x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
|
FLORIDA
|
1081
|
65-0955118
|
||
(State or other jurisdiction of
|
(Primary Standard Industrial
|
(I.R.S. Employer
|
||
incorporation or organization)
|
Classification Code Number)
|
Identification No.)
|
PART
I.
|
3
|
Item
1. Financial Statements.
|
3
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
3
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
5
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
7
|
CONDENSED
CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY
|
9
|
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
|
10
|
Item
2. Management’s Discussion and Analysis of Financial Condition and Results
of Operations.
|
25
|
Item
4. Controls and Procedures.
|
33
|
PART
II.
|
33
|
Item
1. Legal Proceedings.
|
33
|
Item
1A. Risk Factors.
|
33
|
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
|
39
|
Item
3. Defaults Upon Senior Securities.
|
39
|
Item
4. Submission of Matter to Vote of Security Holders.
|
39
|
Item
5. Other Information.
|
39
|
Item
6. Exhibits.
|
39
|
SIGNATURES
|
40
|
EXHIBIT
INDEX
|
|
Certification
of CEO Pursuant to Rule 15d-14(a)
|
|
Certification
of CFO Pursuant to Rule 15d-14(a)
|
|
Certification
of CEO Pursuant to Section 1350
|
|
Certification
of CFO Pursuant to Section 1350
|
|
September 30,
2009
|
December 31,
2008
|
||||||
|
(Unaudited)
|
(Audited)
|
||||||
ASSETS
|
||||||||
CURRENT
ASSETS
|
||||||||
Cash
and cash equivalents
|
$
|
97,089
|
$
|
322,938
|
||||
Total
Current Assets
|
97,089
|
322,938
|
||||||
MINERAL
RIGHTS, PLANT AND EQUIPMENT
|
||||||||
Mineral
rights
|
1,530,547
|
1,530,547
|
||||||
Plant
and equipment, net
|
675,068
|
489,236
|
||||||
Total
Mineral Rights, Plant and Equipment
|
2,205,615
|
2,019,783
|
||||||
RECLAMATION
BOND DEPOSIT
|
766,768
|
766,768
|
||||||
OTHER
LONG-LIVED ASSETS - RECLAMATION
|
357,167
|
408,190
|
||||||
TOTAL
ASSETS
|
$
|
3,426,639
|
$
|
3,517,679
|
|
September 30,
2009
|
December 31,
2008
|
||||||
(Unaudited)
|
(Audited)
|
|||||||
LIABILITIES AND STOCKHOLDERS’
DEFICIENCY
|
||||||||
CURRENT
LIABILITIES
|
||||||||
Accounts
payable
|
$
|
1,633,357
|
$
|
1,222,933
|
||||
Accrued
expenses
|
276,237
|
121,750
|
||||||
Accrued
interest payable
|
4,455,191
|
3,458,734
|
||||||
Convertible
debentures
|
10,187,966
|
10,187,966
|
||||||
Other
debt
|
2,653,525
|
2,660,565
|
||||||
Total
Current Liabilities
|
19,206,276
|
17,651,948
|
||||||
LONG-TERM
DEBT AND OTHER LONG-TERM LIABILITIES
|
||||||||
Long-term
convertible debt obligation, net of current portion
|
3,895,411
|
2,782,563
|
||||||
Long-term
debt obligation, net of current portion
|
590,000
|
500,000
|
||||||
Derivative
liability
|
9,213,327
|
5,368,333
|
||||||
Long-term
reclamation liability
|
1,166,560
|
1,105,342
|
||||||
Total
