Geronimo...on licensing:

I agree with your assessment, and the fact that this is not a filter company. They may be biotech, or simply chemical, but not sure if it would stray into the medical NRT area. As long as the product isn't ingested into the body (or inhaled), then it shouldn't come under the control of the FDA. It all depends on how the product functions and whether any of it is passed on to the smoker. My thoughts at this time is that it isn't. It is simply a filtering technology.

Wellstone has made it pretty clear that their intention would be to license the product. It wouldn't make much sense for them to get into the production business. Filter companies are well-established and well-funded. What they could do, though, is produce the product/chemical, etc. that is inserted into the filters. This way they would have absolute control over the product. However much a filter manufacturer wants to insert into their filters is up to the filter manufacturer. No need for licensing agreements or anything of the sort, less headaches. The product could be manufactured by a third party as well, eliminating the need for Wellstone to set up their own manufacturing factilities.

Yes, this all hinges on whether the product is viable and selective, as is desired by the cigarette industry. I'm sure that more testing is warranted and is under way. I am a bit disappointed that news is very sproadic, but that's how it goes sometimes.

I do think the company would be hard to valuate at this point in time. If their product can deliver on the intial claims, it would have a very very large market to serve. Today there's a bit stir among the Cigarette manufacturers since some of the previous lawsuits are in the news and in the courts. I would think that cigarette manufacturers would be doing more to attempt to produce 'safer' products, although there is no safe cigarette.

True about the potential competition. If someone does bring out a similar product, one has to wonder how similar it could be without infringing on the patent(s). I think we are aways from that at the moment, though.

Thanks for the great input!

Get a moveone Wellstone, we are waiting! :-)

Cheers

-------

quote:

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Originally posted by Mech:

Geronimo...on licensing:

Interesting concept but sometimes dangerous as the big boys, and particularly companies in less sophisticated legal regimes, can really take advantage of you. It is almost impossible to monitor the volumes under such a license as a small company, particularly given the tremendous lack of transparency in tobacco company financials. That said it is possible...I'd still sell the thing, though, and get out. Too much headache to be in that industry. That said, an optimistic person might say that a successful harm reducing filter could become the the tobacco industry's Microsoft. 5.5 trillion cigarettes are sold each year -- one can make the math look quite good.

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If you haven't reviewed it, I recommend reading their 10K. Good reading, including statistics on the cigarette and filter industry. Here's the link to the 10K:

http://www.edgar-online.com/bin/cobrand/finSys_main.asp?nad=&formfilenam e=0001002334-04-000030&x=8&y=8

There are 78,989,400 shares outstanding.

From the 10K:

"...Management owns 54,600,000 shares, or 69% of the outstanding shares. Management is able to elect all the board of directors and otherwise control Wellstone and its operations, and other shareholders will have little, if any control over Wellstone's management. The concentration of control in management will discourage takeover attempts such as tender offers, and the purchase of shares by persons who wish to acquire control of Wellstone. Stockholders will likely not be able to benefit from a rise in share prices which usually accompanies hostile takeovers..."

Cheers

__________

quote:

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Originally posted by Mech:
Does anyone know the free float of this company?

---

I had read through their financials but wasn't sure whether the non-management shares were truly free outstanding shares or just held by minority interests. Where I am going with this, and excuse my ignorance with regards to OTC trading rules, is I want to determine the number of shares that are registered to be bought or sold via the OTC. E.g. is a company with 10 million shares outstanding sells 10% of its company through an IPO then the free float would be 1 million shares.

I called their investor relations on Friday and left a message but have not received a return call. I'm going to try to call them again today, as I have some questions to ask.

They don't seem to be active in keeping shareholders informed of the progress, or lack thereof, on events.

The shares have experienced very low trading volume, so coupled with the lack of news, they are weakening. For those with some cash, it could be a buying opportunity. For those with the shares, it's a wait-and-see thing. Disappointing from my point of view, especially the lack of information from the company.

Let's see what I can dig up.

