-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OuHTFTzg8iY6dz2HZscgyAIa3gX463OqOtG2EciG7i0KHnYar4wrLbdRgbMy4Lie v89rKH48ieDAyFryNLiYFw== 0001050502-00-000674.txt : 20000516 0001050502-00-000674.hdr.sgml : 20000516 ACCESSION NUMBER: 0001050502-00-000674 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: GOLDSTATE CORP CENTRAL INDEX KEY: 0001050248 STANDARD INDUSTRIAL CLASSIFICATION: GOLD & SILVER ORES [1040] IRS NUMBER: 880354425 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-26705 FILM NUMBER: 631957 BUSINESS ADDRESS: STREET 1: 3305 SPRING MOUNTAIN RD STREET 2: STE 60 CITY: LAS VEGAS STATE: NV ZIP: 89012 BUSINESS PHONE: 8882285526 MAIL ADDRESS: STREET 1: 3305 SPRING MOUNTAIN RD STREET 2: STE 60 CITY: LAS VEGAS STATE: NV ZIP: 89012 10QSB 1 FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2000 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______ to _______ Commission file number 0-26705 GOLDSTATE CORPORATION --------------------- (Exact name of small business issuer as specified in its charter) NEVADA 88-0354425 ------ ---------- (State or other jurisdiction of (I.R.S. Employer incorporation of organization) Identification No.) 3305 Spring Mountain Road, Suite 60 Las Vegas, Nevada 89102 ------------------------------- (Address of Principal Executive Offices) (888) 228-5526 -------------- (Issuer's telephone number) N/A --- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant 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 issuers classes of common equity, as of the latest practicable date: Class Outstanding as of May 11, 2000 - ----- ---------------------------------- Common Stock, $.0003 par value 38,119,300 Transitional Small Business Disclosure Format (check one) Yes No X Part I. FINANCIAL INFORMATION Item 1. Financial Statements - ---------------------------- The unaudited financial statements of Goldstate Corporation (the "Company") reflect all adjustments which are, in the opinion of management, necessary to present a fair statement of the operating results for the interim period presented. GOLDSTATE CORPORATION (An Exploration Stage Company) FINANCIAL STATEMENTS (Unaudited) MARCH 31, 2000 TABLE OF CONTENTS Page ---- Table of Contents 1 Balance Sheet 2 Statements of Operations 3 Statements of Cash Flows 4 Notes to Financial Statements 5 - 10 1 GOLDSTATE CORPORATION (An Exploration Stage Company) Balance Sheet March 31, 2000 ----------- ASSETS CURRENT ASSETS Cash and cash equivalents $ 375 ----------- Total Assets $ 375 =========== LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES CURRENT LIABILITIES Accounts payable - trade $ 13,828 Advances payable 14,595 Accrued interest payable 61,236 Directors fees payable 25,500 Notes payable 775,000 ----------- Total Liabilities 890,159 ----------- STOCKHOLDERS' EQUITY Preferred stock, $.001 par value; authorized 25,000,000 shares; 0 shares issued and outstanding at March 31, 2000 Common stock $.0003 par value; authorized 75,000,000 shares; 37,101,500 shares issued and outstanding at March 31, 2000 11,434 Paid - in capital 2,359,430 Accumulated deficit through development stage (3,260,648) ----------- Total Stockholders' Equity (Deficit) (889,784) ----------- Total Liabilities and Stockholders' Equity $ 375 =========== See accompanying summary of accounting policies and notes to financial statements. 2
GOLDSTATE CORPORATION (An Exploration Stage Company) Statements of Operations Inception (February 28, For the 3 Months Ended Mar. 31, 1996) to ------------------------------ March 31, 2000 1999 2000 ------------ ------------ ------------ REVENUES Other income $ -- $ -- $ 1,026 ------------ ------------ ------------ OPERATING EXPENSES PROPERTY EXPLORATION EXPENSES Research and Development - Sublicense Agreement -- 666,852 666,852 Claims maintenance fees, exploration, and staking costs -- -- 190,507 Impairment loss related to profit sharing interest -- -- 170,000 ------------ ------------ ------------ Total Property Exploration Expenses -- 666,852 1,027,359 ------------ ------------ ------------ ADMINISTRATIVE EXPENSES ------------ ------------ ------------ Total Administrative Expenses 17,368 272,306 2,082,106 ------------ ------------ ------------ Total Operating Expenses 17,368 939,158 3,109,465 ------------ ------------ ------------ Income (Loss) from Operations (17,368) (939,158) (3,108,439) OTHER INCOME (EXPENSES) Other Income -- -- -- Interest Income -- -- -- Interest Expense (18,352) (11,726) (152,209) ------------ ------------ ------------ Net (Loss) $ (35,720) $ (950,884) $ (3,260,648) ============ ============ ============ Earnings (Loss) Per Share - Basic $ (0.002) $ (0.106) $ (0.371) ============ ============ ============ Weighted Average Number of Common Shares Outstanding 16,655,476 8,960,050 8,799,626 ============ ============ ============ See accompanying summary of accounting policies and notes to financial statements. 3
