8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_________________________

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):  September 25, 2015

PACIFIC VENTURES GROUP, INC.

(Exact name of registrant as specified in its charter)

Delaware	000-54584	75-2100622
(State or other jurisdiction of incorporation)	(Commission File No.)	(IRS Employer 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

200 Camelia Court, Vero Beach, Florida 32963

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

[   ]	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[   ]	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[   ]	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[   ]	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Forward-Looking Statements

This report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The Securities and Exchange Commission encourages companies to disclose forward-looking information so that investors can better understand a company’s future prospects and make informed investment decisions. This 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. Factors that could cause our actual results of operations and financial condition to differ materially are discussed in greater detail under Risk Factors section of this report.

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.

Item 2.01 - Completion of Acquisition or Disposition of Assets.

The Share Exchange and Related Transactions

The Share Exchange Agreement

As previously disclosed on our Form 10-Q for the quarter ended June 30, 2015 filed with the Securities and Exchange Commission, on August 14, 2015, we entered into that certain Share Exchange Agreement ("Exchange Agreement") with Snöbar Holdings, Inc., a Delaware corporation ("Snöbar Holdings"), and the shareholders of Snöbar Holdings ("Snöbar Shareholders") who hold of record (i) at least 99% and up to 100% of the total issued and outstanding shares of Snöbar Holdings’ Class A Common Stock (“Snöbar Class A Common Stock”) and (ii) 100% of the total issued and outstanding shares of Snöbar Holdings’ Class B Common Stock (“Snöbar Class B Common Stock”). In accordance with the terms and provisions of the Exchange Agreement, we are to acquire (i) at least 99% and up to 100% of the total issued and outstanding shares of Snöbar Class A Common Stock and (ii) 100% of the total issued and outstanding shares of Snöbar Class B Common Stock from the Snöbar Shareholders, thus making Snöbar Holdings a majority-owned subsidiary or wholly-owned subsidiary, in exchange (the "Share Exchange") for the issuance to the Snöbar Shareholders of at least 22,285,000 and up to 22,500,000 shares of our unregistered common stock, par value $0.001 per share (“Common Stock”), for each share of common stock of Snöbar Holdings while simultaneously issuing 2,500,000 shares of our unregistered Common Stock (“Other Issuance”) to certain other persons (“Other Persons”), including, but not limited to, Brett Bertolami, the former officer and director of our company prior to the Share Exchange.

On September 25, 2015, we completed the initial closing under the Share Exchange Agreement pursuant to which we agreed to issue 22,474,000 shares of our unregistered Common Stock to the Snöbar Shareholders in exchange for 21,439,000 shares of Snöbar Class A Common Stock and 1,000,000 of Snöbar Class B Common Stock while simultaneously issuing 2,500,000 shares of our unregistered Common Stock to Other Persons. Upon completion of the initial closing, Snöbar Holdings became a subsidiary of our company in which we own a 99% interest.  We plan to complete the acquisition of an additional 61,000 shares of Snöbar Class A Common Stock pursuant to the Share Exchange Agreement by issuing 61,000 shares of our Common Stock no later than October 25, 2015.  Upon completion of this part of the acquisition, SnöbarHoldings will either remain a majority owned subsidiary or become a wholly owned subsidiary of our company and our pro-forma shares of Common Stock outstanding giving effect to the acquisition of SnöbarHoldings is expected to be approximately at least 25,358,031 and up to 25,384,031 shares of our unregistered Common stock with at least 22,474,000  and up to 22,500,000 shares or approximately 89% thereof owned by the Snöbar Shareholders and 1,000,000 shares of the Company's Series E Preferred Stock (with a 10 to 1 voting preference over common stock) with 100% thereof owned by a Snöbar Shareholder, namely Shannon Masjedi.

Through the operations of International Production Impex Corporation, a California corporation ("IPIC"), Snöbar Holdings produces and distributes through third party manufacturers and distributors SnöBar alchohol infused popsicles, whichare original frozen beverage alcohol bars similar to popsicles on a stick, but created in a way that they are made with premium liquors, such as tequila and vodka, and ice cream products, whichare premium quality ice cream and sorbets that are also distilled spirit cocktails containing 20-30% quality liqueurs and liquors. See “Business – Description of Snöbar Holdings, Inc.” Following the closing of the Share Exchange Agreement, we intend to continue Snöbar Holdings’ historical businesses and proposed businesses. Currently, we are not conducting any business, nor have we conducted any business for several years.

Lock-Up/Leak-Out Agreements

Each Snöbar Shareholder that receives 100,000 or more shares of our Common Stock pursuant to the Share Exchange will execute 2-year lock-up/leak-out agreement with us which will provide that their shares will not be, directly or indirectly, publicly sold, subject to a contract for sale or otherwise transferred, except that, beginning one year after the date of the closing of the Share Exchange, such Snöbar Shareholder will be permitted to sell up to 3% of the shares of our Common Stock he or she received pursuant to the Share Exchange in any given 90 day period. All lock-up/leak-out restrictions will expire 24 months after the closing of the Share Exchange.

Piggyback Registration Rights

Pursuant to the terms of the Share Exchange Agreement, recipients of our shares issued pursuant to the Share Exchange (22,474,000 shares of our Common Stock) and Other Issuance (2,500,000 shares of our Common Stock), including Snöbar Shareholders and Other Persons (collectively, “Recipients of Pacific Ventures Shares”), or their permitted transferees are entitled to piggyback rights with respect to the registration of their shares under the Securities Act. These registration rights will expire when such security holder is able to sell all of its shares pursuant to Rule 144 of the Securities Act, without any volume or timing restrictions. In an underwritten offering, the underwriter has the right, subject to specified conditions, to limit the number of shares such holders may include in an offering.

If we propose to register the offer and sale of any of our securities under the Securities Act, in connection with the public offering of such securities the Recipients of Pacific Ventures Shares, or their permitted transferees, will be entitled to certain “piggyback” registration rights allowing the Recipients of Pacific Ventures Shares to include their shares in such registration, subject to certain marketing and other limitations that may be imposed by the underwriters, if any, in such a registration. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to (1) a registration related to an employee benefit plan; or,

(2) a registration related to a corporate reorganizations or certain other transactions under Rule 145 of the Securities Act, the Recipients of Pacific Ventures Shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration.

Generally, we are required to bear all registration expenses, other than selling expenses such as underwriting discounts and selling commissions, incurred in connection with the piggyback registration described above.

Anti-Dilution Agreement

Pursuant to the terms of the Share Exchange Agreement, to prevent the dilution of the percentage of ownership interest of certain recipients (collectively, “Anti-Dilution Recipients”) of shares of Common Stock pursuant to the Other Issuance, we are entering into an Anti-Dilution Agreement with them, whereby for a period of two (2) years after the Closing Date (“Term”), if we issue additional shares (“Additional Shares”) of Common stock, and the purchase price per share of Common Stock is less than $0.50 (“floor price”), adjusted by any split or reverse split in the number of shares of Common Stock of the Company (“as Adjusted”), which occurs after the date of the Other Issuance ("Dilutive Transaction"), contemporaneously with the Dilutive Transaction, we will issue to Anti-Dilution Recipients additional shares of our Common Stock in an amount which provides them with the ownership percentage interest which they would have held in the Company represented by the shares of Common Stock issued to them by the Company pursuant to the Other Issuance had the Additional Shares been sold at $0.50 per share of Common Stock, as Adjusted.

Accounting Treatment of the Merger

For financial reporting purposes, the Share Exchange represents a “reverse merger” rather than a business combination and Snöbar Holdings is deemed to be the accounting acquirer in the transaction. The Share Exchange is being accounted for as a reverse-merger and recapitalization. Snöbar Holdings is the acquirer for financial reporting purposes and Pacific Ventures Group, Inc. is the acquired company. Consequently, the assets and liabilities and the operations that will be reflected in the historical financial statements prior to the Share Exchange will be those of Snöbar Holdings and will be recorded at the historical cost basis of Snöbar Holdings, and the consolidated financial statements after completion of the Share Exchange will include the assets and liabilities of our company and Snöbar Holdings, and the historical operations of Snöbar Holdings and the combined operations with our company from the initial closing date under the Share Exchange Agreement.

The foregoing description of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by the Share Exchange Agreement, a copy of which is attached to this Current Report on Form 8-K as Exhibit 10.1 which is incorporated herein by reference.

FORM 10 INFORMATION

Prior to the Share Exchange, we were a public reporting “shell company,” as defined in Rule 12b-2 of the Securities Exchange Act of 1934, as amended and the rules and regulations promulgated thereunder (“Exchange Act”). Accordingly, pursuant to the requirements of Item 2.01(f) of Form 8-K, set forth below is the information that would be required if we were filing a general form for registration of securities on Form 10 under the Exchange Act for our common stock, which is the only class of our securities subject to the reporting requirements of Section 13 or Section 15(d) of the Exchange Act upon consummation of the Share Exchange.

BUSINESS

Background/Description of Pacific Ventures Group, Inc.’s Business Prior to the Acquisition of Snöbar Holdings, Inc.

Pacific Ventures Group, Inc. (“Pacific Ventures” or the “Company”) was originally incorporated in Delaware on October 3, 1986 under the name AOA Corporation. In October 1991, we changed our name to American Eagle Group, Inc.  In October 2012, we changed our name to our current name, Pacific Ventures Group, Inc.  Pacific Ventures operated as an insurance holding company that, through its subsidiaries, marketed and underwrote specialized property and casualty coverage in the general aviation insurance marketplace. Historically, the Company’s business had been organized into three divisions. 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 Company terminated its business operations, management has been focused on settling debts and closing outstanding operations. Since the termination of its prior business, the Company has had no operations other than seeking an acquisition or merger to bring an operating entity into the Company.

Acquisition of Interest in Snöbar Holdings, Inc.

Following the acquisition of Snöbar Holdings, Inc., our business and operations are now those of International Production Impex Corporation, a California corporation, through our subsidiary Snöbar Holdings, Inc. Unless specifically set forth to the contrary, when used in this report the terms “we”, “our”, the “Company” and similar terms refer to (i) Pacific Ventures Group, Inc., a Delaware corporation, (ii) our 99% owned subsidiary Snöbar Holdings, Inc., a Delaware corporation, (iii) International Production Impex Corporation, a California corporation, which is owned by the Snobar Trust, a California trust, of which Snöbar Holdings, Inc. is the 100% beneficiary of, and (iv) MAS Global Distributors, Inc., a California corporation, which is a majority owned subsidiary of Snöbar Holdings, Inc.

Description of Snöbar Holdings, Inc.

GENERAL

Snöbar Holdings, Inc., a Delaware corporation (“Snöbar Holdings”), was incorporated in the state of Delaware on January 7, 2013. Snöbar Holdings is the trustor and sole beneficiary of Snobar Trust, a California trust ("Trust"), which was formed in June 1, 2013. The trustee that holds legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi. The Trust owns 100% of the shares of International Production Impex Corporation, a California corporation ("IPIC"), which was formed on August 2, 2001. 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. Snöbar Holdings also owns 99.9% of the shares of MAS Global Distributors, Inc., a California corporation ("MGD"). MGD is in the business of selling and leasing freezers and providing marketing services.  As a matter of law, IPIC may not be engaged in any business similar to MGD.  As a result of the foregoing, Snöbar Holdings is the beneficiary of all assets, liabilities and any income received from the business of IPIC through the Trust and is the parent company of MGD.

IPIC is a food and beverage, alcohol distribution company, that 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 20% 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.

What makes the SnöBar products unique is the proprietary formulation and method of manufacturing.   SnöBar ice pops and SnöBar ice cream use a system to stabilize the alcohol molecule, whereby the alcohol content, quality and flavor is not degraded during the production process. The technology is also applicable to other food and beverage products such as yogurt, water ice creations and alcohol based goods.  IPIC has begun the process of obtaining trade secret and other intellectual property protections as to these unique technologies. The SnöBar brand is fully trademarked within the USA and is currently seeking worldwide trademark rights.

SnöBar brand products have been through extensive consumer testing across all age groups and sexes over 21 years of age. According to the results of the consumer testing, there is a large untapped market potential for frozen alcohol desserts. Market research shows that there are very few alcohol infused ice-creams and ice pops available in the U.S. markets and the few that are out there are of lower quality ingredients and are not mass produced. IPIC holds several Federal and State granted liquor licenses.  These licenses allow the SnöBar product line to be introduced and distributed in 95% of the United States.  IPIC desires to be the first to mass market the SnöBar alcohol-infused products in this untapped and sizeable market segment and capitalize on these two exclusive products. IPIC only uses the finest of ingredients and dairy to produce SnöBar products and strives to achieve the highest quality of texture and taste for all of the SnöBar products. IPIC believes that the SnöBar brand has the potential to scale on a national and international level with worldwide distribution capabilities.

MARKET

The alcohol and distilled spirits market, and ice cream markets have consistently exhibited year-over-year growth, and are projected to continue this positive trend.  Not only are these products a part of an expanding market segment, but they have been received by a wide range of consumers who find them entertaining and enjoyable to consume.  The alcohol beverage and dessert industries are extremely innovative and continuously add new and original products.  IPIC has determined that capturing even a small portion of these markets would surpass the initial production capabilities of the SnöBar products and provide a platform for exponential growth nationally and internationally.

In 2012, the SnöBar brand was introduced in the USA in the state of Arizona. The brand was extremely well received and was immediately placed in the top chain stores and restaurants, resorts including Total Wine and the Bevmo Chains.  Due to its multiple applications and uses, the SnöBar alcohol infusing technology is used to create exotic and innovative cocktails and the most unique and delicious desserts.  SnöBar is one of the only few spirit brands that can offer incremental revenues and not compete with other spirits currently on the market.

In 2013, the SnöBar brand was launched in Nevada. Immediately, the SnöBar products were in demand in all the major casinos and resorts.   The SnöBar brand joined forces with reputable hotels and resorts, including, but not limited to, the Bellagio, Golden Nugget, Rio, Wynn, Encore, TAO, Caesars Palace, Hilton, The M and MGM. In Nevada, IPIC’s focus is to place the SnöBar brand within all the venues of the hotels including catering and banquets, room service, retail outlets and nightclubs.

Immediately following Nevada, the SnöBar brand was launched in the state of Florida, in cities including Miami, Tampa, Orlando, Jacksonville and the panhandle. This expansion resulted in SnöBar products being offered by reputable hotels and resorts, including, but not limited to, Ritz Carlton Hotel, Fountainbleau, Hilton, Waldorf Astoria and The Breakers Resort.

In 2014, the SnöBar brand was launched in California. Over 100 accounts with retailers for SnöBar products were established in the 90 day period following the launch in California.  The focus in California has been ensuring that the accounts are reordering product and being serviced and supported properly. Currently, SnöBar products are being offered by Gelson's Markets and there has also been interest from other chains such as Ralph's (Kroger) and Costco.

Walmart, the largest retailer in the world, approved the SnöBar brand to be test marketed in a few stores in the Florida market. The first store sold out of more than 10 cases of SnöBar products within the first two weeks prompting an 85 case reorder. After a three month trial period, Walmart approved the expansion of SnöBar products in to more stores in the Florida market.

In 2015, the SnöBar brand was launched in North Carolina and South Carolina teaming up with a distributor who is well known in the market place. The brand has been very well received within the market.

In the first two months of 2015, IPIC restructured its approach to distribution of SnöBar products and scaled back the operating expenditures by reducing its expenses. Most notably, SnöBar products are now distributed by a local Nestle Distributor in the California markets resulting in almost a 50% decrease in distribution expenses to IPIC.

IPIC has recently entered into contracts with three international distributors pursuant to which IPIC has licensed to the international distributors a right to distribute SnöBar products to certain international destinations.  One of the contracts provides for a non-exclusive right to distribute for a minimum term of three years with an aggregate of $725,000 worth of SnöBar products for distribution in Grand Cayman Island, Slovenia, Croatia, Serbia and Cuba, if and when trade is permissible with Cuba. Another contract provides for an exclusive right to distribute for a minimum term of two years with an aggregate of $700,000 worth of SnöBar products for distribution in Puerto Rico, Costa Rica, Dominican Republic and Panama.  The last contract provides for an exclusive right to distribute for a minimum term of two years with an aggregate of $700,000 worth of SnöBar products for the first year and $300,000 worth of SnöBar products for each year thereafter for distribution in mainland China, Hong Kong, Macau and Thailand.  IPIC has already received the initial orders from these international distributors.

IPIC is also in negotiations with other international distributors for exportation of SnöBar products to territories, including Australia, New Zealand and Europe.

IPIC has recently entered into a contract with a distributor in the United States pursuant to which IPIC has licensed to the domestic distributor an exclusive right to distribute SnöBar products.  The contract provides for a minimum of two years with an aggregate of $500,000 worth of SnöBar products for distribution in North Carolina and South Carolina.

IPIC is also in negotiations with other domestic distributors for distribution of SnöBar products to Texas, where a large retail chain named Spec’s has approved of offering SnöBar products for sale, as well as Alabama.

Ice Cream and Ice Pops

While the majority of ice cream sales have long been regular-fat products, ice cream manufacturers continue to diversify their lines of frozen desserts in order to fit into various lifestyles.  However, most consumers are looking for an indulgence when eating ice creams, which makes these products  well situated  with its ideal formula of two enjoyable products, ice cream and alcohol in an affordable combination.

Alcohol

The second ingredient in SnöBar ice cream and SnöBar ice pops is alcohol.  The U.S. beverage alcohol market is over $400 billion according to The Distilled Spirits Council of the United States (“DISCUS”).  The SnöBar alcohol-infused ice cream and ice pop products take advantage of the success of the thriving frozen desserts industry and the successful alcohol beverage industry, making SnöBar ice cream and ice pop products a hybrid of uniqueness conducive to the consumer markets.   

OPPORTUNITY

IPIC has created a proprietary formula and the methodology and manufacturing technique to mass produce alcohol-infused ice cream leveraging production facilities, warehousing, distribution, and merchandising methods currently used for ice cream.   Specifically, the proprietary formulation and manufacturing method stabilize the alcohol molecules from interacting with ice crystals and milk proteins making it possible to mass-produce a solid alcohol-infused ice cream that has a flavoring system of up to 20% distilled spirits.  To date, SnöBar ice cream is one of the only products of its kind in the U.S.

The original invention of these frozen alcohol desserts follows the same recipes used by America's finest bars and restaurants.  The SnöBar products are distilled spirit cocktails that contain up to 20% quality liqueurs and liquors. What makes liquor ice cream and sorbet different is that the product is solid just like regular ice cream, not semi-soft or in a milk shake consistency like one would find at bars and restaurants:   These products are ready-to-eat solid or can be blended into a cocktail.   While SnöBar products look like ice cream and frozen popsicles, the Bureau of Alcohol, Tobacco, Firearms and Explosives (“ATF”) and Food and Drug Administration (“FDA”) have classified SnöBar ice cream and SnöBar pops as distilled spirits due to the alcohol content.

This formulation positions these two products in a unique market opportunity taking advantage of the $26 billion a year frozen dessert market and the over $400 billion a year alcohol beverage market. A 5 ounce serving represents a significant consumer value when compared to the cost of a traditional drink. Additionally, the concept of a frozen alcohol dessert product is seen by female consumers in our studies as being “innovative” and “fun”.

Female consumers have generally been high consumers of the dessert market; consequently, males have been the greater consumer of alcohol.  The primary target market for these two products is adult women 21 to 65. An alcoholic-infused ice cream drink would appear to combine the best of both worlds for the female consumer. Of course, to a large degree the market for frozen alcohol desserts includes all adults, excluding those who have dietary, medical, or social/religious concerns. This presents an opportunity for a new innovative product that specifically addresses both females and males.

IPIC will market and promote the SnöBar brand utilizing a proprietary manufacturing and freezing method where the alcohol content and flavor is not degraded during the production process.  SnöBar ice pops are frozen beverage alcohol bars, similar to a popsicle on a stick, and are currently manufactured in three flavors; Margarita, Cosmopolitan, and Mojito.  Both recipes include premium liquors of blue agave tequila and vodka, however, the alcohol freezing technology 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.

While SnöBar popsicles are included in the frozen dessert and alcohol beverage category, initially sales are expected to be driven mostly by on-premise accounts.  The spirits category represents over 650,000 licensed retail accounts absorbing sales of over 175 million x 9 liter equivalent cases annually. IPIC can viably reach 30% of this market, approximately 195,000 outlets, accounting for 52.5 million equivalent cases. While a core-target audience of females 21 to 65 years old have been highly accepting and positive regarding the product, our market studies show that the actual acceptance band of the product is much wider, and that if cost is not a purchase condition, most people of drinking age will try one or more.

With a confidential/proprietary formula and exclusive manufacturing process, coupled with a focused launch and national distribution network, IPIC strives to be the first to market in this unique segment and capitalize on a revolutionary product.

STRATEGY

Marketing

The International Dairy Food Association (“IDFA”) reported that approximately 86% of packaged ice cream retail sales occur in supermarkets. Convenience store sales represented 11.4%, drug stores were at nearly 2%, while 0.6% occurred at other locations.

The current marketing strategy is to sell products to high-end restaurants, resorts, cruise lines and hotels. Additionally, various celebrity branding and product endorsements are currently being explored.  Initially, IPIC will focus on major accounts in four core markets consisting of Southern California, Phoenix, Las Vegas and Miami. The larger vision is to sell products in grocery stores such as Kroger, Wal-Mart and others, and thereafter to begin a national marketing program to all U.S. retailers. It is essentially a top down marketing plan where products are placed with the largest retailer then trickle down to the smallest seller in each market area.

The fact that SnöBar products are unique and exclusive, allows SnöBar to bring new consumers and revenue to our vendors, hence creating incremental growth in their overall sales. A national direct mail campaign to liquor retailers and leading food service operators will support these efforts.  By SnöBar creating a new vehicle for distilled spirits, many consumers will be tasting liqueurs and liquors for the first time, and in the very favorable mixed medium of premium ice cream.

The initial target market for SnöBar popsicles consists of bars, night clubs, restaurants, resorts, hotels, event banquet and catering firms, and cruise lines. Negotiations are currently underway with several more Las Vegas resorts and a major cruise line to initially launch the SnöBar products. Heavy attention will also be given to consumer and trade shows in the beverage industry to provide exposure and sampling as well as to enlist new accounts. IPIC intends to provide SnöBar products to more major groceries stores at a later date.

At the outset, the target consumer is 21 to 34 year olds, predominately females that frequent restaurants, bars, and events on a regular basis.   While the consumer demographic is predominantly female, the slight majority of the purchasers are male for female consumption. Our marketing studies and strategy have identified these trends and structured promotional efforts accordingly.  IPIC will coordinate and oversee all out-sourced brand awareness and public relations activities. Many of the strategies used will be replications of the past successes experienced by management and other similar demographically-oriented products.

