-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VOF/JVPHHSN+6sTa4a3+SDqXpMxnYUN2tTY3XVXSBuTrc3EZWx6KKAjzvpyJQVA/ Hf5S33Vtzhrn5etIPWLUaA== 0001210618-04-000001.txt : 20040323 0001210618-04-000001.hdr.sgml : 20040323 20040323095019 ACCESSION NUMBER: 0001210618-04-000001 CONFORMED SUBMISSION TYPE: 10KSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20031231 FILED AS OF DATE: 20040323 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WELUND FUND INC CENTRAL INDEX KEY: 0001210618 STANDARD INDUSTRIAL CLASSIFICATION: [9995] IRS NUMBER: 000000000 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10KSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-50142 FILM NUMBER: 04683843 BUSINESS ADDRESS: STREET 1: 244 FIFTH AVENUE STREET 2: #W219 CITY: NEW YORK STATE: NY ZIP: 10001-7604 BUSINESS PHONE: 212-504-8120 MAIL ADDRESS: STREET 1: 244 FIFTH AVENUE STREET 2: #W219 CITY: NEW YORK STATE: NY ZIP: 10001-7604 10KSB 1 welund10ksb032304.txt FORM 10-KSB UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-KSB [X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended: December 31, 2003 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-50142 Welund Fund, Inc. (Name of small business issuer in its charter) Delaware Pending (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 244 Fifth Avenue, #W219, New York, NY 10001 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (212) 504-8120 Securities registered under Section 12(b) of the Exchange Act: None Securities registered under Section 12(g) of the Exchange Act: Common Stock, $.0001 par value (Title if Class) 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. [x] Yes [ ] No Check if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B is not contained in this form, and no disclosure will be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10- KSB or any amendment to this Form 10-KSB. [x] State issuer's revenues for its most recent fiscal year. $-0- State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.) The aggregate market value of the voting stock held by non affiliates of the issuer was not determinable because the common stock does not trade on any market. State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date. 2,240,000 shares of Common Stock, par value $.0001 per share, as of March 23, 2004. DOCUMENTS INCORPORATED BY REFERENCE If the following documents are incorporated by reference, briefly describe them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc. ) into which the document is incorporated: (1) any annual report to security holders; (2) any proxy or information statement; and (3) any prospectus filed pursuant to Rule 424(b) or (c) of the Securities Act of 1933 (Securities Act). The listed documents should be clearly described for identification purposes (e.g., annual report to security holders for fiscal year ended December 24, 1990): None Transitional Small Business Disclosure Format (Check one): Yes [ ] No [x] PART I CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements. Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make. Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated. Consequently, no forward-looking statement can be guaranteed. The potential risks and uncertainties that could affect forward looking statements include, but are not limited to increased competition, extent of the market demand for and supply of goods and services of the types provided by the Company, governmental regulation, performance of information systems, and the ability of the Company to hire, train and retain qualified employees. In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects have been and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company. We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document. The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements. ITEM 1. DESCRIPTION OF BUSINESS. Welund Fund, Inc. (the "Company") was incorporated in the State of Delaware on July 16, 2002, to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. We have been in the development stage since inception. Welund Fund, Inc. has not engaged in any commercial operations. Welund Fund, Inc. does not have active business operations, and at this time we are considered a "Blank Check" company. We registered our 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. We intend to file with the Securities and Exchange Commission periodic and episodic reports under Rule 13(a) of the Exchange Act, including quarterly reports on Form 10-QSB and annual reports on Form 10-KSB. We will attempt to locate and negotiate with a business entity for the merger of that target business into the Company. In certain instances, a target business may wish to become a subsidiary of the Company or may wish to contribute assets to the Company rather than merge. No assurances can be given that we will be successful in locating or negotiating with any target business. Management believes that there are perceived benefits to being a reporting company with a class of registered securities. These 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) stockholder liquidity; (6) greater ease in subsequently raising capital; (7) compensation of key employees through stock options; (8) enhanced corporate image; and (9) a presence in the United States capital market. A business entity, if any, which may be interested in a business combination with us 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 underwriter 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 it will be able to obtain investment capital on more favorable