GOLDSTATE CORPORATION (An Exploration Stage Company) Statements of Cash Flows Increase (Decrease) in Cash and Cash Equivalents Inception (February 28, For the 3 Months Ended Mar. 31, 1996) to ------------------------------- March 31, 2000 1999 2000 ----------- ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) $ (35,720) $ (950,884) $(3,260,648) Adjustments to reconcile net (loss) to cash used by operating activities Amortization and depreciation -- -- 90 Impairment loss on profit sharing interest -- -- 170,000 Non-cash technology sub-license expenses -- 690,000 690,000 Net discount recognized on technology notes payable 3,495 903 (3,495) Changes in Assets and Liabilities Accounts payable 1,400 (8,509) 20,937 Director fees payable 1,500 1,500 24,000 Accrued interest payable 18,352 (35,403) 114,205 ----------- ----------- ----------- Net Cash Flows Used for Operating Activities (10,973) (302,393) (2,244,911) ----------- ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES Equipment (purchases) dispositions -- (90) Organization costs -- -- -- ----------- ----------- ----------- Net Cash Flows Provided (Used) for Investing Activities -- -- (90) ----------- ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES Sale of common stock -- 1,017 4,231 Additional paid-in capital -- 567,491 1,703,149 Offering costs -- -- (7,173) Advances received 8,300 270,400 1,880,521 Advances repaid -- (431,000) (1,546,200) Proceeds from notes payable -- -- 105,000 ----------- ----------- ----------- Net Cash Flows Provided by Financing Activities 8,300 407,908 2,139,528 ----------- ----------- ----------- Net increase in cash (2,673) 105,515 (105,473) Cash and cash equivalents - Beginning of period 248 877 -- ----------- ----------- ----------- Cash and cash equivalents - End of period $ (2,425) $ 106,392 $ (105,473) =========== =========== =========== 375 39,469 375
Schedule of Non-Cash Investing and Financing Activities: - -------------------------------------------------------- The Company accrued interest on notes payable of $46,225 and $29,218 for the twelve month periods ended December 31, 1999 and 1998, respectively. The Company has also recognized an additional $19,653 in imputed interest during 1999. The Company has accrued interest on notes payable of $9,250 in 2000. The Company issued 22,970,000 shares of common stock in settlement of a $334,622 in advances payable and $67,827 of accrued interest during 2000. During 2000, the Company has accrued $5,607 of interest on outstanding advances payable. Since inception, the Company has not capitalized any interest. See accompanying summary of accounting policies and notes to financial statements. 4 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Presentation ------------ Goldstate Corporation (the "Company") has included the balance sheet of the Company as of March 31, 2000, and statements of operations and cash flows for the three month periods ended March 31, 2000 and 1999 and for the period from inception (February 28, 1996) to March 31, 2000, together with condensed notes thereto. In the opinion of management of the Company, the financial statements reflect all adjustments necessary to fairly present the consolidated financial condition, results of operations, and cash flows of the Company for the interim periods presented. The interim period financial statements presented should be read in conjunction with the audited financial statements of the Company and notes thereto included with the annual report of the Company on Form 10-K for the year ended December 31, 1999. Earnings Per Share ------------------ As of March 31, 2000 there were 1,000,000 options exercisable to purchase common stock and notes payable plus accrued interest that can be converted to 2,018,000 shares of common stock. As these options and convertible notes payable would have an antidilutive effect on the presentation of loss per share, a diluted loss per share calculation is not presented. Going Concern and Continued Operations -------------------------------------- As of March 31, 2000, the Company had not generated revenues from operations and had working capital and stockholders' deficits of $889,784. Subsequent to December 31, 1999, the Company ceased exploration of the joint venture lode mining claims located in the State of Idaho, pending the outcome of Intergold Corporation and Geneva Resources, Inc.'s ongoing litigation with regard to the transfer of technology pursuant to the Sub-license Agreement between the Company and Geneva Resources, Inc. There is a chance that the technology to be transferred under the Sub-license Agreement may be delayed indefinitely, or cancelled all together, depending on the outcome of the Intergold/Geneva litigation. 