THIS
IS NOT A NOTICE OF A SPECIAL MEETING OF SHAREHOLDERS AND NO SHAREHOLDER MEETING WILL BE HELD TO CONSIDER ANY MATTER DESCRIBED HEREIN.
THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT HAVE BEEN APPROVED BY HOLDERS OF A MAJORITY OF THE COMPANY’S COMMON STOCK.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY. THERE ARE NO DISSENTERS’ RIGHTS WITH RESPECT TO
THE ACTIONS DESCRIBED IN THIS INFORMATION STATEMENT.
Information
Statement Pursuant to Section 14C of the Securities Exchange Act of 1934
This
Information Statement is being filed by Pacific Ventures Group, Inc. (the “Company”) with the Securities and Exchange Commission
(the “SEC”) on July __, 2023, based upon the Unanimous Written Consent of the Board of Directors dated June 27, 2023 (the
“Board Consent”), and the consent of the holder of a majority of outstanding shares of voting capital stock of the Company
dated June 27, 2023 (the “Majority Consenting Stockholder”), of the Company dated June 27, 2023 (the “Stockholder Consent”).
The
purpose of this Information Statement is to provide disclosure to our stockholders regarding the corporate action (the “Corporate
Action”) ratified and approved by the Board Consent and the Stockholder Consent, respectively, including Shares of outstanding
Common Stock and shares of Series E Convertible Preferred Stock, par value $0.001 per share (the “Series E Preferred”) and
the Series F Preferred Stock, par value $.001 per share (the “Series F Preferred”) held by the holders of our voting capital
stock, to implement a reverse split in a ratio and at a time and date to be determined by the Company’s Board of Directors, not
to exceed a one-for-two-hundred-fifty (1:250) basis, within ninety (90) days from the date of the filing with the SEC of the Company’s
Definitive Information Statement on Schedule 14C (the “Reverse Split”).
In
order the implement the Reverse Split, sometimes also referred to herein as the “Corporate Action,” after filing of the Definitive
Information Statement on Schedule 14C with the SEC, the Company must make application with FINRA to process the Corporate Action. FINRA
can choose not to process the Corporate Action pursuant to FINRA Rule 6490.
The
Board Consent and the Stockholder Consent approving the Reverse Split were adopted pursuant to the provisions of Sections 141 and 228
of Title 8 of the Delaware General Corporation Law (“DGCL”).
Pursuant
to Rule 14c-2(b) promulgated by the SEC under the Securities Exchange Act of 1934 (the “Exchange Act”), the actions approved
by the Board Consent and the Stockholder Consent cannot become effective until twenty (20) days from the date of mailing of the Definitive
Information Statement to our stockholders. This Information Statement shall constitute notice to our stockholders of the above Corporate
Action taken by the Corporation pursuant to the Board Consent and the Stockholder Consent.
New
Common Stock certificates will not be issued on or after the date that FINRA processes the Reverse Split (the “Effective Date”),
but may be issued subsequently with respect to any certificates returned to the transfer agent upon a sale, exchange or for any other
purpose, following the implementation of the Reverse Split. No fractional shares will be issued in connection with the Reverse Split.
Any fractional share will be rounded up to the next whole share in such a manner that every stockholder shall own at least one (1) share
as a result of the Reverse Split.
The
Company’s Common Stock is subject to quotation on the OTC Market under the symbol “PACV.” On the Effective Date of
the Reverse Split, FINRA will change our symbol from “PACV” to “PACVD” for a period of twenty (20) business days
to indicate to the brokerage and investment community that the Reverse Split has occurred, following which our symbol will be “PACV”
once again.
REVERSE
SPLIT
On
June 27, 2023, the Company’s Board of Directors unanimously approved the of the Reverse Split of the issued and outstanding shares
of Common Stock, including shares of Common Stock reserved for issuance, in a ratio and at a time and date to be determined by the Company’s
Board of Directors, not to exceed a one-for-two-hundred-fifty (1:250) basis within ninety (90) days from the date of the filing with
the SEC of the Definitive Information Statement on Schedule14C.
The
Corporate Action, which provides for the implementing of the Reverse Split, was based upon and approved by the Board Consent dated June
27, 2023, and the Stockholder Consent dated June 27, 2023.
