PROXY STATEMENT PURSUANT TO
SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2)
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
GOLDSTATE CORPORATION
----------------------------------------------
(Name of Registrant as Specified in its Charter)
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction
applies:________.
(2) Aggregate number of securities to which transaction applies:________.
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pursuant to Exchange Act Rule 0-11. (Set forth the amount on which the
filing fee is calculated and state how it was determined):_______.
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously.
Identify the previous filing by registration statement number or the Form
or Schedule and the date of its filing.
(1) Amount previously paid:______
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(4) Date Filed:
<PAGE>
GOLDSTATE CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2001
Notice is hereby given that a Special Meeting of the Shareholders (the
"Meeting") of Goldstate Corporation, a Nevada corporation (the "Company") will
be held at 2:00 p.m. on January 30, 2001, at 1255 West Pender Street, Vancouver,
British Columbia, Canada V6E 2V1, and any adjournments or postponements thereof
(the "Special Meeting") for the following purposes:
1. To authorize the Board of Directors to effect a reverse stock split of
one-for-ten (the "Reverse Stock Split") of the Company's outstanding
Common Stock, depending upon a determination by the Board of Directors
that a Reverse Stock Split is in the best interests of the Company and
its Shareholders with such post-split shares of Common Stock being
referred to herein as the "New Common Stock";
2. To adopt an amendment (the "Amendment") to the Company's Articles of
Incorporation, as amended (the "Articles"), which would effect the
Reverse Stock Split, without having any effect upon the authorized and
unissued shares of Common Stock;
3. To elect the following three (3) persons to serve as directors of the
Company until their successor shall have been elected and qualified:
Carson Walker, Ron F. Horvat and James Bunyan;
4. To ratify the selection of LaBonte & Co. as the independent public
accountants of the Company for the fiscal year ending December 31,
2000; and
5. To consider and act upon such other business as may properly come
before the Meeting or any adjournment thereof.
Only Shareholders of record at the close of business on December 6, 2000
shall be entitled to notice of and to vote at the Meeting or any adjournments
thereof. All Shareholders are cordially invited to attend the Meeting in person.
By Order of the Board of Directors
/s/ Carson Walker
-----------------
Carson Walker, President
December 19, 2000
Blaine, Washington
<PAGE>
IF YOU DO NOT EXPECT TO BE PRESENT AT THE MEETING AND WISH YOUR SHARES OF COMMON
STOCK TO BE VOTED, YOU ARE REQUESTED TO SIGN AND MAIL PROMPTLY THE ENCLOSED
PROXY WHICH IS BEING SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS. A RETURN
ENVELOPE WHICH REQUIRES NO POSTAGE IF MAILED IN THE UNITED STATES IS ENCLOSED
FOR THAT PURPOSE.
GOLDSTATE CORPORATION
1255 West Pender Street
Vancouver, British Columbia, Canada V6E 2V1
PROXY STATEMENT
Dated
December 19, 2000
SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JANUARY 30, 2001
GENERAL
This Proxy Statement is being furnished to the Shareholders of Goldstate
Corporation, a Nevada corporation (the "Company") in connection with the
solicitation of proxies by the Board of Directors of the Company (the "Board of
Directors") from holders (the "Shareholders") of outstanding shares of common
stock, $0.0003 par value, of the Company (the "Common Stock"), for use at the
Special Meeting of the Shareholders to be held at 2:00 P.M. on January 30, 2001,
at 1255 West Pender Street, Vancouver, British Columbia V6E 2V1, and any
adjournments or postponements thereof (the "Special Meeting"). This Proxy
Statement, Notice of Special Meeting of Shareholders and the accompanying Proxy
Card are first being mailed to shareholders on or about January 3, 2001.
VOTING SECURITIES AND VOTE REQUIRED
Only Shareholders of record at the close of business on December 6, 2000,
(the "Record Date") are entitled to notice of and to vote the shares of Common
Stock, $0.0003 par value, of the Company held by them on such date at the
Meeting or any and all adjournments thereof. As of the Record Date, 38,119,500
shares of Common Stock were outstanding. There was no other class of voting
securities outstanding at that date.