5 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) The Company expects to fund ongoing operations for the next twelve months through a combination of advances and future common stock offerings. The Company has been undertaking research relating to new business endeavors and possible new acquisitions. This research may result in the Company entering into business operations and possible acquisitions that are not in the minerals exploration field (Note 9). On January 24, 2000, the Company authorized the execution of agreements for the settlement of outstanding advances and accrued interest payable through the issuance of common stock (Note 3). On March 21, 2000, the Company issued the common shares pursuant to the debt settlements described above. (Note 3). NOTE 2: ADVANCES AND NOTES PAYABLE Advances are comprised of the following: Advances -------- The Company at March 31, 2000 had advances, payable on demand, bearing 10% simple interest, to the following affiliated companies: Tri-Star Financial Services, Inc. $ 14,595 ======== The advance bears 10% simple interest and is due on demand. There is $5,607 of interest accrued on the advance as of March 31, 2000. 6 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 3: STOCKHOLDERS' EQUITY Common Stock ------------ On January 24, 2000, the Company entered into an agreement whereby certain advances and accrued interest payable will be settled through the issuance of common stock. The advances and the corresponding stock issued in settlement are as follows: Advances/Interest Payable as of Common Stock to be 1/24/00 Issued ------- ------------------ Tristar Financial Services, Inc. $ 57,516 3,287,000 shares Investor Communications International, Inc. $296,132 16,912,000 shares Amerocan Marketing, Inc. $ 48,500 2,771,000 shares Total $402,148 22,970,000 shares On March 21, 2000, the Company issued the common shares pursuant to the debt settlements previously authorized for advances and accrued interest payable. The Company settled advances and associated accrued interest totaling $402,148 at $.0175 per share, which represents a 12.5% discount on the value of the common stock as of January 6, 2000, for a total of 22,970,000 shares. NOTE 4: TECHNOLOGY SUB-LICENSE AGREEMENT As of March 31, 2000 the Company has issued the promissory notes and common stock required by the technology sub-license agreement to the various parties, however, the related technology has not been transferred. These promissory notes become due and payable upon the transfer of the technology. Transfer of the technology or any settlement thereto will be contingent on the outcome of the lawsuit described in Note 6. 7 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 5: EMPLOYEE STOCK OPTION PLAN Selected information regarding the Company's employee stock options as of March 31, 2000 are as follows: March 31, 2000 --------------------- Weighted Number Average of Exercise Options Price ------- ----- Outstanding at Beg. of Period -0- -0- Outstanding at End of Period 1,000,000 $.15/share Exercisable at End of Period 1,000,000 $.15/share Options Granted 1,000,000 $.15/share Options Exercised -0- -0- Options Forfeited -0- -0- Options Expired -0- -0- As of March 31, 2000, outstanding options have an exercise price of $.15 per share. The weighted average exercise price of all options outstanding is $.15 per share of common stock and the weighted average remaining contractual life is 19 years 65 days. There are 1,000,000 options that are exercisable with a weighted average exercise price of $.15 per share of common stock. NOTE 6: CONTINGENCIES On October 8, 2000, the Company's joint venture partner, Intergold Corporation ("IGCO"), its wholly owned subsidiary, International Gold Corporation ("IGC"), , and Geneva Resources, Inc. initiated a legal complaint against AuRIC Metallurgical Laboratories, LLC ("AuRIC"), Dames & Moore, Ahmet Altinay, General Manager of AuRIC, and Richard Daniele, Chief Metallurgist for Dames & Moore. The damages sought by IGCO/IGC/Geneva are to be determined in court. The damages incurred stem from reliance on assays and representations made by AuRIC and upon actions and engineering reports produced by Dames & Moore related to the Blackhawk claims. IGCO/IGC/Geneva also alleges there were breaches of contract by AuRIC and Dames and Moore, as well as other causes of action. This legal proceeding affected the timing of technology to be transferred from Geneva to the Company that was scheduled initially before the end of 2000. Subsequent to December 31, 1999, IGC and the Company ceased exploration of the lode-mining claims comprising the profit sharing agreement. 