Pacific Gold Corp fka PCFG

[foxwoodsfan]

The PCFG Story (Part 2):

The rebirth, that’s what I like to call this part.

So here is the company entering 2010 after being torn apart by the “dark years”, a non-reporting PINKSHEET and 2 years delinquent in its SEC filings. PCFG was financially decimated with practically zero to offer investors other than some lame PRs, seeming excuses for delayed production and tons of dilutive financing (soon to be retired). Look at the financial statement for year ending 2009, not very pretty and it wasn’t filed until June of 2011:

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000195/f10k123109.htm

Some Points:

Common Stock, $.001 par value, 5,000,000,000 shares authorized (I will discuss this below)

Through December 31, 2009 the Company has invested approximately $7,900,000 into NRG. (ouch)

Operating expenses for the year ended December 31, 2009 totaled $764,359.

As of December 31, 2009, our assets totaled $1,609,612, which consisted primarily of mineral rights, land and water rights, and related equipment. Our total liabilities were $3,474,033 which primarily consisted of note payable to a shareholder of $1,881,846, accounts payable and accrued expenses of $1,262,310, and convertible debt of $329,877. We had an accumulated deficit of $24,817,628 and a working capital deficit of $3,105,349 at December 31, 2009.

Preferred Stock - $0.001 par value; 5,000,000 shares authorized, 322,728 shares issued and outstanding

Common Stock - $0.001 par value; 500,000,000 shares authorized, 365,470,296, and 160,700,394 shares issued and outstanding at December 31, 2009 and December 31, 2008 respectively

Let’s compare those numbers to the financial statement for year ending 2008 which was filed on March 21, 2011:

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000063/f10k123108.htm

Some points to compare to the above numbers:

Common Stock, $.001 par value, 500,000,000 shares authorized

To date the Company has invested approximately $6,500,000 into Nevada Rae Gold.

Operating expenses for the year ended December 31, 2008 totaled $1,764,552.

Preferred Stock - $0.001 par value; 5,000,000 shares authorized, no shares issued and outstanding

Common Stock - $0.001 par value; 500,000,000 shares authorized, 160,700,394, and 75,127,363 shares issued and outstanding at December 31, 2008 and December 31, 2007 respectively

As of December 31, 2008, our assets totaled $2,208,021, which consisted primarily of mineral rights, land and water rights, and related equipment. Our total liabilities were $4,188,985 which primarily consisted of notes payable and accrued interest to a shareholder of $1,742,346, accounts payable and accrued expenses of $1,507,722 convertible debt of $700,661 and derivative liability of $9,839. We had an accumulated deficit of $23,393,043. Pacific Gold had negative working capital at December 31, 2008.

We know about set-back #1, the dewatering / desanding problems and here it is in plain english from the 2008 10-K, remember, we’ve got no money, no revenue, a boatload invested, floorless convertible debt, the stock is being shorted into oblivion and the plant doesn’t work! (all this is happening as the gold market starts to explode):

In 2007 the Company made some modifications to the plant and site equipment and restarted mining operations. In the summer of 2007 the desanding system that was purchased for the plant failed to operate as anticipated and the mine was eventually shut down in November with limited production having taken place.

In 2008 the Company applied for and received permission to modify its permit to change the makeup of the processing plant. Among the changes were the removal of the three deck screen and the repositioning of the trommel. To solve the desanding difficulties, the company plans to use a series of hydrocyclones and geotextile bags. Additionally, the Company sold its haul trucks and has identified a more cost efficient truck for hauling materials. In the fourth quarter of 2008 most of the plant modifications necessary to resume operations were completed. Remaining work includes electrical, hydrocyclone and the geotextile bag installation.

What did they do to stop the bleeding? How did they protect the company, its assets and its shareholders (including themselves) from being completely liquidated? How did they avoid a hostile take-over from a competitor as the price of gold starts to explode? Well it didn’t sit well with me at all:
http://www.sec.gov/Archives/edgar/data/1137855/000115895709000191/pre14c101409.htm

The purpose of this letter is to inform you that holders of shares representing 50.4% of our aggregate voting power have executed a written consent giving the Board of Directors the authority to amend the Company's Articles of Incorporation to increase the authorized common stock of the Company from 500 million shares to 5 billion shares.

