UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549  FORM 10-Q  X.QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934  For the quarterly period ended June 30, 2010  .TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT  For the transition period from ______ to _______  Commission File Number 000-26673  WELWIND ENERGY INTERNATIONAL CORPORATION (Name of small business issuer in its charter)  Delaware98-0207081(State of incorporation)(I.R.S. Employer Identification No.)  203 22561 Dewdney Trunk Rd. Maple Ridge, British Columbia Canada V3K 2R1 (Address of principal executive offices)  (604) 463-8487 (Registrants telephone number)  with a copy to: Carrillo Huettel, LLP 3033 Fifth Ave. Suite 201 San Diego, CA 92103 Telephone (619) 399-3090 Facsimile (619) 399-0120  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. Yes X. No .  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes . No 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 12b-2 of the Exchange Act.  Large accelerated filer.Accelerated filer.Non-accelerated filer. (Do not check if a smaller reporting company)Smaller reporting companyX.  Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes . No X.  As of August 20, 2010, there were 266,800,692 shares of the registrants $.001 par value common stock issued and outstanding.    WELWIND ENERGY INTERNATIONAL CORP.*  TABLE OF CONTENTS  PagePART I.     FINANCIAL INFORMATIONITEM 1.FINANCIAL STATEMENTS3ITEM 2.MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS12ITEM 3.QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK24ITEM 4.CONTROLS AND PROCEDURES24PART II.    OTHER INFORMATIONITEM 1.LEGAL PROCEEDINGS24ITEM 1A.RISK FACTORS24ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS24ITEM 3.DEFAULTS UPON SENIOR SECURITIES25ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS25ITEM 5.OTHER INFORMATION25ITEM 6.EXHIBITS25  *Please note that throughout this Quarterly Report, and unless otherwise noted, the words "we," "our," "us," the "Company," Welwind, or "WWEI" refers to Welwind Energy International Corp.  2    PART I: FINANCIAL INFORMATION  ITEM 1. FINANCIAL STATEMENTS   Welwind Energy International Corporation (A Development Stage Company) June 30, 2010  Index  Consolidated Balance Sheets 4  Consolidated Statements of Operations 5  Consolidated Statements of Cash Flows 6  Notes to the Consolidated Financial Statements 7    3   Welwind Energy International Corporation (A Development Stage Company) Consolidated Balance Sheets (expressed in Canadian dollars) (unaudited)  June 30,
2010
$December 31,
2009
$ASSETSCurrent AssetsCash2,9976,741Amounts receivable2,6311,090Prepaid expenses1,7731,104Total Current Assets7,4018,935Property and Equipment, net549,363555,196Total Assets556,764564,131LIABILITIES AND STOCKHOLDERS DEFICITCurrent LiabilitiesAccounts payable165,165164,515Due to related parties1,660,2401,566,738Total Liabilities1,825,4051,731,253Stockholders DeficitPreferred Stock
Authorized: 10,000,000 preferred shares, with par value US$0.001 per share
Issued and outstanding: 10,000,000 shares11,13711,137Common Stock
Authorized: 290,000,000 common shares, with par value US$0.001 per share
Issued and outstanding: 254,300,692 and 228,800,692 shares as of June 30, 2010 and December 31, 2009, respectively278,729252,131Additional Paid-In Capital20,199,56720,050,569Deficit accumulated during the development stage(21,758,074)(21,480,959)Total Stockholders Deficit(1,268,641)(1,167,122)Total Liabilities and Stockholders Deficit556,764564,131  Going Concern (Note 1) Commitments (Note 6)  (The accompanying notes are an integral part of these consolidated financial statements)  4   Welwind Energy International Corporation (A Development Stage Company) Consolidated Statements of Operations (expressed in Canadian dollars) (unaudited)  For the Three Months Ended June 30,
2010For the Three Months Ended June 30,
2009For the Six Months Ended June 30,
2010For the Six Months Ended June 30,
2009Accumulated from August 17, 2006 (Date of Inception) to June 30,
2010$$$$$RevenueOperating ExpensesGeneral and Administrative80,969366,046213,841708,35219,403,959Total Operating Expenses80,969366,046213,841708,35219,403,959Loss from Operations(80,969)(366,046)(213,841)(342,306)(19,403,959)Other Income (Expenses)Interest Expense(32,423)(25,037)(63,274)(48,566)(295,202)Impairment of goodwill(1,714,187)Loss on disposal of property and equipment(1,000)Total Other Income (Expenses)(32,423)(25,037)(63,274)(48,566)(2,010,389)Net Loss from continuing operations(113,392)(391,083)(277,115)(756,918)(21,414,348)Discontinued operations(343,726)Net loss and comprehensive loss(113,392)(391,083)(277,115)(756,918)(21,758,074)Net Loss Per Share  Basic and Diluted
Net Loss Per Share  Basic and DilutedContinuing operationsDiscontinued operationsWeighted Average Shares Outstanding242,172,417202,544,395240,356,256201,303,494  (The accompanying notes are an integral part of these consolidated financial statements)  5   Welwind Energy International Corporation (A Development Stage Company) Consolidated Statements of Cash Flows (expressed in Canadian dollars) (unaudited)  For the Six Months Ended June 30, 2010For the Six Months Ended June 30, 2009Accumulated from August 17, 2006 (Date of Inception) to June 30, 2010$$$Operating ActivitiesNet Loss for the period(277,115)(756,918)(21,758,074)Adjustments to reconcile net loss to net cash provided by (used in) operating activities:Amortization8,066Depreciation5,8336,92158,025Foreign exchange loss and other15,410Gain on cancellation of shares(572,901)Impairment loss1,714,187Imputed interest on shareholder loans63,27448,566295,202Issuance of shares to settle debt(17,177)588,224Issuance of shares for compensation and services85,217113,27115,459,924Write-off of subscription receivable770,310Changes in operating assets and liabilities:Amounts receivable(1,541)(5,577)15,267Accounts receivable(16,985)Prepaid expenses and other(669)(1,773)Accounts payable and accrued liabilities650220,359287,625Net Cash Used In Operating Activities(124,351)(390,555)(3,137,493)Investing ActivitiesNet cash acquired from acquisition2,194Purchase and construction of equipment(614,223)Net Cash Used In Investing Activities(612,029)Financing ActivitiesProceeds from issuance of common shares25,773 ,7732,191,583Proceeds from related parties, net94,834371,0632,019,271Repayment of debt(464,049)Net Cash Provided By Financing Activities120,607371,0633,746,805Net cash used in discontinued operations5,714Increase (Decrease) in Cash(3,744)(19,492)2,997Cash  Beginning of Year6,74128,734Cash  End of Year2,9979,2422,997Supplemental DisclosuresInterest paidIncome tax paidNon-cash Transaction:Stock issued for debt64,60664,606 (The accompanying notes are an integral part of these consolidated financial statements)   6   Welwind Energy International Corporation Notes to the Consolidated Financial Statements (expressed in Canadian dollars) (unaudited)   1. Nature of Operations and Continuance of Business  Welwind Energy International Corporation (the Company) was incorporated in the State of Delaware on December 18, 1997 as Global Golf Holdings Inc.  The Company acquired a business on November 23, 2004 to sell and distribute low carbohydrate and sugar-free foods through retail and wholesale outlets in Western British Columbia, Canada, and through the Internet. On August 17, 2006, the Company acquired all of the outstanding and issued share capital of Welwind Energy International Corporation (WEIC), a private Canadian company. WEIC was founded in 2005 to build, own and operate wind farms on an international scale.  Accordingly, the Company is now involved with wind power projects in China. The Company is based in British Columbia, Canada.  On November 24, 2007, the Company discontinued operations of the retail and wholesale foods division to focus specifically on the wind power projects in China.  The Company has not realized revenues on its wind power projects, has a working capital deficiency of $1,818,004 and has an accumulated deficit at June 30, 2010 of $21,758,074.  The Company's ability to continue as a going concern is dependent upon the Company's ability to obtain additional financing and/or achieving a profitable level of operations. These factors raise substantial doubt regarding the Companys 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.  Management of the Company has undertaken a plan with the goal of sustaining the Companys operations for the next twelve months and beyond.   These steps include: (a) becoming cash flow positive via the Companys Zhanjiang turbine and a Power Purchase Agreement from the local power authority, (b) continue efforts to raise significant additional capital and/or other forms of financing with Acterra Group and Adventis Capital; and (c) controlling overhead expenses.  There can be no assurance that any of these efforts will be successful.  2. Summary of Significant Accounting Policies  a) Basis of Presentation  These consolidated financial statements and related notes are presented in accordance with accounting principles generally accepted in the United States, and are expressed in Canadian dollars. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, WEIC, incorporated in the Province of Alberta, Canada. All significant intercompany balances and transactions have been eliminated. The Companys fiscal year-end is December 31.  b) Use of Estimates  The preparation of these consolidated financial statements in accordance with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenue and expenses in the reporting period. The Company regularly evaluates estimates and assumptions related to goodwill and purchased intangible asset valuations, stock-based compensation expense, deferred income tax asset valuation allowance and loss contingencies. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. The actual results experienced by the Company may differ materially and adversely from the Companys estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.  c) Interim Financial Statements  These interim unaudited financial statements have been prepared on the same basis as the annual financial statements and in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Companys financial position, results of operations and cash flows for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected for a full year or for any future period.  7   Welwind Energy International Corporation Notes to the Consolidated Financial Statements (expressed in Canadian dollars) (unaudited)   2. Summary of Significant Accounting Policies (continued)  d) Cash and Cash Equivalents  Cash consists of bank accounts held at financial institutions in the United States, Canada, and China. The Company considers all highly liquid instruments with a maturity of three months or less, at the time of issuance, to be cash equivalents. As of June 30, 2010 and December 31, 2009 there are no cash equivalents.  e) Property and Equipment  Property and equipment are recorded at cost and is depreciated using the straight-line method over the estimated useful lives of the related asset. Maintenance and repairs are charged to expense as incurred. Significant renewals and betterments are capitalized.  Costs included in wind equipment are under construction and will be amortized over their useful life on a straight-line basis once they are put into use.  f) Long-Lived Assets  In accordance with ASC 360, Property Plant and Equipment, the Company tests long-lived assets or asset groups for recoverability when events or changes in circumstances indicate that their carrying amount may not be recoverable. Circumstances which could trigger a review include, but are not limited to: significant decreases in the market price of the asset; significant adverse changes in the business climate or legal factors; accumulation of costs significantly in excess of the amount originally expected for the acquisition or construction of the asset; current period cash flow or operating losses combined with a history of losses or a forecast of continuing losses associated with the use of the asset; and current expectation that the asset will more likely than not be sold or disposed significantly before the end of its estimated useful life. Recoverability is assessed based on the carrying amount of the asset and its fair value which is generally determined based on the sum of the undiscounted cash flows expected to result from the use and the eventual disposal of the asset, as well as specific appraisal in certain instances. An impairment loss is recognized when the carrying amount is not recoverable and exceeds fair value.  g) Foreign Currency Translation  The Company's functional and reporting currency is the Canadian dollar. Monetary assets and liabilities denominated in foreign currencies are translated to Canadian dollars in accordance with SFAS No. 52 Foreign Currency Translation using the exchange rate prevailing at the balance sheet date.  Gains and losses arising on settlement of foreign currency denominated transactions are included in the determination of net income or loss. Foreign currency transactions are primarily undertaken in Chinese Renminbi. At June 30, 2010, the exchange rate for one Chinese Renminbi was $0.1564 CAD.  For the period from January 1, 2010 to June 30, 2010, the average exchange rate for one Chinese Renminbi was $0.1506 CAD. The Company has not, to the date of these consolidated financial statements, entered into derivative instruments to offset the impact of foreign currency fluctuations.  h) Comprehensive Loss  ASC 220, Comprehensive Income, establishes standards for the reporting and display of comprehensive loss and its components in the consolidated financial statements. As at June 30, 2010 and December 31, 2009, the Company had no items representing comprehensive income/loss.  i) Stock-based Compensation  The Company records stock-based compensation in accordance with ASC 718, Compensation  Stock Based Compensation, using the fair value method. All transactions in which goods or services are the consideration received for the issuance of equity instruments are accounted for based on the fair value of the consideration received or the fair value of the equity instrument issued, whichever is more reliably measurable.  8   Welwind Energy International Corporation Notes to the Consolidated Financial Statements (expressed in Canadian dollars) (unaudited)   2. Summary of Significant Accounting Policies (continued)  j) Financial Instruments and Concentrations of Business  The fair values of financial instruments including cash, accounts receivable, accounts payable, accrued liabilities and amounts due to related parties were estimated to approximate their carrying values due to the immediate or short-term maturity of these financial instruments. The Companys operations are in Canada and China resulting in exposure to market risks from changes in foreign currency rates.  The financial risk is the risk to the Companys operations that arise from fluctuations in foreign exchange rates and the degree of volatility of these rates.  Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.  k) Recently Issued Accounting Pronouncements  In August 2009, FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendment did not have a material effect on the Companys consolidated financial statements.  In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.  In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the products essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.  In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend.  This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis.  The adoption of this standard is not expected to have a significant impact on the Companys consolidated financial statements.  In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis.  This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010.  9   Welwind Energy International Corporation Notes to the Consolidated Financial Statements (expressed in Canadian dollars) (unaudited)   2. Summary of Significant Accounting Policies (continued)  l) Recently Issued Accounting Pronouncements (continued)  In February 2010, the FASB issued ASU No. 2010-09 Subsequent Events (ASC Topic 855) Amendments to Certain Recognition and Disclosure Requirements (ASU No. 2010-09). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Companys financial position and results of operations.  In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds.  The amendments in this Update are effective as of the beginning of a reporting entitys first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted.  The Companys adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.  In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.  The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entitys first fiscal quarter beginning after issuance of this Update.  The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.  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 consolidated financial statements.  l) Reclassifications  Certain reclassifications have been made to the prior periods consolidated financial statements to conform to the current periods presentation.  3. Property and Equipment  Cost
$Accumulated Depreciation
$June 30,
2010
Net Carrying
Value
$December 31,
2009
Net Carrying Value
