Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines

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Page 1 of 27

Disclosure Statement Pursuant to the Pink Basic Disclosure Guidelines

Pacific Software, Inc.

9905 Pin Oak Acres Way, #622 Charlotte, North Carolina 28277 ________________________________

704-397-7622 www.pacificsoftwareinc.com [email protected]

SIC: 7372 Quarterly Report

For the Period Ending: March 31, 2021 (the “Reporting Period”)

As of March 31, 2021, the number of shares outstanding of our Common Stock was:

19,187,299

As of December 31, 2020, the number of shares outstanding of our Common Stock was:

19,187,299

As of September 30, 2020, the number of shares outstanding of our Common Stock was:

19,187,299

Indicate by check mark whether the company is a shell company (as defined in Rule 405 of the Securities Act of 1933 and Rule 12b-2 of the Exchange Act of 1934):

Yes: ☐ No: ☒

Indicate by check mark whether the company’s shell status has changed since the previous reporting period:

Yes: ☐ No: ☒

Indicate by check mark whether a Change in Control¹ of the company has occurred over this reporting period:

1 “Change in Control” shall mean any events resulting in:

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Page 2 of 27 Yes: ☐ No: ☒

1) Name and address(es) of the issuer and its predecessors (if any)

In answering this item, provide the current name of the issuer any names used by predecessor entities, along with the dates of the name changes.

Incorporated as Pacific Mining, Inc., on October 12, 2005; changed to Pacific Software, Inc. as of November 28, 2006

The state of incorporation or registration of the issuer and of each of its predecessors (if any) during the past five years; Please also include the issuer’s current standing in its state of incorporation (e.g., active, default, inactive):

Pacific Software, Inc. was incorporated in the state of Nevada on October 12, 2005 and is currently in good standing with a status of

“active.”

Describe any trading suspension orders issued by the SEC concerning the issuer or its predecessors since inception:

None.

List any stock split, stock dividend, recapitalization, merger, acquisition, spin-off, or reorganization either currently anticipated or that occurred within the past 12 months:

On September 18, 2020, the Company entered into a Stock Purchase Agreement for the acquisition of all of the issued and outstanding shares of common stock of Pacific Acquisition Assets, Inc., a Nevada corporation (“PAA”). PAA has a fifty-one (51) percent membership interest in the LLCs of the West Hartford World of Beer and Cambridge Craft restaurants as well as the associated assets and liabilities, from Attitude Beer Holding, Inc. As payment for the acquisition the Company issued 22,000 shares of Series B Convertible Preferred Stock, convertible notes aggregating $4,255.472 with interest of 10% to 12.5%, per annum..

The address(es) of the issuer’s principal executive office:

9905 Pin Oak Acres Way, #622 Charlotte, North Carolina, 28277

The address(es) of the issuer’s principal place of business:

Check box if principal executive office and principal place of business are the same address: ☒

Has the issuer or any of its predecessors been in bankruptcy, receivership, or any similar proceeding in the past five years?

Yes: ☐ No: ☒

If this issuer or any of its predecessors have been the subject of such proceedings, please provide additional details in the space below:

N/A

(i) Any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becoming the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities;

(ii) The consummation of the sale or disposition by the Company of all or substantially all of the Company’s assets;

(iii) A change in the composition of the Board occurring within a two (2)-year period, as a result of which fewer than a majority of the directors are directors immediately prior to such change; or

(iv) The consummation of a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) at least fifty percent (50%) of the total voting power represented by the voting securities of the Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

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Page 3 of 27 2) Security Information

Trading symbol: PFSF

Exact title and class of securities outstanding: Common Stock

CUSIP: 69482P 205

Par or stated value: $0.001

Total shares authorized: 100,000,000 as of date: 3.31.2021 Total shares outstanding: 19,187,299 as of date: 3.31.2021 Number of shares in the Public Float²: 165,899 as of date: 3.31.2021 Total number of shareholders of record: 151 as of date: 3.31.2021 All additional class(es) of publicly traded securities (if any):

Trading symbol: N/A

Exact title and class of securities outstanding: Preferred Stock

CUSIP: N/A

Par or stated value: $0.10

Total shares authorized: 10,000,000 as of date: 3.31.2021 Total shares outstanding: 22,000 as of date: 3.31.2021

Transfer Agent

Name: Action Stock Transfer Phone: (801) 274.1088

Email: [email protected]

Address: 2469 E. Fort Union Blvd., Suite 214, Salt Lake City, UT 84121 Is the Transfer Agent registered under the Exchange Act?³ Yes: ☒ No: ☐ 3) Issuance History

The goal of this section is to provide disclosure with respect to each event that resulted in any direct changes to the total shares outstanding of any class of the issuer’s securities in the past two completed fiscal years and any subsequent interim period.

