|SBA
    Loan          |  |                 | 114,100   |  |                   | 4/1/20      |         |  
|                      |  | $               | 9,108,514 |  |                   |             |         | $



13







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% 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 June 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% 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 June 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%. Maturity date has been extended to December 31, 2018, and
interest rate has been reduced to 2%, and lender agreed to make all interest retroactive and deferred. The balance of the note
was $15,000 as of June 30, 2020.



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 June 30, 2020 was $36,464. There is no conversion feature to this settlement and 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% 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 June 30, 2020, including the $15,000 extension fee.



Over
the past year Classic Beverage has periodically issued loans to the Company. The Company has agreed to pay interest 10% per year
and has agreed on penalty fees if late on payments. The note is due on demand. The current balance is $317,274, 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%. The outstanding
balance of the notes with TCA Global Fund for San Diego Farmers Outlet is $2,784,688 as of June 30, 2020.



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%. The total outstanding balance of the two (2) notes for Seaport Meat is $8,519,275 as of June 30, 2020.



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.



As
of June 30, 2020, the Company had short-term notes payable of $1,228,563 and long-term notes payable of $10,217,696.



14







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% and up to 100% of the total issued
and outstanding shares of Class A Common Stock and (ii) 100% 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).



There
was 0 restricted shares of the Company’s common stock issued during the fiscal quarter ended June 301, 2020.



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. Additionally, Company has designated 10,000 shares of Series F Preferred Stock and 10,000 shares
of the Series F Preferred Stock are issued and outstanding. Each share of Series F Preferred Stock is convertible into 0.1% of
the issued and outstanding stock at the time of conversion.



From
January 1, 2020 through June 30, 2020, the Company issued 0 shares of its common stock.



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 June 30, 2019, and the same period in 2020, there were 275,858,986 and 1,142,781 shares of the
Company’s common stock issued and outstanding, respectively. The June 30, 2020 common stock issued and outstanding shares
reflect the 1-for-500 reverse stock split that occurred on Apr 13, 2020.



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.



15







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.
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.



We
have evaluated events through August 19, 2020.



16









ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Forward-Looking
Statements



This
Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements. The Securities and Exchange
Commission (the “SEC”) encourages companies to disclose forward-looking information so that investors can better understand
a company’s future prospects and make informed investment decisions. This Quarterly Report 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% 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% 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.



17







Description
of the Business Operations of Snöbar Holdings



Snöbar
Holdings is the trustor and sole beneficiary of the Trust. The Trust owns 100% 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% 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.



Plan
of Operations



Snobar



As
of the date of this Quarterly Report, 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.



18







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.



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



19







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 new 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



Six
Months ended June 30, 2020, as Compared to Six Months Ended June 30, 2019



Revenues
―The Company recorded $15,388,665 sales revenue for the six months ended June 30, 2020 as compared to $2,418,994 for
the same period of June 30, 2019. The Company had $1,700,470 inventory of saleable merchandise as of June 30, 2020 as compared
to $371,220 for the period ending June 30, 2019. The increase in revenue and inventory is due to our acquisition of Seaport Meat.



Operating
Expenses― Total operating expenses for the six months ended June 30, 2020 was $3,082,873 as compared to $884,495 in
the same period in, 2019, due to increased operating activities during the period ended June 30, 2020, and an increase in salaries
and wages. The increases in expenses as stated through this section is due primarily to the acquisition of Seaport Meat in December
2019.



Selling,
General and Administrative Expenses ―Selling, general and administrative expenses for the six months ended June 30,
2020 increased by $1,615,872 to $2,136,086 from $520,214 in the same period in 2019, which was due to an increase in various expenses
and business expansion.



20







Marketing
and Advertising Expenses –Marketing and advertising expenses for the six months ended June 30, 2020 was $19,143 compared
to $23,871 in June 30, 2019.



Professional
fees – Professional fees expense for the six months ended June 30, 2020 was $453,622, which includes accounting, legal
fees and consulting services compared to $327,937 during the same period in 2019.



Depreciation
and Amortization Expenses ―Depreciation and Amortization expenses for the six months ended June 30, 2020 and 2019 was
$324,022 and $12,473, respectively.



Salaries
and Wages ―Salaries and wages expense, in the form of payroll expenses, which is included under selling & general
expenses for the six months ended June 30, 2020 was $1,197,219, as compared to $242,827 for the prior same period.



