UNITED
STATES
 SECURITIES
AND EXCHANGE COMMISSION
 Washington,
D. C. 20549
 
 FORM
10-KSB/A
 Amendment
No. 1
 
 (Mark
One)
 xANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF
 1934
 
 For the
fiscal year ended December 31, 2007
 
 o  
    TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT
 OF
1934
 
 For the
transition period from ___________ to ___________
 
 Commission
File Number:   000-26673
  
 WELWIND
ENERGY INTERNATIONAL CORPORATION
 (Name of
Small Business Issuer in Its Charter)
  Delaware
              
              98-0207081(State
      or Other Jurisdiction
              
              IRS
      Employerof
      Incorporation or Organization)
              
              Identification
      Number
  10-20172
113B Avenue
 Maple
Ridge, British Columbia
 Canada
V2X 0Y9
 (604)
460-8487
 (Address
and Telephone Number of Principal Executive Offices)
  Securities
      registered under Section 12(b) of the Exchange Act:Title
      of each class registered:
              Name
      of each exchange on which registered:None
              Over-the-Counter
      Bulletin BoardSecurities
      registered under Section 12(g) of the Exchange Act:Common
      Stock, par value $0.001
                (Title
      of class)
  Indicate
by check mark whether the registrant is a well-known seasoned issuer, as defined
in Rule 405 of the Securities Act.    Yes   ̈    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 Exchange
Act.    ̈
 
 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. Yesx Noo
  Indicate by check mark whether the
registrant is a shell company as defined in Rule 12b-2 of the Exchange
Act.   Yeso   
Nox
  Table of Contents
 1
 Check if there is no disclosure of
delinquent filers in response to Item 405 of Regulation S-B not contained in
this form, and no disclosure will be contained, to the best of the registrant’s
knowledge, in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB.
Yeso Nox
  Revenues
for year ended December 31, 2007: $nil (From Discontinued Operations - $197,545
Please refer to Note 11 of the Financial Statements)
  Number of
shares of the registrant’s common stock outstanding as of April 11, 2008 was:
163,564,837
  Transitional Small Business Disclosure
Format: Yeso Nox
 
  DOCUMENTS
INCORPORATED BY REFERENCE:
  Form 8-K
filed on February 8, 2007
  Form 8-K
filed on April 4, 2007
  Form 8-K
filed on May 9, 2007
  Form 8-K
filed on January 23, 2008
  Form S-8
filed on February 4, 2008
  EXPLANATORY
NOTE
 
 The
Registrant’s Consolidated Financial Statements for the year ended December 31,
2007 are being restated to record a correction to the stock based compensation
recognized in the year.  The effect of the restatement is to increase
net loss by $416,520 for the year ended December 31, 2007. Net loss per share
was unchanged. There are no other changes to our Annual Report.
  Table of Contents
 2
 Welwind
Energy International Corporation
  Table
of Contents
  Forward-Looking
      StatementsPART
      IPageItem 1.
              Description
      of Business
              5The
      CompanyOur
      StrategyCompetitionTrademarksGovernment
      RegulationEmployeesAvailable
      InformationItem 2.
              Properties
              11Item 3.
              Legal
      Proceedings
              11Item 4.
              Submission
      of Matters to a Vote of Security Holders
              11PART
      IIItem 5.
              Market
      for Common Equity and Related Stockholder Matters
              12Item 6.
              Management’s
      Discussion and Analysis or Plan of Operation
              13Item 7.
              Financial
      Statements
              19Item 8.
              Changes
      In and Disagreements With Accountants on Accounting and Financial
      Disclosure
              38Item 8A(T).
              Controls
      and Procedures
              38Item 8B.
              Other
      Information
              39PART
      IIIItem 9.
              Directors,
      Executive Officers and Corporate Governance
              39Item 10.
              Executive
      Compensation
              43Item 11.
              Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
              45Item 12.
              Certain
      Relationships and Related Transactions
              45Item 13.
              Exhibits
              46Item 14.
              Principal
      Accountant Fees and Services
              46
 Table of Contents
 3
 FORWARD-LOOKING
STATEMENTS
  This
Annual Report on Form 10-KSB 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.
 
 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.  Table of Contents
 4
 PART
I
 
 Item1.    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. Concurrently with the
development of the wind farm projects, the Company intends to continue to
operate the retail bakery and food store and its manufacturing and distribution
of specialty health food products.
 
 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.
  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.
 
 Table of Contents
 5
 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.
 
 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.
 
 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.
 
 During
2006, Company representatives took several trips to China where two contracts
were signed with the cities of Yangxi and Zhanjiang in the Province of
Guangdong. The signed contracts allow the Company to build up to 1000 Megawatts
(“MW”) of wind power in Guangdong Province. The company has also been in
negotiations for a 50 year purchase price agreement (“PPA”) as
well.  The engineering, procurement and Construction (EPC) contractor,
China Machine International Building Corp., has agreed to provide the
engineering, procurement and construction on the projects along with performance
bonds.
 
 In June
2006, Representatives of the Company attended the Renewable Energy Finance Asia
Conference in Hong Kong. The investment forum brought together International
Industry leaders and presented networking discussions from Carbon markets and
alternative energy. Investors, Fund managers, Utilities Government, Asian
Development Banks, The World Bank and the United Nations were among those in
attendance, providing experience and perspective to this growing market. The
event clearly solidifies the confidence of renewable energy in Asia and provided
us with numerous networking opportunities.
 
 While at
the conference, Company representatives spent time with representatives of the
International Finance Corporation/World Bank to discuss international
developments and economic growth of the company.
 
 In 2006,
while in China, Company representatives formally signed the commitment for a
land lease pertaining to the Zhanjiang wind farm. We plan to build forty-nine
(49) MW in the first phase of a six hundred (600) MW wind farm on this
property.
 
 Table of Contents
 6
 Projects
 
 The Zhanjiang
Project
 
 The
Zhanjiang Project will see the instillation of a six hundred (600) MW wind farm
on the subject property.  Through a cooperative agreement with
Guangzhou Engga Wind Energy Co. Ltd (“Engga”), the first turbine produced by
Engga for the Company rolled-off the production line in February 2007. During
this Phase 1, the Company expects to build forty-nine (49) MWs.
 