8 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 7: PROPOSED ACQUISITIONS On March 31, 2000, the Company entered into a letter of intent to acquire of 100% of the issued and outstanding shares of National Care Card, a Washington registered company. The Company further executed a letter of intent to purchase 50% of the issued and outstanding shares of Washington Health Card (WHC). WHC is a Preferred Provider Organization (PPO) in Washington State, offering significantly discounted rates on health services to individuals who do not have health insurance, but do have the ability to pay for their own care. NOTE 8: SUBSEQUENT EVENTS On April 15, 2000 the Company entered into an agreement with Tri Star Financial Services, Inc ("Tri Star") to rescind its previous agreement for management services entered into on July 1, 1999. On April 17, 2000, the Company accepted the resignation of Mr. Harold Gooding from the Board of Directors. Mr. Gooding also resigned effective May 5, 2000 from his position as Director and Officer of Intergold Corporation. On April 17, 2000, the Company received assignments of all issued and outstanding grants of options under the Employee Stock Option Plan described in Note 5. On April 20, 2000, the Company announced the appointment of Mr. Carson Walker as director and President of the Corporation. Mr. Walker replaces Harold Gooding as the sole director and officer of the Corporation. On April 20, 2000, the Company entered into a letter agreement to acquire 100% of the issued and outstanding shares of FP Telecom Ltd., a corporation organized under the laws of Alberta ("FP Telecom"). The acquisition of FP Telecom by the Company would be in exchange for a funding commitment of an aggregate of $250,000 CDN and the issuance of an aggregate of 425,000 restricted shares of the Company's common stock, subject to final due diligence and finalization of negotiations relating to the Definitive Agreement. The Company is continuing its due diligence and research regarding the proposed acquisition of FP Telecom Ltd. The Company is in the process of negotiating terms and conditions with respect to a definitive agreement (the "Definitive Agreement") based on the preliminary letter agreement in place. 9 GOLDSTATE CORPORATION (An Exploration Stage Company) Notes to Financial Statements March 31, 2000 - -------------------------------------------------------------------------------- NOTE 8: SUBSEQUENT EVENTS (Continued) On May 3, 2000, the Company converted certain convertible notes in the amount of $175,000 together with accrued interest in the amount of $28,583 at $0.20 per share to issue 1,018,000 common shares in the capital of the Corporation. The following convertible promissory notes payable were converted: Brent Pierce $ 75,000 Rising Sun Capital Corporation 100,000 -------- $175,000 ======== On May 4, 2000, the proposed acquisition interests between Goldstate Corp., National Care Card, and Washington Health Card lapsed. The Company could not reach an agreement on specific terms and conditions with the shareholders and principles of the related companies to enable it to proceed with these acquisitions. The Company advises that it has terminated further negotiations thereto and will not move forward with the proposed acquisitions of, or contracts with, or relating to, these companies. On May 9, 2000, the Company executed an assignment agreement that transferred and conveyed the potential claims and causes of action that the Company may have in connections with the Sub-license Agreement with Geneva Resources, Inc. (Notes 4 and 6). If amounts are recovered by the lawsuit initiated by International Gold Corporation and Geneva Resources, Inc., the Company will receive the equivalent pro rata share of the Claims in relation to all other claims and causes of action for which any damages of settlement amounts are recovered. The Company has made this assignment to Geneva Resources, Inc. 10 Item 2. Management's Discussion and Analysis or Plan of Operation General As of the date of this Report, there has been no income realized from the business operations of the Company. During fiscal year 1999, the Company's primary source of cash was from advances made to the Company. International Gold Corporation ("INGC"), the wholly-owned subsidiary of Intergold Corporation ("IGCO") and AuRIC Metallurgical Laboratories LLC ("AuRIC") had entered into an Agreement for Services whereby AuRIC agreed to perform certain services, including the development of proprietary technology and know-how relating to fire and chemical assay analysis techniques and metallurgical