MAS Global Distributors, Inc., a California corporation (“MGD”), formed in December 14, 2010, a majority owned subsidiary of Snöbar Holdings, is the sole marketer for SnöBar ice cream and SnöBar ice pops. MGD handles all the marketing and promotional aspect for the SnöBar product line.

Seasonality

While it is anticipated that SnöBar ice cream will be consumed year round with special holiday flavors and promotions planned, it is anticipated that SnöBar consumption will be strong in warm climates, specialty venues, cruise lines, resorts, and of course seasonal occasions.

Raw Materials and Other Supplies

The principal raw materials for the production, storage and aging of distilled products are primarily corn and other grains for whiskies and other spirits, agave for tequila, molasses for rum, grapes for cognac, sticks for the popsicles and milk and other dairy products for the ice cream. IPIC does not currently have any long-term supply agreements with third-party suppliers for the purchase of any of raw materials used in our products. From time to time, these raw materials are affected by weather and other forces that may impact production and quality, and, ultimately, their price.

Manufacturing

Due to the confidentiality of the SnöBar ice cream and SnöBar formulas and manufacturing processes, IPIC has established a manufacturing agreement with a large frozen dessert manufacturer and packer in Southern California that is large enough to meet initial and all anticipated future demand for the SnöBar brands. The co-packing facility can scale to handle worldwide demand of the SnöBar products. The co-packing facility currently manufactures for such retailers as Trader Joes and Whole Foods.

Inventory

IPIC maintains inventory of SnöBar products with the third-party manufacturer/co-packer of its ice-pops and ice creams, as well as with third-party distributors of its products . IPIC's products that are in inventory may be subject to spoliation, theft, or other hazards that could adversely affect the financial condition, results of operations or business of IPIC. While IPIC tries to take precautions to prevent such occurrences, the ice pops, in particular, require refrigeration to a certain temperature that if not maintained can cause the degradation in the products consistency. Ultimate end consumers may not maintain their freezers at the required temperatures which may cause them to believe that there ice-pops have partially melted and therefore they may return the ice-pops, requiring IPIC to reimburse its distributors and take such product back in to inventory for possible disposal. No assurance can be given that individual consumers will be educated in the proper freezing requirements of the SnöBar products.

Distribution

In order to scale distribution, SnöBar will partner with more food, beverage and alcohol distributors. The SnöBar products are primarily sold through direct sales forces to distributors. The product delivery will occur through frozen distribution channels. Transportation of the product from the manufacturing facility to customers will be handled by third parties contracted by IPIC. IPIC is utilizing frozen warehouse facilities in Los Angeles and Phoenix, and accounts in Las Vegas and Miami will be shipped directly to the distributor.

In addition, IPIC may sell the SnöBar products through joint ventures with and global or regional duty free customers. IPIC may also sell the SnöBar products through governmental liquor authorities in jurisdictions where aspects of the purchase and distribution of products that contain alcohol are under government control.

Examples of such authorities are the eighteen "control" states (and one county) in the United States and the Liquor Control Boards in Canada.

TRADEMARKS

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

COMPETITION

The global distilled spirits industry is very competitive and the dessert industry is very competitive. The SnöBar products compete on the basis of product quality, brand image, price, service and innovation in response to consumer preferences. While the industry is highly fragmented, major competitors on the alcohol-side of the business include Brown-Forman Corporation, Diageo PLC, Beam, Inc, Pernod Ricard S.A., Bacardi Limited, Davide Campari Milano-S.P .A., Remy Cointreau S.A., and Constellation Brands, Inc. and major competitors on the dessert-side of the business include such premium brands as Haagen Dazs and Dreyer's, which are owned by Nestle's and Ben and Jerry's which is owned by Unilever.

REGULATORY ENVIRONMENT

The production, storage, transportation, distribution and sale of the SnöBar products are subject to regulation by federal, state, local and foreign authorities. Various countries and local jurisdictions prohibit or restrict the marketing or sale of products containing alcohol in whole or in part.

The Bureau of Alcohol, Tobacco, Firearms and Explosives regulates the U.S. spirits industry with respect to production, blending, bottling, sales, advertising, and transportation of industry products. Also, each state in the United States regulates the advertising, promotion, transportation, sale, and distribution of such products.  Many of the key markets for IPIC’s business, distilled spirits are subject to federal excise taxes and/or customs duties, as well as state/provincial, local and other taxes. Sales of products containing alcohol could be adversely impacted by increases to excise tax rates, which are considered from time to time by U.S. states and municipalities and in other key markets for IPIC’s business. The effect of any future excise tax increases in any jurisdiction cannot be determined, but it is possible that any future excise tax increases could have an adverse effect on IPIC’s business, financial condition and results of operations.

ENVIRONMENTAL MATTERS

IPIC is subject to both U.S. and international laws and regulations relating to the protection of the environment. In the U.S., the laws and regulations include the Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act and Superfund (the environmental program established in the Comprehensive Environmental Response, Compensation, and Liability Act to address abandoned hazardous waste sites), which imposes joint and severable liability on each potentially responsible party.

EMPLOYEES

As of September 25, 2015, Snöbar Holdings does not have any employees.  IPIC, a consolidated variable interest entity of Snöbar Holdings, which conducts the operations of producing, selling and distributing alcohol-infused ice creams and ice-pops, has five (5) employees as of September 25, 2015.

RISK FACTORS

An investment in our common stock involves a high degree of risk. You should carefully consider the risks described below and the other information in this report before making a decision to invest in our common stock. If any of the following risks and uncertainties develop into actual events, our business, results of operations and financial condition could be adversely affected. In those cases, the trading price of our common stock could decline and you may lose all or part of your investment.

Risks Related to Our Business

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

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

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

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

Our success depends on certain key personnel.

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

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

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

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

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

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

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

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

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

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

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

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

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

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our ability to continue to attract clients for our services and products;

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the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our businesses, operations and infrastructure;

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our focus on long-term goals over short-term results;

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the results of our investments in high risk products;

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general economic conditions and those economic conditions specific to our industries;

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changes in business cycles that affect the markets in which we sell our products and services; and

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geopolitical events such as war, threat of war or terrorist actions.  

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

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

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

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

Our accountants have raised substantial doubt regarding our ability to continue as a going concern.

As noted in our consolidated financial statements, we had an accumulated stockholders’ deficit of approximately $5,420,431 and recurring losses from operations as of December 31, 2014. We also had a working capital deficit of approximately $2,045,677 as of December 31, 2014. We intend to fund operations through raising additional capital through debt financing and equity issuances and increased lending activities which may be insufficient to fund our capital expenditures, working capital or other cash requirements for the year ending December 31, 2014. We are continuing to seek additional funds to finance our immediate and long term operations. The successful outcome of future financing activities cannot be determined at this time and there is no assurance that if achieved, we will have sufficient funds to execute our intended business plan or generate positive operating results. These factors, among others, raise substantial doubt about our ability to continue as a going concern. The audit report of Heaton & Company, PLLC for the fiscal years ended December 31, 2014 and 2013 contain a paragraph that emphasizes the substantial doubt as to our continuance as a going concern. This is a significant risk that we may not be able to remain operational for an indefinite period of time.

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

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

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

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the number and characteristics of product candidates that we pursue, including our product candidates in development;

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our need to expand our research and development activities, including the hiring of additional employees;

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the costs of licensing, acquiring or investing in complimentary businesses, products, product candidates and technologies;

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our ability to maintain, expand and defend the scope of our intellectual product portfolio, including the amount and timing of any payments we may be required to make, or that we may receive, in connection with the licensing, filing, prosecution, defense and enforcement of any intellectual property rights;

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the effect of any competing technological or market developments;

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the need to implement additional internal systems and infrastructure, including financial and reporting systems;

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obtaining market acceptance of our alcohol-infused popsicles and ice cream; and

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the economic and other terms, timing of and success of our co-branding, licensing, collaboration or marketing relationships into which we have entered or may enter in the future.

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

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

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

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

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

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increased expenses due to transaction and integration costs;  

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potential liabilities of the acquired businesses;  

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potential adverse tax and accounting effects of the acquisitions;  

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diversion of capital and other resources from our existing businesses;

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diversion of our management’s attention during the acquisition process and any transition periods;  

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loss of key employees of the acquired businesses following the acquisition; and  

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inaccurate budgets and projected financial statements due to inaccurate valuation assessments of the acquired businesses.

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

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

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

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

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

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

Changes in regulatory standards could adversely affect our business.

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

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

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

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

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

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

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

We carry product liability insurance supplemented by an umbrella insurance policy of $3,000,000 million per occurrence and $5,000,000 million aggregate limit. We believe our product liability insurance coverage as supplemented by our umbrella insurance policy is sufficient in light of our current financial condition; however, we may not be able to maintain insurance coverage at a reasonable cost or in sufficient amounts to protect us against losses due to liability.

Our revenue may be adversely affected if we fail to protect our proprietary technology or fail to enhance or develop new technology.

We depend on our proprietary technology to develop and produce all of our products.  With respect to our proprietary technology, we rely on a combination of copyright and trade secret protection and non-disclosure agreements to establish and protect our proprietary rights. The efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete.

We generally enter into non-disclosure or license agreements with our employees, consultants and vendors, and generally control access to and distribution of our software, technology and other proprietary information. Despite these precautions, it may be possible for a third party to copy or otherwise obtain and use our software, technology and other proprietary information, without authorization, or to develop similar or superior technology independently. The steps we take may not prevent misappropriation of our technology, and our non-disclosure and license agreements may not be enforceable.

In addition, we may be required to litigate in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity. Any such litigation could result in substantial costs and diversion of resources and could have an adverse effect on our business and/or our operating results.

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

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

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

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

In addition, if a catastrophe such as an earthquake, fire, flood or power loss should affect one of the third parties on which we rely, our business prospects could be harmed. Moreover, acts of terrorism could cause disruptions in our business or the business of our third-party service providers, partners, customers or the economy as a whole.

Third-party technology licenses may not continue to be available to us in the future.

We also rely on certain technology that we license from third parties, including software that is integrated and used with internally developed software. These third-party technology licenses may not in the future be available to us on commercially reasonable terms, or at all. The loss of any of these technology licenses could result in delays in performance of work until we identify, license and integrate equivalent technology, and we may not be able to identify, license or integrate any such equivalent technology in a timely manner or at all. Any resulting delays in our performance could damage our reputation and result in a decrease in our revenues during the period of delay, either of which could materially adversely affect our business, operating results and/or financial condition.

Others may assert intellectual property infringement claims against us.

We use alcohol products from other companies in the making of our alcohol infused frozen desserts. Infringement or misappropriation claims (or claims for indemnification resulting from such claims) against us may be asserted or prosecuted, regardless of their merit, and any such assertions or prosecutions may adversely affect our business and/or our operating results. Irrespective of the validity or the successful assertion of such claims, we would incur significant costs and diversion of resources relating to the defense of such claims, which could have an adverse effect on our business and/or our operating results. If any claims or actions are asserted against us, we may seek to obtain a license of a third-party’s intellectual property rights; however, under such circumstances such a license may not be available on reasonable terms or at all.

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

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

We operate in a highly regulated area.

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

Changes in U.S., regional or global economic conditions could adversely affect our profitability.

A decline in economic conditions in the United States or in other regions of the world could lead to a decrease in discretionary consumer spending, which in turn could adversely affect alcoholic type products.  In addition, an increase in price levels generally, or in price levels in a particular sector such as the energy sector, could result in a shift in consumer demand away from alcohol type products.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Risks Related to the Common Stock of Pacific Ventures Group, Inc.

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

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

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

The market for our common stock is characterized by significant price volatility when compared to seasoned issuers, and we expect that our share price will continue to be more volatile than a seasoned issuer for the indefinite future. The volatility in our share price is attributable to a number of factors. First, as noted above, our common stock are sporadically and thinly traded. As a consequence of this lack of liquidity, the trading of relatively small quantities of shares by our shareholders may disproportionately influence the price of those shares in either direction. The price for our shares could, for example, decline precipitously in the event that a large number of our common stock are sold on the market without commensurate demand, as compared to a seasoned issuer which could better absorb those sales without adverse impact on its share price. Secondly, we are a speculative or “risky” investment due to our limited operating history and lack of profits to date, and uncertainty of future market acceptance for our potential products and services. As a consequence of this enhanced risk, more risk-adverse investors may, under the fear of losing all or most of their investment in the event of negative news or lack of progress, be more inclined to sell their shares on the market more quickly and at greater discounts than would be the case with the stock of a seasoned issuer. Many of these factors are beyond our control and may decrease the market price of our common stock, regardless of our operating performance. We cannot make any predictions or projections as to what the prevailing market price for our common stock will be at any time, including as to whether our common stock will sustain their current market prices, or as to what effect that the sale of shares or the availability of common stock for sale at any time will have on the prevailing market price.

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

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

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that a broker or dealer approve a person’s account for transactions in penny stocks, and

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the broker or dealer receives from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

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

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obtain financial information and investment experience objectives of the person, and

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

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

•

sets forth the basis on which the broker or dealer made the suitability determination, and

•

that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

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

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

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

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

•

1% of the total number of securities of the same class then outstanding (253,580 shares of common stock as of the date of this Report); or

•

the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale; provided, in each case, that we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale. Such sales by affiliates must also comply with the manner of sale, current public information and notice provisions of Rule 144.

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

Shannon Masjedi, our principal stockholder, director and executive officer, will have substantial influence over the outcome of corporate actions requiring shareholder approval, including the election of directors, any merger, consolidation or sale of all or substantially all of our assets or any other significant corporate transaction. In particular, because a certain officer, Shannon Masjedi, who owns 15,864,639 shares of our Common Stock and 1,000,000 shares of Series E Preferred Stock (with 10 votes per share), she will be assured of such control. This shareholder may also delay or prevent a change of control or otherwise discourage a potential acquirer from attempting to obtain control of us, even if such a change of control would benefit our other shareholders. This significant concentration of stock and voting ownership may adversely affect the value of our common stock due to investors’ perception that conflicts of interest may exist or arise.

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

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

FINANCIAL INFORMATION

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

The following management’s discussion and analysis should be read in conjunction with the historical financial statements and the related notes thereto contained in this report. The management’s discussion and analysis contains forward-looking statements, such as statements of our plans, objectives, expectations and intentions. Any statements that are not statements of historical fact are forward-looking statements. When used, the words “believe,” “plan,” “intend,” “anticipate,” “target,” “estimate,” “expect” and the like, and/or future tense or conditional constructions (“will,” “may,” “could,” “should,” etc.), or similar expressions, identify certain of these forward-looking statements. These forward-looking statements are subject to risks and uncertainties, including those under “Risk Factors” in this Form 8-K, that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. The Company’s actual results and the timing of events could differ materially from those anticipated in these forward-looking statements as a result of several factors. The Company does not undertake any obligation to update forward-looking statements to reflect events or circumstances occurring after the date of this report.

As the result of the Share Exchange and the change in business and operations of the Company, from marketing and underwriting specialized property and casualty coverage in the general aviation insurance marketplace to producing and distributing alcohol infused ice pops and ice creams, a discussion of the past, pre-Share Exchange financial results of Pacific Ventures, is not pertinent, and under applicable accounting principles the historical financial results of Snöbar Holdings, the accounting acquirer, prior to the Share Exchange are considered the historical financial results of the Company.

The following discussion highlights Snöbar Holdings’ results of operations and the principal factors that have affected our financial condition as well as our liquidity and capital resources for the periods described, and provides information that management believes is relevant for an assessment and understanding of the statements of financial condition and results of operations presented herein. The following discussion and analysis are based on Snöbar Holdings’ audited and unaudited financial statements contained in this Current Report, which we have prepared in accordance with United States generally accepted accounting principles. You should read this discussion and analysis together with such financial statements and the related notes thereto.

Basis of Presentation

The audited financial statements for our fiscal years ended December 31, 2014 and 2013, and the unaudited financial statements for our fiscal six months ended June 30, 2015, include a summary of our significant accounting policies and should be read in conjunction with the discussion below. In the opinion of management, all material adjustments necessary to present fairly the results of operations for such periods have been included in these audited financial statements. All such adjustments are of a normal recurring nature.

Overview

Snöbar Holdings, Inc., a Delaware corporation (“Snöbar Holdings”), was incorporated in the state of Delaware on January 7, 2013. As a result, we have currently available two years of financial results. These results have been presented in the audited financial statements with fiscal years ended December 31, 2014 and 2013 and in the unaudited financial statements for our fiscal six months ended June 30, 2015.  

The alcohol and distilled spirits market, and ice cream markets have consistently exhibited year-over-year growth, and are projected to continue this positive trend.  The alcohol beverage and dessert industries are extremely innovative and continuously add new and original products.  IPIC has determined that capturing even a small portion of these markets would surpass the initial production capabilities of the SnöBar products and provide a platform for exponential growth nationally and internationally. The offering of SnöBar alcohol-infused ice cream and ice pop products worldwide seeks to take advantage of the success of the worldwide alcohol beverage market and the thriving frozen desserts market.

Overview 2012

In 2012, the SnöBar brand was introduced in the USA in the state of Arizona. The brand was well received and was immediately placed in the top chain stores and restaurants, resorts including Total Wine and the Bevmo Chains.  

Overview 2013

In 2013, the SnöBar brand was launched in Nevada. Immediately, the SnöBar products were in demand in all the major casinos and resorts.   The SnöBar brand joined forces with reputable hotels and resorts, including, but not limited to, the Bellagio, Golden Nugget, Rio, Wynn, Encore, TAO, Caesars Palace, Hilton, The M and MGM. In Nevada, IPIC’s focus is to place the SnöBar brand within all the venues of the hotels including catering and banquets, room service, retail outlets and nightclubs.

Immediately following Nevada, the SnöBar brand was launched in the state of Florida, in cities including Miami, Tampa, Orlando, Jacksonville and the panhandle. This expansion resulted in SnöBar products being offered by reputable hotels and resorts, including, but not limited to, Ritz Carlton Hotel, Fountainbleau, Hilton, Waldorf Astoria and The Breakers Resort.

Overview 2014

In 2014, the SnöBar brand was launched in California. Over 100 accounts with retailers for SnöBar products were established in the 90 day period following the launch in California, including Gelson’s Markets.  The focus in California was ensuring that the accounts were reordering product and being serviced and supported properly.

Walmart, the largest retailer in the world, approved the SnöBar brand to be test marketed in few stores in the Florida market. The first store sold out of more than 10 cases of SnöBar products within the first two weeks prompting an 85 case reorder. After a three month trial period, Walmart approved the expansion of SnöBar products in to more stores in the Florida market.

Overview 2015

In 2015, the SnöBar brand was launched in North Caroline and South Carolina teaming up with a distributor who is well known in the market place. The brand has been very well received within the market.

In the first two months of 2015, IPIC restructured its approach to distribution of SnöBar products and scaled back the operating expenditures by reducing its expenses. Most notably, SnöBar products are now distributed by a local Nestle Distributor in the California markets resulting in almost a 50% decrease in distribution expenses to IPIC.

IPIC has recently entered into contracts with three international distributors pursuant to which IPIC has licensed to the international distributors a right to distribute SnöBar products to certain international destinations.

One of the contracts provides for a non-exclusive right to distribute for a minimum term of three years with an aggregate of $725,000 worth of SnöBar products for distribution in Grand Cayman Island, Slovenia, Croatia, Serbia and Cuba, if and when trade is permissible with Cuba. Another contract provides for an exclusive right to distribute for a minimum term of two years with an aggregate of $700,000 worth of SnöBar products for distribution in Puerto Rico, Costa Rica, Dominican Republic and Panama.  The last contract provides for an exclusive right to distribute for a minimum term of two years with an aggregate of $700,000 worth of SnöBar products for the first year and $300,000 worth of SnöBar products for each year thereafter for distribution in mainland China, Hong Kong, Macau and Thailand.  IPIC has already received the initial orders from these international distributors. IPIC has already received the initial orders from these international distributors.

IPIC is also in negotiations with other international distributors for exportation of SnöBar products to territories, including Australia, New Zealand and Europe.

IPIC has recently entered into a contract with a distributor in the United States pursuant to which IPIC has licensed to the domestic distributor an exclusive right to distribute SnöBar products.  The contract provides for a minimum of two years with an aggregate of $500,000 worth of SnöBar products for distribution in North Carolina and South Carolina.

IPIC is also in negotiations with other domestic distributors for distribution of SnöBar products to Texas, where a large retail chain named Spec’s has approved of offering SnöBar products for sale, as well as Alabama.

Strategy

The general marketing strategy is for the SnöBar products to be sold to or sold in high-end restaurants, resorts, cruise lines and hotels worldwide.  Additionally, various celebrity branding and product endorsements are currently being explored.  Initially, the focus will be on establishing major accounts in four core markets consisting of Southern California, Phoenix, Las Vegas and Miami. The larger vision is to sell products in grocery stores such as Kroger, Wal-Mart and others, and thereafter to begin a national marketing program to all U.S. retailers. It is essentially a top down marketing plan where products are placed with the largest retailer then trickle down to the smallest seller in each market area. Furthermore, by being quoted as Pacific Ventures Group, Inc. on the OTC Markets QB Tier we intend to raise more capital from the markets in order to realize also the future stages of our growth path and expansion of distribution.

Going Concern

The accompanying consolidated financial statements have been prepared assuming we will continue as a going concern. As discussed in this Current Report and in the notes to the Snöbar Holdings consolidated financial statements, we have incurred operating losses, and at December 31, 2014, we have a working capital deficiency of approximately $2,045,000. For the interim period ending June 2015, our working capital deficiency amounted to approximately $2,176,000. These factors raise substantial doubt about our ability to continue as a going concern. Additionally, our independent registered public accounting firm included an explanatory paragraph in their report for the years ended December 31, 2014 and 2013 regarding concerns about our ability to continue as a going concern.

Our ability to continue as a going concern is dependent upon our generating operating cash flow and raising capital sufficient to fund operations. We have discussed our strategy and plans relating to these matters elsewhere in this Current Report although the consolidated financial statements included herein do not include any adjustments that might result from the outcome of these uncertainties. Our business strategy may not be successful in funding ongoing operations and accelerating our domestic and international expansion, and if we cannot continue as a going concern, our stockholders may lose their entire investment in us.

Plan of Operation for the Next Twelve (12) Months

We will need $500,000 to sustain our operations for the next twelve (12) months. Our plan is to increase sales revenue from the sale of the SnöBar products to meet our operating needs. However, it is very likely that we will not be able to increase our sale revenue sufficiently to meet these needs in time. It is also unlikely that we will be able to satisfy all of our obligations to pay interest and repay principal in the estimated aggregate amount of $852,000 due and payable within the next twelve (12) months under the various forms of our outstanding debt. Although we have been able to extend the maturity dates as well as repayment terms of a substantial amount of such debt, there is no assurance that we 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 we are 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 us, we 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 our operations. Our 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 we will be successful, which would in turn significantly affect our ability to be successful in our new business plan. If not, we will likely be required to reduce operations or liquidate assets. We will continue to evaluate our projected expenditures relative to our available cash and to seek additional means of financing in order to satisfy our working capital and other cash requirements.