Disclosure under this item shall include, in chronological order, all offerings and issuances of securities, including debt convertible into equity securities, whether private or public, and all shares, or any other securities or options to acquire such securities, issued for services. Using the tabular format below, please describe these events.

A. Changes to the Number of Outstanding Shares

Check this box to indicate there were no changes to the number of outstanding shares within the past two completed fiscal years and any subsequent periods: ☐

2 “Public Float” shall mean the total number of unrestricted shares not held directly or indirectly by an officer, director, any person who is the beneficial owner of more than 10 percent of the total shares outstanding (a “control person”), or any affiliates thereof, or any immediate family members of officers, directors and control persons.

3 To be included in the Pink Current Information tier, the transfer agent must be registered under the Exchange Act.

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Page 4 of 27 10/16/2018 New Issuance 21,000 Common $4.75 Yes Peter Pizzino Services as

Officer

Restricted 4(a)(2) 10/16/2018 New Issuance 15,000 Common $4.75 Yes Harrysen Mittler Services as

Officer

Restricted 4(a)(2) 10/16/2018 New Issuance 10,000 Common $4.75 Yes Jerry Cornwell Cash Restricted 4(a)(2) 10/16/2018 New Issuance 672,000 Preferred N/A N/A Harrysen Mittler Services as

Officer

Restricted 4(a)(2) 10/16/2018 New Issuance 328,000 Preferred N/A N/A Peter Pizzino Services as

Officer

Restricted 4(a)(2)

10/30/2018 Cancellation 300,000 Common N/A N/A Heide Morris N/A N/A N/A

10/30/2018 New Issuance 25,000 Common $5.25 Yes Sean Leech Cash Restricted 4(a)(2)

10/30/2018 New Issuance 12,500 Common $5.25 Yes JC Capital Consultants (Juan C. Alejos, Manager)

Services Restricted 4(a)(2)

11/16/2018 New Issuance 21,000 Common $5.50 Yes Peter Pizzino Services as Officer

Officer

Restricted 4(a)(2) 12/18/2018 New Issuance 21,000 Common $5.50 Yes Peter Pizzino Services as

Officer

Restricted 4(a)(2)

1/17/2019 New Issuance 10,000 Common $5.50 Yes Antonio

Hernandez

Cash Restricted 4(a)(2)

1/17/2019 New Issuance 62,500 Common $5.50 Yes Matthew

Markham

Cash Restricted 4(a)(2)

1/18/2019 New Issuance 35,000 Common $5.50 Yes JC Capital

Consultants (Juan C. Alejos, Manager)

Services Restricted 4(a)(2)

1/25/2019 Cancellation 15,000 Common N/A N/A Elmer Carlson N/A N/A N/A

Officer

Restricted 4(a)(2)

3/12/2019 New Issuance 100,000 Common $5.50 Yes Jason Cohen Cash Restricted 4(a)(2)

3/12/2019 New Issuance 50,000 Common $5.50 Yes JC Capital

Services Restricted 4(a)(2) Shares Outstanding as of Second Most Recent Fiscal

Year End:

Opening Balance Date 10.1.2018 Common: 18,430,049 Preferred: -0-

*Right-click the rows below and select “Insert” to add rows as needed.

Date of Transaction

Transaction type (e.g. new issuance, cancellation, shares returned to treasury)

Number of Shares Issued (or cancelled)

Class of Securities

Value of shares issued ($/per share) at Issuance

Were the shares issued at a discount to market price at the time of issuance?

(Yes/No)

Individual/ Entity Shares were issued to (entities must have individual with voting / investment control disclosed).

Reason for share issuance (e.g. for cash or debt conversion) - OR- Nature of Services Provided

Restricted or Unrestricted as of this filing.

Exemption or Registration Type.

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Page 5 of 27 3/21/2019 New Issuance 26,000 Common $5.50 Yes Peter Pizzino Services as

Officer

Restricted 4(a)(2) 3/29/2019 Cancellation 2,578,750 Common N/A N/A JC Capital

N/A N/A N/A

3/29/2019 Cancellation 200,000 Common N/A N/A Juan C. Alejos N/A N/A N/A

4/1/2019 Conversion Issuance

450,000 Common $4.50 Yes Peter Pizzino Services as Officer

Restricted 4(a)(2) 4/1/2019 Conversion

Cancellation

45,000 Preferred N/A N/A Peter Pizzino N/A N/A N/A

900,000 Common $4.50 Yes Harrysen Mittler Services as Officer

Cancellation 90,000 Preferred N/A N/A Harrysen Mittler N/A N/A N/A

4/8/2019 New Issuance 100,000 Common $4.50 Yes Wang-Chan Wong Services Restricted 4(a)(2) 4/24/2019 New Issuance 100,000 Common $4.50 Yes Wang-Chan Wong Services Restricted 4(a)(2) 4/24/2019 New Issuance 25,000 Common $4.50 Yes Peter Pizzino Services as