 Installation
of the 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 Guandong Electric Power Design Institute, and subsequently submitted
to the Guangdong Power Grid Corporation for review in anticipation of finalizing
a Power Purchase Agreement (“PPA”).
  However,
certain unexpected issues arose late in 2007 related to the Zhanjiang
Windfarm.  During the due diligence period for the PPA, an issue with
the local Port Authority arose requiring meetings with various levels of the
Zhanjiang Government and the Port Authority. In a meeting during January 2008
between Welwind representatives and high ranking officials of the Port Authority
and Government, all outstanding issues were resolved and the PPA due diligence
process should be completed sometime during the 2nd quarter
of 2008.
 The Yangxi
Project
  The base
of the Yangxi Wind Farm Project was completed, along with the installation of
the 100 meter meteorological tower, in June of 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 date from the tower at the Yangxi
location, a formal Project Proposal was submitted to the Yangxi Government. All
data collected to date shows promising results for the future build out of this
wind farm.
 Funding the
Projects
 In
January 2008, the Company also completed a $500,000 financing, which will be
used to fund the two projects and as general working capital. The Company
believes that these funds will be sufficient to meet our working capital
requirements until the signing of the PPAs and subsequent completion of the
financing for the projects.
 Supply
  The
Company and 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.
 
 Our
Strategy
 
 During
2007, we successfully completed several important milestones that we believe
were fundamental to our being able to achieve growth from our business model for
project developments in the alternative energy market and continued growth in
our health and wellness operations.
 
 In
addition to those described herein, the Company announced the following in
2007:
 
 (1)
              Begin
      a study to expand into the Peace River Region of British Columbia;
      and
 (2)
              The
      Company retained Wall Street Transfer Agents, Inc. as its transfer
      agent.
 
 In
November  2007, the Company was announced that Acterra Group signed a
letter of commitment to fund Phase 1 of the Zhanjiang Wind Farm Project, which
we anticipate will expedite the PPA with the Zhanjiang Government.  A
second announcement was made early 2008 for a letter of commitment to fund Phase
1 of the Yangxi Wind Farm Project with Acterra.
 
 Table of Contents
 7
 As a
result of the achievements of these milestone and our ongoing marketing and
business development efforts, we have set the ground work for promising results
for the organization.  Our current focus in the alternative energy
market will be our only focus in our business moving forward for 2008. The
capital currently available to us and future financings will be for the
development and operation of wind farms in China and continued expansion of wind
projects globally. The company sees additional growth via acquisitions of
additional wind farm projects.
 
 Our
Industry
 
 On
February 2, 2007, the Global Wind Energy Council (“GWEC”) announced that the
wind energy markets around the world exceeded expectations in 2006. GWEC is the
industry's global trade organization, with a combined membership of over 1,500
organizations involved in hardware manufacture, project development, power
generation, finance and consultancy, as well as researchers, academics and
associations. More information can be viewed on their web site which is
www.gwec.org and it contains much information on the industry and its
markets.
 
 The GWEC
report further states that in terms of economic value, the wind energy sector
has now become firmly installed as one of the important players in the energy
markets, with the total value of new generating equipment installed in 2006
reaching €18 billion, or USD$23 billion.  Outside of Europe, Asia has
experienced the largest growth in the industry, in 2006 the continent accounted
for 24% of new instillations of wind power facilities.
 
 Specifically,
according to the GWEC release, China more than doubled its total installed
capacity by installing 1,347 MW of wind energy in 2006, a 70% increase from last
year’s figure. This brings China up to 2,604 MW of capacity, making it the sixth
largest market worldwide. The Chinese market was boosted by the country’s new
Renewable Energy Law, which entered into force on 1 January 2006.
 
 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.
 
 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.
 
 Trademarks
 
 The
Company currently holds no Trademarks.
 
 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.
  Table of Contents
 8
 Employees
 
 As of
April 11, 2008, 11 full time employees.
 
 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.
 
 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 2007 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
 9
 Possible
Delisting
 
 On
November 16, 2005, the Securities and Exchange Commission (SEC) approved the
proposed rule change to NASD Rule 6530, also known as the Eligibility Rule.
Under the rule change, OTC Bulletin Board (OTCBB) issuers that are cited for
filing delinquency three times in a 24-month period and those removed for
failure to file two times in a 24-month period will be ineligible for quotation
by an NASD member. The new rule will apply to filings for reporting periods
ending on and after October 1, 2005.
 
 Since
October 1, 2005, the Company has been cited for a filing delinquency two (2)
times. If the Company is cited for a filing delinquency for a third time on or
before April 20, 2008, then the Company will be ineligible for quotation by an
NASD member, which would cause an investor or an existing shareholder to
potentially lose all or part of his investment.
 
 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 Chief Executive
Officer, President and Chief Operating Officer. 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.
 
 Risks
Relating to Our Common Stock
 
 Due to
the fact that our common stock is listed on the NASD OTC Bulletin Board, there
can be no assurance that a regular trading market for our common stock will ever
be developed. As such, the investors must be able to bear the financial risk of
losing their entire investment. Our common stock is listed on the NASD OTC
Bulletin Board under the trading symbol “WWEI.” From time to time, the Company’s
trading activity is volatile and subject to rapid changes in both trading volume
and trading price. Therefore, investors should realize that they may be unable
to sell our common stock if they purchase it. Accordingly, investors must be
able to bear the financial risk of losing their entire investment in our common
stock.
 
 Table of Contents
 10
 Lack
of dividends may affect the value of your investment when compared to comparable
stock, which does pay a dividend
 
 We have
never paid a cash dividend on our common stock. We are not obligated to pay a
dividend on our common stock and do not anticipate payment of any dividends for
the foreseeable future.. The value of your stock may be reduced in that
prospective buyers may prefer a stock which does pay a dividend.
 
 Potential
volatility of stock price will affect the value of our common stock
 
 There can
be no assurance that an active public trading market can be established or
sustained. Furthermore, if a regular trading market for the common stock is
established, the shares could be subject to significant fluctuations in response
to operating results and other factors, many of which are not within our
control. Accordingly, you may not be able to obtain a satisfactory price for
your shares if you need to sell some or all of your shares at a time when the
shares may be depressed.
 
 Available
Information
  We file
electronically with the Securities and Exchange Commission our annual reports on
Form 10-KSB, quarterly reports on Form 10-QSB, 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.
  Item
2.    Properties
  We are
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,
and approximately 600 square feet of office space in China for approximately
$1000 per month. Collectively, all of the space we lease is utilized for as
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 windfarm activities. We do not foresee any significant difficulties
in obtaining any required additional facilities.
 
