U

PACIFIC WEBWORKS, INC.

Notes to Condensed Consolidated Financial Statements

June 30, 2017

(Unaudited)

NOTE 1 – THE COMPANY

Pacific WebWorks, Inc. (the “Company”) was incorporated in the state of Nevada on May 18, 1987, as Asphalt Associates, Inc. and changed its name to Pacific WebWorks, Inc. in January 1999. From 1999 to 2016 the Company engaged in the development and distribution of web tools software, electronic business storefront hosting, and Internet payment systems for individuals and small to mid-sized businesses. On February 23, 2016 the Company filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the District of Utah, and soon afterwards ceased its business activities. On August 19, 2016 the Company proposed a Plan of Liquidation and on November 28, 2016 the Court entered an order confirming the Plan of Liquidation and establishing a Liquidating Trust. On December 28, 2016 all assets and liabilities of the Company were transferred to the Liquidating Trust. All assets, liabilities, and operations have been presented as discontinued operations prior to the December 28, 2016 transfer (see Note 4). The Company currently has no business operations.

NOTE 2 – BASIS OF FINANCIAL STATEMENT PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the U. S. Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented adequately ensure that the information is not misleading, it is suggested that these interim condensed consolidated financial statements be read in conjunction with the Company’s December 31, 2016 audited financial statements and notes thereto.

NOTE 3 – GOING CONCERN

The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The Company filed bankruptcy in February 2016 and in December of 2016 all assets and liabilities of the Company were transferred to the Liquidating Trust. Furthermore, the Company has an accumulated deficit of $18,119,429 as of June 30, 2017. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans to continue as a going concern include seeking a merger or an acquisition with a larger, better capitalized entity that will benefit current shareholders, however, as of the date hereof, we have not identified any potential merger or acquisition partner. Because the Company has no capital with which to pay current expenses the Company’s sole officer and director has agreed to pay these charges with his personal funds, as interest free loans to the Company or as capital contributions.

Management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. These consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 4 – DISCONTINUED OPERATIONS

On February 23, 2016 the Company filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the District of Utah, and soon afterwards ceased its business activities. On August 19, 2016 the Company proposed a Plan of Liquidation and on November 28, 2016 the Court entered an order confirming the Plan of Liquidation and establishing a Liquidating Trust. On December 28, 2016 all assets and liabilities of the Company were transferred to the Liquidating Trust. The Company has recognized the cessation of its business operations in accordance with Accounting Standards Codification (ASC) 205-20, Discontinued Operations. As such, the historical results of the Company have been classified as discontinued operations.

Results of the discontinued operations for the three and six months ended June 30, 2016 are as follows:


			For the Three Months Ended June 30, 2016		For the Six Months Ended June 30, 2016
Revenues
	Hosting, gateway and maintenance fees	$	35,790	$	159,475
	Product sales		5,889		28,737
			41,679		188,212
Cost of sales			17,504		69,821
	Gross profit		24,175		118,390

Selling expenses			8,804		32,966
Research and development			15,182		51,659
General and administrative			103,744		326,852
	Total operating expenses		127,729		411,477
	Loss from operations		(103,554)		(293,087)

Other income (expense)
	Interest income (expense), net		(397)		(1,011)
	Gain on sale of assets		158,099		150,728
	Total other income (expense)		157,702		149,717

	Net income (loss) from discontinued operations	$	54,148	$	(143,369)

Cash flow from discontinued operations for the six months ended June 30, 2016 are as follows:


Cash Flows From Operating Activities
	Net loss	$	(143,369)
	Adjustments to reconcile net loss to net
	cash used for operating activities:
	Gain on sale of assets		(150,728)
	Changes in assets and liabilities:
	Deposits		4,825
	Receivables		77,196
	Restricted cash		62,840
	Prepaid expenses and other assets		61,952
	Inventory		18,942
	Accounts payable and accrued liabilities		(12,094)
	Deferred revenue		(34,311)
	Net cash used for discontinued operating activities	$	(114,747)

Cash Flows From Investing Activities
	Proceeds from sale of property and equipment	$	158,099
Net cash provided by discontinued investing activities		$	158,099

Cash Flows From Financing Activities
	Cash paid on notes payable	$	(29,564)
	Net cash used for discontinued financing activities	$	(29,564)

NOTE 5 – EQUITY

On June 19, 2017 the Company amended its Articles of Incorporation to increase its authorized common shares from 50,000,000 to 150,000,000.

On June 20, 2017 control was purchased from the bankruptcy trustee for $25,000 and the Company issued 100,000,000 shares of its common stock to its President. No proceeds were received by the Company for the issuance of shares, therefore the shares were valued at par value.

