|UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K                                                                                                                                                                                                                                                                                                                
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                                                                                                                                                                                                                                                                 
|(Mark One)                                                                                                                                                                                                                                                                                                                                                                                       
|[X]                                                                                                                                                                                                                                                                                                                                                                                              
|                                                                                                                                                                                                                                                                                                                                                                                                 
|[  ]                                                                                                                                                                                                                                                                                                                                                                                             
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Commission file number 0-26108                                                                                                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 
|NATUREWELL, INCORPORATED(Name of small business issuer in its charter)                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Delaware(State or other jurisdiction
of incorporation or organization)                                                                                                                                                                                                                                                                                                                           
|                                                                                                                                                                                                                                                                                                                                                                                                 
|110 West C St., Suite 1300, San Diego, California 92101(Address of principal executive office)      (Zip Code)                                                                                                                                                                                                                                                                                   
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Registrant's telephone number including area code:  (619) 237-1350                                                                                                                                                                                                                                                                                                                               
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Securities registered pursuant to Section 12(b) of the Act: None
(Title of Class)                                                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Securities registered pursuant to Section 12(g) of the Act:Common Stock, $0.00001 Par Value
(Title of Class)                                                                                                                                                                                                                                                                                     
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
[  ] YES     [X] NO                                                                                                                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.
[X] YES     [  ] NO                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 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                     
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendments to this Form 10-K.
[X]                             
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the Definitions of "large accelerated filer", "accelerated filer" and "smaller reporting company" in Rule 12-b2 of the Exchange Act.                                                                                              
|Large accelerated filer [  ]                                                                                                                                                                                                                                                                                                                                                                     
|Non-accelerated filer [  ]                                                                                                                                                                                                                                                                                                                                                                       
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Indicate by check whether registrant is a shell company (as defined in Rule 12b-2 of the Act)
[X] YES     [  ] NO                                                                                                                                                                                                                                                                                
|                                                                                                                                                                                                                                                                                                                                                                                                 
|State the aggregate market value of the voting and non-voting stock held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter. As of December 31, 2009 the aggregate market value was $439,227.
|                                                                                                                                                                                                                                                                                                                                                                                                 
|State the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. As of October 12, 2010 the Company had issued and outstanding 2,448,665,750 shares of regular common stock and 19,000,000 shares of Series A Common Stock.                                                                                                            
|                                                                                                                                                                                                                                                                                                                                                                                                 
|Documents incorporated by reference and parts of Form 10-K into which incorporated:
None.                                                                                                                                                                                                                                                                                                        

- 1 -



|
|

THIS REPORT ON FORM 10-K CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS.



This report contains a number of forward-looking statements, which reflect the Company's current views with respect to future events and financial performance. Such forward-looking statements are based on management's beliefs and assumptions regarding information that is currently available, and are made pursuant to the "safe harbor" provisions of the federal securities laws. These forward-looking statements are subject to certain risks and uncertainties. The Company's actual performance and results could differ materially from those expressed in the forward-looking statements due to risks and uncertainties that could materially impact the Company in an adverse fashion and are only predictions of future results, and there can be no assurance that the Company's actual results will not materially differ from those anticipated in these forward-looking statements. In this report, the words "anticipates", "believes", "expects", "intends", "plans", "may", "future", and similar expressions identify forward-looking statements. Readers are cautioned to consider the risk factors described below and not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company has no obligation to publicly update or revise any of the forward-looking statements to reflect events or circumstances that may arise after the date hereof.



Item 1.     BUSINESS

NatureWell, Incorporated, a Delaware corporation (the "Company"), is a public company traded on the Over-the-Counter Bulletin Board ("OTC-BB") under the symbol "NAWL." The Company was formerly engaged in the research and development of unique proprietary healthcare products intended for a variety of conditions.



On May 9, 2008 the Company completed the sale of essentially all of its assets. As a result of the consummation of the sale of its assets, the Company has become a shell company as defined under Rule 12b-2 of the Exchange Act.



The Company is currently seeking business opportunities including an acquisition or merger with an operating business. The Company can give no assurance that an acquisition or merger will occur.

- 2 -



|
|

Item 1A.     RISK FACTORS

Certain statements under the headings "Risk Factors," "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Business," and elsewhere in this Report constitute "forward-looking statements" within the meaning of the rules and regulations promulgated by the Securities and Exchange Commission.



THIS REPORT ON FORM 10-K CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER SIGNIFICANTLY FROM THE RESULTS DISCUSSED IN SUCH FORWARD-LOOKING STATEMENTS.



This report contains a number of forward-looking statements, which reflect the Company's current views with respect to future events and financial performance. Such forward-looking statements are based on management's beliefs and assumptions regarding information that is currently available, and are made pursuant to the "safe harbor" provisions of the federal securities laws. These forward-looking statements are subject to certain risks and uncertainties. The Company's actual performance and results could differ materially from those expressed in the forward-looking statements due to risks and uncertainties that could materially impact the Company in an adverse fashion and are only predictions of future results, and there can be no assurance that the Company's actual results will not materially differ from those anticipated in these forward-looking statements. In this report, the words "anticipates", "believes", "expects", "intends", "plans", "may", "future", and similar expressions identify forward-looking statements. Readers are cautioned to consider the risk factors described below and not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company has no obligation to publicly update or revise any of the forward-looking statements to reflect events or circumstances that may arise after the date hereof.



As described above, the forward-looking statements contained in this report involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. These risks, uncertainties and other factors include, but are not limited to the following: the Company's lack of operating history and the uncertainty of profitability; the Company's ability to obtain capital, which is critical to its future existence, and if able to obtain capital it can do so on terms that are advantageous or desirable to current shareholders and/or stakeholders of the Company; the Company's ability to locate an acquisition or merger candidate under terms that it finds favorable; changes in or failure to comply with governmental regulation; the Company's dependence on key employees; and general economic and business conditions and other factors referenced in this report. Accordingly, any investment in the Company's common stock hereby involves a high degree of risk. In addition to the other information contained in this Form 10-K, the Company's business should be considered carefully before purchasing any of the securities of the Company. In addition to other information contained in this report, prospective investors should carefully consider the following factors before purchasing securities of the Company. Prospective investors are cautioned that the statements in this Section that are not descriptions of historical facts may be forward-looking statements that are subject to risks and uncertainties. Actual results could differ materially from those currently anticipated due to a number of factors, including those identified in "Risk Factors," "Business," and elsewhere in this report.

- 3 -



|
|

We Have No Current Operations and We May Never Be Able to Acquire or Merge with an Operating Company.



As discussed herein the Company sold essentially all of its assets on May 9, 2008 and discontinued its operations, which was intended to improve the Company's balance sheet in order to make it more attractive for an acquisition of, or merger with, a more viable company. However, there can be no assurance that such an acquisition or merger will materialize.



The Company's Large Amount of Debt May Make it Difficult to Attract an Acquisition or Merger Candidate.



The Company has a considerable amount of secured and unsecured debt remaining on its balance sheet following the disposal of its assets. Such debt may make the Company unattractive to potential acquisition or merger candidates.



In Order to Facilitate an Acquisition or Merger the Company's Creditors May Have to Convert Some or All of Their Debt into Equity Thereby Substantially Diluting Current Shareholders.



Because the Company continues to carry a considerable amount of debt on its Balance sheet, and that such debt may make the Company unattractive to potential acquisition or merger candidates, it is likely that a further restructuring of the Company's balance sheet would be necessary in order to facilitate an acquisition or merger. Such a restructuring would likely include the conversion of some or all of the Company's debt into equity, which would lead to substantial dilution of existing shareholders.



Our Ability to Generate Revenues Depends on Our Ability to Acquire or Merge with an Operating Company.



If the Company is unable to acquire or merge with an operating company it will be unable to generate any revenues. Additionally, the inability to generate revenues will make it unlikely that the Company would be able to service or repay any of its debt or current liabilities.



We Depend Upon Our Key Personnel.



The Company is dependent on the efforts and abilities of certain of its senior management, particularly James Arabia, its Chief Executive Officer, to remain until an acquisition or merger has been accomplished. In light of the Company's cash position and balance sheet there can be no assurance that the Company could provide the necessary incentive for Mr. Arabia to remain.

We May Not Be Able To Continue As a Going Concern.

In their report accompanying the audit of our June 30, 2010 financial statements, our auditors expressed doubt as to our ability to continue as a going concern. Currently, the Company has no sales as a result of the disposition of its assets. Prior to the first quarter of fiscal year ending June 30, 2002, the Company was primarily engaged in research and development activities. Consequently, the Company has incurred recurring losses from previous operations. These factors, as well as the risks associated with the Company being able to consummate an acquisition of or merger with an operating business and raising capital through the issuance of equity and/or debt securities creates uncertainty as to the Company's ability to continue as a going concern.



The Company believes that capital raised, together with cash on hand, will be sufficient to fund the Company's operations, which, as a shell company, essentially consists of complying with reporting requirements as a public company.  However, there can be no assurance that the Company will be able to complete these efforts. To the extent that cash on hand along with proceeds from the capital raising efforts fall short or are insufficient to fund the Company's activities, we may not be able to continue as a going concern.



The Company's plan to address its going concern issues is to locate a viable operating business to acquire or merge with, however, there can be no assurance that the Company will be able to consummate such a transaction, or if a transaction is completed that it would be on terms that are favorable to the then-shareholders.



