UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D.C. 20549
 
 FORM
10-K
 
  (Mark
      One)x
                ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the Fiscal Year Ended December 31,
      2008r
                TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE EXCHANGE ACT
 
 For
the transition period from ________  to ______
  Commission
File Number 000-26673
 
 WELWIND ENERGY INTERNATIONAL
CORPORATION
 (Exact
name of registrant as specified in its charter)
  Delaware
                98-0207081(State
      or other jurisdiction of incorporation or organization)
                (IRS
      Employer Identification No.)
 10-20172 113B Avenue, Maple
Ridge, British Columbia, Canada V2X 0Y9
 (Address
of principal executive offices)
 
 (604)
460-8487
 (Registrant's
telephone number, including area code)
 
 Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in
Rule 405 of the Securities Act. Yes r No x
 
 Indicate
by check mark if the registrant is not required to file reports pursuant to
Section 13 or Section 15(d) of the Act. Yes r  No x
 
 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 r
 
 Table of Contents
 1
 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.r
  Indicate
by checkmark whether the registrant is a shell company (as defined in Rule 126.2
of the Exchange Act). Yes r No x
 
 The
aggregate market value of common stock held by non-affiliates of the Registrant
on May 13, 2009 based on the closing price on that date of $0.02 on
the Over the Counter Bulletin Board was $2,964,000. For the purposes of
calculating this amount only, all directors, executive officers and shareholders
owning in excess of ten percent (10%) of the Registrant’s outstanding common
stock have been treated as affiliates.
  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  r
              Accelerated
      filer  r
              Non-accelerated
      filer r
              Smaller
      reporting company  x(Do
      not check if a smaller reporting company)
 
 The
number of shares of common stock outstanding as of May 13, 2009 was
198,064,837.
 
 DOCUMENTS
INCORPORATED BY REFERENCE:
  Table of Contents
 2
 WELWIND
ENERGY INTERNATIONAL CORPORATION
  Tableof Contents
 
 PagePART
      IItem 1
                  Business
                  5Item 1A
                  Risk Factors
                  21Item 1B
                  Unresolved Staff Comments
                  25Item 2
                  Properties
                  25Item 3
                  Legal Proceedings
                  25Item 4
                  Submission of Matters to a Vote of Security
      Holders
                  25PART
      IIItem 5
                  Market for Registrant's Common Equity, Related
      Stockholder Matters and Issuer Purchases of Equity
      Securities
                  26Item 6
                  Selected Financial Data
                  27Item 7
                  Management's Discussion and Analysis of Financial
      Condition and Results of Operations
                  27Item 7A
                  Quantitative and Qualitative Disclosures about
      Market Risk
                  33Item 8
                  Financial Statements and Supplementary
      Data
                  34Item 9
                  Changes in and Disagreements with Accountants on
      Accounting and Financial Disclosure
                  51Item 9A(T)
                  Controls and Procedures
                  51Item 9B
                  Other Information
                  53PART
      IIIItem 10
                  Directors and Executive Officers and Corporate
      Governance
                  53Item 11
                  Executive Compensation
                  56Item 12
                  Security Ownership of Certain Beneficial Owners
      and Management and Related Stockholder Matters
                  59Item 13
                  Certain Relationships and Related
      Transactions
                  60Item 14
                  Principal Accountant Fees and
      Services
                  60PART
      IVItem 15
                  Exhibits and Financial Statement
      Schedules
                  61
 
 Table of Contents
 3
 FORWARD-LOOKING
STATEMENTS
  This
Annual Report on Form 10-K 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 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. These risks and uncertainties include the following:
  ·
              The
      availability and adequacy of our cash flow to meet our
      requirements;
  ·
              Economic,
      competitive, demographic, business and other conditions in our local and
      regional markets;
  ·
              Changes
      or developments in laws, regulations or taxes in our
    industry;
  ·
              Actions
      taken or omitted to be taken by third parties including our suppliers and
      competitors, as well as legislative, regulatory, judicial and other
      governmental authorities;
  ·
              Competition
      in our industry;
  ·
              The
      loss of or failure to obtain any license or permit necessary or desirable
      in the operation of our business;
  ·
              Changes
      in our business strategy, capital improvements or development
      plans;
  ·
              The
      availability of additional capital to support capital improvements and
      development; and
  ·
              Other
      risks identified in this report and in our other filings with the
      Securities and Exchange Commission or the
SEC.
  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.
 
 Table of Contents
 4
 Use
of Term
  Except as
otherwise indicated by the context, references in this report to “Company,”
“WEIC,” “we,” “us” and “our” are references to the pre-acquisition business of
Vitasti, Inc. and post-acquisition business of Welwind Energy International
Corporation.  All references to “USD” or United States Dollars refer to the
legal currency of the United States of America and all other references to “$”
refer to the legal currency of Canada.
 
 PART
I
 
 ITEM
1. 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”) that was
incorporated in February 2000, as West Coast Electric Vehicle Distributors, Inc.
Under the terms of the Share Exchange Agreement, we acquired all of the
outstanding shares of GolfLogix Canada in exchange for 2,500,000 shares of our
common stock. As a result, GolfLogix Canada was a wholly owned subsidiary of our
Company.
 
 Prior to
the acquisition of Golflogix Canada, our business activities included designing
web sites and operating and maintaining a computer internet web site for
companies associated with the forest and wood product industries. However,
subsequent to the acquisition of this business we failed to generate
profitability and incurred negative cash flows from operations. GolfLogix
Canada, a distributor of golfing merchandise and has entered into an agreement
to purchase a licensing right to market and distribute the GolfLogix System in
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 April
15, 2004, the Company filed a Form 8-K announcing that due to lack of success in
executing the Company’s business plan and considerable under funding of the
same, that the Board of Directors had determined that it was no longer viable to
continue operations under the current business plan.
  Table of Contents
 5
 On
November 23, 2004 the Registrant 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 brick-and-mortar retail stores and the World Wide Web at
www.lowcarbcentre.com. The Low Carb Bakery (“LCB”) is a privately held company
organized under the laws of British Columbia, Canada with its primary business
being the manufacturing of food products for the LCC retail market. McNabb &
Associates (“MNA”) is a privately held company organized under the laws of
British Columbia, Canada with its primary business being the management and
supervision of the business operations of both LCC and LCB.
 
 Under the
terms of the LCC Transaction, the Registrant acquired substantially all of the
assets of LCC, including, but not limited to, LCC’s suppliers, customer and
vendor lists and records pertaining thereto, the trade names “Low Carb Centre,”
“Low Carb Bakery” and “McNabb and Associates,” all registered and unregistered
trademarks, service marks, sales marks, colors, names and slogans relating to
the business, and all applications for any of the foregoing, together with all
of the Sellers’ rights to use all of the foregoing forever, and all goodwill
associated with the foregoing, the existing phone number(s) and websites of the
business, all assets referred to or referenced within any audited financial
statements of the business in preparation or consideration of the closing of the
LCC Transaction and any and all recipes, trade secrets, trade practices, décor,
goodwill, clients, equipment, furniture, assets, machinery, trade fixtures,
miscellaneous supplies, inventory, existing contracts and tangible personal
property.
 
 Consideration
for the LCC Transaction was 14,743,199 newly issued shares of the Registrant
post-reverse split. The terms and conditions of the Agreement were determined in
arm’s length negotiations between the Registrant and LCC.
 
 The terms
and conditions of the Asset Purchase Agreement were determined in arm’s length
negotiations between the Company and LCC.
 
 Since the
LCC Transaction effectively constituted a reverse purchase with the management
and shareholders of LCC essentially assuming the same positions in Vitasti,
reverse purchase accounting principles were utilized by the Company in
accounting for that transaction.
 
 The
Acquisition of Welwind Energy International Corporation (an Alberta,
CanadaCcorporation).
 
 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 (“WEIC”) in exchange for 11,000,000 unregistered
shares of Vitasti, which were distributed to the Shareholders as required by the
terms of the Agreement. The Shareholders are subject to the resale provisions of
Rule 144.
 
 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.
 
 Table of Contents
 6
 WEIC was
founded in 2005 to build, own and operate wind farms on an international scale.
Our current project is to bridge the North America-China link by building wind
farms in China beginning along the South China Sea.
 
 Recent
Business Developments
  Subsequent
to December 31, 2008, the Company announced the following:
 
 (1)
              Termination
      of relationship with Ningxia Electric Power Corp. in late January
      2009
 
 Organizational
Structure
  Our
current organizational structure is summarized by the illustration
below:
 
 
 
 Overview
of our Business
 
 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.
  Since
2006, we have been engaged primarily in the development of two projects, both
located in the Guangdong Province in China.
  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.
 
 Table of Contents
 7
 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.
 
 Our two
China projects would be considered, at least initially, small scale wind power
wind farms, which is the name 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 1 kW 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.
 
 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.
 
 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.
 Table of Contents
 8
 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.
 
 
 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.
 
 According
to the U.S. Department of Energy, Energy Information Administration’s
publication Renewable Resources in the U.S. Electricity Supply, wind power
generation is projected to increase eight-fold between 1990 and 2010, a rate of
10.4% per year. Annual growth in the wind power industry for the past ten years
has exceeded 28% per year according to the Global Wind Energy Council. Although
wind power produces under 1% of electricity worldwide according to the Global
Wind Energy Council’s Global Wind 2007 Report, it is a leading renewable energy
source and accounts for 19% of electricity production in Denmark (according to
the U.S. Department of Energy’s Energy Facts web page), 10% in Spain and 7% in
Germany (according to the Global Wind Energy Council’s Europe region web
page).
  Table of Contents
 9
 Wind
power has become a mainstream option for electricity generation, and we believe
that it is a critical element to solving climate change and delivering
cost-effective power.
  According
to the Global Wind Energy Council’s Global Wind 2007 Report, the United States
led the world in wind power installations in 2007 and global wind capacity
increased by more than 20,000 megawatts, with 5,244 megawatts installed in the
United States alone. Spain and China were the second and third largest wind
power growth countries in 2007 with 3,522 megawatts and 3,304 megawatts of wind
power capacity added, respectively, according to the report.
  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,
  Table of Contents
 10
 ·
              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.
 
 China’s
abundant inland and offshore wind energy resources provide potential for
large-capacity, in-grid wind farms. By the end of 2005, China had built 59 wind
farms with 1,854 wind turbine generators and a 1,266 megawatt in-grid wind power
installed capacity, ranking it number ten globally.
 
 CHINA’S
      WIND POWER POTENTIALgreen=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.
By 2020, China plans to have 30 gigawatts of wind power.
 
 European
companies dominate China’s wind power equipment market. Among U.S. companies,
only GE Wind Power is active in China. In 2005, GE Wind Power occupied 3% of the
in-grid wind turbine market in China.
 
 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.
 
 Table of Contents
 11
 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 policies:
 
 – Ride the Wind
Program
 
 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.
 
 Table of Contents
 12
 – 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. By 2006, NDRC had approved 5 wind farms, in Jiangsu, Guangdong, Inner
Mongolia, and Jilin Province.
 
 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.
 
 Although
China’s government has, for many years, encouraged the use of wind power,
favorable conditions for wide-scale development have yet to develop. 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.
 
 
  Table of Contents
 13
 Incentive
policies have finally begun to emerge within China. China encourages the
development of wind power in its “National Middle and Large Term Development
Plan.” According to the plan, by 2010, China’s installed capacity of wind power
will reach 5 gigawatts. By 2020, it will achieve 30 gigawatts. In order to
achieve this level of growth, China needs to build 800 megawatts of new wind
power capacity each year from 2006 to 2010.
 
 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.
 
 Some
local governments in Guangdong, Jilin, Xinjiang and Inner Mongolia formulated
their own incentive policies to develop wind power. By the end of 2005, China’s
wind power installed capacity was about 1gigawatts. According to NDRC’s
planning, China’s wind power installed capacity will reach 5gigawatts by 2010
and 30-40 gigawatts by 2020. According to statistics, the cost of wind power is
33%-60% higher than that of coal, which makes the wind power tariff 68%-94%
higher than the coal tariff. Industry expert predicts that the wind power can be
commercially viable and compete with clean coal-fired power economically by
2020.
 
 
  Table of Contents
 14
 On any
listing of the very best prospects for China-focused wind sector business
development, these would be amongst the top priorities:
 
 -Large
capacity wind turbine generators, especially at the 1megawatts level and
above.
 -Design
and operation technology of large-scale wind farms.
 
 Development
trends for single wind turbine generators favor large capacity sets, especially
at the 1 megawatt level. Before 1997, the 1 megawatt-level wind turbine
generators occupied less than 10% of the worldwide market share. In 2001, that
figure had risen to 52.3% and reached 62.1% in 2002. Although China has the
ability to manufacture wind turbine generators below the 750 kilowatt level,
production of higher capacity generators remains a challenge.
 Although
China has made a prototype of a 1.2 megawatt level wind turbine, it has only
been used for demonstration projects. International suppliers will find strong
demand in China for wind turbine generators at 1 megawatt and above levels.
Beyond the manufacturing sector, Chinese companies also lack experience for
investment, design, and operation of large wind farms.
 
 With the
recent passage of China's new Renewable Energy Law, one of the world's largest
economies has now made one of the largest state-sponsored commitments toward
renewable energy. China's government imposed a national renewable energy
requirement that is expected to boost the use of renewable energy capacity up to
10 percent by the year 2020.
 
 The law
requires power grid operators to purchase resources from registered renewable
energy producers. The law also offers financial incentives, such as a national
fund to foster renewable energy development, and discounted lending and tax
preferences for renewable energy projects.
 
 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.
 
 Table of Contents
 15
 Our
Wind Farm Portfolio
  We have
two (2) wind projects in China’s Guangdong Province. The following provides an
overview of the two projects, including current status:
 
 Project
      Name
              
              Megawatts
              
              PhaseZhanjiang
      Project
              
              49
      - 400
              
              Local
      Approvals Secured, Pending Construction Permit and Possible Site
      RelocationYangxi
      Project
              
              49
      -400
              
              Development
      Agreement with City of Yangxi signed in June 2007, Wind Testing
      Completed,  Project Proposal & Feasibility Report along with
      the Grid Connection Report Anticipated by end of Q3 2009 for Submission to
      City of Yangxi
  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.
 
 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
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 is proposed located 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”).
 
 Table of Contents
 16
 Based on
the completed Project Feasibility Study Report and Grid Connection Report, we
executed the PCA with the local utility company, the Guangdong Power Grid
Corporation, in November 2007.  The local utility’s buying price with
respect to each local energy producer is set by the National Development &
Reform Commission (“NDRC”) upon issuance of the Construction Permit by the
Guangdong Provincial Government as such buying price, though set by law, is
subject to change.
 
