UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 3 TO
FORM 8-K
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CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported)
June 22, 2004
GOLDSPRING, INC.
(Exact name of registrant as specified in its charter)
Florida 000-32429 65-0955118
(State or other jurisdiction (Commission (IRS Employer ID No.)
of Incorporation) File Number)
8585 E. Hartford Drive, Suite 400, Scottsdale, Arizona 85255
480-505-4040
(Address and Telephone Number of Registrant's Principal
Executive Offices and Principal Place of Business)
THIS FORM 8-K IS BEING AMENDED BASED ON GOLDSPRING'S DECISION TO CHANGE THE
ACCOUNTING TREATMENT OF THE ORIGINAL TRANSACTION BETWEEN GOLDSPRING, INC. AND
ECOVERY'S GOLDSPRING, LLC AND ECOVAT COPPER NEVADA, LLC FROM A BUSINESS
COMBINATION TO A REVERSE MERGER. SEE ITEM 5 FOR A DETAILED EXPLANATION.
Item 1. Changes in Control of Registrant
On June 12, 2003 (the "Effective Date"), pursuant to a Plan and Agreement of
Reorganization ("Agreement") by exchange by Goldspring, Inc. ("Goldspring" or
the "Company") with Ecovery, Inc. the Company purchased two wholly owned
affiliates of Ecovery, Ecovat Copper Nevada L.L.C. and GoldSpring L.L.C. These
two entities contained substantially all of the mining assets of Ecovery, Inc.
In consideration for these two L.L.C.'s the Company issued a total of 90,000,000
restricted common shares of the Company and 46,500 newly authorized $100
Preferred Convertible/Redeemable shares plus $100,000 in full satisfaction of
$4,750,000 of production payments due from the operation. Total consideration
for the GoldSpring mining claims was $4,750,000, which has been reported as an
asset on the Company's balance sheet. The Agreement was entered into on March
20, 2003, to be effective March 11, 2003 and all of the requirements of
conditions of the closing were satisfied as of June 12, 2003.
Pursuant to such agreement, the Company cancelled the previously issued
79,500,000 restricted common shares and reissued 90,000,000 restricted common
shares to the Ecovery shareholders.
Goldspring, LLC was formed for the purpose of acquiring the Goldspring Placer
Gold Claims and therefore to date has no audited financial statements.
Based on the Bourne and Pelke Engineering Reports, Goldspring, LLC has reported
Gold reserves of 1,199,999 ounces. Based on geological reports, Big Mike has
25,000,000 pounds of reported copper ore reserves.
Pursuant to the terms of the Agreement, Antonio Treminio resigned from the Board
of Directors of the Company and John Cook and Les Cahan were appointed to the
Board of Directors. In addition, Antonio Treminio resigned as President, Chief
Executive Officer and Chief Financial Officer and John Cook was named as
President and Chief Executive Officer of the Company. Les Cahan was named as the
Treasurer of the Company. In addition, on June 9, 2003, the Company appointed
Robert Faber, CPA, to its Board of Directors and named him Chief Financial
Officer of the Company.
Subsequent to the filing of the initial 8K, the Company completed a private
placement offering in which it sold 2 million restricted shares at $0.125. This
financing netted the Company $250,000.00, which was used to advance the gold
production timing on the Company's GoldSpring Placer gold claims near Carson
City, Nevada, and for general corporate purposes. The Company also closed the
Stage 2 equity financing with the London Stock Exchange Listed Investment Trust
which netted approximately $1.7M. This placement, coupled with the private
placement completed in August 2003, provided the Company with nearly $2M in
working capital Proceeds were also used for general corporate purposes and to
pursue additional acquisition opportunities, including the acquisition of The
Plum Mining Company, LLC, which was aquired by the Company in November 2003.
The Acquisition of GoldSPring, LLC and Ecovat Copper Nevada, LLC was approved by
the unanimous consent of the Board of Directors of the Company and by the
majority of the Board of Directors of Ecovery on March 12, 2003.
The following is a biographical summary of the directors and officers of the
Company:
John Cook became the Company's President, Chief Executive Officer and a
Director since March 2003. He is a professional mining engineer (PEng) with an
extensive background in worldwide mining projects and operations. Most recently,
he has been involved in the construction of a gravity gold extraction plant in
eastern Canada. He is the non-executive Chairman of Anaconda Gold Corp. and is a
director of three other public companies. Mr. Cook has previously worked in
senior positions with Navan Resources, Goldcorp and Lac Minerals. In all he has
more than 40 years experience in the mining industry.
Leslie L. Cahan has been our Treasurer and a Director since March 2003. Mr.
