SECURITIES AND EXCHANGE COMMISSION

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

William W. Dillard, Jr.

404 Lakeview Drive

Boerne, Texas 78006

(830) 249-2610

Thomas C. Cook, Esq.

Thomas C. Cook & Associates

3110 S. Valley View Suite #106

Las Vegas, Nevada 89102

(702) 876-5941

Approximate date of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, please check the following box.

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier registration statement for the same offering.

If the delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.

(1) Estimated solely for the purposes of calculating the registration fee. 

Mag-Well, Inc. ("Mag-Well" or the "Company"), a Texas corporation incorporated on June 20, 1988, is a leader in the magnetic industrial fluid treatment industry. The Company produces a patented Magnetic Fluid Conditioner (MFC) that provides an environmentally-safe solution to costly paraffin and scale deposit problems. The Company has successfully designed and sold specialized MFC tools for users in the oil, gas, marine diesel, sugar refining and water treatment industries. To date, the Company has installed over 1,300 MFC tools worldwide with a 90% success rate.

The proceeds from the sale of the Common Stock in this offering will be payable directly to the Company and the Company will deliver stock certificates attributable to shares purchased directly to the Purchasers within thirty (30) days of the closing of this offering. All subscription funds will be held in an escrow account pending achievement of the Minimum Offering. (See "Plan of Distribution"). Broker fees and commissions, in addition to expenses of the offering, may be deducted from the proceeds as the offering progresses once the Minimum Offering is achieved.

PRIOR TO THIS OFFERING THERE HAS BEEN NO PUBLIC MARKET FOR THE COMMON STOCK OF THE COMPANY AND THERE CAN BE NO ASSURANCE THAT A PUBLIC MARKET WILL RESULT FOLLOWING THE SALE OF THE SHARES OFFERED HEREBY, OR THAT THE COMMON STOCK CAN BE SOLD AT OR NEAR THE OFFERING PRICE. THE INITIAL PUBLIC OFFERING PRICE HAS BEEN ARBITRARILY DETERMINED BY THE COMPANY BASED UPON WHAT IT BELIEVES PURCHASERS OF SUCH SPECULATIVE ISSUES WOULD BE WILLING TO PAY FOR THE SECURITIES OF THE COMPANY AND BEARS NO RELATIONSHIP WHATSOEVER TO ASSETS, BOOK VALUE OR ANY OTHER ESTABLISHED CRITERIA OF VALUE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The following table illustrates the dilution to the purchaser of the Common Stock in this Offering:

NOTES TO DILUTION:

1. Dilution figures were estimated using un-audited interim financial statements for Mag-Well, Inc., dated June 30, 1999.

The Company has had revenues from operations since its inception on June 20, 1988. However, revenues for the year ended December 31, 1998, decreased by $717,416 to $206,326 as compared to $923,742 for the year ended December 31, 1997. As of December 31, 1998, the Company had a year-to-date loss of $298,668 and a working capital deficit of approximately $30,000. In the second quarter of 1999 the Company made a profit of $78,124 on total revenue of $157,410. Management estimates that the continuation of the Company is dependent upon obtaining additional long-term debt and/or equity financing to meet its obligations and provide marketing and operating funds to maintain profitable operations.

With the increase in oil prices in 1999, management anticipates an increase in capital spending by oil companies, which may reduce or eliminate the Company's net losses through improved sales to oil and gas industry customers. Management is also in the process of attempting to raise capital through a $5,000,000 direct public offering. This funding is expected to satisfy the Company's cash requirements for the foreseeable future. The Company expects to allocate these funds to (1) the implementation of continued research and development for the enhancement of the Company's products and services; (2) the acceleration of the Company's sales and marketing efforts in both the domestic and international markets; and (3) the required upgrades at its manufacturing plant located in Edinburg, Texas. Management of the Company has committed to reducing expenses and attempting to settle and obtain extended terms on its existing debt.

The Company anticipates the need to hire additional employees. Management estimates that by the close of the last quarter of 1999, the Company will grow from three (3) to as many as ten (10) full-time employees. This estimate is exclusive of part-time employees, independent contractors, and/or consultants who may be retained as the need arises.

The Company anticipates additional asset and equipment purchases in order to expand capabilities and facilitate operations. These purchases include additional computer resources such as programming and development of proprietary software, and additional hardware.

Mag-Well, Inc. ("Mag-Well" or the "Company"), is a leader in the magnetic industrial fluid treatment industry. Founded in 1988, the Company has patented technology and proprietary trade secrets that are used to manufacture a Magnetic Fluid Conditioner ("MFC"). The MFC can be used in place of costly chemicals and manual labor to treat various fluid deposition problems. To date, Mag-Well has installed over 1,300 MFC tools worldwide with a 90% success rate. The Company has sold the MFC to major companies including Amoco, Chevron, Exxon, Imperial Sugar, PeMex, Pennzoil, Shell and Texaco. (See "Mag-Well Product Description"). Recently, the Company has discovered that its technology can be economically utilized to improve the efficiency of diesel fuel combustion thereby increasing the fuel use efficiency (for many diesel engines) by up to 10% while reducing harmful emissions. The Company has received positive results from tests conducted on the fuel MFC by Southwest Research Institute and intends to pursue further testing and EPA documentation of the MFC's performance capability. Further information on the technical aspects of the Company's products and the Company may be retrieved from the Company's website, www.magwell.com, which contains links to technical documents and reviews by industry participants.

The Company will focus the sales of its MFC on three (3) target markets that experience economic benefits from the use of the MFC. (1) A significant market for MFC's is caused by paraffin and scale deposits, which are a re-occurring problem for petroleum refineries and oil well producers around the globe. (2) The second target market is for the treatment of large transmissions of water and the use of fluids in processing. (3) The third target market is focused on capitalizing on Mag-Well's recent success in treating diesel fuel. Management believes that its MFC tool may be a viable and cost-efficient product for use in the markets described herein.

The Company's objective is to improve the efficiency of fluid transfer in all major industries through magnetic fluid conditioning technologies. To achieve its objectives, Management of the Company designates as its priorities for the next twelve (12) months of operations as follows: (i) develop and expand the Company's organizational structure, (ii) upgrade facilities and equipment, (iii) further product research and development, (iv) increase geographical sales coverage, and (v) implement an aggressive marketing campaign. Management of the Company believes that this Offering will provide necessary growth financing to Mag-Well and will allow the Company to capitalize on the opportunities available in its multi-billion dollar industry.