$Wind equipment under construction521,037521,037521,037Automobile70,84349,46121,38224,990Computer hardware11,65111,1634882,378Office furniture and equipment11,7985,3426,4566,791615,32965,966549,363555,196  The wind equipment under construction relates to the Companys wind farm projects.  As the capital assets have not been placed in use, no depreciation of the wind equipment has been recorded for the period ended June 30, 2010.  10   Welwind Energy International Corporation Notes to the Consolidated Financial Statements (expressed in Canadian dollars) (unaudited)   4. Related Party Transactions/Balances  a) As at June 30, 2010, the Company owes $1,473,560 (2009 - $1,405,536) to management of the Company for financing of general operations.  The amounts are unsecured, non-interest bearing, and due on demand.  b) As at June 30, 2010, the Company owes $186,680 (2009 - $161,202) to a director of the Company for financing of general operations.  The amounts are unsecured, non-interest bearing, and due on demand.  For the period ended June 30, 2010, imputed interest of $63,274 has been recorded on all amounts owing to related parties at an annual interest rate of 8%.  5. Common Stock  a) On January 8, 2010, the Company issued 5,000,000 common shares at $0.005 per share for proceeds of $25,826.  b) On January 29, 2010, the Company issued 7,000,000 common shares at $0.01 per share to settle outstanding consulting services. The total fair value was $74,303, based on the closing price per share on the date of grant.  c) On March 2, 2010, the Company issued 1,000,000 common shares at $0.01 per share to settle outstanding professional fees. The total fair value was $10,481, based on the closing price per share on the date of grant.  d) On June 28, 2010, the Company issued 12,500,000 common shares at $0.005 per share to settle outstanding loan from shareholder. The total fair value of shares issued was $64,606, based on the closing price per share on the date of grant, resulting in a loss on debt extinguishment of $2,106.  6. Commitments  a) The Company entered into an agreement dated January 18, 2006, with the Government of Yangxi City (Yangxi) for the development of a wind farm producing a total of 400,000 kilowatt (KW) per year of electrical power in the next ten years. As at December 31, 2009, the Company decided to focus its efforts on the Zhanjiang project, and will no longer be pursuing the Yangxi project.  b) The Company entered into an agreement dated March 21, 2006, with the Zhanjiang Foreign Trade & Economic Bureau (Zhanjiang) for the development of a wind power generation project in Zhanjiang City in the Guangdong Province. The project is expected to produce up to 600,000 KW of electrical power per year, with Phase 1 being 100,000 KW per year. The Company had six months from the date of the agreement to begin Phase 1 (commenced) or Zhanjiang had the right to terminate the agreement.  c) The Company rents, on a month-to-month basis, its office space for $1,726 per month, office space in China for approximately $1,791 per month.  7. Subsequent Event  In July 2010, the Company issued 12,500,000 common shares to settle related party debt of $64,868.   11     ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION FORWARD-LOOKING STATEMENTS  This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the Securities Act) and Section 21E of the Securities Exchange Act of 1934, as amended (the Exchange Act). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as anticipate, expect, intend, plan, believe, foresee, estimate and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. You should read this report completely and with the understanding that actual future results may be materially different from what we expect. The forward looking statements included in this report are made as of the date of this report and should be evaluated with consideration of any changes occurring after the date of this Report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.  BUSINESS  Overview  We see wind power becoming an efficient power source globally. Welwinds current projects focus is in the wind energy sector with future renewable energy applications under consideration. Renewable energy is power that comes from renewable resources such as the sun, wind and organic matter. These resources are constantly replenished by nature and are a cleaner source of energy. Welwinds goal is to add more renewable energy globally, resulting in cleaner air and a more stable energy supply for our future.  Welwind Energy International was founded to build, own and operate wind farms on an international scale. Our current project focus is to bridge the North America-China link by building wind farms in China. The Company will also work on extending its business plan into other markets including Canada and the United States.  Our Corporate History   The Company was incorporated on December 18, 1997, pursuant to the laws of the State of Delaware under the name of Autoeye Inc. On February 25, 2000, as part of an acquisition of The Forest Industry Online Inc., we changed our name to forestindustry.com, Inc. Prior to this acquisition, our Company was inactive. On October 25, 2002, we entered into a share exchange agreement with GolfLogix, Inc., a British Columbia, Canada Corporation (GolfLogix Canada). After our acquisition of GolfLogix Canada, on November 30, 2002, we entered into a stock purchase agreement with Cherry Point Consulting, resulting in a divestiture of the assets of Forest Industry Online. Under the agreement, Cherry Point Consulting purchased shares of Forest Industry Online and assumed all of the related assets and liabilities of the same. On January 7, 2003, we changed our name to Global Golf Holdings, Inc.  On November 23, 2004 the Company closed on the Agreement with Low Carb Centre and affiliates (hereinafter LCC). LCC is a privately held company organized under the laws of British Columbia, Canada with its primary business being the retail sales and distribution of gourmet low carbohydrate food products through its traditional retail stores and online. Soon after, on November 29, 2004 the Company changed its name to Vitasti, Inc.  On April 11, 2006, the Company and Welwind Energy International Corporation, a Corporation duly incorporated under the laws of the Province of Alberta, Canada, and the shareholders of Welwind Energy International Corporation (the Shareholders), entered into a Share Exchange Agreement (the Agreement). The Agreement was closed on the 17th of August 2006. Per the Agreement, the Company acquired 100% of Welwind Energy International Corporation (WWEI), and on October 26, 2006, the Company filed in the office of the Secretary of State for the State of Delaware a Certificate of Amendment to the Companys Certificate of Incorporation, causing the name of the Company to be changed from Vitasti, Inc. to Welwind Energy International Corp.  12     Recent Business Developments  The Zhanjiang Government and Zhanjiang Development and Reform Commission jointly held a meeting on January 10, 2010, to discuss the relocation of Welwind Energy International's Zhanjiang wind farm project. Welwind was informed that the two government bodies reached a consensus to relocate the Company's project to Nansan Island (Nansandao) in Guangzhou. Nansan Island is located approximately 8 miles from the Zhanjiang Airport with a short ferry ride from the mainland. Nansan Island occupies an area of 123.4 square kilometers, with a coastline of 83 kilometers. Nansan Island is a famous tourist location and has a population of 72,000. It is expected that the power generated from the Company's wind farm will be sent to the mainland utilizing a local bridge connecting Nansan and Potou District of Zhanjiang, which is currently under construction and it is expected to be completed this year.  During the meetings held between the Company, Zhanjiang Government and Zhanjiang Development and Reform Commission, it was stated that final approval will be issued in March or April. Welwind has agreed to the relocation to Nansan Island and will review final documentation supplied to the Company by the Government and Commission in March/April.  Our initial projects in China will be considered, at least initially, small scale wind power wind farms, which the name is given to wind generation systems with the capacity to produce 50 kW or less of electrical power. Isolated communities, that otherwise rely on diesel generators, may use wind turbines to displace diesel fuel consumption. Individuals may purchase these systems to reduce or eliminate their dependence on grid electricity for economic or other reasons, or to reduce their carbon footprint. Wind turbines have been used for household electricity generation in conjunction with battery storage over many decades in remote areas. Increasingly, U.S. consumers are choosing to purchase grid-connected turbines in the 1 to 10 kilowatt range to power their whole homes. Household generator units of more than 1kW are now functioning in several countries, and in every state in the U.S. Grid-connected wind turbines may use grid energy storage, displacing purchased energy with local production when available. Off-grid system users can either adapt to intermittent power or use batteries, photovoltaic or diesel systems to supplement the wind turbine. In urban locations, where it is difficult to obtain predictable or large amounts of wind energy (little is known about the actual wind resource of towns and cities), smaller systems may still be used to run low power equipment. Equipment such as parking meters or wireless Internet gateways may be powered by a wind turbine that charges a small battery, replacing the need for a connection to the power grid, making the potential carbon savings of small wind turbines difficult to determine.  