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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Wellstar International Inc (CE) | USOTC:WLSI | OTCMarkets | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 0.000001 | 0.00 | 01:00:00 |
x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT |
Nevada | 20-1834908 | |
(State or other jurisdiction of incorporation or organization)
|
(I.R.S. Employer Identification No.)
|
6911 Pilliod Road
Holland, Ohio 43528
(Address of principal executive offices)
|
Large accelerated filer
o
|
Accelerated filer
o
|
Non-accelerated filer
o
|
Smaller reporting company
x
|
(Do not check if smaller reporting company)
|
Page
|
||
Part I –
|
Financial Information
|
|
Item 1. Financial Statements (unaudited)
|
F-1 | |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
1 | |
Item 3. Quantitative and Qualitative Disclosures about Market Risk
|
8 | |
Item 4. Controls and Procedures
|
8 | |
Part II –
|
Other Information
|
|
Item 1. Legal Proceedings
|
9 | |
Item 1A. Risk Factors
|
9 | |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
|
9 | |
Item 3. Defaults upon Senior Securities
|
9 | |
Item 4. Removed and Reserved
|
9 | |
Item 5. Other Information
|
9 | |
Item 6. Exhibits
|
9 | |
Signatures
|
10 | |
SIMONTACCHI, MILLER & DeANGELIS, PA | 170 E. MAIN STREET | |
CERTIFIED PUBLIC ACCOUNTANTS | ROCKAWAY, NEW JERSEY 07866 | |
TEL: (973) 664-1140 | ||
FAX: (973) 664-1145 |
PAGE
|
|
REVIEW REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM |
F-i
|
CONSOLIDATED BALANCE SHEETS | F-1 - F-2 |
CONSOLIDATED STATEMENTS OF OPERATIONS | F-3 |
CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (DEFICIT)
|
F-4 |
CONSOLIDATED STATEMENTS OF CASH FLOWS | F-5, F-6 |
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS | F-7 - F-29 |
October 31,
2010
(Unaudited)
|
July 31,
2010
(Audited)
|
|||||||
Current Assets:
|
||||||||
Cash | $ | 150,681 | $ | - | ||||
Prepaid Expenses
|
- | 19.837 | ||||||
Total Current Assets
|
150,681 | 19,837 | ||||||
Fixed Assets:
|
||||||||
Imaging Equipment
|
829,169 | 829,169 | ||||||
Office Equipment and Fixtures
|
157.213 | 157.213 | ||||||
Subtotal
|
986,382 | 986,382 | ||||||
Less: Accumulated Depreciation
|
799,656 | 748.925 | ||||||
Net Fixed Assets
|
186.726 | 237.457 | ||||||
Development of New Medical Camera, in Progress
|
380,893 | 380,893 | ||||||
Intangible Assets:
|
||||||||
Manufacturing and Distribution Agreement
|
700,000 | 700,000 | ||||||
Subtotal
|
700,000 | 700,000 | ||||||
Less: Accumulated Amortization
|
618,880 | 586,849 | ||||||
Net Intangible Assets
|
81,120 | 113,151 | ||||||
Other Assets:
|
||||||||
Loan Acquisition Cost (net of amortization of $405,285 @ 10/31/10 and $358,999 @ 7/31/09)
|
385,240 | 206,526 | ||||||
Software and Manuals (net of amortization of $55,400 @ 10/31/09 and $55,372 @ 7/31/10)
|
- | 28 | ||||||
Security Deposit | - | - | ||||||
Total Other Assets | 385,240 | 206,554 | ||||||
Total Assets | $ | 1,184,660 | $ | 957,892 |
October 31,
2010
(Unaudited)
|
July 31,
2010
(Audited)
|
|||||||
Current Liabilities:
|
||||||||
Cash Book Overdraft
|
$ | - | $ | 6,103 | ||||
Due to Employees
|
- | 7,136 | ||||||
Accounts Payable
|
809.535 | 866.615 | ||||||
Accrued Expenses
|