Cheers

---------

quote:

---

Originally posted by Mech:
...E.g. is a company with 10 million shares outstanding sells 10% of its company through an IPO then the free float would be 1 million shares.

Otherwise no news recently, eh?

---

At this point, this stock is a hold, not a sell. Selling and taking losses on this stock is not the bright thing to do. This company is in its infacy. It will need more a lot more time to get moving.

They previously announced that they'd be shipping test samples out to tobacco companies, filter manufacturers, etc. I had asked if this had been done already. They responded that it hadn't, because they are waiting on the completion of transfer agreements with the particular entities. This is to protect the ownership rights of Wellstone, and definitely needs to be in place for their sake.

I asked about the lack of PR from the company. They said they've been cutting back on that because there isn't any real news they can provide. A lot of what is going on now is confidential, so it's better to put out good news, instead of putting out news just for the sake of issuing a press release. I agree, although it is contributing to weakness on the stock.

I asked about the previously-mentioned relocation of their offices to a tobacco-growing region. They couldn't really comment on this (when, where, etc.). This is understood, and I consider the relocation a good strategic move.

I made a suggestion as to how to approach the product licensing. Rather, instead of licensing, produce the filtering agent and sell it to the filter producers, etc. This way the licensing issue is out of the way. I was told that they are definitely considering this as an option.

I got a feeling that they will be issuing some news in the not-too-distant future, but we'll have to wait and see. My thoughts are all positive about this company, and the potential for the product. Their competition has nothing on them (charcoal filters with cow's blood?... please).

The stock has been trading down, day-after-day, on lack of news and volume. It should only be of concern to those individuals that got in a significantly higher prices, and only on the price basis. When a stock falls on lack of news and low volume there really shouldn't be any concern. This is a baby of a company, strictly R&D. I have a feeling they will be signing significant agreements in the future and shareholders will benefit from having been patient and well-invested.

I continue to have significant faith in the potential of their product and the company. Management is maintaining tight control on the shares, and this would indicate to me that they have every confidence that things will work out well in the long run. They don't want to give up control or the potential for huge returns when things get cranking.

Hang in there dudes, and remember, the weakness is not based on news or events, just simply lack of news and events.

Who has the most to lose with this company? The founders and majority shareholders, of course. It's a very tight-knit group, and they seem to be managing things very well (being very careful).

With individuals like that at the helm we are provided with the best possible outcome from the development of their products.

Cheers

_________

quote:

---

Originally posted by my$0.02:
Mr_G,
Excellent post, very informative...

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http://biz.yahoo.com/prnews/040608/nytu155_1.html

Sec filing for forward split!
http://www.sec.gov/Archives/edgar/data/...000053.txt

Link isn't working now: (hmmmmmmmmmmmmm...)

*******************************************

WELLSTONE FILTERS, INC.
712 Kitchawan Road
Ossining, New York 10562

INFORMATION STATEMENT

Mailing Date: June 12, 2004

We are not asking you for a proxy and you are
requested not to send us a proxy

General

This Information Statement is furnished to the holders of Common Stock,
$.001 par value per share (the "Common Stock"), of Wellstone Filters, Inc. (the
"Company") on behalf of the Company in connection with a proposed amendment to
the Certificate of Incorporation of the Company to increase the number of
authorized shares of Common Stock from 80,000,000 up to 300,000,000 and an
accompanying five-for-one forward stock split of the Common Stock. This
amendment has already been approved by the consent of persons holding 39,000,000
Shares, which is a majority of the 79,064,095 outstanding shares. YOU ARE NOT
BEING ASKED FOR A PROXY NOR TO VOTE ON THIS MATTER. THIS DOCUMENT IS FOR
INFORMATIONAL PURPOSES ONLY.

The cost of this Information Statement will be borne by the Company.

Record Date

The close of business on June 2, 2004, which is the date of the consent
action by shareholders approving the amendment to its articles, was fixed as the
record date pursuant to Section 228 of the Delaware General Corporation Law
("DGCL").