An Acquisition or Merger Would Likely Require Significant Amounts of Additional Financing Which Could Result in Dilution to Investors; Additional Financing Could be Unavailable or Have Unfavorable Terms



If the Company were to enter into an acquisition or merger it is possible that a substantial amount of capital would be needed to consummate such a transaction. Such capital may be raised in a variety of ways including through equity and/or debt financings (including convertible debt). Any equity financings would likely result in substantial dilution to our then-existing stockholders. Sources of debt financing may result in higher interest expense. Any financing, if available, may be on terms unfavorable to us. If such capital raising efforts are unsuccessful, we may be unable to consummate an acquisition or merger. The Company's actual capital requirements for an acquisition or merger will depend on many factors, including, but not limited to, the financial strength of a particular acquisition or merger candidate and the need for capital to expand or grow their business.

- 4 -



|
|



Risk Factors Relating To Our Current Financing Arrangements:

We Are Delinquent In Payments To Our Unsecured Creditors And May Face Collection Actions As a Result.



The Company is delinquent with a number of unsecured creditors for which no payment arrangements exist or for which no agreement to forestall collection action has been agreed upon. At June 30, 2010 the Company has a litigation reserve totaling $125,102 which it maintains for legal and settlement costs associated with its restructuring efforts and for current litigation arising in the ordinary course of business. Notwithstanding the litigation reserve established, in the light of the Company's current financial condition, the Company's cash liability, if any, arising from legal proceedings, could have a material adverse affect on the Company's financial position, results of operations or cash flows. Unsecured creditors are comprised of a number of creditors owed amounts of less than $10,000. Whenever feasible the Company negotiates with these creditors to reach settlement agreements that are acceptable to the Company, however, if the Company is unable to reach acceptable settlement arrangements it may be subject to various collection actions.



We Have Secured Debt Obligations That are in Default



As of June 30, 2010, the Company was in payment default on the following secured notes; one senior secured note issued to Dutchess totaling $330,847.



The Company has no scheduled repayment arrangements in regard to any of the defaulted debt listed above. Because these creditors are secured by virtually all of the Company's assets, the Company could face action to have its assets foreclosed upon. Collection action by any secured creditor is governed by an Intercreditor Agreement, as amended, between such creditors, which requires a majority of senior creditors to approve of any collection action by any secured creditor(s) before such action is commenced (including an action to foreclose on the Company's assets). Although the Company believes that the majority of senior creditors will not agree to authorize collection action at this time, there can be no assurance that the senior creditors will not authorize certain collection actions. If collection actions are authorized and do commence, the assets of the Company could be foreclosed upon and the Company's ability to continue as a going concern would be severely limited.



The Company may need to negotiate debt for equity swaps with defaulted creditors, which could lead to the issuance of substantial amounts of common stock and substantial dilution of then-existing shareholders. There can be no assurance that any of the Company's secured creditors will accept equity in exchange for their debt. If the Company is unable to issue equity to retire much of its secured debt obligations, it may be very difficult to consummate an acquisition of or merger with an operating business or company.



Risk Factors Relating to Our Common Stock:



We Do Not Expect to Pay Dividends for Some Time, if At All.



No cash dividends have been paid on our common stock. We expect that any income received from operations will be devoted to our future operations. We do not expect to pay cash dividends in the foreseeable future. Payment of dividends would depend upon our profitability at the time, cash available for those dividends, and other factors.



The Public Market for Our Common Stock is Volatile and Limited.



Our common stock is currently quoted on the Over the Counter Bulletin Board under the ticker symbol NAWL. The market price of the Company's common stock has been, and is likely to continue to be, volatile. Factors such as announcement of an acquisition or merger, if any, announcements relating to strategic relationships, government regulatory actions, general conditions in overall market conditions and other unforeseen factors may have a significant impact on the market price of the common stock. In addition, in recent years the stock market for penny stocks in general, has experienced extreme price fluctuations. This volatility has had a substantial effect on the market prices of penny stock securities issued by many companies for reasons unrelated to the operating performance of the specific companies. These broad market fluctuations may adversely affect the market price of the Company's common stock

- 5 -



|
|

In addition, the public float of the Company's common stock is small in comparison to total shares outstanding on a fully diluted basis, resulting in a very thin public market for the trading of the Company's shares. Limited trading volume entails a high degree of volatility in the stock price. In the 52-week period from July 1, 2009 to June 30, 2010, the closing price for the shares of the Company's stock on the OTC "Pink Sheets" ranged from $0.0001 to $0.0008 This situation of limited liquidity and volatile stock price will most likely continue for the near future.



Our Common Stock is Subject to the "Penny Stock" Rules of the SEC and the Trading Market in Our Securities is Limited, Which Makes Transactions In Our Stock Cumbersome and May Reduce the Value of an Investment in Our Stock.



The Securities and Exchange Commission has adopted Rule 15g-9 which establishes the definition of a "penny stock," for the purposes relevant to us, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require:

|* | that a broker or dealer approve a person's account for transactions in penny stocks; and                                                                          
|- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person's account for transactions in penny stocks, the broker or dealer must:

|* | obtain financial information and investment experience objectives of the person; and                                                                                                                                                                 
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|* | make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the Commission relating to the penny stock market, which, in highlight form:

|* | sets forth the basis on which the broker or dealer made the suitability determination; and                
|- | ----------------------------------------------------------------------------------------------------------
|* | that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the "penny stock" rules. This may make it more difficult for investors to dispose of our common stock and cause a decline in the market value of our stock.



Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.



Rule 144 Stock Sales



As of June 30, 2010, the Company had outstanding approximately1,658,544,638 shares of common stock and 19,000,000 shares of Series A common stock as "restricted securities" which may be sold only in compliance with Rule 144 adopted under the Securities Act of 1933, as amended or other applicable exemptions from registration. The SEC recently adopted amendments to Rule 144 which became effective on February 15, 2008 and apply to securities acquired both before and after that date.  Under these amendments, a person who has beneficially owned restricted shares of our common stock for at least six months would be entitled to sell their securities provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale, (ii) we are subject to the Exchange Act reporting requirements for at least 90 days before the sale and (iii) if the sale occurs prior to satisfaction of a one-year holding period, we provide current information at the time of sale.



Persons who have beneficially owned restricted shares of our common stock or warrants for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

|· | 1% of the total number of securities of the same class then outstanding; or                                                                                
|- | -----------------------------------------------------------------------------------------------------------------------------------------------------------
|· | the average weekly trading volume of such securities during the four calendar weeks preceding the filing of a notice on Form 144 with respect to such sale.

provided,

- 6-



|
|

Item 2.     PROPERTIES

The Company's corporate offices for mailing and meeting services are located at 110 West "C" St, Suite 1300, San Diego, California 92101. The Company also maintains storage space in San Diego, California at a cost of $141 per month.



Item 3.     LEGAL PROCEEDINGS

At June 30, 2010 the Company has a litigation reserve totaling $125,102 which it maintains for legal and settlement costs associated with its restructuring efforts and for litigation arising in the ordinary course of business. Notwithstanding the reserve established, in the light of the Company's current financial condition, the Company's cash liability, if any, arising from legal proceedings related to these matters, and others in which it is involved, could have a material adverse effect on the Company's financial position, results of operations or cash flows.



Item 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

- 7 -



|
|

PART II



Item 5.     MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES



As of June 30, 2010, there were over 600 holders of record of the Common Stock. The Company has not paid cash dividends on its capital stock since inception and does not have any plans to do so in the future. The Company currently intends to retain earnings, if any, for use in its business.



Market Information



The Company's Common Stock is traded on the Over-the-Counter Pink Sheets under the symbol "NAWL." The following table sets forth the high and low closing prices per share for the Company's Common Stock for the prior three years:



|                  | HIGH   | LOW   
|----------------- | ------ | ------
|                  |        |       
|Fiscal Year 2007: |        |       
|First Quarter     | 0.0011 | 0.0005
|Second Quarter    | 0.0006 | 0.0001
|Third Quarter     | 0.0002 | 0.0001
|Fourth Quarter    | 0.0001 | 0.0001
|                  |        |       
|Fiscal Year 2008: |        |       
|First Quarter     | 0.0001 | 0.0001
|Second Quarter    | 0.0001 | 0.0001
|Third Quarter     | 0.0001 | 0.0001
|Fourth Quarter    | 0.0001 | 0.0001
|                  |        |       
|Fiscal Year 2009: |        |       
|First Quarter     | 0.0003 | 0.0001
|Second Quarter    | 0.0008 | 0.0001
|Third Quarter     | 0.0007 | 0.0002
|Fourth Quarter    | 0.0005 | 0.0002

Recent Sales of Unregistered Securities



For the year ended June 30, 2010 the Company made no sales of unregistered securities.

- 8 -



|
|

Item 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The Company intends to seek opportunities to acquire or merge with an operating company and is actively seeking such a transaction. However, there can be no assurance that the Company will be successful in locating an acquisition or merger candidate or that it will be able to consummate a transaction with a candidate over the next twelve months. The Company's ability to repay its debt and/or further restructure its balance sheet is highly dependent upon its success in identifying and transacting an acquisition or merger. Additionally, the Company believes that an acquisition or merger may require the raising of additional capital to facilitate such a transaction, however at this time the Company has no specific plans for raising additional capital as such needs, if any, are unknown at this time.