ore extraction procedures developed specifically for properties of IGCO. Dames & Moore subsequently verified the fire and chemical assay techniques and procedures developed by AuRIC, their repeatability, and confirmed preliminary metallurgical recovery testing. Geneva Resources, Inc. ("Geneva") and AuRIC thus entered into a License Agreement whereby AuRIC agreed to supply the proprietary technology to Geneva and grant to Geneva the right to sub-license the proprietary technology to the Company for use on the Blackhawk II Property. The Company and Geneva simultaneously entered into the Sub-License Agreement whereby the Company acquired from Geneva a sub-license to utilize such proprietary information and related precious metals recovery processes on the Blackhawk II Property. Management of the Company has suspended exploration of the Blackhawk II Property indefinitely due to (i) the existence of multiple breaches of the Agreement for Services and the License Agreement by AuRIC; (ii) ensuing litigation initiated by INGC, on behalf of IGCO, and Geneva against AuRIC and Dames & Moore; (iii) the delay of transfer to the Company of the assay and metallurgical recovery technology allegedly developed by AuRIC and confirmed by Dames & Moore; (iv) the rock type of the Company's Blackhawk II claims is thought to be similar to that of the claims located on the Blackhawk Property owned by IGCO and INGC, and without the assay and metallurgical recovery technology, management deems the probability of commercial grade gold or silver located in the Blackhawk II claims to be nil; and (v) the independent assessment information received by IGCO from Strathcona Mineral Services Limited and Mineral Science Limited of London, England pertaining to the Blackhawk Property, which does not support the assay and metallurgical recovery testing results of AuRIC and Dames & Moore. See "Part II. Item 1. Legal Proceedings". Management of the Company and IGCO are also currently involved in negotiations regarding the temporary suspension of the Company's obligations and duties under the Joint Venture Agreement relating to the exploration of the Blackhawk II Property until resolution of the litigation against AuRIC and Dames & Moore. Therefore, management of the Company has currently been undertaking research relating to prospective new business endeavors and acquisitions. This research may result in the Company entering into business operations that are not in the minerals exploration field. On April 20, 2000, the Company entered into a letter agreement to acquire 100% of the issued and outstanding shares of FP Telecom Ltd., a corporation organized under the laws of Alberta ("FP Telecom"). FP Telecom is engaged in the leasing of cellular telephone equipment and services to credit challenged consumers who do not otherwise qualify to sign and operate a network carrier's agreement for service without the support and backing of FP Telecom. Management is currently continuing its due diligence and research regarding the proposed acquisition of FP Telecom. Management is also engaged in the process of negotiating terms and conditions with respect to finalization of a definitive agreement, of which execution and consummation is subject to the satisfactory outcome of the Company's due diligence. 11 Results of Operation - -------------------- Quarter Ended March 31, 2000 compared to March 31, 1999 - --------------------------------------------------------------- For the three-month period ended March 31, 2000, the Company recorded a net loss of $35,720 compared to a net loss of $950,884 in the corresponding period of 1999. During the three-month period ended March 31, 2000, and March 31, 1999, the Company recorded no income. During the three-month period ended March 31, 2000, the Company recorded operating expenses of $17,368 as compared to $939,158 of operating expenses recorded in the same period for 1999. There were no property exploration expenses incurred during the three-month period during 2000 as compared to property exploration expenses incurred in the amount of $666,852 during the same period for 1999. This resulted from suspension of any further exploration of the Blackhawk II Property and the cessation of work orders for research, development and metallurgical services compared to the significant property exploration expenses incurred in the same period for 1999 relating to amounts paid by the Company for research, development and metallurgical services performed associated with contractual agreements between the Company and Geneva Resources, Inc. Administrative expenses decreased significantly by approximately $254,938 in the three-month period in 2000 compared to 1999. This decrease