Each share of Common Stock held by a Shareholder entitles such Shareholder
to one vote on each matter that is voted upon at the Meeting or any adjournments
thereof.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Common Stock is necessary to constitute a quorum at the
Meeting. Assuming that a quorum is present, (i) the affirmative vote of the
holders of a majority of the shares of Common Stock outstanding will be required
to authorize the Board of Directors to effect the Reverse Stock Split; (ii) the
affirmative vote of the holders of a majority of the shares of Common Stock
outstanding will be required to approve the amendment to the Company's Articles
of Incorporation to effect the Reverse Stock Split; (iii) the affirmative vote
of the holders of a majority of the shares of Common Stock outstanding will be
required to approve the election of Carson Walker, Ron F. Horvat and James
Bunyan as the directors of the Company; and (iv) the affirmative vote of the
holders of a majority of the shares of Common Stock outstanding will be required
to ratify the selection of LaBonte & Co. as the independent public accountants
of the Company for the fiscal year ending December 31, 2000.
<PAGE>
Abstentions and broker "non-votes" will be counted toward determining the
presence of a quorum for the transaction of business; however, abstentions will
have the effect of a negative vote on the proposals being submitted. Abstentions
may be specified on all proposals. A broker "non-vote" will have no effect on
the outcome of any of the proposals.
If the accompanying proxy is properly signed and returned to the Company
and not revoked, it will be voted in accordance with the instructions contained
therein. Unless contrary instructions are given, the persons designated as proxy
holders in the accompanying Proxy will vote "FOR" the Reverse Stock Split, "FOR"
the approval of the amendment to the Company's Articles of Incorporation, "FOR"
approval of the nominated individuals to the board of directors, and "FOR"
approval of ratification of LaBonte & Co. as the independent public accountants
of the Company, and as recommended by the Board of Directors with regard to any
other matters or if no such recommendation is given, in their own discretion.
Each Proxy granted by a Shareholder may be revoked by such Shareholder at any
time thereafter by writing to the Secretary of the Company prior to the Meeting,
or by execution and delivery of a subsequent Proxy or by attendance and voting
in person at the Meeting, except as to any matter or matters upon which, prior
to such revocation, a vote shall be been cast pursuant to the authority
conferred by such Proxy.
The cost of soliciting these Proxies, consisting of the printing, handling,
and mailing of the Proxy and related material, and the actual expense incurred
by brokerage houses, custodians, nominees and fiduciaries in forwarding proxy
materials to the beneficial owners of the shares of Common Stock, will be paid
by the Company.
In order to assure that there is a quorum, it may be necessary for certain
officers, directors, regular employees and other representatives of the Company
to solicit Proxies by telephone or telegraph or in person. These persons will
receive no extra compensation for their services.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as of the Record Date
concerning: (i) each person who is known by the Company to own beneficially more
than 5% of the Company's outstanding Common Stock; (ii) each of the Company's
executive officers, directors and key employees; and (iii) all executive
officers and directors as a group. Common Stock not outstanding but deemed
beneficially owned by virtue of the right of an individual to acquire shares
within 60 days is treated as outstanding only when determining the amount and
percentage of Common Stock owned by such individual. Except as noted, each
person or entity has sole voting and sole investment power with respect to the
shares shown.
<PAGE>
SHARES BENEFICIALLY OWNED
NAME POSITION AMOUNT AND NATURE OF PERCENT OF
BENEFICIAL OWNERSHIP OWNERSHIP
--------------------------------------------------------------------------------
Cybergarden Development Inc. Shareholder 5,950,000 15.6%
1105 Park Drive
Vancouver, British Columbia
V6P 2J7 Canada
Epaulette Investments S.A. Shareholder 3,287,000 8.6%
60 Market Square
P.O. Box 364
Belize City, Belize
No 50 Corporate Ventures Ltd. Shareholder 7,412,000 6.6%
1255 Pender Street
Vancouver, British Columbia
V6E 2V1 Canada
Marnie Stanton Shareholder 2,771,000 7.3%
19489 115th A Avenue
Pitt Meadows, British Columbia
V3Y 1R5 Canada
All officers and directors -0-
as a group (1 person)
-------------------------------
EXECUTIVE COMPENSATION
Summary Compensation Table. The following table sets forth the annual and
long-term compensation for services in all capacities to the Company during the
past three fiscal years ended December 31st, of Brian Harris, Ronald Lambrecht
and Harold Gooding.