Critical Accounting Estimates

We regularly evaluate the accounting estimates that we use to prepare our financial statements. A complete summary of these policies is included in the Notes to our audited financial statements. In general, management’s estimates are based on historical experience, on information from third party professionals, and on various other assumptions that are believed to be reasonable under the facts and circumstances. Actual results could differ from those estimates made by management.

We believe that of our significant accounting policies, which are described in Note 2 to our consolidated financial statements, the following accounting policies involve a greater degree of judgment and complexity. Accordingly, these are the policies we believe are the most critical to aid in fully understanding and evaluating our financial condition and results of operations.

Revenue Recognition

We are generating substantially all our revenue from the domestic and international sales of SnöBar ice creams and ice pops of International Production Impex Corporation (“IPIC”), which is owned by the Snobar Trust (“Trust”), of which Snöbar Holdings is the 100% beneficiary.  Sales revenues are generally recognized when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured.

Concentrations of Credit Risk

Cash held in banks: we maintain cash balances at a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to federally insured limits. At times balances may exceed FDIC insured limits. We have not experienced any losses in such accounts.

Accounts Receivable: During the years-ended December 31, 2014 and 2013, approximately 47% and 87% of total sales were to two distributors, respectively. As of December 31, 2014, 99% of the Company’s

accounts receivable were for one distributor. Notwithstanding, customer accounts typically are collected within a short period of time, and based on its assessment of current conditions and its experience collecting such receivables, management believes it has no significant risk related to its concentration within its accounts receivable.

Components of Results of Operations

Revenues

We generate our revenues from the domestic and international sales of SnöBar ice creams and ice pops of IPIC, which is owned by the Trust, of which Snöbar Holdings is the 100% beneficiary.

Research and development

Research and development expenses consist primarily of IPIC’s expenses in developing the alcohol infused ice creams and ice pops. We expense substantially all of IPIC’s research and development costs as they are incurred.

Selling, General and Administrative

Our selling, general and administrative expenses consist primarily of salaries for our executives as well as our finance, legal, human resources, and other administrative employees. In addition, general and administrative expenses include outside consulting, legal and accounting services, and facilities and other supporting overhead costs.

International Production Impex Corporation

Snöbar Holdings has a variable interest in Snobar Trust, a California trust ("Trust"), and International Production Impex Corporation (“IPIC”). Snöbar Holdings is the trustor and sole beneficiary of the Trust, which was formed in June 1, 2013. The Trust owns 100% of the shares of IPIC, which was formed on August 2, 2001. IPIC is the owner of the licenses and trade names "SnöBar" and is in the business of selling and distributing alcohol-infused ice creams and ice-pops through its distributors domestically and internationally.

Pacific Ventures consolidates any variable interest entity (“VIE”) for which Pacific Ventures is considered the primary beneficiary¹.

Snöbar Holdings is deemed to be the primary beneficiary of the Trust and IPIC because Snöbar Holdings is the 100% beneficiary of the Trust that owns IPIC and Snöbar Holdings has a controlling financial interest in the Trust and IPIC because it has the power to direct the activities of the Trust and IPIC that most significantly impact the Trust’s and IPIC’s economic performance. Snöbar Holdings as trustor of the Trust has the power to appoint and remove the trustee of the Trust that owns IPIC. The current trustee that holds legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi, who controls Snöbar Holdings and who is the President, Chief Operating Officer, Secretary, director and majority shareholder of Pacific Ventures.

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

As a result of this VIE structure, Snöbar Holdings consolidates the financial statements of the Trust and IPIC.

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

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

Pacific Ventures evaluates whether entities in which it has an interest are VIEs and whether Pacific Ventures qualifies as the primary beneficiary of any VIEs identified in its analysis.

Results of Operations

Fiscal period ended June 30, 2015

The following table summarizes our historical consolidated statements:

	For the Three Months Ended June 30,		For the Six Months Ended June 30,
	2015	2014		2015	2014
Sales, net of discounts	$         98,158	$       34,508		$       205,386	$      75,110
Cost of Goods Sold	(42,222)	(11,915)		(89,252)	(26,244)
Gross Profit	55,936	22,593		116,134	48,866
Operating Expenses
Selling, general and administrative	47,015	228,165		11,037	347,687
Depreciation expense	22,305	41,593		44,611	83,186
Salaries and wages	105,797	131,545		211,594	263,089
Operating Expenses/(Loss)	175,117	401,303		267,242	693,962
Loss from Operations	(119,181)	(378,710)		(151,108)	(645,096
Other Non-Operating Income and Expenses
Interest expense	(14,360)	(16,788)		(37,333)	(27,440)
Net Income/(Loss) before Income Taxes	(133,541)	(395,498)		(188,441)	(672,536)
Provision for income taxes	$                  -	$                 -		$                   -	$               -
Net Income/(Loss)	$    (133,541)	$   (395,498)		$    (188,441)	$  (672,536

Revenues

Sales, net of discounts for the six months period ended June 30, 2015 were $205,386, increasing by about $130,276 compared to the same period in 2014, due to increased sales. However, cost of goods sold for the six months period ended June 30, 2015 were $89,252, increasing by about $63,008 compared to the same period in 2014, due to an increase in the production of inventory. As a result, gross profits for the six months period ended June 30, 2015 were $116,134, increasing by about $67,268 compared to the same period in 2014.

Sales, net of discounts for the three months period ended June 30, 2015 were $98,158, increasing by about $63,650 compared to the same period in 2014, due to increased sales. However, cost of goods sold for the three months period ended June 30, 2015 were $42,222, increasing by about $30,307 compared to the same period in 2014, due to an increase in the production of inventory. As a result, gross profits for the three months period ended June 30, 2015 were $55,936, increasing by about $33,343 compared to the same period in 2014.

Operating Expenses

Total operating expenses for the six months period ended June 30, 2015 were $267,242, decreasing by about $426,720 compared to the same period in 2014, due to a decrease in selling, general and administrative expenses, depreciation expenses, and salaries and wages. Total operating expenses for the three months period ended June 30, 2015 were $175,117, decreasing by about $226,186 compared to the same period in 2014, due to a decrease in selling, general and administrative expenses, depreciation expenses, and salaries and wages.

Selling, General and Administrative Expenses

Selling, general and administrative expenses for the six months period ended June 30, 2015 were $11,037, decreasing by about $336,650 compared to the same period in 2014, which decrease was primarily due to a decrease in stock compensation, travel expenses, rent, taxes and insurance and the implementation of cost cutting measures as to other overhead expenses. Selling, general and administrative expenses for the three months period ended June 30, 2015 were $47,015, decreasing by about $181,150 compared to the same period in 2014, which decrease was primarily due to a decrease in stock compensation, travel expenses, rent, taxes and insurance and the implementation of cost cutting measures as to other overhead expenses.  

Depreciation Expense

Depreciation expense for the six months period ended June 30, 2015 was $44,611, decreasing by about $38,575 compared to the same period in 2014, which decrease was primarily due to assets becoming no longer subject to depreciation and the disposal of depreciable property. Depreciation expense for the three months period ended June 30, 2015 was $22,305, decreasing by about $19,288 compared to the same period in 2014, which decrease was primarily due to assets becoming no longer subject to depreciation and the disposal of depreciable property.

Salaries and Wages

Salaries and wages for the six months period ended June 30, 2015 were $211,594, decreasing by about $51,495 compared to the same period in 2014, which was due to cost cutting measures, which were primarily the reduction of staff and the reduction of salary and wages to the remaining staff. Salaries and wages for the three months period ended June 30, 2015 were $105,797, decreasing by about $25,748 compared to the same period in 2014, which was due to cost cutting measures, which were primarily the reduction of staff and the reduction of salary and wages to the remaining staff.

Other Non-Operating Income and Expenses

Total non-operating income and expenses for the six months period ended June 30, 2015 were $37,333, increasing by about $9,893 compared to the same period in 2014, due to an increase in interest expenses. Total non-operating income and expenses for the three months period ended June 30, 2015 were $14,360, decreasing by about $2,428 compared to the same period in 2014, due to a decrease in interest expenses.

Net Loss

Net loss for the six months period ended June 30, 2015 were $188,441, decreasing by about $484,095 compared to the same period in 2014, due to a decrease in selling, general and administrative expenses. Net loss for the three months period ended June 30, 2015 were $133,541, decreasing by about $261,957 compared to the same period in

2014, primarily due to a decrease in selling, general and administrative expenses and interest expense.

Fiscal years ended December 31, 2014 and 2013

The following table summarizes our historical consolidated statements:

	For the Years Ended December 31,
	2014	2013
Sales, net of discounts	$          128,002	$         237,835
Cost of Goods Sold	(107,665)	(180,685)
Gross Profit	20,337	57,150
Operating Expenses
General and administrative	403,663	778,537
Marketing and advertising	79,701	238,190
Professional fees	4,574	61,703
Research and development	-	43,951
IPIC business rights expense	-	500,000
Depreciation expense	166,373	255,466
Salaries and wages	413,161	729,844
Total Operating Expenses	1,067,472	2,607,691
Operating Income/(Loss)	(1,047,135)	(2,550,541)
Other Non-Operating Income and Expenses
Interest expense	(89,558)	(50,954)
Net Income/(Loss) before Income Taxes	(1,136,693)	(2,601,495)
Provision for income taxes	-	-
Net Income/(Loss)	$     (1,136,693)	$     (2,601,495)

Revenues

Sales, net of discounts in 2014 were $128,002, decreasing by about $109,833 compared to 2013, due to decreased sales. However, cost of goods sold for 2014 were $107,655, decreasing by about $73,020 compared to 2013, due to a decrease in production costs, a decrease in the cost of raw materials and a decrease in the production of inventory in 2014. As a result, gross profits for 2014 were 20,337, decreasing by about $36,813 compared 2013.

Operating Expenses

Total operating expenses for 2014 were $1,067,472, decreasing by about $1,540,216 compared to 2013, primarily due to a decrease in general and administrative expenses, marketing and advertising, professional fees, research and development, wages and salaries, IPIC business rights expense and depreciation expense.

General and Administrative Expenses

General and administrative expenses for 2014 were $403,663, decreasing by about $374,874 compared to the same period in 2014, which decrease was primarily due to a decrease in stock compensation, travel expenses, rent, taxes and insurance and the implementation of cost cutting measures as to other overhead expenses.  

Marketing and Advertising

Marketing and advertising expenses for 2014 were $79,701, decreasing by about $158,489 compared to 2013, which decrease was primarily due to a decrease in expenditures allocated to marketing and advertising in 2014.

Professional Fees

Professional fees for 2014 were $4,574, decreasing by about $57,129 compared to 2013, which was primarily due to a decrease in legal and accounting fees in 2014.  

Research and Development

Research and development expense for 2014 was $0, decreasing by about $43,951 compared to 2013, which was primarily due to the absence of research and development conducted by IPIC in 2014.  

IPIC Business Rights Expense

IPIC business rights expense for 2013 was $500,000, which was attributable to expensing a $500,000 promissory note issued by Snöbar Holdings in exchange for the transfer of the stock ownership of IPIC to Snobar Trust, of which Snöbar Holdings is the trustor and sole beneficiary, in 2013.  As this was a one-time expense, there was no IPIC business rights expense for 2014.

Depreciation Expense

Depreciation expense for 2014 was $166,373, decreasing by about $89,093 compared to 2013, which decrease was primarily due to assets becoming no longer subject to depreciation and the disposal of depreciable property.

Salaries and Wages

Salaries and wages for 2014 were $413,161, decreasing by about $316,683 compared to 2013, which was due to cost cutting measures implemented in 2014, which were primarily the reduction of staff in 2014 and the reduction of salary and wages to the remaining staff in 2014.

Net Loss

Net lossfor 2014 was ($1,136,693), decreasing by about $1,464,802 compared to the net loss of 2013.

Financial Condition, Liquidity and Capital Resources

As of June 30, 2015, we had cash on hand of $15,523 and a working capital deficit of $2,176,410.

Our principal sources of liquidity have been cash generated by issuing new shares in Snöbar Holdings and cash generated from operations.

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 expand our services and to realize an international coverage a significant capital increase has been and will continue to be required. We have drafted an investment plan and concluded we should enter in the process of raising additional capital from current shareholders and new investors.

We plan to continue raising capital in order to meet our liquidity needs. However, we may be unable to raise sufficient additional capital when we need it or to raise capital on favorable terms. If we are unable to obtain adequate funds on reasonable terms, we may be required to significantly curtail or discontinue operations or obtain funds by entering into financing agreements on unattractive terms.

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.

Fiscal period ended June 30, 2015

Net cash used in operating activities was $24,417 for the six months period ended June 30, 2015, primarily resulted from our net loss of $188,441 for the six months period ended June 30, 2015 partially offset by non-cash charges of $44,611 and net cash used by changes in our

operating assets and liabilities of $119,413. Our net loss was primarily attributed to salaries and wages of $211,594, depreciation expense $44,611, interest expense of $37,333, selling, general and administrative expenses of $11,037, and exceeding our product gross profit of $116,134 during the period. Our net non-cash charges consisted of $44,611 of depreciation. Net cash used by changes in our operating assets and liabilities consisted primarily of an increase in accounts payable of $29,395, accrued expenses of $143,382 and a decrease in accounts receivables of $9,542 partially offset by an increase in inventory of $42,858 and deposits of $20,048.  The changes in our accrued expenses and accounts payable were primarily attributable to accrued payroll liabilities and due to timing of vendor invoicing and payments.

Net cash provided by financing activities was $39,940 for the six months period ended June 30, 2015 resulted from the proceeds from the sale of stock in the amount of $100,000 and the issuance of debt to related parties in the amount of $22,879 partially offset by the repayment of debt to non-related parties for $80,350 and the payment towards a bank overdraft of $2,589.

There was no net cash provided by or used in investing activities for the six months period ended June 30, 2015.

As of June 30, 2015, we had total current liabilities of $2,317,774 primarily related to our accounts payable of $388,262, accrued expenses of $1,034,914, current portion of notes payable to non-related parties of $550,333 and related parties of $301,700 and current portion of leases payable of $42,565.

Fiscal years ended December 31, 2014 and 2013

Net cash used in operating activities was $2,107,885 from the date of inception on January 7, 2013 through December 31, 2014, primarily resulted from our net loss of $3,738,188 from the date of inception on January 7, 2013 through December 31, 2014 partially offset by non-cash charges of $526,876 and net cash used by changes in our operating assets and liabilities of $1,103,427. Our net losses from the date of inception of January 7, 2013 through December 31, 2014 was primarily attributed to general and administrative expenses of $1,182,200, salaries and wages of $1,143,005, IPIC business rights expense of $500,000, depreciation expense of $421,839, marketing and advertising of $317,891, interest expense of $140,512, professional fees of $66,277, and research and development of $43,951 exceeding our product gross profit of $77,487 during the period. Our net non-cash charges consisted and primarily of $421,839 of depreciation and $55,888 of stock-based compensation expense. Net cash used by changes in our operating assets and liabilities on a consolidated basis with IPIC and MGD consisted primarily of an increase in accrued expenses of $879,312, accounts payable of $125,823, and deposits of $120,496 partially offset by a decrease in accounts receivables of $12,371and inventory of $9,833. The change in our accrued expenses was primarily attributable to accrued payroll liabilities on a consolidated basis with IPIC and MGD of $807,365. The change in our accounts payable was primarily due to timing of vendor invoicing and payments.

Net cash used in investing activities was $206,587 from the date of inception on January 7, 2013 through December 31, 2014 resulted from the purchase of property, plant and equipment for $260,232 partially offset by the proceeds from the disposal of property, plant and equipment in the amount of $53,645.

Net cash provided by financing activities was $2,055,235 from the date of inception on January 7, 2013 through December 31, 2014 primarily resulted from the proceeds from the sale of stock in the amount of $950,000 and the issuance of debt to related parties in the amount of $606,302 and non-related parties in the amount of $550,333 partially offset by the repayment of leases payable for $53,989.

As of December 31, 2014, we had total current liabilities of $2,118,154 primarily related to our accounts payable of $358,867, accrued expenses of $891,532, current portion of notes payable to non-related parties of $550,333 and related parties of $278,821 and current portion of leases payable of $36,012.

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.

Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Critical Accounting Policies

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 below.  We also have other key accounting policies, which involve the use of estimates, judgments and assumptions that are significant to understanding our results, which are described in Note 2 to our consolidated financial statements.  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.

PROPERTIES

Description of Property

Pacific Venture’s corporate headquarters are now located at 117 West 9th Street, Suites 316 and 423, Los Angeles, California 90015 where we occupy an aggregate of approximately 655 square feet pursuant to leases. With respect to Suite 316, the lease expires in December 2015. With respect to Suite 423, we lease that space on a month-to-month basis.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

At September 25, 2015, upon the initial closing of our acquisition of SnöbarHoldings, we had 25,358,031 shares of common stock and 1,000,000 shares of preferred stock issued and outstanding.  The following tables set forth information known to us as of September 25, 2015 relating to the beneficial ownership of shares of our voting securities by:

· each person who is known by us to be the beneficial owner of more than 5% of our outstanding voting stock;

· each director;

· each named executive officer; and

· all named executive officers and directors as a group.

Unless otherwise indicated, the business address of each person listed is in care of Pacific Ventures Group, Inc., 117 West 9th Street, Suite 316, Los Angeles, California 90015.  The percentages in the table have been calculated on the basis of treating as outstanding for a particular person, all shares of our common stock outstanding on that date and all shares of our common stock issuable to that holder in the event of exercise of outstanding options, warrants, rights or conversion privileges owned by that person at that date which are exercisable within 60 days of that date. Except as otherwise indicated, the persons listed below have sole voting and investment power with respect to all shares of our common stock owned by them, except to the extent that power may be shared with a spouse.

COMMON STOCK

	Amount and Nature of Beneficial Ownership(1)		Percentage of Class Common(3)
Executive Officers and Directors
Robert E. Smith (2)		100,000		0.4	%
Shannon Masjedi (3)		15,864,639		62.6	%
Marc Shenkman (4)		650,000		2.6	%
All officers and directors a group (3 group)		16,614,639		65.5	%
5% Shareholders
ACD Trust(3)		15,864,639		62.6	%

(1)	Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of our Common Stock held by them. Applicable percentage ownership is based on 25,358,031 shares of our Common Stock outstanding as of September 25, 2015.
(2)	Consists of 100,000 shares of our Common Stock owned directly by Mr. Smith..
(3)	Consists of 15,864,639 shares of our Common Stock owned by ACD Trust (“Trust”). The trustee of the Trust is Shannon Masjedi who holds voting and investment power over the shares of our Common Stock owned by the Trust. In addition, Mrs. Masjedi owns 1,000,000 shares of Series E Preferred stock with such shares having a 10-to-1 voting preference where every one share of preferred stock is equivalent in votes to ten shares of Common Stock. As such, Mrs. Masjedi would have 73% of the voting control of the issued and outstanding stock when the 10,000,000 shares of voting are added to the existing 25,358,031 shares of issued and outstanding Common Stock, for an aggregate total of 35,358,031 shares of issued and outstanding Common Stock
(4)	Consists of 650,000 shares of our Common Stock owned directly by Mr. Shenkman.

PREFERRED STOCK

	Amount and Nature of Beneficial Ownership(1)		Percentage of Class Preferred
Executive Officers and Directors
Robert E. Smith	0		0.0	%
Shannon Masjedi (2)	1,000,000		100.0	%
Marc Shenkman	0		0.0	%
All officers and directors a group (3 group)	1,000,000	(2)	100.0	%
5% Shareholders
None	0		0	%

(1)

Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the shares. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all shares of our preferred stock held by them. Applicable percentage ownership is based on 1,000,000 shares of our Preferred Stock (Series E Preferred Stock) outstanding as of September 25, 2015.

(2)

Consists of 1,000,000 shares of our Series E Preferred Stock owned directly by Shannon Masjedi. Series E Preferred Stock have a 10-to-1 voting preference where every one share of preferred stock is equivalent in votes to ten shares of Common Stock.

DIRECTORS AND EXECUTIVE OFFICERS

In connection with the change of control of Pacific Ventures described in Item 5.01 of this Current Report on Form 8-K, the following individuals have been appointed to serve as executive officers and directors of Pacific Ventures:

Name	Age	Positions
Robert E. Smith	68	Chairman of the Board of Directors, Chief Executive Officer and Director
Shannon Masjedi	44	President, Chief Operating Officer, Secretary and Director
Marc Shenkman	55	Executive Vice President and Director

Our directors are appointed for a one-year term to hold office until the next annual general meeting of our shareholders or until removed from office in accordance with our bylaws. Our officers are appointed by our board of directors and hold office until removed by the

board. All officers and directors listed above will remain in office until the next annual meeting of our stockholders, and until their successors have been duly elected and qualified. There are no agreements with respect to the election of Directors. Our Board of Directors appoints officers annually and each Executive Officer serves at the discretion of our Board of Directors.

At this time, we do not have any written employment agreement or other formal compensation agreements with our new officers and directors. Compensation arrangements are the subject of ongoing development and we will make appropriate additional disclosures as they are further developed and formalized.

Robert E. Smith. Mr. Smith, as Chairman of the Board of Directors and Chief Executive Officer of Pacific Ventures, in accordance with its Bylaws, will be responsible for, among other things, the general supervision of the affairs of Pacific Ventures, have general control of all of its business, be responsible for implementing the its long term plans, and preside when present at all meetings of the stockholders and the Board of Directors. From April 1, 2013 to present, Mr. Smith has worked as Executive Vice President of development and new acquisitions of Glazers, one of the leading U.S. spirits and wine distributors, with annual revenue of more than $3 billion. From December 1, 1999 to April 1, 2013, Mr. Smith worked as President and CEO of Alliance Beverage Distributing Company, the Arizona based joint distribution venture between Glazers and Charmer-Sunbelt Group. The major suppliers in Alliance Beverage Distributing Company are DIAGEO, Moet-Hennessy, Brown-Forman, Bacardi, Gallo, Boston Beer, Guinness and Foster Estates.  Alliance Beverage Distributing Company is a full service, statewide distributor of alcoholic beverages. With the primary focus being the distribution, sales, and marketing of alcoholic beverages to licensed retailers, Alliance Beverage has become the leading distributor of alcoholic beverages in the state of Arizona. Mr. Smith graduated from Richard Stockton State College with a bachelor of science degree in marketing.  Mr. Smith also served in the United States Marine Corps from 1965 to 1970 and is a Vietnam veteran. Mr. Smith does not hold, and has not previously held, any directorships in any other reporting companies, other serving as a director of Hiram Walker and Sons from 1987 to 1990.