3,851,198 | 3,749,839 | ||||||
Note & Loan Payable - Other
|
63,382 | 63,382 | ||||||
Notes Payable
|
350,000 | 350,000 | ||||||
Derivative Instrument Liability - Convertible Notes
|
29,618,756 | 28,093,659 | ||||||
Convertible Debt
|
4,205,029 | 3.992 216 | ||||||
Total Current Liabilities
|
38,897,900 | 37.128,950 | ||||||
Long Term Liabilities:
|
||||||||
Convertible Debt
|
3,261.836 | 2.959,105 | ||||||
Derivative Instrument Liability - Convertible Notes
|
16,453,223 | 15,902.472 | ||||||
Derivative Instrument Liability - Warrants
|
17 | 19 | ||||||
Contingent Liability
|
270.000 | |||||||
Total Long-Term Liabilities
|
19,985.076 | 18,861,596 | ||||||
Total Liabilities
|
58,882,976 | 55,990,546 | ||||||
Stockholders' Deficit:
|
||||||||
Preferred Stock
|
||||||||
Series A, Authorized 100,000 Shares, par value .001 per share
|
||||||||
Issued and Outstanding Shares. 60.000
|
60 | 60 | ||||||
Paid in Surplus
|
59.940 | 59.940 | ||||||
Series B, Authorized 1,000,000 Shares, par value .001 per share
|
||||||||
Issued and Outstanding Shares, 200,000 Shares,
|
200 | 200 | ||||||
Paid in Surplus
|
199,800 | 199,800 | ||||||
Series C. Authorized 1,000,000 Shares, par value .001 per share
|
||||||||
Issued and Outstanding Shares, 200,000 Shares
|
200 | |||||||
Paid in Surplus
|
199,800 | |||||||
Common Stock
|
||||||||
Authorized 15,000,000,000 Shares, par value .001 per share
|
||||||||
Issued Shares. 6,293,999,155 - Outstanding Shares,
6,293,984,155 (10/31/10) and 3.565,354,384 (7/31/10)
|
6,293,984 | 3,565,354 | ||||||
Paid in Surplus
|
(2,239,823 | ) | 396.351 | |||||
Retained Earnings (Deficit) | (62,212,477 | ) | (59,254,359 | ) | ||||
Total Shareholders' Deficit
|
(57,698,316 | ) | (55,032,654 | ) | ||||
Total Liabilities Less Stockholder's Deficit
|
$ | 1,184,660 | $ | 957,892 |
Three Months October 31,
|
||||||||
2010 | 2009 | |||||||
Income: | ||||||||
Revenue from Medical Imaging | $ | - | $ | - | ||||
Cost of Sales | - | - | ||||||
Gross Profit | - | - | ||||||
Operating Expenses: | ||||||||
Selling. General and dministrative
|
315,962 | 409,145 | ||||||
Depreciation and Amortization
|
129,076 | 104,646 | ||||||
Total Operating Expenses
|
445 , 038 | 513,791 | ||||||
Loss from Operations
|
(445,038 | ) | (513,791 | ) | ||||
Other Expense (Income):
|
||||||||
Interest Income
|
( 15 | ) | ( 68 | ) | ||||
Interest Expense
|
437,249 | 183,169 | ||||||
Derivative Instrument (Income) Expense, Net
|
2,075,846 | (7,331,453 | ) | |||||
Non-Registration Penalties
|
- | 108,900 | ||||||
Total Other Expenses (Income)
|
2,513,080 | (7,039,452 | ) | |||||
Income (Loss) before Provision for Taxes
|
(2,958,118 | ) | 6,525,661 | |||||
Provision for Taxes
|
- | - | ||||||
Net Income (Loss)
|
$ | (2,958,118 | ) | $ | 6,525,661 | |||
Net Income (Loss) Per Share,
Basic and Diluted
|
(.0 | ) | $ | (.0 | ) | |||
Weighted Average Number of Common Shares Outstanding, Basic and Diluted
|
5,652,204,864 | 804,247,516 |
Note:
|
Effective January 15, 2010, the Company had a reverse Split of their Common Stock of 100 to 1. The above average number of Common Shares Outstanding reflects the split. The 3 months ended October 31, 2009 have been restated to reflect the split, and the net loss per share has also been restated.