Summary Compensation Table
Annual Compensation Awards Payouts
--------------------- ---------- -------
$ $ $ $ # $ $
Name and Position Salary Bonus Other RSA Options LTIP Other
----------------- ------ ----- ----- --- ------- ---- -----
Brian Harris 1997 0 0 0 0 0 0 0
Pres./Director
Ronald Lambrecht 1997 0 0 0 0 0 0 0
Secy./Director
Harold Gooding 1997 0 0 0 0 0 0 0
Pres./Director 1998 0 0 0 0 0 0 0
1999 0 0 0 0 0 0
As of the date of this Proxy Statement, officers and directors of the
Company are reimbursed for any out-of-pocket expenses incurred by them on behalf
of the Company.
<PAGE>
COMPENSATION PURSUANT TO PLANS
Options and Warrants. A total of 1,500,000 shares of the Company's Common
Stock, $0.0003 par value, have been reserved for issuance to officers, directors
and consultants of the Company pursuant to the Company's existing non-qualified
stock option plan (the "Stock Option Plan"). Options allow for the purchase of
the Company's restricted Common Stock at a price of $0.25 per share. According
to the provisions of the Stock Option Plan, the Stock Option Plan is
administered by the board of directors which determines the persons to be
granted options, the number of shares subject to such options, the exercise
price of such options and the option period, and the expiration date, if any, of
such options. The exercise of an option may be less than fair market value of
the underlying shares of Common Stock. No options granted under the Stock Option
Plan will be transferable by the optionee other than by that provided by the
Option Share Grant Agreement or will or the laws of descent and distribution,
and each option will be exercisable only by such optionee. The options provide
for adjustment of the number of shares issuable in the case of stock dividends
or stock splits or combinations and adjustments in the case of recapitalization,
merger or sale of assets.
On April 17, 2000, the Company received assignments from the respective
individuals listed below representing all of the options previously granted
under the Non-Qualified Stock Option Plan exercisable into an aggregate of
1,000,000 shares of Common Stock. As of June 30, 2000, all options granted to
the following individuals have been assigned to the Company for possible
redistribution at a future date according to the direction of the Board of
Directors:
Name Number of Shares Granted
---- ------------------------
Gino Cicci 200,000
Grant Atkins 300,000
Brent Pierce 300,000
Harold Gooding 100,000
Marcus Johnson 100,000
Total 1,000,000
CERTAIN TRANSACTIONS
On December 11, 1997, the Company, Intergold Corporation ("IGCO") and its
wholly-owned subsidiary, International Gold Corporation ("INGC") entered into a
joint venture agreement pertaining to the joint exploration of gold and silver
on the Blackhawk II Property (the "Joint Venture Agreement"). Pursuant to the
terms of the Joint Venture Agreement, the Company paid $100,000 and issued
1,000,000 shares of its restricted common stock to IGCO in exchange for the
purchase of a future profit sharing interest. The terms of the Joint Venture
Agreement further provided that the Company would be the operating partner and
be responsible solely for providing funding for all exploration expenses to be
incurred on the Blackhawk II Property. In accordance with the terms of the Joint
Venture Agreement, the Company would receive eighty percent (80%) of the net
profits to be realized from the joint venture until its invested capital is
repaid, and IGCO and INGC would receive twenty percent (20%) of the net profits
to be realized from the joint venture. After the invested capital by the Company
had been repatriated, the Company would then receive fifty-one percent (51%) of
the net profits to be realized from the joint venture and IGCO and INGC would
retain forty-nine percent (49%) of the net profits realized from the joint
<PAGE>
venture. The Company had also agreed to contribute all future capital
requirements for the further exploration and mining operation costs of the
claims on the Blackhawk II Property.
As of the date of this Proxy Statement, and effective September 1, 2000,
the Company has ceased continuation of payments of any maintenance fees for any
of the Blackhawk II Property, as management of the Company does not believe that
the Blackhawk II claims contain any commercial grade of gold or silver. See
"Part II. Item 1. Legal Proceedings" in the Company's annual report on Form
10-KSB and "Part II. Item 1. Legal Proceedings" in the Company's quarterly
reports on Form 10-QSB.
The above described transaction was conducted pursuant to arms-length
negotiations and is on terms as fair as those that would have been obtainable
from independent third parties. The board of directors of the Company has not
adopted or approved any policy regarding future transactions with related third
parties.
As of the date of this Proxy Statement, the Company has not entered into
any other contractual arrangements with related parties other than those
transactions resulting primarily from advances made by related parties to the
Company and subsequent issuance of notes.