Shannon Masjedi. Mrs. Masjedi, as President and Chief Operating Officer of Pacific Ventures, in accordance with its Bylaws, will be responsible for, among other things, subject to the supervision and direction of the Chairman of the Board/Chief Executive Officer and the Board of Directors of Pacific Ventures, the general management and control of its specified day-to-day business operations, and implementing its short and long term plans, and, as Secretary of Pacific Ventures, will be responsible for, among other things, attending all meeting of the stockholders, the Board, and, as required, committees of the Board and recording all the proceedings of such meetings in books to be kept for that purpose.

Mrs. Masjedi has served as a director and chairman of the board of directors, chief executive officer, president, vice president, treasurer, chief financial officer, secretary of Snöbar Holdings since January 2013. From June 1, 2010 to present, Mrs. Masjedi worked as a director of

operations for International Production Impex Corporation (“IPIC”), where she implemented all current operating platforms including development of SnöBar product line, packaging and research and development and oversaw all day-to-day operations of IPIC as well as managing all the contractors of IPIC.  Ms. Masjedi was in charge of all compliance and regulatory issues for IPIC and obtained all necessary licenses for IPIC to distribute and export products worldwide.   

Mrs. Masjedi attended Arizona State University where she studied Aeronautical Technology, She also attended flight school and obtained her pilots license.  Mrs. Masjedi has had extensive experience with creating the distribution platform for the SnöBar product line in the alcohol industry.  Her knowledge in the frozen ice cream category and alcohol category combined make her indispensible to Pacific Ventures. Mrs. Masjedi has long standing relationships within these industries which allow Snobar products to be distributed efficiently.  Mrs. Masjedi does not hold, and has not previously held, any directorships in any other reporting companies. In 2010, Mrs. Masjedi filed for Chapter 7 bankruptcy, which was discharged in August 2011.

Marc Shenkman. Mr. Shenkman, as Executive Vice President of Pacific Ventures, in accordance with its Bylaws, will act in the absence of the President performing the duties of the President and will perform such other duties and have such other powers as the Board of Directors may from time to time prescribe.  Mr. Shenkman has served as a director of Snöbar Holdings since January 2013. From year 2000 to present, Mr. Shenkman worked as the President of Priority Financial Network.  Priority Financial Network is a mortgage brokerage company that closed over $2 billion in FHA, and “A” through “D” residential and commercial loans over the past several years.  While working at Priority Financial Network, Mr. Shenkman has been producing personal loans in the range of $60 million to $100 million per year and managing over 89 employees and loan officers. Mr. Shenkman graduated from the University of Vermont with a Bachelor of Arts in Economics and a Bachelor of Arts in Political Science. Mr. Shenkman brings knowledge and experience in the banking and financial industries.  His experience in the financial markets will help Pacific Ventures Group navigate in the public marketplace. Mr. Shenkman does not hold, and has not previously held, any directorships in any other reporting companies. Mr. Shenkman was a member of Raynol LLC which filed for Chapter 11 bankruptcy in May 2010, which bankruptcy was dismissed (not discharged) in May 2012.

Committee of our Board of Directors

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

We have not established any committees, including an Audit Committee, a Compensation Committee or a Nominating Committee, any committee performing a similar function.

The functions of those committees are being undertaken by Board of Directors as a whole.  Because we have only three directors, none of whom are independent, we believe that the establishment of these committees would be more form over substance.

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

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

· · understands generally U.S. GAAP and financial statements,

· · is able to assess the general application of such principles in connection with accounting for estimates, accruals and reserves,

· · has experience preparing, auditing, analyzing or evaluating financial statements comparable to the breadth and complexity to our financial statements,

· · understands internal controls over financial reporting, and

· · understands audit committee functions.

EXECUTIVE COMPENSATION

PACIFIC VENTURES COMPENSATION

The following table sets forth certain compensation information for: (i) Pacific Ventures’ principal executive officer or other individual serving in a similar capacity during fiscal years ended December 31, 2014 and 2013; (ii) our two most highly compensated executive officers other than our principal executive officer who were serving as executive officers at December 31, 2014 and 2013 whose compensation exceed $100,000; and (iii) up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2014 and 2013. Compensation information is shown for the fiscal years ended December 31, 2014 and 2013:

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($) *	Option Awards ($) *	All Other Compensation ($)	Total ($)
Brett Bertolami, CEO	2014	-0-	-0-	-0-	-0-	-0-	-0-
	2013	-0-	-0-	-0-	-0-	-0-	-0-

SNÖBAR HOLDINGS COMPENSATION

The following table sets forth certain compensation information for: (i) Snöbar Holdings’ principal executive officer or other individual serving in a similar capacity during the fiscal years ended December 31, 2014 and 2013; (ii) Snöbar Holdings’ two most highly compensated executive officers other than its principal executive officer who were serving as executive officers at December 31, 2014 and 2013 whose compensation exceed $100,000; and (iii) up to two additional individuals for whom disclosure would have been required but for the fact that the individual was not serving as an executive officer at December 31, 2014 and 2013. Compensation information is shown for the fiscal years ended December 31, 2014 and 2013:

Name and Principal Position	Year	Salary ($)	Bonus ($)	Stock Awards ($) *	Option Awards ($) *	All Other Compensation ($)	Total ($)
Shannon Masjedi, President	2014	$160,000	-0-	-0-	-0-	-0-	$160,000
	2013	$250,000	-0-	-0-	-0-	-0-	$250,000
Marc Shenkman, Vice President	2014	-0-	-0-	-0-	-0-	-0-	-0-
	2013	-0-	$100,000	-0-	-0-	-0-	$100,000

Compensation of Executive Officers

At this time, we do not have any written employment agreement or other formal compensation agreements with our new officers. Compensation arrangements are the subject of ongoing development and we will make appropriate additional disclosures as they are further developed and formalized.

Compensation of Directors

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

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The descriptions set forth above under the captions “The Share Exchange and Related Transactions—Share Exchange Agreement,” “—Piggyback Registration Rights,” “—Lock-Up/Leak-Out Agreements” and “—Anti-Dilution Agreement” are incorporated herein by reference.

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

In January 2011, MAS Global Distributors, Inc. (“MGD”), which is now a majority owned subsidiary of Snöbar Holdings, entered into an unsecured promissory note with a person, who is now an officer and shareholder of Pacific Ventures.  The note had a principal balance of $150,000 with an interest rate of 3% and has a maturity date of December 31, 2017.  The balance of the note at June 30, 2015 and December 31, 2014 was $142,621.  As of June 30, 2015 and December 31, 2014, the Company accrued $17,621 of interest, respectively.

In February of 2012, MGD entered into an unsecured promissory note with a person, who is now a shareholder of Pacific Ventures.  The note had a principal balance of $30,000 with an interest rate of 8% and a maturity date of August 1, 2014.  The note’s maturity date has subsequently been extended to February 1, 2017.  The note’s balance is $25,000 as of June 30, 2015 and December 31, 2014, respectively.

Snöbar Holdings entered into a promissory note agreement with a relative and former officer to purchase all shares and interests in IPIC, including liquor licenses, for $500,000.  The note bears no interest and payments are due in five installments of $100,000 due each year beginning on December 31, 2013 and going through December 31, 2017.  The entire purchase price of $500,000 was expensed in 2013 and the balance on the note was $219,172 and $299,522 as of June 30, 2015 and December 31, 2014, respectively.

On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a person, who is now a shareholder of Pacific Ventures.  The note had a principal balance of $10,000 with an interest rate of 5% and had a maturity date of March 14, 2014 and was subsequently extended to December 14, 2017. The note is current and has an outstanding balance of $6,000 and $6,000 as of June 30, 2015 and December 31, 2014, respectively.

On March 14, 2013, Snöbar Holdings entered into an unsecured promissory note with a person, who is now a shareholder of Pacific Ventures. The note had a principal balance of $87,121 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, 2017.  The note is current and the entire balance is still owed and outstanding.

On July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a person, who is now a shareholder of Pacific Ventures. The note’s maturity date has subsequently been extended to February 1, 2017.  The note had a principal balance of $15,000 with an interest rate of 5% and is due on demand.  

On February 24, 2014, Snöbar Holdings entered into an unsecured promissory note with a person, who is now a shareholder of Pacific Ventures. The note had a principal balance of $20,000 with an interest rate of 8% and a maturity date of 30 days from execution of the note. The maturity date has subsequently been extended to February 1, 2017.

During the year ended December 31, 2014, Snöbar Holdings entered into unsecured promissory notes with an entity owned by a person, who is now a shareholder of Pacific Ventures.  The notes had a total principal balance of $16,000 with an interest rate of 2% and are due on demand.  

As of June 30, 2015, a person, who is now an officer Pacific Ventures, advanced $48,579 to IPIC to pay for operating expenses.

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 Shannon Masjedi, who filed for Chapter 7 bankruptcy in 2010, which was discharged in August 2011, and Marc Shenkman, who filed for Chapter 11 bankruptcy in 2010, which was dismissed but not discharged in May 2012, none of our directors or officers has filed for and has been affiliated with any company that has filed for bankruptcy within the last ten years. We are not aware of any proceedings to which any of our officers or directors, or any associate of any such officer or director, is a party adverse to us or any of our or has a material interest adverse to us or any of our subsidiaries.

MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Pacific Ventures’ Common Stock is quoted on the OTCQB, under the symbol “PACV.”

Quarter Ended

High Bid

Low Bid

June 30, 2015

$0.51

$0.51

March 31, 2015

$0.30

$0.30

December 31, 2014

$0.55

$0.21

September 30, 2014

$1.25

$0.35

June 30, 2014

$0.85

$0.51

March 31, 2014

$1.00

$0.30

December 31, 2013

$0.30

$0.30

September 30, 2013

$0.75

$0.30

June 30, 2013

$0.75

$0.30

March 31, 2013

$0.50

$0.30

Pacific Ventures’s Common Stock is traded sporadically and has a very limited volume so the prices reflected above may not be indicative of actual prices if volume were to increase. All prices listed herein reflect inter-dealer prices, without retail mark-up, mark-down or commissions and may not represent actual transactions with retail customers.

Since its inception, Pacific Ventures has not paid any dividends on its Common Stock, and Pacific Ventures does not anticipate that it will pay dividends in the foreseeable future.

At September 25, 2015, Pacific Ventures had approximately 264 stockholders of record and 25,358,031 shares of its Common Stock issued and outstanding.

RECENT SALES OF UNREGISTERED SECURITIES

Please see Item 3.02 - “Unregistered Sales of Equity Securities” of this Current Report.

DESCRIPTION OF SECURITIES

Pacific Ventures’ authorized capital stock consists of 110,000,000 shares, of which 100,000,000 shares are common stock, par value $0.001 per share, and 10,000,000 shares are preferred stock, par value $0.001 per share.  As of September 25, 2015 after giving effect to the initial closing of our acquisition of Snöbar Holdings, Inc., there were 25,358,031 shares of Pacific Ventures’ common stock outstanding.

Common Stock

Subject to certain limitations discussed below, holders of common stock are entitled to one vote for each share on all matters submitted to a stockholder vote. Holders of common stock do not have cumulative voting rights. Subject to certain limitations discussed below, holders of common stock are entitled to share in all dividends that the board of directors, in its discretion, declares from legally available funds. In the event of our liquidation, dissolution or winding up, subject to the preferences of any shares of preferred stock which may then be authorized and outstanding, each outstanding share entitles its holder to participate in all assets that remain after payment of liabilities and after providing for each class of stock, if any, having preference over the common stock. The board of directors has the authority to issue the authorized but unissued shares of common stock without action by the stockholders. The issuance of such shares would reduce the percentage ownership held by current stockholders.

Holders of common stock have no conversion, preemptive or other subscription rights, and there are no redemption provisions for the common stock. The rights of the holders of common stock are subject to any rights that may be fixed for holders of preferred stock, when and if any preferred stock is authorized and issued. All outstanding shares of common stock are duly authorized, validly issued, fully paid and non-assessable.

Lock-Up/Leak-Out Agreements

Each Snöbar Shareholder that receives 100,000 or more shares of our Common Stock pursuant to the Share Exchange will execute 2-year lock-up/leak-out agreement with us which will provide that their shares will not be, directly or indirectly, publicly sold, subject to a contract for sale or otherwise transferred, except that, beginning one year after the date of the closing of the Share Exchange, such Snöbar Shareholder will be permitted to sell up to 3% of the shares of our Common Stock he or she received pursuant to the Share Exchange in any given 90 day period. All lock-up/leak-out restrictions will expire 24 months after the closing of the Share Exchange.

Piggyback Registration Rights

Pursuant to the terms of the Share Exchange Agreement, recipients of our shares issued pursuant to the Share Exchange (22,474,000 shares of our Common Stock) and Other Issuance (2,500,000 shares of our Common Stock), including Snobar Shareholders and Other Persons (collectively, “Recipients of Pacific Ventures Shares”), or their permitted transferees are entitled to piggyback rights with respect to the registration of their shares under the Securities Act. These registration rights will expire when such security holder is able to sell all of its shares pursuant to Rule 144 of the Securities Act, without any volume or timing restrictions. In an underwritten offering, the underwriter has the right, subject to specified conditions, to limit the number of shares such holders may include in an offering.

If we propose to register the offer and sale of any of our securities under the Securities Act, in connection with the public offering of such securities the Recipients of Pacific Ventures Shares, or their permitted transferees, will be entitled to certain “piggyback” registration rights allowing the Recipients of Pacific Ventures Shares to include their shares in such registration, subject to certain marketing and other limitations that may be imposed by the underwriters, if any, in such a registration. As a result, whenever we propose to file a registration statement under the Securities Act, other than with respect to (1) a registration related to an employee benefit plan; or, (2) a registration related to a corporate reorganizations or certain other transactions under Rule 145 of the Securities Act, the Recipients of Pacific Ventures Shares are entitled to notice of the registration and have the right, subject to limitations that the underwriters may impose on the number of shares included in the registration, to include their shares in the registration.

Generally, we are required to bear all registration expenses, other than selling expenses such as underwriting discounts and selling commissions, incurred in connection with the piggyback registration described above.

Anti-Dilution Agreement

Pursuant to the terms of the Share Exchange Agreement, to prevent the dilution of the percentage of ownership interest of certain recipients (collectively, “Anti-Dilution Recipients”) of shares of Common Stock pursuant to the Other Issuance, we are entering into an Anti-Dilution Agreement with them, whereby for a period of two (2) years after the Closing Date (“Term”), if we issue additional shares (“Additional Shares”) of Common stock, and the purchase price per share of Common Stock is less than $0.50 (“floor price”), adjusted by any split or reverse split in the number of shares of Common Stock of the Company (“as Adjusted”), which occurs after the date of the Other Issuance ("Dilutive Transaction"), contemporaneously with the Dilutive Transaction, we will issue to Anti-Dilution Recipients additional shares of our Common Stock in an amount which provides them with the ownership percentage interest which they would have held in the Company represented by the shares of Common Stock issued to them by the Company pursuant to the Other Issuance had the Additional Shares been sold at $0.50 per share of Common Stock, as Adjusted.

Preferred Stock

We are authorized to issue 10,000,000 shares of “blank check” preferred stock, par value $0.001 per share, in one or more series, subject to any limitations prescribed by law, without further vote or action by the stockholders. Each such series of preferred stock shall have such number of shares, designations, preferences, voting powers, qualifications, and special or relative rights or privileges as shall be determined by the Company’s board of directors, which may include, among others, dividend rights, voting rights, liquidation preferences, conversion rights and preemptive rights.

Series E Preferred Stock

Series E Preferred Stock was authorized October 2006 for up to 1,000,000 shares. Under the rights, preferences and privileges of the Series E Preferred Stock, the holders of the preferred stock receive a 10 to 1 voting preference over common stock. Accordingly, for every share of Series E Preferred Stock held, the holder received the voting rights equal to 10 shares of common stock. The Series E preferred Stock is not convertible into any other class of stock of the Company and has no preference to dividends or liquidation rights. As of September 25, 2015, there were 1,000,000 Series E Preferred shares outstanding. Concurrently with the initial closing of the transactions contemplated by the Share Exchange Agreement, Brett Bartolami sold all of his 1,000,000 shares of Series E Preferred Stock, par value $0.001 per share, of the Company to Shannon Masjedi for an aggregate purchase price of $100.

Transfer Agent

Pacific Ventures’ transfer agent is Action Stock Transfer Corporation, 2469 East Fort Union Blvd, Suite 214, Salt Lake City, Utah 84121, Telephone (801) 274-1088 and Facsimile (801) 274-1099.

INDEMNIFICATION OF DIRECTORS AND OFFICERS

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

(1) A corporation shall have power to indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative (other than an action by or in the right of the corporation) by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other enterprise, against expenses (including attorneys’ fees), judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding if he acted in good faith and in a manner he reasonably believed to be in or not

opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful. The termination of any action, suit, or proceeding by judgment, order, settlement, conviction, or on a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the corporation, and with respect to any criminal action or proceeding, had reasonable cause to believe that his conduct was unlawful.

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

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

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

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

The Registrant’s certificate of incorporation and bylaws provide that the Registrant “may indemnify” to the full extent of its power to do so, all directors, officers, employees, and/or  

agents.  It is anticipated that the Registrant will indemnify its officer and director to the full extent permitted by the above-quoted statute.

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

WHERE YOU CAN FIND MORE INFORMATION

We have filed with the U.S. Securities and Exchange Commission (the “SEC”), located on 100 F Street NE, Washington, D.C. 20549, Current Reports on Form 8-K, Quarterly Reports on Form 10-Q, Annual Reports on Form 10-K, and other reports, statements and information as required under the Securities Exchange Act of 1934, as amended.

The reports, statements and other information that we have filed with the SEC may be read and copied at the Commission's Public Reference Room at 100 F Street NE, Washington, D.C. 20549. The public may obtain information on the operation of the Public Reference Room by calling the Commission at 1-800-SEC-0330.

The SEC maintains a web site (HTTP://WWW.SEC.GOV.) that contains the registration statements, reports, proxy and information statements and other information regarding registrants that file electronically with the SEC such as us. You may access our SEC filings electronically at this SEC website. These SEC filings are also available to the public from commercial document retrieval services.

Item 3.02      Unregistered Sales of Equity Securities.

Under the Share Exchange Agreement described in Item 2.01 of this report, at the initial closing on September 25, 2015, we exchanged 22,474,000 shares of our unregistered common stock for 22,474,000 shares of common stock of Snöbar Holdings, Inc. representing approximately 89% of our issued and outstanding common stock in connection with the Share Exchange while simultaneously issuing 2,500,000 shares of our unregistered common stock to certain other persons.

In the issuances of our common stock, the recipients were accredited investors and the issuances were exempt from registration under the Securities Act of 1933 in reliance on an exemption provided by Section 4(a)(2) and Regulation S of that act.

Item 5.01     Changes in Control of Registrant.

The information set forth in Item 2.01 of this Current Report on Form 8-K is incorporated by reference into this Item 5.01.

Except as described herein, there were no arrangements or understandings among members of both the former and new control groups and their associates with respect to the election of directors or other matters.

As required to be disclosed by Regulation S-K Item 403(c), there are no arrangements, known to the Company, including any pledge by any person of securities of the Company or any of its parents, the operation of which may at a subsequent date result in a change in control of the Company.

Item 5.02

Departure of Directors and Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 25, 2015, upon the initial closing of the Share Exchange Agreement, Brett Bertolami resigned as the Company’s Chief Executive Officer, Chief Financial Officer, President, Secretary, Treasurer and as a Director. The resignations of Mr. Bertolami were made in accordance with the terms of the Share Exchange Agreement and were not due to any disagreements with the Company.

Upon the tendering of Mr. Bertolami’s resignations, Robert E. Smith was appointed as the Chairman of the Board of Directors, Chief Executive Officer and as a member of the Board of Directors of the Company, Shannon Masjedi was appointed as the President, Chief Operating Officer, and Secretary and as a member of the Board of Directors of the Company, and Marc Shenkman was appointed as the Executive Vice President and as a member of the Board of Directors of the Company.

The information set forth in Item 2.01 – “Directors and Executive Officers” and “Snöbar Holdings, Inc.  Compensation” of this Current Report on Form 8-K is incorporated by reference into this Item 5.02.

Item 5.06

Change in Shell Company Status.

As a result of the consummation of the transactions described in Item 1.01 of this Current Report on Form 8-K, we are no longer a shell company as that term is defined in Rule 405 of the Securities Act of 1933, as amended, and Rule 12b-2 of the Exchange Act of 1934, as amended.

Item 9.01

Financial Statements and Exhibits

Reference is made to the shares of Snöbar Holdings, Inc.  acquired under the Share Exchange Agreement, as described in Item 2.01 of this Current Report on Form 8-K, which is incorporated herein by reference. As a result of the consummation of the transactions described in Item 2.01, our primary operations consist of the business and operations of Snöbar Holdings, Inc.  Accordingly, we are presenting the financial statements of Snöbar Holdings, Inc. for the fiscal years ended December 31, 2014 and 2013.

(a)	Financial statements of business acquired. The audited consolidated financial statements of Snöbar Holdings, Inc. as of and for the fiscal years ended December 31, 2014 and 2013 and the unaudited financial statements of Snöbar Holdings, Inc. as of and for the six months ended June 30, 2015, including the notes to such financial statements, are attached as Exhibit 99.1 and Exhibit 99.2, respectively, and are incorporated herein by reference.
(b)	Pro forma financial information. The following unaudited pro forma condensed consolidated financial statements of Pacific Venture Group, Inc., giving effect to Pacific Venture Group, Inc.’s acquisition of Snöbar Holdings, Inc. are attached as Exhibit 99.3 and incorporated herein by reference. (1) Unaudited Pro Forma Condensed Consolidated Balance Sheet as of June 30, 2015; (2) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the year ended December 31, 2014; and (3) Unaudited Pro Forma Condensed Consolidated Statement of Operations for the six months ended June 30, 2015
(c)	Shell company transactions. Included in this report as Exhibit 99.1 is the audited consolidated financial statements of Snöbar Holdings, Inc. as of and for the fiscal years ended December 31, 2014 and 2013 and the unaudited financial statements of Snöbar Holdings, Inc. as of and for the six months ended June 30, 2015 and are incorporated herein by reference.