Think about it, Mitch and Rob took no salaries from 2007-2009 what they ended up doing is issuing themselves preferred shares under the compensation program. This gave them controlling interest to make this decision without shareholder consent. The stock had been shorted all the way down to .001!! OK, whatever, it is what it is. They stopped the bleeding and took control of the situation and avoided total liquidation and a take-over. There is no doubt in my mind that when they got into trouble with the dewatering someone dangled the proverbial carrot and they bit not fully understanding the implications and the bear trap they stepped into.

http://www.sec.gov/Archives/edgar/data/1137855/000115895709000181/f8k092309.htm
Item 3.02 – Unregistered Sales of Equity Securities

On September 21, 2009, the Company issued a total of 322,727 shares of Series A Preferred Stock as follows: 127,273 shares were issued to Mitchell Geisler, a director and the Company’s Chief Operating Officer, in full payment of $280,000 of earned but unpaid salary owed to Mr. Geisler, 150,000 shares to Robert Landau, a director and the Company’s Chief Executive Officer, in full payment of $330,000 of earned but unpaid salary owed to Mr. Landau and 45,454 shares to ZDG Investments Limited, an entity controlled by Messers, Geisler and Landau, in full payment of $100,000 of owed but unpaid rent owed to ZDG Investments.
At this point Rob has close to 2MM invested:

Pacific Gold owes $1,742,346 and $1,602,463 to a shareholder as of December 31, 2008, and 2007 respectively.

REBIRTH:

The company did some things prior to 2010 like spinning off Oregon Gold and retiring debt, etc… to keep the doors open and keep the business plan moving, but I won’t go into that. Nevada Rae Gold is the goal, the money machine.

First PR of 2010:

02/16/2010
Pacific Gold Corp. Black Rock Canyon Mine Nears Completion on Mill Modifications
TORONTO, February 16, 2010 - Pacific Gold Corp. (Pink Sheets: PCFG) announced today that the Black Rock Canyon mine is nearing completion of the modifications to its mill.

Nevada Rae Gold has been upgrading the mill to ensure a better efficiency and production rate once operations commence. Currently the Company is working on reconnecting the electrical power to all plant machinery. Having completed the majority of general repairs and upgrades to the plant, this is one of the final steps before production can commence.

Preparations are being made to run a batch of material to test the new system once the electrical is complete. At that time, we will implement the geo-textile tubes for testing as well to ensure we have resolved any issues regarding sedimentary build up within our pond and water flow system.

The advances of the plant are the key to restarting the mine for anticipated production this year, and will aid the company in its search to secure a funding source which is needed by the company.

We have now entered 2010 with the convertible debt retired and a painful lesson learned about bear traps and floorless convertible debt, but we have full knowledge of what we need to do to make the mill work, and a boatload of bills facing us including, but not limited to land lease payments (so we can maintain the NRG mineral rights), legal settlements (from the bills we couldn’t pay). Oh yeah, our stock is now in the toilet, we are a non-reporting PINKSHEET and we can’t generate any interest in the company because we have no financials and our A/S is bloated at 5 BILLION SHARES. But we’re still in business!

Gold prices are really starting to move north. OK, what’s the plan?

First, let’s figure out what we need, dollar wise, to get this thing moving because we are going to have to be very careful about financing because we just got our asses handed to us with the last round:

STEP #1: FINANCING (PREFERABLY NON-DESTRUCTIVE)

06/17/2010
Pacific Gold Corp. Corporate Update
TORONTO, June 17, 2010 - Pacific Gold Corp. (Pink Sheets: PCFG).

Nevada Rae Gold
The Company has completed upgrading the Black Rock Canyon mill to ensure a better efficiency and production rate once operations commence.

Once production resumes the Company will conduct a batch run of gravel to test the new system, including the installation of the geo-textile tubes to ensure that any issues regarding sedimentary build up within the water flow system have been resolved.

The Company is actively searching for working capital in order to restart production at the Mine. The estimated requirements are up to $500,000. Production could begin at the Mine within 8 weeks of the Company securing financing. Due to the lack of potential funding sources in the US capital markets the Company is exploring financing options in Canada as well as the US.

The Company is completing a 43-101 report on the Black Rock Canyon Project which is a required technical report that governs a description of the mining project. This report is necessary in Canada in order to raise public funds for a mining venture. The Company expects the 43-101 report to be complete within the next two weeks.

Now I am not sure that this is how it went down, but the timing seems about right.