Long-Term Debt and Other Long-Term Liabilities
|
14,865,298
|
9,756,238
|
||||||
Total
Liabilities
|
34,071,574
|
27,408,186
|
||||||
COMMITMENTS
AND CONTINGENCIES
|
||||||||
STOCKHOLDERS’
DEFICIT
|
||||||||
Common
stock, $.000666 par value 3,950,000,000 shares authorized, shares issued
and outstanding were 3,617,841,740 (September 30, 2009) and 3,380,948,371
(Dec. 31, 2008)
|
2,409,483
|
2,251,712
|
||||||
Additional
paid-in capital
|
24,954,962
|
22,721,504
|
||||||
Accumulated
deficit
|
(58,009,380
|
)
|
(48,863,723
|
)
|
||||
Total
Stockholders’ Deficiency
|
(30,644,935
|
)
|
(23,890,507
|
)
|
||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICICT
|
$
|
3,426,639
|
$
|
3,517,679
|
|
Three Months Ended Sept. 30,
|
|||||||
|
2009
|
2008
|
||||||
REVENUE
FROM GOLD SALES, Net
|
$
|
―
|
$
|
―
|
||||
COST
AND EXPENSES
|
||||||||
Depletion,
depreciation and amortization
|
37,604
|
60,000
|
||||||
Reclamation,
exploration and test mining expenses
|
485,430
|
974,430
|
||||||
General
and administrative
|
330,453
|
429,767
|
||||||
Consultants
and professional fees
|
32,204
|
83,026
|
||||||
Total
Cost and Expenses
|
885,691
|
1,547,223
|
||||||
LOSS
FROM OPERATIONS
|
(885,691
|
)
|
(1,547,223
|
)
|
||||
OTHER
INCOME (EXPENSE):
|
||||||||
Financing
cost – warrant issuances
|
(111,160
|
)
|
―
|
|||||
Derivative
change in fair value
|
(42,643
|
)
|
―
|
)
|
||||
Interest
expense
|
(1,693,994
|
)
|
(723,698
|
)
|
||||
Total
Other Expense
|
(1,847,797
|
)
|
(723,698
|
)
|
||||
NET
LOSS
|
$
|
(2,733,487
|
)
|
$
|
(2,270,921
|
)
|
||
Net
loss per common share – basic
|
$
|
(0.0008
|
)
|
$
|
(0.0007
|
)
|
||
Basic
weighted average common shares outstanding
|
3,615,907,012
|
3,245,163,591
|
|
Nine Months Ended Sept. 30,
|
|||||||
|
2009
|
2008
|
||||||
REVENUE
FROM GOLD SALES, Net
|
$
|
―
|
$
|
―
|
||||
COST
AND EXPENSES
|
||||||||
Depletion,
depreciation and amortization
|
114,073
|
180,000
|
||||||
Reclamation,
exploration and test mining expenses
|
2,577,821
|
2,415,831
|
||||||
General
and administrative
|
1,022,670
|
1,532,774
|
||||||
Consultants
and professional fees
|
177,610
|
141,985
|
||||||
Total
Cost and Expenses
|
3,892,174
|
4,270,590
|
||||||
LOSS
FROM OPERATIONS
|
(3,892,174
|
)
|
(4,270,590
|
)
|
||||
OTHER
INCOME (EXPENSE):
|
||||||||
Financing
cost – warrant issuances
|
(1,856,195
|
)
|
―
|
|||||
Derivative
change in fair value
|
(42,643
|
)
|
(130,604
|
)
|
||||
Other,
net
|
(58,500
|
)
|
551,907
|
|||||
Interest
expense
|
(3,296,145
|
)
|
(2,053,008
|
)
|
||||
Total
Other Expense
|
(5,253,483
|
)
|
(1,631,705
|
)
|
||||
NET
LOSS
|
$
|
(9,145,657
|
)
|
$
|
(5,902,295
|
)
|
||
Net
loss per common share – basic
|
$
|
(0.0026
|
)
|
$
|
(0.0019
|
)
|
||
Basic
weighted average common shares outstanding
|
3,538,215,668
|
3,079,822,345
|
|
|