Officer

Issuance

440,000 Common $4.50 Yes Peter Pizzino Services as Officer

Cancellation

44,000 Preferred N/A N/A Peter Pizzino N/A N/A N/A

880,000 Common $4.50 Yes Harrysen Mittler Services as Officer

Cancellation 88,000 Preferred N/A N/A Harrysen Mittler N/A N/A N/A

Officer

Restricted 4(a)(2) 9/28/2020 Cancellation 494,000 Series A

Preferred

N/A N/A Harrysen Mittler Services as Officer

N/A N/A

9/28/2020 Cancellation 239,000 Series A Preferred

N/A N/A Peter Pizzino Services as Officer

N/A N/A

9/28/2020 New issuance 12,866 Series B Preferred

N/A N/A Alpha Capital

Anstalt- Ari Rabinowitz

Asset sale N/A 4(a)(2)

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Page 6 of 27

9/28/2020 New issuance 6,480 Series B

Preferred

N/A N/A Tarpon Bay

Partners LLC- Henry Sargent

9/28/2020 New issuance 654 Series B

Preferred

N/A N/A EMA Financial

LLC- Felicia Preston

Preferred

N/A N/A Harrysen Mittler Services as Officer

N/A N/A

Preferred

N/A N/A Peter Pizzino Services as

Officer

N/A N/A

Example: A company with a fiscal year end of December 31^st, in addressing this item for its quarter ended September 30, 2019, would include any events that resulted in changes to any class of its outstanding shares from the period beginning on January 1, 2017 through September 30, 2019 pursuant to the tabular format above.

Use the space below to provide any additional details, including footnotes to the table above:

B. Debt Securities, Including Promissory and Convertible Notes

Use the chart and additional space below to list and describe all outstanding promissory notes, convertible notes, convertible debentures, or any other debt instruments that may be converted into a class of the issuer’s equity securities.

Check this box if there are no outstanding promissory, convertible notes or debt arrangements: ☐ Date of Note

Issuance

Outstanding Balance ($)

Principal Amount at Issuance ($)

Interest Accrued ($)

Maturity Date

Conversion Terms (e.g. pricing mechanism for determining conversion of instrument to shares)

Name of Noteholder (entities must have individual with voting / investment control disclosed).

Reason for Issuance (e.g.

Loan, Services, etc.)

9/20/20 7,000 7,000 368 3/20/21 50% discount to low closing bid

price over prior 30 days

Trillium Partners LLC- Narine Persaud

Loan

9/21/20 26,600 26,600 1,378 9/21/21 Non-convertible Alpha Capital Anstalt-

Ari Rabinowitz

Loan

9/24/20 1,929,900 1,929,900 98,769 9/24/21 25% of lowest closing bid price over the 20 days prior to conversion

Alpha Capital Anstalt- Ari Rabinowitz

Purchase financing 9/24/20 972,000 972,000 50,065 9/24/21 25% of lowest closing bid price

over the 20 days prior to conversion

Tarpon Bay Partners, LLC- Narine Persaud

Purchase financing 9/24/20 98,100 98,100 5,053 9/24/21 25% of lowest closing bid price

EMA Financial, LLC- Felicia Preston

Purchase financing 9/28/20 1,255,472 1,255,472 4,945 9/28/21 25% of lowest closing bid price

Southridge Financial Management Financial Services- Narine Persaud

Purchase financing

2/17/21 33,000 33,000 353 2/28/22 Convertible at fixed price of $0.10 per common share

Trillium Partners LLC- Narine Persaud

Loan Shares Outstanding:

Balance sheet date:

Date 3.31.21. Common: 19,187,299 Preferred Stock Series

A: 733,000 B: 22,000

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Page 7 of 27 3/2/21 33,000 33,000 262 3/2/22 Convertible at fixed price of $0.10

per common share

Alpha Capital Anstalt- Ari Rabinowitz

Loan

Use the space below to provide any additional details, including footnotes to the table above:

4) Financial Statements

A. The following financial statements were prepared in accordance with:

☒ U.S. GAAP

☐ IFRS

B. The financial statements for this reporting period were prepared by (name of individual)⁴:

Name: William Gonyer

Title: Managing Member – Will Stephenson Advisory Relationship to Issuer: Contractor Service Providor

Provide the financial statements described below for the most recent fiscal year or quarter. For the initial disclosure statement (qualifying for Pink Current Information for the first time) please provide reports for the two previous fiscal years and any subsequent interim periods.

