U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C.
20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 2003
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from
Commission File No. 000-32429
GOLDSPRING, INC.
(Exact name of small business issuer as specified in its charter)
Florida 65-0955118
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
117 West 58th Street, 2I, New York, New York 10019
(Address of Principal Executive Offices)
(212)581-2506
(Issuer`s telephone number)
(Former name, address and fiscal year, if changed since last report)
Check whether the issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for
such shorter period that the issuer was required to file such reports), and
(2)has been subject to such filing requirements for the past 90 days.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer`s classes of common
equity, as of May 19, 2003: 107,687,346 shares of common stock outstanding,
$0.000666 par value.
BALANCE SHEET
March 31, 2003
ASSETS
CURRENT ASSETS
Cash $ 318
TOTAL CURRENT ASSETS
PROPERTY AND EQUIPMENT, net 1,118
TOTAL ASSETS 1,436
LIABILITIES AND STOCKHOLDERS` DEFICIENCY
LIABILITIES
CURRENT LIABILITIES
Accounts payable and
accrued expenses 49,322
TOTAL CURRENT LIABILITIES 49,322
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS` DEFICIENCY (47,886)
TOTAL LIABILITIES AND
STOCKHOLDERS` DEFICIENCY 1,436
GOLDSPRING, INC.
STATEMENT OF OPERATIONS
For the Three
Months Ended
March 31, 2003 March 31, 2002
REVENUES $ -- $ 511
GENERAL AND ADMINISTRATIVE $ -- $ 41,347
EXPENSES
LOSS BEFORE INCOME TAX BENEFIT $ -- $(40,836)
INCOME TAX BENEFIT $ -- $ --
NET LOSS $ -- $(40,836)
Loss per share of common stock- $ -- $ --
Basic and Diluted
GOLDSPRING, INC.
STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
For the Three
Months Ended
March 31, 2003 March 31, 2002
Cash Flows From Operating Activities
Net loss $ - $(40,836)
Adjustments to reconcile net loss to net
cash used by operating activities
Depreciation 3,316
-
Decrease in prepaid assets 25,000
-
Total adjustments 28,316
-
Net Cash Used in Operating Activities (12,520)
-
Cash Flows From Investing Activities
Security deposits paid 4,355
-
Net Cash Provided by Investing Activities 4,355
-
Cash Flows From Financing Activities
Checks drawn in excess of cash balance 12,852
Net proceeds from notes payable -
related parties 2,238
-
Net Cash Provided by Financing Activities 15,090
-
NET INCREASE IN CASH 6,925
-
CASH OVERDRAFT AT BEGINNING OF PERIOD 318 (6,925)
CASH (OVERDRAFT) AT END OF PERIOD $ 318 $ -
GOLDSPRING, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003 and 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Summarized below are the significant accounting policies of GOLDSPRING, INC.
(f/k/a VISATOR, INC. AND STARTCALL.COM, INC.)
THE COMPANY: The Company, incorporated in the State of Florida effective October
19, 1999 (Date of Inception) under the name of Click and Call, Inc. and,
established its corporate offices in Miami, Florida.
On June 7, 2000, the Company filed an amendment to the Articles of Incorporation
effecting a name change to STARTCALL.COM, INC., and changed its capital
structure as disclosed below.
NATURE OF THE BUSINESS: The Company formerly planned on operating as an
Application Service Provider, or ASP, and offering real-time interaction
technology as an outsource service. In December 2002 management entered into a
Stock Purchase Agreement and Share Exchange with Web Intelligence Technology ApS
and ARN Invest ApS (both Denmark Corporations) in consideration for the issuance
of 79,500,000 shares of Startcall to ARN. The Company subsequently filed a
Certificate of Amendment in the State of Florida changing its name to Visator,
Inc. Pursuant to the agreement, Antonio Treminio and Sylvio Martini resigned as
officers and directors and Anders Nielsen and Jesper Toft were appointed new
officers and directors of the Company. However, in February 2003 the parties to
this agreement entered into a termination agreement and mutual release in which
the parties mutually agreed to terminate and deem null and void the Stock
Purchase Agreement and Share Exchange and ARN Invest agreed to return the
79,500,000 shares of stock in consideration for the payment of $20,000 by the
Company to Web Intelligence. Upon, termination of this agreement, management
determined in the best interest of the shareholders to seek other opportunities
for the Company.