Mag-Well operates in three (3) main industry segments: Oil & Gas, Industrial Processing, and Transportation. These industry segments each coincide with the Company' solution for oil and gas production, water and industrial fluid treatment, and diesel fuels treatment. The following table outlines the potential markets that the company is addressing. The industry size is based upon industry sources and management's analysis.

The market for MFC's is caused by paraffin and scale deposits, which are a re-occurring problem for petroleum refineries and oil well producers around the globe. These paraffin, scale and asphaltene deposits are found on pipes, on rods, tubing and pumps. This condition reduces the well's production rate, and eventually, if not chemically or mechanically treated, will completely stop the flow of oil. Remedial action against these deposits reduces the effectiveness of the oil industry each year by way of treatment costs, lost revenues associated with production downtime, well abandonment and contingent liability costs of chemical usage.

The scale and paraffin solutions market is a segment of the oil service and equipment industry that increases in size every year. As wells deplete and reactionary solutions are used to continue production, the wells begin to show paraffin, scale and asphaltene side effects. This extraction process causes the wells to need treatment several times per year and in some cases several times per month.

The scale and paraffin solutions industry has three (3) traditional methods to fight paraffin and scale buildup: (i) chemical injections; (ii) slick line cutting known as scrappers; and (iii) hot oil or water treatments. Companies providing chemical injections are usually large petrochemical corporations such as Tret-o-lite or Camco. These companies, through the use of mechanical pumps, inject chemical solvents into the well, which slows the formation of paraffin and scale deposits. Slick line companies lower a cutting device into the well to physically remove the buildups and are usually small, privately owned operations. Companies known as hot oilers pump hot oil or water down the well to melt paraffin buildups. Each of these solutions requires the well to stop production for treatment.

Two (2) additional treatments, which are gaining market recognition, are the use of microbes or microorganisms and the use of magnetic fields in tools known as magnetic fluid conditioners. Microbes are placed downhole at the oil water contact point. The microbes secrete substances that act as paraffin inhibitors. However, the microbes are living organisms and only work in certain environments. They are unable to work with chemical injection or hot oil treatments. Magnetic fluid conditioning companies are gaining strong market recognition. These companies use various products known as magnetic fluid conditioners (MFC's), that affect oil production by passing the oil flow through strong magnetic fields. These fields are proven to inhibit the formation of paraffin and scale deposits. However, the majority of MFC companies within the industry are currently applying outdated technology, originally intended for water treatment.

The Company has developed solutions to prevent deposition when there is large transmission of water and when there is use of water or other fluids in chemical and other processing industries. The Company has successfully developed a MFC solution for the following industry problems.

Heat exchanger fouling has been defined as the initial deposition and subsequent accumulation of unwanted material on an active heat transfer surface. It has been referred to as a universal problem in the design and operation of heat transfer equipment and, over twenty-five (25) years ago, was referred to as "the major unresolved problem in heat transfer."

Fouling impacts the performance of heat transfer equipment in two (2) ways. Due to its low thermal conductivity, the unwanted deposits will increase the resistance to heat transfer and reduce the thermal efficiency of the heat transfer surface. An initial deposition may have minimal impact on both the thermal and hydraulic performance of a heat exchanger. However, when subsequent accumulation are allowed to become excessive the result will be severe fouling with significantly reduced thermal efficiency and reduced cross-sectional areas resulting in an increased pressure drop across the heat exchanger and decreased process fluid throughput.

Today there are a few under-commercialized, yet fully-developed technologies that have demonstrated capabilities to eliminate fouling within a diversity of applications. Competitive technologies are costly and require the replacement of existing equipment. Mag-Well's water MFC can rectify a wide variety of scaling and deposit issues economically without the replacement of existing equipment.

A Heat Exchanger that costs $160,000 with a ten (10) year life span, may require as many as four (4) cleanings per year at $40,000 per cleaning. The additional maintenance fee could cost the company up to $160,000 a year to keep the heat exchanger functioning. Throughout U.S. industry, the total annual cost of fouling (including installed stand-by equipment, regular and costly maintenance, process downtime and loss of production), has been estimated to exceed $3.5 billion (B. A. Garrett-Price "Fouling of Heat Exchangers").

Often, the design phase solution to an anticipated severe fouling problem has focused on widely accepted counter-measures that increase the projects capital cost. These include excess surface (20%-500%), redundant installed equipment (100% stand-by for off-line cleaning), chemical cleaning sub-systems and special materials used in construction to handle hazardous cleaning chemicals. These design phase fouling cost components can be (and often are) overshadowed by the real-world operating phase fouling cost components that will persist throughout the service life of the heat transfer equipment.

The Company's MFC is able to retard scale formation in Heat Exchange processes and produce the following benefits:

• Reduced maintenance costs through less frequent cleaning
• Minimization or elimination of hazardous cleaning operations and disposal of hazardous cleaning chemicals
• Capital cost reduction with the elimination of heat transfer equipment oversizing and/or redundancy
• Lower energy cost due to reduced pumping power requirements to overcome tube plugging by fouling solids.

• Chemical treatments will no longer be required to reduce calcium and other forms of scale from damaging pipes in large buildings and manufacturing complexes.
• Less money will be spent annually in the chemical treatment of water.
• Chemical treatment and or power washing will not be needed for equipment such as water towers, boiler, and evaporators.
• Replacement of damaged equipment will be reduced.

• Plumbing collage
• Fewer destroyed pipes
• Less clog filtering
• Increased life of the water heater

• Desalination plants suffer from scale problems due to the large amounts of water processing and transfer.
• Nuclear power plants suffer from similar water processing problems as desalination plants, and have water storage issues that can benefit from MFC treatment.
• Other alternative applications include unique forms of process oriented, biological manufacturing.
• In food processing industries, Mag-Well's MFC is marketable due to the restrictions on chemical usage.

Initial pricing for the diesel fuel truck MFC will be $1,000. The following table outlines the cost benefit proposition to be made by Mag-Well.

*This table is based on preliminary findings and actual results may vary significantly and will be known only following further research.