 All
testing, reports, and other necessary documentation, including all approvals
required, were submitted to the City of Zhanjiang for ratification of the
Project Feasibility Study Report in June 2008.  In early December
2008, the City of Zhanjiang approved the ZWWL Project Feasibility Study Report,
a pre-requisite for submission to the Guangdong Provincial Government for the
Construction Permit. Based on the Company’s Project Proposal and Feasability
Report, the Company received a conditional land use permit, subject to the
issuance and approval of the construction permit by the Guangdong Provincial
Government, for the construction of a wind farm on Zhanjiang,
Donghai Island.
 
 Immediately
thereafter, the ZWWL submitted the City of Zhanjiang approved Project
Feasibility Study Report to the Guangdong Provincial Government for issuance of
the Construction Permit.  After corresponding with the Guangdong
Provincial Government in January and February 2009, the ZWWL was advised in
March 2009 that the Federal Government of China had given preference to a major
steel project on Donghai Island.  As a result of this major
steel project, the Guangdong Provincial Government was reassessing the location
of all other projects in the area.  By way of correspondence received
in March 2009, the Guangdong Provincial Government asked the Company to relocate
the site for its proposed wind farm to another location as all available lands
on Donghai Island were being reserved for the steel project until further
notice, with such steel project including an accompanying town of an estimated
100,000 people.  The ZWWL is working with the Guangdong Provincial
Government to secure a feasible alternate site, and it is expected that the
Guangdong Provincial Government will begin to designate approved alternate sites
for the other local projects, including the ZWWL wind farm project, beginning in
June 2009.  Depending on the distance of the possible alternate site
from the previously designated area, we may be forced to conduct additional win
testing.
 
 The Yangxi
Project
 
 The
Yangxi Windfarm, the subsidiary through which all operations pertaining to the
Yangxi Project are handled, commenced operations in July 2006.
 
 The
installation of an 80 foot meteorological tower was completed in July 2006. At
that time, we began to collect data necessary to provide the information
required to build out the wind farm. Phase 1 of the Yangxi wind farm will
consist of a 49 MW project.  We anticipate that the Yangxi project
will consist of a total of 400 MWs once fully completed.
  In
January 2008, after 16 months of collecting data from the tower at the Yangxi
location, a formal Project Proposal was submitted to the City of Yangxi
Government as well as to the Guangdong Tianlian Engineering Ltd., the Company
which is actively engaged in preparing the Project Feasibility Study Report,
which includes the Grid Connection Report.
  In May
2008, the Company opened its Yangxi office.
  In
December of 2008, we submitted a process report/update to the City of Yangxi
Government.  This process report provided detailed information about
our plans to build the wind farm.   On December 24, 2008, we
received a letter of support for our project from the City of Yangxi
Government.
  We
anticipate that the Project Feasibility Study Report and Grid Connection Report
will be available by the end of September 2009, at which time we anticipate
continuing the process of attempting to secure the necessary approvals to move
forward.
  Table of Contents
 17
 Supply
  The
Company and YATU Wind Energy Manufacturing Co. Ltd., formerly known as Guangzhou
Engga Wind Energy Co. Ltd. (“ENGGA”), have a cooperative relationship where by
the Company and ENGGA will work together on the technology and future supply of
all Welwind turbines. The agreement gives Welwind priority for all turbines to
be manufactured by ENGGA. ENGGA is the sino-joint enterprise with the
shareholders by Britain ENGGA Power Generator Co., Ltd. and Hong Kong ENGGA
Investment Co., Ltd. with the registered capital reaching RMB30 million and
specializing in making, selling and installing wind power generation equipments,
as well as selling parts of wind power generation equipments.
 
 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.
  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.
  Table of Contents
 18
 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.
 
 Table of Contents
 19
 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.
  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 May
13, 2009, we employed 11 full-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.
 
 Change
in Reporting Currency
 
 Effective
January 1, 2005, the Company changed its reporting currency from the U.S.
dollar to the Canadian dollar. The reason for this change was because a majority
of the Company’s assets and operations are located in Canada. All amounts set
forth in this filing are in Canadian Dollars, unless otherwise
indicated.
 
 Available
Information
  We file
electronically with the Securities and Exchange Commission our annual reports on
Form 10-K, quarterly reports on Form 10-Q, and current reports on Form 8-K,
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934. 
You may obtain a free copy of our reports and amendments to those reports on the
day of filing with the SEC by going to http://www.sec.gov.
  Table of Contents
 20
 ITEM
1A. RISK
FACTORS
 
 Risk
Factors
 
 Cautionary
Statement on Forward-Looking Statements
 
 We have
made and will make “forward-looking statements” within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934 in our 2006 Annual Report, in this Annual Report
on Form 10-K and in other contexts relating to future growth and
profitability targets and strategies designed to increase total shareholder
value. Forward-looking statements also include, but are not limited to,
information regarding our future economic and financial condition, the plans and
objectives of our management and our assumptions regarding our performance and
these plans and objectives.
 
 The
Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for
forward-looking statements to encourage companies to provide prospective
information, so long as those statements are identified as forward-looking and
are accompanied by meaningful cautionary statements identifying important
factors that could cause actual results to differ materially from those
discussed in the forward-looking statements. We desire to take advantage of the
“safe harbor” provisions of that Act.
 
 Some
forward-looking statements that we make in our 2008 Annual Report, in this
Annual Report on Form 10-K and in other contexts represent challenging
goals for our company, and the achievement of these goals is subject to a
variety of risks and assumptions and numerous factors beyond our control.
Important factors that could cause actual results to differ materially from the
forward-looking statements we make are described below. All forward-looking
statements attributable to us or persons working on our behalf are expressly
qualified in their entirety by the following cautionary statements.
 
 Going
Concern
 
 Our
auditors have expressed substantial doubt about our ability to continue as a
going concern, which may result in the loss of your entire investment. If we
discontinue operations, you will lose your entire investment.
 
 Our
business is capital intensive and will require additional financing which will
result in dilution to existing shareholders which would in turn reduce the share
price of earlier issued shares. Our operations are capital intensive and growth
will consume a substantial portion of available working capital. We may require
additional capital in order to fund our operations. We do not have any
commitments for additional financing and there can be no assurance that such
additional funding, if required, will be available, or if available, will be
available upon favorable terms. With respect to our ability to obtain financing
on favorable terms, we do not have significant assets to serve as loan
collateral. Still further, we presently do not have a sufficient cash flow to
qualify for reasonable debt financing. Insufficient funds may prevent us from
implementing our business strategy. In the event we raise additional funds
through the issuance of equity securities, dilution to the then existing
stockholders will result and future investors may be granted rights superior to
those of existing stockholders. Accordingly, such dilution would reduce the
share price of the earlier issued shares.
 
 Table of Contents
 21
 Lack
of operations, positive cash flow and profitability may continue which will
affect our ability to remain in business
 
 Since the
inception of the Company, we have been unable to generate positive cash flow or
profits in the industries in which we participate. If we do not generate
positive cash flow and hence become profitable, we may not be able to remain in
business.
 
 Uncertainty
of commercial success may affect our ability to remain in business
 
 With
respect to our revenue and profitability prospects, we may not be able to
achieve commercial success with our operations. Furthermore, our industry is
characterized by rapid change and growth. Accordingly, we may not be able to
keep up with the pace of change or fund its growth. If we fail to achieve
commercial success, we will continue to suffer net losses and we will have to go
out of business.
 
 Competition
may have an adverse effect on our business
 
 We are
subject to competition from other companies that may try to emulate or compete
with similar products or services. These competitors have been in the business
longer than us and may have large executive and operating staffs. Our prospects
may be adversely affected by competition from these companies. The introduction
of similar or superior products by current or future competitors could have a
material adverse effect on our business and financial condition.
 
 Dependence on management will affect
our profitability
 
 Future
success depends on the continued services of the Company’s management team. The
loss of any of their services would be detrimental and could have a material
adverse effect on the business, financial condition and results of operations.
Future success is also dependent on our ability to identify, hire, train and
retain other qualified managerial and other employees. Competition for these
individuals is intense and increasing. We may not be able to attract,
assimilate, or retain qualified managerial personnel and our failure to do so
could have a material adverse effect on the business, financial condition and
results of operations.
 
 This
is a highly speculative investment.
 
 Ownership
of our common stock is extremely speculative and involves a high degree of
economic risk, which may result in a complete loss of your investment. Only
persons who have no need for liquidity and who are able to withstand a loss of
all or substantially all of their investment should purchase our common
stock.
 
 For the
year ended December 31, 2008, we did not generate any income from any of our
projects.  We are not adequately capitalized to carry out our business
plan (subject to the risks inherent in such plan), and there can be no assurance
that we will have sufficient economic resources or that such resources will be
available to us on terms and at times that are necessary or acceptable, if at
all. There is no assurance that future revenues of the Company will ever be
significant or that the Company's operations will ever be
profitable.
 
 Table of Contents
 22
 You
will be diluted if we issue additional common stock, options to purchase common
stock and/or debt or equity securities convertible into common
stock.
  Future
offerings of debt securities, which would be senior to our common stock upon
liquidation, or equity securities, which could dilute our existing stockholders
and be senior to our common stock for the purposes of distributions, may have an
adverse effect on the value of our common stock.
 
 In the
future, we may attempt to increase our capital resources by making additional
offerings of equity or debt securities, including medium-term notes, senior or
subordinated notes and classes of preferred stock or common stock. Upon our
liquidation, holders of our debt securities, if any, and shares of preferred
stock, if any, and lenders with respect to other borrowings, if any, will
receive a distribution of our available assets prior to the holders of our
common stock. Additional equity offerings by us reduce the value of our common
stock. Any preferred stock we may issue would have a preference on distributions
that could limit our ability to make distributions to the holders of our common
stock. Because our decision to issue securities in any future offering will
depend on market conditions and other factors beyond our control, we cannot
predict or estimate the amount, timing or nature of our future offerings. Thus,
our stockholders bear the risk of our future offerings reducing the market price
of our common stock and diluting their stock holdings in the
Company.
 
 Results
may fluctuate and may not be indicative of future performance.
 
 Our
operating results may fluctuate and, therefore, you should not rely on current
or historical period results to be indicative of our performance in future
reporting periods.  Factors that could cause operating results to
fluctuate include, but are not limited to, variations in the costs of
identifying, negotiating and consummating acquisitions of businesses consistent
with our business plan; variations in and the timing of the recognition of net
realized gains or losses and changes in unrealized appreciation or depreciation;
the degree to which we encounter competition in our markets; and other general
economic and operational circumstances.
 
 Our
common stock price may be volatile.
 
 The
trading price of our common stock may fluctuate substantially. The price of the
common stock may be higher or lower than the price you pay for your shares,
depending on many factors, some of which are beyond our control and may not be
directly related to our operating performance. These factors include, but are
not limited to, the following:
 
 ·
              price
      and volume fluctuations in the overall stock market from time to
      time;
 
 ·
              significant
      volatility in the market price and trading volume of securities of
      financial services companies;
 
 ·
              volatility
      resulting from trading in derivative securities related to our common
      stock including puts, calls, long-term equity anticipation securities
      (“LEAPs”), or short trading
positions;
 
 ·
              actual
      or anticipated changes in our earnings or fluctuations in our operating
      results or changes in the expectations of securities
    analysts;
 
 ·
              general
      economic conditions and trends;
 
 ·
              loss
      of a major funding source; or
 
 ·
              departures
      of key personnel.
 
 Table of Contents
 23
 OTC
Bulletin Board.
 
 Our
common stock is quoted on the OTC Bulletin Board (“OTCBB”).  The OTCBB
is an inter-dealer, over-the-counter market that provides significantly less
liquidity than the NASDAQ Stock Market or national or regional
exchanges.  Securities traded on the OTCBB are typically thinly
traded, highly volatile, have fewer markets and are not followed by
analysts.  The SEC's order handling rules, which apply to
NASDAQ-listed securities, do not apply to securities quoted on the
OTCBB.  Quotes for stocks included on the OTCBB are not listed in
newspapers.  Therefore, prices for securities traded solely on the
OTCBB may be difficult to obtain and holders of our common stock may be unable
to sell their shares at acceptable prices.
 
 Penny
Stock Rules.
 
 Trading
in our securities will be subject to the “penny stock” rules for the foreseeable
future.  The SEC has adopted regulations that generally define a penny
stock to be any equity security that has a market price of less than $5.00 per
share, subject to certain exceptions.  These rules require that any
broker-dealer who recommends our securities to persons other than prior
customers and accredited investors must, prior to the sale, make a special
written suitability determination for the purchaser and receive the purchaser's
written agreement to execute the transaction.  Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock
market and the risks associated with trading in the penny stock
market.  In addition, broker-dealers must disclose commissions payable
to both the broker-dealer and the registered representative and current
quotations for the securities they offer.  The additional burdens
imposed upon broker-dealers by such requirements may discourage broker-dealers
from recommending transactions in our securities, which could severely limit the
liquidity of our common stock and consequently adversely affect the market price
of our common stock.
 
 Changes
in the law or regulations that govern us could have a material impact on us or
our operations.
 
 Our
business operations are subject to various laws and regulations concerning
consumer financing.  We are also regulated by the SEC and impacted by
regulations of certain state regulatory agencies and self-regulatory
organizations.  Any change in the law or regulations that govern our
business could have a material impact on us or our operations. Laws and
regulations may be changed from time to time, and the interpretations of the
relevant laws and regulations also are subject to change, which may have a
material effect on our operations.
 
 No
dividends.
 
 Holders
of our securities will only be entitled to dividends when, as and if declared by
our Board of Directors.  We do not expect to generate a sufficient
cash surplus which would be available for dividends in the foreseeable
future.
  Table of Contents
 24
 ITEM1B.  UNRESOLVED STAFF
COMMENTS
 
 None.
 
 ITEM
2. PROPERTIES
 
 Or
principal executive office is located at 10-20172 113B Avenue Maple Ridge,
British Columbia Canada V2X 0Y9. Our telephone number is (604) 460-8487. We
rent, on a monthly basis, approximately 1915 square feet of industrial/office
space for $1,830 per month. The space we lease is utilized for offices and for
production purposes. It is our belief that the various spaces are adequate for
our immediate needs. Additional space may be required as we expand our wind farm
activities. We do not foresee any significant difficulties in obtaining any
required additional facilities.
 