|
Preferred Stock
|
Common Stock
|
|
||||||||||||||||||||||||||||||
Additional
|
Additional
|
|||||||||||||||||||||||||||||||
Shares
|
Amount
|
Paid in
Capital
|
Shares
|
Amount
|
Paid in
Capital
|
Accumulated
Deficit
|
Total
|
|||||||||||||||||||||||||
Balance, July 31, 2010
|
260,000 | $ | 260 | $ | 259,740 | 3,565,354,384 | $ | 3,565,354 | $ | 396,351 | $ | (59,254,359 | ) | $ | (55,032,654 | ) | ||||||||||||||||
Series C, Preferred
|
200,000 | 200 | 199,800 | 200,000 | ||||||||||||||||||||||||||||
Conversion of Debentures
|
2,728,629,771 | 2,728,630 | (2,636,174 | ) | 92,456 | |||||||||||||||||||||||||||
Net
Income for the Period
|
(2,958,118 | ) | (2,958,118 | ) | ||||||||||||||||||||||||||||
Balance, October 31 2010 | 460,000 | $ | 460 | $ | 459,540 | 6,293,984,155 | 6,293,984 | $ | (2,239,823 | ) | $ | (62,212,477 | ) | $ | (57,698,316 | ) |
Three Month Ended October 31,
2010 2009
|
||||||||
Cash Flows from Operating Activities:
|
||||||||
Net Income (Loss)
|
$ | (2,958,118 | ) | $ | 6,525,661 | |||
Adjustments to Reconcile Net Loss to Net Cash used in Operating Activities:
|
||||||||
Depreciation and Amortization
|
129,076 | 104,646 | ||||||
Interest Added to Not Payable
|
207,000 | |||||||
Derivative Instrument (Income) Expense, Net
|
2,075,846 | (7,331,453 | ) | |||||
Delinquent Registration Penalty
|
108,900 | |||||||
Changes in Operating Assets and Liabilities:
|
||||||||
Increase (Decrease) In:
|
||||||||
Prepaid Expenses
|
19,837 | 5,186 | ||||||
Accounts Payable
|
(63,183 | ) | 44,496 | |||||
Accrued Expenses
|
301,359 | 280,993 | ||||||
Net Cash Used in Operating Activities
|
(288,183 | ) | (261,571 | ) | ||||
Cash Flows from Investing Activities:
|
||||||||
Purchase of Equipment and Software
|
- | (27,000 | ) | |||||
Security Deposit - Reduction
|
- | 4,525 | ||||||
Net Cash Used in Investing Activities
|
- | (22,475 | ) | |||||
Cash Flows From Financing Activities:
|
||||||||
Loan Payable
-
Other
|
(7,136 | ) | ||||||
Proceeds from Issuance of Convertible Notes
|
176,000 | 260,000 | ||||||
Proceeds from Supply Agreement
|
270,000 | |||||||
Net Cash Provided by Financing Activities
|
438, 864 | 260,000 | ||||||
Net Increase in Cash
|
150,681 | (24,046 | ) | |||||
Cash at Beginning of Period
|
- | 29,564 | ||||||
Cash at End of Period
|
$ | 150,681 | $ | 5,518 | ||||
Cash Paid for Interest | $ | - 0 - | $ | - 0 - | ||||
Cash Paid for Taxes
|
$ | - 0 - | $ | - 0 - |
1.
|
During the three months ended October 31, 2010, convertible debentures in the amount of $92,456 were converted into 2,728,629,771 shares of Common Stock.
|
2.
|
During the three months ended October 31, 2010, two officers were issued Series C Preferred Stock in lieu of salaries for a value of $200,000, no cash was expended.
|
3.
|
During the three months ended October 31, 2009, convertible debentures in the amount of $313,553 were converted into 9,399,081,801 shares of Common Stock.