PLAN OF OPERATION



The Company has no ongoing operations and any plan of operations would be developed in conjunction with the transaction of an acquisition or merger of an operating company as yet unidentified.



EXPECTED CAPITAL REQUIREMENTS



Over the next twelve months the Company's capital requirements are unknown except in regard to monies needed to make its filings required by the Securities and Exchange Commission. The Company expects that Dutchess Advisors LLC ("Dutchess") will pay a third-party consultant fees for the preparation of such filings (which includes the expenses related to the filings) that will be adequate to cover the expenses related to continuing to report as a public company, however, there can be no assurance that Dutchess will be willing to provide such further funding.



EXPECTED RESEARCH AND DEVELOPMENT ACTIVITIES



None.



EXPECTED PURCHASES OR SALES OF PLANT AND SIGNIFICANT EQUIPMENT



None.



EXPECTED CHANGES IN NUMBER OF EMPLOYEES



The Company has 2 consultants/officers (a part-time CEO and part-time CFO) and does not expect to add any new employees over the next twelve months unless an acquisition or merger is completed within that time-frame.



RESULTS OF OPERATIONS



As discussed above, the Company did not engage in any significant business prior to April 17, 1995. During April 1995, the Company acquired Unified Technologies, Inc., a development stage business. Since that time, the Company had been developing various healthcare products until it discontinued operations in May of 2008 following the Asset Sale.



FISCAL YEAR ENDED JUNE 30, 2010 COMPARED TO THE CORRESPONDING PERIOD IN 2009.



The Company experienced net income of $102,718 for the twelve-month period ended June 30, 2010, compared with a net loss of $526,212 for the same period ended June 30, 2009. This represents an increase of $628,930 from the prior year. The increase in net income is primarily attributable to an increase in other income related to forgiveness of debt and to a decrease in interest expense.

Consulting fees totaled $9,061 for the year ended June 30, 2010, compared with $37,550 for the same period ending June 30, 2009. This represents a decrease of $28,489 from the prior year or 75.87%. General and administrative expenses incurred by the Company were $25,219 for the year ended June 30, 2010, compared with $50,240 for the same period ended June 30, 2009. This represents a decrease of $25,012 from the prior year due to reduced costs related to the Company's shell status.

- 9 -



|
|

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Pending an acquisition of or merger with another business or company, the Company anticipates that Dutchess will pay the necessary fees to third-party consultants in order to cover the expense of preparing the Company's required public filings, defend against creditor suits or actions and to reach settlements with creditors when advisable. There can be no assurance that Dutchess will pay such third-party fees and expenses, which, if not provided, could result in the Company being unable to continue as a going concern.



At June 30, 2010 and 2009, the Company had current assets of $0 and $79,888, respectively, including cash of $0 and $441. The report of the Company's independent auditors on the financial statements for the fiscal year ended June 30, 2010, includes an explanatory paragraph relating to the uncertainty of the Company's ability to continue as a going concern due to recurring losses and the risks associated with consummating a business acquisition or merger.



Item 8.     FINANCIAL STATEMENTS



|INDEX TO FINANCIAL STATEMENTS   
|--------------------------------
|                                
|                                
|REPORT OF INDEPENDENT ACCOUNTANT
|                                
|FINANCIAL STATEMENTS:           
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                
|                                

- 10 -



|
|



Chang G. Park, CPA, Ph. D.t





|
|





Report of Independent Registered Public Accounting Firm





To the Board of Directors of
Naturewell, Incorporated and Subsidiaries
(A Development Stage Company)



We have audited the accompanying consolidated balance sheets of Naturewell, Incorporated and subsidiaries (the "Company") as of June 30, 2010 and 2009 and the related consolidated statements of operations, changes in shareholders' equity and cash flows for the years then ended and for the period of May 13, 2008 to June 30, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Naturewell, Incorporated and subsidiaries as of June 30, 2010 and 2009, and the consolidated results of its operations and its cash flows for the years then ended and for the period of May 13, 2008 to June 30, 2010 in conformity with U.S. generally accepted accounting principles.

The consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note O to the consolidated financial statements, the Company has no operating business and has substantial amounts of debt that is in default as well as having a number of unpaid creditors. Without an operating business the Company has no revenue, cash flow or earnings available to meet its obligations. Those factors raise substantial doubt about its ability to continue as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.







---



October 13, 2010

San Diego, CA. 92108







|2667 Camino Del Rio South Plaza B, San Diego, CA 92108
|------------------------------------------------------
|Tel: (858) 722-5953                                   

- 11 -



|
|



|NATUREWELL, INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheets
|---------------------------------------------------------------------



|                                    |                                           | As of June 30, 2010                                                                                                                                                                     |                                                                                                                    | As of June 30, 2009
|----------------------------------- | ----------------------------------------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------ | -------------------
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|ASSETS                              |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Current Assets                            |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           | Cash                                                                                                                                                                                    |                                                                                                                    | $                  
|                                    |                                           | Notes Receivable                                                                                                                                                                        |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Total Current Assets                      |                                                                                                                                                                                         |                                                                                                                    | -                  
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | TOTAL ASSETS                              |                                                                                                                                                                                         | $                                                                                                                  | -                  
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|LIABILITIES & STOCKHOLDERS' DEFECIT |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Current Liabilities                       |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           | Accounts payable                                                                                                                                                                        |                                                                                                                    | $                  
|                                    |                                           | Accrued litigation costs                                                                                                                                                                |                                                                                                                    |                    
|                                    |                                           | Loans payable                                                                                                                                                                           |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Total Current Liabilities                 |                                                                                                                                                                                         |                                                                                                                    | 2,504,840          
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Long-Term Liabilities                     |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           | Senior secured notes                                                                                                                                                                    |                                                                                                                    |                    
|                                    |                                           | Senior secured convertible notes                                                                                                                                                        |                                                                                                                    |                    
|                                    |                                           | Subordinated secured convertible notes                                                                                                                                                  |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Total Long-Term Liabilities               |                                                                                                                                                                                         |                                                                                                                    | 305,324            
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | TOTAL LIABILITIES                         |                                                                                                                                                                                         | $                                                                                                                  | 2,810,164          
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Stockholders' Deficit                     |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           | Preferred stock, $0.01 par value                                                                                                                                                        |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         | Series C; 75 shares issued and outstanding as of June 30, 2010 and June 30, 2009                                   |                    
|                                    |                                           |                                                                                                                                                                                         | Series E; 3,115 shares and 3,115 shares issued and outstanding as of June 30, 2010 and June 30, 2009, respectively |                    
|                                    |                                           | Common stock,  $0.00001 par value, (4,980,000,000 shares authorized; 2,448,665,750 and 2,448,665,750 shares issued and outstanding as of June 30, 2010 and June 30, 2009, respectively) |                                                                                                                    |                    
|                                    |                                           | Common stock series A,  $0.00001 par value, (20,000,000 shares authorized; 19,000,000 and 19,000,000 shares issued and outstanding as of June 30, 2010 and June 30, 2009, respectively) |                                                                                                                    |                    
|                                    |                                           | Additional paid-in capital                                                                                                                                                              |                                                                                                                    |                    
|                                    |                                           | Accumulated deficit                                                                                                                                                                     |                                                                                                                    |                    
|                                    |                                           | Accumulated deficit during the development stage                                                                                                                                        |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | Total Stockholders' Deficit               |                                                                                                                                                                                         |                                                                                                                    | (2,810,164)        
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    | TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT |                                                                                                                                                                                         | $                                                                                                                  | 0                  
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    
|                                    |                                           |                                                                                                                                                                                         |                                                                                                                    |                    



See Notes to Consolidated Financial Statements.

- 12 -



|
|

NATUREWELL, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Operations (Audited)
For the Years Ended June 30, 2010 and 2009
and for the period from May 13, 2008 to June 30, 2010



|                                                     | June 30,
2010                                              |   | June 30,
2009 |           | Development Stage
May 13, 2008 -
June 30, 2010
|---------------------------------------------------- | ---------------------------------------------------------- | - | ------------- | --------- | ----------------------------------------------
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Revenues                                             |                                                            |   |               |           |                                               
|                                                     | Gross Sales                                                |   | $             | -         |                                               
|                                                     |                                                            |   |               |           |                                               
|Net Sales                                            |                                                            |   | -             |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Costs and Expenses                                   |                                                            |   |               |           |                                               
|                                                     | Selling general & administrative                           |   |               | 25,219    |                                               
|                                                     | Consulting services                                        |   |               | 9,061     |                                               
|                                                     |                                                            |   |               |           |                                               
|Total Costs and Expenses                             |                                                            |   | 34,280        |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Loss From Operations                                 |                                                            |   | (34,280)      |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Other Income & (Expenses)                            |                                                            |   |               |           |                                               
|                                                     | Other expense, bad debt                                    |   |               | (83,470)  |                                               
|                                                     | Other income                                               |   |               | 18,575    |                                               
|                                                     | Debt forgiveness                                           |   |               | 407,247   |                                               
|                                                     | Interest income                                            |   |               | 4,023     |                                               
|                                                     | Interest expense                                           |   |               | (209,377) |                                               
|                                                     |                                                            |   |               |           |                                               
|Total Other Income & (Expenses)                      |                                                            |   | 136,998       |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Net Income from continuing operations                |                                                            |   | 102,718       |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Discontinued operation                               |                                                            |   |               |           |                                               
|                                                     | Net Income (Loss) from operations of discontinued business |   |               | -         |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Loss before extraordinary item                       |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     | Extraordinary item                                         |   |               | -         |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Net Loss                                             |                                                            | $ | 102,718       |           | $                                             
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Basic and diluted earnings (loss) per share          |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     | Continuing operations                                      |   | $             | 0.00004   |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     | Discontinued operation                                     |   | $             | -         |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     | Net Income (Loss)                                          |   | $             | 0.00004   |                                               
|                                                     |                                                            |   |               |           |                                               
|Basic earnings (loss) per share                      |                                                            | $ | 0.00004       |           | $                                             
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Weighted average number of common shares outstanding |                                                            |   | 2,448,665,750 |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|Diluted Earnings (Loss) per Share                    |                                                            |   | 0.00004       |           | $                                             
|Weighted average number of common shares outstanding |                                                            |   | 2,473,693,045 |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               
|                                                     |                                                            |   |               |           |                                               

See Notes to Consolidated Financial Statements.