 Our China
offices are located near our active project as indicated below:
 
 Zhanjiang Windcor Windfarm
Ltd:
 
 Address:
                Room
      E12, E13 Flourishing Silver Masion, 12 Lvhua
      Road,  Zhanjiang Guangdong, ChinaOffice
      Size:
                978
      square feetTotal:
                $1789.00
      (approximate based on actual amount paid in Chinese currency)Lease
      term:
                Two
      years (November 2008 to November 2010)
                  (Original
      Lease Date April 2006)
 
 Yangxi
Welwind Windfarm Ltd:
  Address:
              No.15, Building 6,
      Dongyi Garden, Dongfeng 2 Road, Yanjiang Guangdong, ChinaBuilding
    area:
              657 Square
      FeetRent:
              $420.00 per month
      (approximate based on actual amount paid in Chinese currency)Lease
      term:
              Two years (May 2008
      to May 2010)
  ITEM
3. LEGAL
PROCEEDINGS
 
 We know
of no material, active or pending legal proceedings against us, our subsidiaries
or our property, nor are we involved as a plaintiff in any material proceedings
or pending litigation. There are no proceedings in which any of our directors,
officers or affiliates, or any registered or beneficial shareholders are an
adverse party or have a material interest adverse to us.
 
 ITEM4. SUBMISSION OF MATTERS
TO A VOTE OF SECURITY HOLDERS
 
 No
matters were submitted to a vote of security holders during our fourth fiscal
quarter ended December 31, 2008.
  Table of Contents
 25
 PART
II
  ITEM
      5.
              Market
      for the Company’s Common Equity, Related Stockholder Matters and Issuer
      Purchases of Equity Securities
  Price
Range of Our Common Stock
  Our
shares of common stock commenced trading on the OTC Bulletin Board (“OTCBB”) on
February 24, 2003.  Prior to November 01, 2006, our trading symbol was
“VITS.” On November 01, 2006, to reflect our new name, our trading symbol was
changed to “WWEI”. The OTCBB is a regulated quotation service that displays
real-time quotes, last-sale prices, and volume information in over-the-counter
equity securities. An OTCBB equity security generally is any equity that is not
listed or traded on NASDAQ or a national securities exchange. The reported high
and low bid and ask prices for the common stock are shown below for the period
from January 1, 2007 through December 31, 2008.
  BidHigh
                  
                  Low2007
      Fiscal YearFirst
      Quarter
                  
                  $
                  0.14
                  
                  $
                  0.07Second
      Quarter
                  
                  $
                  0.23
                  
                  $
                  0.09Third
      Quarter
                  
                  $
                  0.13
                  
                  $
                  0.06Fourth
      Quarter
                  
                  $
                  0.18
                  
                  $
                  0.05
  BidHigh
                  
                  Low2008
      Fiscal YearFirst
      Quarter
                  
                  $
                  0.12
                  
                  $
                  0.06Second
      Quarter
                  
                  $
                  0.19
                  
                  $
                  0.04Third
      Quarter
                  
                  $
                  0.14
                  
                  $
                  0.05Fourth
      Quarter
                  
                  $
                  0.10
                  
                  $
                  0.04
 
  Our
common stock is subject to rules adopted by the Commission regulating broker
dealer practices in connection with transactions in “penny stocks.” Those
disclosure rules applicable to “penny stocks” require a broker dealer, prior to
a transaction in a “penny stock” not otherwise exempt from the rules, to deliver
a standardized list disclosure document prepared by the Securities and Exchange
Commission. That disclosure document advises an investor that investment in
“penny stocks” can be very risky and that the investor’s salesperson or broker
is not an impartial advisor but rather paid to sell the shares. The disclosure
contains further warnings for the investor to exercise caution in connection
with an investment in “penny stocks,” to independently investigate the security,
as well as the salesperson with whom the investor is working and to understand
the risky nature of an investment in this security. The broker dealer must also
provide the customer with certain other information and must make a special
written determination that the “penny stock” is a suitable investment for the
purchaser and receive the purchaser’s written agreement to the transaction.
Further, the rules require that, following the proposed transaction, the broker
provide the customer with monthly account statements containing market
information about the prices of the securities.
  These
disclosure requirements may have the effect of reducing the level of trading
activity in the secondary market for our common stock. Many brokers may be
unwilling to engage in transactions in our common stock because of the added
disclosure requirements, thereby making it more difficult for stockholders to
dispose of their shares.
  Table of Contents
 26
 Holders
  As of May
13, 2009, there were 121 holders of record of our common stock.
  Dividends
  We have
not paid any cash dividends on our common stock or preferred stock since
inception and presently anticipate that all earnings, if any, will be retained
for development of our business and that no dividends on our common stock or
preferred will be declared in the foreseeable future. Any future dividends will
be subject to the discretion of our Board of Directors and will depend upon,
among other things, future earnings, operating and financial condition, capital
requirements, general business conditions and other pertinent facts. Therefore,
there can be no assurance that any dividends on our common stock or preferred
stock will be paid in the future.
  Securities
Authorized for Issuance Under Equity Compensation Plans
  On
February 4, 2008, the board of directors adopted the 2008 Equity Incentive Plan.
The 2008 Equity Incentive Plan reserves 20,000,000 shares of our common stock
for issuance in connection with stock options, stock awards and other
equity-based awards.
 
 Recent
Sales of Unregistered Securities
  None,
other than those set forth in the Form 8-Ks filed during the year ended December
31, 2008, and subsequently through the date of this Report.
 
 ITEM
6.SELECTED
FINANCIAL DATA
 
 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
7. Management's
Discussion and Analysis or Plan of Operation.
 
 The
following discussion should be read in conjunction with our audited financial
statements and notes thereto included herein. In connection with, and because we
desire to take advantage of, the “safe harbor” provisions of the Private
Securities Litigation Reform Act of 1995, we caution readers regarding certain
forward looking statements in the following discussion and elsewhere in this
report and in any other statement made by, or on our behalf, whether or not in
future filings with the Securities and Exchange Commission. Forward-looking
statements are statements not based on historical information and which relate
to future operations, strategies, financial results or other developments.
Forward looking statements are necessarily based upon estimates and assumptions
that are inherently subject to significant business, economic and competitive
uncertainties and contingencies, many of which are beyond our control and many
of which, with respect to future business decisions, are subject to change.
These uncertainties and contingencies can affect actual results and could cause
actual results to differ materially from those expressed in any forward looking
statements made by, or our behalf. We disclaim any obligation to update
forward-looking statements.
 
 Table of Contents
 27
 Historical
Background and Overview
 
 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.
  The
worldwide demand for electricity is ever growing. At Welwind Energy
International Corp., we are committed to providing the best resource option
available for renewable energy, protecting our environment, empowering
communities, bolstering local economies and respecting the rights of future
generations.
 
 Welwind
Energy International was founded to build, own and operate wind farms on an
international scale. Our goal is to become a leading provider of clean energy
products for the residential, business and governmental
consumer.
 
 Results
of Operations
  Year
Ended December 31, 2008 Compared to Year Ended December 31, 2007
  The
following table summarizes the Company’s results of operations. The table and
the discussion below should be read in conjunction with the audited financial
statements and the notes thereto appearing elsewhere in this
report.
  Results
of Operations
 For
      the Year Ended December 31, 2008
                
                
                Increase
      (Decrease) from Prior Period
                
                
                For
      the Year Ended December 31, 2007$
                
                %
                
                $Operating
      Expenses
                
                
                5,067,886
                
                
                
                (2
                %)
                
                
                5,174,022Net
      Loss from Continuing Operations
                
                
                (5,067,886
                )
                
                
                (2
                %)
                
                
                (5,174,022
                )Interest
      Income (Expense)
                
                
                (73,569
                )
                
                
                38
                %
                
                
                (53,440
                )Other
      Income (Expense)
                
                
                -
                
                
                
                (100
                %)
                
                
                (1,714,187
                )Net
      Loss before Discontinued Operations
                
                
                (5,141,455
                )
                
                
                (26
                %)
                
                
                (6,941,649
                )Discontinued
      Operations
                
                
                (4,923
                )
                
                
                (98
                %)
                
                
                (249,758
                )Net
      Loss for the Year
                
                
                (5,146,378
                )
                
                
                (28
                %)
                
                
                (7,191,407
                )
  Table of Contents
 28
 General
and Administrative Expenses
  During
the year ended December 31, 2008, the Company incurred general and
administrative expenses of $5,067,886 compared to $5,174,022 in the previous
year. This minimal 2% decrease in general and administrative expenses of
$106,136 was mainly attributable to a slight decrease in general office
operating costs.
  Net
Loss
  During
the year ended December 31, 2008, the Company incurred a net loss of $5,146,378
compared to a net loss of $7,191,407 in the previous year. The 28% decrease of
$2,045,029 in net loss was mainly attributable to a write-off of goodwill and
customer relationships of $1,714,187 in 2007 (nil in 2008).  In
addition, discontinued operations decreased by 244,835 from $249,758 in 2007 to
$4,923 in 2008.
  LIQUIDITY
AND CAPITAL RESOURCES
  As at
December 31, 2008, the Company had $28,734 in cash, total current assets of
$46,823, and current liabilities of $1,356,400. The Company may require
additional capital investments or borrowed funds to meet cash flow projections
and carry forward our future business objectives.  There can be no
assurance that the Company will be able to raise capital from outside sources in
sufficient amounts to fund the business.
 
 The
failure to secure adequate outside funding would have an adverse affect on our
expansion plan of operation and results therefrom and a corresponding negative
impact on shareholder liquidity.
  During
the year ended December 31, 2008, the Company used $710,192 of net cash flows in
operating activities. However, the Company was able to fund operations by
receiving cash proceeds of $501,052 from common stock
subscriptions.
 
 Uses
of Liquidity
 The
Company's cash requirements through the end of fiscal 2008 are primarily to fund
operations and to complete the wind farm projects in China.
  Sources of
Liquidity
 The
Company’s primary source of liquidity for its short-term cash needs is expected
to be cash flow generated from operations, and cash and cash equivalents
currently on hand. The Company believes that will be able to borrow additional
funds if needed.
 Table of Contents
 29
 Cash
Requirements
 
 Our cash
on hand as of December 31, 2008 is $28,734. We do not have sufficient cash on
hand to pay the costs of our operations as projected to twelve (12) months or
less or to fund our operations for that same period of time. We will require
additional financing in order to proceed with some or all of our goals as
projected over the next twelve (12) months. We presently do not have any
arrangements for additional financing, and no potential lines of credit or
sources of financing are currently available for the purpose of proceeding with
any of our goals projected over the next twelve (12) months and
beyond.
  Any
additional growth of the Company will require additional cash infusions. We may
face expenses or other circumstances such that we will have additional financing
requirements. In such event, the amount of additional capital we may need to
raise will depend on a number of factors. These factors primarily include the
extent to which we can achieve revenue growth, the profitability of such
revenues, operating expenses, research and development expenses, and capital
expenditures. Given the number of programs that we have ongoing and not
complete, it is not possible to predict the extent or cost of these additional
financing requirements.
 
 Notwithstanding
the numerous factors that our cash requirements depend on, and the uncertainties
associated with each of the major revenue opportunities that we have, we believe
that our plan of operation can build long-term value if we are able to
demonstrate clear progress toward our objectives.
 
 Progress
in the development of our business plan will likely lend credibility to our plan
to achieve profitability. We hired several members to our sales, marketing,
research and development, regulatory and administrative staff during the course
of 2008 in order to fully implement our plans for growth.
 
 The
Company does not anticipate any contingency upon which it would voluntarily
cease filing reports with the SEC, even though it may cease to be required to do
so. It is in the compelling interest of this Registrant to report its affairs
quarterly, annually and currently, as the case may be, generally to provide
accessible public information to interested parties, and also specifically to
maintain its eligibility for the OTCBB.
 
 The
failure to secure any necessary outside funding would have an adverse affect on
our development and results there from and a corresponding negative impact on
shareholder liquidity.
  Future
Financings
 
 Our plan
of operation calls for significant expenses in connection with the
implementation of our business plan over the course of the next 24 months. For
the next twelve months, management anticipates that the minimum cash
requirements to fund our proposed goals and our continued operations will exceed
$1,000,000 As such, we do not have sufficient funds on hand to meet our planned
expenditures over the next 24 months. Therefore, we will require and will need
to seek additional financing to meet our planned expenditures.
  Obtaining
additional financing would be subject to a number of factors, including
development of our business plan and interest in our company. These factors may
make the timing, amount, terms or conditions of additional financing unavailable
to us. Since our inception, we have relied on our revenues, to the extent
generated, to fund our operations and have used our common stock to raise money
for our operations as well.
 
 Table of Contents
 30
 Off-Balance
Sheet Arrangements
  We do not
have any 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 our
investors.
  Critical
Accounting Policies
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make a wide variety of estimates
and assumptions that affect (i) the reported amounts of assets and liabilities
and disclosure of contingent assets and liabilities as of the date of the
financial statements, and (ii) the reported amounts of revenues and expenses
during the reporting periods covered by the financial statements. Our management
routinely makes judgments and estimates about the effect of matters that are
inherently uncertain. As the number of variables and assumptions affecting the
future resolution of the uncertainties increases, these judgments become even
more subjective and complex. The most significant accounting policies that are
most important to the portrayal of our current financial condition and results
of operations are as follows:
  Revenue
Recognition
  The
Company recognizes revenue in accordance with Securities and Exchange Commission
Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial
Statements”.
  Acquired
Goodwill
  Goodwill
represents the excess of the purchase price of acquired assets over the fair
values of the identifiable assets acquired and liabilities assumed. Pursuant to
SFAS No. 141, “Business Combinations” the Company does not amortize goodwill,
but tests for impairment of goodwill on an annual basis and at any other time if
events occur or circumstances indicate that the carrying amount of goodwill may
not be recoverable. Circumstances that could trigger an impairment test include
but are not limited to: a significant adverse change in the business climate or
legal factors; an adverse action or assessment by a regulator; unanticipated
competition and loss of key personnel. Goodwill is tested for impairment using
present value techniques of estimated future cash flows; or using valuation
techniques based on multiples of earnings. If the carrying amount of goodwill
exceeds the implied fair value of that goodwill, an impairment loss is charged
to operations.
 