terms after it has become public; (5) a foreign company which may wish to gain 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; or (7) a company seeking one or more of the other perceived benefits of becoming a public company. Management is actively engaged in seeking a qualified company as a candidate for a business combination. We are authorized to enter into a definitive agreement with a wide variety of businesses without limitation as to their industry or revenues. It is not possible at this time to predict which company, if any, we will enter into a definitive agreement or what will be the industry, operating history, revenues, future prospects or other characteristics of that company. We may seek a business opportunity with entities which have recently commenced operations, or which wish to utilize the public marketplace in order to raise additional capital in order to expand into new products or markets, to develop a new product or service, or for other corporate purposes. We may acquire assets and establish wholly-owned subsidiaries in various businesses or acquire existing businesses as subsidiaries. Our management, which in all likelihood will not be experienced in matters relating to the business of a target business, will rely upon its own efforts in accomplishing our business purposes. The analysis of new business opportunities will be undertaken by, or under the supervision of our officer and director, who is not a professional business analyst. In analyzing prospective business opportunities, management may consider such matters as: * the available technical, financial and managerial resources; * working capital and other financial requirements; history of operations, if any; * prospects for the future; * nature of present and expected competition; * the quality and experience of management services which may be available and the depth of that management; * the potential for further research, development, or exploration; * specific risk factors not now foreseeable but which then may be anticipated to impact our proposed activities; * the potential for growth or expansion; * the potential for profit; * the perceived public recognition or acceptance of products, services, or trades; name identification and; * other relevant factors. Management does not have the capacity to conduct as extensive an investigation of a target business as might be undertaken by a venture capital fund or similar institution. As a result, management may elect to merge with a target business which has one or more undiscovered shortcomings and may, if given the choice to select among target businesses, fail to enter into an agreement with the most investment-worthy target business. Following a business combination we may benefit from the services of others in regard to accounting, legal services, underwritings and corporate public relations. If requested by a target business, management may recommend one or more underwriters, financial advisors, accountants, public relations firms or other consultants to provide such services. A potential target business may have an agreement with a consultant or advisor providing that services of the consultant or advisor be continued after any business combination. Additionally, a target business may be presented to us only on the condition that the services of a consultant or advisor be continued after a merger or acquisition. Such preexisting agreements of target businesses for the continuation of the services of attorneys, accountants, advisors or consultants could be a factor in the selection of a target business. In implementing a structure for a particular business acquisition, we may become a party to a merger, consolidation, reorganization, joint venture, or licensing agreement with another corporation or entity. We may also acquire stock or assets of an existing business. On the consummation of a transaction, it is likely that our present management and stockholder will no longer be in our control. In addition, it is likely that our officer and director will, as part of the terms of the acquisition transaction, resign and be replaced by one or more new officers and directors. It is anticipated that any securities issued in any such reorganization would be issued in reliance upon exemption from registration under applicable federal and state securities laws. In some circumstances however, as a negotiated element of its transaction, we may agree to register all or a part of such securities immediately after the transaction is consummated or at specified times thereafter. If such registration occurs, of which there can be no assurance, it will be undertaken by the surviving entity after we have entered into an agreement for a business combination or have consummated a business combination and we are no longer considered a blank check company. The issuance of additional securities and their potential sale into any trading market which may develop in our securities may depress the market value of our securities in the future if such a market develops, of which there is no assurance. While the terms of a business transaction to which we may be a party cannot be predicted, it is expected that the parties to the business transaction will desire to avoid the creation of a taxable event and thereby structure the acquisition in a tax-free reorganization under Sections 351 or 368 of the Internal Revenue Code of 1986, as amended. With respect to any merger or acquisition negotiations with a target business, management expects to focus on the percentage of the Company