Material
Terms of the Reverse Split
As
of June 27, 2023, the Record Date, and the date of filing of this Definitive Information Statement, the Company has 781,784,701 issued
and outstanding shares of Common Stock, which does not include shares of Common Stock reserved for issuance underlying certain convertible
notes. In addition, the Company has issued and outstanding (a) 6,000,000 shares of Series E Preferred Stock, par value $0.001 per share
(the “Series E Preferred Stock”) that have ten (10) votes per share and (b) 10,000 shares of Series F Preferred Stock, par
value $0.001 per share (the “Series F Preferred Stock”). Shannon Masjedi, the Company’s CEO, director and principal
stockholder, is the holder of the outstanding shares of Series F Preferred Stock, which will not be subject to the Reverse Split. Each
share of Series E Preferred Stock has the equivalent of ten (10) votes of Common. Each share of Series F Preferred Stock is entitled
to a number of votes equal to 0.1% of the issued and outstanding Common Stock on the Record Date. The Majority Consenting Stockholder
owns approximately 90.28% of the total voting power of all issued and outstanding voting shares of the Company.
In
the event that the Board of Directors implements a one-for-two-hundred-fifty (1:250) reverse split, the maximum authorized by the Board
Consent and the Stockholder Consent, of which there can be no assurance, there will be approximately 3,127,139 shares of Common Stock
issued and outstanding, excluding the shares reserved for issuance underlying the convertible preferred shares and convertible notes.
The Reverse Split will affect all holders of shares of Common Stock and holders of convertible notes equally (but will not affect the
outstanding shares of Series E Preferred Stock or Series F Preferred Stock). The Company believes that the Reverse Split will benefit
all stockholders, as, without the Reverse Split, the Company will, in all likelihood, have difficulties if and when it seeks to raise
additional capital for its anticipated future growth and seeks to list its shares of Common Stock on a National Exchange, of which there
can be no assurance.
However,
the reduction in the number of outstanding shares of Common Stock following implementation of the Reverse Split, if implemented, could
adversely affect the trading market for our Common Stock by reducing the relative level of liquidity of the shares of Common Stock. Further,
there can be no assurance that the Reverse Split will result in a proportionate increase or, for that matter, any increase, in the price
of the shares of Common Stock subject to quotation on the OTC Market.
Any
new shares issued following the Effective Date of the Reverse Split will be fully-paid and non-assessable shares. On the Effective Date
of the Reverse Split, the number of stockholders will remain unchanged because those stockholders who would otherwise receive only be
entitled to receive a fractional share will receive a number of shares rounded up to the next whole number.
The
Reverse Split will not change the number of authorized shares of Common Stock, which will continue to be 900,000,000 shares of Common
Stock, or the par value of our Common Stock, which will continue to be $0.001 per share. While the aggregate par value of our outstanding
Common Stock will be reduced as a result of the Reverse Split, our additional paid-in capital will be increased by a corresponding amount.
Therefore, the Reverse Split will not affect our total stockholders’ equity. All share and per share information will be retroactively
adjusted to reflect the Reverse Split for all periods presented in our future financial reports and regulatory filings.
On
July ___, 2023, the date immediately preceding the filing of this Definitive Information Statement on Schedule 14C, the closing price
of our shares subject to quotation on the OTC Market was approximately $0.0008 and the total market value was approximately $625,425,
based on the 781,784,701 shares of Common Stock issued and outstanding.
Rationale
for the Reverse Split
The
Company’s Board of Directors believes that a Reverse Split should, at least initially, increase the price of the shares of Company
Common Stock to approximately $0.20 per share, in the event that our Board of Directors elects to implement the maximum reverse based
on a one-for-two-hundred-fifty (1:250) ratio, which ratio is subject to the discretion of the Company’s Board of Directors. The
Company’s stockholders should understand that, as of the date of this Information Statement, the Board has not determined the exact
ratio of the Reverse Split nor the date that the Reverse Split will be implemented. Nevertheless, the Board Consent and the Stockholder
Consent provide that the Reverse Split, if implemented, must be initiated within 90 days of the filing of this Definitive Information
Statement, subject to the processing of the Reverse Split by FINRA.