Nine Month Period Ended
September 30,
|
|
|||||
|
|
2009
|
|
|
2008
|
|
||
OPERATING
ACTIVITIES:
|
||||||||
Net
loss
|
$
|
(9,145,657
|
)
|
$
|
(5,902,295
|
)
|
||
Adjustments
to reconcile net loss to net cash used in operating
activities:
|
||||||||
Depreciation
and amortization
|
114,073
|
485,833
|
||||||
Stock
warrants and stock based compensation
|
2,025,152
|
735,290
|
||||||
Interest
and liquidated damages paid through the issuance of stock
|
1,342,979
|
2,430,211
|
||||||
Accretion
and debt discount interest
|
1,013,513
|
―
|
||||||
Payments
through the issuance of company stock
|
36,000
|
345,236
|
||||||
Financing
Fees
|
52,500
|
―
|
||||||
Derivative
change fair value, net
|
42,643
|
130,604
|
||||||
Net
loss adjusted for non-cash operating activities
|
(4,518,797
|
)
|
(1,775,121
|
)
|
||||
Changes
in operating assets and liabilities:
|
||||||||
Prepaid
and other current assets
|
―
|
95,834
|
||||||
Accounts
payable
|
410,423
|
128,516
|
||||||
Accrued
expenses
|
1,150,945
|
(1,843,785
|
)
|
|||||
Other
operating assets and liabilities
|
―
|
―
|
||||||
Other
|
―
|
317,598
|
||||||
NET
CASH USED IN OPERATING ACTIVITIES
|
(2,957,429
|
)
|
(3,076,958
|
)
|
||||
INVESTING
ACTIVITIES:
|
||||||||
Reclamation
bond deposit
|
―
|
(389,599
|
)
|
|||||
Mineral
claims
|
―
|
(161,150
|
)
|
|||||
Acquisition
/ sale of plant and equipment
|
(128,880
|
)
|
(18,041
|
)
|
||||
NET
CASH USED IN INVESTING ACTIVITIES
|
(128,880
|
)
|
(568,789
|
)
|
||||
FINANCING
ACTIVITIES:
|
||||||||
Principal
payments on Note Payable
|
(37,040
|
)
|
(51,759
|
)
|
||||
Net
proceeds from the issuance of company stock
|
902,500
|
2,472,944
|
||||||
Proceeds
from the issuance of note payable
|
1,995,000
|
1,150,000
|
||||||
NET
CASH PROVIDED BY FINANCING ACIVITIES
|
2,860,460
|
3,571,185
|
||||||
INCREASE
(DECREASE) IN CASH AND CASH EQUIVALANTS
|
(225,849
|
)
|
(74,562
|
)
|
||||
CASH
AND CASH EQUIVALENTS, BEGINNING OF YEAR
|
322,938
|
174,996
|
||||||
CASH
AND CASH EQUIVALENTS, END OF YEAR
|
$
|
97,089
|
$
|
100,434
|
||||
SUPPLEMENTAL
CASH FLOW INFORMATION:
|
||||||||
INCOME
TAXES
|
$
|
―
|
$
|
―
|
||||
INTEREST
PAID
|
$
|
―
|
$
|
―
|
Supplemental
disclosure of non-cash investing and financing activities:
|
||||||||
Issuance
of company stock for interest
|
$
|
1,342,279
|
$
|
1,420,366
|
||||
Issuance
of company stock for liquidated damages
|
$
|
―
|
$
|
1,009,845
|
||||
Conversion
of debt principal into company’s common shares
|
$
|
―
|
$
|
1,520,373
|
||||
Issuance
of company stock to employees
|
$
|
62,250
|
$
|
84,690
|
||||
Issuance
of company stock for directors’ fees
|
$
|
―
|
$
|
234,400
|
||||
Seller
note for acquisition of land
|
$
|
120,000
|
$
|
―
|
||||
Issuance
of company stock for consulting services
|
$
|
―
|
$
|
101,096
|
||||
Issuance
of company stock for software