GOLDSPRING, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003 and 2002
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued BASIS OF
PRESENTATION: The Company`s independent accountants are including a "going
concern" paragraph in their audit report accompanying these financial statements
that cautions the users of the Company`s financial statements that these
statements do not include any adjustments that might result from the outcome of
this uncertainty. Furthermore, the "going concern" paragraph states that the
Company`s ability to continue is also dependent on its ability to, among other
things, obtain additional debt and equity financing, identify customers, secure
vendors and suppliers, and establish an infrastructure for its operations.
Management continues to actively seek various sources and methods of short and
long-term financing and support; however, there can be no assurances that some
or all of the necessary financing can be obtained. Management continues to
explore alternatives that include seeking strategic investors, lenders and/or
technology partners and pursuing other transactions that, if consummated, might
ultimately result in the dilution of the interest of the current stockholders.
Because of the nature and extent of the uncertainties, many of which are outside
the control of the Company, there can be no assurances that the Company will be
able to ultimately consummate planned principal operations or secure the
necessary financing.
The accompanying unaudited condensed financial statements have been prepared in
accordance with generally accepted accounting principles for interim financial
information and with the instructions to Form 10-QSB and Article 10 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three Month period ending March 31,
2003 are not necessarily indicative of the results that may be expected for the
year ending December 31, 2003. For further information, refer to the financial
statements and footnotes thereto included in the Company`s 10-KSB and/or Annual
Report for the fiscal year ended December 31, 2002
NOTE B - STOCKHOLDERS` EQUITY
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On September 27, 2002, the stockholders approved an amendment to the Company`s
Articles of Incorporation pursuant to which the Company will increase the
authorized shares of common stock from 50,000,000 to 150,000,000.
On February 4, 2002, the Board of Directors approved an 11-1 forward split of
the Company`s outstanding stock. At the time of the stock split outstanding
common shares totaling 2,207,450 was exchanged for 24,281,950 common shares.
GOLDSPRING, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003 and 2002
NOTE B - STOCKHOLDERS` EQUITY - continued
In October 2002, the Company issued and aggregate of 726,932 shares for
consulting services to be rendered. The Company valued these common shares at
the fair market value on the issuance date of $23,278, which will be amortized
over the service period. On December 6, 2002, the Board of Directors approved a
25-1 reverse split of the Company`s outstanding stock. At the time of the stock
split, outstanding common shares totaling 25,033,882 were exchanged for
1,001,335 common shares. Weighted average shares outstanding for 2001 have been
restated to reflect this reverse split.
During December 2002 the Company entered into consulting agreements for investor
relation services and business advisory services to be rendered. As compensation
for these services the Company issued an aggregate of 18,500,000 shares of
common stock to these consultants. The Company valued these common shares at the
fair market value on the contract date of $18,685,000. However, in concurrent
with the termination agreement further described in Note H, 16,500,000 of these
shares were surrendered to treasury and retired which was recorded as of
December 31, 2002 at the issuance cost of $1.01 per share (the fair market value
on the issuance date) aggregating $16,665,000 that also was recorded as a
reduction to deferred consulting fees and additional paid-in capital. The
consulting services have not yet been performed. The remaining deferred
consulting fees will be amortized over remaining service period.
NOTE C - COMMITMENTS
PURCHASE AND SALE AGREEMENT:
Concurrent with the termination agreement described above, management signed a
letter of intent and subsequent purchase agreement with Ecovery, Inc. ("Seller")
to purchase substantially all of the assets used by Ecovery in conducting its
mining business in Nevada. The assets shall include, but not be limited to
Seller`s accounts receivable, corporate name, trade name, trademarks and logos,
mining tenements and any and all mining claims. The Company agreed to transfer
the 79,500,000 shares held in treasury and issue an additional 10,500,000
restricted shares.
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Pursuant to this letter of intent and agreement, the Company changed its name to
GoldSpring, Inc. As of the date of this audit report the Company is currently
working to finalize the terms of the Asset Purchase Agreement.
GOLDSPRING, INC.
NOTES TO FINANCIAL STATEMENTS
March 31, 2003 and 2002
CANCELLATION OF SHAREHOLDER DEBT:
In March 2003, in consideration for the issuance of 1,198,726 restricted shares
of common stock, certain shareholders of the Company canceled all of the debt
and promissory notes and accrued interest owed to them by the Company.
CONSULTING AGREEMENTS:
In March 2003, the Company entered into three consulting agreements whereby the
Company issued an aggregate of 24,000,000 shares of stock, with an aggregate
offering price of $2,080,000 (fair market value at the time of the contracts) in
exchange for consulting services. Each contract has a term of one year that is
renewable by either party.