Organizational Structure  Our current organizational structure is summarized by the illustration below:  [welwind10q063010001.jpg] Our Wind Farm Portfolio  We have two one wind project in Chinas Guangdong Province. The following provides an overview of the projects, including current status:  Project NameMegawattsPhaseZhanjiang Project49 - 400Local Approvals Secured, Pending Construction Permit and Possible Site Relocation  Our plan is to develop 49Mw per project per year upon the commencement of construction (subject to securing necessary approvals), which is the maximum allowed by the provincial government.  13     The Zhanjiang Project  The Zhanjiang Windcor Windfarm Ltd. (ZWWL) began operations in 2006.  The ZWWL was acquired by the Company as part of the acquisition of Welwind (the Alberta corporation) in August 2006.  The ZWWL is the subsidiary of Welwind through which all operations pertaining to the Zhanjiang Project would be handled.  The ZWWL commenced initial operations in April 2006, with such operations including establishment of an office location.  The ZWWL projects proposed located will be on Donghai Island.  A MET tower was installed and began collecting wind data in June 2006.  The data collected was processed in accordance with strict industry standard procedures and correlating data from the 80 meter meteorological tower on site has ensured accurate compilation of atmospheric conditions during the testing period.  Installation of a 750 KW test turbine was completed in May 2007.  ENGAA, the turbine manufacturer, immediately commenced monitoring the data from this first turbine. By July 2007, ENGAA had completed its commissioning stage of the Zhanjiang Turbine and had begun to assess and analyze the data from that turbine.  A Project Feasibility Study Report and Grid Connection Report were finalized in November 2007 by the Guangdong Electric Power Design Institute, and subsequently submitted to the Guangdong Power Grid Corporation for review in anticipation of finalizing a Power Connection Agreement (PCA).  Zhanjiang Government and Zhanjiang Development and Reform Commission jointly held a meeting on January 10, 2010 to discuss the relocation of Welwind Energy International's Zhanjiang wind farm project. Welwind was informed that the two government bodies reached a consensus to relocate the Company's project to Nansan Island (Nansandao) in Guangzhou.  As of June 30, 2010, the company awaits final construction approvals from the government and believes this will obtained third quarter 2010.  Overview of our Industry  The Company is engaged in the research, development and construction of wind farms, primarily involving small scale wind power. Our ultimate goal is to build small to medium scale wind farms of which our company has operating control. It is our goal to have our wind farm connected to the general utility electric grid to produce clean, environmentally-sound wind power for use by the electric power industry.  Our Management has been involved in the wind power industry for more than 10 years. We have experience in the design, manufacture, maintenance and sale of wind turbines, as well as the full-scale development of wind farms. We hold contract rights, are involved with projects in development and under negotiation, and provide development activities in the wind power industry.  A wind farm is a group of wind turbines in the same location used for production of electric power. Individual turbines are interconnected with a medium voltage (usually 34.5 kV) power collection system and communications network. At a substation, this medium-voltage electrical current is increased in voltage with a transformer for connection to the high voltage transmission system. A large wind farm may consist of a few dozen to about 100 individual wind turbines, and cover an extended area of hundreds of square miles (square kilometers), but the land between the turbines may be used for agricultural or other purposes. A wind farm may be located off-shore to take advantage of strong winds blowing over the surface of an ocean or lake.  A new Carbon Trust study into the potential of small-scale wind energy has found that small wind turbines could provide up to 1.5 terawatt hours (TW·h) per year of electricity and 0.6 million tonnes of carbon dioxide (Mt CO2) emission savings. This is based on 10% of households installing turbines at costs competitive with grid electricity, which is currently around 12p per kilowatt-hour.  Distributed generation from renewable resources is increasing as a consequence of the increased awareness of climate change. The electronic interfaces required to connect renewable generation units with the utility system can include additional functions such as active filtering to enhance the power quality.  What is Wind Power?  Wind power is the conversion of wind energy into a useful form, such as electricity, using wind turbines.  14     Wind energy has historically been used directly to propel sailing ships or converted into mechanical energy for pumping water or grinding grain, but the principal application of wind power today is the generation of electricity. Wind power, along with solar power, is non-dispatchable, meaning that for economic operation all of the available output must be taken when it is available, and other resources, such as hydroelectricity, must be used to match supply with demand.  What is a MET tower?  MET towers (Meteorological towers), are used to gather wind data necessary for site evaluation and development of wind energy projects.  [welwind10q063010002.jpg]  MET tower instrumentation data logs wind direction and speed. In addition the MET tower can be equipped to record temperature, solar radiation and air pressure if necessary.  The most reliable wind energy assessments depend on wind data recorded continually, over a 1 year period at 40 and 60 meter heights (or greater). The wind data is sampled periodically (every 10 minutes is typical) and stored locally at the tower base using solid state memory devices. MET towers data loggers can be fitted with web server software and an internet connection for remote downloading of the meteorological information stored at the site.  MET tower installation costs typically range between $45,000 - $100,000 (tubular v. lattis) depending on site conditions and the necessity for site improvement, as well as the instrumentation and data logging strategies employed.  Note: Wind turbine efficiencies are proportional (in part) to the turbine rotor diameter. Since modern rotor diameters can exceed 80 meters it is necessary to gather information on the differing wind conditions that exist along the radius of a rotor blade. Wind differences occur in great part as a result of wind shear, or drag, along hilly contours and heavily wooded or developed surfaces surrounding the turbine. Wind readings at different heights are used to extrapolate wind energy data for all heights along the rotor diameter.  Market Overview  Demand for electricity has dramatically increased as our society has become more technologically driven, demand for Green Energy has also dramatically increased due to consumers desire to become environmentally conscious. Both trends are expected to continue. Significant new capacity for the generation of electricity will be required to meet anticipated demand.  Most of the worlds main energy sources are still based on the consumption of non-renewable resources such as petroleum, coal, natural gas and uranium. However, while still a small segment of the energy supply, renewable sources such as wind power are growing rapidly in market share. Wind power delivers multiple environmental benefits. Wind power operates without emitting any greenhouse gases and has one of the lowest greenhouse gas lifecycle emissions of any power technology. Wind power results in no harmful emissions, no extraction of fuel, no radioactive or hazardous wastes and no use of water to steam or cooling. Wind projects are developed over large areas, but their carbon footprint is light. Farmers, ranchers and most other land owners can continue their usual activities after wind turbines are installed on their property.  15     Global wind energy capacity surged by 28.8% in 2008 according to the Wind Energy Councils Global Wind 2008 Report.  The US passed Germany to become the number one market in wind power, and Chinas total capacity doubled for the fourth year in a row. The worlds total installed capacity reached 120.8 GW at the end of 2008, over 27 GW of which came online in 2008 alone, representing a 36% growth rate in the annual market. These figures show that there is huge and growing global demand for emissions-free wind power, which can be installed quickly, virtually everywhere in the world. Wind energy has become an important player in the worlds energy markets, with the 2008 market for turbine installations worth about € 36.5 billion. The wind industry also creates many new jobs; as of 2008 over 400,000 people are now employed in this industry, and that number is expected to be in the millions in the near future.   The 120.8 GW of global wind capacity installed at  the end of 2008 produced  260 TWh of electricity and saved 158 million tons of CO2 every year.  