(d) Exhibits

Exhibit	Description
2.1	Share Exchange Agreement, dated August 14, 2015, by and among Pacific Ventures Group, Inc., Snöbar Holdings, Inc., and certain shareholders of Snöbar Holdings, Inc. (Incorporated by reference to Exhibit 10.1 of Pacific Ventures Group, Inc.'s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015 filed on August 14, 2015 (SEC File No. 000-54584)).
2.2*	Amendment No. 1 to Share Exchange Agreement, dated August 21, 2015, by and among Pacific Ventures Group, Inc., Snöbar Holdings, Inc., and certain shareholders of Snöbar Holdings, Inc.
3.2	Bylaws of Pacific Ventures Group, Inc. (Incorporated by reference to Exhibit 3.03 of Pacific Ventures Group, Inc.’s Registration Statement on Form 10 filed on January 20, 2012 (SEC File No. 000-54584)).
3.3	Amendment No. 1 to the Bylaws of Pacific Ventures Group, Inc. (Incorporated by reference to Exhibit 3.3 of Pacific Ventures Group, Inc.'s Quarterly Report

	on Form 10-Q for the quarter ended June 30, 2015 filed on August 14, 2015 (SEC File No. 000-54584))
10.1*	Co-Packaging Letter Agreement dated April 24, 2013, by and between International Production Impex Corporation and Brothers International Desserts, Inc.
10.2*	Distribution Agreement, dated March 16, 2015, between International Production Impex Corporation and Spectrum Entertainment & Events LLC.
10.3*	Distribution Agreement, dated June 5, 2015, between International Production Impex Corporation and Eddie Holman.
10.4*	Exclusive Distribution Agreement, dated February 3, 2015, between International Production Impex Corporation and Yes Consolidated, LLC.
10.5*	Distribution Agreement, dated May 1, 2015, between International Production Impex Corporation and Dejako Trading Company.
10.6*	Form of Lock-Up/Leak-Out Agreement between Pacific Ventures Group, Inc. and certain Snöbar Shareholders party thereto.
10.7*	Anti-Dilution Agreement, dated September 25, 2015, among Pacific Ventures Group, Inc. and Brett Bertolami and Danzig Ltd.
10.8*	Piggyback Registration Rights Agreement, dated September 25, 2015, by and among Pacific Ventures Group, Inc., Snöbar Shareholders and Other Persons
21.1*	Subsidiaries of the Registrant.
99.1*	The audited consolidated financial statements of Snöbar Holdings, Inc. for the fiscal years ended December 31, 2014 and 2013.
99.2*	The unaudited condensed consolidated financial statements of Snöbar Holdings, Inc. as of and for the six months ended June 30, 2015.
99.3*	The unaudited pro forma condensed consolidated financial statements of Pacific Venture Group, Inc., giving effect to Pacific Venture Group, Inc.’s acquisition of Snöbar Holdings, Inc.

* Filed herewith.

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 hereunto duly authorized.

	PACIFIC VENTURES GROUP, INC.
Date: September 25, 2015	By:	/S/ Shannon Masjedi
		Shannon Masjedi President

EX-2.2

AMENDMENT NO. 1 TO SHARE EXCHANGE AGREEMENT

THIS AMENDMENT NO. 1 TO SHARE EXCHANGE AGREEMENT (this “Amendment”) is made and entered into as of August 21, 2015, by and among Pacific Ventures Group, Inc., a Delaware corporation (the “Company”), with offices at 200 Camelia Court, Vero Beach, Florida 32963 and Snöbar Holdings, Inc., a Delaware corporation (“SNO’’), with offices at 117 West 9th Street, Suite 423, Los Angeles, California 90015 and the shareholders of SNO set forth on Composite Exhibit A (the “SNO Shareholders”), each sometimes referred to herein as a “Party” and collectively the “Parties”.

R E C I T A L S

WHEREAS, the Parties have executed a Share Exchange Agreement dated as of August 14, 2015 (the “Exchange Agreement”); and

WHEREAS, the Parties desire to amend a certain provision of the Exchange Agreement as set forth below.

AGREEMENT

NOW THEREFORE, in consideration of the foregoing premises and the respective promises and agreements of the parties set forth herein, the Parties hereto agree as follows:

1. Definitions. Capitalized terms used herein and not otherwise defined herein shall have the respective meanings ascribed thereto in the Exchange Agreement.

2. Amendments.

2.4 Section 2.17 of the Exchange Agreement is hereby amended by deleting such section in its entirety and inserting in its place the following:

Section 2.17

The Company is a “shell company” as that term is defined in Reg. 405 of the Securities Act of 1933, as amended.

3. Miscellaneous. Except as modified and amended pursuant to this Amendment, the Exchange Agreement shall remain in full force and effect. This Amendment may be executed in one or more counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument. The execution and delivery of a facsimile or other electronic transmission of a signature to this amendment shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy. This Amendment will become binding when one or more counterparts hereof, individually or taken together, will bear the signatures of all the parties reflected hereon as signatories.

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IN WITNESS WHEREOF, the corporate parties hereto have caused this Amendment to be executed by their respective officers, hereunto duly authorized, as of the date first-above written.

SNÖBAR HOLDINGS, INC.

A Delaware corporation

By:

/s/ Shannon Masjedi

 Shannon Masjedi, Senior Vice President

PACIFIC VENTURES GROUP, INC.

A Delaware corporation

By:

/s/ Brett Bertolami

 Brett Bertolami, Chief Executive Officer

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EX-10.1

EX-10.2

EX-10.3

EX-10.4

EX-10.5

EX-10.6

PACIFIC VENTURES GROUP, INC.

LOCK-UP/LEAK-OUT AGREEMENT

THIS LOCK-UP/LEAK-OUT AGREEMENT (the “Agreement”) is made and entered into as of September 25, 2015, by and among Pacific Ventures Group, Inc., a Delaware corporation (the “Company”), and the undersigned owner (the “Undersigned”) of the shares of the Company’s common stock, $.001 par value per share (the “Common Stock”), set forth opposite the undersigned’s name on the signature page of this Agreement (“Shares”).

RECITALS

WHEREAS, pursuant to that certain Share Exchange Agreement dated August 14, 2015 (“Share Exchange Agreement”), among the Company, Snöbar Holdings, Inc., a Delaware corporation (“Snöbar Holdings”), and the shareholders of Snöbar Holdings (“Snöbar Shareholders”), the Company is to issue 22,474,000 shares of the Company’s unregistered common stock, par value $0.001 per share (“Common Stock”), to Snöbar Shareholders on the initial closing of the Share Exchange Agreement; and

WHEREAS, as contemplated and required by the Share Exchange Agreement and to ensure the development of an orderly trading market in the Company’s common stock, the parties are entering into this Agreement to restrict the sale, assignment, transfer, conveyance, hypothecation or alienation of the Shares contemplated as being issued to the undersigned under the Share Exchange Agreement, all on the terms set forth below.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing premises and the mutual covenants, contained herein, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1. The undersigned hereby agrees that for a period of two (2) years following the date hereof, which is the date of the initial closing of the Share Exchange Agreement (the “Lock-Up Period”), the undersigned will not sell, assign, pledge or otherwise transfer any of the Shares that the undersigned beneficially owns, including (i) all shares of Common Stock that the undersigned may receive as a stock dividend or other distribution on shares of Common Stock, and (ii) all other securities of the Company that the undersigned may receive in a recapitalization or similar transaction (the “Lock-up Shares”), and the undersigned agrees not to take any of the preceding actions, without the Company’s prior written consent. In addition, the undersigned agrees that, during the Lock-Up Period, the undersigned will not engage in (i) any short sale of any Lock-up Shares or other Common Stock, (ii) any hedging transaction regarding the Lock-up Shares or other Common Stock, or (ii) any grant of a put or call option regarding the Lock-up Shares or other Common Stock.

2. Notwithstanding Section 1, the Lock-up Shares may be transferred or sold under the following circumstances:

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A) The undersigned may transfer (i) all or any portion of the Lock-up Shares as a bona fide gift or gifts, provided that the donee or donees thereof agree to be bound by the restrictions set forth herein, and (ii) all or any portion of the Lock-up Shares to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, provided that the trustee of the trust agrees to be bound by the restrictions set forth herein, and provided further than any such transfer shall not involve a disposition for value. For purposes hereof, “immediate family and friends” shall mean any relationship by blood, marriage, adoption, or close business relationship.

B) Beginning on the date that is the twelve month anniversary of the date hereof, the undersigned may sell up to three percent (3%) of the Shares owned by the undersigned in any given ninety (90) day period.

3. The undersigned consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the transfer of shares of Common Stock except in compliance with the preceding provisions of this Agreement. The undersigned also consents to the placement of the following legend on any and all stock certificates that evidence the shares of Common Stock that are the subject of this Agreement:

“THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS OF THAT CERTAIN LOCK-UP/LEAK-OUT AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDERS NAMED THEREIN, DATED AS OF SEPTEMBER 25, 2015. A COPY OF THE LOCK-UP/LEAK-OUT AGREEMENT MAY BE INSPECTED AT THE PRINCIPAL OFFICE OF THE COMPANY.”

4. This Agreement will terminate on the second anniversary of the date of this Agreement and thereafter all provisions and restrictions contained herein shall cease and be of no further force or effect.

5. Notwithstanding anything to the contrary set forth herein, the Company may, at any time and from time to time, waive in writing any of the conditions or restrictions contained herein.

6. Except as otherwise provided in this Agreement, the undersigned shall be entitled to beneficial rights of ownership of the Lock-up Shares, including the right to vote the Lock-up Shares for any and all purposes.

7. This Agreement may be executed in any number of counterparts with the same force and effect as if all parties had executed the same document. The execution and delivery of a facsimile or other electronic transmission of this agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.

8. All notices, instructions or other communications required or permitted to be given pursuant to this Agreement shall be given in writing and delivered by certified mail, return receipt requested, overnight delivery or hand-delivered to all parties to this Agreement at the addresses set forth on the signature page below. All notices shall be deemed to be given on the same day if delivered

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by hand or on the following business day if sent by overnight delivery or the second business day following the date of mailing.

9. This Agreement sets forth the entire understanding of the parties hereto with respect to the subject matter hereof, and may not be amended except by a written instrument executed by the parties hereto.

10. These terms and conditions shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of laws provisions of such state.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement as of the day and year first above written.

THE COMPANY

Pacific Ventures Group, Inc.,

a Delaware corporation

By: /s/Shannon Masjedi

Name:  Shannon Masjedi

Title: President

UNDERSIGNED

___________________________

Name:

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EX-10.7

PACIFIC VENTURES GROUP, INC.

ANTI-DILUTION AGREEMENT

ANTI-DILUTION AGREEMENT (this “Agreement”), dated as of September 25, 2015, by and among Pacific Ventures Group, Inc., a Delaware corporation (the “Company”), Brett Bertolami (“Bertolami”) and Danzig Ltd. (“Danzig”).  Bertolami and Danzig are sometimes referred to herein individually as a “Holder” and collectively as the “Holders”.

RECITALS

WHEREAS, pursuant to that certain Share Exchange Agreement dated August 14, 2015 (“Share Exchange Agreement”), among the Company, Snöbar Holdings, Inc., a Delaware corporation (“Snöbar Holdings”), and certain shareholders of Snöbar Holdings (“Snöbar Shareholders”), the Company is to issue an aggregate of 2,105,000 shares of Common Stock of the Company (the “Issuance”) to the Holders on the initial closing of the Share Exchange Agreement; and

WHEREAS, as a condition to consummating the transactions under the Share Exchange Agreement, the parties are entering into this Anti-Dilution Agreement to provide dilution protections to the Holders.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the parties hereto agree as follows:

1. TERM. This agreement applies to any equity investment made in Company for a period of two (2) years following the date hereof, which is the date of initial closing of the Share Exchange Agreement. The period during which this Agreement is in effect is referred to as the “Term”.

2. ANTI-DILUTION RIGHTS. To the extent that during the Term the Company issues any additional Common Stock (the “Additional Shares”), and the purchase price per share of Common Stock is less than $0.50 (“floor price”) (as determined without regard to the operation of this Agreement and the issuance of Adjusting Shares (as defined below)), adjusted by any split or reverse split in the number of shares of Common Stock of the Company (“as Adjusted”) which occurs after the Closing Date (“Dilutive Transaction”), contemporaneously with the Dilutive Transaction, the Company will issue the Holders additional shares of Common Stock in the Company in an amount which provides them with the Ownership Percentage Interest which they would have held in the Company represented by the shares of Common Stock issued to them by the Company pursuant to the Other Issuance had the Additional Shares been sold at $0.50 per share of Common Stock, as Adjusted (“Adjusting Shares”).

For example: Assume that a month after the Closing Date a new investor is willing to invest $500,000.00 at $0.20 per share (which is below the floor price of $0.50). Assuming there are

1

25,323,031 shares of Common Stock outstanding, if this agreement were not in effect, the new investor would receive 2,500,000 units at $0.20 per unit and the aggregate units outstanding would be 27,823,031. Because the per unit price for the new investment is less than $0.50, the proposed investment would be a Dilutive Transaction. Had the Dilutive Transaction been at $0.50 per share, 1,000,000 shares would have been issued to the new investor ($500,000 divided by $0.50) and 26,323,031 aggregate shares would have been outstanding (25,323,031 plus 1,000,000). Assuming the Holders owned 2,105,000 shares of Common Stock, if the new shares were sold to the investor at $0.50 per share, the Holders would hold 7.996799% of the outstanding shares of Common Stock (2,105,000 is 7.996799% of 26,323,031). The Holders would hold only 7.565675% of the shares of Common Stock outstanding if the Dilutive Transaction were to occur without adjustment (2,105,000 is 7.565675% of 27,823,031).  Consequently, under the terms of this agreement the Holders must receive enough Adjustment Shares to own 7.996799% of the aggregate outstanding shares of Common Stock after the Dilutive Transaction (the formula being 7.996799% equaling 2,105,000 plus Adjusted Shares divided by 27,823,031 plus Adjusted Shares). Based on solving the foregoing formula, the Holders must be issued 130,377 Adjustment Shares (7.996799% equals 2,105,000 plus 130,377 divided by 27,823,031 plus 130,377). The anti-dilution formula and this example are set forth in greater detail as follows:

ANTI-DILUTION FORMULA:

F$ = floor price ($0.50)

D$ = dilutive price

DI = dilutive investment

HS = number of shares held by Holders

SPD = total issued and outstanding shares of Pacific Ventures common stock prior to dilutive investment

SAD = total issued and outstanding shares of Pacific Ventures common stock after dilutive investment (SPD + DI/D$)

SND = total issued and outstanding shares of Pacific Ventures common stock after dilutive investment but adjust up to floor price (SPD + DI/F$)

NDOI = non-diluted ownership interest at diluted price (HS/SND)

DOI = diluted ownership interest at floor price (HS/SAD)

X = new shares to be awarded to Holders to counteract dilution

 HS

      =

  HS    +   X

SND

SAD   +   X

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EXAMPLE:

F$ = $0.50 per share

D$ = $0.20 per share

DI = $500,000

HS = 2,105,000 shares

SPD = 25,323,031 shares

SAD = SPD + DI/F$ = 25,323,031 + $500,000/$0.20 = 25,323,031 + 2,500,000 = 27,823,031

SND = SPD + DI/F$ = 25,323,031 + $500,000/$0.50 = 25,323,031 + 1,000,000 = 26,323,031

NDOI = HS/SND = 2,105,000/26,323,031 = 0.07996799

DOI = HS/SAD = 2,105,000/27,823,031 = 0.07565675

X = new shares to be awarded to Holders to counteract dilution

  2,105,000 shares

      =        2,105,000 shares + X

26,323,031 shares

  27,823,031 shares + X

0.07996799 = 2,105,000 shares + X

27,823,031 shares + X

0.07996799 (27,823,031 shares + X) = 2,105,000 shares + X

2,224,951 shares + 0.07996799X = 2,105,000 shares + 1X

2,224,951 shares - 2,105,000 shares = 1X - 0.07996799X

119,951 shares = 0.92003201X

X = 119,951 shares

 0.92003201

X = 130,377 shares to be awarded to Holders to counteract dilution

VERIFICATION OF ANSWER TO EXAMPLE:

0.07996799 = 2,105,000 shares + 130,377 shares

27,823,031 shares + 130,377 shares

0.07996799 = 2,235,377 shares

27,953,408 shares

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0.07996799 = 0.07996799 (Ownership Interest Adjusted to Investment if at Floor Price)

3.

MISCELLANEOUS. All notices under this Agreement shall be in writing, and shall be deemed given when personally delivered, three days after being sent by prepaid certified or registered U.S. mail, or one day after being sent by overnight express courier to the address of the party to be noticed, as set forth in any writing or document provided by the party to be noticed to the other. This Agreement constitutes the entire agreement between the parties regarding the subject matter hereof and supersedes all prior understandings, agreements, or representations by or between the parties, written or oral, to the extent they related in any way to the subject matter hereof. No changes, modifications, or waivers to this Agreement will be effective unless in writing and signed by the parties. In the event that any provision hereof is determined to be illegal or unenforceable, that provision will be limited or eliminated to the minimum extent necessary so that these terms and conditions shall otherwise remain in full force and effect and enforceable. These terms and conditions shall be governed by and construed in accordance with the laws of the State of California, without regard to the conflicts of laws provisions of such state. Each Holder may assign his or its rights and delegate his or its duties under this Agreement without the consent of the Company or the other Holder. The Company may not assign its rights or delegate its duties under this Agreement without the express prior written consent of the Holders.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which, together, shall constitute one and the same instrument. The execution and delivery of a facsimile or other electronic transmission of this agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.

[signature page follows]

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IN WITNESS WHEREOF, the undersigned parties have executed this Anti-Dilution Agreement as of the date first above written.

Pacific Ventures Group, Inc.,

a Delaware corporation

By: /s/ Shannon Masjedi

Name:  Shannon Masjedi

Title: President

/s/Brett Bertolami

Brett Bertolami, as an individual

Danzig Ltd.

By: /s/Elliott Foxcroft

Name: Elliott Foxcroft

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EX-10.8

PACIFIC VENTURES GROUP, INC.

REGISTRATION RIGHTS AGREEMENT

REGISTRATION RIGHTS AGREEMENT (the “Agreement”), dated as of September 25, 2015, by and among Pacific Ventures Group, Inc., a Delaware corporation (the “Company”), and the shareholders of Snöbar Holdings, Inc., a Delaware corporation, set forth on Exhibit A (the “Snöbar Shareholders”) and the other persons (“Other Persons”) set forth on Exhibit B.

RECITALS

WHEREAS, pursuant to that certain Share Exchange Agreement dated August 14, 2015 (“Share Exchange Agreement”), among the Company, Snöbar Holdings, Inc., a Delaware corporation (“Snöbar Holdings”), and the Snöbar Shareholders, the Company is to issue 22,474,000 shares of the Company’s unregistered common stock, par value $0.001 per share (“Common Stock”) to Snöbar Shareholders while simultaneously issuing 2,500,000 shares of the Company’s unregistered Common Stock (“Other Issuance”) to Other Persons on the initial closing of the Share Exchange Agreement; and

WHEREAS, as a condition to consummating the transactions under the Exchange Agreement, the parties are entering into this Registration Rights Agreement providing piggy back registration rights to the Snöbar Shareholders and Other Persons.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the parties hereto agree as follows:

1.          (a) Piggyback Registration. The Company shall give Snöbar Shareholders and Other Persons at least 10 days’ prior written notice of each filing by the Company of a registration statement (other than a registration statement on Form S-4 or Form S-8 or on any successor forms thereto) with the Securities and Exchange Commission (the “Commission”) pursuant to which the Company is registering shares of its Common Stock for sale by itself or others for cash proceeds. If requested by Snöbar Shareholders and/or Other Persons in writing within 20 days after receipt of any such notice, the Company shall, at the Company’s sole expense (other than the underwriting discounts, if any, payable in respect of the Shares sold by Snöbar Shareholders and/or Other Persons), register all or, at Snöbar Shareholders and/or Other Persons’ option, any portion of the shares of common stock then held by Snöbar Shareholders and/or Other Persons, including all shares of common stock issuable to Snöbar Shareholders and/or Other Persons upon the exercise, conversion or exchange of other securities now held by Snöbar Shareholders and/or Other Persons (the “Shares”), concurrently with the registration of such other securities, all to the extent requisite to permit the public offering and sale of the Shares through the securities exchange, if any, on which the Common Stock is being sold or on the over-the-counter market, and will use its commercially reasonable efforts through its officers, directors, auditors, and counsel to cause such registration statement to become effective as promptly as practicable. If the managing underwriter of any such offering shall determine and advise the

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Company that, in its opinion, the distribution of all or a portion of the Shares requested to be included in the registration concurrently with the securities being registered by the Company would adversely affect the distribution of such securities by the Company, then the Company will include in such registration first, the securities that the Company proposes to sell itself and second, the Shares requested to be included in such registration, to the extent permitted by the managing underwriter.

(b) In the event of a registration pursuant to the provisions of this Agreement, the Company shall use its reasonable commercial efforts to cause the Shares so registered to be registered or qualified for sale under the securities or blue sky laws of such jurisdictions as Snöbar Shareholders and/or Other Persons may reasonably request; provided, however, that the Company shall not be required to qualify to do business in any state by reason of this Section 1(b) in which it is not otherwise required to qualify to do business.

(c) The Company shall keep effective any registration or qualification contemplated by this Section 1 and shall from time to time amend or supplement each applicable registration statement, preliminary prospectus, final prospectus, application, document and communication until such time as all of the Shares may be sold without volume restrictions pursuant to Rule 144, in each case as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Company's transfer agent.

(d) In the event of a registration pursuant to the provisions of this Agreement, the Company shall furnish to Snöbar Shareholders and/or Other Persons such reasonable number of copies of the registration statement and of each amendment and supplement thereto (in each case, including all exhibits), of each prospectus contained in such registration statement and each supplement or amendment thereto (including each preliminary prospectus), all of which shall conform to the requirements of the Securities Act and the rules and regulations thereunder, and such other documents, as Snöbar Shareholders and/or Other Persons may reasonably request to facilitate the disposition of the Shares included in such registration.

(e) The Company shall notify Snöbar Shareholders and/or Other Persons promptly when such registration statement has become effective or a supplement to any prospectus forming a part of such registration statement has been filed.

(f) The Company shall advise Snöbar Shareholders and/or Other Persons promptly after it shall receive notice or obtain knowledge of the issuance of any stop order by the Commission suspending the effectiveness of such registration statement, or the initiation or threatening of any proceeding for that purpose and promptly use its reasonable best efforts to prevent the issuance of any stop order or to obtain its withdrawal if such stop order should be issued.

(g) The Company shall promptly notify Snöbar Shareholders and/or Other Persons at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event as a result of which the prospectus included in such registration statement, as then in effect, would include an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing, and at the reasonable request of Snöbar Shareholders and/or Other

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Persons prepare and furnish to it such number of copies of a supplement to or an amendment of such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such Shares or securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances under which they were made. The Snöbar Shareholders and/or Other Persons shall suspend all sales of the Shares upon receipt of such notice from the Company and shall not re-commence sales until it receives copies of any necessary amendment or supplement to such prospectus, which shall be delivered to Snöbar Shareholders and/or Other Persons within 30 days of the date of such notice from the Company.