 During
the fourth quarter of the fiscal year ended December 31, 2007 management
performed an assessment of the fair value of WEIC. The Company recognized an
impairment loss of $1,469,171 relating to the goodwill since the carrying value
exceeded the assessed fair value. Management believes that there is not a
reasonable level of certainty as to the timing or amount of future cash flows
related to its wind power project.
  Table of Contents
 31
 Customer
Relationships
  Customer
relationships consist of the relationships the Company has attained with the
various levels of governments in China, which resulted in the entering of two
agreements. The Company used the replacement cost approach for accounting for
customer relationships. This approach uses an estimate of what a notional
purchaser would likely pay for the intangible asset in order to be in the same
position of the Company at the date of the closing of the Asset Purchase
Agreement. The Company will amortize the carrying value of the customer
relationships on a straight-line basis over the remaining estimated useful lives
of the wind power plants upon commencement of the commercial production of
electricity.  An impairment allowance was taken against the full
amount of these customer relationships in 2007.
 
 RECENT
ACCOUNTING PRONOUNCEMENTS
  In June
2008, the FASB issued FASB Staff Position No. EITF 03-6-1, Determining Whether Instruments
Granted In Share-Based Payment Transactions Are Participating Securities,
(“FSP 03-6-1”), which states that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) are participating securities and shall be included in the computation
of earnings per share pursuant to the two-class method described in
SFAS No. 128, Earnings Per Share.
FSP 03-6-1 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those years.
All prior period earnings per share data presented shall be adjusted
retrospectively (including interim financial statements, summaries of earnings,
and selected financial data) to conform with the provisions of FSP 03-6-1.
FSP 03-6-1 is not expected to have an impact on our financial
statements
  In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”.  This identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles
(“GAAP”).  SFAS 162 directs the GAAP hierarchy to the entity, not the
independent auditors, as the entity is responsible for selecting accounting
principles for financial statements that are presented in conformity with
GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to remove the GAAP
hierarchy from the auditing standards.  SFAS 162 is not expected to
have an impact on our financial statements.
  In March
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161,
“Disclosures about Derivative
Instruments and Hedging Activities – an amendment to FASB Statement No.
133”. SFAS No. 161 is intended to improve financial standards for
derivative instruments and hedging activities by requiring enhanced disclosures
to enable investors to better understand their effects on an entity's financial
position, financial performance, and cash flows. Entities are required to
provide enhanced disclosures about: (a) how and why an entity uses derivative
instruments; (b) how derivative instruments and related hedged items are
accounted for under Statement 133 and its related interpretations; and (c) how
derivative instruments and related hedged items affect an entity’s financial
position, financial performance, and cash flows.  It is effective for
financial statements issued for fiscal years beginning after November 15, 2008,
with early adoption encouraged.  The Company is currently evaluating
the impact of SFAS No. 161 on its financial statements, and the adoption of this
statement is not expected to have a material effect on the Company’s financial
statements.
  Table of Contents
 32
 In
December 2007, the FASB issued SFAS No. 141R, “Business
Combinations”.  This statement replaces SFAS 141 and defines
the acquirer in a business combination as the entity that obtains control of one
or more businesses in a business combination and establishes the acquisition
date as the date that the acquirer achieves control. SFAS 141R requires an
acquirer to recognize the assets acquired, the liabilities assumed, and any
non-controlling interest in the acquiree at the acquisition date, measured at
their fair values as of that date. SFAS 141R also requires the acquirer to
recognize contingent consideration at the acquisition date, measured at its fair
value at that date. This statement is effective for fiscal years, and interim
periods within those fiscal years, beginning on or after December 15, 2008, and
earlier adoption is prohibited. The adoption of this statement is not expected
to have a material effect on the Company's financial statements.
  In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements Liabilities –an Amendment of ARB No.
51”.  This statement amends ARB 51 to establish accounting and
reporting standards for the Noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. This statement is effective for fiscal years,
and interim periods within those fiscal years, beginning on or after December
15, 2008, and earlier adoption is prohibited. The adoption of this statement is
not expected to have a material effect on the Company's financial
statements.
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial
Assets and Financial Liabilities – Including an Amendment of FASB Statement No.
115”.  This statement permits entities to choose to measure
many financial instruments and certain other items at fair value. Most of the
provisions of SFAS No. 159 apply only to entities that elect the fair value
option. However, the amendment to SFAS No. 115 “Accounting for Certain Investments
in Debt and Equity Securities” applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity’s first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, “Fair Value Measurements”. The
adoption of this statement is not expected to have a material effect on the
Company's financial statements.
 
 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.
 
 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
7A. 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.
  Table of Contents
 33
 Item
8. Financial Statements
and Supplementary Data
 
 PART
1.  FINANCIAL STATEMENTS
 Welwind
Energy International Corporation
 December
31, 2008
  
 Report of
      Independent Registered Public Accounting Firm
                
                F-1Consolidated
      Balance Sheets as of December 31, 2008 and 2007
                
                F-2Consolidated
      Statements of Operations for the years then ended December 31, 2008 and
      2007and
      the period of inception (August 17, 2006) through December 31,
      2008
                
                F-3Consolidated
      Statements of Cash Flows for the years then ended December 31, 2008 and
      2007and
      the period of inception (August 17, 2006) through December 31,
      2008
                
                F-4Consolidated
      Statements of Stockholders’ Decifit for the years then ended December 31,
      2008 and 2007
                
                F-5Notes to the
      Consolidated Financial Statements
                
                F-6
 Table of Contents
 34
 REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
the Board of Directors
 Welwind
Energy International Corporation
 
 We
have audited the accompanying consolidated balance sheet of Welwind Energy
International, Corporation and its subsidiaries (a development stage company) as
of December 31, 2008 and 2007, and the related consolidated statements of
operations, changes in stockholders' equity (deficit), and cash flows for the
years then ended. The financial statements for the period from August 17, 2006
(inception) through December 31, 2006, were audited by other auditors whose
report dated March 16, 2007 expressed unqualified opinions on those statements.
The consolidated financial statements for the period August 17, 2006 (inception)
through December 31, 2006, include total revenues of $0 and a net loss of
$1,701,033. Our opinion on the consolidated statements of expenses,
stockholders' deficit and cash flows for the period August 17, 2006 (inception)
through December 31, 2006, insofar as it relates to amounts for prior periods
through December 31, 2006, is based solely on the reports of other auditors.
These financial statements are the responsibility of the Company's management.
Our responsibility is to express an opinion on these consolidated financial
statements based on our audits.
 
 We
conducted our audits 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. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's internal control over financial
reporting. Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements, 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 consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Welwind Energy
International Corporation as of December 31, 2008 and 2007, and the results of
its operations, changes in stockholders' equity (deficit) and cash flows for the
periods then in conformity with accounting principles generally accepted in the
United States of America.
 
 The
accompanying financial statements have been prepared assuming that the Company
will continue as a going concern. As discussed in Note 2 to the financial
statements, the Company has insufficient working capital, which raises
substantial doubt about its ability to continue as a going concern. Management's
plans regarding those matters also are described in Note 2. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
 
 As
discussed in Note 11 to the financial statements, the Company has restated its
financial statements as of and for the year ended December 31, 2007 to correct
errors. Unaudited restatement information is presented in Note 11 for the year
ended December 31, 2007.
 
 
 /s/
M&K CPAS, PLLC
 www.mkacpas.com
 Houston,
Texas
 May
13, 2009
 
 
 Table of Contents
 35
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Balance Sheets
 (Expressed
in Canadian Dollars)
 December
      31,
                                    2008
                                    $
                                  
                                  
                                  December
      31,
                                    2007
                                    (Restated)
                                    $ASSETSCurrent
      AssetsCash
                                  
                                  
                                  28,734
                                  
                                  
                                  
                                  18,211Taxes
      recoverable
                                  
                                  
                                  16,985
                                  
                                  
                                  
                                  17,898Prepaid
      expenses
                                  
                                  
                                  1,104
                                  
                                  
                                  
                                  3,830Total
      Current Assets
                                  
                                  
                                  46,823
                                  
                                  
                                  
                                  39,939Property
      and equipment, net
                                  
                                  
                                  569,039
                                  
                                  
                                  
                                  514,397Assets
      held for sale
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,224Total
      Assets
                                  
                                  
                                  615,862
                                  
                                  
                                  
                                  556,560LIABILITIES
      AND STOCKHOLDERS’ DEFICITCurrent
      LiabilitiesAccounts
      payable
                                  
                                  
                                  107,507
                                  
                                  
                                  
                                  129,618Accrued
      liabilities
                                  
                                  
                                  175,090
                                  
                                  
                                  
                                  245,117Due
      to related parties
                                  
                                  
                                  1,073,803
                                  
                                  
                                  
                                  765,426Current
      liabilities of discontinued operations
                                  
                                  
                                  -
                                  
                                  
                                  
                                  14,038Total
      Liabilities
                                  
                                  
                                  1,356,400
                                  
                                  
                                  
                                  1,154,199Commitments and
      ContingenciesStockholders’
      Deficita)Preferred
      Stock:Authorized:
      10,000,000 shares, US$0.001 par value
                                    Issued
      and outstanding: 10,000,000 shares at December 31, 2008 and
      2007
                                  
                                  
                                  11,137
                                  
                                  
                                  
                                  11,137b)Common
      Stock:Authorized:
      290,000,000 shares, US$0.001 par value
                                    Issued
      and outstanding: 198,064,837 and 147,572,395 shares  at December
      31, 2008 and 2007, respectively
                                  
                                  
                                  218,321
                                  
                                  
                                  
                                  164,658Additional
      paid-in capital
                                  
                                  
                                  19,442,170
                                  
                                  
                                  
                                  14,492,354Stock
      subscriptions receivable
                                  
                                  
                                  -
                                  
                                  
                                  
                                  -Deficit
      accumulated during development stage
                                  
                                  
                                  (20,412,166
                                  )
                                  
                                  
                                  (15,265,788
                                  )Total
      Stockholders’ Deficit
                                  
                                  
                                  (740,538
                                  )
                                  
                                  
                                  (597,639
                                  )Total
      Liabilities and Stockholders’ Deficit
                                  
                                  
                                  615,862
                                  
                                  
                                  
                                  556,560
  
 Table of Contents
 36
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Operations
 (Expressed
in Canadian Dollars)
 For
      the
                                  Year
      Ended
                                  December
      31,
                                  2008
                                  $
                                
                                
                                For
      the
                                  Year
      Ended
                                  December
      31,
                                  2007
                                  (Restated)
                                  $
                                
                                
                                Accumulated
      from
                                  August
      17, 2006
                                  (Date
      of inception of
                                  Development
      Stage)
                                  to
                                  December
      31,
                                  2008
                                  $Revenue
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Operating
      ExpensesGeneral
      and Administrative
                                
                                
                                (5,067,886
                                )
                                
                                
                                (5,174,022
                                )
                                
                                
                                (18,226,244
                                )Net
      Loss from Continuing Operations
                                
                                
                                (5,067,886
                                )
                                
                                
                                (5,174,022
                                )
                                
                                
                                (18,226,244
                                )Interest
      Income (Expense)
                                
                                
                                (73,569
                                )
                                
                                
                                (53,440
                                )
                                
                                
                                (127,009
                                )Other
      Income (Expense)Impairment
      of Goodwill
                                
                                
                                -
                                
                                
                                
                                (1,714,187
                                )
                                
                                
                                (1,714,187
                                )Loss
      on Disposal of Property and Equipment
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                (1,000
                                )Net
      Loss before Discontinued
                                  Operations
                                
                                
                                (5,141,455
                                )
                                
                                
                                (6,941,649
                                )
                                
                                
                                (20,068,440
                                )Discontinued
      Operations (Note 11)
                                
                                
                                (4,923
                                )
                                
                                
                                (249,758
                                )
                                
                                
                                (343,726
                                )Net
      Loss and Comprehensive Loss for
                                  the
      Period
                                
                                
                                (5,146,378
                                )
                                
                                
                                (7,191,407
                                )
                                
                                
                                (20,412,166
                                )Net
      Loss Per Common ShareContinuing
      Operations – Basic and Diluted
                                
                                
                                (0.03
                                )
                                
                                
                                (0.05
                                )Discontinued
      Operations – Basic and Diluted
                                
                                
                                (0.00
                                )
                                
                                
                                (0.00
                                )Weighted
      Average Number of Common Shares Outstanding
                                
                                
                                170,633,971
                                
                                
                                
                                140,971,469
 
 
 Table of Contents
 37
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 (Expressed
in Canadian Dollars)
 
 For
      the
                                      Year
      Ended
                                      December 31,
                                      2008
                                      $
                                    
                                    
                                    For
      the
                                      Year
      Ended
                                      December
      31,
                                      2007
                                      (Restated)
                                      $
                                    
                                    
                                    Accumulated
      from August 17, 2006 (Date of inception of Development Stage)
      to
                                      December
      31, 2008
                                      $Operating
      ActivitiesNet
      loss for the period
                                    
                                    
                                    (5,146,378
                                    )
                                    
                                    
                                    (7,191,407
                                    )
                                    
                                    
                                    (20,412,166
                                    )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Amortization
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    8,066Foreign
      exchange loss and other
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    15,410Stock
      issued for compensation and services
                                    
                                    
                                    3,504,002
                                    
                                    
                                    
                                    3,903,849
                                    
                                    
                                    
                                    14,731,067Loss
      on stock issued for debt
                                    
                                    
                                    539,028
                                    
                                    
                                    
                                    49,196
                                    
                                    
                                    
                                    588,224Gain
      on cancellation of shares
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (572,901
                                    )
                                    
                                    
                                    (572,901
                                    )Write-off
      of subscription receivable
                                    
                                    
                                    -
                                    
                                    
                                    
                                    770,310
                                    
                                    
                                    
                                    770,310Imputed
      interest on shareholder loans
                                    
                                    
                                    73,569
                                    
                                    
                                    
                                    53,440
                                    
                                    
                                    
                                    127,009Depreciation
      expense
                                    
                                    
                                    20,034
                                    
                                    
                                    
                                    18,315
                                    
                                    
                                    
                                    38,349Impairment
      loss
                                    
                                    
                                    -
                                    
                                    
                                    
                                    1,714,187
                                    
                                    
                                    
                                    1,714,187Changes
      in operating assets and liabilities:Taxes
      recoverable
                                    
                                    
                                    913
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    913Accounts
      receivable
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (4,062
                                    )
                                    
                                    
                                    (16,985
                                    )Inventory
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -Prepaid
      expenses and other assets
                                    
                                    
                                    4,950
                                    
                                    
                                    
                                    646
                                    
                                    
                                    
                                    (1,104
                                    )Accounts
      payable and accrued liabilities
                                    