which target business stockholder would acquire in exchange for their shareholdings in the target business. Depending upon, among other things, the target business's assets and liabilities, our stockholder will in all likelihood hold a substantially lesser percentage ownership interest in the Company following any merger or acquisition. Any merger or acquisition effected by us can be expected to have a significant dilutive effect on the percentage of shares held by our stockholder at such time. No assurances can be given that we will be able to enter into a business combination, as to the terms of a business combination, or as to the nature of the target business. As of the date hereof, management has not made any final decision concerning or entered into any written agreements for a business combination. When any such agreement is reached or other material fact occurs, we will file notice of such agreement or fact with the Securities and Exchange Commission on Form 8-K. Persons reading this Form 10-KSB are advised to determine if we have subsequently filed a Form 8-K. We anticipate that the selection of a business opportunity in which to participate will be complex and without certainty of success. Management believes (but has not conducted any research to confirm) that there are numerous firms seeking the perceived benefits of a publicly registered corporation. Such perceived benefits may include facilitating or improving the terms on which additional equity financing may be sought, providing liquidity for incentive stock options or similar benefits to key employees, increasing the opportunity to use securities for acquisitions, and providing liquidity for stockholder and other factors. Business opportunities may be available in many different industries and at various stages of development, all of which will make the task of comparative investigation and analysis of such business opportunities extremely difficult and complex. ITEM 2. DESCRIPTION OF PROPERTY. We have no properties and at this time have no agreements to acquire any properties. We currently use the offices of management at no cost to us. Management has agreed to continue this arrangement until we complete an acquisition or merger. ITEM 3. LEGAL PROCEEDINGS. There is no litigation pending or threatened by or against us. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. No matter was submitted to a vote of security holders, through the solicitation of proxies or otherwise, during the fourth quarter of the fiscal year covered by this report. PART II ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS. There is currently no public market for our securities. We do not intend to trade our securities in the secondary market until completion of a business combination or acquisition. It is anticipated that following such occurrence we will cause our common stock to be listed or admitted to quotation on the NASD OTC Bulletin Board or, if we then meet the financial and other requirements thereof, on the Nasdaq SmallCap Market, National Market System or regional or national exchange. The proposed business activities described herein classify us as a "blank check" company. The Securities and Exchange Commission and many states have enacted statutes, rules and regulations limiting the sale of securities of blank check companies in their respective jurisdictions. Management does not intend to undertake any efforts to cause a market to develop in our securities until such time as we have successfully implemented our business plan described herein. There is currently one stockholder of our outstanding common stock. During the past three years, we have issued securities which were not registered as follows:
NUMBER OF DATE NAME SHARES CONSIDERATION 07/16/2002 T. Chong Weng 1,240,000 $124* 12/31/2003 T. Chong Weng 1,000,000 $100**
_______________ * T. Chong Weng is our sole director, controlling stockholder and president. Shares issued to T. Chong Weng were in return for services provided to us by T. Chong Weng, in lieu of cash. With respect to the stock issued to T. Chong Weng, we relied upon Section 4(2) of the Securities Act of 1933, as amended and Rule 506 promulgated thereunder. ** Shares issued to T. Chong Weng were conversions of debt to equity for monies advanced by T. Chong Weng. With respect to the stock issued to T. Chong Weng, we relied upon Section 4(2) of the Securities Act of 1933. ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION. We were formed to engage in a merger with or acquisition of an unidentified foreign or domestic company which desires to become a reporting ("public") company whose securities are qualified for trading in the United States secondary market. We meet the definition of a "blank check" company contained in Section (7)(b)(3) of the Securities Act of 1933, as amended. We have been in the developmental stage since inception and have no operations to date. Other than issuing shares to our original stockholder, we have not commenced any operational activities. We will not acquire or merge with any entity which cannot provide audited financial statements at or within a reasonable period of time after closing of the proposed transaction. We are subject to all the reporting requirements included in the Exchange Act. Included in these requirements is our duty to file audited financial statements as part of our Form 8-K to be filed with the Securities and Exchange Commission upon consummation of a merger or acquisition, as well as our audited financial statements included in our annual report on Form 10-K (or 10-KSB, as applicable). If such audited financial statements are not available at closing, or within time parameters necessary to insure our compliance with the requirements of the Exchange Act, or if the audited financial statements provided do not conform to the representations made by the target business, the closing documents may provide that the proposed transaction will be voidable at the discretion of our present management. We will not restrict our search for any specific kind of businesses, but may acquire a business which is in its preliminary or development stage, which is already in operation, or in essentially any stage of its business life. It is impossible to predict at this time the status of any business in which we may become engaged, in that such business may need to seek additional capital, may desire to have its shares publicly traded, or may seek other perceived advantages which we may offer. A business combination with a target business will normally involve the transfer to the target business of the majority of our common stock, and the substitution by the target business of its own management and board of directors. We have, and will continue to have, no capital with which to provide the owners of business opportunities with any cash or other assets. However, management believes we will be able to offer owners of acquisition candidates the opportunity to acquire a controlling ownership interest in a publicly registered company without incurring the cost and time required to conduct an initial public offering. Our officer and director have not conducted market research and are not aware of statistical data to support the perceived benefits of a merger or acquisition transaction for the owners of a business opportunity. Our audit reflects the fact that we have no current source of income. Further, that without realization of additional capital, it would be unlikely for the Company to continue as a going concern. Our stockholder has agreed that they will advance any additional funds which we need for operating capital and for costs in connection with searching for or completing an acquisition or merger. Such advances will be made without expectation of repayment unless the owners of the business which we acquire or merge with agree to repay all or a portion of such advances. There is no minimum or maximum amount such stockholder will advance to us. We will not borrow any funds for the purpose of repaying advances made by such stockholder, and we will not borrow any funds to make any payments to our promoters, management or their affiliates or associates. The Board of Directors has passed a resolution which contains a policy that we will not seek an acquisition or merger with any entity in which our officer, director, stockholder or his affiliates or associates serve as officer or director or hold more than a 10% ownership interest. ITEM 7. FINANCIAL STATEMENTS. The Company is an inactive entity as defined by Section 3-11 of Regulation S-X. Accordingly, the financial statements required for purposes of reports pursuant to the Securities Exchange Act of 1934 may be unaudited. The financial statements for the year ended December 31, 2003 are attached to this filing below. WELUND FUND, INC. (A Development Stage Company) BALANCE SHEET
ASSETS For the Year Ended December 31, 2003 2002 ------------ ------------ (Unaudited) CURRENT ASSETS: Cash ................................... $ -- $ -- ------- ------- TOTAL ASSETS................................ $ -- $ -- ======= ======= LIABILITIES AND STOCKHOLDERS' EQUITY LIABILITIES: ............................... $ -- $ -- ------- ------- STOCKHOLDERS' EQUITY: Preferred Stock, $.0001 par value, 20,000,000 shares authorized; none issued and outstanding.................... -- -- Common Stock, $.0001 par value, 100,000,000 shares authorized; 2,240,000 and 1,240,000 issued and outstanding at 12/31/2003 & 12/31/2002.... 224 124 Additional paid-in capital................. -- -- Deficit accumulated during development stage......................... (224) (124) ------- ------- Total Stockholders' Equity............... -- -- ------- ------- TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY.. $ -- $ -- ======= =======
The accompanying notes are an integral part of these financial statements. WELUND FUND, INC. (A Development Stage Company) STATEMENT OF OPERATIONS
For the Year From July 16, Accumulated deficit ended 2002 to during the Dec. 31, 2003 Dec. 31, 2002 development stage -------------- ------------- ----------------- (Unaudited) (Unaudited) Revenue ............................... $ -- $ -- $ -- --------- --------- --------- Expenses Organization expense................. -- 124 124 General and administrative........... 100 -- 100 --------- --------- --------- Total expenses...................... 100 124 224 --------- --------- --------- Loss before taxes...................... (100) (124) (224) --------- --------- --------- Provision for income taxes............. -- -- -- Net loss............................... $ (100) $ (124) $ (224) ========= ========= ========= Loss per common share.................. $ (.00) $ (.0001) $ (.0002) ========= ========= ========= Weighted average number of common shares outstanding.......... 2,240,000 1,240,000 2,240,000 ========= ========= =========
The accompanying notes are an integral part of these financial statements. WELUND FUND, INC. (A Development Stage Company) STATEMENT OF STOCKHOLDERS' EQUITY For the Years Ended December 31, 2003 (Unaudited) and 2002