While
the Reverse Split will not increase the total market value of our Common Stock, the Board of Directors believes that the increase in
the price of our shares of Common Stock, which increase may not necessarily be sustained, should make our shares of Common Stock more
attractive to potential investors, encourage investor interest and trading in, and possibly the marketability of, our Common Stock.
In
addition, because brokers’ commissions on lower-priced stocks generally represent a higher percentage of the stock price than commissions
on higher-priced stocks, the current per share price of our Common Stock can result in individual stockholders paying transaction costs
(commissions, markups or markdowns) that constitute a higher percentage of their total share value than would be the case if the share
price of our Common Stock were higher. This difference in transaction costs may also limit the willingness of institutional investors
to purchase shares of our Common Stock.
Trading
in our shares of Common Stock also may be adversely affected by a variety of policies and practices of brokerage firms that discourage
individual brokers within those firms from dealing in low-priced stocks. These policies and practices pertain to the payment of brokers’
commissions and to time-consuming procedures that make the handling of low-priced stocks unattractive to brokers from an economic standpoint.
Similarly, many brokerage firms are reluctant to recommend low-priced stocks to their customers and the analysts at many brokerage firms
do not provide coverage for such stocks. The Board also believes that the decrease in the number of shares of Common Stock outstanding
as a consequence of the Reverse Split, and the anticipated increase in the price of the Common Stock, could generate interest in the
Common Stock and possibly promote greater liquidity for the Company’s stockholders. However, the Company’s aggregate market
capitalization could be reduced to the extent that any increase in the market price of the Common Stock resulting from the Reverse Split
is proportionately less than the decrease in the number of shares of Common Stock outstanding.
The
Board of Directors further believes that the total number of shares of our Common Stock currently outstanding is disproportionately large
relative to our present market capitalization and that the Reverse Split would bring the number of outstanding shares to a level more
in line with other companies with comparable market capitalizations. Moreover, the Board considered that the number of outstanding shares
of Common Stock is unreasonably large in relation to the Company’s operations. Upon implementation of the Reverse Split and decrease
the number of shares of Common Stock that are issued and outstanding, the Company’s investors may more easily understand the impact
on earnings or loss per share attributable to future developments in our business.
The
Company ultimately cannot predict whether, and to what extent, the Reverse Split would achieve the desired results. The price per share
of the Company’s Common Stock is a function of various factors, including the profitability of its business operations.
Accordingly,
there can be no assurance that the market price of the Company’s Common Stock after the Reverse Split would increase in an amount
proportionate to the decrease in the number of issued and outstanding shares, or would increase at all, that any increase can be sustained
for a prolonged period of time or that the Reverse Split would enhance the liquidity of, or investor interest in, the Company’s
Common Stock.
Notwithstanding
the foregoing, our Board of Directors believes that the potential positive effects of the Reverse Split outweigh the potential disadvantages.
In making this determination, our Board of Directors has taken into account various negative factors, including: (a) the negative perception
of Reverse Splits held by some stock market participants; (b) the adverse effect on liquidity that might be caused by a reduced number
of shares outstanding; and (c) the costs associated with implementing the Reverse Split. The effect of the Reverse Split upon the market
price of our Common Stock cannot be predicted with any certainty, and the history of similar stock splits for companies in similar circumstances
to ours is varied. It is also possible that the Reverse Split may not increase the per share price of our Common stock in proportion
to the reduction in the number of shares of our Common Stock outstanding or result in a permanent increase in the per share price, which
depends on many factors.
After
considering the foregoing factors, the Company’s Board of Directors determined that amending the Company’s Certificate of
Incorporation to implement the Reverse Split is in the Company’s best interests and in the best interests of its stockholders.
Effects
of the Reverse Split
After
the filing of this Information Statement on Schedule 14C and the determination by the Board of Directors of the ratio of the Reverse
Split, the Company will file a Certificate of Amendment to its Certificate of Incorporation with the State of Delaware and make application
to FINRA to process the Reverse Split of our issued and outstanding Common Stock, to be effective upon notification from FINRA (the “Effective
Date”), which will also change our symbol on the OTC Market from “PACV” to “PACVD” for a period of twenty
(20) business days following the Effective Date to indicate to the brokerage and investment community that the Reverse Split has occurred.