|
4.
|
During the three months ended October 31, 2009, two officers were issued Series B Preferred Stock in lieu of salaries for a value of $100,000, no cash was expended.
|
5.
|
There was an assignment of Convertible Notes Payable of $70,000 from one Lender to new Lenders, which had no effect on cash.
|
Deferred Tax Asset | $ | 4,252,000 | ||
Reserve | (4,252,000 | ) | ||
Balance | $ | - 0 - |
|
l)
|
Fair Value of Financial Instruments
|
|
o)
|
Derivative Instruments
|
|
a)
|
The Company has borrowed $150,000 from an unrelated individual. The Note is dated August 1, 2005. The outstanding balance of the loan shall bear monetary interest at the fixed rate of six percent (6%) simple, non-compounding interest payable in arrears per annum.
|
|
b)
|
The Company has entered into a loan agreement with an unrelated individual. The note is dated October 11, 2005. The note provides for a total loan of $400,000, the Company received $190,000 by October 31, 2005. The balance of $210,000 was subsequently received on November 29, 2005. The note bears interest at a fixed rate of 8%, plus the prevailing variable margin rate charged to the lender.
|
|
c)
|
On December 21, 2005, the Company completed the purchase of certain assets of Micro Health Systems, Inc. (“MHS”) under a definitive agreement.
|
Mikron Manufacturing Distribution Agreement | ||||
Customer List and Intangible Assets | $ | 700,000 | ||
Tangible Assets | 80,000 | |||
Covenant Not-To-Compete | 20,000 | |||
Total | $ | 800,000 |
d)
|
The Company has borrowed $16,912 from an unrelated party. The note is dated January 16, 2009, and was due on February 16, 2009 (maturity date). The note has an interest rate of 12% per annum. Per the terms of the note, the Company is in default as it failed to pay the principal and interest due upon the maturity date. In the event of default, the lender, by notice given to the borrower, may declare the unpaid principal and accrued interest owing to be paid. The Company (borrower) has not received any demand for payment as of November 30, 2010. The note is included as a current liability in Notes and Loans Payable - Other in the amount of $16,912.
|
e)
|
See Note 3(b), this Lender assigned $290,000 of his Notes Receivable to two individuals and two Companies and entered into agreements with them. The Notes are convertible into the Company’s Common Stock and are being accounted for as Embedded Derivative Liabilities in accordance with U.S. GAAP (See Note 5). The Lenders have converted $234,465 of these Notes into 749,162,474 shares of Common Stock after reflecting a reverse split of 100 - 1 in January 2010. The Notes have an interest rate of 0.0% and mature August 20, 2011. Total shares available for conversion at October 31, 2010 are 1,662,645,020.
|
|
a)
|
On June 18, 2009, JMJ Financial purchased $270,500 of certain Convertible Notes from AJW Partner and related entities (see Note 2). Through April 30, 2010, $270,500 of these Notes were converted to Common Stock. These Notes bear interest at 8% per annum. The Company has consented to the sale of these Notes. The Notes bear the same terms as in the hands of the seller, AJW Partners, and related entities.
|
b)
|
The Company has entered into an agreement with JMJ Financial, the Lender, and the Company as the Borrower. They will loan to the Company the principal sum of $575,000 of which $75,000 has been recorded as a loan acquisition cost and is being amortized over 36 months. The loan has a 12% one time interest charge on the principal sum of $69,000 which is included in the balance due. No interest or principal payments are required until the maturity date three (3) years from the effective date (May 22, 2009). Both principal and interest may be included in conversion prior to maturity date. The conversion formula, the number of shares issued through conversion, is the conversion amount, divided by the conversion price which is 70% which was amended to 35% on March 9, 2010 of the lowest trading price in the 20 trading days previous to the conversion, as applied to the Company’s voting Common Stock. Prepayment of the loan is not permitted, unless approved by Holder.