|
―
|
9,740
|
||||||
Issuance
of company shares for acquisition of mineral claims
|
$
|
―
|
$
|
79,558
|
||||
Issuance
of company stock for financing fees
|
36,000
|
―
|
|
Common
Shares Issued
|
Par value
$.000666
per share
|
Additional
Paid-in
Capital
|
Accumulated
Deficit
|
Total
|
|||||||||||||||
December
31, 2007 (Restated)
|
2,743,508,248
|
$
|
1,827,177
|
$
|
12,969,210
|
$
|
(32,376,040
|
)
|
$
|
(17,579,653
|
)
|
|||||||||
Common
stock issued for:
|
||||||||||||||||||||
Debenture
principal
|
196,155,028
|
130,639
|
1,949,634
|
-
|
2,080,273
|
|||||||||||||||
Debenture
interest
|
151,961,857
|
101,207
|
1,456,497
|
-
|
1,557,704
|
|||||||||||||||
Mineral
rights
|
3,866,667
|
2,575
|
76,983
|
-
|
79,558
|
|||||||||||||||
Consulting
services
|
7,166,704
|
4,773
|
106,323
|
-
|
111,096
|
|||||||||||||||
Mining
software
|
2,434,892
|
1,622
|
8,118
|
-
|
9,740
|
|||||||||||||||
Directors
|
20,000,000
|
13,320
|
221,080
|
-
|
234,400
|
|||||||||||||||
Employees
|
10,665,714
|
7,103
|
132,787
|
-
|
139,890
|
|||||||||||||||
Private
placement
|
137,000,000
|
91,242
|
1,428,758
|
-
|
1,520,000
|
|||||||||||||||
529,250,862
|
352,481
|
5,380,180
|
-
|
5,732,661
|
||||||||||||||||
Warrant
cost and stock based option compensation
|
3,434,323
|
-
|
3,434,323
|
|||||||||||||||||
Liquidated
damages
|
108,189,261
|
72,054
|
937,791
|
-
|
1,009,845
|
|||||||||||||||
Net
loss
|
-
|
-
|
-
|
(16,487,683
|
)
|
(16,487,683
|
)
|
|||||||||||||
December
31, 2008
|
3,380,948,371
|
$
|
2,251,712
|
$
|
22,721,504
|
$
|
(48,863,723
|
)
|
$
|
(23,890,507
|
)
|
|||||||||
Common
stock issued for:
|
||||||||||||||||||||
Debenture
interest
|
133,293,369
|
88,774
|
1,254,205
|
-
|
1,342,979
|
|||||||||||||||
Employees
|
5,000,000
|
3,330
|
58,920
|
-
|
62,250
|
|||||||||||||||
Private
placement
|
98,600,000
|
65,667
|
920,333
|
-
|
986,000
|
|||||||||||||||
236,893,369
|
157,771
|
2,158,492
|
-
|
2,391,229
|
||||||||||||||||
Net
loss
|
-
|
-
|
-
|
(9,145,657
|
)
|
(9,145,657
|
)
|
|||||||||||||
September
30, 2009
|
3,617,841,740
|
$
|
2,409,483
|
$
|
24,954,962
|
$
|
(58,009,380
|
)
|
$
|
(30,644,935
|
)
|
Company
|
Goldspring,
Inc. and Subsidiaries
|
|
APB
|
Accounting
Principles Board
|
|
ARB
|
Accounting
Review Board
|
|
EITF
|
Emerging
Issues Task Force
|
|
FASB
|
Financial
Accounting Standards Board
|
|
FSP
|
FASB
Staff Position
|
|
Plum
LLC
|
Plum
Mining Company, LLC
|
|
SAB
|
SEC
Staff Accounting Bulletin
|
|
SEC
|
Securities
Exchange Commission
|
|
SFAS
or FAS
|
Statement
of Financial Accounting Standards
|
|
SOP
|
Statement
of Position
|
1)
|
Persuasive evidence of an
arrangement exists,
|
2)
|
Delivery has occurred or services
have been rendered,
|
3)
|
The seller’s price to the buyer
is fixed or determinable,
and
|
4)
|
Collectability is reasonably
assured.