Item 2 MANAGEMENT`S DISCUSSION AND ANALYSIS AND PLAN OF OPERATIONS
The following discussion and analysis provides information which management
believes is relevant to an assessment and understanding of our results of
operations and financial condition. The discussion should be read in conjunction
with our financial statements and footnotes. The following discussion and
analysis contains forward-looking statements, which involve risks and
uncertainties. Our actual results may differ significantly from the results,
expectations and plans discussed in these forward-looking statements.
OVERVIEW
During the past two years, we have spent considerable time and capital resources
defining and developing our strategic plan for delivering and operating our
real-time interactive e-commerce technology.
We attempted to manage the marketing launch of our services from our office in
New York where we currently manage the
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administration and coordination for all our other activities. Such
responsibilities included the administration of our Interactive Online Services
and related products to business` websites as well as technical support, daily
bookkeeping and scheduling of employee responsibilities. Our primary service was
ClickiChat/Support which was automatically available to our potential customers
via Online. Upon receiving an online order it takes approximately 60 to 120
seconds to process such order and send back to the new register user an account
number, login name and password with all instructions in order to set-up their
new Interactive Online Solution ClickiChat/Support account. Please visit our
sign up page at: www.liveinternethelp.com/signup.htm.
We attempted to launch our services in July 2001 and intended to continue
attracting new marketing partners to continue increasing the brand name of our
services and continue increasing our customer base. We also intended to continue
our ongoing marketing campaign for the following 12 months but we were spending
approximately $15,000 per month. In order to fund the Company, our officers and
directors had to continue to make capital contributions since we failed to
generate sufficient revenue to continue operations. Finally, in December 2002,
our management decided to close our current business operations and pursue
potential merger candidates.
In December 2002 we entered into a Stock Purchase Agreement and Share Exchange
with Web Intelligence Technology ApS and ARN Invest ApS (both Denmark
Corporations) in consideration for the issuance of 79,500,000 shares of
Startcall to ARN. However, in February 2003 the parties to this agreement
entered into a termination agreement and mutual release in which the parties
mutually agreed to terminate and deem null and void the Stock Purchase Agreement
and Share Exchange and ARN Invest agreed to return the 79,500,000 shares of
stock in consideration for the payment of $20,000 by the Company to Web
Intelligence. Concurrent with the execution of the termination agreement
described above, management signed a letter of intent and subsequent purchase
agreement with Ecovery, Inc. to purchase substantially all of the assets used by
Ecovery in conducting its mining business in Nevada. The assets shall include,
but not be limited to Seller`s accounts receivable, corporate name, trade name,
trademarks and logos, mining tenements and any and all mining claims. The
Company agreed to transfer the
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79,500,000 shares held in treasury and issue an additional 10,500,000 restricted
shares.
PLACER GOLD MINING - PRE-PRODUCTION ACTIVITIES
The Company`s initial focus for immediate development is the GoldSpring Placer
Gold mining claims, located about 6 miles east of Carson City, Nevada. According
to Donald A. Bourne, P.Eng, consulting geologist, in his report dated March
1994, which was completed right after the 1993 extensive sampling and testing
programs, "these claims have reported reserves of 1,199,000 ounces of gold which
is contained in 41,000,000 cubic yards of sand and gravel".
The GoldSpring property consists of 21 unpatented placer mining claims covering
approximately 850 acres. The claim groups lie immediately south of the famous
Comstock Lode gold - silver mining camp, which is considered the source of the
placer gold values in the immediate area.
A recent geological report dated May 2003 prepared by consulting geologist Paul
A. Pelke, of Reno, Nevada, further supports the earlier Bourne report and adds
important additional information that the writer learned from time spent with
John Uhalde, a mining engineer that was intimately associated with the previous
owners of the claims.
Pelke`s knowledge, coupled with his long term relationship with Jerrie Gasch
registered Geophysicist and Geologist of Gasch and Associates, from Sacramento ,
California, has enabled the Company to identify the production starting location
and to design the operating plant for initial production. Gasch has been
involved in virtually all exploration work carried out on the claims over the
past 20 years.
The Company is actively pursuing financing proposals in the range of $1,000,000
to $1,500,000, which will enable, once finalized, the commencement of gold
production and revenue.
Once funding is suitably arranged, the Company should be able to Implement its
business plan within 90-120 days.
Development Stage Revenues
--------------------------
Our recent operations have been devoted primarily to preparing to place the
GoldSpring Placer Gold Claims into production. Our ability to achieve our
business objectives is contingent upon our success in raising additional capital
which, once finalized, will lead to revenues realized from operations.
