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EX-32.1 - EXHIBIT 32 - PACIFIC WEBWORKS INCexhibit32_ex32z1.htm
EX-31.1 - EXHIBIT 31 - PACIFIC WEBWORKS INCexhibit31_ex31z1.htm

          

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549


FORM 10-Q


QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934


FOR THE QUARTERLY PERIOD ENDED: September 30, 2017


COMMISSION FILE NUMBER: 000-26731



PACIFIC WEBWORKS, INC.


(Exact name of registrant as specified in its charter)


            Nevada                                                                                                            87-0627910

_______________________________                                                                ___________________

(State or other jurisdiction of                                                                                    (I.R.S. Employer

 incorporation or organization)                                                                                  Identification No.)

       

3136 Mission Gorge Road, Suite 111

San Diego, California 92120


Tel: (858) 459-1133

Fax: (858) 459-1103

(Address and telephone number of principal executive offices)


               

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                         Yes  / /        No  /x/


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).      Yes  /X/       No  / /


Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.


Large accelerated filer [ ]                                    Accelerated Filer [ ]


Non-accelerated filer [ ]                              Smaller reporting company [X]


Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).            

Yes  /X/        No  / /


The number of Registrant’s shares of common stock, $0.001 par value, outstanding as of December 8, 2017 was 149,713,895.






ITEM 1.  FINANCIAL STATEMENTS



The un-audited quarterly financial statements for the period ended September 30, 2017, prepared by the Company, immediately follow.




PACIFIC WEBWORKS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

 

 

 

 

 

 

 

 

 

September 30, 2017

 

December 31, 2016

 

(Unaudited)

 

 

ASSETS

 

 

 

 

 

 

 

       Total Assets

$

 

$

 

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' DEFICIT

 

 

 

 

 

 

 

Related Party Payables

$

20,000 

 

$

       Total Liabilities

20,000 

 

 

 

 

 

Commitments and contingencies

 

 

 

 

 

Stockholders' Deficit

 

 

 

Common stock, $0.001 par value, 150,000,000 shares authorized;

 

 

 

149,713,895 and 49,713,895 shares issued and outstanding

 

 

 

as of September 30, 2017 and December 31, 2016, respectively

149,714 

 

49,714 

Additional paid-in capital

17,969,715 

 

18,069,715 

Accumulated deficit

(18,139,429)

 

(18,119,429)

        Total stockholders' deficit

(20,000)

 

        Total liabilities and stockholders' deficit

$

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

        The accompanying notes are an integral part of these financial statements








PACIFIC WEBWORKS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended June 30,

 

For the Nine Months Ended September 30,

 

2017

 

2016 

 

2017 

 

2016 

 

 

 

 

 

 

 

 

Revenue

$

 

$

 

$

 

$

 

 

 

 

 

 

 

 

Operating expenses

20,000 

 

 

20,000 

 

 

 

 

 

 

 

 

 

Loss from continuing operations

(20,000)

 

 

(20,000)

 

 

 

 

 

 

 

 

 

Loss from discontinued operations

 

(109,522)

 

 

(252,891)

 

 

 

 

 

 

 

 

Loss before income taxes

(20,000)

 

(109,522)

 

(20,000)

 

(252,891)

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

 

 

 

 

 

 

 

 

Net Loss

$

(20,000)

 

$

(109,522)

 

$

(20,000)

 

$

(252,891)

 

 

 

 

 

 

 

 

Net loss per share - basic and diluted

$

(0.00)

 

$

(0.00)

 

$

(0.00)

 

$

(0.01)

 

 

 

 

 

 

 

 

Weighted average shares - basic and diluted

149,713,895 

 

49,713,894 

 

87,076,532 

 

49,713,894 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

                       The accompanying notes are an integral part of these financial statements







PACIFIC WEBWORKS, INC.

 STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

 

 

 

 

 

 

For the Nine Months Ended September 30,

 

2017 

 

2016 

 

 

 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

Net Loss

$

(20,000)

 

$

Net cash from (used for) operating activities - continuing operations

(20,000)

 

Net cash from (used for) operating activities -  discontinued operations

 

(213,677)

Net cash from (used for) provided by operating activities

(20,000)

 

(213,677)

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

Net cash from (used for) investing activities -  discontinued operations

 

162,204 

Net cash from (used for) provided by investing activities

 

162,204 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

Related party payables

20,000 

 

Net cash from (used for) financing activities - continuing operations

20,000 

 

Net cash from (used for) financing activities -  discontinued operations

 

(29,564)

Net cash from (used for) provided by financing activities

20,000 

 

(29,564)

 

 

 

 

NET DECREASE IN CASH AND CASH EQUIVALENTS

 

(81,037)

 

 

 

 

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

 

178,187 

 

 

 

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

$

 

$

97,150 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

 

 

 

Cash paid during period for :

 

 

 

     Interest

$

 

$

1,011 

     Income Taxes

$

 

$

 

 

 

 

 

 

 

 

     The accompanying notes are an integral part of these financial statements

  





 PACIFIC WEBWORKS, INC.

Notes to Condensed Consolidated Financial Statements

September 30, 2017

(Unaudited)



NOTE 1 – THE COMPANY


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



NOTE 2 – BASIS OF FINANCIAL STATEMENT PRESENTATION


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



NOTE 3 – GOING CONCERN


The Company’s consolidated financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.  The Company filed bankruptcy in February 2016 and in December of 2016 all assets and liabilities of the Company were transferred to the Liquidating Trust.  Furthermore, the Company has an accumulated deficit of $18,139,429 as of September 30, 2017.  These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern.    


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






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


NOTE 4 – DISCONTINUED OPERATIONS


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


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


 

 

 

For the Three Months Ended September 30, 2016

 

For the Nine Months Ended September 30, 2016

Revenues

 

 

 

 

 

 

Hosting, gateway and maintenance fees

 

$

-

$

159,475

 

Product sales

 

 

-

 

28,737

 

 

 

 

-

 

188,212

Cost of sales

 

 

70

 

69,891

 

Gross profit (loss)

 

 

(70)

 

118,320

 

 

 

 

 

 

 

Selling expenses

 

 

-

 

32,966

Research and development

 

 

2,539

 

54,198

General and administrative

 

 

111,018

 

437,870

 

Total operating expenses

 

 

113,557

 

525,034

 

Loss from operations

 

 

(113,627)

 

(406,714)

 

 

 

 

 

 

 

Other income (expense)

 

 

 

 

 

 

Interest income (expense), net

 

 

-

 

(1,011)

 

Gain on sale of assets

 

 

4,105

 

154,833

 

Total other income (expense)

 

 

4,105

 

153,822

 

 

 

 

 

 

 

 

Net loss from discontinued operations

 

$

(109,522)

$

(252,891)

 

 

 

 

 

 

 



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










Cash Flows From Operating Activities

 

 

 

 

Net loss

 

$

(252,891)

 

Adjustments to reconcile net loss to net

 

 

 

 

    cash used for operating activities:

 

 

 

    Gain (loss) on sale of assets

 

 

(154,833)

 

Changes in assets and liabilities:

 

 

 

 

    Deposits

 

 

4,825

 

    Receivables

 

 

77,196

 

    Restricted cash

 

 

62,840

 

    Prepaid expenses and other assets

 

 

77,172

 

    Inventory

 

 

18,942

 

    Accounts payable and accrued liabilities

 

(12,617)

 

    Deferred revenue

 

 

(34,311)

 

    Net cash used for discontinued operating activities

$

(213,677)

 

 

 

 

 

Cash Flows From Investing Activities

 

 

 

 

Proceeds from sale of property and equipment

$

162,204

Net cash provided by discontinued financing activities

$

162,204

 

 

 

 

 

Cash Flows From Financing Activities

 

 

 

 

Cash paid on notes payable

 

$

(29,564)

 

Net cash used for discontinued financing activities

$

(29,564)

 

 

 

 

 


NOTE 5 – RELATED PARTY TRANSACTIONS


During the three months ended September 30, 2017, the Company’s President paid $20,000 on behalf of the Company to vendors for accounting and auditing services required to complete the annual and quarterly reports of the Company which had been delayed because of the Company’s bankruptcy.  As such, a related party payable was recorded in the amount of $20,000 as of September 30, 2017.