Other
Non-Operating Income and Expenses ―For the six months period ended June 30, 2020, the Company recorded interest and
penalty expenses in the amount of $808,134 for a non-operating loss in the same amount. In the six months ended June 30, 2019
the Company recorded other non-operating expenses of $356,737 in interest expense for a non-operating loss in the same amount.



Net
Loss ―Net loss for six months ended June 30, 2020 was $1,861,646, as compared to net loss of $540,962 for the six months
ended June 30, 2019.



Financial
Condition, Liquidity and Capital Resources



As
of June 30, 2020, the Company had a working capital deficit of $1,138,877, consisting of $457,096 in cash, $1,849,842 in accounts
receivable, $1,700,470 in inventory, $264,879 in other assets and $16,845 in deposits, offset by accounts payable $2,926,497,
accrued expenses of $957,868, equipment of $102,081 and $1,441,563 in the current portion of notes payable.



For
the six months period ended June 30, 2020, the Company used $1,188,222 of cash in operating activities, used cash of $35,687 for
investing activities and obtained $1,365,048 cash from financing activities, resulting in a increase in total cash of $141,139
and a cash balance of $457,096 for the period. For the six months period ended June 30, 2019, the Company used cash of $392,899
in operating activities, used cash of $127,816 for investing activities and obtained cash of $358,312 from financing activities,
resulting in an decrease in cash of $162,403 and a negative cash balance of $11,345 at the end of such period.



Total
current assets as of June 30, 2020 was $4,289,132, while current liabilities were $5,428,009. The Company has incurred an operating
loss of $1,861,646 for the six months period ended June 30, 2020, largely due the increase in operating expenses, business expansion
and increase in interest and penalty fees. During the six months period ended June 30, 2020, the Company had an accumulated deficit
of $11,902,013. 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 June 30, 2020 |           |  | As of December 31, 2019 |  
|----------------------- |  | ------------------- | --------- |  | ----------------------- | -
|                        |  | $ Current           |           |  | $ Long-Term             |  
|Notes Payable           |  |                     | 827,048   |  |                         |  
|                        |  |                     |           |  |                         |  
|Notes Payable - Related |  |                     | 401,515   |  |                         |  
|                        |  | $                   | 1,228,563 |  |                         | $



Total
Notes Payable for related and unrelated parties increased by $1,414,525 from the fiscal year ended December 31, 2019 from $10,031,734
to $11,446,259 in the six months period ended June 30, 2020.



21







As
of June 30, 2020, total stockholders’ equity deficit increased to $6,473,968 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 $11,902,013 for the six months period ended June
30, 2020.



As
of June 30, 2020, the Company had a cash balance of $457,096 (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 included elsewhere in this Quarterly Report. 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.



Item
3. Quantitative and Qualitative Disclosures About Market Risk.



Not
required for smaller reporting companies.



22







Item
4. Controls and Procedures.



Evaluation
of Disclosure Controls and Procedures



As
required by Securities Exchange Act of 1934, as amended (the “Exchange Act”), Rule 13a-15(b), we have carried out
an evaluation(the “Evaluation”), under the supervision and with the participation of our management, including our
Chief Executive Officer and Interim Chief Financial Officer, of the effectiveness of the design and operation of our management,
and the design and operation of our disclosure controls and procedures as of June 30, 2020. Based upon an evaluation of the effectiveness
of disclosure controls and procedures, our Chief Executive Officer and Interim Chief Financial Officer has concluded that as of
the end of the period covered by this Quarterly Report, our disclosure controls and procedures (as defined in Rules 13a-15(e)
or 15d-15(e) under the Exchange Act) were not effective because of the material weaknesses described below, in order to provide
reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized
and reported within the time periods specified by the rules and forms of the SEC and is accumulated and communicated to management,
including the Chief Executive Officer and Interim Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure (see below for further discussion).We had neither the resources, nor the personnel, to provide an adequate
control environment.



The
following material weaknesses in our internal control over financial reporting continued to exist at June 30, 2020:



| | ● | we
                                         do not have written documentation of our internal control policies and procedures. Written
                                         documentation of key internal controls over financial reporting is a requirement of Section
                                         404 of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”);
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   |                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | We
                                         do not have a full time CFO                                                                                                                                                                                                                                                                                                               
| |   |                                                                                                                                                                                                                                                                                                                                                                                       
| | ● | we
                                         do not have an independent audit committee of our Board of Directors;                                                                                                                                                                                                                                                                     



We
plan to take a number of actions to correct these material weaknesses including, but not limited to, establishing an audit committee
of our Board of Directors comprised of three independent directors, and retaining third-party consultants to review our internal
controls and recommend improvements.