Cahan was the former owner of the GoldSpring placer gold claims and will serve
as Company treasurer and will oversee the management of the GoldSpring claims.
He has owned the claims since 1986 and has been intimately involved in the
exploration and development activities over the past 17 years. Mr Cahan has a
history of real estate development in U.S.A and Canada.
Robert Faber has been a member of our Board of Directors and Chief Financial
Officer since June 2003. Mr. Faber is a financial executive with 20 years of
diverse financial management, business and acquisition experience including
substantial international experience. Mr. Faber has extensive experience in
developing and implementing business strategies for complex multi-country,
multi-currency, multi-location and multi-cultural environments as well as
extensive merger and acquisition experience with over 50 separate transactions
ranging from $250 million to $500,000. Mr. Faber previously served as the
Assistant Regional Controller with Allied Waste Industries, where his team was
responsible for management of a $1.2 billion multi state business operation.
Prior to Allied, Faber spent 17 years with Waste Management, Inc., a $12 billion
publicly traded environmental services company, during which time he served at
senior positions such as Director of Finance, London, England. He has extensive
experience in SEC reporting.
The following is a biographical summary of the outside Professional Consultants:
P.K. Rana Medhi, Mining Engineer was the senior operations engineer with Cypress
Minerals for 15 years, working directly with the President of the Company. Rana,
as a senior advisor to the Company, brings large scale earthmoving experience
and extensive mining and permitting background to the Company.
Paul A. Pelke, Registered Geologist, has over 20 years experience as project
manager/geologist in gold projects around the world. A graduate of MIT, Paul, as
a resident of Reno, NV has had the opportunity to be involved in the GoldSpring
claims and has intimate knowledge of the exploration activities through the
years. The knowledge and information he brings is invaluable to the current
operation.
Terry Plummer, President of RMS - Ross Corporation, has 35 years in the placer
mining industry world wide and has visited over 250 placer mining operations.
RMS -Ross is a leading supplier of placer mining processing equipment and a
licensed dealer for Falcon concentrators. Terry will head up GoldSpring's
processing equipment team and will be instrumental in both the start up and
ongoing phases of operations. The initial plant will be capable of handling 200
tons per hour and has been fully designed and specified following Terry's March
site visit.
Jerrie Gasch is a Registered Geophysicist and Geologist from Gasch and
Associates of Sacramento, Ca. www.geogasch.com. Jerrie has been involved in
virtually all of the exploration and engineering work conducted on the
GoldSpring placer claims over the past 20 years.
Item 5. Other Events
On June 24, 2004, we filed the following amended 1934 Exchange Act documents:
(i) Form 10-KSB for December 31, 2003; and (ii) Form 10-QSB for March 31, 2004.
After careful review and consideration, and pursuant to the Company's recent S-1
filing, the Company has elected to treat the original transaction between
GoldSpring, Inc. and Ecovery, Inc. as a reverse merger and not as a business
combination. The purpose for this filing is to restate the financial statements
to reflect the accounting treatment change for recording this transaction.
At the time of the transaction, the Company adopted the business combination
accounting treatment to record this transaction, whereby the market value of the
common stock exchanged for the assets plus the book value of the assets acquired
were used to determine the valuation of the transaction. Employing this
accounting treatment, the Company recorded approximately $8.9 million of
goodwill, an intangible asset. After considering such factors as: (1) the change
in control of the Company based on the number of Goldspring shares issued to the
Ecovery shareholders in the transaction; (2) effective the date of the
transaction, the sole officer and director of the Company resigned; and (3) the
Company, GoldSpring, Inc., had no operations prior to the Transaction, the
Company concluded that the reverse merger accounting treatment more
appropriately reflected the nature of this transaction. Under the reverse merger
accounting treatment, historical asset values (book value of the assets) are
utilized to determine the valuation of the transaction. Accordingly, no goodwill
is generated with this transaction.
Pursuant to the Company's decision to change the accounting treatment, the
financial statements have been restated and are presented within this filing, to
reflect the new treatment. This change in accounting treatment has no impact on
the results of operations of the Company and the Company continues to meet the
published listing requirements established by the American Stock Exchange
(AMEX).
Item 7. Financial Statements and Exhibits
(a) Unaudited Pro Forma Statements are presented after the signature page.
(b) Not applicable.
(c) Exhibits
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, we have
duly caused this report to be signed on our behalf by the undersigned hereunto
duly authorized.
GOLDSPRING, INC.