- 13 -



|
|



|NATUREWELL INCORPORATED AND SUBSIDIARIESConsolidated Statement of Changes in Stockholders' Equity
For the Years Ended  June  30, 2007 through 2010
|--------------------------------------------------------------------------------------------------------------------------------------------------
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  
|                                                                                                                                                  



See Notes to Consolidated Financial Statements.

- 14 -



|
|

NATUREWELL, INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Cash Flows (Audited)
For the Years Ended June 30, 2010 and 2009
and for the period from May 13, 2008 to June 30, 2010





|                                                                            |                                                          |   | For the Year Ended |           | Development Stage 
May 13, 2008 - 
June 30, 2010
|--------------------------------------------------------------------------- | -------------------------------------------------------- | - | ------------------ | --------- | ------------------------------------------------
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | June 30, 2010                                            |   | June 30, 2009     
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|CASH FLOWS FROM OPERATING ACTIVITIES                                        |                                                          |   |                    |           |                                                 
|Net income (loss)                                                           |                                                          | $ | 102,718            |           | $                                               
|Adjustments to reconcile net loss to net cash used in operating activities: |                                                          |   |                    |           |                                                 
|                                                                            | Accrued interest income                                  |   |                    | (4,023)   |                                                 
|                                                                            | Depreciation and amortization                            |   |                    | -         |                                                 
|                                                                            | Loss on disposal of fixed assets                         |   |                    | -         |                                                 
|                                                                            | Debt forgivness income                                   |   |                    | (407,247) |                                                 
|                                                                            | Extraordinary item                                       |   |                    | -         |                                                 
|                                                                            | Gain on disposal on discontinued operations              |   |                    | -         |                                                 
|                                                                            | Amortization of debt discount                            |   |                    | -         |                                                 
|                                                                            | Accrued interest expense                                 |   |                    | 209,377   |                                                 
|                                                                            | Other expense / bad debt                                 |   |                    | 83,470    |                                                 
|                                                                            | Accrued interest expense                                 |   |                    | -         |                                                 
|Changes in assets and liabilities:                                          |                                                          |   |                    |           |                                                 
|                                                                            | (Increase) decrease in accounts receivable               |   |                    | -         |                                                 
|                                                                            | (Increase) decrease in inventory                         |   |                    | -         |                                                 
|                                                                            | (Increase) decrease in prepaid expenses                  |   |                    | -         |                                                 
|                                                                            | Increase (decrease) in due to officers                   |   |                    | -         |                                                 
|                                                                            | Increase (decrease) in accrued expenses                  |   |                    | -         |                                                 
|                                                                            | Increase (decrease) inaccured litigation costs           |   |                    | -         |                                                 
|                                                                            | Increase (decrease) in accounts payable                  |   |                    | 15,264    |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|Net cash provided by (used in) operating activities                         |                                                          |   | (441)              |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|CASH FLOWS FROM INVESTING ACTIVITIES                                        |                                                          |   |                    |           |                                                 
|                                                                            | Proceed from fixed assets sales                          |   |                    |           |                                                 
|                                                                            | Increase note receivalbe                                 |   |                    | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|Net cash provided by (used in) investing activities                         |                                                          |   | -                  |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|CASH FLOWS FROM FINANCING ACTIVITIES                                        |                                                          |   |                    |           |                                                 
|                                                                            | Stock issued for cash                                    |   |                    | -         |                                                 
|                                                                            | Payments made on loans payable                           |   |                    | -         |                                                 
|                                                                            | Proceeds from loans payable                              |   |                    | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|Net cash provided by (used in) financing activities                         |                                                          |   | -                  |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | Net increase (decrease) in cash                          |   |                    | (441)     |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | Cash at beginning of period                              |   |                    | 441       |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | Cash at end of period                                    | $ | $                  | 0         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:                          |                                                          |   |                    |           |                                                 
|                                                                            | Income taxes paid                                        | $ | $                  | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | Interest paid                                            | $ | $                  | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|NON-CASH ACTIVITIES                                                         |                                                          |   |                    |           |                                                 
|                                                                            | Notes issued to officers                                 | $ | $                  | -         |                                                 
|                                                                            | Retirement of debt                                       |   |                    | -         |                                                 
|                                                                            | Reclassified long-term loan to short-term loan           |   |                    | -         |                                                 
|                                                                            | Stock issued from conversion of convertible notes        |   |                    | -         |                                                 
|                                                                            | Notes payable for settlement of notes                    |   |                    | -         |                                                 
|                                                                            | Stock issued for services                                |   |                    | -         |                                                 
|                                                                            | Preferred stock issuance for settlement of notes payable |   |                    | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            | Total non-cash activities                                | $ | $                  | -         |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 
|                                                                            |                                                          |   |                    |           |                                                 



See Notes to Consolidated Financial Statements.

- 15 -



|
|

NATUREWELL, INCORPORATED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARS ENDING JUNE 30, 2010 AND 2009



A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:



ORGANIZATION AND BASIS OF CONSOLIDATION:



NatureWell, Inc., a California corporation ("NWI-CA") was originally incorporated on April 26, 1983 (through an earlier predecessor corporation). In August 1998, NWI-CA acquired the assets and technology of Amtech Scientific, Inc. ("ATS") of which the assets were contributed to a newly formed subsidiary of NWI-CA, DiagnosTech, Inc, a California corporation ("DTI"). In September 2001, NWI-CA formed a wholly owned subsidiary in Delaware, NatureWell, Incorporated. This wholly owned subsidiary was established for the sole purpose of reincorporating NWI-CA in Delaware. In October 2001, NWI-CA obtained approval from a vote of a majority of its shareholders to reincorporate in Delaware. On October 25, 2001, the merger of NWI-CA into NatureWell, Incorporated, a Delaware corporation ("NatureWell", "NWI" or the "Company") was consummated. NWI-CA has been "merged-out" and dissolved as a result of the reincorporation. The Company has two wholly owned subsidiaries, Unified Technologies, Inc., a California corporation ("UTI") and Chemical Dependency Healthcare of California, Inc., a California corporation ("CDHC"). Both UTI and CDHC are dormant and not engaged in any operating activities and there are no plans to engage in any activities in the future. The Company as of June 30, 2010 also holds a 91.9 percent (91.9%) ownership interest in Nasal Mist, Inc., a California corporation ("NMI"). NMI is also dormant and not engaged in any operating activities and there are no plans to engage in any activities in the future.



PRINCIPLES OF CONSOLIDATION:



The audited consolidated financial statements include the accounts of the Company and its subsidiaries and present them as one economic entity. All significant intercompany transactions and balances have been eliminated in consolidation as of June 30, 2010 and 2009.



BASIS OF ACCOUNTING:



The Company's policy is to use the accrual method of accounting to prepare and present financial statements, which conforms to U.S. generally accepted accounting principles ("GAAP').



RECENT ACCOUNTING PRONOUNCEMENTS:

In June 2009, the FASB issued guidance now codified as ASC 105, Generally Accepted Accounting Principles as the single source of authoritative accounting principles recognized by the FASB to be applied by nongovernmental entities in the preparation of financial statements in conformity with U.S. GAAP, aside from those issued by the SEC. ASC 105 does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all authoritative literature related to a particular topic in one place. The adoption of ASC 105 did not have a material impact on the Company's financial statements, but did eliminate all references to pre-codification standards.



The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.



INCOME TAXES:



Income taxes are provided in accordance with ASC 740, Income Taxes. A deferred tax asset or liability is recorded for all temporary differences between financial and tax reporting and net operating loss carry forwards. Deferred tax expense (benefit) results from the net change during the year of deferred tax assets and liabilities.



Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.



USE OF ESTIMATES:



The preparation of the Company's audited financial statements 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 financial statement date and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates made by management.





|
|

B.  FORMATION OF SUBSIDIARIES:



NASAL MIST, INC.



The Company owns 91.9% of Nasal Mist ("NMI"), a subsidiary formed by the Company during August 1997, NMI is dormant and not engaged in any operating activities and there are no plans to engage in any activities in the future.



C.  INVENTORY:



As of June 30, 2010 and 2009 the Company has no inventory.



D.  BASIC EARNINGS (LOSS) PER SHARE:



The Company computes net income (loss) per share in accordance with ASC 260, Earnings per Share.ASC 260 specifies the computation, presentation and disclosure requirements for earnings (loss) per share for entities with publicly held common stock. Basic net earnings (loss) per share amounts are computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding. Diluted earnings (loss) per share are the same as basic earnings (loss) per share due to the lack of dilutive items in the Company.