|
c)
|
The Company has an additional commitment to borrow up to $1,725,000 from JMJ Financial of which $225,000 will be recorded as a loan acquisition cost and will be amortized over 36 months. The interest rate will be 12% one time interest charge on the principal sum of $207,000 interest. No interest or principal payments are required until the maturity date, but both principal and interest may be included in the conversion prior to maturity. Maturity is three (3) years from the effective date of August 3, 2010. The loan is convertible into voting common stock of the Company. The conversion formula, the number of shares issued through conversion is the conversion amount, divided by the conversion price which is 70% amended to 35% on March 9, 2010 of the lowest trading price in the 20 trading days previous to the conversion. Prepayment of the loan is not permitted unless approved by holder.
|
d)
|
On July 26, 2010, JMJ assigned $25,000 of its $1,150,000 convertible notes receivable to Redwood Management, LLC. The assignment was accepted by the Company.
|
e)
|
On July 28, 2010, JMJ assigned $75,000 of its $1,150,000 convertible notes receivable to Black Mountain Equities, Inc. The terms of conversion are the same as JMJ Financial. There is no interest on this note. The assignment was accepted by the Company.
|
f)
|
In December 2009, JMJ Financial was assigned a note of $40,000 from another lender (see Note 3 (b). The Lender converted $40,000 into Common Stock, there is no balance due.
|
Issue
Date
|
Expiry Date
|
No. of
Warrants
|
Issued To
|
Exercise Price Per
Share
|
Value - Issue
Date
|
Value - October 31,
2010
|
||||||||||||
10/31/2005
|
10/31/2010
|
16,667 |
AJW Partners
|
$ | 0.50 | $ | 169,629 | $ | 0 | |||||||||
1/20/2006
|
1/20/2011
|
16,667 |
AJW Partners
|
$ | 0.50 | 81,321 | 0 | |||||||||||
7/25/2006
|
7/25/2011
|
8,333 |
AJW Partners
|
$ | 0.50 | 146,197 | 0 | |||||||||||
8/4/2006
|
8/4/2011
|
8,333 |
AJW Partners
|
$ | 0.50 | 102,816 | 0 | |||||||||||
11/30/2006
|
11/30/2013
|
40,000 |
AJW Partners
|
$ | 0.08 | 158,741 | 0 | |||||||||||
3/26/2007
|
3/26/2014
|
10,000 |
AJW Partners
|
$ | 0.03 | 25,433 | 0 | |||||||||||
5/30/2007
|
5/30/2014
|
100,000 |
AJW Partners
|
$ | 0.02 | 163,409 | 0 | |||||||||||
10/12/2007
|
10/12/2014
|
150,000 |
AJW Partners
|
$ | 0.00 | 179,353 | 7 | |||||||||||
11/15/2007
|
11/15/2014
|
100,000 |
AJW Partners
|
$ | 0.00 | 39,649 | 5 | |||||||||||
12/14/2007
|
12/14/2014
|
100,000 |
AJW Partners
|
$ | 0.00 | 24,000 | 5 | |||||||||||
4/22/2008
|
4/22/2015
|
200,000 |
AJW Partners
|
$ | 0.00 | 17,540 | 0 | |||||||||||
Fair value of derivative instrument liabilities for warrants
|
$ | 1,108,088 | $ | 17 | ||||||||||||||
Issue
Date
|
Due
Date
|
Note
Amount
|
Instrument
|
Exercise Price Per
Share
|
Value -
Issue Date
|
Value - October
31, 2010
|
|||||||||
10/31/2005
|
10/31/2008
|
$ | 1,000,000 |
Convertible Notes
|
Various
|
$ | 2,681,204 | $ | 0 | ||||||
1/20/2006
|
1/20/2009
|
1,000,000 |
Convertible Notes
|
Various
|
1,363,058 | 6,358,464 | |||||||||
7/25/2006
|
7/25/2009
|
500,000 |
Convertible Notes
|
Various
|
791,994 | 3,600,000 | |||||||||
8/4/2006
|
8/4/2009
|
500,000 |
Convertible Notes
|
Various
|
616,127 | 1,652,400 | |||||||||