 Item
3.    Legal Proceedings
 
 We are
not currently involved in any legal proceedings
 
 Item
4.     Submission of Matters to a Vote of Security
Holders
  None.  Table of Contents
 11
 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, 2006 through December 31, 2007.
  BidHigh
              
              Low2006
      Fiscal YearFirst
      Quarter
              
              $
              0.20
              
              $
              0.01Second
      Quarter
              
              $
              0.19
              
              $
              0.09Third
      Quarter
              
              $
              0.11
              
              $
              0.05Fourth
      Quarter
              
              $
              0.13
              
              $
              0.062007
      Fiscal YearFirst
      Quarter
              
              $
              0.07
              
              $
              0.14Second
      Quarter
              
              $
              0.09
              
              $
              0.23Third
      Quarter
              
              $
              0.06
              
              $
              0.13Fourth
      Quarter
              
              $
              0.05
              
              $
              0.18
  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.
  Holders
  As of
April 11, 2008, there were approximately 128 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.
 Table of Contents
 12
 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, 2007, and subsequently through the date of this Report.
 
 Item
6.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.
 
 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.
 
 Our
commitment to our investors is to provide an ethical investment
opportunity.
 
 Results
of Operations
  Year
Ended December 31, 2007 Compared to Year Ended December 31, 2006
  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.  Table of Contents
 13
 Results
of Operations
  For
      the Year Ended December 31, 2007
                $
              Increase
      (Decrease) from Prior Period
                %
              
              For
      the Year Ended December 31, 2006
                $
              Increase
      (Decrease) from Prior Period
                %Operating
      Expenses
              
              5,679,168
              159.46
              
              2,188,854
              (10.78)Net
      Loss from Continuing Operations
              
              (5,679,168)
              159.46
              
              (2,188,854)
              (10.78)Other
      Income (Expense)
              
              (85,644)
              (10.34)
              
              (95,517)
              (64.25)Net
      Loss before Discontinued Operations
              
              (5,764,182)
              152.33
              
              (2,284,371)
              (16.03)Discontinued
      Operations
              
              (249,758)
              19.51
              
              (208,981)
              214.13Net
      Loss for the Year
              
              (6,014,570)
              141.22
              
              (2,493,352)
              (10.54)
  General
and Administrative Expenses
  During
the year ended December 31, 2007, the Company incurred general and
administrative expenses of $4,209,997 compared to $2,188,854 in the previous
year. The 92.34% increase of $2,021,143 in general and administrative expenses
was mainly attributable to a $1,750,934 increase in stock based compensation
from $1,443,987 during the year ended December 31, 2006 to $3,194,921 in the
year ended December 31, 2007..
  Net
Loss
  During
the year ended December 31, 2007, the Company incurred a net loss of $6,014,570,
compared to a net loss of $2,493,352 in the previous year. The 141.22% increase
of $3,521,218 in net loss was mainly attributable to an increase in stock based
compensation of $1,750,934 and the recognition of an impairment loss on goodwill
relating to the wind projects of $1,469,171.
  LIQUIDITY
AND CAPITAL RESOURCES
  As at
December 31, 2007, the Company had $18,211 in cash, total current assets of
$472,165, and current liabilities of $929,199. 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, 2007, the Company used $749,615 of net cash flows in
operating activities. However, the Company was able to fund operations by
receiving cash proceeds of $381,295 from common stock subscriptions and $104,858
from shareholder advances.
 
 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
 14
 Cash
Requirements
 
 Our cash
on hand as of December 31, 2007 is $18,211. We have sufficient cash on hand to
pay the costs of some of our operations as projected to twelve (12) months or
less and to fund our operations for that same period of time. However, 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 may 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 maintain profitability. We hired several members to our sales, marketing,
research and development, regulatory and administrative staff during the course
of 2007 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 be at
least $500,000. As such, we do not have sufficient funds on hand to meet our
planned expenditures over the next 24 months. Therefore, we may require and may
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 fund our
operations and have used our common stock to raise money for our operations as
well.
 
 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:
  Table of Contents
 15
 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.
  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.
 
 RECENT
ACCOUNTING PRONOUNCEMENTS
  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.
  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.
  Table of Contents
 16
 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.
  In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS No. 157 is to increase consistency and comparability in fair
value measurements and to expand disclosures about fair value
measurements.  SFAS No. 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS No. 157 applies
under other accounting pronouncements that require or permit fair value
measurements and does not require any new fair value measurements. The
provisions of SFAS No. 157 are effective for fair value measurements made in
fiscal years beginning after November 15, 2007. The adoption of this statement
is not expected to have a material effect on the Company's financial
statements.
  In
September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108, “Considering the Effects of Prior
Year Misstatements when Quantifying Misstatements in Current Year Financial
Statements.” SAB No. 108 addresses how the effects of prior year
uncorrected misstatements should be considered when quantifying misstatements in
current year financial statements. SAB No. 108 requires companies to quantify
misstatements using a balance sheet and income statement approach and to
evaluate whether either approach results in quantifying an error that is
material in light of relevant quantitative and qualitative factors. SAB No. 108
is effective for period ending after November 15, 2006. The adoption of SAB No.
108 did not have a material effect on the Company’s financial
statements.
  In
September 2006, the Financial Accounting Standards Board (FASB) issued SFAS No.
158, “Employers’ Accounting
for Defined Benefit Pension and Other Postretirement Plans – an amendment of
FASB Statements No. 87, 88, 106, and 132(R)”. This statement requires
employers to recognize the overfunded or underfunded status of a defined benefit
postretirement plan (other than a multiemployer plan) as an asset or liability
in its statement of financial position and to recognize changes in that funded
status in the year in which the changes occur through comprehensive income of a
business entity or changes in unrestricted net assets of a not-for-profit
organization.  This statement also requires an employer to measure the
funded status of a plan as of the date of its year-end statement of financial
position, with limited exceptions. The provisions of SFAS No. 158 are effective
for employers with publicly traded equity securities as of the end of the fiscal
year ending after December 15, 2006. The adoption of this statement did not have
a material effect on the Company's reported financial position or results of
operations.
  In June
2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statements No. 109”. FIN 48
clarifies the accounting for uncertainty in income taxes by prescribing a
two-step method of first evaluating whether a tax position has met a more likely
than not recognition threshold and second, measuring that tax position to
determine the amount of benefit to be recognized in the financial statements.
FIN 48 provides guidance on the presentation of such positions within a
classified statement of financial position as well as on derecognition, interest
and penalties, accounting in interim periods, disclosure, and transition. FIN 48
is effective for fiscal years beginning after December 15, 2006. The adoption of
this statement did not have a material effect on the Company's financial
statements.
  In March
2006, the FASB issued SFAS No. 156, "Accounting for Servicing of
Financial Assets, an amendment of FASB Statement No. 140, Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities". This statement requires all separately recognized servicing
assets and servicing liabilities be initially measured at fair value, if
practicable, and permits for subsequent measurement using either fair value
measurement with changes in fair value reflected in earnings or the amortization
and impairment requirements of Statement No. 140. The subsequent measurement of
separately recognized servicing assets and servicing liabilities at fair value
eliminates the necessity for entities that manage the risks inherent in
servicing assets and servicing liabilities with derivatives to qualify for hedge
accounting treatment and eliminates the characterization of declines in fair
value as impairments or direct write-downs. SFAS No. 156 is effective for an
entity's first fiscal year beginning after September 15, 2006. The adoption of
this statement did not have a material effect on the Company's financial
statements.
  Table of Contents
 17
 In
February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140",
to simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", to permit fair value re-measurement
for any hybrid financial instrument with an embedded derivative that otherwise
would require bifurcation, provided that the whole instrument is accounted for
on a fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the Impairment or
Disposal of Long-Lived Assets", to allow a qualifying special-purpose
entity to hold a derivative financial instrument that pertains to a beneficial
interest other than another derivative financial instrument. SFAS No. 155
applies to all financial instruments acquired or issued after the beginning of
an entity's first fiscal year that begins after September 15, 2006, with earlier
application allowed. The adoption of this statement did not 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.
  Table of Contents
 18
 Item 7.    Financial Statements
  Welwind
Energy International Corporation
 