It
should be noted that any system of controls, however well designed and operated, can provide only reasonable and not absolute
assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain
assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there
can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless
of how remote.



Changes
in Internal Control Over Financial Reporting



There
were no material changes in our internal control over financial reporting (as defined in Rule 13a- 15(f) under the Exchange Act)
that occurred as of June 30, 2020, that have materially affected, or are reasonably likely to materially affect, our internal
control over financial reporting.



CEO
and CFO Certifications



Exhibits
31.1 and 31.2 to this Quarterly Report are the Certifications of the Chief Executive Officer and the Interim Chief Financial Officer,
respectively. These Certifications are required in accordance with Section 302 of the Sarbanes-Oxley Act (the “Section 302
Certifications”). This Item 4 of this Quarterly Report, which you are currently reading, is the information concerning the
Evaluation referred to above and in the Section 302 Certifications and this information should be read in conjunction with the
Section 302 Certifications for a more complete understanding of the topics presented.



23







PART
II - OTHER INFORMATION



ITEM
1. 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.



From
time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business.
However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may have, individually
or in the aggregate, a material adverse effect on our business, financial condition or operating results. The company is not aware
of any other legal proceedings except what is listed below.



On
November 29, 2018, assignees of certain convertible redeemable promissory notes of the Company with an aggregate principal balance
of $223,499 commenced an action in the New York Supreme Court for New York County against the Company (BNA Investment Capital,
LLC and TRA Capital, LLC v. Pacific Ventures Group, Inc., Index Number 655927 (Supreme Court, New York County 2018)). The suit
was brought by the plaintiffs by a motion for summary judgment in lieu of complaint. The motion asserts breaches of contract due
to failure to honor certain conversion notices allegedly tendered pursuant to the convertible notes and cross-default. The Company
has opposed the motion, but the court has not scheduled arguments or rendered any decision.



We
intend to vigorously defend against the lawsuits described above. There is no assurance, however, that we will be successful in
the defense of these lawsuits. Moreover, we are unable to predict the outcome or reasonably estimate a range of possible losses
at this time. A resolution of these lawsuits in a manner adverse to us, however, could have a material effect on our financial
position and results of operations.



ITEM
2. Unregistered Sales of Equity Securities and Use of Proceeds



Recent
Sales of Unregistered Securities



During
the six months ended June 30, 2020, the Company issued 0 shares of its common stock.



Use
of Proceeds of Registered Securities



Not
applicable.



Purchases
of Equity Securities by Us and Affiliated Purchasers



During
the six months ended June 30, 2020, the Company has not purchased any equity securities nor have any officers or directors of
the Company.



ITEM
3. Defaults Upon Senior Securities



The
Company is not aware of any defaults upon its senior securities.



ITEM
4. Mine Safety Disclosures



Not
applicable.



ITEM
5. Other Information.



None.



24







ITEM
6. Exhibits



|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).               
|        |  |                                                                                                                                                                                                                                                                                                                           
|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     |  | Amendment No. 1 to the Bylaws of the Company (Incorporated by reference to Exhibit 3.3 to the Company’s Registration Statement on Form S-1/A, as filed with the SEC on June 14, 2017).                                                                                                                                    
|        |  |                                                                                                                                                                                                                                                                                                                           
|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 on Form 8-K, as filed with the SEC on September 25, 2015).                             
|        |  |                                                                                                                                                                                                                                                                                                                           
|10.2    |  | Distribution Agreement, dated March 16, 2015, between International Production Impex Corporation and Spectrum Entertainment & Events LLC (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2015).                                            
|        |  |                                                                                                                                                                                                                                                                                                                           
|10.3    |  | Distribution Agreement, dated June 5, 2015, between International Production Impex Corporation and Eddie Holman (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2015).                                                                     
|        |  |                                                                                                                                                                                                                                                                                                                           
|10.4    |  | Exclusive Distribution Agreement, dated February 3, 2015, between International Production Impex Corporation and Yes Consolidated, LLC (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K, as filed with the SEC on September 25, 2015).                                              
|        |  |                                                                                                                                                                                                                                                                                                                           
|10.5    |  | Distribution Agreement, dated May 1, 2015, between International Production Impex Corporation and Dejako Trading Company (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on 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 on Form 8-K, as filed with the SEC on September 25, 2015).                                                                                
|        |  |                                                                                                                                                                                                                                                                                                                           
|10.7    |  | Anti-Dilution Agreement, dated September 25, 2015, among the Company and Brett Bertolami and Danzig Ltd. (Incorporated by reference to Exhibit 10.7 to the Company’s Current Report Form on 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 Annual Report on Form 10-K, Amendment No. 1, as filed with the SEC on October 16, 2017).                           