Except
for the number of shares of Common Stock outstanding, the rights and preferences of shares of our Common Stock prior and subsequent to
the Reverse Split would remain the same. We do not anticipate that our financial condition, the percentage of our stock owned by management,
the number of our stockholders, or any aspect of our current business would materially change as a result of the Reverse Split.
The
Company’s Common Stock is currently registered under Section 12(g) of the Exchange Act and, as a result, we are subject to periodic
reporting and other requirements. The Reverse Split, if implemented, would not affect the registration of the Company’s Common
Stock under the Exchange Act.
After
the Effective Date of the Reverse Split, each stockholder would own a reduced number of shares of our Common Stock, based upon the ratio
of the reverse, which will be subject to the determination of our Board of Directors. However, a Reverse Split would affect all stockholders
equally and will not affect any stockholder’s percentage ownership of the Company, except for the immaterial result that the Reverse
Split shall involve in the rounding up of any fractional shares up to the next whole in such a manner that every stockholder shall own
at least one (1) share subsequent to the Reverse Split, as described herein. Proportionate voting rights and other rights and preferences
of the holders of our Common Stock would not be affected by the Reverse Split. There will be no payment of cash in lieu of any fractional
shares. Furthermore, the number of stockholders of record would not be affected by the Reverse Split.
Authorized
but Unissued Shares; Potential Dilution; and Anti-Takeover Effects.
Upon
the Effective Date of the Reverse Split, the Company is expected to have approximately 3,127,139 shares issued and outstanding, assuming
a 1:250 Reverse Split and will continue to have 900,000,000 shares of Common Stock authorized. However, if the Board of Directors determines
that it is in the best interests of the Company and its stockholders to implement a 1:200 or a 1:100 Reverse Split, the Company would
have approximately 3,908,923 shares or 7,817,847 shares of Common Stock issued and outstanding, respectively, depending upon the effect
of rounding up fractional, after implementation of the Reverse Split. The ultimate determination of the Board of Directors on the ratio
of the Reverse Split shall be based upon, among other factors, the prevailing market price of the Company’s shares of Common Stock
during the period immediately preceding the Reverse Split determination. After the Reverse Split is implemented, there will be available,
in any event, a significant number of authorized but unissued shares of Common Stock available for issuance from time to time for business
purposes as reasonably determined by the Board of Directors, including for use in capital-raising transactions and acquisitions, among
other purposes, consistent with our business objectives.
The
significant increase in the proportion of unissued authorized shares to issued shares after the Reverse Split could, under certain circumstances,
have an anti-takeover effect (for example, by permitting issuances that would dilute the stock ownership of a person seeking to effect
a change in the composition of our Board of Directors or contemplating a tender offer or other transaction for the combination of our
company with another company), we are not proposing the Reverse Split in response to any effort of which we are aware to accumulate any
of our shares of our Common Stock or to otherwise seek to obtain control of the Company. Our Board of Directors does not currently contemplate
recommending the adoption of any other proposals that could be construed to affect the ability of anyone to take over or change the control
of the Company.
The
Company believes that the availability of the additional shares will provide it with the flexibility to pursue potential transactions
as they arise, to take advantage of desirable business opportunities and to respond effectively in a changing corporate environment.
For example, the Company may elect to issue shares of Common Stock to raise equity capital, to make acquisitions using shares of Common
Stock, to establish strategic relationships with other companies, to adopt additional employee benefit plans or reserve additional shares
for issuance under such plans, where the Board determines it advisable to do so, without the necessity of soliciting further stockholder
approval, subject to applicable stockholder vote requirements.
If
the Company issues additional shares for any of the above purposes, the aggregate ownership interest of our current stockholders, and
the interest of each such existing stockholder, would be diluted, possibly substantially. Although the Company continually examines potential
transactions, it has no current plans or arrangements to issue any additional shares of Common Stock. Furthermore, the additional shares
of Common Stock that would become available for issuance upon the Effective Date of the Reverse Split could also be used by the Company’s
management to oppose any potential hostile takeover attempt or delay or prevent changes in control or changes in or removal of the Company.