NOTE 6 – SUBSEQUENT EVENTS

On November 1, 2017 the Bankruptcy Court for the District of Utah issued a final decree ending the bankruptcy case filed by the Company in February 2016. The Company had been separated from this case on December 28, 2016 when all assets and liabilities were transferred to a liquidating trust.

The Company has evaluated subsequent events in accordance with the provisions of ASC 855 and has identified that there are no additional subsequent events that require disclosure.

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

RESULTS OF OPERATIONS

The following discussion and analysis is intended to help you understand our financial condition and results of operations for the quarter ended June 30, 2017. You should read the following discussion and analysis together with our audited financial statements for the year ended December 31, 2016 and the notes to the financial statements included in this report on Form 10-Q. You should understand that we are no longer in the internet business, the software business, or any business. Thus our future financial condition and results of operations will have no relationship to our historical financial condition and results of operations described below.

Forward-Looking Statements

The discussion contained herein contains "forward-looking statements" that involve risk and uncertainties. These statements may be identified by the use of terminology such as "believes," "expects," "may," "should" or anticipates" or expressing this terminology negatively or similar expressions or by discussions of strategy. The cautionary statements made in this Form 10-Q should be read as being applicable to all related forward-looking statements wherever they appear in this Form 10-Q. Our actual results could differ materially from those discussed in this report.

Executive Overview

The Company was incorporated in the state of Nevada on May 18, 1987, as Asphalt Associates, Inc. and changed its name to Pacific WebWorks, Inc. in January 1999. During the years from 1999 to 2016 Pacific WebWorks, Inc. was an application service provider and software development firm that developed business software technologies and services for business merchants and organizations using Internet and other technologies.

On February 23, 2016 the Company filed a voluntary petition for bankruptcy in the U.S. Bankruptcy Court for the District of Utah, and soon afterwards ceased its business activities. On August 19, 2016 the Company proposed a Plan of Liquidation and on November 28, 2016 the Court entered an order confirming the Plan of Liquidation and establishing a Liquidating Trust. On December 28, 2016 all remaining assets and liabilities of the Company were transferred to the Liquidating Trust. As a result of these transfers the Company became, and remains as of the date of this filing, an empty shell company, with no assets and no liabilities, except for advances from our sole officer and director.

The information presented below with regard to the quarter ended June 30, 2016 should be read as historic information on the Company. As a result of its bankruptcy, the Company as of the date of this filing is an empty shell with no liquidity, no capital resources, and no operations other than the search for a merger candidate.

Liquidity And Capital Resources

As of June 30, 2017 we had no assets and we had no liabilities; we had an accumulated deficit of $18,119,429. As of December 31, 2016 we also had no assets and no liabilities; we had an accumulated deficit of $18,119,429. As of June 30, 2016 we had assets of $207,195 and liabilities of $192,058 and an accumulated deficit of $18,104,292. All assets held at June 30, 2016 were subsequently liquidated per order of the bankruptcy court and all liabilities were paid through a liquidating trust, also per order of the bankruptcy court.

Results of Operations

We had no revenues and no expenses in the three and six months ended June 30, 2017. Our only activity during the period was the filing of an amendment to our Articles of Incorporation increasing the number of authorized common shares from 50,000,000 to 150,000,000 and the issuance of 100,000,000 shares of

our common stock. No proceeds were received by the Company for the issuance of shares, therefore the shares were valued at par value.

In the three months ended June 30, 2016 we had gross revenues of $41,679, cost of sales of $17,504, operating expenses of $127,729, a net loss from operations of $103,554, and total other income of $157,702. In the six months ended June 30, 2016 we had gross revenues of $188,212, cost of sales of $69,821, operating expenses of $411,477, a net loss from operations of $293,087, and total other income of $149,717. The Company had filed a voluntary petition for bankruptcy in February of 2016 and these revenues and expenses reflect the Company’s wind down to liquidation. Our decrease in revenues and liabilities to $0 at June 30, 2017 reflects the liquidation of all assets and payment of all liabilities per the court ordered Plan of Liquidation. All remaining assets and liabilities were transferred from the Company to a liquidating trust on December 28, 2016. We will, in all likelihood, sustain operating expenses without corresponding revenues, as we return the Company to current in its reporting obligations and as we commence the search for a business combination with a company with ongoing business activities. We will depend upon our sole officer and director to make loans to the Company to meet any costs that may occur. All such advances will be interest-free loans or equity contributions.

Going Concern

The accompanying financial statements are presented on a going concern basis. The company's financial condition raises substantial doubt about the Company's ability to continue as a going concern. The Company has no cash and no other material assets and it has no operations or revenues from operations. It is relying on advances from its officer and director to meet its limited operating expenses.