E.  WARRANTS, OPTIONS AND STOCK BASED COMPENSATION:



There are no warrants or options outstanding as of June 30, 2010 and 2009.



In May of 2004 the Company adopted its 2004 Incentive Stock Bonus and Option Plan (the "Plan"). The Plan is intended to advance the interests of the Company by affording to selected employees, directors and consultants, an opportunity for investment in the Company and the incentives inherent in stock ownership in the Company and to provide the Company with a means of attracting, compensating, and retaining the services of selected employees, directors and consultants. It initially allowed for the issuance of 10,000,000 shares of S-8 stock, subject to the board's authority to amend the Plan.



On December 21, 2005 the Plan was amended to allow for the issuance of up to 30,000,000 shares of S-8 stock. In addition to the shares authorized by the Plan, the Company may issue restricted shares, or securities that convert into restricted common stock (including convertible notes), to non-employees, employees, directors and consultants for services. Shares issued to non-employees, employees and directors in return for services are valued under the fair value method in accordance with SFAS 123. At June 30, 2010 18,642,742 shares were issued under the Plan.



Total compensation cost recognized in income for stock-based employee compensation was $0 and $0 (including officers) for the years ending June 30, 2010 and June 30, 2009, respectively.



F.  PREFERRED STOCK:



The Company has outstanding 75 shares of Series C Convertible Preferred Stock (the "Series C Preferred"). Each share of Series C Preferred has a $1,000 liquidation preference, and all 75 shares are owned by Dutchess Advisors LLC ("Dutchess"), the Company's largest senior secured creditor (see also Note H - "Loans Payable" and Note K - "Related Party Transactions"). Pursuant to the terms of the Certificate of Designation for the Series C Preferred, Dutchess is allowed to cast a vote on all matters that the Company's shareholders are permitted to vote upon, equal to 0.7% of all outstanding securities that are eligible to vote at the time of such shareholder action for each share of Series C Convertible Preferred that it owns (0.7% X 75 shares = 52.5% of total vote). Each share of Series C Preferred is convertible into 25,000 shares of the Company's common stock (1,875,000 total).



The Company has outstanding 3,115 shares of Series E Convertible Preferred Stock (the "Series E Preferred"). Each share of Series E Preferred has a $1,000 liquidation preference, and all 3,155 shares are owned by Dutchess Advisors LLC ("Dutchess"), the Company's largest senior secured creditor (see also Note H - "Loans Payable" and Note K - "Related Party Transactions"). Pursuant to the terms of the Certificate of Designation for the Series E Preferred, each share is convertible into 1,333 shares of common stock (which conversion price is not subject to adjustment due to a reverse split), provided however, in no event shall the Company permit such conversion, into that number of shares of common stock which, when added to number of shares of common stock already beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as amended), by the holder, would cause the holder's beneficial ownership of common stock to exceed 4.99% of the number of shares of common stock outstanding as of the conversion date for the shares of Series E Preferred that the holder seeks to convert. On any matter for which the shareholders of the Company are entitled to vote, each share of Series E Preferred shall be entitled to cast a number of votes equal to the number of whole shares of common stock into which such share of Series E Preferred could then be converted into.

- 17 -



|
|

G.  SERIES A COMMON STOCK



The Company has 20,000,000 authorized shares of Series A Common Stock of which 19,000,000 shares are issued and outstanding all of which are owned by Dutchess. Each share of Series A Common Stock shall entitle the holder to cast ten (10) votes for all matters presented to the shareholders for vote, and each share may be converted at the option of the holder into one share of regular Common Stock by surrendering to the Company the certificate or certificates evidencing the shares of Series A Common Stock to be converted together with a written request that the shares be so converted. Holders of regular Common Stock and Series A Common Stock shall vote together as a single class on all matters as to which holders of the class of common stock are entitled to vote, except as may be otherwise required by law.



At June 30, 2010, the 19,000,000 shares of Series A Common Stock were eligible to cast a vote equal to 7.2% of the eligible votes possessed by the common stock as a class (190,000,000 votes of an eligible 2,638,665,750 votes) and 3.41% of the eligible votes possessed by the common stock and preferred stock voting together (190,000,000 votes of an eligible 5,563,770,621).



H.  LOANS PAYABLE:



Loans payable as of June 30, 2010 and 2009 are as follows:



|                                                         | 2010          | 2009      
|-------------------------------------------------------- | ------------- | ----------
|                                                         |               |           
|Loans payable with annual interest varying from 6% to 8% | $   2,309,137 | $  328,026
|                                                         |               |           
|                                                         |               |           
|                                                         | $   2,309,137 | $  328,026
|                                                         |               |           
|                                                         |               |           
|                                                         |               |           

Loans payable as of June 30, 2010 consist of the following:

(1) the current portion ($168,000) of a senior secured note issued to Dutchess, face value $300,000, which matures on January 1, 2012, pays interest of six percent per annum, requires minimum monthly payments of $6,000 beginning on March 1, 2009, is secured by a lien on all of the Company's assets, and is equal in rank with all other senior secured debt of the Company. The Company did not make the required March 1, 2009 payment on the note or any required payments thereafter, however Dutchess has not initiated any collection action and has not given notice of any intent to exercise any remedies available under the terms of the note (see also Note K - "Related Party Transactions""), (2) one unsecured note totaling $20,573, including interest thereon of $8,621 which accrues interest at the rate of 8% per annum, and (3) one senior secured note totaling $2,120,564, including interest accrued thereon of $237,564, which is secured by a first priority security interest in essentially all of the Company's assets, is equal in rank with other senior debt and accrues interest at the rate of 8% per annum until maturity on January 1, 2011.



I.  LEASES:



The Company's corporate offices for mail and meeting space are located at 110 West "C" St, Suite 1300, San Diego, California 92101. The office services are made available to the Company by Naturewell, Incorporated (a Nevada corporation that is privately owned by the Company's CEO, James R. Arabia) at no charge on a month to month basis. Office rent and incidental expense was $0 and $0 for the fiscal years ending June 30, 2010 and 2009, respectively. The Company also maintains storage space in San Diego, California at a cost of $141 per month.

- 18 -



|
|

J.  NOTES PAYABLE AND LONG TERM PAYABLES:



Notes payable as of June 30, 2010 and June 30, 2009 consist of the following:





|                                                                   | June 2010 |  | June 2009  
|------------------------------------------------------------------ | --------- |  | -----------
|                                                                   |           |  |            
|Senior Secured Notes, with annual interest of 8%                   | $207,216  |  | $2,213,128 
|Senior Secured Convertible Notes, with annual interest of 4% to 8% | 49,054    |  | 224,038    
|Subordinated Secured Convertible Notes, with annual interest of 4% | 49,054    |  | 47,140     
|                                                                   |           |  |            
|                                                                   | $305,324  |  | $ 2,484,306
|                                                                   |           |  |            
|                                                                   |           |  |            
|                                                                   |           |  |            

The senior secured notes totaling $207,216 includes interest accrued thereon of $35,216 and are comprised of three senior secured notes that are issued to Dutchess. The notes are secured by a first priority security interest in essentially all of the Company's assets, are equal in rank with other senior debt and accrues interest at rates between 6% and 8%.  All three notes mature on January 1, 2012.



The senior secured convertible notes totaling $49,054 include interest accrued thereon of $4,054, and is comprised of a note that was issued to the Company's Chief Executive Officer, James R. Arabia secured by a first priority security interest in essentially all of the Company's assets and is equal in rank with other senior debt. Mr. Arabia's note accrues interest at the rate of 4% per annum until maturity on July 1, 2012 and is convertible into the Company's common stock at a conversion price of $.01 at the option of the holder, however, after July 1, 2010 the Company shall have the right to force conversion of the note at the conversion price.



The subordinated secured convertible notes totaling $49,054 includes interest accrued thereon of $4,054 and is comprised of a note that was issued to the Company's Chief Executive Officer, James R. Arabia, and is secured by a subordinate security interest (subordinated to senior debt) in essentially all of the Company's assets, is equal in rank with other subordinate secured debt, accrues interest at the rate of 4% per annum until maturity on July 1, 2012 and is convertible into the Company's common stock at a conversion price of $.02 at the option of the holder, however, after July 1, 2010 the Company shall have the right to force conversion of the note at the conversion price.



K.  RELATED PARTY TRANSACTIONS



On January 26, 2009 the Company entered into a Settlement Agreement and Mutual General Release (the "Agreement") with Dutchess Private Equities Fund, Ltd., its largest senior secured creditor at that time. The Agreement was made effective as of January 1, 2009. Pursuant to the terms of the Agreement, Dutchess agreed to exchange seventeen (17) senior secured notes issued to it by the Company, for which there was an aggregate remaining balance due, including all accrued and unpaid interest and/or penalties, if any, in the amount of approximately $5,298,139 as of January 1, 2009, for the following; (i) A senior secured note, face value $300,000, which matures on January 1, 2012, pays interest of six percent (6%) per annum and requires minimum monthly payments of $6,000 beginning on March 1, 2009. The $300,000 note is secured by a lien on all of the Company's assets and is equal in rank with all other senior secured debt of the Company; and (ii) A senior secured note, face value $1,883,000, which accrues interest at the rate of eight percent (8%) per annum until maturity on January 1, 2011, at which time all principal and interest accrued thereon are due in full. The $1,883,000 note is secured by a lien on all of the Company's assets and is equal in rank with all other senior secured debt of the Company; and (iii) 3,115 restricted shares of the Company's Series E Convertible Preferred Stock (see also Note H - "Loans Payable" and Note J - "Notes Payable and Long Term Payables"). Two of the Company's three directors, Michael A. Novielli and Douglas H. Leighton, are also directors of Dutchess Private Equities Fund, Ltd.