4 The financial statements requested pursuant to this item must be prepared in accordance with US GAAP or IFRS by persons with sufficient financial skills.

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Page 8 of 27 C. Balance sheet;

D. Statement of income;

E. Statement of cash flows;

F. Statement of Changes in Shareholders’ Equity G. Financial notes; and

H. Audit letter, if audited

You may either (i) attach/append the financial statements to this disclosure statement or (ii) file the financial statements through OTCIQ as a separate report using the appropriate report name for the applicable period end. (“Annual Report,” “Quarterly Report” or

“Interim Report”).

If you choose to publish the financial statements in a separate report as described above, you must state in the accompanying disclosure statement that such financial statements are incorporated by reference. You may reference the document(s) containing the required financial statements by indicating the document name, period end date, and the date that it was posted to OTCIQ in the field below. Financial Statements must be compiled in one document.

Attached Hereto.

Financial statement information is considered current until the due date for the subsequent report (as set forth in the qualifications section

above). To remain qualified for Current Information, a company must post its Annual Report within 90 days from its fiscal year-end date and Quarterly Reports within 45 days of each fiscal quarter-end date.

5) Issuer’s Business, Products and Services

The purpose of this section is to provide a clear description of the issuer’s current operations. In answering this item, please include the following:

A. Summarize the issuer’s business operations (If the issuer does not have current operations, state “no operations”)

Pacific Software, Inc. (OTC: PFSF) was incorporated on October 12, 2005 in the State of Nevada, United States - with an established end of fiscal year of September 30. Corporate Headquarters is located at 9905 Pin Oak Acres Way, #622, Charlotte, North Carolina 28277. The Directors of the Company are Izak On and Michael Finkelstein.

B. Describe any subsidiaries, parents, or affiliated companies, if applicable, and a description of such entity’s business, contact information for the business, officers, directors, managers or control persons. Subsidiary information may be included by reference.

On September 18, 2020, the Company entered into a Stock Purchase Agreement for the acquisition of all of the issued and outstanding shares of common stock of Pacific Acquisition Assets, Inc., a Nevada corporation (“PAA”). PAA has a fifty-one (51) percent membership interest in the LLCs of the West Hartford World of Beer and Cambridge Craft restaurants as well as the associated assets and liabilities, from Attitude Beer Holding, Inc. As payment for the acquisition the Company issued 22,000 shares of Series B Convertible Preferred Stock, convertible notes aggregating $4,255,072 with interest of 10% to 12.5%, per annum.

.

C. Describe the issuers’ principal products or services, and their markets.

The Company is the majority owner of two restaurants in New England which concentrate on selling craft beer in a pressure-free and fun setting.

6) Issuer’s Facilities

The goal of this section is to provide a potential investor with a clear understanding of all assets, properties or facilities owned, used or leased by the issuer.

In responding to this item, please clearly describe the assets, properties or facilities of the issuer, give the location of the principal plants and other property of the issuer and describe the condition of the properties. If the issuer does not have complete ownership or control of the property (for example, if others also own the property or if there is a mortgage on the property), describe the limitations on the ownership.

If the issuer leases any assets, properties or facilities, clearly describe them as above and the terms of their leases.

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Page 9 of 27

Our offices are currently located at 9905 Pin Oak Acres Way, #622, Charlotte, North Carolina 28277. Our telephone number is 704-397-7622.

The office facility is provided by a board member at no cost to the Company. Management believes that its current facilities are adequate for its needs through the next twelve months, and that, should it be needed, suitable additional space will be available to accommodate expansion of the Company's operations on commercially reasonable terms, although there can be no assurance in this regard.

The Company’s two operating facilities as of March 31, 2021 are as follows:

World of Beer Tavern- West Hartford CT 73 Isham Road, # B-30

West Hartford CT 06107

Our facility is a 4,163 square foot bar restaurant located in a commercial mall. Included in the property are inventory which is comprised mostly of bottled beer. Fixed assets are comprised of ovens for cooking, freezers and refrigerators for food and beverages, bar equipment and an audio/visual system. The menu includes an assorted portion of sides such as wings burgers and fries and other food to be found at casual dining establishments.

World of Beer Tavern- Cambridge MA 100 Cambridge Side Place

Cambridge MA 02141

Our facility is located near the Charles River. The establishment is slightly smaller than our West Hartford facility but the assets and menu are almost identical.

7) Officers, Directors, and Control Persons

The goal of this section is to provide an investor with a clear understanding of the identity of all the persons or entities that are involved in managing, controlling or advising the operations, business development and disclosure of the issuer, as well as the identity of any significant or beneficial shareholders.