With a truck life expectancy of ten (10) years, the Mag well MFC can be worth as much as $25,000 to the truck operator. The overwhelming value proposition is an impetus for fleet sales. Not chronicled in the above table is the reduction in emissions. The MFC will provide an economic platform that the transportation industry and environmental leaders can use to reduce harmful emissions and improve the environment.

Trucking and marine shipping companies utilize their vehicles at high rates and will have substantial savings from the incremental reduction of fuel consumption. The following market data displays the large market potential available for the Mag-Well fuel tool:

• Today there are almost 3 million truck drivers in the U.S. alone (over 6 million trucks.)
• In Canada there are in excess of 250,000 long haul truckers.
• Almost 360,000 companies in the U.S. are involved in interstate trucking.
• The two major trucking segments, Common Carrier and Private Fleets, accounted for $167 billion in revenues. (Department of Transportation)
• 1996 On-Highway Diesel Consumption was approximately 27 billion gallons. North American makers produced 916,000 diesel engines of all sizes last year. Many of these engines are of great size and are used in every industry from agriculture to construction to manufacturing.
• Mike McCarthy of Freightliner Trucks stated that the average truck gets 5 miles to the gallon and travels 100,000 miles per year.
• According to J.C. Holder of Mack Trucking, the average cost of a diesel truck is $105,000. Used trucks average 4 miles to the gallon, and new trucks can get up to 6 miles per gallon.

Also, driving demand for equipment are fundamental changes in the trucking industry that include shorter vehicle replacement cycles, just-in-time business practices that have placed more freight on the road, as well as more regional and local delivery companies purchasing Class 8 vehicles. US retail sales of Class 8 trucks came to 178,551 last year, making it the third highest sales year. Freightliner took the top place in the Class 8 market in 1997 with a 28.2% market share, or 50,282 units sold. The EPA is expecting US retail sales of Class 8 vehicles in the US in 1998 to reach about 195,000, declining to 180,000 in 1999. With a continued demand for profits, consolidations continue as companies focus on increasing their market share through mergers or acquisitions.

The Company owns United States patent for its Magnetic Fluid Conditioner ("MFC") which was assigned to the Company on January 12, 1993. The MFC technology developed by Mag-Well, Inc., is protected under United States Patent No. 5,178,757.

The MFC is designed for the magnetic treatment of fluids that have a depositing tendency. Deposits cause blockages to form and subsequently slow or halt fluid movement. The MFC works by directing fluids across controlled magnetic fields, which alters the growth of paraffin crystals and scale, thereby inhibiting the formation of solids in the fluids. The following are specific fluid applications for the Mag-Well MFC: oil well production, diesel fuel treatment, industrial water and other fluids utilized in processing. Deposit formation in fluids increase energy costs, damage equipment and decrease the amount a system can produce. The MFC is a treatment for removing and preventing the build-up of solid scale and paraffin deposits in oil wells; treating combustible fuels such as diesel, which improves engine efficiency while reducing emissions; treating industrial water in order to reduce scale buildup (frequent in heat exchange and chemical processes); and the treatment of commercial buildings for hard water to reduce scale buildup that damages the plumbing system.

The body and shell of the MFC are constructed with 300 series stainless steel. However, titanium is used for highly corrosive environments. Inside the MFC tool are a series of neodymium-iron-boron magnetic circuits creating flux densities in excess of 8000 Gauss. One hundred percent (100%) of the fluids produced pass across the magnetic circuits, which prevent the crystallization of paraffin and scale deposits inside the venturi (a slot passage that all fluids flow through).

Listed below are some of the strengths and weaknesses in regards to the MFC tool:

• The MFC requires no electrical or external power.
• Mag-Well's technology is patented and its trade secrets are difficult to duplicate.
• The MFC offers savings by eliminating treatment costs. In addition, the MFC may increase a user's revenues by improving the viscosity, yield point and other flow properties of the well and eliminates production downtimes.
• The product's (MFC's) low cost of production leads to high profit margins and high rates of return for shareholders.
• The MFC improves oil flow in cold weather and topside surface temperature.
• The MFC removes existing scale and inhibits the formation of new deposits in pumps, tubing, heat exchangers, separators and other equipment. In addition, the MFC reduces corrosion by eliminating scale that causes "under-deposit pitting."
• The MFC reduces or eliminates most tank high bottoms and the liquid component or base sediment and water (BS & W) emulsion in storage tanks.
• To install the MFC, only the rod and pump need to be removed from the well.
• Testing has shown improvements in fuel consumption and emission control. Mag-Well plans to work with the Southwest Research Institute to give further creditability to this application of the MFC. This will allow Mag-Well to fully commercialize their efforts in the railroad, jet, marine and trucking fuel industries.

• Paraffin, Scale and Asphlatene problems vary in degree. Severe buildups require a combination of solutions (i.e. Mag-Well's MFC along with chemical treatments). However, the MFC still reduces the well operator's costs by reducing the amount of treatments needed as well as reducing the amount of down time associated with other solutions.
• New technology receives resistance during its initial commercialization. Despite opposition Mag-Well has successfully sold 1,300 tools, received positive client feedback and has amassed technical papers and client tests that support the efficacy of the MFC technology.

Numerous field case studies conducted by oil industry leaders as well as published articles have recognized the MFC to be a cost-effective and environmentally sound solution to the paraffin and scale deposit dilemma. Those who confirm Mag-Well's reliability include Halliburton Energy Service, which sells Mag-Well MFC's under a verbal distribution agreement, The American Oil and Gas Reporter, British Petroleum's BPXpress Newsletter, Shell Oil Company, Maraven, The Petrobas Research Center, The Society of Petroleum Engineers and several others.

The Company believes that its ability to enhance its current services, develop and introduce new products and services on a timely basis, maintain technological competitiveness and meet customer requirements are essential to the Company's success. The Company's research and development efforts focus primarily on: (i) enhancing the Company's MFC and its reliability and (ii) assisting the Company's sales organization and customers with special requirements and products. The Company intends to continue its research, engineering and product development programs to develop proprietary products that are complementary to the Company's existing products.

