WELLSPRING INVESTMENTS INC
10-Q/A, 1999-10-19
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                  SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, DC 20549

                            FORM 10-QSB/A
                           AMENDMENT NO. 1


(Mark One)

[X]     Quarterly report under Section 13 or 15(d) of the Securities
        Exchange Act of 1934

        For the quarterly period ended June 30, 1999

[   ]   Transition report under Section 13 or 15(d) of the Exchange Act

        For the transition period from __________ to __________

Commission file number O-25483

                     WELLSPRING INVESTMENTS, INC.
  (Exact Name of Small Business Issuer as Specified in Its Charter)

       Delaware                                       33-0835337

(State or Other Jurisdiction of                      (IRS Employer
 Incorporation or Organization)                    identification No.)


                 610 Newport Center Drive, Suite 800
                       Newport Beach, CA 92660
               (Address of Principal Executive Offices)

                            (949) 719-1977
           (Issuer's Telephone Number, Including Area Code)


        (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
issuer's classes of common equity, as of the latest practicable
date: As of June 30, 1999, there were outstanding 1,000,000 shares
of common stock, par value $0.001, and 5,000 shares of Series A
Convertible Preferred Stock, par value $0.001.

<PAGE>

                     WELLSPRING INVESTMENTS, INC.

                                INDEX
                                                                  Page

Part I  Financial Information

Item 1. Financial Statements

        Balance sheet as of June 30, 1999 and December 31, 1998
           (unaudited). .                                           3

        Statements of loss for the three months ended
        June 30, 1999 and 1998 (unaudited) . .                      4

        Statements of loss for the six months ended
        June 30, 1999 and 1998 (unaudited) . .                      5

        Statements of cash flows for the six months ended
        June 30, 1999 and 1998 (unaudited) . .                      7

        Notes to financial statements. . . . .                      8

Item 2. Managements Discussion and Analysis or Plan of
        Operation . . .                                             9


Part II        Other Information

Item 1. Legal Proceedings. . . . . . .                             11

Item 2. Changes in Securities. . . . .                             11

Item 3. Defaults Upon Senior Securities. . . .                     11

Item 4. Submission of Matters to a Vote of Security Holders. .     11

Item 5. Other Information. . . . . . .                             11

Item 6. Exhibits and Reports on Form 8-K . . .                     11

<PAGE>

                    PART I - FINANCIAL STATEMENTS

Item 1. Financial Statements

                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)
                            BALANCE SHEET

<TABLE>
<S>                                  <C>                    <C>
                                     June 30, 1999          December 31, 1998

        ASSETS

Cash                                 $    10,000              $    --
Deferred costs of stock issuance     $    --                  $   10,000
   Total assets                      $    10,000              $   10,000


       LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities:
   Due to related party              $    --                  $      672
   Accrued liabilities               $    --                  $   10,800

   Total current liabilities         $    --                  $   11,472

Contingencies                        $    --                  $    --

Stockholders' deficit:
   Preferred stock:
    Series A Convertible Preferred Stock,
    $0.0001 par value, 5,000,000 shares
    authorized; no shares issued and
    outstanding (December 31, 1998) and
    5,000 shares issued and outstanding
    (June 30, 1999)                  $         1             $      --
   Common stock, $0.0001 par value,
    authorized: 25,000,000 shares;
    1,000,000 shares issued and
    outstanding on December 31, 1998
    and June 30, 1999                $       100             $      100
   Deficit accumulated during the
    development stage                $   (11,572)            $   (1,572)

   Total stockholders' deficit       $   (11,471)            $   (1,472)

                                     $    10,000             $   10,000
</TABLE>
<PAGE>

                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)
                          STATEMENTS OF LOSS

<TABLE>
<S>                                  <C>                    <C>

                                     Three months           Three months
                                     ended June 30, 1999    ended June 30, 1998

Operating expenses:
   Taxes and licenses                 $       --            $     --
   Officer compensation               $       --            $     --

   Total operating expenses           $       --            $     --

Other expense:
   Interest expense                   $       --            $     --