For
example, without further stockholder approval, the Board of Directors could authorize the issuance and sale of shares of Common Stock
in one or more private transactions to purchasers who would oppose a takeover or favor the current Board. Although the Reverse Split
was based upon business and financial considerations that the Board considers reasonable and necessary as of the Record Date, as discussed
above, stockholders nevertheless should be aware that approval of one or more of the proposals could facilitate future efforts by management
to deter or prevent a change in control of the Company.
Accounting
Matters
The
Reverse Split would not affect the par value of the Company’s Common Stock. As a result, on the Effective Date of the Reverse Split,
the stated par value capital on our balance sheet attributable to the Company’s Common Stock would be reduced and the additional
paid-in capital account would be credited with the amount by which the stated capital is reduced. The per-share net income or loss and
net book value per share of the Company’s Common Stock would be increased because there would be fewer shares of our Common Stock
outstanding.
The
Company presents earnings per share (“EPS”) in accordance with Statement of Financial Accounting Standards (“SFAS”)
No. 128, “Earnings per Share,” and it will comply with the requirements of SFAS No. 128 with respect to reverse stock splits.
In pertinent part, SFAS No. 128 states: “If the number of common shares outstanding decreases as a result of a reverse stock split,
the computations of basic and diluted EPS shall be adjusted retroactively for all periods presented to reflect that change in capital
structure. If changes in Common Stock resulting from reverse stock splits occur after the close of the period but before issuance of
the financial statements, the per-share computations for those and any prior-period financial statements presented shall be based on
the new number of shares. If any per-share computations reflect such changes in the number of shares, that fact shall be disclosed.”
Fairness
of the Process
The
Board of Directors did not obtain a report, opinion, or appraisal from an appraiser or financial advisor with respect to the Reverse
Split and no representative or advisor was retained on behalf of the unaffiliated stockholders to review or negotiate the transaction.
The Board of Directors concluded that the additional expense of these independent appraisal procedures was unreasonable in relation to
the Company’s available cash resources and concluded that the Board of Directors could adequately establish the fairness of the
Reverse Split without the engagement of third parties.
Street
Name Holders of Common Stock
The
Company intends for the Reverse Split to treat stockholders holding Common Stock in street name through a nominee (such as a bank or
broker) in the same manner as stockholders whose shares are registered in their names. Nominees will be instructed to affect the Reverse
Split for their beneficial holders. However, nominees may have different procedures. Accordingly, stockholders holding Common Stock in
street name should contact their nominees.
Stock
Certificates
Mandatory
surrender of certificates is not required by our stockholders. The Company’s transfer agent will adjust the record books of the
company to reflect the Reverse Split as of the Effective Date of the Reverse Split. New certificates will not be mailed to stockholders.
Federal
Income Tax Consequences
The
following description of federal income tax consequences of the reverse stock split is based on the Internal Revenue Code of 1986, as
amended, the applicable Treasury Regulations promulgated thereunder, judicial authority, and current administrative rulings and practices
as in effect on the date of this information statement. The discussion is for general information only and does not cover any consequences
that apply for special classes of taxpayers (e.g., non-resident aliens, broker-dealers or insurance companies). The Company urges all
stockholders to consult their own tax advisers to determine the particular consequences to each of them of the reverse stock split.
The
Company has not sought and will not seek an opinion of counsel or a ruling from the Internal Revenue Service regarding the federal income
tax consequences of the reverse stock split. The Company believes, however, that because the Reverse Split is not part of a plan to periodically
increase or decrease any stockholder’s proportionate interest in the assets or earnings and profits of our company, the Reverse
Stock would have the federal income tax effects described below.
The
exchange of pre-split shares for post-split shares should not result in recognition of gain or loss for federal income tax purposes.
In the aggregate, a stockholder’s basis in the post-split shares would equal that stockholder’s basis in the pre-split shares.
A stockholder’s holding period for the post-split shares would be the same as the holding period for the pre-split shares exchanged
therefor. Provided that a stockholder held the pre-split shares as a capital asset, the post-split shares received in exchange therefore
would also be held as a capital asset.
There
is no provision for stockholders’ receiving cash in lieu of any fractional share interest because any fractional shares will be
rounded up to the next whole integer in such a manner that every stockholder shall own at least one (1) share as a result of the Reverse
Split, instead fractional shares are being rounded up to the next whole share.