Using the tabular format below, please provide information, as of the period end date of this report, regarding any person or entity owning 5%

of more of any class of the issuer’s securities, as well as any officer, and any director of the company, regardless of the number of shares they own. If any listed are corporate shareholders or entities, provide the name and address of the person(s) beneficially owning or controlling such corporate shareholders, or the name and contact information of an individual representing the corporation or entity in the note section.

Name of

Officer/Director or Control Person

Affiliation with Company (e.g.

Officer/Director/Owner of more than 5%)

Residential Address (City / State Only)

Number of shares owned

Share type/class

Ownership Percentage of Class Outstanding

Note

Izak On CEO, CFO, Director Tel-Aviv, Israel -0- 0% Appointed

September 28, 2020 Michael

Finkelstein

Secretary, Director Charlotte, N.C. -0- 0% Appointed

September 28, 2020 Harrysen Mittler >5% Toronto, ON 10,455,000

494,000

1,000

Common Stock Series A Preferred Stock Series B Preferred

Stock

54.5%

19%

4.5%

5%

Former officer

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Page 10 of 27 8) Legal/Disciplinary History

A. Please identify whether any of the persons listed above have, in the past 10 years, been the subject of:

1. A conviction in a criminal proceeding or named as a defendant in a pending criminal proceeding (excluding traffic violations and other minor offenses);

None.

2. The entry of an order, judgment, or decree, not subsequently reversed, suspended or vacated, by a court of competent jurisdiction that permanently or temporarily enjoined, barred, suspended or otherwise limited such person’s involvement in any type of business, securities, commodities, or banking activities;

None.

3. A finding or judgment by a court of competent jurisdiction (in a civil action), the Securities and Exchange Commission, the Commodity Futures Trading Commission, or a state securities regulator of a violation of federal or state securities or commodities law, which finding or judgment has not been reversed, suspended, or vacated; or

None.

4. The entry of an order by a self-regulatory organization that permanently or temporarily barred, suspended, or otherwise limited such person’s involvement in any type of business or securities activities.

None.

B. Describe briefly any material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which the issuer or any of its subsidiaries is a party or of which any of their property is the subject. Include the name of the court or agency in which the proceedings are pending, the date instituted, the principal parties thereto, a description of the factual basis alleged to underlie the proceeding and the relief sought. Include similar information as to any such proceedings known to be contemplated by governmental authorities.

None.

9) Third Party Providers

Please provide the name, address, telephone number and email address of each of the following outside providers:

Securities Counsel

Peter Pizzino >5% New York, NY 5,278,500

239,000

1,000

Common Stock Series A Preferred Series B Preferred

Stock

27.5%

19%

4.5%

Former officer

Alpha Capital Anstalt

>5% Ari Rabinowitz

510 Madison Ave 14^th Floor, NY,

NY 10022

12,866 Series B Preferred

Stock

59%

Tarpon Bay Partners

>5% Henry Sargent

90 Grove Street Ridgefield, CT

06877

6,480 Series B

Preferred Stock

30%

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Page 11 of 27

Name: Andrew Coldicutt

Firm: Law Office of Andrew Coldicutt Address 1: 1220 Rosecrans St., PMB 258 Address 2: San Diego, CA 92106

Phone: 619.228.4970

Email: [email protected]

Accountant or Auditor

Name: William Gonyer

Firm: Will Stephenson Advisory LLC Address 1: 697 Sport Hill Road

Address 2: Easton, CT 06612

Phone: 203.702.1820

Email:

Investor Relations

Name:

Firm:

Address 1:

Address 2:

Phone:

Email:

Other Service Providers

Provide the name of any other service provider(s) that that assisted, advised, prepared or provided information with respect to this disclosure statement. This includes counsel, advisor(s) or consultant(s) or provided assistance or services to the issuer during the reporting period.

Name:

Firm:

Nature of Services:

Address 1:

Address 2:

Phone:

Email:

Name:

Firm:

Nature of Services:

Address 1:

Address 2:

Phone:

Email:

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Page 12 of 27 10) Issuer Certification

Principal Executive Officer:

The issuer shall include certifications by the chief executive officer and chief financial officer of the issuer (or any other persons with different titles but having the same responsibilities).

The certifications shall follow the format below:

I, Izak On certify that:

1. I have reviewed this Quarterly Disclosure Statement of Pacific Software, Inc.;

2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and

3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

August 3,.2021 [Date]

/s/ Izak On [CEO’s Signature]

(Digital Signatures should appear as “/s/ [OFFICER NAME]”)

Principal Financial Officer:

I, Izak On certify that:

1. I have reviewed this Quarterly Disclosure Statement of Pacific Software Inc.;

2. Based on my knowledge, this disclosure statement does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this disclosure statement; and

3. Based on my knowledge, the financial statements, and other financial information included or incorporated by reference in this disclosure statement, fairly present in all material respects the financial condition, results of operations and cash flows of the issuer as of, and for, the periods presented in this disclosure statement.