                                    
                                    293,690
                                    
                                    
                                    
                                    425,459
                                    
                                    
                                    
                                    405,057Net
      Cash Flows Provided (Used) In Operating Activities
                                    
                                    
                                    (710,192
                                    )
                                    
                                    
                                    (832,968
                                    )
                                    
                                    
                                    (2,604,564
                                    )Investing
      ActivitiesCash
      acquired
                                    
                                    
                                    -
                                    
                                    
                                    
                                    -
                                    
                                    
                                    
                                    2,194Purchase
      and construction of equipment
                                    
                                    
                                    (74,676
                                    )
                                    
                                    
                                    (320,278
                                    )
                                    
                                    
                                    (614,223
                                    )Net
      Cash Flows Used In Investing Activities
                                    
                                    
                                    (74,676
                                    )
                                    
                                    
                                    (320,278
                                    )
                                    
                                    
                                    (612,029
                                    )Financing
      ActivitiesProceeds
      from subscriptions and issuance of stock
                                    
                                    
                                    501,052
                                    
                                    
                                    
                                    381,295
                                    
                                    
                                    
                                    2,165,810Borrowings
      on debt- related party
                                    
                                    
                                    308,377
                                    
                                    
                                    
                                    631,277
                                    
                                    
                                    
                                    1,537,852Principal
      payments on debt
                                    
                                    
                                    -
                                    
                                    
                                    
                                    (464,049
                                    )
                                    
                                    
                                    (464,049
                                    )Net
      Cash Flows Provided By Financing Activities
                                    
                                    
                                    809,429
                                    
                                    
                                    
                                    548,523
                                    
                                    
                                    
                                    3,239,613Decrease
      in Cash from Discontinued Operations
                                    
                                    
                                    (14,038
                                    )
                                    
                                    
                                    19,752
                                    
                                    
                                    
                                    5,714Increase
      (Decrease) in Cash
                                    
                                    
                                    10,523
                                    
                                    
                                    
                                    (584,971
                                    )
                                    
                                    
                                    28,734Cash
      – Beginning of Period
                                    
                                    
                                    18,211
                                    
                                    
                                    
                                    603,182
                                    
                                    
                                    
                                    -Cash
      – End of Period
                                    
                                    
                                    28,734
                                    
                                    
                                    
                                    18,211
                                    
                                    
                                    
                                    28,734Supplementary
      DisclosuresInterest
      paid
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –Income
      taxes paid
                                    
                                    
                                    –
                                    
                                    
                                    
                                    –Non-cash
      Investing and Financing ActivitiesShares
      issued for finders fee
                                    
                                    
                                    -Shares issued to settle
      debt
                                    
                                    
                                    385,828
                                    
                                    
                                    
                                    215,848
  
 Table of Contents
 38
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statement of Stockholders’ Equity (Deficit)
 From
December 31, 2006 to December 31, 2008
 (Expressed
in Canadian Dollars)
 
 Preferred
      Stock
                    
                    
                    Common
      Stock#
      of
                      shares
                    
                    
                    Amount
                    
                    
                    #
      of
                      Shares
                    
                    
                    Amount
                    
                    
                    Additional
                      Paid-in
                      Capital
                    
                    
                    Stock
      subscriptions receivable
                    
                    
                    Accumulated
                      Deficit
                    
                    
                    TotalBalance,
      December 31, 2006
                    
                    
                    10,000,000
                    
                    
                    $
                    11,137
                    
                    
                    
                    128,583,583
                    
                    
                    $
                    144,875
                    
                    
                    $
                    12,274,139
                    
                    
                    $
                    (1,151,605
                    )
                    
                    $
                    (8,074,381
                    )
                    
                    $
                    3,204,165Common
      stock issued for services
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    26,982,255
                    
                    
                    
                    28,876
                    
                    
                    
                    2,461,173
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    2,490,048Common
      stock issued for settlement of debt
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    2,006,557
                    
                    
                    
                    2,366
                    
                    
                    
                    265,044
                    
                    
                    
                    -
                    
                    
                    
                    –
                    
                    
                    
                    267,410Common
      stock subscriptions received
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    381,295
                    
                    
                    
                    –
                    
                    
                    
                    381,295Cancellation
      of shares
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    (10,000,000
                    )
                    
                    
                    (11,459
                    )
                    
                    
                    (561,442
                    )
                    
                    
                    -
                    
                    
                    
                    –
                    
                    
                    
                    (572,901
                    )Write
      off of subscriptions receivable
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    -
                    
                    
                    
                    770,310
                    
                    
                    
                    –
                    
                    
                    
                    770,310Imputed
      Interest on shareholder loan
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    53,440
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    53,440Net
      loss for the year
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    (7,191,407
                    )
                    
                    
                    (7,191,407
                    )Balance,
      December 31, 2007
                      (Restated)
                    
                    
                    10,000,000
                    
                    
                    $
                    11,137
                    
                    
                    
                    147,572,395
                    
                    
                    $
                    164,658
                    
                    
                    $
                    14,492,354
                    
                    
                    $
                    -
                    
                    
                    $
                    (15,265,788
                    )
                    
                    $
                    (
      597,639
                    )Common
      stock issued for cash
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    10,000,000
                    
                    
                    
                    10,098
                    
                    
                    
                    490,954
                    
                    
                    
                    -
                    
                    
                    
                    –
                    
                    
                    
                    501,052Common
      stock issued for services
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    30,992,442
                    
                    
                    
                    31,711
                    
                    
                    
                    3472291
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    3,504,002Common
      stock issued for settlement of debt
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    9,500,000
                    
                    
                    
                    11,854
                    
                    
                    
                    913,002
                    
                    
                    
                    -
                    
                    
                    
                    –
                    
                    
                    
                    924,856Imputed
      Interest on shareholder loan
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    73,569
                    
                    
                    
                    -
                    
                    
                    
                    -
                    
                    
                    
                    73,569Net
      loss for the year
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    –
                    
                    
                    
                    (5,146,378
                    )
                    
                    
                    (5,146,378
                    )Balance,
      December 31, 2008
                    
                    
                    10,000,000
                    
                    
                    $
                    11,137
                    
                    
                    
                    198,064,837
                    
                    
                    $
                    218,321
                    
                    
                    $
                    19,442,170
                    
                    
                    $
                    -
                    
                    
                    $
                    (20,412,166
                    )
                    
                    $
                    (740,538
                    )
 
  (The
accompanying notes are an integral part of these consolidated financial
statements)
  Table of Contents
 39
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Operations
 (Expressed
in Canadian Dollars)
 
 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.
 2.      Going
Concern
  The
Company has not realized revenues on its wind power projects, has a working
capital deficiency of $1,309,577 and has an accumulated deficit at December 31,
2008 of $20,412,166 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.
  3.      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 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)
              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. There were no cash equivalents at December 31, 2008 and
2007.
 F
  Table of Contents
 40
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Operations
 (Expressed
in Canadian Dollars)
  d)
              Property
      and Equipment
  Equipment
is recorded at cost and is depreciated on a straight line basis 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.
  e)
              Revenue
      Recognition
 The
Company recognizes revenue in accordance with Securities and Exchange Commission
Staff Accounting Bulletin No. 104 (“SAB 104”), “Revenue Recognition in Financial
Statements”. Revenue is recognized when it is realized or realizable and earned.
The Company considers revenue realized or realizable and earned when persuasive
evidence of an arrangement exists, services have been provided, and
collectability is reasonably assured.
  f)
              Taxes
      Receivable
 The goods
and services tax (GST) is a tax that applies to the supply of most goods and
services in Canada. Although the consumer pays the tax, businesses are generally
responsible for collecting and remitting it to the government. Businesses that
are required to have a GST registration number are called registrants.
Registrants collect the GST on most of its sales and pay the GST on most
purchases it makes to operate the business. The Company can claim a credit,
called an input tax credit (ITC), to recover the GST it paid or owes on the
purchases it uses in commercial activities. GST registrants must meet certain
responsibilities. Generally, the Company must file returns on a regular basis,
collect the tax on taxable supplies it makes in Canada, and remit any resulting
net tax owing. Since the Company earned no revenue during the years ended
December 31, 2008 and 2007 and filed an input tax credit for purchases made in
relation to commercial activities, it recorded a receivable of
$16,985.
 g)
              Long-Lived
      Assets
  In
accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of
Long-Lived Assets”, 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 initiate 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.
   Table of Contents
 41
 h)
              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 December 31, 2008,
the exchange rate for one Chinese Renminbi was $0.1795 CAD (2007 - $0.1353
CAD).  For the period from January 1, 2008 to December 31, 2008, the
average exchange rate for one Chinese Renminbi was $0.1537 CAD (2007 - $0.1411
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.
  i)
              Comprehensive
      Loss
  SFAS No.
130, “Reporting Comprehensive Income,” establishes standards for the reporting
and display of comprehensive loss and its components in the consolidated
financial statements. As at December 31, 2008 and 2007, the Company has no items
that represent a comprehensive loss and, therefore, has not included a schedule
of comprehensive loss in the consolidated financial statements.
  j)
              Basic
      and Diluted Net Income (Loss) Per
Share
  The
Company computes net income (loss) per share in accordance with SFAS No. 128,
"Earnings per Share". SFAS No. 128 requires presentation of both basic and
diluted earnings per share (EPS) on the face of the income statement. Basic EPS
is computed by dividing net income (loss) available to common shareholders
(numerator) by the weighted average number of shares outstanding (denominator)
during the period. Diluted EPS gives effect to all dilutive potential common
shares outstanding during the period using the treasury stock method and
convertible preferred stock using the if-converted method. In computing diluted
EPS, the average stock price for the period is used in determining the number of
shares assumed to be purchased from the exercise of stock options or warrants.
Diluted EPS excludes all dilutive potential shares since their effect is
anti-dilutive.
  k)
              Stock-based
      Compensation
  The
Company records stock-based compensation in accordance with SFAS No. 123R “Share
Based Payments”, 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. Equity instruments issued to employees and the cost of the services
received as consideration are measured and recognized based on the fair value of
the equity instruments issued.
  l)
              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.
   Table of Contents
 42
 m)
              Discontinued
      Operations
  Certain
amounts have been reclassified to present the Company’s discontinuance of its
retail and wholesale foods division, as discontinued operations. Unless
otherwise indicated, information presented in the notes to the financial
statements relates only to the Company’s continuing operations. Information
relating to discontinued operations is included in Note 11.
  n)
              Income
      Taxes
  Potential
benefits of income tax losses are not recognized in the accounts until
realization is more likely than not. The Company has adopted SFAS No. 109
“Accounting for Income Taxes” as of its inception. Pursuant to SFAS No. 109 the
Company is required to compute tax asset benefits for net operating losses
carried forward. The potential benefits of net operating losses have not been
recognized in these consolidated financial statements because the Company cannot
be assured it is more likely than not it will utilize the net operating losses
carried forward in future years. The Company has adopted FASB Interpretation 48
“Accounting for Uncertain Income Taxes, an Interpretation of SFAS 109” (“FIN
48”), however, this adoption did not have any impact on the financial statements
of the Company.
  o)
              Fair
      Value of Financial Instruments
  The FASB
issued SFAS No. 157,“Fair
Value Measurements” (“SFAS 157”) that defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles
and expands disclosures about fair value measurements.  This Statement
reaffirms that fair value is the relevant measurement attribute. The adoption of
SFAS No. 157 did not have a material effect on the Company’s consolidated
financial statements as reflected herein. The carrying amounts of cash, accounts
receivable, accounts payable, loan payable and convertible debentures reported
on the balance sheet are estimated by management to approximate fair value
primarily due to the short term nature of the instruments.
  p)
              Recently
      Issued Accounting Pronouncements
  In June
2008, the FASB issued FASB Staff Position No. EITF 03-6-1, Determining Whether Instruments
Granted In Share-Based Payment Transactions Are Participating Securities,
(“FSP 03-6-1”), which states that unvested share-based payment awards that
contain nonforfeitable rights to dividends or dividend equivalents (whether paid
or unpaid) are participating securities and shall be included in the computation
of earnings per share pursuant to the two-class method described in
SFAS No. 128, Earnings Per Share.
FSP 03-6-1 is effective for financial statements issued for fiscal years
beginning after December 15, 2008, and interim periods within those years.
All prior period earnings per share data presented shall be adjusted
retrospectively (including interim financial statements, summaries of earnings,
and selected financial data) to conform with the provisions of FSP 03-6-1.
FSP 03-6-1 is not expected to have an impact on our financial
statements
  In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles”.  This identifies the sources of accounting
principles and the framework for selecting the principles to be used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles
(“GAAP”).  SFAS 162 directs the GAAP hierarchy to the entity, not the
independent auditors, as the entity is responsible for selecting accounting
principles for financial statements that are presented in conformity with
GAAP.  SFAS 162 is effective 60 days following the SEC’s approval of
the Public Company Accounting Oversight Board amendments to remove the GAAP
hierarchy from the auditing standards.  SFAS 162 is not expected to
have an impact on our financial statements.
  In March
2008, the Financial Accounting Standards Board (“FASB”) issued SFAS No. 161,
“Disclosures about Derivative Instruments and Hedging Activities – an amendment
to FASB Statement No. 133”.  SFAS No. 161 is intended to improve
financial standards for derivative instruments and hedging activities by
requiring enhanced disclosures to enable investors to better understand their
effects on an entity's financial position, financial performance, and cash
flows. Entities are required to provide enhanced disclosures about: (a) how and
why an entity uses derivative instruments; (b) how derivative instruments and
related hedged items are accounted for under Statement 133 and its related
interpretations; and (c) how derivative instruments and related hedged items
affect an entity’s financial position, financial performance, and cash
flows.  It is effective for financial statements issued for fiscal
years beginning after November 15, 2008, with early adoption
encouraged.  The Company is currently evaluating the impact of SFAS
No. 161 on its financial statements, and the adoption of this statement is not
expected to have a material effect on the Company’s financial
statements.
   Table of Contents
 43
 In
December 2007, the Financial Accounting Standards Board (FASB) issued SFAS No.
141R, “Business Combinations”.  This statement replaces SFAS 141 and
defines the acquirer in a business combination as the entity that obtains
control of one or more businesses in a business combination and establishes the
acquisition date as the date that the acquirer achieves control. SFAS 141R
requires an acquirer to recognize the assets acquired, the liabilities assumed,
and any non-controlling interest in the acquiree at the acquisition date,
measured at their fair values as of that date. SFAS 141R also requires the
acquirer to recognize contingent consideration at the acquisition date, measured
at its fair value at that date. This statement is effective for fiscal years,
and  periods within those fiscal years, beginning on or after December
15, 2008, and earlier adoption is prohibited. The adoption of this statement is
not expected to have a material effect on the Company's financial
statements.
  In
December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in
Consolidated Financial Statements Liabilities –an Amendment of ARB No.
51”.  This statement amends ARB 51 to establish accounting and
reporting standards for the Noncontrolling interest in a subsidiary and for the
deconsolidation of a subsidiary. This statement is effective for fiscal years,
and  periods within those fiscal years, beginning on or after December
15, 2008, and earlier adoption is prohibited. The adoption of this statement is
not expected to have a material effect on the Company's financial
statements.
  Other new
pronouncements issued during 2008 are not applicable to the
Company.
  q)
Recently Adopted Accounting Pronouncements
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
Financial Assets and Financial Liabilities – Including an Amendment of FASB
Statement No. 115”.  This statement permits entities to choose to
measure many financial instruments and certain other items at fair value. Most
of the provisions of SFAS No. 159 apply only to entities that elect the fair
value option. However, the amendment to SFAS No. 115 “Accounting for Certain
Investments in Debt and Equity Securities” applies to all entities with
available-for-sale and trading securities. SFAS No. 159 is effective as of the
beginning of an entity’s first fiscal year that begins after November 15, 2007.
Early adoption is permitted as of the beginning of a fiscal year that begins on
or before November 15, 2007, provided the entity also elects to apply the
provision of SFAS No. 157, “Fair Value Measurements”. The adoption of this
statement did not have a material effect on the Company's financial
statements.
  r)
              Reclassifications
  Certain
reclassifications have been made to the prior period’s consolidated financial
statements to conform to the current period’s presentation.
  4.      Property
and Equipment
 