 December
31, 2007
 
 
  IndexReport of
      Independent Registered Public Accounting Firm
              F–1Consolidated
      Balance Sheets
              F–2Consolidated
      Statements of Operations
              F–3Consolidated
      Statements of Cash Flows
              F–4Consolidated
      Statement of Stockholders’ Equity
              F–5Notes to the
      Consolidated Financial Statements
              F–6
   Table of Contents
 19
  
 
  Report of Independent
Registered Public Accounting Firm
  
 To the
Directors and Stockholders
 Welwind
Energy International Corporation
 (formerly
Vitasti Inc.)
 
 We have
audited the accompanying consolidated balance sheets of Welwind Energy
International Corporation (formerly Vitasti Inc.) as of December 31, 2007 and
2006 and the related consolidated statements of operations, cash flows and
stockholders' equity for the years then ended. These consolidated 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 audits to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. The Company is not required to have, nor were we
engaged to perform, an audit of its internal control over financial reporting.
An audit includes 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 internal control over financial reporting. Accordingly, we
express no such opinion. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide 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 (formerly Vitasti Inc.) as of December 31, 2007 and 2006, and the
results of its operations and its cash flows for the years then ended, in
conformity with accounting principles generally accepted in the United
States.
 
 The
accompanying consolidated financial statements have been prepared assuming the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company has incurred significant
operating losses. The Company will need additional equity/debt financing to
sustain operations. These factors raise substantial doubt about the Company’s
ability to continue as a going concern. Management’s plans in regard to these
matters are also discussed in Note 1. The consolidated financial statements do
not include any adjustments that might result from the outcome of this
uncertainty.
 
 /s/ MANNING ELLIOTT
LLP
 
 CHARTERED
ACCOUNTANTS
  Vancouver,
Canada
  April 10,
2008
  Table of Contents
 20
 Welwind
Energy International Corporation
 Consolidated
Balance Sheets
 (Expressed
in Canadian Dollars)
 
 
 December
      31,
                2007
                $
              
              
              December
      31,
                2006
                $(Restated
      –
                Note
      14)ASSETSCurrent
      AssetsCash
              
              
              18,211
              
              
              
              603,182Taxes
      recoverable
              
              
              17,898
              
              
              
              13,836Prepaid
      expenses (Note 3)
              
              
              426,477
              
              
              
              1,417,630Current
      assets of discontinued operations (Note 11)
              
              
              9,579
              
              
              
              15,703Total
      Current Assets
              
              
              472,165
              
              
              
              2,050,351Property
      and equipment (Note 4)
              
              
              514,397
              
              
              
              212,434Customer
      relationships (Note 9)
              
              
              245,016
              
              
              
              245,016Goodwill
      (Note 9)
              
              
              –
              
              
              
              1,469,171Assets
      held for sale (Note 11)
              
              
              2,224
              
              
              
              2,870Other
      long-term assets (Note 3)
              
              
              266,716
              
              
              
              –Total
      Assets
              
              
              1,500,518
              
              
              
              3,979,842LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      LiabilitiesAccounts
      payable
              
              
              129,618
              
              
              
              120,037Accrued
      liabilities
              
              
              20,117
              
              
              
              47,453Due
      to related parties (Note 6)
              
              
              765,426
              
              
              
              598,198Current
      liabilities of discontinued operations (Note 11)
              
              
              14,038
              
              
              
              9,989Total
      Liabilities
              
              
              929,199
              
              
              
              775,677Commitments
      and Contingencies (Notes 1 and 8)Stockholders’
      EquityPreferred
      Stock:Authorized:
      10,000,000 shares, US$0.001 par value
                Issued
      and outstanding: 10,000,000 shares
                (2006
      – 10,000,000 issued and outstanding)
              
              
              11,137
              
              
              
              11,137Common
      Stock:Authorized:
      290,000,000 shares, US$0.001 par value
                Issued
      and outstanding: 147,572,395 shares
                (2006
      – 128,583,583 issued and outstanding)
              
              
              164,704
              
              
              
              144,875Additional
      paid-in capital
              
              
              14,484,429
              
              
              
              12,274,139Stock
      subscriptions receivable
              
              
              –
              
              
              
              (1,151,605
              )Accumulated
      deficit
              
              
              (14,088,951
              )
              
              
              (8,074,381
              )Total
      Stockholders’ Equity
              
              
              571,319
              
              
              
              3,204,165Total
      Liabilities and Stockholders’ Equity
              
              
              1,500,518
              
              
              
              3,979,842
   (The
accompanying notes are an integral part of these consolidated financial
statements)
 
 F-2
 Table of Contents
 21
 Welwind
Energy International Corporation
 Consolidated
Statements of Operations
 (Expressed
in Canadian Dollars)
 
 
 For
      the Year Ended
                December
      31,
                2007
                $
              
              
              For
      the Year Ended
                December
      31,
                2006
                $(Restated
      –
                Note
      14)Revenue
              
              
              –
              
              
              
              –Operating
      ExpensesGeneral
      and Administrative
              
              
              4,209,997
              
              
              