11/30/2006
|
11/30/2009
|
400,000 |
Convertible Notes
|
Various
|
523,047 | 2,448,000 | |||||||||
3/26/2007
|
3/26/2010
|
165,000 |
Convertible Notes
|
Various
|
274,500 | 237,600 | |||||||||
5/30/2007
|
5/30/2010
|
435,000 |
Convertible Notes
|
Various
|
825,801 | 2,786,400 | |||||||||
10/12/2007
|
10/12/2010
|
175,000 |
Convertible Notes
|
Various
|
711,289 | 1,260,000 | |||||||||
11/15/2007
|
11/15/2010
|
325,000 |
Convertible Notes
|
Various
|
465,052 | 2,275,019 | |||||||||
12/14/2007
|
12/14/2007
|
315,000 |
Convertible Notes
|
Various
|
631,254 | 2,205,059 | |||||||||
12/31/2007
|
12/31/2010
|
427,760 |
Convertible Notes
|
Various
|
894,835 | 2,994,422 | |||||||||
4/22/2008
|
4/22/2011
|
190,000 |
Convertible Notes
|
Various
|
569,394 | 798,662 | |||||||||
6/12/2008
|
6/12/2011
|
135,000 |
Convertible Notes
|
Various
|
555,374 | 946,969 | |||||||||
8/29/2008
|
8/29/2011
|
235,114 |
Various
|
875,919 | 1,654,188 | ||||||||||
Fair value of bifurcated embedded derivative instrument liabilities carry forward
|
$ | 12,149,037 | $ | 29,217,183 | |||||||||||
Carry Forward
|
Issue
Date
|
Due
Date
|
Note
Amount
|
Instrument
|
Exercise Price Per
Share
|
Value -
Issue Date
|
Value - October 31,
2010
|
|||||||||
5/15/2009
|
5/15/2012
|
$ | 79,500 |
Convertible Notes
|
Various
|
79,500 | 567,912 | |||||||||
6/30/2009
|
6/30/2012
|
551,565 |
Convertible Notes
|
Various
|
551,565 | 3,951,699 | ||||||||||
5/27/2009
|
5/27/2012
|
575,000 |
Convertible Notes
|
Various
|
575,000 | 1,528,036 | ||||||||||
8/20/2009
|
8/20/2011
|
70,000 |
Convertible Notes
|
Various
|
70,000 | 55,817 | ||||||||||
12/7/2009
|
12/7/2012
|
50,000 |
Convertible Notes
|
Various
|
177,486 | 361,903 | ||||||||||
8/19/2009
|
8/19/2012
|
1,188,000 |
Convertible Notes
|
Various
|
1,188,000 | 5,835,987 | ||||||||||
5/5/2010
|
2/5/2011
|
50,000 |
Convertible Notes
|
Various
|
165,721 | 117,298 | ||||||||||
5/19/2010
|
5/19/2012
|
40,000 |
Convertible Notes
|
Various
|
40,000 | 150,049 | ||||||||||
7/13/2010
|
7/13/2012
|
395,344 |
Convertible Notes
|
Various
|
395,344 | 1,869,360 | ||||||||||
7/26/2010
|
8/19/2012
|
25,000 |
Convertible Notes
|
Various
|
25,000 | - 0 - | ||||||||||
7/27/2010
|
7/27/2012
|
40,000 |
Convertible Notes
|
Various
|
40,000 | 78,411 | ||||||||||
|
||||||||||||||||
7/28/2010
|
7/28/2012
|
75,000 |
Convertible Notes
|
Various
|
75,000 | 270,185 | ||||||||||
7/25/2010
|
7/25/2013
|
421,000 | Convertible Notes |
Various
|
421,000 | 2,068,140 | ||||||||||
Fair value of bifurcated embedded derivative instrument liabilities
|
$ | 15,952,653 | $ | 46,071,980 | ||||||||||||
Total derivative financial instruments
|
$ | 17,060,741 | $ | 46,071,997 | ||||||||||||
Oct. 31, 2010
|
31-Jul-10
|
|||||||
Penalties - Registrations
|
$ | 1,585,774 | $ | 1,585,774 | ||||
Interest on Debt
|
1,223,514 | 993,977 | ||||||
Payroll and Payroll Taxes
|
1,026,057 | 1,158,835 | ||||||
Professional Fees
|
15,600 | 11,000 | ||||||
Accrued Trade Payables
|
253 | 253 | ||||||
$ | 3,851,198 | $ | 3,749,839 | |||||
a)
|
CAS agrees that it shall pay to the Company $300,000. Through October 31, 2010, the amount of $270,000 has been advanced, the balance of $30,000 was received by the Company in November 2010.