(h) If requested by the underwriter for any underwritten offering of Shares, the Company and Snöbar Shareholders and/or Other Persons will enter into an underwriting agreement with such underwriter for such offering, which shall be reasonably satisfactory in substance and form to the Company, the Company’s counsel and Snöbar Shareholders and/or Other Persons ’s counsel, and the underwriter, and such agreement shall contain such representations and warranties by the Company and Snöbar Shareholders and/or Other Persons and such other terms and provisions as are customarily contained in an underwriting agreement with respect to secondary distributions solely by selling stockholders, including, without limitation, indemnities substantially to the effect and to the extent provided in Section 2 of this Agreement.

(i) The Company agrees that until all the Shares have been sold under a registration statement or pursuant to Rule 144 promulgated under the Securities Act or other available exemption from Securities Act registration requirements, it shall use its reasonable commercial efforts to keep current in filing all reports, statements and other materials required to be filed with the Commission to permit Snöbar Shareholders and/or Other Persons to sell the Shares under Rule 144.

(j) Snöbar Shareholders and/or Other Persons hereby agrees not to offer, sell, make any short sale of, loan, grant any option for the purchase of, or otherwise dispose of any of the Company's Common Stock held of record or beneficially owned by Snöbar Shareholders and/or Other Persons (other than those included in the registration) which at the time of the effective date of such registration statement may be sold or otherwise transferred in reliance upon Rule 144 during the period of time (not to exceed 180 days) determined by the Board of Directors of the Company upon advice of its managing underwriter, from and after the effective date of the registration statement; provided that the obligations of Snöbar Shareholders and/or Other Persons under this Section 1(j) shall not apply unless each officer and director of the Company then outstanding, in each case, who are not signatories to this Agreement, are bound by similar restrictions. Such restriction shall not apply to shares registered in such offering. In order to enforce this provision, the Company may impose stop-transfer instructions with respect to such Shares until the end of such period.

(k) However, nothing herein shall be construed to prohibit Snöbar Shareholders and/or Other Persons from reselling all or part of the Shares in a private transaction or transactions exempt from Securities Act registration under Section 4(1) thereof or otherwise; provided, however, that any such transferee(s) shall have the same registration rights and have the same

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obligations hereunder as Snöbar Shareholders and/or Other Persons, and that Snöbar Shareholders and/or Other Persons and all such transferees together shall share any resale limit imposed by an underwriter.

2. Indemnification.

(a) Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless Snöbar Shareholders and/or Other Persons, his employees, agents, and counsel, and each person, if any, who controls any such person within the meaning of Section 15 of the Securities Act or Section 20(a) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”) from and against any and all loss, liability, charge, claim, damage, and expense whatsoever (which shall include, for all purposes of this Section 2, but not be limited to, attorneys’ fees and any and all reasonable expenses whatsoever incurred in investigating, preparing, or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation) as and when incurred, arising out of, based upon, or in connection with (i) any untrue statement or alleged untrue statement of a material fact contained (A) in any registration statement, preliminary prospectus, or final prospectus (as from time to time amended and supplemented) or any amendment or supplement thereto, relating to the sale of any of the Shares or (B) in any application or other document or communication (in this Section 2 collectively called an “application”) executed by or on behalf of the Company or based upon written information furnished by or on behalf of the Company filed in any jurisdiction in order to register or qualify any of the Shares under the securities or blue sky laws thereof or filed with the Commission or any securities exchange; or any omission or alleged omission to state a material fact required to be stated therein or necessary to make the statements made therein not misleading, unless (x) such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to Snöbar Shareholders and/or Other Persons by or on behalf of Snöbar Shareholders and/or Other Persons expressly for inclusion in any registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, as the case may be, or (y) such loss, liability, charge, claim, damage or expense arises out of Snöbar Shareholders and/or Other Persons ’s failure to comply with the terms and provisions of this Agreement, or (ii) any breach of any representation, warranty, covenant, or agreement of the Company contained in this Agreement. The foregoing agreement to indemnify shall be in addition to any liability the Company may otherwise have, including liabilities arising under this Agreement.

If any action is brought against Snöbar Shareholders and/or Other Persons or any of his employees, agents, or counsel, or any controlling persons of such person (an “indemnified party”) in respect of which indemnity may be sought against the Company pursuant to the foregoing paragraph, such indemnified party or parties shall promptly notify the Company in writing of the institution of such action (but the failure so to notify shall not relieve the Company from any liability other than pursuant to this Section 2(a)) and the Company shall promptly assume the defense of such action, including the employment of counsel provided that the indemnified party shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such indemnified party or parties unless the employment of such counsel shall have been authorized in writing

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by the Company in connection with the defense of such action or the Company shall not have promptly employed counsel reasonably satisfactory to such indemnified party or parties to have charge of the defense of such action or such indemnified party or parties shall have reasonably concluded that there may be one or more legal defenses available to it or them or to other indemnified parties which are different from or additional to those available to the Company, in any of which events such fees and expenses shall be borne by the Company and the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties. Anything in this Section 2 to the contrary notwithstanding, the Company shall not be liable for any settlement of any such claim or action effected without its written consent, which shall not be unreasonably withheld. The Company shall not, without the prior written consent of each indemnified party that is not released as described in this sentence, settle or compromise any action, or permit a default or consent to the entry of judgment in or otherwise seek to terminate any pending or threatened action, in respect of which indemnity may be sought hereunder (whether or not any indemnified party is a party thereto) unless such settlement, compromise, consent, or termination includes an unconditional release of each indemnified party from all liability in respect of such action. The Company agrees promptly to notify Snöbar Shareholders and/or Other Persons of the commencement of any litigation or proceedings against the Company or any of its officers or directors in connection with the sale of any Shares or any preliminary prospectus, prospectus, registration statement, or amendment or supplement thereto, or any application relating to any sale of any Shares.

(b) The Snöbar Shareholders and/or Other Persons agrees to indemnify and hold harmless the Company, each director of the Company, each officer of the Company who shall have signed any registration statement covering Shares held by Snöbar Shareholders and/or Other Persons, each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, and its or their respective counsel, to the same extent as the foregoing indemnity from the Company to Snöbar Shareholders and/or Other Persons in Section 2(a) but only with respect to statements or omissions, if any, made in any registration statement, preliminary prospectus, or final prospectus (as from time to time amended and supplemented) or any amendment or supplement thereto, or in any application, in reliance upon and in conformity with written information furnished to the Company with respect to Snöbar Shareholders and/or Other Persons by or on behalf of Snöbar Shareholders and/or Other Persons, expressly for inclusion in any such registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, as the case may be. If any action shall be brought against the Company or any other person so indemnified based on any such registration statement, preliminary prospectus, or final prospectus, or any amendment or supplement thereto, or in any application, and in respect of which indemnity may be sought against Snöbar Shareholders and/or Other Persons pursuant to this Section 2(b), Snöbar Shareholders and/or Other Persons shall have the rights and duties given to the Company, and the Company and each other person so indemnified shall have the rights and duties given to the indemnified parties, by the provisions of Section 2(a).

(c) To provide for just and equitable contribution, if (i) an indemnified party makes a claim for indemnification pursuant to Section 2(a) or 2(b) (subject to the limitations thereof) but it is found in a final judicial determination, not subject to further appeal, that such indemnification may not be enforced

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in such case, even though this Agreement expressly provides for indemnification in such case, or (ii) any indemnified or indemnifying party seeks contribution under the Securities Act, the Exchange Act or otherwise, then the Company (including for this purpose any contribution made by or on behalf of any director of the Company, any officer of the Company who signed any such registration statement, any controlling person of the Company, and its or their respective counsel) as one entity, and Snöbar Shareholders and/or Other Persons (including for this purpose any contribution by or on behalf of an indemnified party) as a second entity, shall contribute to the losses, liabilities, claims, damages, and expenses whatsoever to which any of them may be subject, on the basis of relevant equitable considerations such as the relative fault of the Company and Snöbar Shareholders and/or Other Persons in connection with the facts which resulted in such losses, liabilities, claims, damages, and expenses. The relative fault, in the case of an untrue statement, alleged untrue statement, omission, or alleged omission shall be determined by, among other things, whether such statement, alleged statement, omission or alleged omission relates to information supplied by the Company or by Snöbar Shareholders and/or Other Persons, and the parties’ relative intent, knowledge, access to information, and opportunity to correct or prevent such statement, alleged statement, omission, or alleged omission. The Company and Snöbar Shareholders and/or Other Persons agree that it would be unjust and inequitable if the respective obligations of the Company and Snöbar Shareholders and/or Other Persons for contribution were determined by pro rata or per capita allocation of the aggregate losses, liabilities, claims, damages, and expenses (even if Snöbar Shareholders and/or Other Persons and the other indemnified parties were treated as one entity for such purpose) or by any other method of allocation that does not reflect the equitable considerations referred to in this Section 2(c). No person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who is not guilty of such fraudulent misrepresentation. For purposes of this Section 2(c) each person, if any, who controls Snöbar Shareholders and/or Other Persons within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act and each employee, agent, and counsel of Snöbar Shareholders and/or Other Persons or control person shall have the same rights to contribution as Snöbar Shareholders and/or Other Persons and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20(a) of the Exchange Act, each officer of the Company who shall have signed any such registration statement, each director of the Company, and its or their respective counsel shall have the same rights to contribution as the Company, subject to each case to the provisions of this Section 2(c). Anything in this Section 2(c) to the contrary notwithstanding, no party shall be liable for contribution with respect to the settlement of any claim or action effected without its written consent. This Section 2(c) is intended to supersede any right to contribution under the Securities Act, the Exchange Act or otherwise.

3. Miscellaneous.

(a) Remedies. In the event of a breach by the Company of its obligations under this Agreement, Snöbar Shareholders and/or Other Persons, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Agreement.

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(b) Agreements and Waivers. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, unless such amendment, modification or supplement is in writing and signed by the Company and Snöbar Shareholders and/or Other Persons.

(c) Notices. All notices and other communications provided for or permitted hereunder shall be made in writing by hand-delivery, registered first-class mail, telex, or telecopies, initially to the address set forth in the preamble to this Agreement, and thereafter at such other address, notice of which is given in accordance with the provisions of this Section 3(c). All such notices and communications shall be deemed to have been duly given when delivered by hand, if personally delivered; two business days after being deposited in the mail, postage prepaid, if mailed; when answered back, if telexed; and when receipt is acknowledged, if telecopied.

(d) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties.

(e) Counterparts; Facsimile Execution. This Agreement may be executed in any number of counterparts and by the parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. The execution and delivery of a facsimile or other electronic transmission of this agreement shall constitute delivery of an executed original and shall be binding upon the person whose signature appears on the transmitted copy.

(f) Headings. The headings in this Agreement are for convenience of references only and shall not limit or otherwise affect the meaning hereof.

(g) Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without reference to its conflicts of law provisions. Each of the parties submits to the jurisdiction of any state or federal court sitting in California, in any action or proceeding arising out of or relating to this Agreement and agrees that all claims in respect of the action or proceeding may be heard and determined in any such court. Each of the parties waives any defense of inconvenient forum to the maintenance of any action or proceeding so brought and waives any bond, surety, or other security that might be required of any other party with respect thereto. Nothing in this Section, however, shall affect the right of any party to bring any action or proceeding arising out of or relating to this Agreement in any other court or to serve legal process in any other manner permitted by law or at equity. Each party agrees that a final judgment in any action or proceeding so brought shall be conclusive and may be enforced by suit on the judgment or in any other manner provided by law or at equity.

(h) Severability. In the event that any one or more of the provisions contained herein, or the application hereof in any circumstance is held invalid, illegal or unenforceable, the validity, legality and enforceability of any such provisions in every other respect and of the remaining provisions contained herein shall not be affected or impaired thereby.

(i) Entire Agreement. This Agreement is intended by the parties as a final expression of their agreement and intended to be a complete and exclusive statement of this agreement and understanding

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of the parties hereto in respect of the subject matter contained herein. There are no restrictions, promises, warranties or undertakings, other than those set forth or referred to herein, concerning the registration rights granted by the Company pursuant to this Agreement.

[signature page follows]

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IN WITNESS WHEREOF, the parties have caused this Registration Rights Agreement to be executed as of the date first written above.

PACIFIC VENTURES GROUP, INC.
By:	/s/Shannon Masjedi
	Name: Shannon Masjedi
	Title: President

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EX-21

Exhibit 21.1

Pacific Ventures Group, Inc.

Subsidiaries of the Registrant

Item	Name	State of Formation
1.	Snöbar Holdings, Inc., a majority owned subsidiary of Pacific Ventures Group, Inc.	Delaware
2.	MAS Global Distributors, Inc., a majority owned subsidiary of Snöbar Holdings, Inc.	California

EX-99.1

Heaton & Company, PLLC

240 North East Promontory, Suite 200

Farmington, Utah 84025

Kristofer Heaton, CPA

William R. Denney, CPA

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To The Board of Directors and Stockholders of

SnöBar Holdings, Inc.

We have audited the accompanying consolidated balance sheets of SnöBar Holdings, Inc., (the Company) as of December 31, 2014 and 2013, and the related statements of operations, changes in stockholders’ equity (deficit) and cash flows for the years then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of SnöBar Holdings, Inc. as of December 31, 2014 and 2013, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.  As discussed in Note 3 to the consolidated financial statements, the Company has an accumulated deficit and has suffered recurring losses from operations.  These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to this matter are also described in Note 3.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/Heaton & Company, PLLC

Farmington, Utah

September 21, 2015

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

			December, 31		December 31,
			2014		2013
	ASSETS
Current Assets:
	Cash and cash equivalents		$	-	$	30,024
	Accounts receivable			12,721		6,844
	Inventory, net			58,256		30,494
	Deposits			1,500		18,400
		Total Current Assets		72,477		85,762
	Property, plant and equipment, net			106,740		326,758
		Total Assets	$	179,217	$	412,520
	LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
	Bank overdraft		$	2,589	$	-
	Accounts payable			358,867		320,631
	Accrued expenses			891,532		572,506
	Current portion, notes payable			550,333		100,000
	Current portion, notes payable - related party			278,821		336,821
	Current portion, leases payable			36,012		30,082
		Total Current Liabilities		2,118,154		1,360,040
Long-Term Liabilities:
	Notes payable - related party			324,522		308,799
	Leases payable			6,553		37,000
		Total Long-Term Liabilities		331,075		345,799
		Total Liabilities	$	2,449,229	$	1,705,839
	STOCKHOLDERS' EQUITY (DEFICIT)
	Preferred stock, $.001 par value, 10,000,000 shares authorized,  none issued and outstanding			-		-
	Class A common stock, $.001 par value, 30,000,000 shares authorized, 7,489,157 and 7,177,829 issued and outstanding, respectively			19,322		19,211
	Class B common stock, $.001 par value, 10,000,000 shares  authorized, 1,000,000 issued and outstanding, respectively			1,000		1,000
	Additional paid in capital			3,130,097		2,970,208
	Accumulated deficit			(5,420,431)		(4,283,738)
		Total Stockholders' Equity (Deficit)		(2,270,012)		(1,293,319)
		Total Liabilities and Stockholders' Equity (Deficit)	$	179,217	$	412,520

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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

			For the Years Ended,
			December 31,
			2014		2013
	Sales, net of discounts		$	128,002	$	237,835
	Cost of Goods Sold			(107,665)		(180,685)
		Gross Profit		20,337		57,150
Operating Expenses
	General and administrative			403,663		778,537
	Marketing and advertising			79,701		238,190
	Professional fees			4,574		61,703
	Research and development			-		43,951
	IPIC business rights expense			-		500,000
	Depreciation expense			166,373		255,466
	Salaries and wages			413,161		729,844
		Total Operating Expenses		1,067,472		2,607,691
		Operating Income/(Loss)		(1,047,135)		(2,550,541)
Other Non-Operating Income and Expenses
	Interest expense			(89,558)		(50,954)
		Net Income/(Loss) before Income Taxes		(1,136,693)		(2,601,495)
	Provision for income taxes			-		-
		Net Income/(Loss)	$	(1,136,693)	$	(2,601,495)
Basic and Diluted Loss per Share - Class A Common Stock			$	(0.06)	$	(0.13)
Basic and Diluted Loss per Share - Class B Common Stock			$	(1.14)	$	(4.43)
Weighted Average Number of Shares Outstanding:
Basic and Diluted Class A Common Stock				19,267,184		18,042,534
Basic and Diluted Class B Common Stock				1,000,000		587,432

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES
Statements of Stockholders' Equity (Deficit)
For the Years Ended December 31, 2014 and 2013
										Additional				Total
	Preferred Stock			Class A Common Stock			Class B Common Stock			Paid-in		Accumulated		Stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		Capital		Deficit		Equity (Deficit)
Balance, December 31, 2012	-	$	-	-	$	-	-	$	-	$	-	$	(1,682,243)	$	(1,682,243)
Shares issued for exchange agreement	-		-	1,154,500		1,154	-		-		971,846		-		973,000
Debt converted into shares	-		-	428,900		429	-		-		999,571		-		1,000,000
Shares sold for cash	-		-	751,729		752	-		-		949,248		-		950,000
Imputed interest - contributed capital	-		-	-		-	-		-		11,531		-		11,531
Founder's shares	-		-	14,832,733		14,833	1,000,000		1,000		-		-		15,833
Shares issued for services				2,043,200		2,043	-		-		38,012		-		40,055
Net loss for the year ended December 31, 2013	-		-	-		-	-		-		-		(2,601,495)		(2,601,495)
Balance, December 31, 2013	-	$	-	19,211,062	$	19,211	1,000,000	$	1,000	$	2,970,208	$	(4,283,738)	$	(1,293,319)
Note conversion	-		-	111,328		111	-		-		159,889		-		160,000
Net loss for the year ended December 31, 2014	-		-	-		-	-		-		-		(1,136,693)		(1,136,693)
Balance, December 31, 2014	-	$	-	19,322,390	$	19,322	1,000,000	$	1,000	$	3,130,097	$	(5,420,431)	$	(2,270,012)
The accompanying notes are an integral part of these consolidated financial statements.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
			For the Years Ended,
			December 31,
			2014		2013
OPERATING ACTIVITIES
	Net loss		$	(1,136,693)	$	(2,601,495)
	Adjustments to reconcile net loss to
	net cash used in operating activities:
		Common stock issued for services		-		55,888
		Depreciation		166,373		255,466
		Write-off inventory to R&D		-		37,618
		Imputed interest		-		11,531
	Changes in operating assets and liabilities
		Accounts receivable		(5,877)		(6,494)
		Inventory		(27,762)		17,929
		Deposits		16,900		103,596
		Accounts payable		38,235		87,588
		Accrued expenses		319,026		560,286
		Net Cash Used in Operating Activities		(629,798)		(1,478,087)
INVESTING ACTIVITIES
		Purchase of property, plant and equipment		-		(260,232)
		Disposal of property, plant and equipment		53,645		-
		Net Cash Provided By (Used In) Investing Activities		53,645		(260,232)
FINANCING ACTIVITIES
	Proceeds from the sale of stock			-		950,000
	Bank overdraft			2,589
	Proceeds from related party notes payable			17,724		588,578
	Proceeds from notes payable			550,333		-
	Repayment of leases payable			(24,517)		(29,472)
		Net Cash Provided by Financing Activities		546,129		1,509,106
NET INCREASE (DECREASE) IN CASH				(30,024)		(229,213)
CASH AT BEGINNING OF PERIOD				30,024		259,237
CASH AT END OF PERIOD			$	-	$	30,024
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
	CASH PAID FOR:
		Interest	$	76,820	$	46,806
		Income taxes	$	-	$	-
NON CASH FINANCING ACTIVITIES:
		Issuance of shares for debt conversion	$	160,000	$	1,000,000
The accompanying notes are an integral part of these consolidated financial statements.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

1.     NATURE OF OPERATIONS

The Company and Nature of Business

Snöbar Holdings, Inc. (“Snöbar Holdings”) was formed in the State of Delaware on January 7, 2013.  Snöbar Holdings is the trustor and sole beneficiary of Snobar Trust, a California trust ("Trust"), which was formed in June 1, 2013. The current trustee that holds legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi, who controls Snöbar Holdings. The Trust owns 100% of the shares of International Production Impex Corporation, a California corporation ("IPIC"), which was formed on August 2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops, and holds all of the right 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 MAS Global Distributors, Inc., a California corporation ("MGD"). MGD is in the business of selling and leasing freezers and providing marketing services.  As a result of the foregoing, Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust and IPIC through the Trust and is the parent company of MGD.

The Trust and IPIC are considered variable interest entities (“VIEs”) and Snöbar Holdings is identified as the primary beneficiary of the Trust and IPIC. Under 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.

Principles of Consolidation

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

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

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

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

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

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include Snöbar Holdings, Inc. a Delaware corporation (“Snöbar Holdings”), MAS Global Distributors, Inc., a California corporation (“MGD”), International Production Impex Corporation, a California corporation (“IPIC”), and Snobar Trust, a California trust (“Trust”), which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been eliminated during consolidation.  See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC.

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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

Revenue Recognition - Sales revenues are generally recognized when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured.

Shipping and Handling Costs – The Company’s shipping costs are all recorded as operating expenses for all periods presented.

Cash Equivalents - The Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents.

Accounts Receivable - Accounts receivable are stated at net realizable value. 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. The Company did not write off any bad debt during the years ended December 31, 2014 and 2013, and thus has not set an allowance for doubtful accounts for the year ended December 31, 2014.

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.

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 in 2014 and 2013. 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.

Fair Value of Financial Instruments - The carrying amounts of Snöbar Holdings' 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 Snöbar Holdings 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.

During the years-ended December 31, 2014 and 2013, approximately 47% and 87% of total sales were to two distributors, respectively.

As of December 31, 2014, 99% of IPIC accounts receivable were from one distributor.

Advertising Costs - The Company expenses advertising costs when incurred.  Advertising costs incurred amounted to $79,701 and $238,190 for the years ended December 31, 2014 and 2013, respectively.

Research and Development Costs - Expenditures for research activities of IPIC relating to product development and improvement are charged against income as incurred and included within operating expenses in the accompanying statements of operations. Research and development (R&D) costs were $0 for the year ended December 31, 2014 and were $43,951 for the year ended December 31, 2013.

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 Snöbar Holdings' financial statement.

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 (“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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

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. 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. 2015-04, “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. 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. 2015-05, “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. 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 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 for year ended December 31, 2014.

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.  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.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

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 U.S. 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). 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.

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 Snöbar Holdings or their effect on the financial statements would not have been significant.

3.  GOING CONCERN

The accompanying consolidated financial statements have been prepared assuming Snöbar Holdings will continue as a going concern. As shown in the accompanying financial statements, Snöbar Holdings has incurred a net loss of $1,136,693 and $2,601,495 for the years ended December 31, 2014 and 2013, respectively and has an accumulated deficit of $5,420,431 as of December 31, 2014.   