August 3, 2021 [Date]

/s/ Izak On [CFO’s Signature]

(Digital Signatures should appear as “/s/ [OFFICER NAME]”)

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Page 13 of 27

CONSOLIDATED FINANCIAL STATEMENTS

Index to the Condensed Consolidated Financial Statements

Page

Condensed Consolidated Financial Statements:

Condensed Consolidated Balance Sheet at March 31, 2021 and September 30, 2020 14 Condensed Consolidated Statement of Operations for the three and six months ended

March 31, 2021 and 2020

15 Condensed Consolidated Statement of Changes in Stockholders’ Deficit for the three and six months ended March 31, 2021 and 2020

16 Condensed Consolidated Statement of Cash Flows for the six months ended March 31, 2021 and 2020

17 Notes to the Condensed Consolidated Financial Statements 18 - 27

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Page 14 of 27 PACIFIC SOFTWARE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

March 31, September 30,

ASSETS 2021 2020

Current assets

Cash $ 127,516 $ 80,550

Accounts receivable - 20,000

Inventories 56,128 56,831

Prepaid expenses 117,627 150,755

ROU asset – short term 202,202 194,552

Total Current assets 503,473 502,688

Fixed assets, net 852,386 931,032

Other assets 50,885 50,498

ROU asset – long term 942,023 -

TOTAL ASSETS $ 2,348,767 $ 2,536,098

LIABILITIES AND EQUITY Current liabilities

Accounts payable and accrued expenses $ 308,446 $ 292,618

Convertible notes payable 5,784,031 5,718,763

Notes payable (PPP) 442,491 351,064

Derivative liability 14,657,800 14,657,800

Deferred rent 93,839 97,558

Lease liability 296,041 292,108

Total Current liabilities 21,582,648 58,170

Lease liability – long term 754,345 856,766

TOTAL LIABILITIES 22,336,993 22,266,677

Commitments and contingencies MEZZZANINE EQUITY

Series B, preferred stock, 22,000 shares authorized, par value $0.10, 22,000 shares

issued and outstanding at March 31, 2021 and September 30, 2020, respectively 2,200 2,200 EQUITY

Preferred stock, 10,000,000 shares authorized, $0.001 par value Series A, 3,000,000 shares authorized, par value $.001

733,000 issued and outstanding, at March 31, 2021 and September 30, 2020,

respectively 733 733

Common stock, 100,000,000 shares authorized, par value $0.001, 19,187,299shares

issued and outstanding at March 31, 2021 and September 30, 2020,, respectively 19,187 19,187

Additional paid in capital 27,522,247 27,522,247

Accumulated deficit (48,185439) (47,824,641)

Total Pacific Software, Inc. equity (deficit) (20,643,272) (20,282,474)

Non-controlling interest 652,846 549,695

Total Equity (19,990,426) (19,732,779)

TOTAL LIABILITIES AND EQUITY $ 2,348,767 $ 2,536,098

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

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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 AND 2020

(Unaudited)

Three Months Ended March 31, Six Months Ended March 31,

2021 2020 2021 2020

Sales $ 725,135 $ - $ 1,403,005 $ -

Cost of goods sold 192,887 - 390,323 -

Gross profit 532,248 - 1,012,682 -

Operating expenses:

Advisory board fees - 50,000 - 100,000

Compensation 251,052 432,000 472,852 864,000

General and administrative 206,473 4,761 631,981 24,057

Total expenses 457,525 486,761 1,104,833 988,057

Income (loss) from operations 74,723 (486,761 ) (92,151 ) (988,057)

Other income (expenses):

Interest expense (81,893 ) (207 ) (165,496 ) (797)

(81,893 ) (207 ) (165,496

)

(797

)

Loss before federal income taxes (7,170 ) (486,968 ) (257,647 ) (988,854

)

Federal income taxes - -

-

Net loss (7,170 ) (486,968 ) (257,647 ) (988,854

)

Net income attributable to non-controlling interest 21,383 - 103,151 -

Net loss attributable to Pacific Software, Inc. $ (28,553 ) $ (486,968 ) $ (360,798 ) $ (988,854

)

Loss per share, basic and diluted $ (0.00 ) (0.04 ) $ (0.02) $ (0.08

)

Weighted average shares outstanding 19,187,299 12,432,747 19,187,299 12,432,747

(16)