NOTE 6 – EQUITY


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


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



NOTE 7 – SUBSEQUENT EVENTS






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


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









ITEM 2.   

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND

          

RESULTS OF OPERATIONS


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


Forward-Looking Statements


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


Executive Overview


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


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


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


Liquidity And Capital Resources


As of September 30, 2017 we had no assets, related party liabilities of $20,000, and an accumulated deficit of $18,139,429.  As of December 31, 2016 we also had no assets and no liabilities and an accumulated deficit of $18,119,429. As of September 30, 2016 we had assets of $97,150 and liabilities of $191,535 and an accumulated deficit of $18,213,814. All assets held at September 30, 2016 were subsequently liquidated per order of the bankruptcy court and all liabilities were paid through a liquidating trust, also per order of the bankruptcy court.


Results of Operations


We had no revenues or operations in the three and nine months ended September 30, 2017, and expenses of $20,000 related to accounting and auditing costs required to complete the annual and quarterly reports which had been delayed because of the Company’s bankruptcy.  






In the three months ended September 30, 2016 we had no revenues, cost of sales of $70, operating expenses of $113,557, a net loss from operations of $113,557, and total other income of $4,105. In the nine months ended September 30, 2016 we had gross revenues of $188,212, cost of sales of $69,891, operating expenses of $525,034, a net loss from operations of $406,714, and total other income of $153,822.  The Company had filed a voluntary petition for bankruptcy in February of 2016 and the revenues and expenses for the quarter ended September 30, 2016 reflect the Company’s wind down to liquidation. All remaining assets and liabilities were transferred from the Company to a liquidating trust on December 28, 2016. We will, in all likelihood, continue to sustain operating expenses without corresponding revenues, as we return the Company to current in its reporting obligations and as we commence the search for a business combination with a company with ongoing business activities. We will depend upon our sole officer and director to make loans to the Company to meet any costs that may occur. All such advances will be interest-free loans or equity contributions. During the quarter ended September 30, 2017 our sole officer and director provided the company with an interest free loan of $20,000.


Going Concern


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


Off-Balance Sheet Arrangements

  

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.



ITEM 4.     CONTROLS AND PROCEDURES



Evaluation Of Disclosure Controls And Procedures

 

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


Internal Control Over Financial Reporting


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


Changes in Internal Control Over Financial Reporting

 

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

 





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

 


 





PART II - OTHER INFORMATION


ITEM 1. LEGAL PROCEEDINGS


None.


ITEM 1A. RISK FACTORS


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


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


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


ITEM 3. DEFAULTS UPON SENIOR SECURITIES


None.


ITEM 4. REMOVED AND RESERVED



ITEM 5. OTHER INFORMATION


None.



ITEM 6. - EXHIBITS


No.

Description

---

-----------

31

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


32

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

 

101

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

the quarter ended September 30, 2017, formatted in XBRL (eXtensible Business Reporting Language); (i) Balance Sheets at September 30, 2017 and December 31, 2016, (ii) Statement of Operations for the three months and nine months ended September 30, 2017 and 2016, (iii)





Statement of Cash Flows for the nine months ended September 30, 2017 and 2016, and (iv) Notes to Financial Statements.

                             









SIGNATURES


         Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


Date: December 26, 2017                 


PACIFIC WEBWORKS, INC.



                                   By: /s/ Daniel Masters

                                       _________________________________

                                       Daniel Masters

                                       President, CEO, CFO, and Director