There is not any currently proposed transaction, or series of the same to
which the Company is a party, in which the amount involved exceeds $60,000 and
in which, to the knowledge of the Company, any director, executive officer,
nominee, five percent shareholder or any member of the immediate family of the
foregoing persons, have or will have a direct or indirect material interest.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Exchange Act requires the Company's directors and
officers, and the persons who beneficially own more than ten percent of the
common stock of the Company, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission. Copies of all filed
reports are required to be furnished to the Company pursuant to Rule 16a-3
promulgated under the Exchange Act. Based solely on the reports received by the
Company and on the representations of the reporting persons, the Company
believes that these persons have complied with all applicable filing
requirements during the fiscal year ended December 31, 1999 and during the
nine-month period ended September 30, 2000.
PROPOSAL 1
PROPOSED REVERSE STOCK SPLIT
The Board of Directors has authorized, subject to Shareholder approval, a
Reverse Stock Split of one-for-ten of the Company's outstanding Common Stock
that may be effected by the Board depending on market conditions. The intent of
the Reverse Stock Split is to increase the marketability and liquidity of the
Common Stock.
If the Reverse Stock Split is approved by the Shareholders at the Special
Meeting, it will be effected only upon a determination by the Board of Directors
that the Reverse Stock Split is in the best interests of the Company and the
<PAGE>
Shareholders. In the Board's judgment, the Reverse Stock Split would result in
the greatest marketability and liquidity of the Common Stock, based upon
prevailing market conditions, the proposed public offering described below, on
the likely effect on the market price of the Common Stock and other relevant
factors.
If approved by the Shareholders, the Reverse Stock Split will become
effective on any date (the "Effective Date") selected by the Board of Directors
on or prior to March 31, 2001, upon filing the appropriate amendment to the
Company's Articles of Incorporation with the Colorado Secretary of State. If no
Reverse Stock Split is effected by such date, the Board of Directors will take
action to abandon the Reverse Stock Split without further Shareholder action.
The procedures for consummation of the Reverse Stock Split are attached hereto
as Exhibit A.
Purposes And Effects Of The Reverse Stock Split
-----------------------------------------------
The Common Stock is listed for trading on the OTC Bulletin Board under the
symbol GDSC. On the Record Date, the reported closing price of the Common Stock
on the OTC Bulletin Board was $0.01 per share. The Company intends to use its
best efforts in the future to cause its shares of Common Stock to be approved
for trading on the Nasdaq SmallCap Market (the "SmallCap Market"). The Company
currently does not qualify for admission to the SmallCap Market because its
per-share price of $0.01 (as of the close of trading on December 6, 2000) is
below the $3.00 level required for admission to the SmallCap Market. Further,
the Company's net tangible assets and shareholders' equity are below the minimum
requirements of $4,000,000 and $2,000,000, respectively, for inclusion on the
SmallCap Market. Management believes that, based on future generation of
revenues and offerings of Common Stock, the Company may eventually meet the net
tangible assets requirement imposed by the SmallCap Market and the shareholder
equity requirement imposed by the SmallCap Market. Management intends to effect
a Reverse Stock Split at a level of one-to-ten which it believes is sufficient
to enable the Company in the future to meet such requirements for admission into
the SmallCap Market. The Board of Directors believes that a Reverse Stock Split
will result in attaining both of its goals of achieving a per-share price in
excess of $3.00 and increasing the marketability and liquidity of the Company's
Common Stock.
Additionally, the Board believes that the current per-share price of the
Common Stock has limited the effective marketability of the Common Stock because
of the reluctance of many brokerage firms and institutional investors to
recommend lower-priced stocks to their clients or to hold them in their own
portfolios. Certain policies and practices of the securities industry may tend
to discourage individual brokers within those firms from dealing in lower-priced
stocks. Some of those policies and practices involve time-consuming procedures
that make the handling of lower priced stocks economically unattractive. The
brokerage commission on a sale of lower-priced stock may also represent a higher
percentage of the sale price than the brokerage commission on a higher priced
issue. Any reduction in brokerage commissions resulting from the Reverse Stock
Split may be offset, however, in whole or in part, by increased brokerage
commissions required to be paid by stockholders selling "odd lots" created by
such Reverse Stock Split.
On the Record Date the number of record holders of the Common Stock was 87
and the number of beneficial holders of Common Stock was estimated to be
approximately 526. The Company does not anticipate that any Reverse Stock Split
<PAGE>
will result in a significant reduction in the number of such holders, and does
not currently intend to effect any Reverse Stock Split that would result in a
reduction in the number of holders large enough to jeopardize listing of the
Common Stock on the SmallCap Market or the Company's being subject to the
periodic reporting requirements of the Securities and Exchange Commission.