The Agreement also contains a full mutual general release between the parties and each of their respective Affiliated Parties.



L.  COMMITMENTS AND CONTINGENCIES



Unsecured Creditors of the Company



The Company is in payment default on an unsecured note totaling $20,573, including interest thereon of $8,621 which accrues interest at the rate of 8% per annum. Whenever feasible, the Company negotiates with these creditors to reach settlement agreements that are acceptable to the Company, including agreements to swap equity for debt owed to these creditors. However, if the Company is unable to reach acceptable settlement arrangements it may be subject to various collection actions.



Litigation and Legal Proceedings



As of June 30, 2010, the Company maintains a litigation reserve of $125,102 for the payment of past due unsecured creditors for which it does not have a defined payment arrangement (including creditors whose debts were extinguished due to the statute of limitations expiring for such creditors to take legal action to collect their debt). Notwithstanding the litigation reserve established, in the light of the Company's current financial condition, the Company's cash liability, if any, arising from legal proceedings, could have a material adverse effect on the Company's financial position, results of operations or cash flows.

- 19 -



|
|

M.  STOCK ISSUANCES:



For the year ended June 30, 2009 the Company issued 3,115 restricted shares of its Series E Convertible Preferred Stock to Dutchess Private Equities Fund, Ltd. (the Series E Preferred is described in Footnote F - "Preferred Stock") as part of a Settlement Agreement reached with Dutchess on January 26, 2009 (the Settlement is described in Footnote K - "Related Party Transactions").



For the year ended June 30, 2010 the Company made no stock issuances.



N.  INCOME TAXES:



As of June 30, 2010, the Company had net operating loss carry-forwards totaling approximately $26,629,764, before any limitations. The carry-forwards expire through 2027.



The realization of any future income tax benefits from the utilization of net operating losses may be severely limited. Federal and state tax laws contain complicated change of control provisions (generally when a more than 50 percent ownership change occurs within a three-year period), which, if triggered, could limit or eliminate the use of the Company's net operating loss carry-forwards.



O.  GOING CONCERN:



Currently the Company is a shell company as defined under Rule 12b-2 of the Exchange Act and has no operating business. The Company requires capital to comply with its reporting requirements under the Act and also has substantial amounts of debt that is in default as well as having a number of unpaid creditors. Without an operating business the Company has no revenue, cash flow or earnings available to meet its obligations. Consequently, the Company will likely need to raise additional capital to meet its reporting requirements and to defend, when necessary, against creditors that attempt to collect on their debt. These factors, as well as the risks associated with raising capital through the issuance of equity and/or debt securities creates uncertainty as to the Company's ability to continue as a going concern.



The Company's plan to address its going concern issues is to locate a viable operating business to acquire or merge with, however, there can be no assurance that the Company will be able to consummate such a transaction, or that if a transaction is completed that it would be on terms that are favorable to the then-shareholders.



P.  OTHER INCOME/DEBT FORGIVENESS



For the period ending June 30, 2010 the Company had other income from the forgiveness of debt totaling $407,247. That amount is comprised of the elimination of four notes a follows: (i) two senior secured convertible notes totaling $184,045, including interest accrued thereon of $74,045, (ii) one senior secured note totaling $162,122, including interest accrued thereon of $87,122, and (iii) one subordinated secured note totaling $61,081, including interest accrued thereon of $22,263. Each of the four notes has been in payment default for in excess of three years and none of the holders of the four notes has ever initiated any collection action against the Company. The Company and the holders of the notes are parties to an intercreditor agreement, which governs the terms of all senior secured and subordinated secured debt (the "Intercreditor Agreement"). Pursuant to the Intercreditor Agreement: (a) the time-period that must elapse before the Company may plead any statute of limitations as a defense to any claim made by any Senior Lender or Subordinated Lender shall be  two and one half (2/12) years, (b) any provision contained in any Senior Loan Document or any Subordinated Loan Document that waives or terminates the Company's right to plead any statute of limitations shall be null and void,  and (c) all Senior Lenders and all Subordinated Lenders waive any right to plead or assert in any court of law that any statute of limitations is/was either waived, prevented from starting, tolled, interrupted or restarted for any reason. As such the Company has written off the notes as uncollectible due to the expiration of the statute of limitations provisions contained in the governing Intercreditor Agreement.

- 20 -



|
|



Q.  BAD DEBT EXPENSE



The Company recorded bad debt expense for the period ending June 30, 2010 in the amount of $83,470. This expense is related to notes receivable held by the Company (including interest of $8,470 accrued thereon) that consists of three notes each for $25,000, face value, issued to the Company in exchange for $75,000 in cash. All three notes are issued by Wine & Culinary Concepts, Inc. ("W&CC"). The first note is dated September 16, 2008 and accrues interest at the rate of ten percent (10%) per annum and was scheduled to mature on December 31, 2008 at which time all principal and interest accrued was due and payable. By agreement between the Company and W&CC the maturity on the first note was extended until December 31, 2009. The second note is dated December 11, 2008 and accrues interest at the rate of ten percent (10%) per annum until its scheduled maturity on December 31, 2009 at which time all principal and interest accrued thereon became due and payable.   The third note is dated February 6, 2009 and accrues interest at the rate of ten percent (10%) per annum until its scheduled maturity on December 31, 2009 at which time all principal and interest accrued thereon became due and payable.  None of the three notes were paid on their due date and the Company has unsuccessfully attempted to secure payment of the three notes. By letter dated February 10, 2010 the Company issued a Notice of Default to Wine & Culinary Concepts for the three notes. The Notice of Default makes demand for full and immediate payment of the three notes. The Company has not received any response from W&CC and at this time has determined that it is unlikely it will collect payment on the notes.



R.  SUBSEQUENT EVENTS



In accordance with ASC 855, Subsequent Events, the Company has evaluated subsequent events through October 13, 2010, the date of issuance of the June 30, 2010 audited consolidated financial statements. During this period, the Company did not have any material recognizable subsequent events.

- 21 -



|
|

Item 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.



There have been no changes or disagreements with our accountants on accounting and financial disclosure.



Item 9A(T).     CONTROLS AND PROCEDURES



(A) EVALUATION OF DISCLOSURE CONTROLS AND PROCEDURES



We maintain a system of disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")) that are designed to ensure that information required to be disclosed in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and to ensure that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Management necessarily applied its judgment in assessing the costs and benefits of such controls and procedures, which, by their nature, can provide only reasonable assurance regarding management's control objectives.



Management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures, as of the end of the period covered by this Annual Report on Form 10-K. Based upon this evaluation, management concluded that our disclosure controls and procedures were effective as of the end of the fiscal year.



(B) MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING



Our management with the participation of the Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our internal control over financial reporting as of June 30, 2010. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on this evaluation, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, concluded that, as of June 30, 2010 we did maintain effective internal controls over financial reporting.



This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in the Annual Report.



LIMITATIONS ON THE EFFECTIVENESS OF INTERNAL CONTROLS



Management does not expect that our disclosure controls and procedures or our internal control over financial reporting will necessarily prevent all fraud and material errors. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving our objectives and our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are effective at that reasonable assurance level. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the internal control. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.

(C) CHANGES IN INTERNAL CONTROLS OVER FINANCIAL REPORTING



There have been no significant changes in our internal controls over financial reporting during the quarter ended June 30, 2010 that have materially affected or are reasonably likely to materially affect such controls.



Item 9B.     OTHER INFORMATION



None.

- 22 -



|
|

PART III



Item 10.     DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE DIRECTORS AND EXECUTIVE OFFICERS



The following table sets forth certain information such as the name, age, and current position(s) of each director and executive officer of the Company.



|Name                 | Age | Position                                        
|-------------------- | --- | ------------------------------------------------
|                     |     |                                                 
|James R. Arabia      | 53  | Chairman, President, and Chief Executive Officer
|                     |     |                                                 
|Robert T. Malasek    | 42  | Chief Financial Officer, Treasurer and Secretary
|                     |     |                                                 
|Douglas H. Leighton. | 42  | Director                                        
|                     |     |                                                 
|Michael A. Novielli  | 46  | Director                                        

JAMES R. ARABIA



Mr. Arabia assumed the role of Chairman of the Board of Directors in January 2002, and became President and Chief Executive Officer of the Company during September 2001 and Chief Financial Officer in May of 2005. From February 1997 through June 2000, Mr. Arabia served as Chairman, Chief Executive Officer and President of ICH Corporation, an American Stock Exchange listed company. During Mr. Arabia's tenure, ICH grew from a non-operational company to becoming the parent company of various subsidiaries that owned and operated 265 fast food and family dining restaurants, generating approximately $245 million in revenues and employing approximately 7,800 people. From 1982 through 1997, Mr. Arabia provided financial advisory and investment banking services to a variety of private clients.