 Cost
                  $
                
                
                Accumulated
      Depreciation
                  $
                
                
                December
      31,
                  2008
                  Net
      Carrying
                  Value
                  $
                
                
                December
      31,
                  2007
                  Net
      Carrying Value
                  $Wind
      equipment under construction
                
                
                521,037
                
                
                
                –
                
                
                
                521,037
                
                
                
                448,103Automobile
                
                
                70,843
                
                
                
                35,143
                
                
                
                35,700
                
                
                
                51,000Computer
      hardware
                
                
                11,651
                
                
                
                6,896
                
                
                
                4,755
                
                
                
                7,086Office
      furniture and equipment
                
                
                11,798
                
                
                
                4,251
                
                
                
                7,547
                
                
                
                8,208615,329
                
                
                
                46,289
                
                
                
                569,039
                
                
                
                514,397
  The wind
equipment under construction relates to the Company’s wind farm projects, as
disclosed in Note 8.  As the capital assets have not been placed in
use, no depreciation of the wind equipment has been recorded for the year ended
December 31, 2008.
  
 Table of Contents
 44
 5.      Related
Party Transactions/Balances
  a)
              As
      at December 31, 2008, the balance due to related parties amounted to
      $912,601 (December 31, 2007 - $637,402), which includes $233,438 (December
      31, 2007 - $111,499) owed to the former President of the Company for
      management fees and working capital purposes and $679,163 (December 31,
      2007 - $533,736) owed to the Newly appointed President and spouse of the
      former President of the Company for working capital
      purposes.  Total management fees charged by these parties for
      2008 was $150,000US$ (2007 - $120,000US$). The amounts are unsecured,
      non-interest bearing, and due on
demand.
  b)
              As
      at December 31, 2008, the Company owes $161,202 (December 31, 2007 -
      $128,024) to shareholders for advances to the Company and expenses paid on
      behalf of the Company. Of this amount, $112,798 (December 31, 2007 -
      $103,040) is unsecured, bears no interest, and is due on
      demand.  The remaining balance of $48,404 (December 31, 2007 -
      $16,382) is due to a shareholder who is also the President of the Company,
      unsecured, non-interest bearing, and payable on
  demand.
  Imputed
interest of $53,440 (December 31, 2007 - $73,569) at 8% interest has been
recorded on the shareholder loans and is included as an increase to additional
paid in capital.
  6.      Preferred
Stock
  On
September 29, 2006, the Company entered into a Stock Purchase Agreement for a
private placement consisting of 10,000,000 shares of preferred stock for cash
proceeds of $556,855 (US$500,000) and 2,000,000 shares of common stock for cash
proceeds of $111,371 (US$100,000). The Company also issued, to the investor, a
20% interest in its Zhanjiang wind farm project described in Note 8(b). The
preferred stock is convertible into common stock, on a one-for-one basis
commencing August 17, 2007.  As at December 31, 2008, there are
10,000,000 shares of preferred stock issued and outstanding and no shares have
been converted.
 
 7.      Common
Stock
  a)
              On
      December 8, 2008, the Company issued 2,000,000 common shares of the
      Company with a total value of $188,123 based on the closing price of the
      Company’s common stock on the date of issuance. On December 3, 2008, the
      Company issued 5,000,000 common shares of the Company in relation to
      settlement of amounts due from the Company.  The Company also
      issued 200,000 common shares for consulting services
      provided.  The total value of shares issued was $621,953 based
      on the closing price of the Company’s common stock on the date of
      issuance.
  b)
              On
      November 18, 2008, the Company issued 2,500,000 common shares of the
      Company with a total value of $138,701 based on the closing price of the
      Company’s common stock on the date of issuance in relation to services
      previously rendered.
  c)
              On
      September 11, 2008, the Company issued 3,000,000 common shares of the
      Company with a value of $301,655 based on the closing price of the
      Company’s common stock on the date of
issuance.
  d)
              On
      September 4, 2008, the Company issued 3,000,000 common shares of the
      Company with a value of $294,989 based on the closing price of the
      Company’s common stock on the date of
issuance.
  e)
              On
      July 17, 2008, the Company issued 10,000,000 common shares of the Company
      in relation to settlement of debt in the amount of $100,000. The remaining
      value of $1,302,243 was expensed to General and Administrative. The total
      value was $1,402,660 based on the closing price of the Company’s common
      stock on the date of issuance.
   Table of Contents
 45
 f)
              On
      July 8, 2008, the Company issued 200,000 common shares of the Company for
      consulting services previously rendered with a value of $22,436 based on
      the closing price of the Company’s common stock on the date of
      issuance.
  g)
              On
      July 3, 2008, the Company issued 6,000,0000  common shares of
      the Company to related parties and 200,000 common shares of the Company to
      consultants for consulting services previously rendered  with a
      value of $612,827 based on the closing price of the Company’s common stock
      on the date of issuance.
  h)
              On
      June 17, 2008, the Company issued 2,500,000 common shares of the Company
      in relation to services previously rendered with a value of $436,475 based
      on the Company’s common stock on the date of
  issuance.
  i)
              On
      May 7, 2008, the Company issued 10,000,000 common shares of the Company at
      US$0.05 per common share for proceeds of
  $501,052.
  j)
              On
      March 26, 2008, the Company issued 3,000,000 common shares of the Company
      for settlement of past services with a fair value of $213,549 the
      Company’s common stock on the date of
issuance.
  k)
              On
      March 26, 2008, the Company issued 500,000 common shares of the Company
      for consulting services with a fair value of $35,592 the Company’s common
      stock on the date of issuance.
  l)
              On
      March 6, 2008, the Company issued 2,050,000 common shares of the Company
      for consulting services with a fair value of $122,102 the Company’s common
      stock on the date of issuance.
  m)
              On
      January 7, 2008, the Company issued 342,442 common shares of the Company
      with a fair value of $37,797 the Company’s common stock on the date of
      issuance.
  Year
Ended December 31, 2007:
  n)
              On
      October 24, 2007, the Company issued 1,058,255 common shares with a fair
      value of $57,633 the Company’s common stock on the date of issuance to the
      President of the Company as reimbursement of expenses paid on behalf of
      the Company.
  o)
              On
      October 23, 2007, the Company issued 5,000,000 shares of common stock for
      a prior period performance bonus valued at $301,692 the Company’s common
      stock on the date of issuance.
  p)
              On
      October 10, 2007, the Company issued 200,000 shares of common stock for
      consulting services valued at $12,826 based on the closing price of the
      Company’s common stock on the date of
issuance.
  q)
              On
      October 3, 2007, the Company issued 3,200,000 shares of common stock for
      consulting services valued at $222,522 based on the closing price of the
      Company’s common stock on the date of
issuance.
   Table of Contents
 46
 r)
              On
      August 31, 2007, the Company issued 3,424,000 shares of common stock for
      consulting services valued at $272,439 based on the closing price of the
      Company’s common stock on the date of
issuance.
  s)
              On
      August 31, 2007, the Company issued 1,500,000 shares of common stock for
      consulting services valued at $112,500 based on the closing price of the
      Company’s common stock on the date of
issuance.
  t)
              On
      June 12, 2007, the Company issued 100,000 shares of common stock for a
      performance bonus valued at $12,743 based on the closing price of the
      Company’s common stock on the date of
issuance.
  u)
              On
      May 9, 2007, the Company issued 1,000,000 shares of common stock for
      services valued at $214,500 based on the closing price of the Company’s
      common stock on the date of
issuance.
  v)
              On
      May 2, 2007, the Company issued 1,000,000 shares of common stock for
      services valued at $51,690 based on the closing price of the Company’s
      common stock on the date of
issuance.
  w)
              On
      April 21, 2007, the Company issued 2,000,000 shares of common stock to a
      director for consulting services with a fair value of $225,440 based on
      the closing price of the Company’s common stock on the date of
      issuance.
  x)
              On
      April 4, 2007, the Company issued 6,000,000 shares of common stock to a
      consultant valued at $763,620 based on the closing price of the Company’s
      common stock on the date of issuance for services
  rendered.
  y)
              On
      April 2, 2007, the Company issued 2,000,000 shares of common stock to a
      director for consulting services valued at $242,445 based on the closing
      price of the Company’s common stock on the date of
    issuance.
  z)
              On
      March 7, 2007, the Company issued 1,263,158 common shares a fair value of
      $178,651 based on the closing price of the Company’s common stock on the
      date of issuance to the President of the Company in settlement of past
      services.
  aa)
              On
      March 7, 2007, the Company issued 343,399 common shares with a fair value
      of $48,568 based on the closing price of the Company’s common stock on the
      date of issuance to various consultants in settlement of past
      services.
  bb)
              On
      January 24, 2007, the Company issued 400,000 common shares with a fair
      value of $40,191 based on the closing price of the Company’s common stock
      on the date of issuance.
  cc)
              During
      the year ended December 31, 2007, the Company received proceeds of
      $381,295 relating to the 30,000,000 common shares issued during the year
      ended December 31, 2006.
  
 Table of Contents
 47
 Stock
Options
  On June
23, 2006, the Company adopted a fixed stock option plan that provides for the
issuance of incentive and non-qualified stock options to officers, directors,
employees and consultants to acquire up to 15,000,000 shares of the Company's
common stock. The Board of Directors determines the terms of the options
granted, including the number of options granted, the exercise price and the
vesting schedule. The stock option plan will expire December 31,
2016.
  Effective
February 4, 2008, the Company filed a Form S-8 Registration Statement in
connection with its 2008 Equity Incentive Plan allowing for the direct award of
stock or granting of stock options to directors, officers, employees and
consultants to acquire up to a total of 20,000,000 shares of common stock. The
Plan Administrator determines the terms of the options granted, including the
number of options granted, the exercise price and the vesting schedule. At
December 31, 2008, 550,000 shares have been issued under the plan and there are
no stock options outstanding.
  8.      Commitments
  a)
              The
      Company rents, on a month-to-month basis, its industrial and office space
      for $1,726 per month, office space in China for approximately $1,000 per
      month and warehouse space for $1,791 per
month.
  9.      Income
Taxes
  The
difference between the statutory federal tax rate and the tax provision recorded
by the Company is primarily due to the Company's full valuation allowance
against its deferred tax assets.
  Deferred
income taxes arise from the temporary differences between financial statement
and income tax recognition of net operating losses and asset impairment. Net
operating loss carryovers may be limited under the Internal Revenue Code should
a significant change in ownership occur.
  As at
December 31, 2008, the Company had approximately $2,800,786 of unused Canadian
net operating losses available for carry forward for Canadian income tax
purposes which begin to expire in the year 2027. Current year net operating
losses for Canadian income tax purposes are approximately $1,207,026 and will
expire in 2028.
  A
deferred tax asset has been offset by a full valuation allowance. The components
of the Company's deferred tax assets are as follows:
 December
      31,
                  2008
                  $
                
                
                December
      31,
                  2007
                  $Deferred
      tax asset-
      Non-capital losses
                
                
                980,275
                
                
                
                3,690,000-
      Less valuation allowance
                
                
                (980,275
                )
                
                
                (3,690,000
                )Net
      deferred tax asset
                
                
                -
                
                
                
                -
  
 Table of Contents
 48
  The
provision for income tax differs from the amount computed by applying statutory
rates to earnings before income taxes.  The difference results from
the following:
 December
      31,
                  2008
                  $
                
                
                December
      31,
                  2007
                  $Earnings
      (loss) before taxes
                
                
                (5,146,378
                )
                
                
                (7,191,407
                )Statutory
      rate
                
                
                35
                %
                
                
                35
                %Computed
      expected tax (recovery)
                
                
                (1,801,232
                )
                
                
                (2,516,992
                )Non-deductible
      expenses
                
                
                1,241,016
                
                
                
                2,087,516Temporary
      differences
                
                
                (2,150,159
                )
                
                
                -Change
      in valuation allowance
                
                
                2,710,375
                
                
                
                422,527Other
                
                
                -
                
                
                
                6,949Reported
      income taxes
                
                
                -
                
                
                
                -
  10.  Discontinued
Operations
  On
November 24, 2007, the Company discontinued all operations related to the former
business of selling and distributing low carbohydrate and sugar-free
foods.
  The
results of discontinued operations are summarized as follows:
  Year
      ended
                      December
      31,
                    
                    
                    Year
      ended
                      December
      31,2008
                    
                    
                    2007$
                    
                    
                    
                    $Revenue
                    
                    
                    6,098
                    
                    
                    
                    197,545Cost
      of sales
                    
                    
                    (2,131
                    )
                    
                    
                    (70,652
                    )Gross
      Profit
                    
                    
                    3,967
                    
                    
                    
                    126,893Operating
      Expenses:General
      and administrative
                    
                    
                    (8,890
                    )
                    