|
2009
|
2008
|
|||||||
Comstock
Placer Claims
|
$
|
100,000
|
$
|
100,000
|
||||
Big
Mike Copper Claims
|
69,138
|
69,138
|
||||||
Comstock
Lode Claims
|
1,271,409
|
1,271,409
|
||||||
Water
rights
|
90,000
|
90,000
|
||||||
$
|
1,530,547
|
$
|
1,530,547
|
2009
|
2008
|
|||||||
Land
and Building
|
$
|
677,443
|
$
|
547,166
|
||||
Vehicle
and Equipment
|
302,094
|
302,094
|
||||||
Processing
and Lab
|
704,527
|
585,923
|
||||||
Furniture
and Fixtures
|
49,391
|
49,391
|
||||||
1,733,455
|
1,484,574
|
|||||||
Less
accumulated depreciation
|
(1,058,837
|
)
|
(995,338
|
)
|
||||
$
|
675,068
|
$
|
489,236
|
2009
|
||||
Long-term
asset retirement obligation 1/1/2009
|
$
|
1,105,342
|
||
Additional
obligations incurred
|
―
|
|||
Increase
in present value of the reclamation obligation (accretion
expense)
|
61,218
|
|||
Long-term
asset retirement obligation 09/30/2009
|
$
|
1,166,560
|
2009
|
2008
|
|||||||
Convertible
Debentures Payable (interest rate of 15%)
|
$
|
1,105,908
|
$
|
1,105,908
|
||||
Convertible
Debentures Payable- Mandatory Redemption payment (interest rate of
18%)
|
4,412,058
|
4,412,058
|
||||||
Convertible
Notes Payable – 2006 & 2007 (interest rate of 18%)
|
2,170,000
|
2,170,000
|
||||||
Convertible
Notes Payable – 2008 (interest rate of 11%)
|
2,500,000
|
2,500,000
|
||||||
Total
|
$
|
10,187,966
|
$
|
10,187,966
|
a)
|
8% convertible notes in the
aggregate principal amount of approximately
$11.1 million. The principal amount of the
convertible notes consist of the original $10.0 million investment
plus approximately $1.1 million of accrued penalties associated with
the delay in registration of the common stock held by the investors,
and
|
b)
|
warrants to purchase
approximately 27.8 million shares of common stock at an exercise
price of $0.20 per share, subject to anti-dilution adjustments, which
expire in 4 years.
|
Issued date
|
Face amount
|
|||||||
Winfield
Group Debenture Payable
|
5/15/2006
|
$
|
300,000
|
|||||
Winfield
Group Debenture Payable
|
6/21/2006
|
300,000
|
||||||
Winfield
Group Debenture Payable
|
8/23/2006
|
300,000
|
||||||
Longview
Debenture Payable
|
8/24/2006
|
300,000
|
||||||
Winfield
Group Debenture Payable
|
12/12/2006
|
100,000
|
||||||
Winfield
Group Debenture Payable
|
Q1
2007
|
331,120
|
||||||
Winfield
Group Debenture Payable
|
Q2
2007
|
288,880
|
||||||
Longview
Debenture Payable
|
3/27/2007
|
250,000
|
||||||
$
|
2,170,000
|
Note Principal |
Unamortized
Debt Discount
|
Conversion
Price per
Share
|
Number of
Shares
Underlying
Convertible
Note
|
||||||||||
$ |
2,500,000
|
-
|
$
|
0.015
|
166,666,667
|
2009
|
2008
|
|||||||
Promissory
Notes Payable - 2005 through 2008
|
$
|
2,400,000
|
$
|
2,400,000
|
||||
Debt
– Plum Mine
|
250,000
|
250,000
|
||||||
Equipment
Financing - current portion
|
3,525
|
10,565
|
||||||
$
|
2,653,525
|
$
|
2,660,565
|
2009
|
2008
|
|||||||
Promissory
Notes Payable-July 2005 Financing (interest rate of 17%)
|
$
|
1,200,000
|
$
|
1,200,000
|
||||
Promissory
Notes Payable-December 2007 Financing (interest rate of
18%)
|
600,000
|
600,000
|
||||||
Promissory
Notes Payable-January 2008 Financing (interest rate of
18%)
|
600,000
|
600,000
|
||||||
$
|
2,400,000
|
$
|
2,400,000
|
|
·
|
0%
secured promissory note
|
|
·
|
Default
interest of 5% per annum
|
|
·
|
Maturity
Date: June 2006
|
2009
|
2008
|
|||||||
Long-term
Convertible Notes Payable – July 2008 (Longview Amended and Restated Note)
(interest rate of 11%)
|
$
|
2,782,563
|
$
|
2,782,563
|
||||
Long-term
Convertible Notes Payable – May 2009 (interest rate of 9%)
|
2,000,000
|
―
|
||||||
Embedded
Derivatives (Note accretion)
|
(887,152
|
)
|
―
|
|||||
Long-term
Convertible Notes Payable, net of current portion
|
$
|
3,895,411
|
$
|
2,782,563
|
Expiration
Date:
|
July
10, 2011
|
|
Accrued
Interest:
|
Accrued
interest at July 10, 2008 capitalized into the amended and revised
note.