              2,188,854Impairment
      loss on goodwill (Note 9)
              
              
              1,469,171
              
              
              
              –Net
      Loss from Continuing Operations
              
              
              (5,679,168
              )
              
              
              (2,188,854
              )Other
      Income (Expense)Loss
      on settlement of debt (Note 7)
              
              
              (85,644
              )
              
              
              (94,517
              )Loss
      on disposal of property and equipment
              
              
              –
              
              
              
              (1,000
              )Net
      Loss before Discontinued Operations
              
              
              (5,764,812
              )
              
              
              (2,284,371
              )Discontinued
      Operations (Note 11)
              
              
              (249,758
              )
              
              
              (208,981
              )Net
      Loss for the Year
              
              
              (6,014,570
              )
              
              
              (2,493,352
              )Net
      Loss Per Common ShareContinuing
      Operations – Basic and Diluted
              
              
              (0.04
              )
              
              
              (0.03
              )Discontinued
      Operations – Basic and Diluted
              
              
              –
              
              
              
              –(0.04
              )
              
              
              (0.03
              )Weighted
      Average Number of Common Shares Outstanding
              
              
              142,973,000
              
              
              
              71,309,000
 
 
 (The
accompanying notes are an integral part of these consolidated financial
statements)
 
 F-3
 Table of Contents
 22
 Welwind
Energy International Corporation
 (A
Development Stage Company)
 Consolidated
Statements of Cash Flows
 (Expressed
in Canadian Dollars)
 
 For
      the
                Year
      Ended
                December
      31,
                2007
                $
              
              
              For
      the
                Year
      Ended
                December
      31,
                2006
                $(Restated
      – Note 14)Operating
      ActivitiesNet
      loss for the year
              
              
              (6,014,570
              )
              
              
              (2,493,352
              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Amortization
              
              
              20,192
              
              
              
              7,212Loss
      on settlement of debt
              
              
              85,644
              
              
              
              90,732Loss
      on disposal of property and equipment
              
              
              –
              
              
              
              1,000Stock-based
      compensation
              
              
              3,194,921
              
              
              
              1,443,987Impairment
      loss on goodwill
              
              
              1,469,171
              
              
              
              –Changes
      in operating assets and liabilities:Taxes
      recoverable
              
              
              (7,972
              )
              
              
              (4,643
              )Inventory
              
              
              10,035
              
              
              
              (12,703
              )Prepaid
      expenses
              
              
              617
              
              
              
              (5,440
              )Accounts
      payable and accrued liabilities
              
              
              25,964
              
              
              
              93,503Due to related
      parties
              
              
              466,383
              
              
              
              319,649Net
      Cash Flows Used In Operating Activities
              
              
              (749,615
              )
              
              
              (560,949
              )Investing
      ActivitiesCash
      received upon acquisition of Welwind Energy
              
              
              –
              
              
              
              2,194Purchase
      and construction of equipment
              
              
              (321,509
              )
              
              
              (200,592
              )Net
      Cash Flows Used In Investing Activities
              
              
              (321,509
              )
              
              
              (198,398
              )Financing
      ActivitiesProceeds
      from issuance of preferred shares
              
              
              –
              
              
              
              556,855Proceeds
      from subscriptions and issuance of common shares
              
              
              381,295
              
              
              
              804,875Advances
      from shareholders
              
              
              104,858
              
              
              
              –Net
      Cash Flows Provided By Financing Activities
              
              
              486,153
              
              
              
              1,361,730Increase
      (Decrease) in Cash
              
              
              (584,971
              )
              
              
              602,383Cash
      – Beginning of Year
              
              
              603,182
              
              
              
              799Cash
      – End of Year
              
              
              18,211
              
              
              
              603,182Supplementary
      DisclosuresInterest
      paid
              
              
              –
              
              
              
              –Income
      taxes paid
              
              
              –
              
              
              
              –Non-cash
      Investing and Financing ActivitiesShares
      issued for finders’ fees
              
              
              –
              
              
              
              1,188,001Shares issued to settle
      debt
              
              
              404,101
              
              
              
              103,109
 
  (The
accompanying notes are an integral part of these consolidated financial
statements)
 
 F-4
 Table of Contents
 23
 Welwind
Energy International Corporation
 Consolidated
Statement of Stockholders’ Equity (Deficit)
 From
December 31, 2005 to December 31, 2007
 (Expressed
in Canadian Dollars)
 
 Preferred
      Stock
              Common
      Stock
              Additional
                Paid-in
                Capital
              Stock
      subscriptions receivable
              Accumulated
                Deficit
              Total#
      of
                shares
              Amount
              #
      of
                shares
              AmountBalance,
      December 31, 2005
              –
              $
              –
              45,436,494
              $
              49,893
              $
              5,285,024
              $
              –
              $
              (5,581,029)
              $
              (246,112)Common
      stock issued for cash
              –
              –
              34,050,000
              38,883
              1,917,597
              (1,151,605)
              –
              804,875Common
      stock issued for services
              –
              –
              27,326,795
              31,181
              2,605,736
              –
              –
              2,636,917Common
      stock issued for finders’ fees
              –
              –
              10,000,000
              11,429
              1,176,572
              –
              –
              1,188,001Common
      stock issued for settlement of debt
              –
              –
              770,000
              859
              102,250
              –
              –
              103,109Stock
      split adjustment
              –
              –
              294
              1
              24
              –
              –
              25Common
      stock issued for purchase of Welwind Energy International
      Corp.
              –
              –
              11,000,000
              12,629
              1,619,456
              
              
              1,632,085Preferred
      stock issued for cash
              10,000,000
              11,137
              –
              –
              545,718
              –
              –
              556,855Share
      issuance costs
              –
              –
              –
              –
              (1,188,001)
              –
              –
              (1,188,001)Stock-based
      compensation
              –
              –
              –
              –
              209,763
              –
              –
              209,763Net
      loss for the year
              –
              –
              –
              –
              –
              –
              (2,493,352)
              (2,493,352)Balance,
      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
              –
              –
              25,324,000
              27,269
              2,374,073
              –
              –
              2,401,342Common
      stock issued for settlement of debt
              –
              –
              3,664,812
              4,019
              411,175
              –
              –
              415,194Common
      stock subscriptions received
              –
              –
              –
              –
              –
              381,295
              –
              381,295Cancellation
      of shares
              –
              –
              (10,000,000)
              (11,459)
              (561,442)
              756,794
              –
              183,893Write
      off of subscriptions receivable
              –
              –
              –
              –
              (13,516)
              13,516
              –
              –Net
      loss for the year
              –
              –
              –
              –
              –
              –
              (6,014,570)
              (6,014,570)Balance,
      December 31, 2007 (Restated)
              10,000,000
              $
              11,137
              147,572,395
              $
              164,704
              $
              14,484,429
              $
              –
              $
              (14,088,951)
              $
              571,319
 