   Total other expense                $       --            $     --

Net loss before income taxes          $       --            $     --

Provision for income taxes            $       --            $     --

Net loss                              $       --            $     --

Net loss per share                    $       --            $     --

Weighted average common
shares outstanding                     1,000,000            1,000,000

</TABLE>
<PAGE>

                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)
                          STATEMENTS OF LOSS

<TABLE>
<S>                                   <C>                   <C>

                                      Six months            Six months
                                      ended June 30, 1999   ended June 30, 1998

Operating expenses:
   Taxes and licenses                  $       --            $      --
   Officer compensation                $       --            $      --

   Total operating expenses            $       --            $      --

Other expense:
   Interest expense                    $       --            $      --
   Cost of registration statement      $    10,000           $      --

   Total other expense                 $    10,000           $      --

Net loss before income taxes           $   (10,000)          $      --

Provision for income taxes             $       --            $      --

Net loss                               $   (10,000)          $      --

Net loss per share                     $     (0.01)          $      --

Weighted average common
shares outstanding                       1,000,000           1,000,000

</TABLE>
<PAGE>

                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)


<TABLE>
<S>                                               <C>           <C>          <C>           <C>     <C>           <C>
                                                     Common Stock           Series A Convertible   Deficit
                                                                              Preferred Stock      Accumulated
                                                                                                   Development
                                                  Shares       Amount       Shares        Amount   Stage         Total

Issuance of common stock as compensation for    1,000,000     $   100          -         $     -   $     -      $  100
     services to stockholder/director ($0.0001 per
     share) (Note 3)

Net loss for the period from date of inception         -            -          -               -      (216)       (216)
     (October 24, 1994) to December 31, 1994

Balance at December 31, 1994                   1,000,000          100          -               -      (216)       (116)

    Net loss for the year                              -            -          -               -      (111)       (111)

Balance at December 31, 1995                   1,000,000          100          -               -      (327)       (227)

    Net loss for the year                              -            -          -               -      (105)       (105)

Balance at December 31, 1996                   1,000,000          100          -               -      (432)       (332)

    Net loss for the year                             -            -           -               -       (75)        (75)

Balance at December 31, 1997                   1,000,000          100          -               -      (507)       (407)

    Net loss for the year                             -            -           -               -    (1,065)     (1,065)

Balance at December 31, 1998                   1,000,000          100          -               -    (1,572)     (1,472)

     Issuance of Series A Preferred Stock
     ($0.0001 per share)                              -            -         5,000             1         -      (1,471)
     per share)

     Net loss for the six months                      -            -           -               -   (10,000)    (10,000)
     ended June 30, 1999

Balance at June 30, 1999                      1,000,000          100        5,000              1   (11,572)    (11,471)
</TABLE>
<PAGE>


                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)
                       STATEMENTS OF CASH FLOWS

<TABLE>
<S>                                            <C>                   <C>

                                               Six months             Six Months
                                               ended June 30, 1999    ended June 30, 1998

Cash flows from operating activities:

   Net loss                                     $  (10,000)          $      --

Adjustments to reconcile net loss
to net cash used in operating activities:

   Increase in deferred costs of stock issuance $     --             $      --
   Advances from related party                  $     --             $      --
   Increase in accrued liabilities              $  (10,000)          $      --

   Net cash used in operating activities        $  (20,000)          $      --

Cash flows from financing activities:

   Issuance of common stock as compensation
   for services to stockholder/director         $     --             $      --

   Net cash provided by financing activities    $  30,000            $      --

Net increase (decrease) in cash                 $  10,000            $      --
Cash, beginning of period                       $     --             $      --

Cash, end of period                             $  10,000            $      --

</TABLE>
<PAGE>

                     WELLSPRING INVESTMENTS, INC.
                    (A Development Stage Company)
                    NOTES TO FINANCIAL STATEMENTS

Note 1                Summary of Significant Accounting Policies.