The voting securities of the Company are the shares of its Common
Stock, of which 79,064,095 shares were issued and outstanding as of June 2,
2004. All outstanding shares of Common Stock are entitled to one vote on each
matter submitted for voting at the Meeting.

Beneficial Ownership of Common Stock

Principal Shareholders, Directors and Officers. The following table
sets forth the beneficial ownership of the Company's Common Stock as of June 2,
2004 by each person known to the Company to own more than five percent (5%) of
the Company's Common Stock and by each of the Company's current directors, and
by all directors and officers of the Company as a group. The table has been
prepared based on information provided to the Company by each shareholder.

<PAGE>

<TABLE>
<CAPTION>

Amount of
Name and Beneficial Percent of
Address Ownership(1) Class

<S> <C> <C> <C>
Jere E. Goyan(3) 125,000 *

Learned Jeremiah Hand(2) 39,000,000 69.1%

Carla Cerami Hand, MD,PhD(2) 39,00,000 69.1%

Anthony Cerami, PhD(2) 7,000,000 12.4%

All officers and directors
as a group (3 persons) 46,125,000 81.2%
</TABLE>

(1) As used in this table, "beneficial ownership" means the sole or shared power
to vote, or to direct the voting of, a security, or the sole or shared
investment power with respect to a security (i.e., the power to dispose of, or
to direct the disposition of a security). The address of this person is c/o the
Company.
(2) The business address of each of these persons is 712 Kitchawan Road,
Ossining, New York, 10562. Ms. Cerami Hand and Mr. Learned Jeremiah Hand are
wife and husband. The 39,000,000 shares listed as beneficially owned by Mr.
Learned Jeremiah Hand include 33,500,000 shares which are controlled by Carla
Cerami Hand, as stated below. Mr. Hand disclaims beneficial
ownership of such 33,500,000 shares. Ms. Cerami is the sole shareholder of
Cerami Consulting and the shares listed as held by her in the above table
include 5,600,000 shares held of record by Cerami Consulting, which is
controlled by her, 5,500,000 shares held via a trust, and 5,500,000 shares
controlled by Learned Jeremiah Hand. She disclaims beneficial ownership of the
5,500,000 shares controlled by Learned Jeremiah Hand. Such 1,100,000 shares
stated as controlled by Mr. Hand are held through a family limited partnership
controlled by him. Titratable Holdings, Ltd. Dr. Anthony
Cerami is the father of Carla Cerami Hand. Pending the increase in authorized
common stock, one of these shareholders may exchange his or her shares for the
convertible preferred equivalent of their shares.
(3) Includes options to purchase 125,000 shares of common stock.

As of June 2, 2004, there were 140 shareholders of record.

<PAGE>

PROPOSAL NO. 1:
AMENDMENT OF CERTIFICATE OF INCORPORATION
INCREASE OF AUTHORIZED SHARES OF COMPANY'S COMMON STOCK AND
FORWARD STOCK SPLIT

The Shareholders holding a majority of the common stock have
approved an amendment to Article 4 of the Company's Certificate of Incorporation
to increase the number of authorized shares of the Company's Common Stock from
80,000,000 up to 300,000,000 and to effect a five for one forward stock split of
the common stock. The increase in authorized and the forward stock split will be
effected together.

The Company's Certificate of Incorporation presently authorizes
the issuance of 80,000,000 shares of Common Stock having $0.001 par value, of
which 79,064,295 shares were outstanding at the close of business on June 2,
2004.

The Board of Directors has proposed the increase in authorized
common shares in connection with a five-for-one forward split of the common
stock to provide the Board of Directors with greater flexibility in the event
the Board of Directors determines that it is in the best interest of the Company
to issue additional shares to raise capital or to effect an acquisition.

Under the laws of the State of Delaware, authorized, but
unissued and unreserved, shares may be issued for such consideration (not less
than par value) and purposes as the Board of Directors may determine without
further action by the shareholders. The issuance of such additional
shares may, under certain circumstances, result in the dilution of the equity
or earnings per share of the existing shareholders.