The Company's business strategy is to develop and market cost-effective, proprietary and patented MFC's for the following markets: (a) oil exploration and production companies; (b) water treatment and water transmission companies; (c) treatment of diesel fuels; and (d) fluid treatment for industrial facilities. Principal elements of the Company's growth strategy are as follows:

The Company has pioneered the sales of MFC and seeks to develop a sales force to penetrate each of its target markets. Management has performed preliminary interest surveys with potential salesperson candidates and is confident that it can hire the necessary experienced salespersons to accomplish its sales goals. Mag-Well will hire professionals from within the industry of the target market in which they will sell. Established relationships and rapport will ensure the proper introduction of the Company's MFC into each market.

The Company believes that customer services and support are critical components of customer satisfaction and the success of the Company's business. Management believes regional service coverage will allow the company to react quickly to changes in local markets and customer demands. The Company intends to develop strong relationships with its customers and prospective customers to identify their requirements early.

 Additional Distribution Agreements

In addition, Mag-Well recognizes the importance of relationships with key customers. Mag-Well will build new relationships with its sales force, as well as continue development of prior relationships. The addition of new distribution agreements will allow Mag-Well to build on established relationships and obtain accelerated entry into established markets.

Mag-Well will continue to promote its leasing program, as well as develop complete financing solutions for wells with multiple problems. The development of this program will shield the company's revenues from capital constrictions that occur during cyclical industry recessions. The customer will make fixed payments that are typically less than is being spent on current treatments, with no associated capital outflows.

Mag-Well's implementation of its marketing campaign must be aided by tools to educate the market on MFC advancement. The goal of educating the market is to expand the market size and opportunities for Mag-Well. In addition, the campaign will educate targeted markets on Mag-Well's MFC technology and the benefits and reliability obtained through its use. The marketing campaign coincides with the hiring of sales staff so as not to outsell Mag-Well's ability to follow-up with customers. The specific methods to accomplish this objective are outlined in the Marketing Strategy section of this offering. (See "Business of the Company - Marketing").

The Company believes that there are numerous opportunities to acquire other businesses with established bases, compatible operations, experience with additional or emerging magnetic fluid treatment services and technologies, and experienced management. The Company believes that these acquisitions, if successful, will result in synergistic opportunities, and may increase the Company's revenue and income growth. Currently, Mag-Well has initiated talks with EnviroResponse Products, Inc. ("ERP"), concerning the purchase of the company. The Company believes that ERP has a sound marketing branch involving diesel fuel equipment. If acquired, Mag-Well anticipates an immediate client base for its MFC product which would complement this market segment. However, as discussions are in its early stages, the Company does not guarantee that the acquisition of ERP will be effectuated, if effectuated there is no assurance that the transaction will be successful.

The market for fluid treatment solutions is highly competitive. The industry is comprised of chemical solvent treatments, slick line, and hot water or hot oil treatments. The procedures are time and capital intensive, causing most companies to remain within certain geographic regions.

Mag-Well's patented technology is unique in the marketplace. There are few companies manufacturing downhole magnetic fluid conditioners. Most produce an antiquated water-conditioning tool that has been converted for oil field use. Various government-run petroleum companies in the former Soviet Union, China, and others have experimented with magnetic tools in oil field services but have not offered a competitive tool. Their results were limited and inclusive and not economically viable. Magniflo, Inc. and Magnetizer are two other companies found to offer magnetic fluid conditioners. These companies currently do not pose a substantial competitive threat to Mag-Well due to the Company's superior technology and performance history

Mag-Well's MFC technology also competes against companies offering the traditional methods for solving paraffin and scale buildup. Chemical treatment providers such as those offered by Baker Hughes, BJ Services, Camco, Dowell, Nalco and Tret-o-lite mechanically inject chemical solvents down the well. Hot oil/water treatments pump heated oil or water into the well to melt paraffin and scale back into a liquid state. Slick line treatment, also known as paraffin cutters, use a slick line to run a tool, called a scrapper, down the well to where the buildup has occurred. The tool is then manipulated to cut the paraffin or scale buildup out of the well.

In water and industrial fluid treatment and diesel fuel treatment, the Company will compete against various companies that utilize chemicals and alternative technology. Many of the Company's current and potential competitors have longer operating histories, are substantially larger and have greater financial, manufacturing, marketing, technical and other resources. A number also have greater name recognition and a larger installed base of products and services than the Company. Competition in the Company's markets may result in significant price reductions As a result of their greater resources, many current and potential competitors may be better able than the Company to initiate and withstand significant price competition or downturns in the economy. There can be no assurance that the Company will be able to continue to compete effectively, and any failure to do so would have a material adverse effect on the Company's business, financial condition and operating results.

The Company seeks to generate sales leads by initiating an aggressive marketing campaign. Management intends to purchase and review customer databases with the objective to target prospective customers to receive advertising mail outs. In addition, a telemarketing firm will contact customers identified on the database with follow-up calls. The advertising campaign will begin with one ad, eventually alternating advertisements between different industry publications in efforts to capture a larger market share without duplicating marketing costs.

The Company believes that its success depends in part upon the strength of its distribution channels and the ability of the Company to maintain close access to its end user customers. The Company intends to develop a wide range of marketing and distribution channels focused on reaching a broad range of customers in the most cost-effective manner. The Company plans to market its products and services through (i) a focused marketing approach and (ii) various advertising and media channels (iii) target market education. The Company intends to continually seek innovative ways to expand the scope of its marketing channels and to enhance its ability to identify and retain customers.

To generate customer leads and sales revenues the Company intends to implement an aggressive marketing campaign. The campaign will educate targeted decision makers on Mag-Well's MFC technology and the benefits and reliability obtained through its use. The marketing campaign will coincide with the hiring of sales staff so as not to outsell Mag-Well's ability to maintain quality customer relationships. The industry focused marketing campaign is intended to leverage Mag-Well's sales efforts by qualifying customers needs and interests before a salesperson sets an initial meeting. The campaign will increase brand visibility and product awareness. To implement this campaign, the Company will need the following: mailing or publishing firm, client tracking database system and print marketing material.

Industry Journals offer the company a direct communication vehicle to decision makers in each of the Company's target markets. For example, the petroleum industry offers several major magazines aimed at decision makers in the oil and gas industry. Previous advertisements are available for the Company to run ads in these publications. In addition, the Company intends to hire a leading marketing and advertising firm to maximize its communications impact. Ad placement in industry journals and magazines will create brand awareness and increase perceived product efficacy, which will in turn support the direct efforts of the Mag-Well sales force.

