PACIFIC VENTURES GROUP, INC. Forward-Looking Statements
Statements in this Quarterly Report on Form 10-Q (this "Quarterly Report") which are not historical in nature are "forward-looking statements" within the meaning of the federal securities laws. These statements often include words such as "believe," "expect," "project," "anticipate," "intend," "plan," "outlook," "estimate," "target," "seek," "will," "may," "would," "should," "could," "forecast," "mission," "strive," "more," "goal," or similar expressions and are based upon various assumptions and our experience in the industry, as well as historical trends, current conditions, and expected future developments. However, you should understand that these statements are not guarantees of performance or results, and there are several risks, uncertainties and other important factors that could cause our actual results to differ materially from those expressed in the forward-looking statements, including, among others:
? any declines in the consumption of food prepared away from home;
? the extent and duration of the negative impact of the COVID-19 pandemic on us;
? cost inflation/deflation and commodity volatility;
? competition;
? reliance on third-party suppliers and interruption of product supply or
increases in product costs;
? changes in our relationships with customers and group purchasing
organizations;
? our ability to increase or maintain the highest margin portions of our
business;
? effective integration of acquired businesses;
? achievement of expected benefits from cost savings initiatives;
? increases in fuel costs;
? economic factors affecting consumer confidence and discretionary spending;
? changes in consumer eating habits;
? reputation in the industry;
? labor relations and costs and continued access to qualified and diverse labor;
? cost and pricing structures;
? changes in tax laws and regulations and resolution of tax disputes;
? environmental, health and safety and other government regulation, including
actions taken by national, state and local governments to contain the COVID-19
pandemic, such as travel restrictions or bans, social distancing requirements,
and required closures of non-essential businesses;
? product recalls and product liability claims;
? adverse judgments or settlements resulting from litigation;
? disruption of existing technologies and implementation of new technologies;
? cybersecurity incidents and other technology disruptions;
? management of retirement benefits and pension obligations;
? extreme weather conditions, natural disasters and other catastrophic events,
including pandemics and the rapid spread of contagious illnesses;
? risks associated with intellectual property, including potential infringement;
indebtedness and restrictions under agreements governing indebtedness; and
? interest rate increases.
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.
15 General
The Company was incorporated under the laws of the
The current structure of the Company resulted from a share exchange with Snöbar
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" .
IPIC is a food, beverage and alcohol distribution company who has sold 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:
The SnöBar brand is fully trademarked within the
On
16
On
Plan of OperationsSnobar
As of the date of this Quarterly Report, Snöbar products are currently being
sold in the east coast of
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 2023. The company will launch the state
of
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'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
The Company's customers range from a wide variety of restaurants, including many
well known in Southern CA, to institutions, schools (
17
Because
In 2021, the California COVID-19 restrictions have eased up on the restaurants
and dining facilities. The Company has seen an increase in sales and our third
quarter revenue has already exceeded our 2020 year-end revenue. The Company has
managed to retain all new customers and seen the return of large customers such
as
During 2020, the
We also acted quickly to protect the health and safety of our communities by implementing new protocols and enhanced safety measures to protect our frontline associates and customers, many of whom are "essential workers" and unable to work remotely. As we adapted to rapidly changing conditions, we also increased our efforts to stay connected to our current customers and attract new customer.
As the
Seaport was able to maintain the historical average of the prior year's revenues but did share the burden of the pandemic and incurred a net loss because of this decrease in demand.
During the onset of the pandemic Seaport's sales staff and management acted
quickly to recover any lost revenue due to the massive government mandated
shutdown. Some of Seaports largest customers were forced to stay closed for
almost a year which include
Both
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.
18San Diego Farmers Outlet
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.
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.
Results of Operations
Nine Months ended
Revenues - The Company recorded
Operating Expenses - Total cash used in operating expenses for the nine months
ended
Selling, General and Administrative Expenses - Selling, general and
administrative expenses for the nine months ended
Marketing and Advertising Expenses - Marketing and advertising expenses for the
nine months ended
Professional fees - Professional fees expense for the nine months ended
Depreciation and Amortization Expenses - Depreciation and Amortization expenses
for the nine months ended
Salaries and Wages - Salaries and wages expense, in the form of payroll
expenses, which is included under selling & general expenses for the nine months
ended
19
Other Non-Operating Income and Expenses - For the nine months period ended
Net Loss - Net loss for three months ended
Financial Condition, Liquidity and Capital Resources
As of
For the nine months period ended
Total current assets as of
Changes in the composition of our Notes Payable and Notes Payable-Related Parties are presented in the table below:
As of September 30, 2022 As of Dec 31, 2021
$ Current $ Long-Term $ Current $ Long Term
Notes Payable 662,273 14,320,261 1,089,544 13,552,008
Notes Payable - Related - - 425,398 42,000
$ 662,273 $ 14,320,261 $ 1,514,942 $ 13,594,008 Total Notes Payable for related and unrelated parties decreased by
As of
As of
20
Our principal sources of liquidity in the past have 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. 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
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.
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