DEVELOPMENT STAGE EXPENSES
Development stage expenses during the twelve-month period primarily consisted of
accounting, legal, consulting and office expenses which are necessitated by
operating in a public environment. Ongoing increases to development stage
expenses are anticipated during the year 2003.
LIQUIDITY AND CAPITAL RESOURCES
We have received capital contributions and related party loans to maintain
operations but we have experienced cash flow shortages that has slowed our
growth and forced to pursue other business opportunities. Through March 31,
2003, the consequences of those cash flow shortages was an increase of accrued
expenses and stockholder loans.
We have primarily financed our activities from sales of our capital stock and
from loans from our shareholders. A significant portion of the funds raised from
the sale of capital stock was used to cover working capital needs such as office
expenses and various consulting and professional fees.
We have essentially ceased software related operations because of inadequate
cash flow. Our new business of operating a producing gold mine is contingent
upon our ability to secure adequate financing. Management believes that this
financing will be necessary in order for us to continue as a going concern. We
are actively pursuing several forms of private debt and equity financing,
although there can be no assurances that we will be successful in procuring such
financing or that it will be available on terms acceptable to us.
Item 3. Controls and Procedures
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(a) Evaluation of disclosure controls and procedures.
Our Chief Executive Officer and Chief Financial Officer (collectively the
"Certifying Officers") maintain a system of disclosure controls and procedures
that is designed to provide reasonable assurance that information, which is
required to be disclosed, is accumulated and communicated to management timely.
Under the supervision and with the participation of management, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule [13a-14(c)/15d-14(C))]
under the Exchange Act) within 90 days prior to the filing date of this report.
Based upon that evaluation, the Certifying Officers concluded that our
disclosure controls and procedures are effective in timely alerting them to
material information relative to our company required to be disclosed in our
periodic filings with the SEC.
(b) Changes in internal controls.
Our Certifying Officers have indicated that there were no significant changes in
our internal controls or other factors that could significantly affect such
controls subsequent to the date of their evaluation, and there were no such
control actions with regard to significant deficiencies and material weaknesses.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. Not Applicable
Item 2. Changes in Securities. None
Item 3. Defaults Upon Senior Securities. Not Applicable
Item 4. Submission of Matters to a
Vote of Security Holders. None
Item 5. Other Information. None
Item 6. Exhibits and Reports of Form 8-K. On March 5, 2003 we filed an 8K
based on change in of management.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed in its
behalf by the undersigned, thereunto duly authorized, on May 20, 2003.
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GOLDSPRING, INC.
Date: May 20, 2003 By:/s/ John Cook
--------------------------------------
John Cook
Chief Executive Officer and President
CERTIFICATION OF
CHIEF EXECUTIVE OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, John Cook certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Goldspring, Inc.
2. Based on my knowledge, this quarterly report 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 quarterly
report;
3. Based on my knowledge, the financial statements, and other financial
information included in the quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in the quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
if any, is made known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant`s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about
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effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the registrant`s
auditors and the audit committee of registrant`s board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant`s ability to record,
process, summarize and report financial data and have identified for the
registrant`s auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant`s internal controls; and
6. I have indicated in the quarterly report whether there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: May 20, 2003
/s/ John Cook
----------------------------------------
John Cook
Chief Executive Officer and President
CERTIFICATION OF
CHIEF FINANCIAL OFFICER
PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
I, Leslie Cahan certify that:
1. I have reviewed this quarterly report on Form 10-QSB of Goldspring, Inc.
2. Based on my knowledge, this quarterly report 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 quarterly
report;
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3. Based on my knowledge, the financial statements, and other financial
information included in the quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in the quarterly report;
4. I am responsible for establishing and maintaining disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the
registrant and have:
a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
if any, is made known to us by others within those entities, particularly during
the period in which this quarterly report is being prepared;
b) evaluated the effectiveness of the registrant`s disclosure controls and
procedures as of a date within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about effectiveness
of the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;
5. I have disclosed, based on our most recent evaluation, to the registrant`s
auditors and the audit committee of registrant`s board of directors (or persons
performing the equivalent functions):
a) all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrant`s ability to record,
process, summarize and report financial data and have identified for the
registrant`s auditors any material weakness in internal controls; and
b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant`s internal controls; and
6. I have indicated in the quarterly report whether there were significant
changes in internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.
Dated: May 20, 2003
/s/ Leslie Cahan
----------------------------------------
Leslie Cahan
Chief Financial Officer and Treasurer
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