Wellstar International Inc., a company with publicly traded stock that operated quietly in Springfield Township, closed its doors this month after years of losses and accumulating debt, according to filings with the U.S. Securities and Exchange Commission.
The company, which was registered in Nevada, owned a subsidiary called Trillennium Medical Imaging Inc., which marketed a thermal imaging system that would be used to detect early stage breast cancer, pressure ulcers, and other conditions.
However, John Antonio, chief executive officer of the defunct company, told The Blade Monday that no devices were sold by the firm.
Mr. Antonio said Wellstar, which had seven employees and closed April 6, ceased operations because of a “lack of funding.”
That it has no income, pays its executives nearly a quarter-million dollars each, and has drawn no local publicity make its story notable.
Stockholder Edward Shiflett, 62, of Elkins, W.Va., invested $34,000 in the company since last year and holds 168 million Wellstar shares.
He heard about the company through a stock-tip Web site and was encouraged by a company statement that said Wellstar’s cameras completed clinical testing at Duke University Medical Center.
Mr. Shiflett, a government accounting contractor for the state of West Virginia, said he doesn’t understand why Wellstar didn’t sell any of its imaging systems after it took on significant debt.
“It just seems to me they took the money and ran,” said Mr. Shiflett, who filed a complaint with the SEC.
The stock of the company headquartered on Pilliod Road is traded on the over-the-counter Bulletin Board under the ticker symbol “WLSI.”
It closed Monday at less than 1 cent a share. It has 8.7 billion shares outstanding, according to OTC Bulletin Board.
In comparison, Owens-Illinois Inc., northwest Ohio’s biggest publicly traded company, has 164 million shares.
Wellstar’s most recent annual report, filed in November, said the company did not have any revenue in 2009 and 2010. The company reported a loss of $3.1 million during its fiscal 2010, ended July 31, compared with a loss of $41.8 million for 2009.
The company reported $958,000 in assets for fiscal 2010 ,and $56 million in liabilities — including a shareholder deficit of $55 million.
Still, it reported in its SEC filings that it paid Mr. Antonio a salary of $240,000 in 2009 and in 2010. Wellstar paid $201,600 in 2010 and $240,000 in 2009 to Kenneth McCoppen, vice president and secretary.
The company’s business model, according to filings, revolved around “placing cameras for a monthly charge in hospitals, clinical, and [long-term] care facilities throughout the United States.”
Its 2010 annual report said the “current financial position of the company is in dire straits and the company will need to obtain additional funding to continue operations.” It predicted the firm would close by January without more funding and said the firm had a working capital deficit of $37.1 million.
A December filing said the company was seeking up to $12 million in financing after it had “exhausted” funding from lender JMJ Financial Group.
An SEC spokesman on Monday would not confirm nor deny whether the agency is investigating Wellstar.
Wellstar was formed in 1997. But the company had “no operating activities” until 2005, when it acquired Trillennium, filings show. Mr. Antonio, who assisted with the Trillennium acquisition, said the firm was based in Springfield Township because it is where he is located. He did not provide further detail about the firm’s operations.
Mr. Antonio graduated from Bowling Green State University with a bachelor’s degree in liberal studies, according to SEC filings. He also is vice president of telecommunication firm Network Technologies International Inc. in Newport Beach, Calif., and manager of Intertel LLC, which distributes prepaid phone cards in Mexico.
A filing this month announcing Wellstar’s closure said the lease for its “Holland, Ohio, facility has been terminated.” Lucas County records show the property where the company is located, at 6911 Pilliod Rd., is a single-family home. Lucas County Auditor’s Office records show the owner is Roxanne Antonio.
Wellstar’s annual reports from the last several years show an independent auditor had “substantial doubt about the company’s ability to continue as a going concern,” because of its losses and stockholder deficiencies.
Contact Sheena Harrison at: firstname.lastname@example.org or 419-724-6103.
Guidelines: Please keep your comments smart and civil. Don't attack other readers personally, and keep your language decent. Comments that violate these standards, or our privacy statement or visitor's agreement, are subject to being removed and commenters are subject to being banned. To post comments, you must be a registered user on toledoblade.com. To find out more, please visit the FAQ.