In order to continue as a going concern, Snöbar Holdings 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 Snöbar Holdings will be successful and without sufficient financing it would be unlikely for Snöbar Holdings to continue as a going concern.

The 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 Snöbar Holdings cannot continue in existence. These conditions raise substantial doubt about Snöbar Holdings' ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

4.  INVENTORIES

Inventories at December 31, 2014 and 2013 consisted of the following:

5.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at December 31, 2014 and 2013, consists of:

	December 31, 2014	December 31, 2013
Computers	$         15,986	$       15,986
Freezers	478,137	531,782
Office Furniture	15,687	15,687
Rugs	6,000	6,000
Software – Accounting	2,901	2,901
Telephone system	5,814	5,814
Truck purchase	86,403	86,403
Video Camera	1,528	1,528
	612,456	666,101
Accumulated Depreciation	(505,716)	(339,343)
Net Book Value	$    106,740	$    326,758

Depreciation expense for the years-ended, December 31, 2014 and 2013 was $166,373 and $255,466, respectively.

6.  ACCRUED EXPENSE

During the calendar year December 2014 and 2013, Snöbar Holdings had accrued expenses of $891,532 and $572,506, respectively. These amounts primarily consist of payroll liabilities of $807,365 and $517,107, as of December 31, 2014 and 2013, respectively.   

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

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.  

At December 31, 2014 and 2013, Snöbar Holdings had cumulative federal operating loss carry forwards of $3,704,035 and $2,572,925, respectively, which begin to expire in 2028.

We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income and tax-planning.

The Company’s federal income tax returns for the years ended December 31, 2013 and 2014 remain subject to examination by the Internal Revenue Service as of December 31, 2014.

Components of net deferred tax assets, including a valuation allowance, are as follows at December 31, 2014 and 2013:

	2014	2013
Deferred tax assets:
Net operating loss carryforward	1,586,808	$	1,107,581
Total deferred tax assets	1,586,808		1,107,581
Less: Valuation allowance	(1,586,808)		(1,107,581	)
Net deferred tax assets	-	$	-

The valuation allowance for deferred tax assets as of December 31, 2014 was $1,586,808 and $1,107,581in 2013.  The net operating losses will begin to expire in 2028.  In assessing the recovery of the deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized.  The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the periods in which those temporary differences become deductible.  Management considers the scheduled reversals of future deferred tax assets, projected future taxable income, and tax planning strategies in making this assessment.   Management believes it is more likely than not that the deferred tax assets as of December 31, 2014 will not be realized based on the management’s assessment that the deductions ultimately recognized for tax purposes will not be fully utilized.  Therefore full valuation allowances were set up for these deferred tax assets as of December 31, 2014 and 2013.      

Components of net deferred tax liabilities are as follows at December 31, 2014 and 2013:

	2014	2013
Deferred tax liabilities:
Deferred tax liabilities	$         -	$	-
Total deferred tax liabilities	$         -	$	-

Reconciliation between the statutory rate and the effective tax rate is as follows at December 31, 2014 and 2013:

	2014	2013
Federal statutory rate	(34)%		(34)	%
State taxes, net of federal benefit	(8.84)%		(8.84)	%
Change in valuation allowance	42.84%		42.84%
Effective tax rate	0%		0	%

8.    RELATED PARTY TRANSACTIONS

In January 2011, MGD entered into an unsecured promissory note with an officer and shareholder.  The note had a principal balance of $150,000 with an interest rate of 3% and has a maturity date of December 31, 2017.  The balance of the note at December 31, 2014 and 2013 was $142,621 and $138,412, respectively.  As of December 31, 2014 and 2013, Snöbar Holdings accrued $17,621 and $13,412 of interest, respectively.

In February of 2012, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $30,000 with an interest rate of 8% and a maturity date of August 1, 2014.  The note’s maturity date has subsequently been extended to February 1, 2017.  The note’s balance is $25,000 as of December 31, 2014 and 2013, respectively.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

Snobar Holdings entered into a promissory note agreement with a relative and former officer to purchase all shares and interests in IPIC, including liquor licenses, for $500,000.  The note bears no interest and payments are due in five installments of $100,000 due each year beginning on December 31, 2013 and going through December 31, 2017.  The entire purchase price of $500,000 was expensed in 2013 and recorded in IPIC business rights expense on the statement of operations. The balance on the note was $299,522 and $383,500 as of December 31, 2014 and 2013, respectively.

On March 14, 2013, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $10,000 with an interest rate of 5% and had a maturity date of March 14, 2014 and was subsequently extended to February 1, 2017.  The note is current and has an outstanding balance of $6,000 and $10,000 as of December 31, 2014 and 2013, respectively.

On March 14, 2013, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $87,121 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, 2017.  The note is current and the entire balance is still owed and outstanding.

On July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a shareholder.  The note’s maturity date has subsequently been extended to February 1, 2017.  The note had a principal balance of $15,000 with an interest rate of 5% and is due  on demand.  

On February 24, 2014, Snöbar Holdings entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $20,000 with an interest rate of 8% and a maturity date of 30 days from execution of the note.  The maturity date has subsequently been extended to February 1, 2017.

During the year ended December 31, 2014, Snöbar Holdings entered into unsecured promissory notes with an entity owned by a shareholder.  The notes had a total principal balance of $16,000 with an interest rate of 2% and are due on demand.  

During the year ended December 31, 2014, an officer advanced $7,238 to IPIC to pay for operating expenses.

9.    NOTES PAYABLE

In July of 2012, MGD entered into secured promissory notes for a total of $1,000,000.  The notes are secured by a security interest in 11% of MGD common shares of stock.  The notes bear interest of 8% and have a maturity date of July 31, 2013.  During 2013, Snöbar Holdings issued a total of 1,298,834 Class A Common Stock in consideration for the entire balance.  The outstanding balance on the notes was $0 as of December 31, 2014 and 2013.

On December 9, 2013, Snöbar Holdings entered into an unsecured promissory note.  The note had a principle balance of $100,000 with an interest rate of 6% and maturity date of February 9, 2014.  During 2014, an additional $60,000 was borrowed for a total balance of $160,000. Snöbar Holdings issued 111,328 shares of its Class A Common Stock to pay off the entire principal balance along with accrued interest.

In February 2014, MGD entered into a secured promissory note with a principal balance of $10,000. The note was secured by interests in tangible and intangible property of MGD The Company is to make payments of $181 each business day (Monday through Friday) until the loan is paid off.  The effective interest rate on the note is 137%.  The note has been paid and the outstanding balance is $0 as of December 31, 2014 and 2013.        

On March 10, 2014, MGD entered into a secured promissory note with a principal balance of $23,000.  The note was secured by MGD future sales and accounts receivable totaling $31,970.   The Company is to remit 2% of revenues and accounts receivables daily until the entire balance of $31,970 has been received.  The outstanding balance on the note is $23,000 as of December 31, 2014.      

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 SnoBar Trust. The note has an interest rate of 10% and a maturity date of December 31, 2015.  The Company is to make interest only payments beginning July 1, 2014.  

The lender determined Snöbar Holdings to be in default and on January 29, 2015, entered into a mutually agreed loan modification.  The agreement increased the principal balance of the note as of December 31, 2014 to $527,333 and all interest due and payable was deemed to have been paid and the conversion rights of the note were removed.  The maturity date is December 31, 2015 and if Snöbar Holdings is not in default, the maturity date of the note will automatically be extended to December 31, 2016 (“First Extended Maturity Date”).  Commencing on January 1, 2016, Snöbar Holdings will make monthly payments of $15,000 until the First Extended Maturity Date.  Assuming Snöbar Holdings is not in default with respect to its obligations as of the First Extended Maturity Date, the note shall automatically be extended to December 31, 2017 (“Second Extended Maturity Date”).  Commencing on January 1, 2017, the monthly payments will be increased to $25,000 for every month until the Second Extended Maturity Date.  All accrued but unpaid interest, charges and the remaining principal balance of the note is fully due and payable on the Second Extended Maturity Date.

In December of 2014, the lender purchased the note entered into by IPIC on August 22, 2014.

On August 22, 2014, IPIC entered into a secured promissory note with a principal balance of $15,000.  The note was secured by interests in all accounts, cash, deposit accounts, documents, equipment, general intangibles and inventory of International IPIC. The

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

Company is to make daily payments of $163 until the entire balance is paid off for an estimated total payment of $20,550.  The effective interest rate on the note is 192%.  This loan was purchased by the lender mentioned in the paragraph above and the outstanding balance is $0 as of December 31, 2014 and 2013.

10.    STOCKHOLDERS’ EQUITY

As of December 31, 2014 and 2013, Snöbar Holdings had issued 20,322,390 and 20,211,062, shares of Snobar Holdings capital stock, respectively.

Preferred Stock, par value $0.001 per share, was authorized January 7, 2013 for up to 10,000,000 shares.  Under the rights, preferences and privileges Preferred Stock holders had dividend and liquidation preferences over Class A and Class B Common shareholders.   As of December 31, 2014 and 2013, there were no preferred shares outstanding.

Class A Common Stock, par value $0.001 per share, was authorized January 7, 2013 for up to 30,000,000 shares.  Class A Common Stock shareholders get one vote per share.  As of December 31, 2014 and 2013, there were 19,322,290 and 19,211,062 shares of Class A Common Stock outstanding, respectively.

Class B Common Stock, par value $0.001 per share, was authorized January 7, 2013 for up to 10,000,000 shares.  Class B Common Stock shareholders get 20 votes per share and can be converted into one Class A Common Stock share.  As of December 31, 2014 and 2013, there were 1,000,000 shares of Class B Common Stock outstanding, respectively.

Both Class A and Class B Common Stock have the same liquidation rights and preferences.

MAS Global Distributors, Inc., a California corporation (MGD), was formed in December 2010.  Shannon Masjedi had approximately 80% ownership interest in MGD.  In January 2013, Snöbar Holdings was incorporated in the State of Delaware.  Shannon Masjedi and the management group of MGD controlled operations of Snöbar Holdings, Inc. and were considered to have common control over both MGD and Snöbar Holdings. Upon the formation of Snöbar Holdings, Snöbar Holdings issued 14,832,733 shares of Class A Common Stock and 1,000,000 shares of Class B Common Stock to the founder, Shannon Masjedi, as trustee of the ACD Trust, for intellectual property and incorporation costs on behalf of Snöbar Holdings for an aggregate value of $15,833.  

During May of 2013, Snöbar Holdings offered to exchange shares of Snöbar Holdings’ Class A Common Stock for shares of common stock of MGD, pursuant to a Subscription Agreement (“Agreement”) between the shareholders of MGD and Snobar Holdings.  Each MGD shareholder received one share of Class A Common Stock of Snöbar Holdings for each share of common stock of MGD exchanged.  Snöbar Holdings issued a total of 1,154,500 shares of Class A Common stock in the transaction, of which (i) 1,000,000 shares of Class A Common Stock were issued to Shannon Masjedi, as trustee of the ACD Trust, in exchange for her 1,000,000 shares of common stock of MGD and (ii) 154,500 shares of Class A Common Stock were issued to the other shareholders of MGD in exchange for their 154,500 shares of common stock of MGD. As a result of the share exchange, MGD became a 99% owned subsidiary of Snöbar Holdings.

This is considered an exchange of shares between entities under common control and per ASC 805-50-45-2 the financial statements, “shall report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. Results of operations for that period will thus comprise those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period”.  ASC 805-50-45-4 continues, “similarly, the receiving entity shall present the statement of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date”.

This method is similar to the pooling-of-interests method and as a result MGD’s financial statements have been included in Snöbar Holdings’ consolidated financial statements.

During 2013, Snöbar Holdings sold 751,729 shares of Snöbar Holdings’ Class A Common Stock for proceeds of $950,000.    

During 2013, Snöbar Holdings issued 2,043,200 shares of Snöbar Holdings’ Class A Common Stock for services of $40,055.

During 2013, Snöbar Holdings issued 428,900 shares of Snöbar Holdings’ Class A Common Stock in exchange for $1,000,000 of outstanding loans.

During 2013, the Company recorded $11,531 as an in kind contribution of interest on the loans.  

During 2014, Snöbar Holdings issued 111,328 shares of Snöbar Holdings’ Class A Common Stock in exchange for $160,000 of outstanding loans.

11. COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES

Capital Lease

MGD leased certain machinery and equipment in 2014 and 2013 under an agreement that is classified as a capital lease.  The cost of

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2014 AND 2013

equipment under capital leases is included in the balance sheets as property, plant and equipment and was $44,946 and $80,723 at December 31, 2014 and 2013, respectively.  Accumulated depreciation of the leased equipment at December 31, 2014 and 2013 was $96,948 and $61,170, respectively.  As of December 31, 2014, future minimum payments for all capital lease obligations are as follows:

Year	Amount
2015	$     36,012
2016	6,553
Total Minimum Lease Payments	41,515
Less: Amount Representing Interest	(5,402)
Present Value of Minimum Lease Payments	36,113
Less: Current Maturities of Capital Lease Obligations	(29,560)
Long-Term Capital Lease Obligations	$      6,553

Operating Lease

IPIC is currently obligated under two operating leases for office spaces and associated building expenses.  One of the leases expires in December 2015 and the other lease is on a month to month basis.  As of December 31, 2014, future minimum payments for all lease obligations are as follows:

Year	Amount
2015	$     9,360
	$     9,360

For the years ended December 31, 2014 and 2013, IPIC and MGD had rent expense of $60,702 and $93,451, respectively.  

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 all subsequent events through the date these consolidated financial statements were issued, and determined the following are material to disclose:

Share Issuances

·

During February 2015, Snöbar Holdings issued 100,000 shares of Class A Common Stock for $100,000 in cash.

·

During July 2015, Snöbar Holdings issued 10,000 shares of Class A Common Stock in exchange of MGD stock.

·

During July 2015, Snöbar Holdings issued 1,120,650 shares of Class A Common Stock for $91,569 in cash.

·

During July 2015, a note holder converted $5,000 into 95,000 shares of Class A Common Stock.

·

During July 2015, Snöbar Holdings issued 851,960 shares of Class A Common Stock for services.

Share Exchange

On August 14, 2015, Snöbar Holdings entered into a Share Exchange Agreement ("Exchange Agreement") with Pacific Ventures Group, Inc., a Delaware corporation ("Pacific Ventures"), and Snöbar Holdings’ shareholders ("Snobar Shareholders") who hold 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. In accordance with the terms and provisions of the Exchange Agreement, Pacific Ventures shall acquire (i) at least 99% and up to 100% of the total issued and outstanding shares of Snöbar Holdings’ Class A Common Stock and (ii) 100% of the total issued and outstanding shares of Snöbar Holdings’ Class B Common Stock from Snöbar Holdings’ Shareholders, thus making Snöbar Holdings a majority-owned or wholly-owned subsidiary, in exchange for the issuance to the Snobar Shareholders of at least 22,285,000 and up to 22,500,000 shares of restricted common stock of Pacific Ventures for each share of common stock of Snobar while simultaneously issuing 2,500,000 shares of restricted common stock of Pacific Ventures to certain other persons.

EX-99.2

SNOBAR HOLDINGS, INC.
Condensed Consolidated Balance Sheets
	June 30,	December 31,
	2015	2014
	(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents	$         15,523	$                        -
Accounts receivable	3,179	12,721
Inventory, net	101,114	58,256
Deposits	21,548	1,500
Total Current Assets	141,364	72,477
Fixed Assets
Fixed assets, net	62,129	106,740
Total Fixed Assets	62,129	106,740
TOTAL ASSETS	$       203,493	$           179,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Bank overdraft	$                   -	$               2,589
Accounts payable	388,262	358,867
Accrued expenses	1,034,914	891,532
Current portion, notes payable	550,333	550,333
Current portion, notes payable - related party	301,700	278,821
Current portion, leases payable	42,565	36,012
Total Current Liabilities	2,317,774	2,118,154
Long-Term Liabilities:
Notes payable - related party	244,172	324,522
Leases payable	-	6,553
Total Long-Term Liabilities	244,172	331,075
Total Liabilities	$     2,561,946	$        2,449,229
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 10,000,000 shares authorized,
none issued and outstanding	$                    -	$                      -
Class A common stock, $.001 par value, 30,000,000 shares
authorized, 19,422,390 and 19,322,390 issued and outstanding,
respectively	19,422	19,322
Class B common stock, $.001 par value, 10,000,000 shares
authorized, 1,000,000 issued and outstanding, respectively	1,000	1,000
Additional paid in capital	3,229,997	3,130,097
Accumulated deficit	(5,608,872)	(5,420,431)
Total Stockholders' Equity (Deficit)	(2,358,453)	(2,270,012)
Total Liabilities and Stockholders' Equity (Deficit)	$         203,493	$          179,217

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

SNOBAR HOLDINGS, INC.
Condensed Consolidated Statements of Operations
(unaudited)
	For the Three Months Ended,		For the Six Months Ended,
	June 30,		June 30,
	2015	2014	2015	2014
Sales, net of discounts	$          98,158	$        34,508	$       205,386	$         75,110
Cost of Goods Sold	(42,222)	(11,915)	(89,252)	(26,244)
Gross Profit	55,936	22,593	116,134	48,866
Operating Expenses
Selling, general and administrative	47,015	228,165	11,037	347,687
Depreciation expense	22,305	41,593	44,611	83,186
Salaries and wages	105,797	131,545	211,594	263,089
Operating Expenses	175,117	401,303	267,242	693,962
Loss from Operations	(119,181)	(378,710)	(151,108)	(645,096)
Other Non-Operating Income and Expenses
Interest expense	(14,360)	(16,788)	(37,333)	(27,440)
Net Income/(Loss) before Income Taxes	(133,541)	(395,498)	(188,441)	(672,536)
Provision for income taxes	-	-	-	-
Net Income/(Loss)	$     (133,541)	$    (395,498)	$     (188,441)	$     (672,536)
Basic and Diluted Loss per Share - Class A Common Stock	$           (0.01)	$          (0.02)	$           (0.01)	$           (0.03)
Basic and Diluted Loss per Share - Class B Common Stock	$           (0.13)	$          (0.40)	$           (0.19)	$           (0.67)
Weighted Average Number of Shares Outstanding:
Basic and Diluted Class A Common Stock	19,422,390	19,247,764	19,396,976	19,229,514
Basic and Diluted Class B Common Stock	1,000,000	1,000,000	1,000,000	1,000,000

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

SNOBAR HOLDINGS, INC.
Consolidated Statements of Cash Flows
(Unaudited)
	For the Six Months Ended
	June 30,
	2015	2014
OPERATING ACTIVITIES
Net loss	$         (188,441)	$       (672,536)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation	44,611	83,186
Changes in operating assets and liabilities
Accounts receivable	9,542	3,499
Inventory	(42,858)	(30,877)
Deposits	(20,048)	(13,890)
Accounts payable	29,395	32,509
Accrued expenses	143,382	107,432
Net Cash Used in Operating Activities	(24,417)	(490,677)
INVESTING ACTIVITIES
Disposal of fixed asset	-	37,062
Net Cash Provided By (Used In) Investing Activities	-	37,062
FINANCING ACTIVITIES
Proceeds from notes payable	-	593,000
Common stock issued for cash	100,000	-
Proceeds from related party notes payable	22,879	36,000
Bank overdraft	(2,589)	-
Repayment on the leases payable	-	(9,391)
Repayment of note payable - related party	(80,350)	(77,128)
Net Cash Provided by Financing Activities	39,940	542,481
NET INCREASE (DECREASE) IN CASH	15,523	88,866
CASH AT BEGINNING OF PERIOD	-	30,024
CASH AT END OF PERIOD	$             15,523	$          118,890
SUPPLEMENTAL DISCLOSURES OF
CASH FLOW INFORMATION:
SUPPLEMENTAL DISCLOSURS OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$             37,333	$            26,296
NON CASH FINANCING ACTIVITIES:
Issuance of shares for debt conversion	$                       -	$          160,000

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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

1.     NATURE OF OPERATIONS

The Company and Nature of Business

Snöbar Holdings, Inc. (“Snöbar Holdings”) was formed in the State of Delaware on January 7, 2013.  Snöbar Holdings is the trustor and sole beneficiary of Snobar Trust, a California trust ("Trust"), which was formed in June 1, 2013. The current trustee that holds legal title to the Trust is Clark Rutledge, who is the father of Shannon Masjedi, who controls Snöbar Holdings. The Trust owns 100% of the shares of International Production Impex Corporation, a California corporation ("IPIC"), which was formed on August 2, 2001. IPIC is in the business of selling alcohol-infused ice cream and ice-pops, and holds all of the right 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 MAS Global Distributors, Inc., a California corporation ("MGD"). MGD is in the business of selling and leasing freezers and providing marketing services.  As a result of the foregoing, Snöbar Holdings is the primary beneficiary of all assets, liabilities and any income received from the business of the Trust and IPIC through the Trust and is the parent company of MGD.

The Trust and IPIC are considered variable interest entities (“VIEs”) and Snöbar Holdings is identified as the primary beneficiary of the Trust and IPIC. Under 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.

Principles of Consolidation

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

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

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

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

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

2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation - The consolidated financial statements include Snöbar Holdings, Inc. a Delaware corporation (“Snöbar Holdings”), MAS Global Distributors, Inc., a California corporation (“MGD”), International Production Impex Corporation, a California corporation (“IPIC”), and Snobar Trust, a California trust (“Trust”), which was established to hold IPIC, which in turn holds liquor licenses. All inter-company accounts have been eliminated during consolidation.  See the discussion in Note 1 above for variable interest entity treatment of the Trust and IPIC.

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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

Revenue Recognition - Sales revenues are generally recognized when an agreement exists and price is determinable, the products are shipped to the customers or services are rendered, net of discounts, returns and allowance and collectability is reasonably assured.

Shipping and Handling Costs – The Company’s shipping costs are all recorded as operating expenses for all periods presented.

Cash Equivalents - The Company considers highly liquid instruments with original maturity of three months or less to be cash equivalents.

Accounts Receivable - Accounts receivable are stated at net realizable value. 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. The Company did not write off any bad debt during the six months ended June 30, 2015 and the year ended December 31, 2014, 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.

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.

Fair Value of Financial Instruments - The carrying amounts of Snöbar Holdings' 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 Snöbar Holdings 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.

During the six months ended June 30, 2015 and 2014, approximately 51% and 20% of total sales were to two distributors, respectively.

As of June 30, 2015 and December 31, 2014, 46% and 99%, respectively, of IPIC’s accounts receivable were from one distributor.

Advertising Costs - The Company expenses advertising costs when incurred.  Advertising costs incurred amounted to $12,271 and $129,796 for the six months ended June 30, 2015 and 2014, respectively.

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 Snöbar Holdings' financial statement.

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 (“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

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

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. 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. 2015-04, “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. 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. 2015-05, “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. 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 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 for year ended December 31, 2014.

