Related Party Transactions

9 Months Ended

Sep. 30, 2019

Related Party Transactions [Abstract]

Related Party Transactions

8. RELATED PARTY TRANSACTIONS

The following table presents a summary of the Company’s promissory notes issued to related parties as of September 30, 2019:

Noteholder	Note Amount		Issuance Date	Unpaid Amount
S. Masjedi	$	150,000	12/10/2010	$	68,792
A. Masjedi		500,000	6/1/2013		234,821
M. Shenkman		10,000	2/21/2012		10,000
M. Shenkman		10,000	2/23/2012		10,000
M. Shenkman		10,000	3/14/2013		6,000
M. Shenkman (Entrust)		16,000	9/9/2014		16,000
	$	696,000		$	345,613

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 Office, 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, 2020. Interest under the note was extinguished in a subsequent extension of the term of the note. The balance of the note at September 30, 2019 was $68,792.

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, 2020. Interest against the note was extinguished in a subsequent extension of the term. The note had a principal balance of $10,000 as of September 30, 2019.

On February 23, 2012, Snöbar Holdings entered into a promissory note with Mr. Shenkman for $10,000, maturing in one year at an interest of 8%. The note has subsequently been extended to December 31, 2020. Interest under the note was extinguished in a subsequent extension of the term. The note had an outstanding balance of $10,000 as of September 30, 2019.

On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a Mr. Shenkman, the Company’s Chairman of the Board of Directors. The note had a principal balance of $10,000 with an interest rate of 5% and an original maturity date of March 14, 2014, subsequently extended to December 31, 2020 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 September 30, 2019.

On June 1, 2013, Snöbar Holdings entered into a promissory note with Azizollah Masjedi, father-in-law to Shannon Masjedi who’s the Company’s President, Chief Executive Officer, Interim Chief Financial Officer, director and majority stockholder, in an amount of $500,000 to purchase all the shares and interests of IPIC. The note matured on June 31, 2017. As of September 30, 2019, the outstanding balance under this note was $234,821, 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, 2020 and the accrual of interest rates and deferral to maturity. The notes had an aggregate outstanding balance of $16,000 as of September 30, 2019.

As of September 30, 2019, the Company had total short-term notes payable of $1,166,354 and long-term notes payable of $2,373,876.

The following table presents a summary of the Company’s promissory notes issued to unrelated third parties as of September 30, 2019:

	Note Amount		Issuance Date	Balance
A. Rodriguez	$	86,821	3/14/13	$	86,821
A. Rodriguez		15,000	7/22/13		15,000
A. Rodriguez		10,000	2/21/14		10,000
TRA Capital		106,112	3 loans		106,112
BNA Inv		223,499	6 loans		223,499
Brian Berg		30,000	2/1/12		25,000
Classic Bev		73,473	5/1/17		265,292
JSJ, Investments		75,000	7/12/17		63,838
Power Up		119,000	7/25/17		204,000
TCA Global fund		2,150,000	5/1/18		2,291,597
	$	3,081,905		$	3,291,160

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 September 30, 2019.

On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a certain unrelated third party, now a shareholder of the Company. The note had a principal balance of $86,821 with an interest rate of 5% and had a maturity date of March 14, 2014. The note’s maturity date has subsequently been extended to February 1, 2020. Interest under the note was extinguished in a subsequent extension of the term. The note is current, and the entire balance is owed and outstanding as of September 30, 2019.

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 September 30, 2019.

On May 19, 2014, Snöbar Holdings entered into a secured convertible promissory note with a principal balance of $500,000. The note was secured by interests in cash, accounts receivable, other receivables, inventory, supplies, other assets of Snöbar Holdings including general intangibles and rights of each liquor license owned by

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

On February 13, 2017, Pacific Ventures entered settlement with one of its creditors for $527,333 of its long-term notes payable. The agreement called for issuance of 400,000 shares of PACV restricted common stocks and $200,000 in future cash payment comprising of $25,000 on March 31, 2017, $25,000 on March 31, 2018, $25,000 on March 31, 2019, and $125,000 on March 31, 2020. As of March 10, 2019, Pacific Ventures has issued to the creditor, 400,000 shares of PACV restricted common stocks, and has also paid the $200,000 for the required cash portion of the settlement agreement. As of September 30, 2019, balance of the cash portion due on March 31, 2020 will be determined based on the value of the stock that the noteholder holds. The amount remaining will be calculated as the following; $200,000 less the value of the 400,000 shares of common stock equals the balance owed.

On July 12, 2017, the Company issued a Convertible Promissory Note to JSJ Investments Inc. for total gross proceeds of $75,000. As of September 30, 2019, the balance of the note was $63.838. On June 4, 2019 the company went to mediation with JSJ in order to settle the debt owed. Both parties mutually agreed in an executed settlement agreement the following terms: JSJ shall receive the sum of $4,000.00 on or before June 24, 2019; the balance due Plaintiff of $70,557.90 shall be paid in 21 monthly installments of $3,359.90 per month. The first payment shall be due on August 15, 2019 and the remaining balance due on the Settlement Sum shall be paid in installments due on the 15^th day of each month thereafter until the entire balance due on the Settlement Sum is paid in full.

Effective September 30, 2017, the Company entered into amended promissory notes with a certain 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 $348,601 as of September 30, 2019, including the $15,000 extension fee. The note is currently in default and there is a pending complaint.

In May of 2019 the Company entered into a financing arrangement pursuant to which the Company borrowed a combined principal of $179,000 secured by shares of the Company’s common stock. The notes were subject to a 6 month hold before any stock was issued. The current balance is $204,000.

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 $265,292, which includes interest and penalty charges.

On May 1, 2018, Pacific Ventures Group entered into a secured promissory note with TCA Global Fund for $1,750,000. The note was secured by interests in tangible and intangible property of Pacific Ventures Group. The effective interest rate on the note is 16%. On July 26, 2018, the Company entered into a second loan with TCA Global Fund for $400,000. The outstanding balance of the notes with TCA Global Fund is $2,291,597 as of September 30, 2019.

As of June 30, 2019, the Company had total short-term notes payable of $1,166,354 and long-term notes payable of $2,373,876.