25







|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, Amendment No. 1, 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 |  | SEAPORT amended APA (Incorporated by reference to Exhibit 10 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                                                            
|      |  |                                                                                                                                                                                                                                                  
|10.12 |  | SEAPORT Asset Purchase Agreement (Incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                                             
|      |  |                                                                                                                                                                                                                                                  
|10.13 |  | Exchange IB Obligations Membership Interests in Seaport (Incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                      
|      |  |                                                                                                                                                                                                                                                  
|10.14 |  | Pledge Irrevocable Proxy (TCA Royalty Foods I, LLC) (Incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                          
|      |  |                                                                                                                                                                                                                                                  
|10.15 |  | Pledge Irrevocable Proxy (Seaport Group Enterprises LLC) (Incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                     
|      |  |                                                                                                                                                                                                                                                  
|10.16 |  | Pledge and Escrow Agreement (Pacific - TCA) (Incorporated by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                                  
|      |  |                                                                                                                                                                                                                                                  
|10.17 |  | Pledge and Escrow Agreement (Pacific - Seaport) (Incorporated by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                              
|      |  |                                                                                                                                                                                                                                                  
|10.18 |  | Pacific Ventures Group - Security Agreement (Issuer) (Incorporated by reference to Exhibit 10 .7 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                        
|      |  |                                                                                                                                                                                                                                                  
|10.19 |  | Pacific Ventures Group - Security Agreement (Guarantors) (Incorporated by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                     
|      |  |                                                                                                                                                                                                                                                  
|10.20 |  | Pacific Ventures Group - Corporate Guaranty (Masjedi) (Incorporated by reference to Exhibit 10.9 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                        
|      |  |                                                                                                                                                                                                                                                  
|10.21 |  | Pacific Ventures Group - Corporate Guaranty (Guarantors) (Incorporated by reference to Exhibit 10.10 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                    
|      |  |                                                                                                                                                                                                                                                  
|10.22 |  | Debenture (Working Capital) TCA ICAV Pacific Venture Group (Incorporated by reference to Exhibit 10.11 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                  
|      |  |                                                                                                                                                                                                                                                  
|10.23 |  | Debenture (Purchase Price) TCA ICAV Pacific Venture Group (Incorporated by reference to Exhibit 10.12 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                                   
|      |  |                                                                                                                                                                                                                                                  
|10.24 |  | Securities Purchase Agreement TCA special Situations Pacific Ventures (Incorporated by reference to Exhibit 10.13 to the Company’s Current Report on Form 8-K as filed with the SEC on December 20, 2019).                                       



26







|31.1*    |  | Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act.                                                                                       
|-------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|         |  |                                                                                                                                                                                       
|31.2*    |  | Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act.                                                                                       
|         |  |                                                                                                                                                                                       
|32.1**   |  | Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|         |  |                                                                                                                                                                                       
|101.INS* |  | XBRL Instance Document                                                                                                                                                                
|101.SCH* |  | XBRL Taxonomy Extension
    Schema Document                                                                                                                                           
|101.CAL* |  | XBRL Taxonomy Extension
    Calculation Linkbase Document                                                                                                                             
|101.DEF* |  | XBRL Taxonomy Extension
    Definition Linkbase Document                                                                                                                              
|101.LAB* |  | XBRL Taxonomy Extension
    Label Linkbase Document                                                                                                                                   
|101.PRE* |  | XBRL Taxonomy Extension
    Presentation Linkbase Document                                                                                                                            



|*  | Filed herewith.    
|-- | -------------------
|** | Furnished herewith.



27







SIGNATURES



Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.



|                      | PACIFIC VENTURES GROUP, INC.
|--------------------- | ----------------------------
|                      |                             
|Date: August 20, 2020 | By:                         
|                      |                             
|                      |                             



28