Wind power can deliver zero-emissions electricity in large amounts. Wind projects do not use any fuel for their operations, so the price of wind power does not vary when fuel prices increase. When utilities acquire wind power, they lock in electricity at a stable price for, on average, 20 years or more.  Wind, however, is intermittent and electricity generated from wind power can be highly variable. Good site selection and advantageous positioning of turbines on a selected site are critical to the economic production of electricity by wind energy. In our experience, the primary cost of producing wind-powered electricity is the construction cost; wind energy has no fuel costs and relative low maintenance costs.  Though we have largely focused on the development of wind projects in China we intend to identify sites to produce wind energy in the United States and Canada.  Growth in Demand for Wind Power  Growth in wind power is being driven by several environmental, socio-economic and energy policy factors that include:  ·ongoing increases in electricity demand due to population growth and growth in energy consuming devices such as computers, televisions and air conditioning systems,·the increasing cost of the predominant fuels required to drive the existing fleet of conventional electric generation such as coal, natural gas, nuclear and oil,·the increasing cost and difficulty faced in the construction of conventional electric generation plants,·existing and growing legislative and regulatory mandates for cleaner forms of electric generation,·ongoing improvements to wind power systems making them more cost effective and improving availability to meet demand, and·worldwide concern over greenhouse gas emissions and calls to reduce global warming due to the carbon dioxide produced by conventional electric generation.  In North America, the USmarket broke all previous records in 2008 with new installations of 8.5 GW, reaching a total installed capacity of over 25 GW. In 2008 the US was the number one market both in terms of new capacity and in terms of total wind generation capacity. The massive growth in the US wind market in 2008 increased the countrys total wind power generating capacity by half. The new wind projects completed in 2008 accounted for about 42% of the entire new power producing capacity added in the US during that year, and created 35,000 new jobs, bringing the total employed in the sector up to 85,000.  All of the fundamental drivers behind its growth remain in place. In 2008, the US Department of Energy released a groundbreaking report, finding that wind power could provide 20% of US electricity by 2030. With the wind energy industrys strong performance in 2008 and the support of the new Obama Administration, the industry is in a position to turn this scenario into reality, or even surpass it.  The growth in Asian markets has been remarkable, as nearly a third of the 8.6 GW installed in 2008 was installed in Asia. Chinacontinued its spectacular growth in 2008, once again doubling its installed capacity by adding about 6.3 GW, to reach a total of 12.2 GW.  The prospects for future growth in the Chinese market are very good. In response to the financial crisis, the Chinese government has identified the development of wind energy as one of the key economic growth areas, and in 2009, new installed capacity was expected to nearly double again. At this rate, China is on its way to overtake Germany and Spain to reach second place in terms of total wind power capacity in 2010. This means that China would have met its 2020 target of 30 GW ten years ahead of time.  16      CHINAS WIND POWER POTENTIAL[welwind10q063010004.gif]green=great, pink=good, blue=ok, yellow=poor
(offshore & coastal potential not shown)  Today, wind power in China is developing rapidly and receives particularly strong government support. The new Renewable Energy Law and its detailed incentive policies reflect the Chinese governments intention to build up this industry.  According to the China Academy of Meteorological Sciences, the country possesses a total 235 gigawatts of practical onshore wind power potential that can be utilized at 10 meters above the ground. Annual potential production from wind power could reach 632.5 gigawatts if the annual, full-load operation reaches 2,000-2,500 hours. A detailed survey is needed, however, for economically utilizable wind power resources. The potential for offshore wind power is even greater, estimated at 750 gigawatts. Offshore wind speed is higher and more stable than onshore wind, and offshore wind farm sites are closer to the major electricity load centers in eastern China. Areas rich in wind power resources are mainly concentrated in two areas: northern Chinas grasslands and Gobi desert, stretching from Inner Mongolia, Gansu, and Xinjiang provinces; and in the east coast from Shangdong and Liaoning and the Southeast Coast in Fujian and Guangdong provinces.  In 1986, China built its first wind farm in Rongcheng, Shandong Province. From 1996 to 1999, in-grid wind power developed very quickly, entering a localization stage. By the end of 2004, there were 43 wind farms with 1291 wind turbines in China, with 764 megawatts of installed capacity. Liaoning, Xinjiang, Inner Mongolia, and Guangdong experienced the fastest wind power development, representing 60% of the installed power generating capacity of national wind power. Currently, Xinjiangs Dabancheng is the largest wind farm in China, with 100 megawatts of installed power generating capacity. Most generators range from 500 kilowatts to 1 megawatt, accounting for 84% of Chinas wind turbine generators.  Regulations and Economic Incentive Plans Implemented by Chinese Government for Renewable Energy Projects  To support the development of wind power technology and growth of the in-grid wind power market, the Chinese government has recently pushed hard on renewables, and it implemented a series of projects and also stipulated a series of economic incentive policie.  17     Ride the Wind Program  [welwind10q063010006.gif]Windmills, while still subsidized, are
economically viable in high-wind areas
(photo: Nordex 2.5 MW units)      To import technology from foreign companies and to establish a high-quality Chinese wind turbine generator sector, the former State Development and Planning Commission (SDPC) initiated the Ride the Wind Program in 1996. This initiative led to two joint ventures, NORDEX (Germany) and MADE (Spain). These JVs effectively introduced 600kilowatts wind turbine generator manufacturing technology of 600 kilowatts into China.  National Debt Wind Power Program  To encourage the development of domestic wind power equipment manufacturing, the former State Economic & Trade Commission (SETC) implemented the National Debt Wind Power Program. This program required the purchase of qualified, locally-made wind power components for new generation projects. Chinas government provided bank loans with subsidized interest to wind farm owners of as compensation for the risk of using locally-made wind turbine generators. These loans funded construction of demonstration project wind farms with a total installed capacity of 8megawatts. This program has been completed.  Wind Power Concession Project  The National Development and Reform Commission (NDRC) initiated the Wind Power Concession Project in 2004 with a 20-year operational period. This program aims to reduce the in-grid wind power tariff by building large capacity wind farms and achieving economies of scale. Each of the wind farms built in this program must reach a 100 megawatts capacity.  In any typical wind power concession, the power grid company signs a long-term power purchase agreement with the wind power project investor and agrees to purchase electricity generated by the project. The bidding competition determines in-grid tariff and the agreement clearly prescribes the quantity of in-grid wind power to be purchased. The duration of the agreement covers the total operation period of the wind project.  Therefore, the investor minimizes risk in recovering investment costs. The concession agreement between the government and project investor guarantees the power-purchase agreement. All end-users of the grids electricity share the tariff increase due to wind power purchase. As incentives, the government waves import customs tariff and VAT on the equipment and accessories.  Through the wind power concession project, the Chinese government hopes to create further incentives for companies to develop this renewable energy resource. The concession agreement and long-term power purchase agreement protect the interests of wind power investors, encouraging large companies, especially foreign ones, to invest in the Chinese wind power sector. Under this policy, market risk is reduced significantly, which in turn reduces the risk premium of the internal rate of return for wind power projects. Eventually, the wind tariff shared by end-users will be cut due to this decreased risk.  