CONDENSED CONSOLIDATED STATEMENT CHANGES IN STOCKHOLDERS’ DEFICIT FOR THE THREE AND SIX MONTHS ENDED MARCH 31, 2021 AND 2020

(Unaudited) Three and six months ended March 31, 2021

Mezzanine Equity

Series B Series A

Preferred Stock, Preferred Stock, Common Stock

par value

$0.010 par value $0.001

par value

$0.001

Additional

Paid-in Accumulated Non -

Controlling Total Shares Amount Shares Amount Shares Amount Capital Deficit Interest Equity Balance

September 30,

2020 22,000 $ 2,200 733,00

0 $ 733 19,187,299 $ 19,187 $ 27,522,247 $ (47,824,641 ) $ 549,695 $ (19,732,779 )

Net income,

(loss) - - - - - - - (332,245 ) 81,768 (250,477 )

Balance December 31,

2020 22,000 2,200

730,00

0 733 19,187,299 19,187 27,522,247 (48,156,886 ) 631,463 (19,983,256 )

Net income,

(loss) - - - - - - - (28,553 ) 21,383 (7,170 )

Balance March 31,

2021 22,000 $ 2,200

7332,0

00 $ 733 19,187,299 $ 19,187 $ 27,522,247 $ (48,185,439 ) $ 652,846 $ (19,990,426 )

Three and six months ended March 31, 2020

Series A

Preferred Stock, Common Stock, Common Stock

par value

$0.001 To be issued

par value

$0.001

Additional

Paid-in Accumulated Non -

Controlling Total Shares Amount Shares Amount Shares Amount Capital Deficit Interest Equity Balance

September 30,

2019 733,000 $ 733 - $ - 19,132,299 $ 19,132 $ 26,843,721 $ (26,284,045 ) $ - $ 579,541

Common stock issued for

compensation - - - - 55,000 55 109,945 - - 110,000

Net income,

(loss) - - - - - - - (501,885 ) - (250,477 )

Balance December 31,

2019 733,000 733 - - 19,187,299 19,187 26,953,666 (26,785,930 ) - 187,656

Common stock to be issued for

compensation - - 165,000 165 - - - - - 165

Net income,

(loss) - - - - - - - (486,969 ) - (486,969 )

Balance March 31,

2020 733,000 $ 733 165,000 $ 165 19,187,299 $ 19,187 $ 26,953,666 $ (27,272,899 ) $ - $ (299,148 )

(17)

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)

Six Months Ended March 31, 2021

Six Months Ended March 31, 2020 Cash flows from operating activities

Net (loss)

$ (257,647) $ (988,854)

Adjustments to reconcile net (loss) to net cash

(used in) operating activities:

Depreciation

78,646 -

Common stock issued for compensation

- 660,000

Amortization of debt discount

582 -

Accretion of premium

4,686 -

Change in working capital items:

Accounts receivable

_20,000 -

Inventory

703 -

Prepaid expenses and other assets

32,741 100,000

Accounts payable and accrued expenses

15,828 151,704

Net cash (used in) operating activities

(104,461) (77,150)

Cash flows from investing activities:

Equity in investment

_- (30,502)

Net cash (used in) investing activities

- (30,502)

Cash flows from financing activities:

Proceeds from convertible notes payable

60,000 -

Proceeds from notes payable

91,427 -

Net cash provided by financing activities

151,427 -

Net increase (decrease) in cash

_46,966 (107,652)

Cash at beginning of period

_80,550 108,849

Cash end of period $

127,516 $ 1,197

Supplemental Cash Flow Information

Cash paid during the period for:

Interest paid

$ - $ -

Taxes paid

$ - $ -

(18)

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS MARCH 31, 2021 AND 2020

(Unaudited) NOTE 1 - ORGANIZATION

Pacific Software, Inc. (the “Company”) was incorporated in the State of Nevada on October 12, 2005. The Company was in the development stage and was engaged in developing. producing, and marketing online internet sales portals to facilitate ecommerce between countries.

Disposition of Hypersoft Ventires

On August 10, 2020, the Company entered into an Agreement of Conveyance, Transfer and Assignment of Assets and Assumption of Obligations with Digi Asset, Inc., a Nevada corporation (“Digi”). The Company transferred all of the right, title and interest in and to 5,000,000 shares of Hypersoft Ventures currently held by the Company; (ii) a 15% royalty fee derived from future revenues of BOAPIN.com, (iii) $70,000 in accrued compensation paid to Digi after the Company receives funding from the sale of the Hypersoft business, (iv) current liabilities including accrued interest, accrued compensation, and notes payable in the amounts of $33,815, $42,000 and $8,294 respectively as of December 31, 2019, and (v) collectively, all of the Company’s right, title and interest in and to all of those assets and liabilities.