The Reverse Stock Split would have the following effects upon the number of
shares of Common Stock outstanding (38,119,500 shares as of the Record Date) and
the number of authorized and unissued shares of Common Stock (assuming that no
additional shares of Common Stock are issued by the Company after the Record
Date and that the Reverse Stock Split is effected and without taking into
account any increase in the number of outstanding shares resulting from the
exercise of outstanding options). The Common Stock will continue to be $0.0003
par value common stock following any Reverse Stock Split, and the number of
shares of Common Stock outstanding will be reduced. The following example is
intended for illustrative purposes.
Reverse Stock Common Stock
Split Outstanding
1 for 10 3,811,950
At the Effective Date, each share of the Common Stock issued and
outstanding immediately prior thereto (the "Old Common Stock"), will be
reclassified as and changed into the appropriate fraction of a share of the
Company's Common Stock, $0.0003 par value per share (the "New Common Stock"),
subject to the treatment of fractional share interests as described below.
Shortly after the Effective Date, the Company will send transmittal forms to the
holders of the Old Common Stock to be used in forwarding their certificates
formerly representing shares of Old Common Stock for surrender and exchange for
certificates representing whole shares of New Common Stock. No certificates or
scrip representing fractional share interests in the New Common Stock will be
issued, and no such fractional share interest will entitle the holder thereof to
vote, or to any rights of a shareholder of the Company. In lieu of any such
fractional share interest, each holder of Old Common Stock who would otherwise
be entitled to receive a fractional share of New Common Stock will in lieu
receive one full share upon surrender of certificates formerly representing Old
Common Stock held by such holder.
Federal Income Tax Consequences of the Reverse Stock Split
----------------------------------------------------------
The following is a summary of the material federal income tax consequences
of the proposed Reverse Stock Split. This summary does not purport to be
complete and does not address the tax consequences to holders that are subject
to special tax rules, such as banks, insurance companies, regulated investment
companies, personal holding companies, foreign entities, nonresident alien
individuals, broker-dealers and tax-exempt entities. This summary is based on
the Internal Revenue Code of 1986, as amended (the "Code"), Treasury regulations
and proposed regulations, court decisions and current administrative rulings and
pronouncements of the Internal Revenue Service ("IRS"), all of which are subject
to change, possibly with retroactive effect, and assumes that the New Common
Stock will be held as a "capital asset" (generally, property held for
investment) as defined in the Code. Holders of Old Common Stock are advised to
consult their own tax advisers regarding the federal income tax consequences of
the proposed Reverse Stock Split in light of their personal circumstances and
the consequences under state, local and foreign tax laws.
<PAGE>
1. The reverse split will qualify as a recapitalization described in
Section 368(a)(1)(E) of the Code.
2. No gain or loss will be recognized by the Company in connection with
the Reverse Stock Split.
3. No gain or loss will be recognized by a shareholder who exchanges all
of his shares of Old Common Stock solely for shares of New Common
Stock.
4. The aggregate basis of the shares of New Common Stock to be received
in the Reverse Stock Split (including any whole shares received in
lieu of fractional shares) will be the same as the aggregate basis of
the shares of Old Common Stock surrendered in exchange therefore.
5. The holding period of the shares of New Common Stock to be received in
the Reverse Stock Split (including any whole shares received in lieu
of fractional shares) will include the holding period of the shares of
Old Common Stock surrendered in exchange therefor.
THE FOREGOING SUMMARY IS INCLUDED FOR GENERAL INFORMATION ONLY. ACCORDINGLY,
EACH HOLDER OF COMMON STOCK OF THE COMPANY IS URGED TO CONSULT WITH HIS OWN TAX
ADVISER WITH RESPECT TO THE TAX CONSEQUENCES OF THE PROPOSED REVERSE STOCK
SPLIT, INCLUDING THE APPLICATION AND EFFECT OF THE LAWS OF ANY STATE, MUNICIPAL,
FOREIGN OR OTHER TAXING JURISDICTION.
Board Recommendation
--------------------
The Board recommends a vote FOR the adoption of the Reverse Stock Split and
each of the resolutions with respect thereto set forth in Exhibit A hereto.