Off-Balance Sheet Arrangements

We do not have any 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.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation Of Disclosure Controls And Procedures

Our sole officer and director has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934), as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on such evaluation, our Chief Executive Officer / Chief Financial Officer has concluded that, as of such date, our disclosure controls and procedures were not effective for the same reasons that our internal controls over financial reporting were not adequate.

Internal Control Over Financial Reporting

As indicated in our Form 10-K for the year ended December 31, 2016 our Chief Executive Officer / Chief Financial Officer concluded that our internal control over financial reporting was not effective during the 2016 fiscal year at the reasonable assurance level, as a result of a material weakness primarily related to a lack of a sufficient number of personnel with appropriate training and experience in accounting principles generally accepted in the United States of America, or GAAP. We are currently in the process of evaluating the steps necessary to remediate this material weakness.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting that occurred during the quarterly period ended June 30, 2017 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

We believe that a control system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the control system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within any company have been detected.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

There have been no material changes to the risks to our business from those described in our Form 10-K as filed with the SEC on December 7, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On June 20, 2017 the Company issued 100,000,000 shares of its common stock to its President. No proceeds were received by the Company for the issuance of shares, therefore the shares were valued at par value. There were no other unregistered sales of equity securities during the period covered by this report on Form 10-Q.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. REMOVED AND RESERVED

ITEM 5. OTHER INFORMATION

None.

ITEM 6. - EXHIBITS

No.

Description

---

-----------

Certification of Chief Executive Officer and Chief Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

Certifications of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101

The following materials from the Company’s Quarterly Report on Form 10-Q for

the quarter ended June 30, 2017, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at June 30, 2017 and December 31, 2016, (ii) Statement of Operations for the three months and six months ended June 30, 2017 and 2016, (iii) Statement of Cash Flows for the six months ended June 30, 2017 and 2016, and (iv) Notes to Financial Statements.

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.

Date: December 26, 2017

PACIFIC WEBWORKS, INC.

By: /s/ Daniel Masters

_________________________________

Daniel Masters

President, CEO, CFO, and Director


PACIFIC WEBWORKS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS


	June 30, 2017	December 31, 2016
	(Unaudited)
ASSETS

Assets	$ -	$ -


LIABILITIES AND STOCKHOLDERS' DEFICIT

Liabilities	$ -	$ -

Commitments and contingencies	-	-

Stockholders' Deficit
Common stock, $0.001 par value, 150,000,000 shares authorized;
149,713,895 and 49,713,895 shares issued and outstanding
as of June 30, 2017 and December 31, 2016, respectively	149,714	49,714
Additional paid-in capital	17,969,715	18,069,715
Accumulated deficit	(18,119,429)	(18,119,429)
Total stockholders' deficit	-	-
Total liabilities and stockholders' deficit	$ -	$ -




The accompanying notes are an integral part of these financial statements


PACIFIC WEBWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)


	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2017	2016	2017	2016

Revenue	$ -	$ -	$ -	$ -

Operating expenses	-	-	-	-

Loss from continuing operations	-	-	-	-

Income (loss) from discontinued operations	-	54,148	-	(143,369)

Income (loss) before income taxes	-	54,148	-	(143,369)

Income tax expense	-	-	-	-

Net Income (Loss)	$ -	$ 54,148	$ -	$ (143,369)

Net income (loss) per share - basic and diluted	$ 0.00	$ 0.00	$ 0.00	$ (0.00)

Weighted average shares - basic and diluted	60,702,906	49,713,894	55,238,757	49,713,894


PACIFIC WEBWORKS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)


	For the Six Months Ended June 30,
	2017	2016

CASH FLOWS FROM OPERATING ACTIVITIES
Net cash from (used for) operating activities - discontinued operations	$ -	$ (114,747)
Net cash from (used for) operating activities	-	(114,747)

CASH FLOWS FROM INVESTING ACTIVITIES
Net cash from (used for) investing activities - discontinued operations	-	158,099
Net cash from (used for) investing activities	-	158,099

CASH FLOWS FROM FINANCING ACTIVITIES
Net cash from (used for) financing activities - discontinued operations	-	(29,564)
Net cash from (used for) financing activities	-	(29,564)

NET DECREASE IN CASH AND CASH EQUIVALENTS	-	13,788

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	-	178,187

CASH AND CASH EQUIVALENTS AT END OF PERIOD	$ -	$ 191,975


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during period for :
Interest	$ -	$ 1,011
Income Taxes	$ -	$ -




The accompanying notes are an integral part of these financial statements