Although the Board of Directors has no present intent to do so,
the unissued and authorized shares of the Company could be issued as defense
to an attempted takeover of the Company and may have an anti-takeover effect.
Management is not aware of any effort on the part of any
person to acquire control of the Company.

The additional shares of Common Stock authorized by this
proposed amendment will, if and when issued, have the same rights and privileges
as the shares of Common Stock currently authorized. Holders of shares of
Common Stock of the Company have no preemptive rights.

The amendment will be filed with an effective date with the
Delaware Secretary of State no less than twenty days after the mailing of the
Information Statement.

------------------
IMHO - GLTA - Reductio Ad Absurdum

The real potential for Wellstone will be after the tobacco manufacturers complete their testing and hopefully return favorable results. If their filtering technology proves to do what they say it will, we might see it incorporated into every cigarette made. What smoker wouldn't want a safer cigarette while maintaining the pleasurable effects of smoking? This is buy and hold long term kids. Good luck to all!

Cheers

___________

quote:

---

Originally posted by blue_in_MI:
...not sure about explode, but my guess is will be good to get WLSF back to $1.15 or so tomorrow. future PR's about orders - then will skyrocket for sure. we will see, i am rooting for them... [/B]

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As for the 5-1 split, I honestly wasn't even aware of this. That to me is the best news I heard yet. :-)

Does anyone know when it will take place?

Great posts by the way! Most have been extremely informative.

Favorable? Unfavorable? Remember, the individuals with the most to lose are the majority shareholders/founders/owners. If we get diluted, they get diluted.

They seem to know what they are doing. I think this is a move in the right direction. It allows them to use the power of the shares for acquisitions in the future. The current market cap is around 75million. The potential that Wellstone has can go into the billions. This will be but a blip on the radar in the future.

While I'm always on guard against dilution (take a look at the WNMI train wreck yesterday to know why), I'm not particularly worried in WLSF's case. They are going to need some cash to prep for any kind of production, also it's not clear at what rate they will actually issue the new shares. I dunno, I have a small amount of shares but basically I'm going to sit on them awhile and see what happens. The company is so insider-heavy that it's not in their best interest to tank the stock price. It is *strongly* in their best interest to work out a deal with some tobbaco companies - insiders would literally be leaving hundreds of millions on the table if they didn't follow through. That's a lot of cash, even Bill Gates might miss that. I think they're going to give it a serious shot to work out some deals. We will see.

http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=/netahtml/search-bool.html&r=1&f=G&l=50&co1=AND&d=ptxt&s1=6,119,701.WKU.&OS=PN/6,119,701&RS=PN/6,119,701

It is clearly not a simple "mechanical" filtration process. It is a combined chemical/mechanical process (a purely mechanical filtering process would be akin to passing coffee through a strainer to remove the grounds... smoke passed through activated charcoal is akin to a chemical/mechanical filtering technique, as agents in smoke would chemically be bound to the activated charcoal, not simply physically trapped, as with a strainer effect).

The scientists involved in the creation of Wellstone's filtering technology has significant experience in patent applications and research (as can be witnessed by researching their filings). From all that I have read the product is a very positive step in the significant reduction of carcinogens and tar in tobacco smoke, while allowing Nicotine to remain behind.

My thoughts, buy and hold this stock long term, and reap the rewards. Contrasting points of view are welcomed.

G, hope you are well. See you have been doing some homework. I need to elaborate on something. First, this stock has room to run, but still a trading play.

I feel the need to clarify a few things, though. First, they do have minor chemical reactions in the process (i.e. so if you want to be perfectly technical it is chemical/mechanical filtration). However, true chemical filtration would be if you took an existing filter, added a chemical in terms of 5% of its weight or so, then your chemical in turn reduced mutagens/carcinogens by 10, 20, or an even higher percentage. Their 25-50mg filters do indeed lower tar but they primarily do it by TRAPPING TAR AND NICOTINE.