Deficit Common Stock Common Stock Additional Accumulated During Shares Amount Paid-in Capital Development Stage Total --------------- -------------- ---------------- ------------------- ------ Issuance of 1,240,000 shares common stock for services at $.0001 per share, July 16, 2002 (inception) 1,240,000 $124 $ --- $ --- $ 124 Net loss for the periods ended at December 31, 2002 --- --- --- (124) (124) --------- ---- ----- ------- ------ Balance at December 31, 2002 1,240,000 $124 $ --- $ (124) $ --- Issuance of 1,000,000 Shares common stock to convert debt to equity at $.0001 per share, December 31, 2003 1,000,000 $100 $ --- $ --- $ 100 Net loss for the periods ended at December 31, 2003 --- --- --- (100) (100) --------- ---- ----- ------- ------ Balance at December 31, 2003 2,240,000 $224 $ --- $ (224) $ --- ========= ==== ===== ======= ======
The accompanying notes are an integral part of these financial statements. WELUND FUND, INC. (A Development Stage Company) STATEMENT OF CASH FLOWS
For the Year From July 16, Accumulated deficit ended 2002 to during the Dec. 31, 2003 Dec. 31, 2002 development stage -------------- ------------- ----------------- (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net loss................................... $ (100) $ (124) $ (224) -------- -------- -------- Adjustment to reconcile net loss to net cash used by operating activities: issuance of common stock for services..... -- 124 124 issuance of stock to convert debt to equity.................................. 100 -- 100 -------- -------- -------- Net cash used in operating activities..... -- -- -- -------- -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES....... -- -- -- -------- -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of common stock.... -- -- -- -------- -------- -------- Net cash provided by financing activities.. -- -- -- -------- -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS.................... $ -- $ -- $ -- ======== ======== ======== CASH AND CASH EQUIVALENTS - at Beginning of Period................. -- -- -- ======== ======== ======== CASH AND CASH EQUIVALENTS - at End of Period....................... $ -- $ -- $ -- ======== ======== ======== SUPPLEMENTAL DISCLOSURE: Interest paid............................ $ -- $ -- $ -- ======== ======== ======== Taxes paid............................... $ -- $ -- $ -- ======== ======== ======== NON-CASH TRANSACTIONS: Number of shares issued for services..... 0 1,240,000 1,240,000 ========= ========= ========= Number of shares issued to convert debt to equity.............................. 1,000,000 0 1,000,000 ========= ========= =========
The accompanying notes are an integral part of these financial statements. WELUND FUND, INC. (A Development Stage Company) NOTES TO FINANCIAL STATEMENTS (Unaudited) NOTE 1 - BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES A. Organization and Business Operations Welund Fund, Inc. (a development stage company) ("the Company") was incorporated in Delaware on July 16, 2002 to serve as a vehicle to effect a merger, exchange of capital stock, asset acquisition or other business combination with a domestic or foreign private business. At December 31, 2003, the Company had not yet commenced any formal business operations, and all activity to date relates to the Company's formation and preparation of the filing of a registration statement with the U.S. Securities and Exchange Commission on Form 10-SB. The year-end of the Company is December 31st for both book and tax purposes. The Company's ability to commence operations is contingent upon its ability to identify a prospective target business. B. Cash and Cash Equivalents The Company considers all highly liquid investments purchased with an original maturity of three months or less from the date of purchase that are readily convertible into cash to be cash equivalents. C. Use of Estimates The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. D. Income Taxes The Company accounts for income taxes under the Financial Accounting Standards Board of Financial Accounting No. 109, "Accounting for Income Taxes" "Statement 109"). Under Statement 109, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Under Statement 109, the effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. There were no current or deferred income tax expense or benefits due to the Company not having any material operations for the period ended December 31, 2003. E. Basic and diluted net loss per share Net loss per share is calculated in accordance with Statement of Financial Accounting Standards 128, Earnings Per Share ("SFAS 128"). Basic net loss per share is based upon the weighted average number of common shares outstanding. Diluted net loss per share is based on the assumption that all dilutive convertible shares, stock options and warrants were converted or exercised. Dilution is computed by applying the treasury stock method. At December 31, 2003 there were no dilutive convertible shares, stock options or warrants. NOTE 2 - STOCKHOLDERS' EQUITY A. Preferred Stock The Company is authorized to issue 20,000,000 shares of preferred stock at $.0001 par value, with such designations, voting and other rights and preferences as may be determined from time to time by the Board of Directors. As of December 31, 2003, no preferred stock has been issued. B. Common Stock The Company is authorized to issue 100,000,000 shares of common stock at $.0001 par value. On July 17, 2002 the Company issued 1,240,000 shares of its $.0001 par value common stock to the founder of the Company for services of $124. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering." On December 31, 2003 the Company issued an officer of the Company 1,000,000 shares of its $.0001 par value common stock for conversion of debt to equity of $100. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering." C. Warrant and Options There are no warrants or options outstanding to issue any additional shares of common stock or preferred stock of the Company. NOTE 3 - RELATED PARTY TRANSACTIONS The Company neither owns nor leases any real or personal property. Office services are provided without charge by the officer and director of the Company. Such costs are immaterial to the financial statements and accordingly, have not been reflected therein. The officer and director of the Company is involved in other business activities and may, in the future, become involved in other business opportunities. If a specific business opportunity becomes available, such person may face a conflict in selecting between the Company and their other business interests. The Company has not formulated a policy for the resolution of such conflicts. The Company's sole officer and director is also the sole shareholder of the Company. NOTE 4 - GOING CONCERN CONSIDERATION The accompanying financial statements have been prepared in conformity with generally accepted accounting principles in the United States, which contemplates the continuation of the Company as a going concern. However, the Company is in the development stage, and has no current sources of revenue. Without realization of additional capital, it would be unlikely for the Company to continue as a going concern. The management's plans include the acquisition of a suitable business venture to provide the opportunity for the Company to continue as a going concern. However, there can be no assurance that management will be successful in this endeavor. NOTE 5 - OFFICERS ADVANCES While the Company is seeking additional capital through a merger with an existing operating company, an officer of the Company has advanced funds on behalf of the Company to pay for any costs incurred by it. These advances have been converted to equity. ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. There were no changes in or disagreements with accountants on accounting and financial disclosure for the period covered by this report. ITEM 8A. CONTROLS AND PROCEDURES (a) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES. Regulations under the Securities Exchange Act of 1934 require public companies to maintain "disclosure controls and procedures," which are defined to mean a company's controls and other procedures that are designed to ensure that information required to be disclosed in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Our president, who is our sole executive officer, carried out an evaluation of the effectiveness of the Company's disclosure controls and procedures as of the end of the period covered by this report. Based on his evaluation, our president believes that, given our limited operations, our disclosure controls and procedures were effective. (b) CHANGES IN INTERNAL CONTROLS. There were no significant changes in our internal controls or in other factors that could significantly affect our internal controls subsequent to the evaluation date. PART III ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT. We have one director and officer as follows: Mr. T. Chong Weng, 66 years of age, has served as our director, president, chief executive officer, treasurer, and secretary since our inception on July 16, 2002, and will serve on the board until the next annual meeting of our shareholders or until a successor is elected. There are no agreements or understandings for the officer or director to resign at the request of another person and the above-named officer and director is not acting on behalf of nor will act at the direction of any other person. Set forth below is the name of our director and officer, all positions and offices held, the period during which he has served as such, and the business experience during at least the last five years: T. Chong Weng acts as president, secretary, treasurer and director for our Company. He has served as an officer and director of our Company since its inception. Since July 2002, he has also served as the president, secretary, treasurer and a director of five other companies; Aegir Ventures, Inc., Ares Global Assets, Inc., Asgaard Ventures, Inc., SME Capital Management, Inc., and Welund Fund, Inc., none of these companies currently conduct any business and none of which have entered into any business combinations as of the date of this registration statement. T. Chong Weng has experience in start-up companies, business reorganizations and cross border business transactions. For the past five years, T. Chong Weng has devoted his full time in managing his own investments in real estate and securities. Other than those mentioned above, we have no employees and do not anticipate hiring any in the future until we successfully implemented our business plan described herein. None of our directors, executive officers, promoters or control persons has been involved in any legal proceedings material to the evaluation of the ability or integrity of any of the aforementioned persons. Compliance with Section 16(a) of the Securities Exchange Act of 1934 Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's executive officers and directors and persons who own more than 10% of a registered class of the Company's equity securities, to file with the Securities and Exchange Commission (hereinafter referred to as the "Commission") initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership, of Common Stock and other equity securities of the Company on Forms 3, 4, and 5, respectively. Executive officers, directors and greater than 10% shareholders are required by Commission regulations to furnish the Company with copies of all Section 16(a) reports they file. To the Company's knowledge, Mr. T. Chong Weng comprising all of the Company's executive officers, directors and greater than 10% beneficial owners of its common Stock, have complied with Section 16(a) filing requirements applicable to them during the Company's most recent fiscal year. Audit Committee and Financial Expert We do not have an Audit Committee, T. Chong Weng, our sole director, performs some of the same functions of an Audit Committee, such as recommending a firm of independent certified public accountants to audit the annual financial statements; reviewing the independent auditors independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document. We have no financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because we are a blank check company, we believe the services of a financial expert are not warranted. Code of Ethics A code of ethics relates to written standards that are reasonably designed to deter wrongdoing and to promote: * Honest and ethical conduct, including the ethical handling of actual or apparent conflicts of interest between personal and professional relationships; * Full, fair, accurate, timely and understandable disclosure in reports and documents that are filed with, or submitted to, the Commission and in other public communications made by an issuer; * Compliance with applicable governmental laws, rules and regulations; * The prompt internal reporting of violations of the code to an appropriate person or persons identified in the code; and * Accountability for adherence to the code. We have not adopted a corporate code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions in that our sole officer and director serves in all the above capacities. ITEM 10. EXECUTIVE COMPENSATION. Our officer and director does not receive any compensation for his services rendered, has not received such compensation in the past, and is not accruing any compensation pursuant to any agreement with us. However, our officer and director anticipates receiving benefits as a beneficial stockholder and, possibly, in other ways. No retirement, pension, profit sharing, stock option or insurance programs or other similar programs have been adopted by us for the benefit of our employees. ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. The following table sets forth each person known by us to be the beneficial owner of five percent or more of our common stock, all directors individually and all our directors and officers as a group. Except as noted, each person has sole voting and investment power with respect to the shares shown.
Name and Address of Amount and Nature of Percent of Title of Class Beneficial Owner Beneficial Ownership Class - -------------- -------------------------- -------------------- ---------- Common Stock T. Chong Weng 2,240,000 100% 244 Fifth Avenue, #W219 Direct Ownership New York, NY 10001-7604 Common Stock All Officers and Directors 2,240,000 100% as a Group (1 person) Direct Ownership
Change of Control and Management There are currently no arrangements that would result in a change of control of our Company. A business opportunity will involve the issuance of our authorized but unissued common shares, which will, in all likelihood, result in shareholders of a private company obtaining a controlling interest in our Company. Any such business opportunity may require our management to resign as members of our Board of Directors. The resulting change in control of our Company could result in the removal of our present management and a corresponding reduction or elimination of their participation in the future affairs of our Company. ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS. On July 16, 2002, we issued a total of 1,240,000 shares of our Common Stock to T. Chong Weng, our sole officer, director and shareholder for a total of $124 in services rendered to us. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering." On December 31, 2003, we issued T. Chong Weng, our sole officer, director and shareholder 1,000,000 shares of our $.0001 par value Common Stock for conversion of debt to equity of $100. The shares were deemed to have been issued pursuant to an exemption provided by Section 4(2) of the Act, which exempts from registration "transactions by an issuer not involving any public offering." The Board of Directors has passed a resolution which contains a policy that we will not seek an acquisition or merger with any entity in which our officer, director or holder or their affiliates or associates serve as officer or director or hold more than a 10% ownership interest. Management is not aware of any circumstances under which this policy may be changed. ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits: 3(i)* Certificate of Incorporation filed as an exhibit to the Company's registration statement on Form 10-SB filed on January 2, 2003, and incorporated herein by reference. 3(ii)* By-Laws filed as an exhibit to the Company's registration statement on Form 10-SB filed on January 2, 2003, and incorporated herein by reference. 3(iii)* Specimen of Certificate of Common Stock filed as an exhibit to the Company's registration statement on Form 10- SB filed on January 2, 2003, and incorporated herein by reference. 