Private Equity 2010: National Venture Capital & Growth Equity Summit
Thursday, November 18, 2010
New York, NY

EVENT DESCRIPTION

Starlight Investments, LLC presents its 31st early and later-stage capital conference on November 18.

Principals from 150+ leading investment partnerships, private equity funds and venture capital firms are expected to attend this event to be held at the Yale Club New York. The upcoming event can provide a highly effective and prestigious venue for management to deliver its vision to a captive audience of receptive investors and direct funding sources.

Our forums are among the nation's best attended events with a focus on showcasing fundable companies to an audience of active and highly-qualified investment professionals. These forums are truly unique because of the high concentration of partners and senior level decision makers.

For more information or to register by credit card, please write Bryan Emerson at [e-mail] or call 1 713 225 3028.

EVENT PRESENTERS

Pacific Gold Corp. (EG) [http://www.pacificgoldcorp.com]
Pacific Gold Corp.'s business plan provides for the acquisition and development of production-ready and in-production mining operations. The company is currently focused on alluvial gold and base metals operations located in western North America. Pacific Gold Corp. currently owns four operating subsidiaries. Nevada Rae Gold, Inc. owns and operates the Black Rock Canyon gold mine, located in north-central Nevada. Pilot Mountain Resources Inc. owns Project W, a large tungsten based deposit. Fernley Gold, Inc. has acquired the exclusive lease rights to mine the Lower Olinghouse Placers. Pacific Gold Corp.'s mission statement is to acquire existing natural resource deposits located throughout North America, either by lease or purchase, collectively containing a minimum of $2 billion of gross market value, and to develop the acquired deposits into producing mines as soon as possible following acquisition. Pacific Gold Corp. is actively researching new projects.

03/28/2011
Pacific Gold Corp. - Financing Announcement
TORONTO, March 28, 2011 - Pacific Gold Corp. (Pink Sheets: PCFG) announced today that the Company has issued promissory notes to investors in exchange for approximately $500,000 USD.
The notes pay 10% interest and are due on December 31, 2013. The notes are convertible into common shares of Pacific Gold Corp. at a fixed price of $0.05 per share.

The Company is using the money raised from the notes for new equipment, preparation for production at the Black Rock Canyon Mine, updating SEC filings and audits, as well as for accounts payables.

Is the financing convertible? Yes. Could it be dilutive? Yes. Does it have a FLOOR above the PPS at the time of issuance? Yes:

STEP #2: CLEAN UP OUR HOUSE

So we had a mess to clean up after the “dark years”. We had lawsuits from Komatsu, plus we needed to pay some bills to protect our lease rights. OK, we still had no cash and we hadn’t been able to secure the 500K we need to get moving yet. Let’s get those bills paid so we can move forward. What do we have lots of? Common shares. Is this dilutive? Yes. Did it settle law suits and pay advanced royalties and leases? Yes. Is this smart business? Yes:

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000030/f8k012511.htm
Item 1.01 – Entry into a Material Definitive Agreement

Pacific Gold Corp. has settled its current outstanding litigation with Komatsu Equipment Company. Pacific Gold Corp. has agreed to pay Komatsu Equipment Company $125,000 in cash and 2,000,000 shares of Pacific Gold Corp. common stock. The shares will be restricted and subject to rule 144. The cash payments totaling the $125,000 are as follows; January 31st, $20,000; April 25th, $20,000; August 25th, $25,000; November 25th, $60,000. The 2,000,000 shares of common stock and the January 31st payment of $20,000 have already been delivered to Komatsu Equipment Company.

http://www.sec.gov/Archives/edgar/data/1137855/000115895710000216/f8k102010.htm
Item 3.02 – Unregistered Sales of Equity Securities

Pacific Gold Corp. issued 2,000,000 shares of its common stock to Bullion Monarch Mining Inc., on behalf of its subsidiary Nevada Rae Gold, to settle the $20,000 annual royalty prepayment due on October 1, 2010. The royalty payment is paid in advance of future production that may take place on the leased property. The shares have been issued as restricted stock under the securities laws, with no registration rights granted by the company.

STEP #3: TRANPARENCY

Between the time the company went non-reporting and the time they became current reporters, the OTC market had a fundamental change, remember this was over a 2 year time frame. Originally the goal was to stay current with 8-K filings and then relist with OTCBB. The company did a good job with keeping those 8-Ks current however the markets now favor electronic platforms, enter OTC Markets Group Inc. and a new OTC security rating system, pretty much rendering OTCBB obsolete.