PROPOSAL 2
PROPOSED AMENDMENT TO THE ARTICLES OF INCORPORATION
TO EFFECT THE REVERSE STOCK SPLIT
The Board of Directors has approved a resolution, subject to Shareholder
approval, to amend the Company's Articles of Incorporation to effect the Reverse
Stock Split. The form of amendment (the "Amendment") to the Articles of
Incorporation is attached as Exhibit A, and reference is made to the Amendment
for the complete terms thereof.
The Company's Articles of Incorporation currently authorize the issuance of
100,000,000 shares. Seventy-Five million (75,000,000) are designated "Common
Stock" and have a par value of $0.0003. Twenty-Five million (25,000,000) are
designated "Preferred Stock" and have a par value of $0.001. As of December 6,
2000, 26,446,000 shares of Common Stock were issued and outstanding. The
Amendment will not affect the total number of shares of Common Stock authorized
for issuance by the Company but will effect the Reverse Stock Split.
Approval of the Amendment requires the affirmative vote of the holders of a
majority of the outstanding shares of Common Stock entitled to notice of, and to
vote at, the Special Meeting. If the Reverse Stock Split and the Amendment are
approved by the Shareholders, it will become effective as of the date and time
it is filed with the office of the Secretary of State of Colorado. The filing
will be made as soon as practicable following the approval of the Reverse Stock
Split and the Amendment by the Shareholders.
<PAGE>
Board Recommendation
--------------------
The Board recommends a vote FOR the adoption of the Amendment to the
Company's Articles of Incorporation to effect the Reverse Stock Split, and each
of the Resolutions with respect thereto set forth in Exhibit B hereto.
PROPOSAL 3
ELECTION OF THREE (3) PERSONS
TO SERVE AS DIRECTORS OF THE COMPANY
The Company's directors are elected annually to serve until the next Annual
Meeting of Shareholders or until their successors shall have been elected and
qualified. The number of directors presently authorized by the Bylaws of the
Company shall be no less than one (1) nor more than nine (9).
Unless otherwise directed by shareholders, the proxy holders will vote all
shares represented by proxies held by them for the election of the following
nominees. The Company is advised that all nominees have indicated their
availability and willingness to serve if elected. In the event that any nominee
becomes unavailable or unable to serve as a director of the Company prior to the
voting, the proxy holder will vote for a substitute nominee in the exercise of
his best judgment.
Information Concerning Nominees
-------------------------------
CARSON WALKER has been a director and the President, Secretary and
Treasurer of the Company since April 17, 2000. Mr. Walker was a director of
Sanfred Resources Ltd., a Canadian Venture Exchange company, from May 1996
through December 1999. Mr. Walker was responsible for investor relations and
raising capital for Sanfred Resources Ltd. From May 1996 through December 1999,
Mr. Walker was also a director and the Secretary for Redmond Capital, Inc., an
OTC Bulletin Board company, where he was responsible for investor relations.
From July 1996 through June 1997, Mr. Walker was Vice President of Corporate
Communications at Rock Resources Ltd., a Canadian Venture Exchange company,
where he was responsible for investor relations and raising funds. Mr. Walker
attended Vancouver City College in Vancouver, British Columbia, where he earned
a diploma as a Denturist. Mr. Walker then entered private practice where he
enjoyed two successful practices located in Quesnel, British Columbia, and
Nanaimo, British Columbia. During this period of private practice, Mr. Carson
established an extensive network of associated with similar concerns and
aspirations to provide affordable public healthcare.
RON F. HORVAT has been primarily involved in the construction business for
the past fifteen years. Mr. Horvat currently is the vice president of Adler
Forest Products Ltd. in which he is responsible for all business operation
<PAGE>
including sales, marketing, receivables, payables, cash flow, product
development, quality control, logistics, employee management, customer
negotiations, purchasing and office management. During 1994 through 1997, Mr.
Horvat was the general manager for RH Forest Products Ltd. During 1992 through
1994, Mr. Horvat was the president of Mill Direct Hardwood in which he was
responsible for initiating and maintaining a small wood flooring importing
company including sales, marketing, small business accounting, receivables,
purchasing, importing and overall office management. Mr. Horvat attended the
University of Victoria and received a Dogwood Certificate from Nanaimo Senior
Secondary School.
JAMES BUNYAN is a corporate development specialist with international
business development experience including industrial and commercial industries
worldwide. Mr. Bunyan has developed skills in strategic business planning,
mergers, acquisitions, disposals, turnarounds and fundraising with particular
emphasis in the international mining industry. Mr. Bunyan is currently a
director of Tiberon Minerals Limited in which he renegotiated a joint venture
agreement for control of a major polymetallic deposit and arranged a share
placing with a London-based investor group to finance further development. Mr.