|
|
Interest
Rate:
|
11%,
payable in arrears in cash or stock (at a 15% discount to market price,
calculated as a 5 day trailing
VWAP)
|
Conversion:
|
The
principal amount of the Note and interest thereon is convertible into
Goldspring Common Stock at a price of $.0175 per share.
|
|
Term:
|
Three
Years
|
|
Anti
Dilution:
|
Full
ratchet
|
Convertible
Loan Amount:
|
Up
to $2,000,000
|
|
Interest
Rate:
|
9%,
payable in arrears in cash or stock at the lender’s
option
|
|
Conversion:
|
The
principal amount of the Note and interest is convertible into Goldspring
Common Stock at the lesser of (A) $.0125 per share, or (B) .85 multiplied
by the “Volume Weighted Average Price” for the Borrower’s Common Stock for
the five trading days immediately prior to the Conversion
Date.
|
Term:
|
Three
Years
|
|
Warrants:
|
50%
Stock warrant coverage (Maximum warrants: 80,000,000) with an exercise
price of $0.02 and a term of four (4) years
|
|
Security:
|
Security
interest in all of the Company’s assets, pari passu with the
existing security
interests
|
Note Principal |
Unamortized
Debt Discount
|
Conversion
Price per
Share
|
Number of
Shares
Underlying
Convertible
Note
|
||||||||||
$ |
2,000,000
|
$ |
877,152
|
$
|
0.0125
|
160,000,000
|
|
2009
|
2008
|
||||||
Long-term
Debt - Winfield Debenture (interest of 11%)
|
500,000
|
500,000
|
||||||
Long-term
Debt – Seller’s Note Land Purchase (interest of 16%)
|
90,000
|
―
|
||||||
Long-term
Debt - Equipment Financing (weighted average interest rate of
7.2%)
|
3,525
|
16,565
|
||||||
Less
current portion
|
(3,525
|
)
|
(10,565
|
)
|
||||
Long-term
debt, net of current portion
|
$
|
590,000
|
$
|
500,000
|
2009
|
$
|
3,525
|
||
2010
|
$
|
―
|
||
2011
|
$
|
―
|
||
2012
and thereafter
|
$
|
―
|
||
Total
|
$
|
3,525
|
2009 Share
Issuances
|
Share Value
|
2008 Share
Issuances
|
Share Value
|
|||||||||||||
Debenture
principal
|
―
|
$
|
―
|
99,847,173
|
$
|
970,273
|
||||||||||
Debenture
Interest
|
125,202,687
|
1,266,041
|
77,145,795
|
700,066
|
||||||||||||
Liquidated
damages
|
―
|
―
|
108,189,261
|
1,009,845
|
||||||||||||
Private
placements
|
98,600,000
|
986,000
|
90,000,000
|
1,000,000
|
||||||||||||
Mineral
claims
|
―
|
―
|
2,200,000
|
32,490
|
||||||||||||
Mining
software
|
―
|
―
|
2,434,892
|
9,740
|
||||||||||||
Consulting
|
―
|
―
|
7,530,000
|
114,240
|
||||||||||||
Employees
and directors
|
4,500,000
|
58,500
|
20,000,000
|
234,400
|
||||||||||||
Total
|
228,302,687
|
$
|
2,310,541
|
407,347,121
|
$
|
4,071,054
|
Note Description
|
Interest
Payment
Number of
shares
|
Value of
Shares
|
See Note
|
|||||||
Convertible
Debentures
Payable-Investors
|
―
|
$
|
―
|
Note
9
|
||||||
Convertible
Debentures Payable - Mandatory Redemption payment
|
―
|
$
|
―
|
Note
9
|
||||||
Long-Term
Convertible Notes – July 2008 (Longview Amended and Restated
Note)
|
8,090,682
|
$
|
76,938
|
Note11
|
Note Description
|
Interest
Payment
Number of
shares
|
Value of
Shares
|
See Note
|
|||||||
Convertible
Debentures Payable-Investors
|
12,300,000
|
$
|
123,000
|
Note
9
|
||||||
Convertible
Debentures Payable - Mandatory Redemption payment
|
99,000,000
|
$
|
990,000
|
Note
9
|
||||||
Long-Term
Convertible Notes – July 2008 (Longview Amended and Restated
Note)
|
21,993,369
|
$
|
229,979
|
Note11
|
·
|
In the first quarter 2009,
$950,000 for 95,000,000 shares at $0.01 per share and 95,000,000
warrants. The warrants have an exercise price of $.015 and a term of
six years. We also issued 3.6 million shares as a placement
fee.