The financials must have been a mess during this 2 year period. Money going out, none coming in, convertible debt, share restructuring, blah, blah, blah… but the company knows that they have to get it straight and come current. This was a pretty daunting and expensive task but one that MUST be done.

BOOM! The company engages auditors and completes NINE financial statements and SEC filings in 5 months!
http://www.sec.gov/Archives/edgar/data/1137855/000115895711000063/f10k123108.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000170/f10q063009.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000174/f10q093009.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000195/f10k123109.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000197/f10q033110.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000207/f10q063010.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000209/f10q093010.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000219/f10k123110.htm

http://www.sec.gov/Archives/edgar/data/1137855/000115895711000237/f10q033111.htm

OTCQB – The U.S. Reporting Company Marketplace
OTCQB is the middle tier of the OTC market. OTCQB companies are reporting with the SEC or a U.S. banking regulator, making it easy for investors to identify companies that are current in their reporting obligations. There are no financial or qualitative standards to be in this tier.

As of July 20, 2011 the company was upgraded to OTCQB (Technically speaking the company is a fully reporting PINKSHEET):

07/20/2011
Pacific Gold Corp. - Stock Quotation Upgrade
TORONTO, July 20, 2011 - Pacific Gold Corp. (OTCQB: PCFG)
Pacific Gold announced today that the Company's stock has been upgraded to now be quoted on the OTCQB market tier of the OTC marketplace.

The OTCQB is the OTC market tier for companies that report to the SEC or a U.S. banking system or insurance regulator. Investors can find Real-Time quotes and information for the Company at http://www.otcmarkets.com/stock/pcfg/quote.

The Company has worked hard to ensure all financial requirements are now up to date. Moving up to the OTCQB will allow the company to reach a larger potential number of investors and bring greater awareness to the Company. The transparency of the OTCQB, and its tier requirements, is of benefit to all current and potential shareholders.

The OTCQB is the chosen market tier of many broker-dealers compared to the OTCBB which is currently undergoing changes. It is the broker-dealers (market makers) who chose whether to quote a Company's shares on OTC Markets Group's OTC Link platform (for OTC Pink, OTCQB and OTCQX securities) or the OTCBB; it is not the Company's choice. Please read below in the "About OTCQB" section of this release for a better understanding of the current quotation markets.

In the future, as the Company develops, PCFG will investigate other potential market tiers that may be a benefit to the Company.

STEP #4: GO GET THE GOLD!

Here is a series of Press Releases that relate to just that, GETTING THE GOLD, beginning in September 2010 (1 year):

Sept 13, 2011
Pacific Gold Corp. - Geotextile Tube EDC Approved
Aug 15, 2011
Pacific Gold Corp. - Production Results and BRCM Update
Aug 2, 2011
Pacific Gold Corp. - B&B Claim Lease Finalized
July 27, 2011
Pacific Gold Corp. - Black Rock Canyon Mine Gold Production
July 8, 2011
Pacific Gold Corp. - NDEP Operating Approval
June 28, 2011
Pacific Gold Corp. - Black Rock Canyon NDEP Site Visit Update
June 14, 2011
Pacific Gold Corp. - Black Rock Canyon Resource Expansion
May 24, 2011
Pacific Gold Corp. - Black Rock Canyon Update
March 8, 2011
Pacific Gold Corp. - Black Rock Canyon Hy-G Equipment Delivered
January 3, 2011
Pacific Gold Corp. - Black Rock Canyon Equipment Order
November 23, 2010
Pacific Gold Corp. - Project Update
November 1, 2010
Pacific Gold Corp. - Black Rock Canyon Mine Successful Geotube Testing
October 21, 2010
Pacific Gold Corp. - Black Rock Canyon Mine Geotextile Tube Test Underway
October 1, 2010
Pacific Gold Corp. - Black Rock Canyon Mine Geotextile Tubes and Polymer Ordered
September 20, 2010
Pacific Gold Corp. - Black Rock Canyon Mine Begins Field Testing with Geotextile Tubes


So this was the rebirth. Four major steps to getting this subsidiary and company back on track. All completed in roughly 1 year’s time. I haven’t gone into the financial situation in great detail here or the stock’s performance or the revenue projections.

The PCFG Story - Part 3

I will get into the timeline for the above events, as well as other company events, and relate them to the financial status and the stock’s performance.

<End Part 2>