The Chinese government has expanded the capacity of wind farms to a 100 megawatt level, and has created new wind power tariffs based on the market mechanism and tendering process. This has attracted a number of Chinese companies into this program. Through successful implementation of the project, the Chinese government hopes to make wind power an economically-viable power choice, effectively competing with conventional power sources in China.  18     In February 2005, Chinas Renewable Energy Law was formulated and was put into effect on January 1, 2006. The law stipulates that the power grid company must sign a grid connection agreement with the wind power generating company and purchase the full amount of the wind power generated by it. The wind power tariff will be determined by the wind farm project tendering. The winners quoted tariff will be the tariff of that wind farm project.  Wind power is a priority National Clean Development Mechanism Project, i.e., wind farm developers can sell Certified Emission Reduction Certificates (CERs) to developed countries under the terms of the Kyoto Protocol.  The Chinese government reduced the Value-added Tax (VAT) for wind power from 17% to 8.5% in 2001 and adjusted the import custom tariff of wind turbine generator sets to 8% and that of its components to 3% in 2004. The import duty of wind power equipment and accessories can be waived if it is for the wind farm developers own use.   Rapid economic development throughout China has resulted in a significant increase in energy consumption, leading to a rise in harmful emissions and power shortages. The Renewable Energy Law is designed to help protect the environment, prevent energy shortages, and reduce dependence on imported energy.   China's new law sets the stage for the widespread development of renewables, particularly for commercial scale renewable generating facilities. Through this legislation, the State officially encourages the construction of renewable energy power facilities. China's electricity grid is obligated to purchase all the electricity generated by approved renewable energy facilities located in its service area. The grid's buying price for renewables will be set by the National Development and Reform Commission (NDRC), a regulatory department of the State Council. NDRC will adjust the buying price from time to time as necessary. The cost of purchasing this power will be spread across all customers on the grid.   NDRC will also implement a national renewable energy plan, including specific renewable energy targets that will act as the framework for implementation of the law. Provincial planning agencies will then develop their more specific implementation plans. The law includes other details related to the purchase and use of solar photovoltaics (PV) and solar water heating as well as renewable energy fuels. Finally, the law includes specific penalties for non-compliance with the law.  Competition  Large utility companies dominate the energy production industry and coal continues to dominate as the primary resource for electricity production. Electricity generated from wind energy faces competition from other traditional resources such as nuclear, oil and natural gas. The advantages of conventional production of electricity are that:  ·the technology and infrastructure already exist for the use of fossil fuels such as coal, oil and natural gas,·commonly-used fossil fuels in liquid form such as light crude oil, gasoline and liquefied petroleum gas are easy to distribute, and·petroleum energy density (an important element in land and air transportation fuel tanks) in terms of volume (cubic space) and mass (weight) is superior to some alternative energy sources.  However, energy produced by conventional resources also faces a number of challenges including:  ·the inefficient atmospheric combustion (burning) of fossil fuels leads to the release of pollution into the atmosphere including carbon dioxide which is largely considered the primary cause of global warming,·dependence on fossil fuels from volatile regions or countries of the world creates energy security risks for dependent countries,·fossil fuels are non-renewable unsustainable resources which will eventually decline in production and become exhausted with potentially dire consequences to societies that remain highly dependent on them, and·extraction of fossil fuels is becoming more expensive and more dangerous as readily-available resources are exhausted and mines get deeper and oil rigs must drill deeper and further out in oceans.  In contrast, electricity generated from wind energy:  ·produces no water or air pollution that can contaminate the environment because there are no chemical processes involved in wind power generation; therefore, there are no waste by-products such as carbon dioxide,·does not contribute to global warming because it does not generate greenhouse gases,·is a renewable source of energy, and·in the case of community wind power, farming and grazing can still take place on land occupied by wind turbines.   19     However, wind energy producers also face certain obstacles including:  ·the reality that wind is unpredictable and, therefore, wind power is not predictably available, and when the wind speed decreases, less electricity is generated,·residents in communities where wind farms exist may consider them an eyesore, and·wind farms, depending on the location and type of turbine, may negatively affect bird migration patterns and may pose a danger to the birds themselves; however, newer, larger wind turbines have slower moving blades which seem to be visible to most birds.  We expect that primary competition for the wind power industry will continue to come from utility company producers of electricity generated from coal and other non-renewable energy sources.  New entrants in the wind power development market, however, face certain barriers to entry. The capital costs of buying and maintaining turbines are high. Other significant factors include the cost of land acquisition, the availability of transmission lines, land use considerations and the environmental impact of construction and operations. Finally, another critical barrier to entry into the wind power development business is the necessary experience required to bring project to the point where they are able to secure interconnection agreements, power purchase agreements and project financing for construction.  Wind Energy Industry Participants  As wind energy technology gains wider acceptance, competition may increase as large, well-capitalized companies enter the business. As previously stated, wind energy is the fastest growing source of energy worldwide for three consecutive years. Energy companies such as British Petroleum, Shell Oil Companys Wind Energy arm, Siemens and other major companies in the energy sector, see opportunities in wind power development.  Additionally, there are many smaller companies that are seeking out opportunities in the wind energy sector.  In some cases, competitors may have longer operating histories, more customers, greater financial strength, more name recognition, and larger technical staffs. These competitors may be able to more readily identify and acquire suitable locations to exploit the growth in the wind energy sector more easily because of their financial resources and awareness in the market. Our larger competitors can also devote substantially more resources to business development and may adopt more aggressive pricing policies.  Our Competitive Advantages  We believe that our experience in developing wind farm projects in new market areas will enable us to continue to successfully implement our business plan. Further, we believe our managements understanding of deregulated energy markets enables us to maximize the value of our development portfolio. Our team has experience in site selection, market analysis, land acquisition, community relations, permitting, financing, regulation and construction.  As a result of our project portfolio and management team, we enjoy strong relationships with key trading partners that are required for successful wind farm development. These relationships include regulators, turbine suppliers, electric component suppliers, equity investors, project lenders, engineering firms, constructors, electric transmission operators and electric utilities.  Distribution  The Company continually analyzes population growth and both national and international economic factor, in determining energy demands in identified areas. Should the Company make the determination and successfully identify suitable property or properties, the Company would test the site to determine whether sufficient wind energy resources are available to effectively and efficiently displace current electricity sources, thus reducing pollution from fossil fuel. Upon completion of the analysis, the Company would attempt, if conditions were favorable, to obtain land right and apply for permits to install and operate a wind power generating plant.  