       Wellspring Investments, Inc. (the Company) is a developmental
       stage enterprise incorporated on October 24, 1994 under the
       laws of the State of Delaware.  The Company intends to seek
       acquisitions or other business endeavors.  The Company has
       had no operations to date and its activities have been
       limited to organization efforts related to obtaining initial
       financing.  The Company intends to purchase, merge with or
       acquire securities or assets held by target entities via an
       exchange of the targeted company's securities or assets for
       the Company's cash, securities and/or assets.  The Company
       has not negotiated with or identified a prospective
       acquisition candidate and has not targeted any particular
       business or industry within which it will seek acquisitions.
       The Company's fiscal year end is December 31.

       The unaudited financial statements and notes are presented as
       permitted by Form 10-QSB.  Accordingly, certain information
       and footnote disclosures normally included in financial
       statements prepared in accordance with generally accepted
       accounting principles may have been omitted.

Note 2                Related Parties.

       The Company has retained the law firm of its President and
       majority shareholder, The Law Offices of M. Richard Cutler,
       to serve as the Company's corporate and securities counsel.
       Mr. Cutler will charge the Company his usual and customary
       rates for legal services rendered to the Company.  During
       fiscal 1998, Mr. Cutler prepared the Company's private
       placement offering and was paid an attorney's fee of $10,000
       in January 1999 from the Company's private placement
       proceeds.  This amount was accrued, outstanding and deferred
       as costs related to the stock issuance as of December 31, 1998.

       Mr. Lebrecht, the Company's vice president, owns 190,150
       shares of the Company's common stock and is also employed by
       The Law Offices of M. Richard Cutler.

<PAGE>

Item 2.        Managements Discussion and Analysis or Plan of Operation

    The Company's activities since inception have been limited to
organizational matters, and the Company has not engaged in any
operating activity since its inception.

    The Company has registered its common stock on a Form 10-SB
registration statement filed pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act") and Rule 12(g) thereof.  The Company
filed with the Securities and Exchange Commission periodic reports
under Rule 13(a) of the Exchange Act, including quarterly reports on
Form 10-QSB and annual reports on Form 10-KSB.  As a reporting
company under the Exchange Act, the Company may register additional
securities on Form S-8 (provided that it is then in compliance with
the reporting requirements of the Exchange Act) and on Form S-3
(provided that is has during the prior 12 month period timely filed
all reports required under the Exchange Act), and its class of
common stock registered under the Exchange Act may be traded in the
United States securities markets provided that the Company is then
in compliance with applicable laws, rules and regulations, including
compliance with its reporting requirements under the Exchange Act.

    The Company was formed to engage in a merger with or acquisition
of an unidentified foreign or domestic private company which desires
to become a reporting ("public") company whose securities are
qualified for trading in the United States secondary market.  The
Company meets the definition of a "blank check" company contained in
Section 7(b)(3) of the Securities Act of 1933, as amended.

    Management believes that there are perceived benefits to being a
reporting company with a class of publicly-traded securities which
may be attractive to foreign and domestic private companies.

    These benefits are commonly thought to include (1) the ability
to use registered securities to make acquisition of assets or
businesses; (2) increased visibility in the financial community; (3)
the facilitation of borrowing from financial institutions; (4)
improved trading efficiency; (5) shareholder liquidity; (6) greater
ease in subsequently raising capital; (7) compensation of key
employees through options for stock for which there is a public
market; (8) enhanced corporate image; and, (9) a presence in the
United States capital market.

    A private company which may be interested in a business
combination with the Company may include (1) a Company for which a
primary purpose of becoming public is the use of its securities for
the acquisition of assets or businesses; (2) a company which is
unable to find an underwriter of its securities or is unable to find
an underwrite of securities on terms acceptable to it; (3) a company
which wishes to become public with less dilution of its common stock
than would occur normally upon an underwriting; (4) a company which
believes that is will be able to obtain investment capital on more
favorable terms after it has become public; (5) a foreign company
which may wish an initial entry into the United States securities
market; (6) a special situation company, such as a company seeking a
public market to satisfy redemption requirements under a qualified
Employee Stock Option Plan; and, (7) a company seeking one or more
of the other benefits believed to attach to a public company.