The Company also plans to pursue networking opportunities. The oil industry offers hundreds of conferences, seminars and meetings for all industry segments each year. Mag-Well currently has designed a portable exhibition center which will be used for major conferences, such as the annual Offshore Technology Conference held in Houston, Texas.

Another channel the Company intends to develop is public relations. Generally, magazine editors find space to cover topical issues that include their advertisers. The Company intends to utilize press releases to announce major clients, new countries, and other success stories. Executive assistance from strategic partners, major customers, and research institutes will assist in making appointments with trade journal editors for the Company's representatives. In addition, the Company plans to utilize the PR Newswire to generate broad interest in Mag-Well's application of magnetic technologies.

Due to the relatively new nature of the MFC industry, the Company will develop resources to educate potential clients of the applications and benefits of the MFC technology. In order to educate the target markets the following methods will be utilized: telemarketing firm that specializes in technical sales, an interactive CD-ROM video and regional seminars.

The Company's initial operating objectives are to: (i) develop and expand the Company's organizational structure; (ii) upgrade facilities and equipment; (iii) further products research and development; (iv) increase geographical sales coverage; and (v) implement an aggressive marketing campaign. To obtain increased efficiency and cost containment from its operations is core to the Company's objectives. The Company plans to modernize and improve its facilities to respond to competition and changes in industry standards. The Company intends to pursue increased productivity and consistently lower operating cost objectives through continuing cost improvement programs. These initiatives include, but are not limited to, reduced delivery time, increased distribution capacity, continued customer orientation and improved process control.

The Company intends to staff several positions key to implementing its growth strategy. Due to the increase need for Investor relations and business reporting a Chief Financial Officer will be selected. A Vice President of Sales and Marketing will be responsible for staffing and managing the Sales department. The Company believes that the addition of these and other key staff positions will prepare the Company to develop and manage revenue growth.

The Company seeks to maximize its internal growth through maintaining state of the art facilities, machinery and equipment. The Company plans to modernize and improve its facilities to respond to competition resulting from changes in industry standards with the objective of focusing operations on increasing production capacity and efficiency. The Company also plans to develop material handling and processing systems, recognizing that efficient systems (not just efficient equipment) increase productivity.

Mag-Well intends to focus on continuous product research and development. Management believes this will allow the Company to pursue additional patents to fully protect its proprietary technologies. In addition, the Company plans to pursue studies with various research institutions whose studies will add additional credibility to the Company's MFC technology.

The Company plans to hire, train and place two salespersons every few months. The sales staff will be hired in their respective regions to open both domestic and international offices. Regional demand will determine which areas will be opened first. The strategic placement of salespersons will reduce travel expenses and increase the personal contact with existing and potential clients.

The Company's headquarters and manufacturing facility are located at 404 Lakeview Drive, Boerne, Texas 78006, and 122 East Wisconsin, Edinburg, Texas 78539, respectively. The office located in Boerne, Texas, is provided to the Company by an officer and director at no expense to the corporation. However, Mag-Well's manufacturing facility is comprised of 4,000 square feet. There is an outside fenced storage yard and parking lot approximately one (1) acre in size. The Company currently leases these facilities at a rate of $1,062.00 per month, which expires on January of 2001 with a ninety (90) day notice of cancellation or renewal. If additional facilities are needed, the Company believes that suitable expansion space is available to meet its future needs at commercially reasonable terms. Currently, the Company's offices and manufacturing facility provides sufficient work space to continue with operations.

As of the date of this Prospectus, the Company has three (3) full-time and four (4) part-time employees. However, within the first twelve (12) months of operations following the successful completion of this Offering, the Company expects to have approximately ten (10) full time employees. The Company's employees are currently not represented by a collective bargaining agreement. However, the Company has entered into employment contracts with Messieurs William W. Dillard, Jr., and John Corney. The Company believes that its relations with its employees are in good standing.

No current or pending litigation, and no claims or counter claims involving the Company as a plaintiff of a defendant exist.

William W. Dillard, Jr., President and CEO - Mr. Dillard graduated from the University of Mississippi before starting in the real estate business in Dallas, Texas. As a Commercial/Industrial Real Estate Broker, Mr. Dillard was involved in every facet of the business, including industrial site selection for many major industrial users, industrial leasing and development, shopping center development, re-development, leasing and management, apartment re-development and management and land sales, ownership, and development. His company, Dillard & Associates, was one of the larger commercial brokerage companies in Dallas. During the 1980's, several large companies and financial institutions utilized Mr. Dillard's experience to assist in the disposal of excess real estate holdings. In 1990, Mr. Dillard became President and majority stockholder for Mag-Well, Inc. by providing the "seed money" to help develop and test-prove the MFC's effectiveness, as well as start the current manufacturing facilities located in Edinburg, Texas.

John D. Corney, Chief Operations Officer - John Corney, the inventor of Mag-Well's MFC, was educated in Australia at the University of Queensland (graduated in 1961) where he specialized in electronics and geophysics. He is considered an expert and one of the world's most knowledgeable individuals in magnetic fluid technology and has published many articles and papers on Magnetic Fluid Treatments, including the Southwest Petroleum Short Course Paper presented at Texas Tech University in 1993. Prior to founding Mag-Well, Inc., in June of 1988, Mr. Corney was employed with the Hydroworld Corporation (circa 1980-1988) and held the positions of Vice President and Design Engineer. During his tenure, he headed the design and manufacturing of MFC's for industrial water treatment and technical sales. In addition, for seven years (1963-1970), Mr. Corney was a field engineer for a major geophysical exploration company (United GeoPhyiscal Corporation) specializing in the development and operation of magnetic playback centers.

Since founding Mag-Well, Inc., Mr. Corney is in charge of design, research and development, and manufacturing. His early work with magnetic and water treatment led directly to his development and application of MFC's for the treatment of oil wells. His work led to the patent now held by Mag-Well.

N. Mark Varel, Executive VP of International Sales and Marketing - After attending the University of Texas, Mark Varel served as Senior Vice President of the Varel Manufacturing Company for eighteen years (son of the founder and CEO). Varel Manufacturing is a fifty-year-old family-owned, multi-level international manufacturing and marketing company that produces high quality roller-cone rock bits for the mining and petroleum industries. His professional career has focused on the management and operational development of Varel Manufacturing. From 1980 to 1982, Mr. Varel specifically managed the Matamoros, Mexico plant. At that time, the plant had 1,100 employees using over 1,000 machine tools. His expertise includes shop floor management techniques, interpreting engineering blueprints, and a working knowledge of international quality standards such as Q1 and ISO-9000.