in administrative expenses was due primarily to a decrease in overhead and administrative expenses resulting from the decreasing scale and scope of overall corporate activity pertaining to the exploration of the Blackhawk II Property. Liquidity and Capital Resources - ------------------------------- As of the three-month period ended March 31, 2000, the Company's total assets were $375. This slight increase from fiscal year ended December 31, 1999 was due primarily to an increase in cash and cash equivalents. As of the three-month period ended March 31, 2000, the Company's total liabilities were $890,159. This decrease from fiscal year ended December 31, 1999 was due primarily to the settlement of advances and accrued interest due and owing by the Company in the amount of $402,148 by issuance of 22,970,000 shares of the Company's restricted Common Stock. Stockholders' Equity (deficit) decreased from $(1,256,211) for fiscal year ended December 31, 1999 to $(889,784) for the three-month period ended March 31, 2000. PART II. OTHER INFORMATION Item 1. Legal Proceedings - ------------------------- On September 27, 1999, Geneva and INGC, on behalf of IGCO, initiated legal proceedings against AuRIC by filing a complaint in the District Court of the Third Judicial District for Salt Lake City, State of Utah, alleging (i) multiple breaches of contract relating to the Agreement for Services and the License Agreement, respectively, including, but not limited to, establishment and facilitation of the proprietary technology and fire assay procedures developed by AuRIC at an independent assay lab and failure to deliver the proprietary technology and procedures to the Company, Geneva and Dames & Moore; (ii) breach of the implied covenant of good faith and fair dealing; (iii) negligent misrepresentation; (iv) specific performance; (v) non-disclosure injunction; (vi) failure by AuRIC to repay advances; and (vii) quantum meruit/unjust enrichment. INGC, on behalf of IGCO, also named Dames & Moore in the legal proceeding in a declaratory relief cause of action. On October 8, 1999, Geneva and INGC, on behalf of IGCO, amended the complaint by naming as defendants AuRIC, Dames & Moore, Ahmet Altinay General Manager of AuRIC, and Richard Daniele, Chief Metallurgist for Dames & Moore and specifying damages in excess of $10,000,000. The damages sought by Geneva and INGC, on behalf of IGCO, are based on the general claims and causes of action set forth in the amended complaint relating to reliance on the assays and representations made by AuRIC, the actions and engineering reports produced by Dames & Moore and, specifically, the negligent misrepresentations and inaccuracies contained within some or all of those Dames & Moore reports and breaches of contract by AuRIC and Dames & Moore. 12 Geneva and IGCO, on behalf of IGCO, are currently pursuing all such legal actions and reviewing further legal remedies against AuRIC and Dames & Moore. The Company and Geneva entered into an assignment agreement dated May 9, 2000 (the "Assignment Agreement") that transferred and conveyed to Geneva the potential claims and causes of action that the Company may have under the Sub-License Agreement with Geneva. If damages are recovered in the lawsuit initiated by Geneva and INGC, on behalf of IGCO, the Company will receive a pro rata share of such damages relating to its claims and causes of action in relation to all other claims and causes of action for which damages are recovered. Thus, Geneva will receive any such pro rata share of the damages recovered pursuant to the terms and provisions of the Assignment Agreement. Item 2. Changes in Securities and Use of Proceeds - ------------------------------------------------- No report required. Item 3. Defaults Upon Senior Securities - --------------------------------------- No report required. Item 4. Submission of Matters to a Vote of Security Holders - ----------------------------------------------------------- No report required. Item 5. Other Information - ------------------------- No report required. Item 6. Exhibits and Reports on Form 8-K - ---------------------------------------- (a) No exhibits required. (b) No reports required. On behalf of the Company an 8-K was filed on April 27, 2000, April 20, 2000 and March 30, 2000. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. GOLDSTATE CORPORATION Dated: May 12, 2000 By: /s/ Carson Walker --------------------- Carson Walker, President 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 3-MOS DEC-31-2000 JAN-01-2000 MAR-31-2000 375 0 0 0 0 375 0 0 375 890,159 0 0 0 11,434 2,359,430 375 0 0 0 0 17,368 0 18,352 (17,368) 0 0 0 0 0 (35,720) (0.002) 0
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