ROBERT T. MALASEK



Effective August 15, 2006 the Company re-appointed Robert T. Malasek to serve as its Chief Financial Officer and Secretary. Mr. Malasek had previously served as Controller for the Company from September of 2001 until October of 2002 at which time he began serving as Chief Financial Officer and Secretary until his resignation in May of 2005. From May 2005 until the present Mr. Malasek has rendered accounting consulting services to a variety of clients (including the Company), including a number of public companies. From September 1987 until August 1999 Mr. Malasek was employed with Starwood Hotel & Resorts Worldwide, Inc. in a number of positions within the accounting department and became Assistant Controller in 1998 until his departure in 1999. Mr. Malasek received his Bachelor of Science in Accountancy from San Diego State University in 1998.



DOUGLAS H. LEIGHTON



Mr. Leighton is a co-founder and principal of Dutchess Capital Management LLC ("DCM"), which since 1996 had arranged private equity and debt financings for publicly traded-companies. Since 2000, he has overseen the trading, investment due diligence, transaction structure, and risk management of DCM managed Funds and is a member of the firm's Investment Committee.  Mr. Leighton has over 16 years of experience in securities, investment banking and asset management.  In 1990 he received a combined Bachelor of Arts and Bachelor of Science degree in Economics and Finance from the University of Hartford.  Mr. Leighton also is a director of Patient Portal Technologies, Inc.



Mr. Leighton is also a director of Dutchess Private Equities Fund, Ltd. and Dutchess Advisors LLC. ("Dutchess"). Dutchess holds four senior secured notes issue by the Company totaling $2,495,779, including interest accrued thereon of $272,779. One of the four loans, face value $300,000, is in payment default as of the date of this report.



MICHAEL A. NOVIELLI



Mr. Novielli is a co-founder and principal of Dutchess Capital Management, LLC ("DCM"). Since 2000, he has overseen transaction structure, risk management and regulatory compliance for DCM managed funds, including Dutchess Private Equities Fund, LTD., and is a member of the firm's Investment Committee. Mr. Novielli has over 15 years experience in securities, investment banking and asset management including tenure with PaineWebber (now UBS). He received a Bachelor of Science degree in Business from the University of South Florida in 1987. Mr. Novielli is also a director of Patient Portal Technologies, Inc.  Mr. Novielli is also a director of Dutchess Private Equities Fund, Ltd. and Dutchess Advisors LLC. ("Dutchess").



All members of the Board of Directors are elected to serve until their respective successors for the Class (as defined below) have been elected and qualified or until their earlier death, resignation or removal in the manner specified in the Company's by-laws. The Board of Directors is divided into three classes, with the term of office of the first class to expire at the first annual meeting of stockholders following such classification ("Class 1 Directors") and the term of office of the second class to expire at the second annual meeting following such classification ("Class 2 Directors") and the term of office of the third class to expire at the third annual meeting following such classification ("Class 3 Directors"). The three classes of directors shall be as nearly equal in number as possible. At each annual meeting of stockholders following such initial classification, directors elected to succeed those directors whose terms expire shall be elected for a term of office to expire at the third succeeding annual meeting of stockholders after their election. Mr. Novielli is a Class I director, Mr. Arabia is a Class 2 Director and Mr. Leighton is a Class III director.



The members of the board of directors maintained regular informal contact throughout the year and acted, when necessary, upon unanimous written consent.





|
|

Item 11.     EXECUTIVE COMPENSATION



SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION



The following table shows, for the most recent three fiscal years, the cash compensation paid by the Company, as well as all other compensation paid or accrued for those years to the Chief Executive Officer and the Company's other executive officers as of June 30, 2010.



|SUMMARY COMPENSATION TABLE                                                                       |                                                                            
|------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------
|                                                                                                 |                                                                            
|                                                                                                 |                                                                            
|Name and Principal Position                                                                      | Fiscal Year                                                                
|                                                                                                 |                                                                            
|James R. Arabia
Chief Executive Officer                                                          | 2009                                                                       
|2008                                                                                             | -                                                                          
|2007                                                                                             | $250,000(1)(2)                                                             
|                                                                                                 |                                                                            
|Robert T. Malasek
Current and Former Chief Financial Officer (current CFO as of August 15, 2006) | 2009                                                                       
|2008                                                                                             | -                                                                          
|2007                                                                                             | -                                                                          
|                                                                                                 |                                                                            
|                                                                                                 |                                                                            
|                                                                                                 |                                                                            
|(1)                                                                                              | Accrued but not paid.                                                      
|(2)                                                                                              | Subsequently waived by Executive.                                          
|(3)                                                                                              | Other income earned by Mr. Malasek as an outside consultant to the Company.

The following table represents the options granted to the Named Executive Officers in the last fiscal year and the value of such options.

OPTION GRANTS IN LAST FISCAL YEAR



|                  |                                                                                             | Realized
Assumed
Rates
of Stock
Appreciation
for
Term 10%($) |  | Options
Granted(#) |  | Number of
Securities
Underlying
in Fiscal
Year |  | Individual
Grants
% if Total
Options
Granted to
Employees
Base
Price($/SH) |  | Exercise
or
Expiration
Date |  | Potential
Value of
Annual
Price
Option
5%($)
|----------------- | ------------------------------------------------------------------------------------------- | ------------------------------------------------------------ |  | ------------------ |  | ---------------------------------------------- |  | -------------------------------------------------------------------------- |  | --------------------------- |  | --------------------------------------------
|                  |                                                                                             |                                                              |  |                    |  |                                                |  |                                                                            |  |                             |  |                                             
|James R. Arabia   | (1)                                                                                         | $   -                                                        |  | -                  |  | 0.0%                                           |  | $   -                                                                      |  | N/A                         |  | $   -                                       
|Robert T. Malasek | (1)                                                                                         | $   -                                                        |  | -                  |  | 0.0%                                           |  | $   -                                                                      |  | N/A                         |  | $   -                                       
|                  |                                                                                             |                                                              |  |                    |  |                                                |  |                                                                            |  |                             |  |                                             
|                  |                                                                                             |                                                              |  |                    |  |                                                |  |                                                                            |  |                             |  |                                             
|                  |                                                                                             |                                                              |  |                    |  |                                                |  |                                                                            |  |                             |  |                                             
|(1)               | There were no option grants during the year ending June 30, 2010 or subsequent to year-end.

- 24 -



|
|

Option Holdings



The following table represents certain information with respect to options held by the Named Executive Officers.



FISCAL YEAR-END OPTION VALUES



|                  |                                                                  |             | Number of Securities
Underlying Unexercised
Options at Fiscal Year-End (#) |               | Value of Unexercised
In-the-Money Options
at Fiscal Year-End ($)
|----------------- | ---------------------------------------------------------------- | ----------- | -------------------------------------------------------------------------- | ------------- | ----------------------------------------------------------------
|                  |                                                                  |             |                                                                            |               |                                                                 
|Name              |                                                                  | Exercisable |                                                                            | Unexercisable |                                                                 
|                  |                                                                  |             |                                                                            |               |                                                                 
|                  |                                                                  |             |                                                                            |               |                                                                 
|James R. Arabia   | (1)                                                              |             | -                                                                          |               | -                                                               
|Robert T. Malasek | (1)                                                              |             | -                                                                          |               | -                                                               
|                  |                                                                  |             |                                                                            |               |                                                                 
|                  |                                                                  |             |                                                                            |               |                                                                 
|(1)               | There were no options being held by any Named Executive Officer.



COMPENSATION OF DIRECTORS



Currently, none of the Company's directors receives any compensation for serving on the Board of Directors.



|Name                  |  | Fiscal
Year
Issued |  | Director Fees |  | # Of Shares |  | $ Value Of
Grant
|--------------------- |  | ------------------ |  | ------------- |  | ----------- |  | ----------------
|                      |  |                    |  |               |  |             |  |                 
|Timothy R. Scott, PhD |  | 2007               |  | $5,750        |  | -           |  | -               



Item 12.     SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS



The following table sets forth information with respect to the beneficial ownership of Common Stock, as of June 30, 2010 (assuming the exercise of options, issuance of stock grants, the conversion of convertible debt or preferred stock with underlying common stock conversion rights, and warrants that are exercisable within 60 days of the date hereof) by:



(i) each person known to the Company to beneficially own more than 5 percent of the outstanding shares of Common Stock, (ii) each of the Company's directors, (iii) each of the Company's executive officers named in the Summary Compensation Table above, and (iv) all directors and officers of the Company as a group. Unless otherwise indicated below, the persons and entities named in the table have sole voting and sole investment power with respect to all the shares beneficially owned, subject to community property laws, where applicable. Percentage ownership assumes all warrants and options of listed person exercised and all other warrant and options unexercised.