|
·
|
Pursuant to his employment
agreement, Larry Martin, the Company’s Chief Geologist, was issued a total
of 2,500,000 of our unregistered common shares, valued at $32,250 or
$0.0129 per share during
2009.
|
·
|
Pursuant to his agreement with
the Company, Dennis Anderson, the Company’s Senior Engineer, was issued a
total of 2,500,000 of our unregistered common shares, valued at $30,000 or
$0.012 per share during
2009.
|
For the three month period ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
Weighted
average number of common shares outstanding – basic
|
3,616
|
3,245
|
||||||
Dilution
from convertible debt, stock options and warrants
|
2,160
|
1,754
|
||||||
Weighted
average number of common shares outstanding – diluted
|
5,776
|
4,999
|
For the nine month period ended
September 30,
|
||||||||
2009
|
2008
|
|||||||
Weighted
average number of common shares outstanding – basic
|
3,538
|
3,080
|
||||||
Dilution
from convertible debt, stock options and warrants
|
2,160
|
1,754
|
||||||
Weighted
average number of common shares outstanding – diluted
|
5,698
|
4,834
|
·
|
Pursuant to his employment
agreement, Larry Martin, the Company’s Chief Geologist, was issued a total
of 2,500,000 of our unregistered common shares, valued at $32,500 or
$0.0129 per share during
2009.
|
·
|
Pursuant to his agreement with
the Company, Dennis Anderson, the Company’s Senior Engineer, was issued a
total of 2,500,000 of our unregistered common shares, valued at $30,000 or
$0.012 per share during
2009.
|
|
·
|
Installation
of a new three-stage crushing
system;
|
|
·
|
Construction
and operation of two new crushed-mineralized material storage
areas;
|
|
·
|
Implementation
of a high-grade mineralized material milling circuit in a contained
area;
|
|
·
|
Increasing
the capacity of the leach solution pumping
systems;
|
|
·
|
Construction
of a new pregnant solution pond;
and
|
|
·
|
Doubling the Merrill-Crowe
processing plant capacity.
|
|
Estimated Recovery %
|
|||||||||||||||||||
Category
|
Tons
|
Au(ounces per ton)
|
Ag(ounces per ton)
|
Au (%)
|
Ag (%)
|
|||||||||||||||
Mill-grade
|
7,753,000
|
0.053
|
0.597
|
95
|
%
|
80
|
%
|
|||||||||||||
Heap-grade
|
15,161,000
|
0.015
|
0.015
|
65
|
%
|
30
|
%
|
|||||||||||||
Total
|
22,914,000
|
0.028
|
0.371
|
|
·
|
Construction and operation of two
new crushed mineralized material storage
areas;
|
|
·
|
Implementation of a high-grade
mineralized material milling circuit in a contained
area;
|
|
·
|
Expansion of the leach solution
pumping systems;
|
|
·
|
Formation of a new pregnant
solution pond; and
|
|
·
|
Expansion of the Merrill Crowe
processing plant.