In 1983, Mr. Varel moved into a direct role for Varel Manufacturing's international marketing efforts. He was instrumental in opening four overseas sales offices: Perth, Australia (1984); Athens, Greece (1987); Dubai, U.A.E. (1989); and Tokyo, Japan (1990). Mr. Varel joined Mag-Well in late 1994. His hands-on approach to the operations management has proven invaluable. He has done business in more than 40 countries and six continents on the globe. He will be instrumental in the future in the future success of Mag-Well.

Fawaz Mourad, Director - Mr. Mourad was born in London, England, and now lives in Beirut, Lebanon. Mr. Mourad has a Master's Degree in Business Administration from the University of Southern California and a Joint Honors Degree in Physics and Chemistry (Bachelor of Science) from the University of Manchester in the United Kingdom. He presently is co-owner of one of the largest Middle Eastern oilfield distribution and service companies, Al Fardouss International. In addition, Mr. Mourad is a co-owner of Envirotech, a full-service engineering company providing enviromental alternatives to major industries throughout the Middle East. Mr. Mourad's businesses operate in Egypt, Lebanon, Oman, Yemen, Syria, Lebanon and the United Arab Emirates.

Mr. Mourad brings forth 15 years of experience in marketing and providing services to the oilfield and industrial markets in the Middle East. He is a member of the International Chamber of Commerce in Lebanon and Syria, and is a member in Egypt's International Economic Forum in Cairo.

NOTES TO MANAGEMENT:

1. Officers serve at the discretion of the Board of Directors. Directors are elected for one-year terms until their successors are elected and qualified. Such election is at the annual meeting of shareholders presently scheduled for a day in the month of April in each year, beginning with the year 1989, unless otherwise fixed by the Board of Directors.
2. No executive Officer or Director of the Company has been the subject of any order, judgment or decree or any court of competent jurisdiction, of any regulatory agency enjoining him from acting as an investment advisor, underwriter, broker or dealer in the securities, or as an affiliated person, director, or employee of an investment company, bank savings and loan association, or insurance company or from engaging in or continuing any conduct or practice in connection with such activity or in connection with the purchase or sale of any securities nor has such person been the subject of any Order of a state authority barring or suspending for more than sixty (60) days, the right of such person to be engaged in such activities or to be associated with such activities.

The Company's Articles of Incorporation eliminate, subject to certain exceptions, the personal liability of directors to the Company or its shareholders for monetary damages for breaches of such directors' duty of care or other duties as a director. The Articles of Incorporation do not provide for the elimination of or any limitation on the personal liability of a director for (i) any appropriation, in violation of the director's duties, of any business opportunity of the Company, (ii) acts or omissions that involve intentional misconduct or a knowing violation of law, (iii) unlawful corporate distributions or (iv) any transaction from which the director received an improper benefit. In addition, the Company's Bylaws provide broad indemnification rights to directors and officers so long as the director or officer acted in a manner believed in good faith to be in, or not opposed to, the best interests of the Company, and with respect to criminal proceedings, if the director had no reasonable cause to believe his or her conduct was unlawful. These provisions of the Articles of Incorporation and Bylaws generally limit the remedies available to a shareholder who is dissatisfied with a decision by the Company protected by these provisions. Insofar as indemnification for liability arising under the Securities Act may be permitted to directors, officers and controlling persons of the Company pursuant to the foregoing provisions, or otherwise, the Company has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

NOTES TO EXECUTIVE COMPENSATION:

1. The Company has entered into an Employment Agreement with Mr. William Dillard as Chief Executive Officer.
2. The Company has entered into an Employment Agreement with Mr. John Corney as Chief Operating Officer.

NOTES:

1. The post offer percentage of class assumes that the maximum number of shares of Common Stock will be issued from this offering (i.e. 5,000,000 shares of Common Stock). The total amount of shares outstanding after a maximum offering will be 12,373,000.
2. Officers and directors as a group control approximately 9,198,000 of the 12,373,000 issued and outstanding shares of Common Stock of the Company (74.34%). After the maximum offering, the group of officers and directors will control approximately 52.94%.

On June 20, 1988, the Company was incorporated under the laws of the State of Texas as Mag-Well, Inc. The Company was authorized to issue 1,000,000 shares of Common Stock at no par value.

On June 20, 1988, the Company issued 19,887 shares of Common Stock to the founder, Mr. John Corney, of the Company which were fully paid and non-assessable. All shares issued by the Company were issued under Section 4(2) of the Securities Act of 1933.

On December 1, 1989, the Company issued 51,763 shares of Common Stock to the second founder of the Company, Mr. William W. Dillard, Jr., which were fully paid and non-assessable. All shares issued by the Company were issued under Section 4(2) of the Securities Act of 1933.

In a statement filed with the Secretary of State of Texas on November 14, 1991, it was amended that the Company's registered agent be changed from Mr. John Corney to proclaim that Mr. William W. Dillard, Jr., as the duly appointed registered agent of Mag-Well, Inc.

On July 1, 1994, the Company issued 5,000 shares of Common Stock to a current officer and director of the Company, Mr. N. Mark Varel, which were fully paid and non-assessable. All shares issued by the Company were issued under Section 4(2) of the Securities Act of 1933.

During 1994, the Company completed a public offering of shares of Common Stock of the Company pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby it sold 23,350 shares of Common Stock to approximately sixteen (16) unaffiliated shareholders of record, none of whom were or are officers and directors of the Company.

The Company filed a "Certificate of Amendment of Articles of Incorporation - (After Issuance of Stock)" on March 12, 1999. In this statement it certified that:

1. There were One Hundred Thousand (100,000) shares of Common Stock issued and outstanding.
2. On February 15, 1999, at a duly noticed meeting of the shareholders of Mag-Well, Inc., a vote was taken whereby Seventy-One Thousand Six Hundred Fifty (71,650) shares voted in favor and none voted against a motion to approve the amendments to the Articles of Incorporation. The amendments, in effect, authorize the Company to issue 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, par value $0.001
3. On February 15, 1999, at a duly noticed meeting of the shareholders of Mag-Well, Inc., a vote was taken whereby Seventy-One Thousand Six Hundred Fifty (71,650) shares voted in favor and none voted against a motion to approve the proposal to split forward the Common Shares outstanding (100,000 shares at the time) at a rate of 120 to 1.

