Pacific States Capitol Corp
Home Profile Resume Products & Services Q & A Contact Clean Coal Tech.

Questions & Answers
Pacific States Capital Corporation


questionHow long does it take to incorporate a new corporation in Nevada?


answerIt can get done in one day! But that is costly!! This is like a lot of other things… we just need to talk! A "reasonable" middle path on time vs. cost would be one week.



questionWhat do I need to do to incorporate my business?


answerThe first step is to have three alternative corporate names for your business. After the company files its articles of incorporation with the Secretary of State, we will need to know who will be the officers, directors, and shareholders for the company, and we can finish the paperwork for the corporation. You provide the money and say "Go!" and we take care of all the details.



questionIn talking to other consulting companies, I notice that things seem to be pretty much "cookie-cutter." Is that the same way with your company?


answerWe have an individualized approach to each entrepreneur for whom we do work. In the final analysis, the corporation will take on the personality of the person running it. Not everyone who has a sole-proprietorship should run a corporation. For some who run a corporation, they should never go public. Everyone is different, and everyone has a different style. All that said, the reason why you are seeing what seems like a lot of "cookie-cutter" approaches is that people tend to stay with what works. The Securities and Exchange Commission (SEC) is used to seeing the materials they want all prepared the same way. There is no creativity here! The banks and other lending institutions want certain things in a file and when those materials work, they get used many times.



questionIf I wanted to buy one of your "Aged" corporations, how long would it take before I could be using it to do business?


answerAs quickly as the ink on your check dries, we hold a shareholder's meeting, and issue new stock certificates to the new owners. This can all be done in one day.



questionI already have a business organized as a corporation. What I really need is capital! Does Pacific States Capital Corporation raise equity capital for small businesses?


answerNo, we don't. Pacific States Capital Corporation is not a securities broker/dealer in any state in the United States; and therefore, we can-not raise capital for your corporation. We are also not certified public accountants, auditors, or attorneys. However, we do work with all of these professionals to get the results our clients want. What you refer to is a major problem today for all small businesses and the entire economy of the United States. As a practical matter, small business is frozen out of the capital markets. Yet, that is where the majority of new jobs are created. A broker / dealer (stock brokerage company) can not afford to work on a "small" deal. Normally, their minimum deal is at least $50 million. Most small businesses don't need that much money. But how does a small corporation obtain permanent capital and grow its business? The Sarbanes-Oxley Act of 2002 (SOX), and the Public Company Accounting Oversight Board (PCAOB) has made the accounting requirements and costs so high that the company has to immediately gain some size to pay the accounting bills. We would need to talk and discuss alternatives.



questionWhat is a "Reverse Merger"?


answerA Reverse Merger is a process where by a privately owned operating company purchases the controlling shareholders position (usually 85% or more) of a "public" corporation by the means of merging the two companies together. The privately-owned company usually provides the operating business and the public company provides the "public structure" of having shareholders, having previously filed registration documents with the Securities and Exchange Commission (SEC), having a trading symbol, and its securities being traded on some organized securities market or exchange. The relative interests of the public "shell" and the private business merging into the "shell" depend upon many things, some of which are the relative sizes of each company, assets, liabilities, net worth, sales, profits, useable tax loss carry-forwards, number of shareholders, what securities exchange the common stock is trading, company histories, and other factors.



questionWhy would a private company want to give up a part of the company to do a reverse merger rather than "going public" as an ongoing stand-alone private business?, … And why would a publicly-traded company want to do a merger with a private company?


answerAssuming that a private company wants to go public, the best answer is saving time and money. To go public as a private company would require two to three years of preparation, preparing audited financial statements that meet the requirements of The Sarbanes-Oxley Act of 2002 (SOX), and the Public Company Accounting Oversight Board (PCAOB), filing a registration statement with the Securities and Exchange Commission (SEC), finding a market maker for the corporations securities, and finding a transfer agent. This entire process may take as long as three years and cost upwards of a million dollars. And,… it is possible, that the process will not be successful. Think of how much the markets have changed in the United States, and the rest of the world, in the last three years, and how a company could have missed its opportunity during that changing market. Whereas, a private operating company could merge with a "shell" company, which has no operating business, but has been through the process in the past of doing financials, filing registration statements, has a transfer agent, an existing shareholder base, a trading symbol, and has a trading market in its securities. The costs of doing a transaction would be the cost of the "shell" having the current shareholders of the "shell" retain a small percentage of stock, legal fees of around $50,000 and accounting fees. Accounting and auditing fee are a "black hole" because of the Sarbanes-Oxley Act of 2002 (SOX), and the Public Company Accounting Oversight Board (PCAOB), but the process is better with the "surviving structure" having been there before. Many well known household named corporations have gone public by merging into a "shell." To mention only two would be Warren Buffet's Berkshire Hathaway Corporation and the New York Stock Exchange (NYSE). A public "shell" would want to do a merger with an operating company because it puts the business into a operating company. A "shell" can-not make its shareholders any money, so therefore it needs an operating company to be back "in-the-game."



questionWhat are the main challenges in doing a "Reverse Merger"?


answerAs you probably can guess by my previous comments, the accounting and auditing are huge challenges. In doing a reverse merger, all of the common stock issued in the formation of the company is issued "restricted." Then, the capital stock has to be registered. To file the registration statement with the Securities and Exchange Commission (SEC), the company has to have audited financial statements. This can be anywhere from "not too difficult" to a nightmare. This is the challenge. Once two years of audited statements have been done and accepted under the standards of the Sarbanes-Oxley Act of 2002 (SOX), and the Public Company Accounting Oversight Board (PCAOB), everything else is manageable.