Bunyan is also currently a director of Madison Energy Limited in which he
identifies acquisition targets. From 1998 through 1999, he served as the chief
executive officer of Carpathian Gold S.A. and from 1993 through 1998, he served
as associate director/corporate development consultant of Euroff Limited. In
both capacities, Mr. Bunyan conducted review of strategic investment/financing
strategies, joint venture initiatives, cost reduction options and organization
review, and identified funding opportunities. Mr. Bunyan has a masters degree in
business administration from Warwick University and a B.S. in Biochemistry from
Heriot-Watt University.
Board Recommendation
--------------------
The Board recommends a vote FOR the election of each of the three nominees
for directors of the Company.
PROPOSAL 4
RATIFICATION OF SELECTION OF
LABONTE & CO. AS INDEPENDENT
PUBLIC ACCOUNTANTS OF THE COMPANY
The Board of Directors has selected LaBonte & Co. as independent public
accountants of the Company for the fiscal year ended December 31, 2000 and has
further directed that the Company submit the selection of independent public
accounts for ratification by shareholders at the Meeting of Shareholders.
Board Recommendation
--------------------
The Board recommends a vote FOR the ratification of the selection of
LaBonte & Co. as independent public accountants of the Company for the fiscal
year ended December 31, 2000.
<PAGE>
GENERAL
Other Matters
-------------
The Board of Directors does not know of any matters that are to be
presented at the Meeting of the Shareholders other than those stated in the
Notice of Special Meeting and referred to in this Proxy Statement. If any other
matters should properly come before the Meeting, it is intended that the proxies
in the accompanying form will be voted as the persons named therein may
determine in their discretion.
Shareholder Proposals
---------------------
If any shareholder of the Company intends to present a proposal for
consideration at the Special Meeting of Shareholders and desires to have such
proposal included in the proxy statement and forms of proxy distributed by the
Board of Directors with respect to such meeting, such proposal must be received
at the Company's offices, 1255 West Pender Street, Vancouver, British Columbia
Canada V6E 2V1, Attention: Secretary, not later than January 12, 2001.
By Order of the Board of Directors
/s/ Carson Walker
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Carson Walker
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EXHIBIT A
THE REVERSE STOCK SPLIT AND
AMENDMENT TO THE ARTICLES OF INCORPORATION
RESOLVED, that the Board of Directors be, and it hereby is, authorized to
effect a Reverse Stock Split in accordance with the following Resolutions if the
Board determines in the exercise of their discretion that a Reverse Stock Split
is in the best interests of the Company and the Shareholders and that a Reverse
Stock Split is likely to result in an increase in the marketability and
liquidity of the Common Stock.
FURTHER RESOLVED, that, prior to March 31, 2001, and on the condition that
no other amendment to the Company's Articles of Incorporation shall have been
filed subsequent to December 19, 2000, effecting a reverse stock split of the
Common Stock, Article VI of the Company's Articles of Incorporation be amended
by the addition of the following provision:
"Simultaneously with the effective date of this amendment (the "Effective
Date"), each share of the Company's Common Stock, $0.0003 par value, issued
and outstanding immediately prior to the Effective Date (the "Old Common
Stock") shall automatically and without any action on the part of the
holder thereof be reclassified as and changed, pursuant to a reverse stock
split, into any fraction thereof, into 1/10 of a share of the Company's
outstanding Common Stock, $0.0003 par value (the "New Common Stock"),
depending upon a determination by the Board that a Reverse Stock Split is
in the best interests of the Company and the Shareholders, subject to the
treatment of fractional share interests as described below. Each holder of
a certificate or certificates which immediately prior to the Effective Date
represented outstanding shares of Old Common Stock (the "Old Certificates,"
whether one or more) shall be entitled to receive upon surrender of such
Old Certificates to the Company's Transfer Agent for cancellation, a
certificate or certificates (the "New Certificates," whether one or more)
representing the number of whole shares of the New Common Stock into which
and for which the shares of the Old Common Stock formerly represented by
such Old Certificates so surrendered, are reclassified under the terms
hereof.
