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
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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
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<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)
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<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
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<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
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<ARTICLE> 5
<LEGEND>
Financial Data Schedule for Wellspring Investments, Inc. Form
10Q-SB for the period ended June 30, 1999
</LEGEND>
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<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
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0
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