i very much know the difference. such is the case you cant chart dilution. im surprised you didnt know that.
could it hit 2 cents maybe. but one thing is absolutely certain they will be diluting the stock.
NOTE 10 – GOING CONCERN
The Company’s financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As of September 30, 2011, the Company had an accumulated deficit of ($26,529,372) negative working capital of ($1,400,755) and negative cash flows from operations of ($670,800) raising substantial doubt about its ability to continue as a going concern. During the quarter ended September 30, 2011, the Company financed its operations through issuance of debt.
NOTE 5 – SHAREHOLDER NOTE PAYABLE/RELATED PARTY TRANSACTIONS
As of September 30, 2011 Pacific Gold owes $2,070,031 in principal to a company owned by the Chief Executive Officer. The amount due is represented by a promissory note accruing interest at 10% per year. The note is due on January 2, 2013 and is convertible into shares of common stock of Pacific Gold at $0.05 per share. Interest expense on the loan for the quarters ended September 30, 2011 and September 30, 2010 was $51,750 and $47,047, respectively. Including interest the balance on the loan at September 30, 2011 was $2,225,281.
Pacific Gold owes its executives $124,380 and $136,636 in short term notes payable reflected in the accrued expenses for the periods ended September 30, 2011, and December 31, 2010, respectively. These short term notes are interest free and due on demand. Pacific Gold owes $434,393 to related parties in short term notes payable for the period ended September 30, 2011. These short term notes are interest free and due on demand.
NOTE 6 – PROMISSORY NOTES
During the nine months ended September 30, 2011, the Company received total proceeds of $807,440 from five individuals. The notes agreements are dated April 1, 2011 and accrue interest at a rate of 10% per annum from the date of the agreements. The principal and accrued interest are due on December 31, 2013.
As of September 30, 2011 Pacific Gold owes $933,140 in promissory notes and accrued interest.
On December 2, 2011, the Company agreed to the assignment of $500,000 in principal amount of an outstanding note, which represents a portion of the note the Company issued to the original debt holder on January 2, 2011. The assignment was to a third party that is not affiliated with the Company. In connection with the assignment, the Company agreed to various modifications of the note for the benefit of the new holder, which enhance and reset the conversion features of the note and change certain other basic terms of the note. As a result of the amendments, the note now (i) has a conversion rate of a 45% discount to the daily VWAP price( a hint, thats not good) of the common stock based on a five day period prior to the date of conversion, which rate will be subject to certain adjustments, (ii) has an annual interest rate of 12%, due at maturity, (iii) has a new maturity date of December 2, 2012, (iv) permits prepayment only with a premium of 50% of the amount being repaid, (v) has ratchet protection of the conversion anti-dilution provisions for all future issuances or potential issuances of securities by the Company at less than the then conversion rate, and (vi) has additional default provisions, including additional events of default and an default interest rate of 24.99%. The Company has also agreed that the assigned debt will not be subordinate to new debt, other than purchase money and similar debt, which may have the effect of limiting the company’s access to additional debt capital while the note is outstanding. Based on the above and without taking into account the conversion of any of the interest to be earned or converted, the principal if fully converted represents the potential issuance of 50,000,000 shares, limited to a maximum conversion right at any one time to 4.99% of the then outstanding shares of common stock of the company.
$50,000 worth of the new note was converted on December 2, 2011. The principal balance as of this filing is $450,000 plus interest.
soo.. whats that make close to $4 million in stock being converted within the next 10 months including interest right?
the notes are all due in less than 1 years time. im here for one reason to let people know that until proven otherwise. this company is in trouble. thats not just me saying it thats them saying it as indicated by the massive accumulated debt in the going concern memoranda.
whats my motive? dont know, but if i knew the company i invested in cut a deal to sell my shares at a 50% discount id probably want to get out before he got em.
who knows maybe the mother load is around the corner. but if it is they sure arent too excited about it. last thing i saw was something about screws. somebody is getting screwed thats for sure.