 (The
accompanying notes are an integral part of these consolidated financial
statements)
 
 F-5
 Table of Contents
 24
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (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.
  The
Company has not realized revenues on its wind power projects, has a working
capital deficiency of $457,034, and has an accumulated deficit at December 31,
2007 of $14,088,951. The Company's ability to continue as a going concern is
dependent upon the Company's ability to obtain additional financing and/or
achieving a profitable level of operations. These factors raise substantial
doubt regarding the Company’s ability to continue as a going
concern.  The consolidated financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
 
 Management
of the Company has undertaken a plan with the goal of sustaining the Company’s
operations for the next twelve months and beyond.   These steps
include: (a) becoming cash flow positive via the Company’s Zhanjiang turbine and
a Power Purchase Agreement from the local power authority, (b) continue efforts
to raise significant additional capital and/or other forms of financing with
Acterra Group and Adventis Capital; and (c) controlling overhead expenses. 
There can be no assurance that any of these efforts will be
successful.
 
 2.      Summary
of Significant Accounting Policies
  a)
              Basis
      of Presentation
  These
consolidated financial statements and related notes are presented in accordance
with accounting principles generally accepted in the United States, and are
expressed in Canadian dollars. These consolidated financial statements include
the accounts of the Company and its wholly-owned subsidiary, WEIC, incorporated
in the Province of Alberta, Canada. All significant intercompany balances and
transactions have been eliminated. The Company’s fiscal year-end is December
31.
  b)
              Use
      of Estimates
  The
preparation of 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.
  d)
              Property
      and Equipment
  Equipment
is recorded at cost and is depreciated using the declining balance method over
the estimated useful lives of the related asset. Maintenance and repairs are
charged to expense as incurred. Significant renewals and betterments are
capitalized.  Costs included in wind equipment are under construction
and will be amortized over their useful life on a straight-line basis once they
are put into use.
  F-6
 Table of Contents
 25
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 2.      Summary
of Significant Accounting Policies (continued)
  e)
              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.
  f)
              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 as noted in Note 8(a) and (b). 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.
  g)
              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”.
  h)
              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.
  i)
              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, 2007,
the exchange rate for one Chinese Renminbi was $0.1346 CAD (2006 - $0.1496
CAD).  For the period from January 1, 2007 to December 31, 2007, the
average exchange rate for one Chinese Renminbi was $0.14131 CAD (2006 - $0.14125
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.
  F-7
 Table of Contents
 26
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 2.      Summary
of Significant Accounting Policies
  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. As of December 31, 2007, the 450,000 outstanding stock options
were forfeited.  Refer to Note 7.
  k)
              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, 2007 and 2006, 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.
  l)
              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.
  m)
              Financial
      Instruments and Concentrations of
Business
  The fair
values of financial instruments including cash, taxes recoverable, 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.
  n)
              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.
  o)
              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.
  F-8
 Table of Contents
 27
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 2.      Summary
of Significant Accounting Policies (continued)
  p)
              Recently
      Issued Accounting Pronouncements
 
 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.
  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.
  In
September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”. The
objective of SFAS No. 157 is to increase consistency and comparability in fair
value measurements and to expand disclosures about fair value
measurements.  SFAS No. 157 defines fair value, establishes a
framework for measuring fair value in generally accepted accounting principles,
and expands disclosures about fair value measurements. SFAS No. 157 applies
under other accounting pronouncements that require or permit fair value
measurements and does not require any new fair value measurements. The
provisions of SFAS No. 157 are effective for fair value measurements made in
fiscal years beginning after November 15, 2007. The adoption of this statement
is not expected to have a material effect on the Company's financial
statements.
  F-9
 Table of Contents
 28
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 2.      Summary
of Significant Accounting Principles (continued)
  q)
              Recently
      Adopted Accounting Pronouncements
  In
September 2006, the SEC issued Staff Accounting Bulletin (“SAB”) No. 108,
“Considering the Effects of Prior Year Misstatements when Quantifying
Misstatements in Current Year Financial Statements.” SAB No. 108 addresses how
the effects of prior year uncorrected misstatements should be considered when
quantifying misstatements in current year financial statements. SAB No. 108
requires companies to quantify misstatements using a balance sheet and income
statement approach and to evaluate whether either approach results in
quantifying an error that is material in light of relevant quantitative and
qualitative factors. SAB No. 108 is effective for periods ending after November
15, 2006. The adoption of SAB No. 108 did not have a material effect on the
Company’s financial statements.
  In
September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined
Benefit Pension and Other Postretirement Plans – an amendment of FASB Statements
No. 87, 88, 106, and 132(R)”. This statement requires employers to recognize the
overfunded or underfunded status of a defined benefit postretirement plan (other
than a multiemployer plan) as an asset or liability in its statement of
financial position and to recognize changes in that funded status in the year in
which the changes occur through comprehensive income of a business entity or
changes in unrestricted net assets of a not-for-profit
organization.  This statement also requires an employer to measure the
funded status of a plan as of the date of its year-end statement of financial
position, with limited exceptions. The provisions of SFAS No. 158 are effective
for employers with publicly traded equity securities as of the end of the fiscal
year ending after December 15, 2006. The adoption of this statement did not have
a material effect on the Company's financial statements.
  In June
2006, the FASB issued FASB Interpretation No. 48, “Accounting for Uncertainty in
Income Taxes, an interpretation of FASB Statements No. 109”. FIN 48 clarifies
the accounting for uncertainty in income taxes by prescribing a two-step method
of first evaluating whether a tax position has met a more likely than not
recognition threshold and second, measuring that tax position to determine the
amount of benefit to be recognized in the financial statements. FIN 48 provides
guidance on the presentation of such positions within a classified statement of
financial position as well as on derecognition, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN 48 is effective
for fiscal years beginning after December 15, 2006. The adoption of this
statement did not have a material effect on the Company's financial
statements.
  In March
2006, the FASB issued SFAS No. 156, "Accounting for Servicing of Financial
Assets, an amendment of FASB Statement No. 140, Accounting for Transfers and
Servicing of Financial Assets and Extinguishments of Liabilities". This
statement requires all separately recognized servicing assets and servicing
liabilities be initially measured at fair value, if practicable, and permits for
subsequent measurement using either fair value measurement with changes in fair
value reflected in earnings or the amortization and impairment requirements of
Statement No. 140. The subsequent measurement of separately recognized servicing
assets and servicing liabilities at fair value eliminates the necessity for
entities that manage the risks inherent in servicing assets and servicing
liabilities with derivatives to qualify for hedge accounting treatment and
eliminates the characterization of declines in fair value as impairments or
direct write-downs. SFAS No. 156 is effective for an entity's first fiscal year
beginning after September 15, 2006. The adoption of this statement did not have
a material effect on the Company's financial statements.
  In
February 2006, the FASB issued SFAS No. 155, "Accounting for Certain Hybrid
Financial Instruments-an amendment of FASB Statements No. 133 and 140", to
simplify and make more consistent the accounting for certain financial
instruments. SFAS No. 155 amends SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities"; to permit fair value re-measurement for any
hybrid financial instrument with an embedded derivative that otherwise would
require bifurcation, provided that the whole instrument is accounted for on a
fair value basis. SFAS No. 155 amends SFAS No. 140, "Accounting for the
Impairment or Disposal of Long-Lived Assets", to allow a qualifying
special-purpose entity to hold a derivative financial instrument that pertains
to a beneficial interest other than another derivative financial instrument.
SFAS No. 155 applies to all financial instruments acquired or issued after the
beginning of an entity's first fiscal year that begins after September 15, 2006,
with earlier application allowed. 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.
  F-10
 Table of Contents
 29
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 3.      Prepaid
Expense and Other Long-term Assets
 