|
b)
|
AGREEMENT TO FINANCE CAMERA PURCHASES. The parties agree that the Company shall place purchase orders for cameras with such manufacturers or suppliers as the Company in its sole discretion shall determine. The Company agrees that it shall contemporaneous with payment for each camera delivered per the Company’s orders, pay to CAS the principal sum of $2,000 per camera. The Company agrees that it shall pay said $2,000 per camera to CAS’s order until such time as the Company exercises its option to pay CAS, and completes payment to CAS of its return on purchase funds. The Company can terminate the agreement by payment to CAS of the principal sum of $900,000, exclusive of any payments made or accrued per camera prior to the date of such $900,000 payment.
|
c)
|
OPTION TO PURCHASE AND SELL CAMERAS. The Company agrees that if the Company ceases to do business, files bankruptcy or is involuntarily placed into any receivership or bankruptcy, files for reorganization of debts or in the event that the Company, after a period of four months next following the month of execution hereof does not commence ordering and continue to order a minimum average of 20 cameras per month, then and upon the occurrence of any such event(s), CAS shall be entitled to purchase such cameras as Company was purchasing pursuant hereto for use and/or sale by CAS as CAS shall in its sole discretion determine; provided further, that the Company shall sign such documents and/or transfer such proprietary information to CAS as is reasonable or necessary for CAS to purchase cameras directly from such manufacturers and/or suppliers as were being utilized by the Company. Nothing set forth herein shall be construed as prohibiting the Company from continuing to purchase cameras for its own account, however, any such purchases shall continue to be subject to the obligation to pay CAS $2,000 per camera until such time as the Return on Purchase Funds as set forth hereinabove is paid in full. Further, nothing set forth herein shall be construed as obligating the Company to release to, provide to or otherwise license authorize CAS to utilize the Company’s proprietary and/or patented technology, software, system or system components.
|
|
Nine Months Ended
November 30,
|
|||||||
(In thousands)
|
2010
|
2009
|
||||||
Cash flow data:
|
||||||||
Net cash (used in) operating activities
|
(288
|
)
|
(262
|
)
|
||||
Net cash (used in) investing activities
|
(0
|
)
|
(22
|
)
|
||||
Net cash provided (used) by financing activities
|
439
|
260
|
||||||
Net increase (decrease) in cash and cash equivalents
|
151
|
(24
|
)
|
|||||
Cash and cash equivalents, beginning of period
|
0
|
30
|
||||||
Cash and cash equivalents, end of period
|
151
|
6
|
31.1
|
Certificate of Chief Executive Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, promulgated pursuant to the Section 302 of the Sarbanes Oxley Act of 2002
|
31.2
|
Certificate of Chief Financial Officer pursuant to Rule 13a-14(a)/Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended, as amended, promulgated pursuant to the Section 302 of the Sarbanes Oxley Act of 2002
|
32.1
|
Certificate of Chief Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
32.2
|
Certificate of Chief Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
|
WELLSTAR INTERNATIONAL, INC.
|
||
Date: December 14 , 2010
|
By:
|
/s/ John Antonio
|
John Antonio
|
||
Chief Executive Officer
|
||
Date: December 14, 2010
|
By:
|
/s/ Howard Bielski
|
Howard Bielski
|
||
Chief Financial Officer
|
1 Year Wellstar (CE) Chart |
1 Month Wellstar (CE) Chart |
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