Acquisition of Pacific Acquisition Assets, Inc.

On September 18, 2020, the Company entered into a Stock Purchase Agreement for the acquisition of all of the issued and outstanding shares of common stock of Pacific Acquisition Assets, Inc., a Nevada corporation (“PAA”). PAA has a fifty-one (51) percent membership interest in the LLCs of the West Hartford World of Beer and Cambridge Craft restaurants as well as the associated assets and liabilities, from Attitude Beer Holding, Inc. As payment for the acquisition the Company issued 22,000 shares of Series B Convertible Preferred Stock, convertible notes aggregating $4,255,472 with interest ranging from 10% to 12.5%, per annum.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Management of the Company is responsible for the selection and use of appropriate accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company’s financial condition and results and require management’s most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company’s significant and critical accounting policies and practices are disclosed below as required by the accounting principles generally accepted in the United States of America.

Basis of Presentation/Principles of Consolidation

The consolidated financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) and include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany balances and transactions have been eliminated in consolidation.

Management use of estimates

The preparation of financial statements in conformity with U.S. 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 amounts of revenues and expenses during the reporting period. The Company considered COVID-19 related impacts to its estimates, as appropriate, within its consolidated financial statements and there may be changes to those estimates in future periods. The Company believes that the accounting estimates are appropriate after giving considerations to the increased uncertainties surrounding the severity and duration of the COVID-19 pandemic. Such estimates and assumptions are subject to inherent uncertainties, actual results could differ materially from those estimates.

Reclassification

Certain prior period amounts have been reclassified for consistency with current year presentation. These reclassifications had no effect on the reported results of operations.

(19)

Page 19 of 27 Cash and cash equivalents

Cash includes demand deposits, time deposits, certificates of deposit and short-term liquid investments with an original maturity of three months or less when purchased. The Company maintains deposits in a financial institution. None of the Company's cash and cash equivalents was in excess of federally insured limits. The Company has not experienced any losses in such accounts and does not believe it is exposed to any significant credit risks from excess deposits. None of the Company's cash is restricted.

Concentration of credit risk

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash accounts in a financial institution which, at times, may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

Accounts receivable and allowance for doubtful accounts

Accounts receivable are stated at the amount management expects to collect from outstanding balances. The Company generally does not require collateral to support customer receivables. The Company provides an allowance for doubtful accounts based upon a review of the outstanding accounts receivable, historical collection information and existing economic conditions. The Company determines if receivables are past due based on days outstanding, and amounts are written off when determined to be uncollectible by management.

The maximum accounting loss from the credit risk associated with accounts receivable is the amount of the receivable recorded, which is the face amount of the receivable net of the allowance for doubtful accounts.

Inventories

Inventories are stated at the lower of cost or net realizable value with cost determined on a first-in, first-out (“FIFO”) basis. Management regularly reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on the estimated forecast of product demand and the ability to sell the product(s) concerned. Demand for products can fluctuate significantly.

Additionally, management’s estimates of future product demand may be inaccurate, which could result in an understated or overstated provision required for excess and obsolete inventory. At March 31, 2021 and December 31, 2020, no such reserves were established.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation. Depreciation of property and equipment is currently being provided using the straight-line method for financial reporting purposes over an estimated useful life of three to twenty years.

Expenditures for normal maintenance and repairs are expensed as incurred. The cost of assets sold or abandoned, and the related accumulated depreciation are eliminated from the accounts and any gains or losses are charged or credited to operations in the respective periods. For the three months ended March 31, 2021 and 2019, depreciation expense of $39,323 and $0 was recognized, respectively.

,

Long-lived assets

In accordance with Accounting Standards Codification (ASC) Topic 360, Property, Plant, and Equipment, the Company periodically reviews for the impairment of long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be realizable. An impairment loss would be recognized when estimated future cash flows expected to result from the use of the asset and its eventual disposition is less than its carrying amount. During the quarter ended March 31, 2021, there were no impairments recognized.

Operating Leases

The Company leases its locations, an office, under an operating lease. The lease includes an option that allows the Company to extend the lease term beyond the initial commitment period, subject to terms agreed at lease inception. The Company adopted ASC 842 using the modified retrospective transition method. In accordance with ASC 842, lease right-of-use assets and lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term. The Company's lease does not provide an implicit rate and therefore, the Company uses an incremental borrowing rate based on the information available at the commencement date, including implied traded debt yield and seniority adjustments, to determine the present value of future payments. Lease expense for the minimum lease payments is recognized on a straight-line basis over the lease term. Variable lease payments are expensed as incurred.

Fair Value Measurements