                    
                    (
      376,651
                    )Net
      Loss
                    
                    
                    (4,923
                    )
                    
                    
                    (249,758
                    )
   Table of Contents
 49
 As at
December 31, 2008 and December 31, 2007, assets and liabilities of the
discontinued retail and wholesale foods division have been reported as
discontinued operations.
  December
      31,
                      2008
                      $
                    
                    
                    December
      31,
                      2007
                      $Property
      and equipment, net
                    
                    
                    -
                    
                    
                    
                    2,224Assets
      held for sale
                    
                    
                    -
                    
                    
                    
                    2,224Accounts
      payable
                    
                    
                    -
                    
                    
                    
                    (14,038
                    )Current
      liabilities of discontinued operations
                    
                    
                    -
                    
                    
                    
                    (14,038
                    )
  11.   Restatement
  The
Company has restated its financial statements as at December 31, 2007 and for
the year ended December 31, 2007 to record various corrections recognized in the
year.  The effect of the restatement is to increase net loss by
$1,176,837 for the year ended December 31, 2007. Net loss per share was
decreased by $0.01 per share from ( $0.04) per share (continuing and
discontinued operations –basic and diluted) to ($0.05) per share.
  a
                )
                Balance
      SheetAs
      At December 31, 2007As
      Reported
                  $
                
                
                Adjustment
                  $
                
                
                As
      Restated
                  $Prepaid
      expenses
                
                
                426,477
                
                
                (422,647)
                
                
                3,830Current
      assets of discontinued operations
                
                
                9,579
                
                
                (9,579)
                
                
                -Customer
      relationships
                
                
                245,016
                
                
                (245,016)
                
                
                -Other
      assets
                
                
                266,716
                
                
                (266,716)
                
                
                -Accrued
      liabilities
                
                
                20,117
                
                
                225,000
                
                
                245,117Common
      stock
                
                
                164,704
                
                
                (46)
                
                
                164,658Additional
      paid-in capital
                
                
                
                14,484,429
                
                
                
                7,925
                
                
                
                14,492,354Accumulated
      deficit
                
                
                
                (14,088,951)
                
                
                
                (1,176,837))
                
                
                
                (15,265,788)
  b
                )
                Statements
      of OperationsFor
      the Year ended December 31, 2007As
      Reported
                  $
                
                
                Adjustment
                  $
                
                
                As
      Restated
                  $General
      and Administrative
                
                
                
                (4,209,997)
                
                
                
                (964,025)
                
                
                
                (5,174,022)Gain
      (loss) on settlement of debt
                
                
                
                (85,644)
                
                
                
                85,611
                
                
                
                -Net
      Loss before Discontinued Operations
                
                
                
                (5,764,812)
                
                
                
                (1,176,837)
                
                
                
                (6,941,649)Net
      Loss for the Year
                
                
                
                (6,014,570)
                
                
                
                (1,176,837)
                
                
                
                (7,191,407)
   Table of Contents
 50
 Item
9. Changes in and
Disagreements with Accountants on Accounting and Financial
Disclosure
  We have
had no disagreements with our independent public accountants on accounting and
financial disclosure.
   Item
9A(T). Controls and
Procedures
  (1)    Evaluation
of Disclosure Controls and Procedures.     As
required by Rule 13a-15 under the Exchange Act, our management, including
Tammy-Lynn McNabb, our Chief Executive Officer and Chief Financial Officer,
evaluated the effectiveness of the design and operation of our disclosure
controls and procedures as of December 31, 2008.
 
 Disclosure
controls and procedures refer to controls and other procedures designed to
ensure that information required to be disclosed in the reports we file or
submit under the Securities Exchange Act is recorded, processed, summarized and
reported within the time periods specified in the rules and forms of the SEC and
that such information is accumulated and communicated to our management,
including our chief executive officer and chief financial officer, as
appropriate, to allow timely decisions regarding required disclosure. In
designing and evaluating our disclosure controls and procedures, management
recognizes that any controls and procedures, no matter how well designed and
operated, can provide only reasonable assurance of achieving the desired control
objectives, and management is required to apply its judgment in evaluating and
implementing possible controls and procedures.
 
 Management
conducted its evaluation of disclosure controls and procedures under the
supervision of our chief executive officer and our chief financial officer.
Based on that evaluation, Ms. McNabb concluded that because of the material
weaknesses in internal control over financial reporting described below, our
disclosure controls and procedures were not effective as of December 31,
2008.
  (2)    Management’s
Report on Internal Control over Financial Reporting
  Our
management is responsible for establishing and maintaining adequate internal
control over financial reporting. Under the supervision and with the
participation of our management, including our Chief Executive Officer and Chief
Financial Officer, we conducted an evaluation of the effectiveness of our
internal control over financial reporting as of December 31, 2008 using the
criteria established in Internal Control—Integrated Framework issued by the
Committee of Sponsoring Organizations of the Treadway Commission
(COSO).
  A
material weakness is a deficiency, or combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely basis. In its
assessment of the effectiveness of internal control over financial reporting as
of December 31, 2008, the Company determined that there were control
deficiencies that constituted material weaknesses, as described
below.
  Table of Contents
 51
 1.
              As
      of December 31, 2008, effective controls over the control environment were
      not maintained.  Specifically, a formally adopted a written code
      of business conduct and ethics that governs to the Company’s employees,
      officers and directors was not in place.  Additionally,
      management has not developed and effectively communicated to its employees
      its accounting policies and procedures.  This has resulted in
      inconsistent practices.  Further, the Board of Directors does
      not currently have any independent members and no director qualifies as an
      audit committee financial expert as defined in Item 407(d)(5)(ii) of
      Regulation S-B.  Since these entity level programs have a
      pervasive effect across the organization, management has determined that
      these circumstances constitute a material weakness.2.
              As
      of December 31, 2008, effective controls over financial statement
      disclosure were not maintained.  Specifically, controls were not
      designed and in place to ensure that all disclosures required were
      originally addressed in our financial statements.   Accordingly,
      management has determined that this control deficiency constitutes a
      material weakness.
 
 
 3.
              As
      of December 31, 2008, effective controls over equity transactions were not
      maintained.  Specifically, controls were not designed and in
      place to ensure that equity transactions were properly reflected.
      Accordingly, management has determined that this control deficiency
      constitutes a material weakness.
  Accordingly,
the Company concluded that these control deficiencies resulted in a reasonable
possibility that a material misstatement of the annual or interim financial
statements will not be prevented or detected on a timely basis by the company’s
internal controls.
  As
a result of the material weaknesses described above, management has concluded
that the Company did not maintain effective internal control over financial
reporting as of December 31, 2008 based on criteria established in Internal
Control—Integrated Framework issued by COSO.
  M&K
CPAs, an independent registered public accounting firm, was not required to and
has not issued a report concerning the effectiveness of our internal control
over financial reporting as of December 31, 2008.
  Continuing
Remediation Efforts to address deficiencies in Company’s Internal Control over
Financial Reporting
  Our
management and Board of Directors plan to establish the following remediation
measures during the fiscal year ended December 31, 2009:
  1.
              Our
      Board of Directors will nominate an audit committee and audit committee
      financial expert to ensure that we establish appropriate internal controls
      over our financial reporting process, including formal review and approval
      of our financial statements and the review, implementation, and monitoring
      of necessary internal controls, procedures, and policies to mitigate the
      potential risk of material misstatement of our financial
      records.
 (3)    Changes in
Internal Controls.     During the period ended
December 31, 2008, there were no changes in our internal control over
financial reporting that materially affected, or are reasonably likely to
materially affect, our internal control over financial reporting.
 
 However,
subsequent to the year ended December 31, 2008, the Company has retained an
outside consulting firm which specializes in Sarbanes Oxley
compliance.  This consulting firm has assisted the Company in
developing a system that should assist in rectifying the material weaknesses
described herein.
  Table of Contents
 52
 Item
9B. Other
Information
  None.
 
 PART III
 
 Item 10. Directors and Executive Officers and Corporate
Governance
 
 The name,
age, and position with our company of each director and executive officer are as
follows:
  Name
                
                Age
                
                Position
                
                Director/Officer
      SinceTammy-Lynn
      McNabb
                
                40
                
                Chief
      Executive Officer, Chief Financial Officer, Secretary, Chairwoman and
      Director
                
                2004Shannon
      de Delley
                
                41
                
                Director
                
                2006Patrick
      Higgins
                
                40
                
                Director
                
                2005Pan
      Huifang
                
                39
                
                Director
                
                2006Feng
      Junyi
                
                47
                
                Director
                
                2007Baldwin
      Kam Tao Cheng
                
                59
                
                Director
                
                2007Zeng
      Zhigao
                
                37
                
                Director
                
                2008
  All
directors serve until their successors have been duly elected and qualified,
unless they earlier resign.
  Tammy-Lynn McNabb,
CEO,
 
 By way of
educational background, Mrs. McNabb attended the British Columbia Institute of
Technology from 1987-1990.  While there, Mrs. McNabb was enrolled in the
Marketing Sales Management Program.
 
 Presently,
Mrs. McNabb has over 15 years of experience in Marketing and Sales.  As
part of her experience, she was involved with Marketing for a large English
Publication company for 4 years in Tokyo, Japan.  While in Japan, she
capitalized on her stay by studying Japanese and earning a Level 4 Proficiency
Certification. Moreover, Mrs. McNabb has specialized in various start-up
companies, including high-tech and public relations firms.  During the tech
boom in the 1990’s, Mrs. McNabb worked in management for a very successful
start-up Internet Service Provider and used this experience to begin her journey
into entrepreneurship.
 
 In June
1999, Mrs. McNabb began a public and investor relations firm tailored to serving
publicly traded companies.    Mrs. McNabb’s keen sense of the
public market has allowed tremendous success in both capital raising for under
funded companies and overall media exposure.
 
 Ultimately,
Mrs. McNabb began another venture of her own, the Low-Carb Centre Inc. 
Low-Carb Centre was Canada’s first low carbohydrate retail wellness
centre.  Additional retail locations and a bakery specializing in this
market soon followed.  Mrs. McNabb is currently pursuing expansion on a
global level of various health and wellness products for the ever-booming Health
Industry.  Recently, Mrs. McNabb was recognized for her efforts as an
Entrepreneur in the Culinary Industry by the Forum for Women
Entrepreneurs.
 
 Table of Contents
 53
 Shannon de
Delley
 
 Mr. de
Delley founded Windcor Power Systems, (“Windcor”) located in Calgary, Alberta in
2002. Since that time, he has served as Windcor’s President, and is directly
responsible for making Windcor a top wind project developer.
 
 Mr. de
Delley has negotiated over two thousand megawatts for Windcor projects, bringing
projects to the early stages of development. Presently, Windcor has ongoing
projects in four Canadian provinces, the Hawaiian Islands and
China.
 
 Mr. de
Delley assembled Windcor’s team that includes developers, legal and financial
professionals, investors and other key administrative personnel necessary to
successfully execute projects.
 
 Prior to
founding Windcor Power Systems in 2002, Mr. deDelley draws on seventeen years of
industrial / electrical construction experience having worked as an electrical /
industrial supervisor at Shell and Syncrude oil refining systems in the Alberta
Tar Sands. During this time, Mr. de Delley was responsible for building and
overhauling electrical substations, co-generation facilities, and underground
and overhead transmission supplies.
 
 In 2002,
Mr. de Delley left the oil industry to form Windcor Power Systems.
 
 Patrick
Higgins
 
 At a
Board of Directors meeting held on August 1, 2005, Patrick Higgins was appointed
as a Director of the Company.
 
 Patrick
Higgins is the senior partner in the management firm of Higgins Cohn Brand
Management (“HCBM”), a leading consumer products organization that provides
strategic operations and sales execution services to consumer brands. HCBM
assists businesses more effectively through brand development and market
penetration.
 
 Additionally,
Mr. Higgins’ extensive experience in brand management within the health and
wellness industry will be useful in his new role as Director of the
Company.
 
 HCBM
specializes in complete management of the market for natural and specialty
product manufacturers. They offer clients valuable capabilities including:
customer service, logistics, warehousing, market research, media services,
design services and sales coverage. The core strength of their team, combined
with full-range capabilities, provides clients with the strong infrastructure
necessary to compete in the natural and specialty product market.
 
 HCBM’s
team, led by Patrick Higgins, consists of some of the most experienced people in
the natural and specialty products industry.
 
 Pan
Huifang
 
 Mrs. Pan
is the Executive Vice General Manager of Dongxing Plastic Corporation (DPC). DPC
is a large-scale, privately operated, blow molding and injection molding factory
spanning over 50,000 square meters. The company’s business is in the area of
injection molding, blow molding, printing, and has four production lines serving
customers within the petroleum, chemical, food, medical, building and tobacco
industries. There are currently 380 employees, including a specialized technical
team, structure designers and 25 mechanical engineers composed of 18 mold
engineers.
 
 The
company currently has clients in over 20 Provinces in mainland China, Europe,
America, Southeast Asia, Japan, Hong Kong, Macao and Taiwan. Mrs. Pan was voted
One of China’s Best Women Developers in 2005
 
 Table of Contents
 54
 Junyi
Feng
  For 10
years Mr. Feng was a finance officer for the GuangZhao Port Authority before he
became a Director for the Economic Development Department of Guangdong
Provincial Government. His focus in the wind energy sector will assist Welwind
in its future development projects.
 
 Baldwin Kam Tao
Cheng
 
 Mr. Cheng
is currently the Managing Director of BIS Supplies and Engineering Ltd., a
company that specializes in the supply of materials for construction projects in
Hong Kong.  In order to meet the ever expanding demand, Mr. Cheng decided
to streamline some of his businesses by further creating four different
companies that would provide specialization to a certain area of trade: 1) BIS
Hua Wei Pipelines & Steel Structure Engineering Co., Ltd., 2) BIS Waterworks
Co., Ltd., 3) BIS Shang Pein Ductile Iron Supply Co., Ltd., and 4) BIS Transport
Co., Ltd.
 
 Mr. Cheng
has over 38 years of experience in the construction and trading industries, and
his vast experience in management has led to successful business transactions
over the course of his career.
 
 Mr. Zeng
Zhigao
 
 Since
March, 2008, Mr. Zhigao has served as a director and Executive Vice General
Manager of Zhanjiang Windcor Windfarm Ltd. and Yangjiang Welwind Windfarm Ltd.
Prior to this from 2006 through early 2008, Mr. Zhigao served as a director and
Deputy General Manager of Guangdong Luzhoushiji Pro-Environment Technology
Co. Ltd. From 2001 to 2006, he served as the General Manager assistant and
Engineer in Guangdong Overseas Construction Supervision Co. Ltd.,
where he was in charge of
the management of engineering construction. Mr. Zhigao has a
bachelor’s degree in management.
 