On March 2, 1999, the Company completed a public offering of shares of Common Stock of the Company pursuant to Regulation D, Rule 504 or the Securities Act of 1933, as amended, whereby it sold 150,000 shares of Common Stock to approximately one (1) unaffiliated shareholder of record, who was not and is not an officer or director of the Company.

On April 5, 1999, the Company completed a public offering of shares of Common Stock of the Company pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended whereby it sold 223,000 shares of Common Stock to approximately fifty-three (53) shareholders of record, none of whom were or are officers or directors of the Company. One of these shareholders was the purchaser of the 150,000 shares on March 2, 1999.

On or about April 7, 1999, the Company filed five copies, one of which was an original, of an amended Form D "Notice of Sales Pursuant to Regulation D" notifying the Securities and Exchange Commission that the offering was exempt from the registration provisions of Section 5 of the Securities Act pursuant to Regulation D, Rule 504 of such same act. On August 25, 1999, an amended copy of the Company's Form D was filed with the SEC, correcting a typographical error.

The Company has approximately 12,373,000 shares of Common Stock issued and outstanding. The holders of the Common Stock: (i) have equal rights to dividends from funds legally available therefore, ratably when as and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution, or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights and there are no redemption or sinking fund provisions applicable thereto; (iv) are entitled to one non-cumulative vote per share of Common Stock, on all matters which stockholders may vote on at all meetings of Shareholders; and (v) all of the shares of Common Stock, now outstanding are fully paid and non-assessable. There is no cumulative voting for the election of directors. There are 12,373,000 shares of Common Stock outstanding held by seventy-two (72) shareholders of record. (See "Principal Shareholders").

The Company is also authorized to issue up to 5,000,000 shares of Preferred Stock, $0.001 par value. However, the Company has not issued any Preferred Stock to date. Additionally, the Company has not developed the descriptive attributes of these Preferred Shares.

The Company has paid no cash dividends to date and does not anticipate paying any cash dividends on its Common Stock in the foreseeable future. The Company intends to retain its earnings, if any, to finance the expansion of its business, for additional and continued research and development and for other general corporate purposes. Any payment of future dividends will be at the discretion of the Board of Directors and will depend upon, among other factors, the Company's earnings, financial condition, capital requirements, level of indebtedness, contractual restrictions with respect to the payment of dividends and other considerations that the Board of Directors deems relevant. (See "Investment Considerations - Lack of Cash Dividends").

Statements made in this Prospectus as to the contents of any contract, agreement or other document referred to are necessarily summaries of such documents. All material elements of the contracts and documents referenced herein are disclosed in the Prospectus. With respect to each such contract, agreement or other document filed as an exhibit to the Registration Statement, reference is made to the exhibit for a more complete description of the matter involved, and each such statement shall be deemed qualified in its entirety by such reference.

The Company intends to furnish its shareholders with annual reports containing financial statements audited by independent accountants and with quarterly reports containing un-audited financial information for each of the first three quarters of each fiscal year.

Upon completion of this offering, there will be 17,373,000 shares of Common Stock of the Company outstanding given a Maximum Offering. Of these outstanding shares, the 5,000,000 shares of Common Stock being sold in this offering, in addition to approximately 373,000 shares currently unrestricted, will be immediately eligible for resale in the public market without restriction under the Securities Act by persons other than "affiliates" of the Company, as that term is defined in Rule 144 adopted under the Securities Act ("Affiliates"). The remaining 12,000,000 shares of Common Stock (the "Restricted Shares") held by officers, directors, employees, consultants and other shareholders of the Company were sold by the Company in reliance on exemptions from the registration requirements of the Securities Act and are "restricted" securities within the meaning of Rule 144 under the Securities Act and may not be sold publicly unless they are registered under the Securities Act or are sold pursuant to Rule 144 or another exemption from registration.

In general, under Rule 144 as currently in effect, beginning approximately ninety (90) days after the effective date of the Registration Statement of which this Prospectus is a part, a stockholder, including an Affiliate, who has beneficially owned his or her restricted securities (as that term is defined in Rule 144) for at least one (1) year from the later of the date such securities were acquired from the Company or (if applicable) the date they were acquired from an Affiliate is entitled to sell, within any three (3) month period, a number of such shares that does not exceed the greater of 1% of the then outstanding shares of Common Stock or the average weekly trading volume in the Common Stock during the four (4) calendar weeks preceding the date on which notice of such sale was filed under Rule 144, provided certain requirements concerning availability of public information, manner of sale and notice of sale are satisfied. In addition, under Rule 144(k), if a period of at least two (2) years has elapsed between the later of the date restricted securities were acquired from the Company or (if applicable) the date they were acquired from an Affiliate of the Company, a stockholder who is not an Affiliate of the Company at the time of sale and has not been an Affiliate of the for at least three (3) months prior to the sale entitled to sell the shares immediately without compliance with the foregoing requirements under Rule 144.

Under the current U.S. tax codes, the Company's corporate tax rate will be about 36%. Under the United States Federal Tax Code amendments enacted in 1993 for small businesses, the Company will be able to deduct up to $17,500 annually on certain capital expenditures for office equipment (i.e. personal computers, copiers, telephones systems, etc.) instead of amortizing such equipment over several years. Specifically, this deduction allowance is included in Section 179 of the I.R.S. Tax Code. There are no (zero) state corporate income taxes in the State of Texas.

However, the Company is assessed a franchise tax according to the Texas Administrative Code (Tax Code-Chapter 171: Franchise Tax). The franchise tax is imposed on each corporation that is chartered in Texas or has a Certificate of Authority to do business in Texas. The Company pays the greater of the tax on (1) net taxable capital or (2) net taxable earned surplus.

Taxable capital is a corporation's stated capital (capital stock) plus surplus. Surplus means the net assets of a corporation minus its stated capital. Taxable capital is apportioned using a single gross receipts factor. Taxable capital for an annual report is based on the end of the corporation's last accounting period in the year prior to the year in which the report is due. The tax rate on taxable capital is 0.25% per year of privilege period.