By: /s/ Stephen B. Parent
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Stephen B. Parent
CEO and Chairman of the Board of Directors
Date: June 23, 2004
GoldSpring, Inc
Unaudited Pro Forma Combined Balance Sheet
As of June 30, 2003
Pro Forma Adjustments
-----------------------------------------------
GoldSpring, LLC
GoldSpring, Inc & Ecovat DR CR Pro Forma
---------------- --------------- ------------ -------------- -------------
ASSETS
CURRENT ASSETS:
Cash 318 1,000 1,318
Accounts Receivable - - -
Inventory - - -
Other Current Assets - - -
---------------- --------------- ------------ -------------- -------------
Total Current Assets 318 1,000 - - 1,318
PROPERTY AND EQUIPMENT - NET:
Land & Development (Big Mike) - 119,138 119,138
Land & Development (Spring Valley
and Gold Canyon) - 4,750,000 4,750,000
Other Property & Equipment 1,118 - 1,118
---------------- --------------- ------------ -------------- -------------
Total Property and Equipment 1,118 4,869,138 - - 4,870,256
OTHER ASSETS:
Goodwill - Net - - -
Other Assets - - -
---------------- --------------- ------------ -------------- -------------
Total Other Assets - - - - -
TOTAL ASSETS 1,436 4,870,138 - - 4,871,574
================ =============== ============ ============== =============
LIABILITIES AND SHAREHOLDER'S EQUITY
CURRENT LIABILITIES:
Accounts Payable - - -
Accrued Expenses 49,322 1,000 50,322
Bank Revolver - - -
Current Portion Long-term Debt - - -
Due to Affiliate - 129,457 129,457 (1) -
Other Payable - 4,750,000 4,650,000 (2) 100,000
---------------- --------------- ------------ -------------- -------------
Total Current Liabilities 49,322 4,880,457 4,779,457 - 150,322
SHAREHOLDER'S EQUITY:
Perferred Stock - - 4,650,000 (2) 4,650,000
Common Stock 18,774 - 59,940 (1) 78,714
Treasury Stock - - -
Additional Paid-in Capital 4,627,391 - 581,092 (3) 69,517 (1) 4,115,816
Deferred Consulting Fees (4,123,278) - (4,123,278)
Accumulated Retained Earnings (570,773) (10,319) 581,092 (3) -
---------------- --------------- ------------ -------------- -------------
Total Stockholder's Equity (47,886) (10,319) 581,092 5,360,549 4,721,252
TOTAL LIABILITIES & SHAREHOLERS'S
EQUITY 1,436 4,870,138 5,360,549 5,360,549 4,871,574
================ =============== ============ ============== =============
GoldSpring, Inc
Unaudited Pro Forma Adjustments
Pro Forma Adjustments reflect the following transactions:
DR CR
----------------- ----------------
1
Additional Paid-in Capital 69,517
Common Stock 59,940
Due to Affiliates 129,457
To record the issuance of 90 million shares of restricted common
stock at a fair market value of $010 per share to Ecovery, Inc
for the purchase of Ecovat Copper Nevada LLC and GoldSpring LLC
2
Preferred Stock 4,650,000
Other Payable 4,650,000
To record the conversion of debt into 46,500 newly authorized
$100 Preferred Convertible / Redeemable shares
3
Accumulated Retained Earnings 581,092
Additional Paid-in Capital 581,092
To eliminate accumulated Deficit of Visator, Inc
GoldSpring, Inc
Unaudited Pro Forma Combined Statement of Operations
For the Six Month Period Ended June 30, 2003
Pro Forma Adjustments
GoldSpring, LLC ---------------------------------------
GoldSpring, Inc. & Ecovat DR CR Pro Forma
--------------- ---------- ----------- ----------- -----------
NET SALES - - -
COST OF SALES - - -
----------- ---------- ----------- ----------- -----------
GROSS PROFIT - - - - -
OPERATING EXPENSES:
General and Administrative - - -
Research and Development - - -
Organization - - -
Marketing and Promotion - - -
Other Operating Expenses - - -
----------- ---------- ----------- ----------- -----------
Total Operating Expenses - - - - -
EBITDA - - - - -
DEPRECIATION AND AMORTIZATION:
Depreciation - - -
Amortization - - -
----------- ---------- ----------- ----------- -----------
Total Depreciation and Amortization - - - - -
EBIT - - - - -
OTHER INCOME AND (EXPENSES):
Interest Income - - -
Other Income - - -
Interest Expense - - -
Other Expense - - -
----------- ---------- ----------- ----------- -----------
Total Other Income and (Expenses) - - - - -
NET INCOME (LOSS) BEFORE TAXES - - - - -
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