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.  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.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

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 U.S. 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). 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.

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 Snöbar Holdings or their effect on the financial statements would not have been significant.

3.  GOING CONCERN

The accompanying unaudited consolidated financial statements have been prepared assuming Snöbar Holdings will continue as a going concern. As shown in the accompanying financial statements, Snöbar Holdings has incurred a net loss of $188,441 for the six months ended June 30, 2015, and has an accumulated deficit of $5,608,872 as of June 30, 2015.   

In order to continue as a going concern, Snöbar Holdings 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 Snöbar Holdings will be successful and without sufficient financing it would be unlikely for Snöbar Holdings to continue as a going concern.

The 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 Snöbar Holdings cannot continue in existence. These conditions raise substantial doubt about Snöbar Holdings' ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might arise from this uncertainty.

4.  INVENTORIES

Inventories at June 30, 2015 and December 31, 2014 consisted of the following:

	June 30, 2015	December 31, 2014
Finished Good	$       101,114	$        58,256
	$       101,114	$        58,256

5.  PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment at June 30, 2015 and December 31, 2014, consists of:

	June 30, 2015	December 31, 2014
Computers	$      15,986	$      15,986
Freezers	478,137	478,137
Office Furniture	15,687	15,687
Rugs	6,000	6,000
Software – Accounting	2,901	2,901
Telephone system	5,814	5,814
Truck purchase	86,403	86,403
Video Camera	1,528	1,528
	612,456	612,456
Accumulated Depreciation	(550,327)	(505,716)
Net Book Value	$      62,129	$    106,740

Depreciation expense for the six months ended June 30, 2015 was $44,611 and for the year ended December 31, 2014 was $166,373.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

6.  ACCRUED EXPENSE

During the six months ended June 30, 2015 and December 31, 2014, Snöbar Holdings had accrued expenses of $1,034,914 and $891,532, respectively.  These amounts primarily consist of payroll liabilities of $938,213 and $807,365, as of June 30, 2015 and December 31, 2014, respectively.   

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.  All of the Company’s federal income tax returns since the year ended December 31, 2013 remain subject to examination by taxing authorities.

8.    RELATED PARTY TRANSACTIONS

In January 2011, MGD entered into an unsecured promissory note with an officer and shareholder.  The note had a principal balance of $150,000 with an interest rate of 3% and has a maturity date of December 31, 2017. The balance of the note at June 30, 2015 and December 31, 2014 was $142,621.  As of June 30, 2015 and December 31, 2014, Snöbar Holdings accrued $17,621 of interest.

In February of 2012, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $30,000 with an interest rate of 8% and a maturity date of August 1, 2014.  The note’s maturity date has subsequently been extended to February 1, 2017.  The note’s balance is $25,000 as of June 30, 2015 and December 31, 2014, respectively.

Snobar Holdings entered into a promissory note agreement with a relative and former officer to purchase all shares and interests in IPIC, including liquor licenses, for $500,000.  The note bears no interest and payments are due in five installments of $100,000 due each year beginning on December 31, 2013 and going through December 31, 2017.  The entire purchase price of $500,000 was expensed in 2013 and the balance on the note was $219,172 and $299,522 as of June 30, 2015 and December 31, 2014, respectively.

On March 14, 2013, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $10,000 with an interest rate of 5% and had a maturity date of March 14, 2014 and was subsequently extended.  The note is current and has an outstanding balance of $6,000 and $6,000 as of June 30, 2015 and December 31, 2014, respectively.

On March 14, 2013, MGD entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $87,121 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, 2017.  The note is current and the entire balance is still owed and outstanding.

On July 22, 2013, Snöbar Holdings entered into an unsecured promissory note with a shareholder.  The note’s maturity date has subsequently been extended to February 1, 2017.  The note had a principal balance of $15,000 with an interest rate of 5% and was due  on demand.  

On February 24, 2014, Snöbar Holdings entered into an unsecured promissory note with a shareholder.  The note had a principal balance of $20,000 with an interest rate of 8% and a maturity date of 30 days from execution of the note.  The maturity date has subsequently been extended to February 1, 2017.

During the year ended December 31, 2014, Snöbar Holdings entered into unsecured promissory notes with an entity owned by a shareholder.  The notes had a total principal balance of $16,000 with an interest rate of 2% and are due on demand.  

As of June 30, 2015, an officer advanced $48,579 to IPIC to pay for operating expenses.

9.    NOTES PAYABLE

In July of 2012, MGD entered into secured promissory notes for a total of $1,000,000.  The notes are secured by a security interest in 11% of MGD common shares of stock.  The notes bear interest of 8% and have a maturity date of July 31, 2013.  During 2013, Snöbar Holdings issued a total of 428,900 Class A Common Stock in consideration for the entire balance.  The outstanding balance on the notes was $0 as of December 31, 2014 and 2013.

On December 9, 2013, Snöbar Holdings entered into an unsecured promissory note.  The note had a principle balance of $100,000 with an interest rate of 6% and maturity date of February 9, 2014.  During 2014, an additional $60,000 was borrowed for a total balance of $160,000. Snöbar Holdings issued 111,328 shares of its Class A Common Stock to pay off the entire principal balance along with accrued interest.

In February 2014, MGD entered into a secured promissory note with a principal balance of $10,000. The note was secured by interests in tangible and intangible property of MGD The Company is to make payments of $181 each business day (Monday through Friday)

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

until the loan is paid off.  The effective interest rate on the note is 137%.  The note has been paid and the outstanding balance is $0 as of December 31, 2014 and 2013.        

On March 10, 2014, MGD entered into a secured promissory note with a principal balance of $23,000.  The note was secured by MGD future sales and accounts receivable totaling $31,970.   The Company is to remit 2% of revenues and accounts receivables daily until the entire balance of $31,970 has been received.  The outstanding balance on the note is $23,000 as of June 30, 2015 and December 31, 2014.

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 SnoBar Trust. The note has an interest rate of 10% and a maturity date of December 31, 2015.  The Company is to make interest only payments beginning July 1, 2014.  

The lender determined Snöbar Holdings to be in default and on January 29, 2015, entered into a mutually agreed loan modification.  The agreement increased the principal balance of the note as of December 31, 2014 to $527,333 and all interest due and payable was deemed to have been paid and the conversion rights of the note were removed.  The maturity date is December 31, 2015 and if Snöbar Holdings is not in default, the maturity date of the note will automatically be extended to December 31, 2016 (“First Extended Maturity Date”). Commencing on January 1, 2016, Snöbar Holdings will make monthly payments of $15,000 until the First Extended Maturity Date. Assuming Snöbar Holdings is not in default with respect to its obligations as of the First Extended Maturity Date, the note shall automatically be extended to December 31, 2017 (“Second Extended Maturity Date”).  Commencing on January 1, 2017, the monthly payments will be increased to $25,000 for every month until the Second Extended Maturity Date.  All accrued but unpaid interest, charges and the remaining principal balance of the note is fully due and payable on the Second Extended Maturity Date.

In December of 2014, the lender purchased the note entered into by IPIC on August 22, 2014.

On August 22, 2014, IPIC entered into a secured promissory note with a principal balance of $15,000.  The note was secured by interests in all accounts, cash, deposit accounts, documents, equipment, general intangibles and inventory of International Production IMPEX Corp. The Company is to make daily payments of $163 until the entire balance is paid off for an estimated total payment of $20,550.  The effective interest rate on the note is 192%.  This loan was purchased by the lender mentioned in the paragraph above and the outstanding balance is $0 as of June 30, 2015 and December 31, 2014.

10.    STOCKHOLDERS’ EQUITY

As of June 30, 2015 and December 31,2014, Snöbar Holdings had issued 20,422,390 and 20,322,390, shares of Snobar Holdings stock, respectively.  

Preferred Stock was authorized January 7, 2013 for up to 10,000,000 shares.  Under the rights, preferences and privileges Preferred Stock holders had dividend and liquidation preferences over Class A and Class B Common shareholders.   As of June 30, 2015 and December 31, 2014, there were no preferred shares outstanding.

Class A Common Stock was authorized January 7, 2013 for up to 30,000,000 shares.  Class A Common Stock shareholders get one vote per share.  As of June 30, 2015 and December 31, 2014, there were 19,422,390 and 19,322,390 shares of Class A Common Stock outstanding, respectively.

Class B Common Stock was authorized January 7, 2013 for up to 10,000,000 shares.  Class B Common Stock shareholders get 20 votes per share and can be converted into one Class A Common Stock share.  As of June 30, 2015 and December 31, 2014, there were 1,000,000 shares of Class B Common Stock outstanding, respectively.

Both Class A and Class B Common Stock have the same liquidation rights and preferences.

MAS Global Distributors, Inc. (MGD) a California corporation was formed in December 2010.  Shannon Masjedi had approximately 80% ownership interest in MGD.  In January 2013, Snöbar Holdings was incorporated in the State of Delaware.  Shannon Masjedi and the management group of MGD controlled operations of Snöbar Holdings, Inc. and were considered to have common control over both MGD and Snöbar Holdings. Upon the formation of Snöbar Holdings, Snöbar Holdings issued 14,832,733 shares of Class A Common Stock and 1,000,000 shares of Class B Common Stock to the founder, Shannon Masjedi, as trustee of the ACD Trust, for intellectual property and incorporation costs on behalf of Snöbar Holdings for an aggregate value of $15,833.  

During May of 2013, Snöbar Holdings offered to exchange shares of Snöbar Holdings’ Class A Common stock for shares of common stock of MGD, pursuant to a Subscription Agreement (“Agreement”) between the shareholders of MGD and Snobar Holdings  Each MGD shareholder received one share of Class A Common Stock of Snöbar Holdings for each share of common stock of MGD exchanged.  Snöbar Holdings issued a total of 1,154,500 shares of Class A Common Stock in the transaction, of which (i) 1,000,000 shares of Class A Common Stock were issued to Shannon Masjedi, as trustee of the ACD Trust, in exchange for her 1,000,000 shares of common stock of MGD and (ii) 154,500 shares of Class A Common Stock were issued to the other shareholders of MGD in exchange for their 154,500 shares of common stock of MGD. As a result of the share exchange, MGD became a 99% owned subsidiary of Snöbar Holdings.

SNOBAR HOLDINGS, INC. AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

JUNE 30, 2015

(UNAUDITED)

This is considered an exchange of shares between entities under common control and per ASC 805-50-45-2 the financial statements, “shall report results of operations for the period in which the transfer occurs as though the transfer of net assets or exchange of equity interests had occurred at the beginning of the period. Results of operations for that period will thus comprise those of the previously separate entities combined from the beginning of the period to the date the transfer is completed and those of the combined operations from that date to the end of the period”.  ASC 805-50-45-4 continues, “similarly, the receiving entity shall present the statement of financial position and other financial information as of the beginning of the period as though the assets and liabilities had been transferred at that date”.

This method is similar to the pooling-of-interests method and as a result MGD’s financial statements have been included in Snöbar Holdings’ consolidated financial statements.

During 2014, Snöbar Holdings issued 111,328 shares of Snöbar Holdings’ Class A Common Stock in exchange for $160,000 of outstanding loans.

During February 2015, Snöbar Holdings issued 100,000 shares of Class A Common Stock for $100,000 in cash.

11. COMMITMENTS, CONTINGENCIES AND UNCERTAINTIES

Capital Lease

MGD leased certain machinery and equipment in 2014 and 2013 under an agreement that is classified as a capital lease.  The cost of equipment under capital leases is included in the balance sheets as property, plant and equipment and was $37,441 and $44,946 at June 30, 2015 and December 31, 2014, respectively.  Accumulated depreciation of the leased equipment at June 30, 2015 and 2014 was $105,588 and $96,948, respectively.  

Operating Lease

IPIC is currently obligated under two operating leases for office spaces and associated building expenses.  One of the leases expires in December 2015 and the other lease is on a month to month basis.  

For the six months ended June 30, 2015 and 2014, International Production and MGD had rent expense of $5,114 and $28,523, respectively.  

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 all subsequent events through the date these consolidated financial statements were issued, and determined the following are material to disclose:

Share Exchange

On August 14, 2015, Snöbar Holdings entered into a Share Exchange Agreement ("Exchange Agreement") with Pacific Ventures Group, Inc., a Delaware corporation ("Pacific Ventures"), and Snöbar Holdings’ shareholders ("Snobar Shareholders") who hold 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. In accordance with the terms and provisions of the Exchange Agreement, Pacific Ventures shall acquire (i) at least 99% and up to 100% of the total issued and outstanding shares of Snöbar Holdings’ Class A Common Stock and (ii) 100% of the total issued and outstanding shares of Snöbar Holdings’ Class B Common Stock from Snöbar Holdings’ Shareholders, thus making Snöbar Holdings a majority-owned or wholly-owned subsidiary, in exchange for the issuance to the Snobar Shareholders of at least 22,285,000 and up to 22,500,000 shares of restricted common stock of Pacific Ventures for each share of common stock of Snobar while simultaneously issuing 2,500,000 shares of restricted common stock of Pacific Ventures to certain other persons.

Share Issuances

·

During July 2015, Snöbar Holdings issued 10,000 shares of Class A Common Stock in exchange of MGD stock.

·

During July 2015, Snöbar Holdings issued 1,120,650 shares of Class A Common Stock for $91,569 in cash.

·

During July 2015, a Note Holder converted $5,000 into 95,000 shares of Class A Common Stock.

·

During July 2015, Snöbar Holdings issued 851,960 shares of Class A Common Stock for services.

EX-99.3

SNOBAR HOLDINGS, INC.
Unaudited Proforma Balance Sheet
December 31, 2014
	Pacific Ventures Group, Inc		SnoBar Holdings, Inc.		Eliminations			Total
ASSETS
Current Assets:
Cash and cash equivalents	$	-	$	-	$	-		$	-
Accounts receivable		-		12,721		-			12,721
Inventory, net		-		58,256		-			58,256
Deposits		-		1,500		-			1,500
Total Current Assets		-		72,477					72,477
									-
Property, plant and equipment, net		-		106,740		-			106,740
									-
Total Assets	$	-	$	179,217	$			$	179,217
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:									-
Bank overdraft	$	-	$	2,589	$	-		$	2,589
Accounts payable		7,471		358,867		-			366,338
Accrued expenses		-		891,532		-			891,532
Current portion, notes payable		14,576		550,333		-			564,909
Current portion, notes payable - related party		-		278,821		-			278,821
Current portion, leases payable		-		36,012		-			36,012
Note payable due to officer		400		-		-			400
Interest payable		173		-		-			173
Interest payable, due to officer		6		-		-			6
						-			-
Total Current Liabilities		22,626		2,118,154		-			2,140,780
									-
Long-Term Liabilities:									-
Notes payable - related party		-		324,522		-			324,522
Leases payable		-		6,553		-			6,553
Total Long-Term Liabilities		-		331,075		-			331,075
									-
Total Liabilities		22,626		2,449,229		-			2,471,855
									-
STOCKHOLDERS' EQUITY (DEFICIT)									-
Preferred stock, $.001 par value, 10,000,000 shares    authorized,  none issued and outstanding		-		-					-
Series E Preferred stock, $.001 par value, 10,000,000    shares authorized, 1,000,000 issued and outstanding		1,000		-		-			1,000
Common stock, $.001 par value, 100,000,000 shares    authorized, 25,384,031 issued and outstanding,    respectively		384		-		25,000	1		25,384
Class A common stock, $.001 par value, 30,000,000    shares  authorized, 19,322,390 issued and    outstanding,		-		19,322		(19,322)	2		-
Class B common stock, $.001 par value, 10,000,000    shares  authorized, 1,000,000 issued and outstanding		-		1,000		(1,000)	2		-
Additional paid in capital		47,075,200		3,130,097		(47,099,210)	2		3,101,409
						(25,000)	1
						19,322	2
						1,000	2
Accumulated deficit		(47,099,210)		(5,420,431)		47,099,210	2		(5,420,431)
									-
Total Stockholders' Equity (Deficit)		(22,626)		(2,270,012)		-			(2,292,638)
Total Liabilities and Stockholders' Equity	$	-	$	179,217	$	-		$	179,217

1. To reflect the issuance 25,000,000 shares in exchange for all of the issued and outstanding shares of SnoBar Holdings, Inc.

2. To eliminate the historical equity of SnoBar Holdings, Inc and recapitalization of Pacific Ventures Group, Inc.

SNOBAR HOLDINGS, INC.
Unaudited Proforma Statements of Operations
December 31, 2014
				Pacific Ventures Group, Inc		SnoBar Holdings, Inc.		Eliminations		Total
	Sales, net of discounts		$	-	$	128,002	$	-	$	128,002
	Cost of Goods Sold			-		(107,665)		-		(107,665)
		Gross Profit		-		20,337				20,338
Operating Expenses
	General and administrative			16,118		403,663		-		419,781
	Marketing and advertising			-		79,701		-		79,701
	Professional fees			-		4,574		-		4,574
	Depreciation expense			-		166,373		-		166,373
	Salaries and wages			-		413,161		-		413,161
		Total Operating Expenses		16,118		1,067,472		-		1,083,590
		Operating Income/(Loss)		(16,118)		(1,047,135)		-		(1,063,252)
Other Non-Operating Income and Expenses
	Interest expense			(179)		(89,558)		-		(89,737)
Net Income/(Loss) before Income Taxes				(16,297)		(1,136,693)		-		(1,152,989)
	Provision for income taxes			-		-		-		-
		Net Income/(Loss)	$	(16,297)	$	(1,136,693)	$	-	$	(1,152,989)
Basic and Diluted Loss per Share - Class A Common Stock			$	-	$	(0.06)	$	-	$	-
Basic and Diluted Loss per Share - Class B Common Stock			$	-	$	(1.14)	$	-	$	-
Basic and Diluted Loss per Share -  Common Stock			$	(0.04)	$	-	$	-	$	(0.05)
Weighted Average Number of Shares Outstanding:
Basic and Diluted Class A Common Stock				-		19,267,184		(19,267,184)	1	-
Basic and Diluted Class B Common Stock				-		1,000,000		(1,000,000)	1	-
Basic and Diluted Common Stock				384,031		-		25,000,000	1	25,384,031

1. To reflect the issuance 25,000,000 shares in exchange for all  of the issued and outstanding shares of SnoBar Holdings, Inc.

SNOBAR HOLDINGS, INC.
Unaudited Proforma Balance Sheet
June 30, 2015
	Pacific Ventures Group, Inc.	SnoBar Holdings, Inc.	Eliminations		Total
ASSETS
Current Assets:
Cash and cash equivalents	$                               -	$                   15,523	$                        -		$                   15,523
Accounts receivable	-	3,179	-		3,179
Inventory, net	-	101,114	-		101,114
Deposits	-	21,548	-		21,548
Total Current Assets	-	141,364	-		141,364
Fixed Assets
Fixed assets, net	-	62,129	-		62,129
Total Fixed Assets	-	62,129	-		62,129
TOTAL ASSETS	$                               -	$                 203,493	$                        -		$                 203,493
LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable	$                     11,059	$                 388,262	$                        -		$                 399,321
Accrued expenses	-	1,034,914	-		1,034,914
Current portion, notes payable	20,522	550,333	-		570,855
Current portion, notes payable - related party	-	301,700	-		301,700
Current portion, leases payable	-	42,565	-		42,565
Note payable due to officer	800	-	-		800
Interest payable	343	-	-		343
Interest payable, due to officer	10	-	-		10
Total Current Liabilities	32,734	2,317,774			2,350,508
Long-Term Liabilities:
Notes payable - related party	-	244,172	-		244,172
Total Long-Term Liabilities	-	244,172	-		244,172
Total Liabilities	$                     32,734	$              2,561,946	$                        -		$              2,594,680
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.001 par value, 10,000,000 shares authorized,
none issued and outstanding	$                               -	$                            -	$                        -		$                             -
Series E Preferred stock, $.001 par value, 10,000,000 shares authorized,
1,000,000 issued and outstanding	1,000	-	-		1,000
Common stock, $.001 par value, 100,000,000 shares
authorized, 25,384,031 issued and outstanding,	384	-	25,000	1	25,384
Class A common stock, $.001 par value, 30,000,000 shares
authorized, 19,422,390 issued and outstanding,	-	19,422	(19,422)	2	-
Class B common stock, $.001 par value, 10,000,000 shares
authorized, 1,000,000 issued and outstanding	-	1,000	(1,000)	2	-
Additional paid in capital	47,075,200	3,229,997	(47,109,318)	2	3,191,301
			(25,000)	1
			19,422	2
			1,000	2
Accumulated deficit	(47,109,318)	(5,608,872)	47,109,318	2	(5,608,872)
Total Stockholders' Equity (Deficit)	(32,734)	(2,358,453)	-		(2,391,187)
Total Liabilities and Stockholders' Equity (Deficit)	$                               -	$                 203,493	$                        -		$                 203,493

1.  To reflect the issuance 25,000,000 shares in exchange for all  of the issued and outstanding shares of SnoBar Holdings, Inc.

2. To eliminate the historical equity of SnoBar Holdings, Inc and recapitalization of Pacific Ventures Group, Inc.

SNOBAR HOLDINGS, INC.
Unaudited Proforma Statements of Operations
June 30, 2015
	Pacific Ventures Group, Inc.	SnoBar Holdings, Inc.	Eliminations		Total
Sales, net of discounts	$                                  -	$                 205,386	$                        -		$             205,386
Cost of Goods Sold	-	(89,252)	-		(89,252)
Gross Profit	-	116,134			116,134
Operating Expenses					-
Selling, general and administrative	9,934	11,037	-		20,971
Depreciation expense	-	44,611	-		44,611
Salaries and wages	-	211,594	-		211,594
Operating Expenses	9,934	267,242	-		277,176
Loss from Operations	(9,934)	(151,108)			(161,042)
Other Non-Operating Income and Expenses
Interest expense	(174)	(37,333)	-		(37,507)
Net Income/(Loss) before Income Taxes	(10,108)	(188,441)	-		(198,549)
Provision for income taxes	-	-	-		-
Net Income/(Loss)	$                      (10,108)	$              (188,441)	$                        -		$          (198,549)
Basic and Diluted Loss per Share - Class A Common Stock	$                                  -	$                    (0.01)	$                        -		$                         -
Basic and Diluted Loss per Share - Class B Common Stock	$                                  -	$                    (0.09)	$                        -		$                         -
Basic and Diluted Loss per Share	$                          (0.03)	$                             -	$                        -		$                 (0.01)
Weighted Average Number of Shares Outstanding:
Basic and Diluted Class A Common Stock	-	19,396,976	(19,396,976)	1	-
Basic and Diluted Class B Common Stock	-	1,000,000	(1,000,000)	1	-
Basic and Diluted Common Stock	384,031	-	25,000,000	1	25,384,031

1.  To reflect the issuance 25,000,000 shares in exchange for all  of the issued and outstanding shares of SnoBar Holdings, Inc.