Intellectual Property  We depend on our ability to develop and maintain the proprietary aspects of our technology to distinguish our products from our competitors products. To protect our proprietary technology, we rely primarily on a combination of confidentiality procedures. It is our policy to require employees and consultants to execute confidentiality agreements and invention assignment agreements upon the commencement of their relationship with us. These agreements provide that confidential information developed or made known during the course of a relationship with us must be kept confidential and not disclosed to third parties except in specific circumstances and for the assignment to us of intellectual property rights developed within the scope of the employment relationship.  20     Governmental Regulation  We do not use, generate or discharge toxic, volatile or otherwise hazardous chemicals and wastes in our research and development and manufacturing activities. However, we are subject to a variety of foreign, federal, state and local governmental regulations. At this time, we believe that we have all permits necessary to conduct our business.  We are not aware of any environmental investigation, proceeding or action by foreign, federal or state agencies involving our current facilities or operations. If we fail to comply with present or future environmental regulations, we could be subject to fines, suspension of production or a cessation of operations. Any failure by us to adequately comply with existing and future regulations could subject us to financial liabilities, operational interruptions and adverse publicity, any of which could materially and adversely affect our business, results of operations and financial condition.  Employees  As of June 30, 2010, we employed five full-time employees and ten part-time employees. None of our employees is subject to a collective bargaining agreement and we believe that relations with our employees are very good. We also frequently use third party consultants to assist in the completion of various projects. Third parties are instrumental to keep the development of projects on time and on budget.  Balance Sheet As at June 30, 2010, the Company had total assets of $556,764 compared with total assets of $564,131 as at December 31, 2009.  The decrease in the total assets of $7,367 was due to amortization of the existing property and equipment of $5,833.  The Company had total liabilities of $1,825,405 as at June 30, 2010 compared with $1,731,253 as at December 31, 2009.  The increase in total liabilities of $94,152 is attributed to the fact that amounts due to related parties increased $89,495 due to imputed interest of $63,274 using an annualized imputed interest rate of 8% and additional payments of operating expenses incurred for professional fees.  During the six months ended June 30, 2010, the Company issued 5,000,000 common shares for proceeds of $25,773, 8,000,000 common shares to settle outstanding debt and services rendered to the Company with a value of $85,216, and 12,500,000 common shares issued to settle related party debt of $64,606.  Operating Revenues  We have not generated any revenues since inception.  Operating Expenses  During the three and six months ended June 30, 2010, the Company incurred operating expenses totaling $80,969 and $213,841 respectively, compared with $366,046 and $708,352 for the three and six months ended June 30, 2009.  The decrease in operating expenses is attributed to the fact that the Company issued $85,000 in stock-based compensation in fiscal 2010 compared with $113,000 of stock-based compensation during the same period in 2009.  Furthermore, the Company had lower levels of cash flows in the current period which resulted in a lower magnitude of transactions during the period.  Net Loss  During the three and six months ended June 30, 2010, the Company incurred a net loss of $113,392 and $277,115 respectively, compared with a net loss of $391,083 and $756,918 for the three and six months ended June 30, 2009.  The decrease in operating expenses is attributed to the fact that the Company issued $85,000 in stock-based compensation in fiscal 2010 compared with $113,000 of stock-based compensation during the same period in 2009.  Furthermore, the Company had lower levels of cash flows in the current period which resulted in a lower magnitude of transactions during the period.   Liquidity and Capital Resources  As at June 30, 2010, the Company had a cash balance of $2,997 and a working capital deficit of $1,818,004 compared with a cash balance of $6,741 and a working capital deficit of $1,722,318 at December 31, 2009.  The increase in working capital deficit is due to the fact that the Company incurred operating expenditures during the year, but had limited cash flows to repay the obligation, hence a general increase in amounts payable relative to the level of current assets in the Company.  21     Cashflow from Operating Activities  During the six months ended June 30, 2010, the Company used $124,351 of cash flow for operating activities compared with $390,555 for the six months ended June 30, 2009.  The decrease in the use of cash flows for operating activities is reflective of the decrease in the level of activity incurred by the Company during the period due to the economic downturn and the lack of sufficient capital funding.  Cashflow from Investing Activities  During the six months ended June 30, 2010 and 2009, the Company incurred no transactions relating to investing activities.  Cashflow from Financing Activities  During the six months ended June 30, 2010, the Company was provided $120,607 of cash flow from financing sources compared with proceeds of $371,063 from financing activities during the six months ended June 30, 2009.   Overall, the Company received more cash financing from related parties in fiscal 2009 compared to fiscal 2010.  During the period ended June 30, 2010, the Company received $25,773 of cash flows from the issuance of common shares.  Off-Balance Sheet Arrangements  The Company has no material transactions, arrangements, obligations (including contingent obligations), or other relationships with unconsolidated entities or other persons that have or are reasonably likely to have a material current or future impact on its financial condition, changes in financial condition, results of operations, liquidity, capital expenditures, capital resources, or significant components of revenues or expenses.   Going Concern  We have not attained profitable operations and are dependent upon obtaining financing to pursue any extensive activities. For these reasons, our auditors stated in their report on our audited financial statements that they have substantial doubt that we will be able to continue as a going concern without further financing.  Future Financings  We will continue to rely on equity sales of our common shares in order to continue to fund our business operations. Issuances of additional shares will result in dilution to existing stockholders. There is no assurance that we will achieve any additional sales of the equity securities or arrange for debt or other financing to fund planned acquisitions and exploration activities.  Off-Balance Sheet Arrangements  We have no significant off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to stockholders.   Recent Accounting Pronouncements  In March 2010, the FASB (Financial Accounting Standards Board) issued Accounting Standards Update 2010-11 (ASU 2010-11), Derivatives and Hedging (Topic 815): Scope Exception Related to Embedded Credit Derivatives.  The amendments in this Update are effective for each reporting entity at the beginning of its first fiscal quarter beginning after June 15, 2010.  Early adoption is permitted at the beginning of each entitys first fiscal quarter beginning after issuance of this Update.  The Company does not expect the provisions of ASU 2010-11 to have a material effect on the financial position, results of operations or cash flows of the Company.  In February 2010, the FASB Accounting Standards Update 2010-10 (ASU 2010-10), Consolidation (Topic 810): Amendments for Certain Investment Funds.  The amendments in this Update are effective as of the beginning of a reporting entitys first annual period that begins after November 15, 2009 and for interim periods within that first reporting period. Early application is not permitted.  The Companys adoption of provisions of ASU 2010-10 did not have a material effect on the financial position, results of operations or cash flows.  22     In February 2010, the FASB issued ASU No. 2010-09 Subsequent Events (ASC Topic 855) Amendments to Certain Recognition and Disclosure Requirements (ASU No. 2010-09). ASU No. 2010-09 requires an entity that is an SEC filer to evaluate subsequent events through the date that the financial statements are issued and removes the requirement for an SEC filer to disclose a date, in both issued and revised financial statements, through which the filer had evaluated subsequent events. The adoption did not have an impact on the Companys financial position and results of operations.  In January 2010, the FASB issued an amendment to ASC 820, Fair Value Measurements and Disclosure, to require reporting entities to separately disclose the amounts and business rationale for significant transfers in and out of Level 1 and Level 2 fair value measurements and separately present information regarding purchase, sale, issuance, and settlement of Level 3 fair value measures on a gross basis.  