|Name and Address                                                                                 |  | Common Stock beneficially owned (1) |  | Percent of Common Stock beneficially owned (1)
|------------------------------------------------------------------------------------------------ |  | ----------------------------------- |  | ----------------------------------------------
|                                                                                                 |  |                                     |  |                                               
|James R. Arabia (2)
c/o NatureWell, Incorporated
110 W C St. Suite 1300
San Diego, CA 92101      |  | 555,448,482                         |  | 22.5%                                         
|                                                                                                 |  |                                     |  |                                               
|Financial Acquisition Partners, LP 
325 W. Washington St. #2-474
San Diego, CA 92103             |  | 194,585,739                         |  | 7.9%                                          
|                                                                                                 |  |                                     |  |                                               
|Douglas H. Leighton (3)
c/o Dutchess Advisors LLC.
50 Commonwealth Ave., Ste. 2
Boston, MA 02116 |  | 422,027,295                         |  | 17.1%                                         
|                                                                                                 |  |                                     |  |                                               
|Michael A. Novielli (4)
c/o Dutchess Advisors LLC.
50 Commonwealth Ave., Ste 2
Boston, MA 02216  |  | 422,027,295                         |  | 17.1%                                         
|                                                                                                 |  |                                     |  |                                               
|Dutchess Advisors LLC. (5)
50 Commonwealth Ave., Ste 2
Boston, MA 02216                          |  | 422,027,295                         |  | 17.1%                                         
|                                                                                                 |  |                                     |  |                                               
|Robert T Malasek
c/o NatureWell, Inc.
110 W C St. Suite 1300
San Diego, CA 92101                 |  | 6,348,533                           |  | 0.3%                                          
|                                                                                                 |  |                                     |  |                                               
|All directors and executive officers as a group (five individuals)                               |  | 984,574,310                         |  | 39.7%                                         
|                                                                                                 |  |                                     |  |                                               
|                                                                                                 |  |                                     |  |                                               
|                                                                                                 |  |                                     |  |                                               





|   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|-- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|1. | Applicable percentage ownership is based on 2,467,665,750  shares of common stock outstanding as of June 30, 2010 (which includes 19,000,000 shares of Series A common stock), together with securities exercisable or convertible into shares of Common Stock within 60 days of June 30, 2010 for each stockholder. Includes shares of common stock underlying convertible securities. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities.
|2. | Includes the following securities; 6,000,000 shares of common stock underlying two convertible notes owned by Mr. Arabia with a face value of $90,000, 354,862,743 shares of common stock owned by Mr. Arabia and 194,585,739 shares of common stock held by Financial Acquisition Partners, LP ("FALP"), a partnership for which Mr. Arabia is the sole General Partner. Mr. Arabia claims sole investment and voting power with regard to the 194,585,739 shares.                                                                                                            
|3. | Includes the following shares all of which are owned by Dutchess Advisors LLC. of which Mr. Leighton is a director and shares investment and voting power over the shares along with the co-director of the LLC, Michael A. Novielli (see below); 1,875,000 shares of common stock underlying the Series C convertible preferred stock, 4,152,295 underlying the Series C convertible preferred stock, 19,000,000 shares of Series A common stock and 397,000,000 shares of common stock.                                                                                      
|4. | Includes the following shares all of which are owned by Dutchess Advisors LLC.of which Mr. Novielli is a director and shares investment and voting power over the shares along with the co-director of the LLC, Douglas H. Leighton (see above); 1,875,000 shares of common stock underlying the Series C convertible preferred stock, 4,152,295 underlying the Series C convertible preferred stock,19,000,000 shares of Series A common stock and 397,000,000 shares of common stock.                                                                                        
|5. | Includes 1,875,000 shares of common stock underlying the Series C convertible preferred stock, 4,152,295 underlying the Series C convertible preferred stock, 19,000,000 shares of Series A common stock and 397,000,000 shares of common stock.                                                                                                                                                                                                                                                                                                                               

- 25 -



|
|

Item 13.     CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS



On January 26, 2009 the Company entered into a new Settlement Agreement and Mutual General Release (the "Agreement") with Dutchess Private Equities Fund Ltd. The Agreement was made effective as of January 1, 2009. Pursuant to the terms of the Agreement, Dutchess agreed to exchange seventeen (17) senior secured notes issued to it by the Company (including the Promissory note issued pursuant to the June 15, 2008 Settlement Agreement described above), for which there was an aggregate remaining balance due, including all accrued and unpaid interest and/or penalties, if any, in the amount of approximately $5,298,139 as of January 1, 2009, for the following; (i) A senior secured note, face value $300,000, which matures on January 1, 2012, pays interest of six percent (6%) per annum and requires minimum monthly payments of $6,000 beginning on March 1, 2009. The $300,000 note is secured by a lien on all of the Company's assets and is equal in rank with all other senior secured debt of the Company; and (ii) A senior secured note, face value $1,883,000, which accrues interest at the rate of eight percent (8%) per annum until maturity on January 1, 2011, at which time all principal and interest accrued thereon are due in full. The $1,883,000 note is secured by a lien on all of the Company's assets and is equal in rank with all other senior secured debt of the Company; and (iii) 3,115 restricted shares of the Company's Series E Convertible Preferred Stock (the notes and preferred stock outlined in (i), (ii) and (iii) above were assigned to Dutchess Advisors LLC ("Dutchess") as of April 9, 2010).



The Agreement also contains a full mutual general release between the parties and each of their respective Affiliated Parties.



Two of the Company's directors, Douglas H. Leighton and Michael A. Novielli, are also directors of Dutchess.



PREFERRED STOCK



The Company has outstanding 75 shares, $1,000 liquidation preference, of Series C Convertible Preferred Stock. Pursuant to the terms of the Series C Convertible Preferred stock, owned by Dutchess Advisors LLC. ("Dutchess"), the Company's largest senior secured creditor (see also Financial Footnotes H - "Loans Payable" and K - "Related Party Transactions"). Dutchess is allowed to cast a vote, on all matters that the Company's shareholders are permitted to vote upon, equal to .7% of all outstanding securities that are eligible to vote at the time of such shareholder action for each share of Series C Convertible Preferred that it owns (.7% X 75 shares = 52.5% of total vote). The shares convert into 1,875,000 shares of the Company's common stock.



The Company has outstanding 3,115 shares of Series E Convertible Preferred Stock (the "Series E Preferred"). Each share of Series E Preferred has a $1,000 liquidation preference, and all 3,155 shares are owned by Dutchess, the Company's largest senior secured creditor (see also Note H - "Loans Payable" and Note K - "Related Party Transactions"). Pursuant to the terms of the Certificate of Designation for the Series E Preferred, each share is convertible into 1,333 shares of common stock (which conversion price is not subject to adjustment due to a reverse split), provided however, in no event shall the Company permit such conversion, into that number of shares of common stock which, when added to number of shares of common stock already beneficially owned (as such term is defined under Section 13(d) and Rule 13d-3 of the Securities Exchange Act of 1934, as amended), by the holder, would cause the holder's beneficial ownership of common stock to exceed 4.99% of the number of shares of common stock outstanding as of the conversion date for the shares of Series E Preferred that the holder seeks to convert. On any matter for which the shareholders of the Company are entitled to vote, each share of Series E Preferred shall be entitled to cast a number of votes equal to the number of whole shares of common stock into which such share of Series E Preferred could then be converted into.



Item 14.     PRINCIPAL ACCOUNTING FEES AND SERVICES



(1)  Audit Fees



The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-QSBs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

2009 - $16,000
2008 - $17,500

(2)  Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

2009 - $0
2008 - $0

(3)  Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

2009 - $ 0
2008 -$ 0

(4)  All Other Fees

The aggregate fees billed in each of the last two fiscal years for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

2009 - $0
2008 - $0

- 26 -



|
|

PART IV.



Item 15.     EXHIBITS, FINANCIAL STATEMENT SCHEDULES



|(a) | The following documents are filed as part of this report:
|--- | ---------------------------------------------------------
|    | 1.                                                       
|    | 2.                                                       

EXHIBIT INDEX



|EXHIBITNUMBER |                                                                                 | DESCRIPTION                                                                                                                                                       
|------------- | ------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              |                                                                                 |                                                                                                                                                                   
|10.1(a)       |                                                                                 | Dutchess Settlement Agreement made effective as of January 1, 2009                                                                                                
|              |                                                                                 |                                                                                                                                                                   
|23.1          |                                                                                 | Auditor Consent Letter dated October 13, 2010                                                                                                                     
|              |                                                                                 |                                                                                                                                                                   
|31.1          |                                                                                 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), filed herewith.                                                                
|31.2          |                                                                                 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), filed herewith.                                                                
|              |                                                                                 |                                                                                                                                                                   
|32.1          |                                                                                 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|              |                                                                                 |                                                                                                                                                                   
|32.2          |                                                                                 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, filed herewith.
|              |                                                                                 |                                                                                                                                                                   
|              |                                                                                 |                                                                                                                                                                   
|(a)           | Incorporated by reference to Exhibit 10.1 to Form 8K filed on January 29, 2009.

- 27 -



|
|



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.





|Date:  October 13, 2010 | NATUREWELL, INCORPORATED                                                                                  
|----------------------- | ----------------------------------------------------------------------------------------------------------
|                        |                                                                                                           
|                        | By:   /s/ James R. Arabia
James R. Arabia
Chief Executive Officer, Chairman 
(Principal Executive Officer)
|                        |                                                                                                           
|                        | By:   /s/ Robert T. Malasek                                                                               
|                        | Robert T. Malasek
Chief Financial Officer
(Principal Financial and Accounting Officer)                    



In accordance with the Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated.





|                                       | Title                                             | Date            
|-------------------------------------- | ------------------------------------------------- | ----------------
|                                       |                                                   |                 
|/ s /   James R. ArabiaJames R. Arabia | Chief Executive Officer
and Chairman of the Board | October 13, 2010







|                                             | Title    | Date            
|-------------------------------------------- | -------- | ----------------
|                                             |          |                 
|/s/   Douglas H. LeightonDouglas H. Leighton | Director | October 13, 2010







|                                             | Title    | Date            
|-------------------------------------------- | -------- | ----------------
|                                             |          |                 
|/s/   Michael A. NovielliMichael A. Novielli | Director | October 13, 2010





|
|