From and after the Effective Date, Old Certificates shall represent only
the right to receive New Certificates pursuant to the provisions hereof. No
certificates or scrip representing fractional share interests in New Common
Stock will be issued, and no such fractional share interest will entitle
the holder thereof to vote, or to any rights of a shareholder of the
Company. Any fraction of a share of New Common Stock to which the holder
would otherwise be entitled will be adjusted upward to the nearest whole
share. If more than one Old Certificate shall be surrendered at one time
for the account of the same Shareholder, the number of full shares of New
Common Stock for which New Certificates shall be issued shall be computed
on the basis of the aggregate number of shares represented by the Old
Certificates so surrendered. In the event that the Company's Transfer Agent
determines that a holder of Old Certificates has not tendered all his
certificates for exchange, the Transfer Agent shall carry forward any
fractional share until all certificates of that holder have been presented
for exchange such that payment for fractional shares to any one person
shall not exceed the value of one share. If any New Certificate is to be
issued in a name other than that in which the Old Certificates surrendered
for exchange are issued, the Old Certificates so surrendered shall be
properly endorsed and otherwise in proper form for transfer. From and after
the Effective Date the amount of capital represented by the shares of the
New Common Stock into which and for which the shares of the Old Common
Stock are reclassified under the terms hereof shall be the same as the
amount of capital represented by the shares of Old Common Stock so
reclassified, until thereafter reduced or increased in accordance with
applicable law."
FURTHER RESOLVED, that at any time prior to the filing of the foregoing
amendment to the Company's Articles of Incorporation effecting a Reverse Stock
Split, notwithstanding authorization of the proposed amendment by the
Shareholders of the Company, the Board of Directors may abandon such proposed
amendment without further action by the Shareholders.
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EXHIBIT 1
GOLDSTATE CORPORATION
SPECIAL MEETING OF SHAREHOLDERS
JANUARY 30, 2001
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned shareholder of Goldstate Corporation, a Nevada corporation
(the "Company"), acknowledges receipt of the Notice of Special Meeting of
Shareholders and Proxy Statement, dated December 19, 2000, and hereby appoints
Carson Walker with the power of substitution, as Attorney and Proxy to represent
and vote all shares of Common Stock of the Company which the undersigned would
be entitled to vote at the Special Meeting of Shareholders, and at any
adjournment or adjournments thereof, hereby revoking any proxy or proxies
heretofore given and ratifying and confirming all that said Attorney and Proxy
may do or cause to be done by virtue thereof with respect to the following
matters:
1. Approval of the Proposal to authorize the Board of Directors to effect
a Reverse Stock Split of one-for-ten of the Company's outstanding
Common Stock, depending upon a determination by the Board of Directors
that a Reverse Stock Split is in the best interests of the Company and
its Shareholders.
FOR /___/ AGAINST /___/ ABSTAIN /___/
2. Approval of the Proposal to amend (the "Amendment") the Company's
Articles of Incorporation, as amended, which would effect the Reverse
Stock Split.
FOR /___/ AGAINST /___/ ABSTAIN /___/
3. Election of each of the following three (3) persons to serve as
directors of the Corporation until the next Annual Meeting of
Shareholders or thereafter until their successors shall have been
elected and qualified:
Carson Walker
FOR /___/ AGAINST /___/ ABSTAIN /___/
Ron F. Horvat
FOR /___/ AGAINST /___/ ABSTAIN /___/
James Bunyan
FOR /___/ AGAINST /___/ ABSTAIN /___/
4. Ratification of the selection of LaBonte & Co. as the independent
public accountants of the Company for the fiscal year ending December
31, 2000.
FOR /___/ AGAINST /___/ ABSTAIN /___/
5. To act upon such other matters as may properly come before the Meeting
or any adjournments thereof.
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This Proxy, when properly executed, will be voted as directed. If no
direction is indicated, the Proxy will be voted FOR each of the above proposals
and FOR the election of each of the nominees listed above to the Board of
Directors and FOR the proposal to ratify the selection of LaBonte & Co. as the
independent public accountants of the Company for the fiscal year ending
December 31, 2000.
Dated:________________________, 2001 ________________________
Please sign your name exactly as it appears hereon. When signing as
attorney, executor, administrator, trustee or guardian, please give your full
title as it appears hereon. When signing as joint tenants, all parties in the
joint tenancy must sign. When a proxy is given by a corporation, it should be
signed by an authorized officer and the corporate seal affixed. No postage is
required if returned in the enclosed envelope and mailed in the United States.
PLEASE SIGN, DATE AND MAIL THIS PROXY IMMEDIATELY IN THE ENCLOSED
ENVELOPE.