Earned surplus basically includes federal net taxable income, plus compensation paid to officers and directors of a corporation. S-corporations and corporations with fewer than 36 shareholders are generally exempt form the compensation add-back. For the earned surplus calculation, unitary income is apportioned using a single gross receipts factor. In addition, non-unitary income is allocated to Texas if Texas is the corporation's commercial domicile. Earned surplus for an annual report should be reported beginning with the day after the ending date on the previous franchise tax report and ending with the end of the corporation's last federal accounting period in the year prior to the year in which the report is due. The tax rate on earned surplus is 4.5%.

The Company currently has a $250,000 "Key Man" life insurance on John Corney, Chief Operations Officer. There are no additional "Key Man" life insurance polices for any of the Company's other officers and directors, but the Company intends to provide such coverage in the near future.

The Company is not currently involved in any litigation or other legal matter that could adversely effect the Company's performance. However, it is important to note that any future litigation could have a materially adverse effect on the ultimate success of the Company.

The Bylaws of the Company further states that the Company shall provide to any person who is or was a director, officer, employee or agent of the Corporation or is or was serving at the request of the Corporation as a director, officer, employee or agent of the corporation, partnership, joint venture, trust or enterprise, the indemnity against expenses of a suit, litigation or other proceedings which is specifically permissible under applicable Texas law. The Board of Directors may, in its discretion, direct the purchase of liability insurance by way of implementing the provisions of this Article. However, the Company has yet to purchase any such insurance and has no plans to do so.

The Articles of Incorporation of the Company states that a director or officer of the corporation shall not be personally liable to this corporation or its stockholders for damages for breach of fiduciary duty as a director or officer, but this Article shall not eliminate or limit the liability of a director or officer for (i) acts or omissions which involve intentional misconduct, fraud or a knowing violation of the law or (ii) the unlawful payment of dividends. Any repeal or modification of this Article by stockholders of the corporation shall be prospective only, and shall not adversely affect any limitation on the personal liability of a director or officer of the corporation for acts or omissions prior to such repeal or modification.

The Articles of Incorporation of the Company further states that every person who was or is a party to, or is threatened to be made a party to, or is involved in any such action, suit or proceeding, whether civil, criminal, administrative or investigative, by the reason of the fact that he or she, or a person with whom he or she is a legal representative, is or was a director of the corporation, or who is serving at the request of the corporation as a director or officer of another corporation, or is a representative in a partnership, joint venture, trust or other enterprise, shall be indemnified and held harmless to the fullest extent legally permissible under the laws of the State of Texas from time to time against all expenses, liability and loss (including attorneys' fees, judgments, fines, and amounts paid or to be paid in a settlement) reasonably incurred or suffered by him or her in connection therewith. Such right of indemnification shall be a contract right which may be enforced in any manner desired by such person. The expenses of officers and directors incurred in defending a civil suit or proceeding must be paid by the corporation as incurred and in advance of the final disposition of the action, suit, or proceeding, under receipt of an undertaking by or on behalf of the director or officer to repay the amount if it is ultimately determined by a court of competent jurisdiction that he or she is not entitled to be indemnified by the corporation. Such right of indemnification shall not be exclusive of any other right of such directors, officers or representatives may have or hereafter acquire, and, without limiting the generality of such statement, they shall be entitled to their respective rights of indemnification under any bylaw, agreement, vote of stockholders, provision of law, or otherwise, as well as their rights under this article.

The following table sets forth the estimated expenses payable by the Company in connection with this offering (excluding commissions):

1. The amounts set forth above, except for the SEC fees, are in each case estimated.

During the past five (5) years, the Company has issued unregistered securities to a limited number of persons, as described below. No underwriters or underwriting discounts or commissions were involved. The Company believes that each transaction was exempt from the registrations requirements of the Securities Act, pursuant to Regulation D, Rule 504 as amended, and pursuant to Section 4(2) of the said act. Accordingly, on or about April 7, 1999, the Company filed five copies, one of which was an original, of an amended Form D "Notice of Sales Pursuant to Regulation D" notifying the Securities and Exchange Commission that the offering was exempt from the registration provisions of Section 5 of the Securities Act pursuant to Regulation D, Rule 504 of such same act. On August 25, 1999, an amended copy of the Company's Form D was filed with the SEC, correcting a typographical error.

1. During April 1994, the Company completed a public offering of shares of Common Stock of the Company pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby is sold 23,350 shares of Common Stock to approximately sixteen (16) unaffiliated shareholders of record, none of whom were or are officers and directors of the Company.
2. On July 1, 1994, the Company issued 5,000 shares to a current officer and director of the Company which were fully paid and non-assessable. All shares issued by the Company were issued under Section 4(2) of the Securities Act of 1933.
3. The Company filed a "Certificate of Amendment of Articles of Incorporation - (After Issuance of Stock)" on March 12, 1999. In this statement it certified that:

1. There were One Hundred Thousand (100,000) shares of Common Stock issued and outstanding.
2. On February 15, 1999, at a duly noticed meeting of the shareholders of Mag-Well, Inc., a vote was taken whereby Seventy-One Thousand Six Hundred Fifty (71,650) shares voted in favor and none voted against a motion to approve the amendments to the Articles of Incorporation. The amendments, in effect, authorize the Company to issue 20,000,000 shares of Common Stock and 5,000,000 shares of Preferred Stock, par value $0.001
3. On February 15, 1999, at a duly noticed meeting of the shareholders of Mag-Well, Inc., a vote was taken whereby Seventy-One Thousand Six Hundred Fifty (71,650) shares voted in favor and none voted against a motion to approve the proposal to split forward the Common Shares outstanding (100,000 shares at the time) at a rate of 120 to 1.

1. On March 2, 1999, the Company completed a public offering of shares of Common Stock of the Company pursuant Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby it sold 150, 000 shares of Common Stock to approximately one (1) unaffiliated shareholder of record, who was not and is not an officer or director of the Company.
2. On April 5, 1999, the Company completed a public offering of shares of Common Stock of the Company pursuant to Regulation D, Rule 504 of the Securities Act of 1933, as amended, whereby it sold 223, 000 shares of Common Stock to approximately fifty-three (53) unaffiliated shareholders of record, none of whom were or are officers and directors of the Company. One of these shareholders was the purchaser of the 150,000 shares on March 2, 1999.

See accompanying notes to unaudited interim financial statements