<PAGE>

    The Company is authorized to enter into a definitive agreement
with a wide variety of private businesses without limitation as to
their industry or revenues.  It is not possible at this time to
predict with which private company, if any, the Company will enter
into a definitive agreement or what will be the industry, operating
history, revenues, future prospects or other characteristics of that
company.

    As of the date hereof, management has not made any final
decision concerning or entered into any agreements for a business
combination.  When any such agreement is reached or other material
fact occurs, the Company will file notice of such agreement or fact
with the Securities and Exchange Commission on Form 8-K.  Persons
reading this Form 10-QSB are advised to see if the Company has
subsequently filed a Form 8-K.

    Each of the current shareholders of the Company have agreed not
to sell or otherwise transfer any of their common stock of the
Company until after such time as the Company has completed a
business combination transaction.

    As soon as the Company is eligible, it intends to apply to have
its common stock listed or admitted to quotation on the NASD OTC
Bulletin Board or, if it meets the financial and other requirements
thereof, on the Nasdaq Small Cap Market, National Market System, or
other regional or national exchange.

Liquidity

    In January 1999, the Company completed a private placement of
5,000 Units, each Unit consisting of one share of Series A Preferred
Stock and one common stock purchase warrant.  The net proceeds to
the Company was $30,000, of which $20,000 went to the Company's
President and securities counsel for legal services related to the
offering and the drafting and filing of a Form 10-SB Registration
Statement.

    Other than the balance of the funds from the private placement,
the Company has no other funds available and does not anticipate
having any funds available until a merger transaction is
consummated.  In the event that no transaction is consummated, the
Company will have a very limited amount of funds with which to
operate and may not be able to operate in the future.

<PAGE>

                     PART II - OTHER INFORMATION

Item 1.        Legal Proceedings

    There are no legal proceedings against the Company and the
Company is unaware of such proceedings contemplated against it.

Item 2. Changes in Securities

    None.

Item 3. Defaults Upon Senior Securities

    None.

Item 4. Submission of Matters to a Vote of Security Holders.

   No matters were submitted to the security holders for a vote.

Item 5. Other Information

   There is no other information deemed material by management for
disclosure herein.

Item 6. Exhibits and Reports on Form 8-K

   (a) Exhibits

    None.

   (b) Reports on Form 8-K

    None.

<PAGE>


                              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.


                                         WELLSPRING INVESTMENTS, INC.


Dated: October 18, 1999                  /s/ M. Richard Cutler

                                         By:    M. Richard Cutler
                                         Its:   President



<TABLE> <S> <C>

<ARTICLE> 5
<LEGEND>
     Financial Data Schedule for Wellspring Investments, Inc. Form
10Q-SB for the period ended June 30, 1999
</LEGEND>
<MULTIPLIER> 1000

<S>                                  <C>
<PERIOD-TYPE>                        6-MOS
<FISCAL-YEAR-END>                    DEC-31-1998
<PERIOD-START>                       JAN-01-1999
<PERIOD-END>                         JUN-30-1999
<CASH>                               10
<SECURITIES>                          0
<RECEIVABLES>                         0
<ALLOWANCES>                          0
<INVENTORY>                           0
<CURRENT-ASSETS>                     10
<PP&E>                                0
<DEPRECIATION>                        0
<TOTAL-ASSETS>                       10
<CURRENT-LIABILITIES>                 0
<BONDS>                               0
                 0
                           0
<COMMON>                              0
<OTHER-SE>                            0
<TOTAL-LIABILITY-AND-EQUITY>         10
<SALES>                               0
<TOTAL-REVENUES>                      0
<CGS>                                 0
<TOTAL-COSTS>                         0
<OTHER-EXPENSES>                      0
<LOSS-PROVISION>                      0
<INTEREST-EXPENSE>                    0
<INCOME-PRETAX>                       0
<INCOME-TAX>                          0
<INCOME-CONTINUING>                   0
<DISCONTINUED>                        0
<EXTRAORDINARY>                       0
<CHANGES>                             0
<NET-INCOME>                          0
<EPS-BASIC>                         0
<EPS-DILUTED>                         0


</TABLE>


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