 INVOLVEMENT
IN CERTAIN LEGAL PROCEEDINGS
 
 We are
not currently involved in any legal proceedings.
 
 During
the last five (5) years, none of our directors or officers has:
  (1)had any bankruptcy petition filed by or against any business of which
such person was a general partner or executive officer either at the time of the
bankruptcy or within two years prior to that time;
  (2)been convicted in a criminal proceeding or subject to a pending criminal
proceeding;
  (3)been subject to any order, judgment, or decree, not subsequently
reversed, suspended or vacated, of any court of competent jurisdiction,
permanently or temporarily enjoining, barring, suspending or otherwise limiting
his involvement in any type of business, securities or banking activities;
or
  (4)been found by a court of competent jurisdiction in a civil action, the
Commission or the Commodity Futures Trading Commission to have violated a
federal or state securities or commodities law, and the judgment has not been
reversed, suspended, or vacated.
  Table of Contents
 55
 Section
16(a) Beneficial Ownership Reporting Compliance
  Section
16 of the Securities Exchange Act of 1934 requires the Company’s directors and
certain executive officers and certain other beneficial owners of the Company’s
common stock to periodically file notices of changes in beneficial ownership of
common stock with the Securities and Exchange Commission.  To the best of
the Company’s knowledge, based solely on copies of such reports received by it,
and the written representations of its officers and directors, the Company
believes that for 2008 all required filings were timely filed by each of its
directors and executive officers.
  Code
of Ethics
  We have
adopted a Code of Ethics and Business Conduct for Officers, Directors and
Employees that applies to all of our officers, directors and
employees.
 
 Audit
Committee
  The
Company currently does not have an audit committee and has not made a
determination of whether there is a financial expert. The Company does not
presently plan to establish an audit committee. However, if an audit committee
is established, the Registrant will make the proper disclosures on Form
8-K.
 
 Item
11.Executive
Compensation
  Summary
Compensation Table
  The
following table sets forth the overall compensation earned over each of the past
two fiscal years ending December 31, 2008 by (1) each person who served as the
principal executive officer of the Company during fiscal year 2008; (2) the
Company’s most highly compensated executive officers as of December 31, 2008
with compensation during fiscal year 2008 of $100,000 or more; and (3) those
individuals, if any, who would have otherwise been in included in section (2)
above but for the fact that they were not serving as an executive of the Company
as of December 31, 2008.
  Salary
      CompensationName and
                Principal
                Position
              
              Fiscal
                Year
              
              Salary ($)
              
              Bonus
                ($)
              
              Stock
                Awards
              
              Options
                Awards
                ($)(1)
              
              Non-Equity
                Incentive Plan
                Compensation
                ($)
              
              Nonqualified
                Deferred
                Compensation
                Earnings ($)
              
              All Other
                Compensation
                Compensation
                ($) (2)(3)
              
              Total ($)Tammy-Lynn
      McNabb
              
              2008
              
              $
              120,000
              
              $
              —
              
              —
              
              
              —
              
              —
              
              —
              
              —
              
              $
              120,000Chief
      Executive Officer
              
              2007
              
              $
              120,000
              
              $
              —
              
              —
              
              —
              
              —
              
              —
              
              —
              
              $
              120,000
  
 There
were no stock options granted or exercised by the named executive directors in
2008.
 
 Table of Contents
 56
 Employment
Agreements
 
 The
Registrant has no written employment agreements.
 
 GRANTS
OF PLAN BASED AWARDS
 
 Estimated Future Payouts Under
                Non-Equity
      Incentive Plan Awards
              
              Estimated
      Payouts Under
                Equity
      Incentive Plan AwardsName
              
              Grant
      Date
              
              Threshold
                ($)
              
              Target
                ($)
              
              Maximum
                ($)
              
              Threshold
                (#)
              
              Target
                (#)
              
              Maximum
                (#)
              
              All
      Other Stock Awards; Number of Shares of Stock or Units
                (#)
              
              All
      Other Option Awards; Number of Securities Underlying Options
                (#)
              
              Exercise
      or Base Price of Option Awards
                ($/Sh)
              
              Grant
      Date Fair Value of Stock and Option Awards-
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
              
              -
  There
were no stock based awards under the Equity Incentive Plan in 2008 to the Named
Executive Officers.
  Executive
Officer Outstanding Equity Awards at Fiscal Year-End
 
 The
following table provides certain information concerning any common share
purchase options, stock awards or equity incentive plan awards held by each of
our named executive officers that were outstanding as of December 31,
2008.
 
 Option Awards
              
              Stock AwardsName
              
              Number of
                Securities
                Underlying
                Unexercised
                Options(#)
                Exercisable
              
              Number of
                Securities
                Underlying
                Unexercised
                Options(#)
                Unexercisable
              
              Equity
                Incentive Plan
                Awards:
                Number of
                Securities
                Underlying
                Unexercised
                Unearned
                Options (#)
              
              Option
                Exercise
                Price ($)
              
              Option
                Expiration
                Date
              
              Number of
                Shares or
                Units of
                Stock That
                Have Not
                Vested (#)
              
              Market
                Value of
                Shares or
                Units of
                Stock That
                Have Not
                Vested
              
              Equity
                Incentive
                Plan
                Awards:
                Number
                of
                Unearned
                Shares,
                Units or
                Other
                Rights
                That Have
                Not
                Vested
              
              Equity
                Incentive Plan
                Awards:
                Market or
                Payout Value of
                Unearned
                Shares, Units or
                Other Rights
                That Have Not
                VestedTammy-Lynn
      McNabb
              
              
              —
              
              
              —
              
              
              —
              
              $
              —
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —
  Table of Contents
 57
 DIRECTOR
COMPENSATION
 
 Cash
Compensation
  Directors
receive no cash compensation for services rendered.
  Director
Compensation
  The
following table shows the overall compensation earned for the 2008 fiscal year
with respect to each person who was a director as of December 31,
2008.
  Name and
                Principal
                Position
              
              Fees
                Earned
                or Paid
                in Cash
                ($)
              
              Stock
                Awards ($)
              
              Option
                Awards ($)
                (1)
              
              Non-Equity
                Incentive Plan
                Compensation
                ($) (2)
              
              Nonqualified
                Deferred
                Compensation
                Earnings ($)
              
              All Other
                Compensation ($)
                (3)
              
              Total ($)Tammy-Lynn
      McNabb Director
              
              $
              —
              
              204,123
              
              $
              —
              
              —
              
              —
              
              121,260
              
              $
              325,383Shannon
      de Delley
              
              $
              —
              
              201,123
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              201,123DirectorPatrick
      Higgins
              
              $
              —
              
              35,630
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              35,630DirectorPan
      Huifang
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              —Zeng
      Zhigao
                Director
              
              $
              —
              
              572,681
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              572,681Feng
      Junyi
                Director
              
              $
              —
              
              404,544
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              404,544Baldwin
      Cheng
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              —
 
 (1)Reflects dollar amount expensed by the company during applicable fiscal
year for financial statement reporting purposes pursuant to FAS 123R.  FAS
123R requires the Company to determine the overall value of the options as of
the date of grant based upon the Black-Scholes method of valuation, and to then
expense that value over the service period over which the options become
exercisable (vest).  As a general rule, for time-in-service-based options,
the Company will immediately expense any option or portion thereof which is
vested upon grant, while expensing the balance on a pro rata basis over the
remaining vesting term of the option.  For a description FAS 123 R and the
assumptions used in determining the value of the options under the Black-Scholes
model of valuation, see the notes to the consolidated financial statements
included with this Report.
  (2)Excludes awards or earnings reported in preceding columns.
  (3)Includes all other compensation not reported in the preceding columns,
including (i) perquisites and other personal benefits, or property, unless the
aggregate amount of such compensation is less than $10,000; (ii) any “gross-ups”
or other amounts reimbursed during the fiscal year for the payment of taxes;
(iii) discounts from market price with respect to securities purchased from the
company except to the extent available generally to all security holders or to
all salaried employees; (iv) any amounts paid or accrued in connection with any
termination (including without limitation through retirement, resignation,
severance or constructive termination, including change of responsibilities) or
change in control; (v) contributions to vested and unvested defined contribution
plans; (vi) any insurance premiums paid by, or on behalf of, the company
relating to life insurance for the benefit of the director; (vii) any consulting
fees earned, or paid or payable; (viii) any annual costs of payments and
promises of payments pursuant to a director legacy program and similar
charitable awards program; and (ix) any dividends or other earnings paid on
stock or option awards that are not factored into the grant date fair value
required to be reported in a preceding column.
  Table of Contents
 58
 Item
12.Security
Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
 
 The
following table sets forth certain information regarding beneficial ownership of
common stock as of May 13, 2009, by:
 
 ·
              each
      person known to us to own beneficially more than 5%, in the aggregate, of
      the outstanding shares of our common
stock;
 ·
              each
      director;
 ·
              each
      of our chief executive officer and our other two most highly compensated
      executive officers; and
 ·
              all
      executive officers and directors as a
group.
 
 The
number of shares beneficially owned and the percent of shares outstanding are
based on 211,247,692 common shares outstanding as of May 13, 2009. Beneficial
ownership is determined in accordance with the rules of the SEC and generally
includes voting or investment power with respect to securities. Except as
otherwise noted below, the address of each of the shareholders in the table is
c/o Welwind Energy International Corporation, 10-20172 113B Avenue, Maple Ridge,
British Columbia, Canada V2X 0Y9.
 
 Beneficial
      Owner
                
                Shares of Common Stock Number
                
                
                Beneficially Owned PercentTammy-Lynn
      McNabb
                
                9,499,117
                
                
                4.49%Shannon
      de Delley
                
                3,662,528
                
                
                1.73%Patrick
      Higgins
                
                500,000
                
                
                0.23%Zeng
      Zhigao
                
                6,000,000
                
                
                2.84%Feng
      Junyi
                
                20,000,000
                
                
                9.47%Larry
      McNabb
                
                6,386,000
                
                
                3.02%Luo
      Yizi
                
                13,000,000
                
                
                6.15%Pan
      Huifang
                
                2,000,000
                
                
                0.95%Baldwin
      Cheng
                
                2,000,000
                
                
                0.95%All
      Officer & Directors as a Group
                
                63,047,645
                
                
                29.85%
 
 
 Table of Contents
 59
 Changes
in Control
 
 We know
of no plans or arrangements that will result in a change of control at our
company.
 
 Item
13. Certain Relationships
and Related Transactions
 
 None,
other than as set forth elsewhere in this Annual Report.
 
 Item
14. Principal Accounting
Fees and Services
  During
the year ended December 31, 2008, we engaged M & K CPAS PLLC as our
independent auditor.  For the year ended December 31, 2008, we were billed
by M & K CPAS PLLC, aggregate fees as discussed below.
  ·Audit Fees:Fees for audit services totaled $25,000 and $25,000 in 2008 and
      2007, respectively, including fees associated with the annual
      audit.
  ·Audit-Related
      Fees:  Fees for audit-related services totaled $0 in 2008 and
      2007, respectively.  Audit-related services principally included
      accounting consultations.
  ·Tax
      Fees:  We did not engage our auditor for any tax related
      services during 2008 or 2007.
  ·All Other
      Fees:Fees for other services not included in the above were
      $0 in both 2008 and 2007.
  Audit
Fees
 
 During
the year ended December 31, 2008, the aggregate fees billed or estimated to be
billed to us for professional services rendered by M & K CPAS PLLC for the
audit of our annual financial statements, review of financial statements
included in our quarterly reports or services normally provided by our
accountants in connection with statutory and regulatory filings or engagements
were $50,000.
 
 Audit-Related
Fees
 
 During
fiscal 2008, there were no fees billed to us for any other products or services
provided by M & K CPAS PLLC other than the services reported
above.
  Tax
Fees.
 
 During
fiscal 2008, there were no fees billed to us for any other products or services
provided by M & K CPAS PLLC other than the services reported
above.
 
 All Other
Fees.
 
 During
fiscal 2008, there were no fees billed to us for any other products or services
provided by  M & K CPAS PLLC other than the services reported
above.
 Table of Contents
 60
 Item
15. Exhibits
  EXHIBIT
      NUMBER
              DESCRIPTION
              LOCATION3.1
      - 3.2
              Articles
      of Incorporation and Bylaws
              Incorporated
      by reference as Exhibits to the Form 8-K filed on December 12, 2004 as
      amended on February 3, 2005.10.1
              Share
      Exchange Agreement between Vitasti, Inc. and Welwind Energy International
      Corporation.
              Incorporated
      by reference as an Exhibit to the Form 8-K filed on August 17, 2006 as
      amended on December 20, 2006.31.1
              Rule
      13a-14(a)/15d-14(a) Certification (CEO)
              Filed
      herewith31.2
              Rule
      13a-14(a)/15d-14(a) Certification (CFO)
              Filed
      herewith32.1
              Section
      1350 Certification (CEO)
              Filed
      herewith32.2
              Section
      1350 Certification (CFO)
              Filed
      herewith
 
 Table of Contents
 61
 SIGNATURES
  In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized on the _______________________.
  Welwind
      Energy International Corporation
                a
      Delaware CorporationBy:/s/
      Tammy-Lynn McNabbTammy-Lynn
      McNabb
                Chief
      Executive Officer and Chairman of the Board
 
 In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of Welwind Energy International Corporation and in
the capacities and on the dates indicated.
 
 Signature
                
                Position
                
                Date/s/
      Tammy-Lynn
      McNabb
                
                Chief
      Executive Officer and Chairman of the Board
                
                May 14,
      2008Tammy-Lynn
      McNabb/s/
      Shannon
      de Delley
                
                Director
                
                May
      14, 2008Shannon
      de Delley/s/
      Patrick
      Higgins
                
                Director
                
                May 14,
      2008Patrick
      Higgins/s/
      Zeng
      Zhigao
                
                Director
                
                May 14,
      2008Zeng
      Zhigao/s/
      Feng
      Junyi
                
                Director
                
                May
      14, 2008Feng
      Junyi
   /s/
      Pan
      Huifang
              
              Director
              
              May
      14, 2008Pan
      Huifang/s/
      Baldwin
      Kam Tao Cheng
              
              Director
              
              May
      14, 2008Baldwin
      Kam Tao Cheng
 
  Table of Contents
 62