 
 December
      31,
                2007
                $
              December
      31,
                2006
                $Consulting
              
              680,295
              1,404,114Other
              
              12,898
              13,516Total
              
              693,193
              1,417,630
 
 As at
December 31, 2007, the Company has non-current prepaid expenses of $266,716
(2006 - $nil) relating to consulting costs.
 
 4.      Property
and Equipment
 
 
 Cost
                $
              Accumulated
      Depreciation
                $
              December
      31,
                2007
                Net
      Carrying Value
                $
              December
      31,
                2006
                Net
      Carrying Value
                $Wind
      equipment under construction
              448,103
              –
              448,103
              158,658Automobile
              70,843
              19,843
              51,000
              44,485Computer
      hardware
              10,034
              2,948
              7,086
              2,780Office
      furniture and equipment
              11,798
              3,590
              8,208
              6,511540,778
              26,381
              514,397
              212,434
 
 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, 2007.
 
 As at
December 31, 2007, the Company had equipment held for sale with a net carrying
value of $2,224 (2006 - $2,870) related to discontinued
operations.  Refer to Note 11.
 
 5.      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, 2007, there are
10,000,000 shares of preferred stock issued and outstanding.
  6.      Related
Party Transactions/Balances
  a)
              As
      at December 31, 2007, the balance due to related parties amounted to
      $765,426 (2006 - $598,198), which includes $111,499 (2006 - $136,153) owed
      to the President of the Company for management fees and working capital
      purposes and $531,456 (2006 - $390,632) owed to the spouse of the
      President of the Company for working capital purposes.  The
      amounts are unsecured, non-interest bearing, and due on
      demand.
  b)
              As
      at December 31, 2007, the Company owes $122,471 (2006 - $71,413) to
      shareholders for advances to the Company and expenses paid on behalf of
      the Company. Of this amount, $103,040 (2006 - $Nil) is unsecured, bears
      interest at 10% per annum, and is due on demand. The remaining balance is
      unsecured, non-interest bearing, and payable on
  demand.
  F-11
 Table of Contents
 30
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 6.      Related
Party Transactions/Balances (continued)
  c)
              During
      the year ended December 31, 2007, the Company issued 2,321,413 shares of
      common stock to the President of the Company for consulting services and
      reimbursements of expenses paid on behalf of the Company valued at
      $172,637. Refer to Notes 7(a) and
(o).
  d)
              During
      the year ended December 31, 2007, the Company recognized a total of
      $638,937 for consulting services provided by a relative of the President
      of the Company. During the year, the Company issued 300,000 shares of
      common stock valued at $18,434 to this individual. Refer to Notes 7 (d)
      and (e). As at December 31, 2007, $9,687 (2006 - $630,190) is included in
      prepaid expenses.
  7.      Common
Stock
  Year
Ended December 31, 2007:
  a)
              During
      the three month period ended December 31, 2007, the Company issued
      8,400,000 common shares for consulting services valued at $482,291
      (US$491,100), of which $149,729 is included in prepaid expenses as at
      December 31, 2007. The Company also issued 1,058,255 common shares with a
      fair value of $57,046 (US$59,262) to the President of the Company as
      reimbursement of expenses paid on behalf of the Company with a fair value
      of $36,484, resulting in stock-based compensation of
      $20,562.  The Company cancelled 10,000,000 common shares issued
      for consulting services based on nonperformance of
    services.
  b)
              During
      the three month period ended September 30, 2007, the Company issued
      4,924,000 common shares for consulting services valued at $295,194
      (US$278,680). As at December 31, 2007, $64,751 is included in prepaid
      expenses.
  c)
              During
      the three month period ended June 30, 2007, the Company issued 11,600,000
      common shares for consulting services valued at $1,582,771 (US$1,382,000),
      of which $385,256 is included in prepaid expenses as at December 31, 2007.
      In addition, the Company also issued 1,000,000 shares of common stock to a
      shareholder with a fair value of $133,128 to settle a shareholder’s loan
      in the amount of $58,578 resulting in a loss on settlement of debt of
      $85,644.
  d)
              During
      the three month period ended March 31, 2007, the Company issued 1,606,557
      common shares at approximately US$0.12 per common share with a fair value
      of $225,020 (US$191,180) for settlement of past services with a fair value
      of $175,823 (US$210,123), resulting in stock-based compensation of $49,197
      (US$36,880). In addition, the Company also issued 400,000 common shares at
      approximately US$0.09 per common share to a consultant for consulting
      services with a fair value of
$40,191.
  e)
              During
      the year ended December 31, 2007, the Company received proceeds of
      $381,295 (US$330,010) relating to the 30,000,000 common shares issued
      during the year ended December 31,
2006.
  Year
Ended December 31, 2006:
  f)
              During
      the three month period ended December 31, 2006, the Company issued
      5,525,000 shares of common stock for consulting services valued at
      $690,275 (US$602,500). As at December 31, 2007, $nil (2006 - $568,469) is
      included in prepaid expenses. The Company also issued 9,500,000 shares of
      common stock to the spouse of the President of the Company for consulting
      services valued at $984,806 (US$863,000).  As at December 31,
      2007, $Nil (2006 – $630,190) is included in prepaid expenses. The Company
      also issued 30,000,000 shares of common stock for proceeds of $1,718,700
      (US$1,500,000).  The proceeds of the private placement are for
      the development of the Zhanjiang Wind Farm and the Yangxi
      Project.  In addition, the Company issued a total of 10,000,000
      shares of common stock for finders’ fees valued at $1,188,001
      (US$1,038,000).
  g)
              During
      the three month period ended September 30, 2006, the Company issued
      2,200,000 shares of common stock for consulting services valued at