99.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Chief Executive Officer and Chief Financial Officer). Filed herewith. ________________________________________ * Previously filed (b) There were no reports on Form 8-K filed by the Company during the quarter ended December 31, 2003. ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES The Company's board of directors reviews and approves audit and permissible non-audit services performed by Stan J.H. Lee, Certified Public Accountant ("Stan Lee") as well as the fees charged by Stan Lee for such services. In its review of non-audit service fees and its appointment of Stan Lee as the Company's independent accountants, the board of directors considered whether the provision of such services is compatible with maintaining Stan Lee's independence. All of the services provided and fees charged by Stan Lee in 2003 were pre-approved by the board of directors. (1) Audit Fees The aggregate fees billed by Stan Lee for professional services for the audit of the annual financial statements of the Company and the reviews of the financial statements included in the Company's quarterly reports for 2003 and 2002 were $-0- and $400, respectively, net of expenses. (2) Audit-Related Fees: None. (3) Tax Fees: None. (4) All Other Fees: None. (5) Audit Committee Policies and Procedures We do not have an audit committee. (6) If greater than 50 percent, disclose the percentage of hours expended on the principal accountant's engagement to audit the registrant's financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant's full- time, permanent employees. Not applicable. SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Date: March 23, 2004 WELUND FUND, INC. By: /s/ T. Chong Weng -------------------------------- T. Chong Weng President and Director (principal executive officer and principal accounting officer) Date: March 23, 2004 In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Signature Title Date - ----------- ------- ------ /s/ T. Chong Weng President, Secretary, Treasurer, March 23, 2004 - --------------------- Principal Financial Officer and T. Chong Weng Director Certification Pursuant to 18 USC, Section 1350, as Adopted Pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report of Welund Fund, Inc. (Registrant) on Form 10-KSB for the year ended December 31, 2003, as filed with the Securities and Exchange Commission, on the date hereof, I, T. Chong Weng, Chief Executive Officer and Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to 18 USC 1350, as adopted pursuant to ss.302 and promulgated as 18 USC 1350 pursuant to ss.906 of the Sarbanes-Oxley Act of 2002, that: (1) I have reviewed this Annual Report on Form 10-KSB of Welund Fund, Inc. for the year ended December 31, 2003. (2) Based on my knowledge, this Annual Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Annual report; (3) Based on my knowledge, the financial statements, and other financial information included in this Annual Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Annual Report; (4) The registrant's other certifying officers, if any, and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Registrant and have: (1) designed such disclosure controls and procedures to ensure that material information relating to the Registrant, including its consolidated subsidiaries, if any, is made known to us by others within those entities, particularly during the period in which this Annual Report is being prepared; (2) evaluated the effectiveness of the Registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this Annual Report (the "Evaluation Date"); and (3) presented in this Annual Report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; (5) The Registrant's other certifying officers, if any, and I have disclosed, based on our most recent evaluation, to the Registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent functions): (1) all significant deficiencies in the design or operation of internal controls which could adversely affect the Registrant's ability to record, process, summarize and report financial data and have identified for the Registrant's auditors any material weaknesses in internal controls; and (2) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and (6) The Registrant's other certifying officers, if any, and I have indicated in this Annual Report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. /s/ T. Chong Weng Dated: March 23, 2004 - --------------------------------- ----------------------- Name: T. Chong Weng Title: Chief Executive Officer and Chief Financial Officer EXHIBIT 99.1 C.E.O. & C.F.O. CERTIFICATION CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report of Welund Fund, Inc. (the "Company") on Form 10-KSB for the period ending December 31, 2003 as filed with the United States Securities and Exchange Commission on the date hereof (the "Report"), I, T. Chong Weng, Chief Executive Officer and Chief Financial Officer of the Company, certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that: (i) the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and (ii) the information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company. The foregoing certification is made solely for the purpose of 18 U.S.C. Section 1350, subject to the knowledge standard contained therein, and not for any other purpose. By: /s/ T. Chong Weng ------------------------------ Name: T. Chong Weng Title: Chief Executive Officer and Chief Financial Officer March 23, 2004 -----END PRIVACY-ENHANCED MESSAGE-----