Proof? Go to their website and drill into their top-line test results. You will see the following

CONTROL (units in mg/cig)
Tar 13.69
Nicotine 1.056

WELLSTONE RESULTS (same units)
Tar 5.66
Nicotine 0.464

So, their own tests show that tar is reduced 59% and nicotine is reduced 56%. The ratio changes only slightly. I.e., there is not real gain here in removing tar per unit of nicotine consumed by a smoker (i.e. the same problem as with Light cigarettes). The fact that water is reduced so much also adds to the argument of mechanical filtration. What is interesting is the reduction of carbon monoxide, which could be a legitimate benefit of the product.

Now, from this we still don't know if it reduces cancer-risk. Why? They have no legitimate test results published that demonstrate this. They need to perform Ames tests, which would demonstrate the overall/total mutagenicity of the tar, and publish the results. Keep the focus on total carcinogenicity...why? The reality in harm reduction technologies is that removing a single carcinogen can often increase total carcinogenicity? Why? No one knows because know one knows the exact formular behand the toxic cocktail in cigarette smoke. Only that it can kill.

So what about these tests? These tests are not too expensive and easy to perform. Makes one wonder why they haven't published the tests results. UNTIL THEY DO, ALL THEIR RESULTS SHOW IS THEY HAVE A PRODUCT SIMILAR TO LIGHTS, WITH PERHAPS A DECENT CARBON MONOXIDE REDUCTION.

Lastly, their product does not selectively allow nicotine through. What they refer to in their documentation is adjusting nicotine...in the tobacco industry this is called "loading", and can be done by using higher nicotine tobacco or alkalining agents such as ammonia. However, the degree to which they refer in their diagrams would not be allowed and they (cleverly?) do not indicate whether this is ionized or free nicotine (the latter is what smokers enjoy -- the former what is generally produced by incomplete tobacco combustion...thus the alkalining agents).

Hope this helps. Not trying to deride your good research but this is perhaps the most opaque and deceptive industry in the world, particularly as played by the majors. Getting to the truth takes a lot of time...

As always, excellent feedback. I agree with you on the publishing of the test results. I also understand how they might want to keep things under wraps, especially at this stage. I requested test results when I called investor relations, but didn't even slightly expect I would get something. Can't hurt to ask, though. :-)

The true test has already begun. With the shipment of samples to tobacco companies, the testing is out of the hands of Wellstone and the independent test labs. Tobacco companies will toss their troops on the samples and will make their own decisions on the efficacy of the product. Their actions will speak louder than any words. No one will be able to put one over on them. If they feel they have a product that's a contender, they will sign on.

The majority owners/scientists, etc. feel they have something solid on their hands. They surely must know they aren't going to pull one over on the tobacco companies. It seems they have a lot of experience in research and development as well (from the previous patent filings). In lieu of published test results, their confidence and persistence must count for something. For now, this is what I'm going with. However, the true test will be based on the actions returned from the companies that received test samples. Not saying that people should dive in, but it wouldn't hurt to hold some shares.

Best of luck to all... and here's hoping to something that helps reduce tobacco-related deaths and illnesses.

The latest news that came out earlier this week has most definitely helped.

One needs to do what is best for one. My view is that a stock split is basically transparent. Yeah, it dilutes the per-share value, but you are also getting five shares for every one you have. It balances out.

The real question is what will the company do with the increase in outstanding shares? Will they dole them out as stock candy? I hope not. Will they use them to acquire another company? Could be. If they do, I truly hope it would be a company that would add value to Wellstone. Also, the higher the value of the stock, the more leverage it provides. So using a weak stock to buyout another company doesn't work out very well. Perhaps they are doing this at a very early stage, and perhaps they are preparing for what they consider a significant rampup in the per-share price? Then their stock would have a lot of leverage.

This is all speculation, mind you. What am I doing? I'm holding on. Opportunities like these are not short-term investments. Things take time. How they work out is another matter altogether. You need to do what is best for you, though. :-)

Best of luck.