|
|
Quarter
ended
September 30,
2009
|
Quarter
ended
September 30,
2008
|
Difference
|
|||||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Depletion
and amortization
|
37,604
|
60,000
|
(22,396
|
)
|
||||||||
Reclamation,
Exploration and Test Mining Expense
|
485,429
|
947,430
|
(489,001
|
)
|
||||||||
General
and Administration
|
330,453
|
429,767
|
(99,314
|
)
|
||||||||
Consulting
and Professional Service
|
32,204
|
83,026
|
(50,822
|
)
|
||||||||
Financing
cost – warrant issuances
|
111,160
|
—
|
111,160
|
|||||||||
Derivative
change in fair value
|
42,643
|
—
|
42,643
|
|||||||||
Interest
Expense
|
1,693,994
|
723,698
|
970,296
|
|||||||||
Net
Loss
|
$
|
(2,733,487
|
)
|
(2,270,921,
|
)
|
$
|
462,566
|
|
Nine months
ended
September 30,
2009
|
Nine months
ended
September 30,
2008
|
Difference
|
|||||||||
Revenue
|
$
|
—
|
$
|
—
|
$
|
—
|
||||||
Depletion
and amortization
|
114,073
|
180,000
|
(65,927
|
)
|
||||||||
Reclamation,
Exploration and Test Mining Expense
|
2,577,821
|
2,415,831
|
161,990
|
|||||||||
General
and Administration
|
1,022,670
|
1,532,774
|
(510,104
|
)
|
||||||||
Consulting
and Professional Service
|
177,610
|
141,985
|
32,625
|
|||||||||
Financing
cost – warrant issuances
|
1,856,195
|
—
|
1,856,195
|
|||||||||
Derivative
change in fair value
|
42,643
|
130,604
|
(87,691
|
)
|
||||||||
Other,
net
|
58,500
|
(551,907
|
)
|
635,407
|
||||||||
Interest
Expense
|
3,296,145
|
2,053,008
|
1,243,137
|
|||||||||
Net
Loss
|
$
|
9,145,657
|
)
|
(5,902,295
|
)
|
$
|
3,243,305
|
|
Principal
|
Interest
|
||||||
Convertible
Debentures Payable – Investors (Note 9)
|
$
|
687,928
|
$
|
32,400
|
||||
Convertible
Debentures Payable - Mandatory Redemption payment (Note 9)
|
4,412,058
|
742,905
|
||||||
Convertible
Notes Payable - 2006 & 2007 (Note 9)
|
1,620,000
|
1,128,970
|
||||||
Promissory
Notes – July 2005 Financing (Note 10)
|
1,200,000
|
1,250,470
|
||||||
Promissory
Notes – Plum Mine (Note 10)
|
250,000
|
53,125
|
||||||
Promissory
Notes Payable – December 2007 (Note 10)
|
600,000
|
122,573
|
||||||
Promissory
Notes Payable – February 2008 (Note 10)
|
600,000
|
114,059
|
||||||
Convertible
Notes Payable – 2008 (Note 9)
|
2,500,000
|
312,833
|
||||||
$
|
11,869,986
|
$
|
3,757,362
|
·
|
In the first quarter 2009,
$950,000 for 95,000,000 shares at $0.01 per share and 95,000,000
warrants. The warrants have an exercise price of $.015 and a term of
six years
|
·
|
Pursuant to his employment
agreement, Larry Martin, the Company’s Chief Geologist, was issued a total
of 2,500,000 of our unregistered common shares, valued at $32,500 or
$0.0129 per share during
2009.
|
·
|
Pursuant to his agreement with
the Company, Dennis Anderson, the Company’s Senior Engineer, was issued a
total of 2,500,000 of our unregistered common shares, valued at $30,000 or
$0.012 per share during
2009.
|
Consolidated
Balance Sheet as of September 30 ,2009
(Unaudited)
|
|
Consolidated
Statement of Operations for the three-month periods ended September 30,
2009 and 2008 (Unaudited)
|
|
Consolidated
Statement of Cash Flows for the three-month periods ended September 30,
2009 and 2008 (Unaudited)
|
|
Notes
to Financial Statements
|
Exhibit
Number
|
Exhibit
|
|
|
||
31
|
Certifications
of Principal Executive Officer and Principal Financial Officer pursuant to
Rule 13a-14(a) and Rule 15d-14(a), promulgated under the Securities
Exchange Act of 1934, as amended.
|
|
|
||
32
|
Certifications
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of
2002
|
GOLDSPRING,
INC.
(Registrant)
|
||
|
||
Date:
November 14, 2009
|
By:
|
/s/
Robert A. Reseigh
|
|
Name:
Robert A. Reseigh
|
|
|
Title:
Principal Executive Officer
|
|
|
||
|
By:
|
/s/
Robert T. Faber
|
|
Name:
Robert T. Faber
|
|
|
Title:
Principal Financial Officer and Principal Accounting
Officer
|