This standard, for which the Company is currently assessing the impact, is effective for interim and annual reporting periods beginning after December 15, 2009 with the exception of disclosures regarding the purchase, sale, issuance, and settlement of Level 3 fair value measures which are effective for fiscal years beginning after December 15, 2010.  In January 2010, the FASB issued an amendment to ASC 505, Equity, where entities that declare dividends to shareholders that may be paid in cash or shares at the election of the shareholders are considered to be a share issuance that is reflected prospectively in EPS, and is not accounted for as a stock dividend.  This standard is effective for interim and annual periods ending on or after December 15, 2009 and is to be applied on a retrospective basis.  The adoption of this standard is not expected to have a significant impact on the Companys consolidated financial statements.  In October 2009, the FASB issued an amendment to the accounting standards related to certain revenue arrangements that include software elements. This standard clarifies the existing accounting guidance such that tangible products that contain both software and non-software components that function together to deliver the products essential functionality, shall be excluded from the scope of the software revenue recognition accounting standards. Accordingly, sales of these products may fall within the scope of other revenue recognition standards or may now be within the scope of this standard and may require an allocation of the arrangement consideration for each element of the arrangement. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.  In October 2009, FASB issued an amendment to the accounting standards related to the accounting for revenue in arrangements with multiple deliverables including how the arrangement consideration is allocated among delivered and undelivered items of the arrangement. Among the amendments, this standard eliminated the use of the residual method for allocating arrangement considerations and requires an entity to allocate the overall consideration to each deliverable based on an estimated selling price of each individual deliverable in the arrangement in the absence of having vendor-specific objective evidence or other third party evidence of fair value of the undelivered items. This standard also provides further guidance on how to determine a separate unit of accounting in a multiple-deliverable revenue arrangement and expands the disclosure requirements about the judgments made in applying the estimated selling price method and how those judgments affect the timing or amount of revenue recognition. This standard, for which the Company is currently assessing the impact, will become effective on January 1, 2011.  In August 2009, FASB issued an amendment to the accounting standards related to the measurement of liabilities that are recognized or disclosed at fair value on a recurring basis. This standard clarifies how a company should measure the fair value of liabilities and that restrictions preventing the transfer of a liability should not be considered as a factor in the measurement of liabilities within the scope of this standard. This standard is effective for the Company on October 1, 2009. The adoption of this amendment did not have a material effect on the Companys consolidated financial statements.  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 consolidated financial statements, but did eliminate all references to pre-codification standards.  Reporting Currency  Effective January 1, 2005, the Company changed its reporting currency from the U.S. dollar to the Canadian dollar. All amounts set forth in this filing are in Canadian Dollars, unless otherwise indicated.  23     The Department of Corporation Finance in its advisory letter titled International Financial Reporting and Disclosure Issues, dated May 1, 2001 has stated, Regulation S-X presumes that a US-incorporated registrant will present its financial statements in US dollars. In rare instances, the staff has not objected to the use of a different reporting currency. Those instances have been limited to situations where the US-incorporated registrant had little or no assets and operations in the US, substantially all the operations were conducted in a single functional currency other than the US dollar, and the reporting currency selected was the same as the functional currency. In these circumstances, reporting in the foreign currency would produce little or no foreign currency translation effects under FASB Statement No. 52.  First, the Company has its corporate headquarters located in Canada, and therefore has no assets or operations in the US. Second, all operations of the Company are conducted only in Canadian currency. Third, the reporting currency is in Canadian dollars which is the same currency that all operations were conducted in. Therefore, reporting in Canadian dollars would produce little or no foreign currency translation effects under FASB Statement No. 52.  ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.  ITEM 4. CONTROLS AND PROCEDURES  Managements Quarterly Evaluation of Disclosure Controls and Procedures  Disclosure controls and procedures are controls and procedures that are designed to ensure that information required to be disclosed in our reports filed under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms.  Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by our company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Our management carried out an evaluation under the supervision and with the participation of our Chief Executive Officer and Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act").  Based upon that evaluation, our Chief Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures were not effective as of March 31, 2010, due to the material weaknesses resulting from not having an audit committee and not maintain appropriate financial reporting controls.Please refer to our Annual Report on Form 10-K as filed with the SEC on April 15, 2010, for a complete discussion relating to the foregoing evaluation of Disclosures and Procedures.  Changes in Internal Control Over Financial Reporting  There were no changes in internal controls over financial reporting that occurred during the three months ended June 30, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.  PART II - OTHER INFORMATION  ITEM 1. LEGAL PROCEEDINGS.  We are not a party to any pending legal proceeding. No federal, state or local governmental agency is presently contemplating any proceeding against the Company. No director, executive officer or affiliate of the Company or owner of record or beneficially of more than five percent of the Company's common stock is a party adverse to the Company or has a material interest adverse to the Company in any proceeding.  ITEM 1A. RISK FACTORS.  We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.  ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.  We did not make any unregistered sales of equity securities during the applicable period, except as otherwise previously disclosed.  24     ITEM 3. DEFAULTS UPON SENIOR SECURITIES.  None.  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.  None.  ITEM 5. OTHER INFORMATION.  None.  ITEM 6. EXHIBITS


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|-------------- | ---------------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------
|Exhibit
Number | Description of Exhibit                                                                               | Filing                                                                                    
|3.01           | Articles of Incorporation                                                                            | Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.
|3.02           | Bylaws                                                                                               | Filed with the SEC on January 17, 2008 as part of our Registration Statement on Form SB-2.
|21.1           | Subsidiaries of Company at March 31, 2010                                                            | Filed with the SEC on May 20, 2010 as part of our Quarterly Report on Form 10-Q.          
|31.01          | Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rule 13a-14 | Filed herewith.                                                                           
|32.02          | CEO and CFO Certification Pursuant to Section 906 of the Sarbanes-Oxley Act                          | Filed herewith.                                                                           

25     SIGNATURES  Pursuant to the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  WELWIND ENERGY INTERNATIONAL CORP.Dated: August  20, 2010By:   /s/ Tammy-Lynn McNabbTAMMY-LYNN MCNABBChief Executive Officer, Chief Financial Officer, President, Secretary and Treasurer   26