      $220,515 (US$198,000). As at December 31, 2007, $Nil (2006 - $Nil) is
      included in prepaid expenses. The Company also issued 2,000,000 shares of
      common stock for director’s compensation valued at $124,736 (US$112,000).
      As at December 31, 2007, $80,559 (2006 - $111,743) is included in prepaid
      expenses. In addition, the Company issued 2,000,000 shares of common stock
      for cash proceeds of $111,371 (US$100,000). Refer to Note 5. The Company
      also returned to treasury 2,000,000 shares of common stock valued at
      $64,725 (US$56,000), which were previously issued in the period. The
      Company also issued 294 shares of common stock at a price of US$0.075 as a
      correction relating to the reverse stock split in a prior fiscal
      year.
  F-12
 Table of Contents
 31
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 7.      Common
Stock (continued)
  h)
              During
      the three month period ended June 30, 2006, the Company issued 38,462
      shares of common stock for consulting services valued at $8,555
      (US$7,000). As at December 31, 2007, $Nil (2006 - $Nil) is included in
      prepaid expenses. The Company also issued 500,000 shares of common stock
      to the spouse of the President of the Company at a price of US$0.17 per
      share for consulting services valued at $95,413 (US$85,000). In addition,
      the Company issued 770,000 shares of common stock at a price of US$0.12
      per share in settlement of debt of $8,592 (US$7,700) resulting in a loss
      on settlement of debt of $94,517.Pursuant to the exercise of 550,000 stock
      options, the Company issued 550,000 shares of common stock at a price of
      US$0.07 per share for proceeds of $43,216 (US$38,500). Pursuant to the
      exercise of 1,500,000 stock purchase warrants, the Company issued
      1,500,000 shares of common stock at a price of US$0.05 per share for
      proceeds of $83,192 (US$75,000). Pursuant to a Share Exchange Agreement,
      as described in Note 9, the Company issued 11,000,000 shares of common
      stock at a price of US$0.126 per share valued at
    $1,632,085.
  i)
              During
      the three month period ended March 30, 2006, the Company issued 6,600,000
      shares of common stock for consulting services valued at $178,573
      (US$154,080). As at December 31, 2007, $Nil (2006 – Nil) is included in
      prepaid expenses.
  i)
              During
      the year ended December 31, 2006, the Company issued 2,963,333 shares of
      common stock for legal services valued at $398,770 (US$347,550). At
      December 31, 2007, $Nil (2006 – $93,532) is included in prepaid
      expenses.
  k)
              During
      the year ended December 31, 2006, the Company’s shareholders approved an
      amendment to the Company’s Articles of Incorporation to increase the
      number of authorized shares of common stock from 90,000,000 shares with a
      par value of $0.0000029 per share to 290,000,000 shares with a par value
      of $0.001 per share, and a change in the par value of preferred stock from
      $0.0001 per share to $0.001 per
share.
  Stock
Options
  On June
23, 2006, the Company adopted a fixed stock option plan that provides for the
issuance of incentive and non-qualified stock options to officers, directors,
employees and consultants to acquire up to 15,000,000 shares of the Company's
common stock. The Board of Directors determines the terms of the options
granted, including the number of options granted, the exercise price and the
vesting schedule. The stock option plan will expire December 31,
2016.
  A summary
of the Company’s stock option activity is as follows:
  Year
      Ended
                December
      31, 2007
              Year
      Ended
                December
      31, 2006Number
      of Options
              Weighted
      Average
                Exercise
      Price
              Number
      of Options
              Weighted
      Average
                Exercise
      PriceBalance,
      beginning of year
              450,000
              US$
      0.04
              450,000
              US$
      0.04Granted
              -
              -
              550,000
              US$
      0.07Cancelled
      / Forfeited
              (450,000)
              US$
      0.04
              -
              -Exercised
              -
              -
              (550,000)
              US$
      0.07Balance,
      end of year
              -
              -
              450,000
              US$
      0.04
 
 Exercisable,
      end of year
              -
              -
              450,000
              US$
      0.04
  As at
December 31, 2007, the aggregate intrinsic value of the stock options granted
and outstanding is $nil (2006 - $27,000).
  F-13
 Table of Contents
 32
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 7.      Common
Stock (continued)
  On May
25, 2006, the Company granted stock options to acquire 550,000 common shares at
an exercise price of US$0.07 per share exercisable on or before May 25,
2016.  The stock options vested immediately and were exercised on May
25, 2006. The fair value for options granted was estimated at the date of grant
using the Black-Scholes option pricing model with the following weighted average
assumptions: expected life of option– 0.05 years; expected volatility – 143%;
rate of dividends – 0%; and risk-free rate – 4.80%. The weighted average fair
value of stock options granted was $0.08 per share. During the year ended
December 31, 2006, the Company recorded stock-based compensation related to this
grant of options of $43,025.
  Warrants
  The
following table summarizes the continuity of the Company’s
warrants:
  Year
      Ended
                December
      31, 2007
              Year
      Ended
                December
      31, 2006Number
      of
                Warrants
              WeightedAverage
                ExercisePrice
              Number
      of
                Warrants
              WeightedAverage
                ExercisePriceBalance,
      beginning of year
              391,863
              US$
      0.15
              391,863
              US$
      0.15Issued
              -
              -
              1,500,000
              US$
      0.05Exercised
              -
              -
              (1,500,000)
              US$
      0.05Expired/Forfeited
              (391,863)
              US$0.15Balance,
      end of year
              -
              -
              391,863
              US$
      0.15
  8.      Commitments
  a)
              The
      Company entered into an agreement dated January 18, 2006, with the
      Government of Yangxi City (“Yangxi”) for the development of a wind farm
      producing a total of 400,000 kilowatt (“KW”) per year of electrical power
      in the next ten years.  Yangxi will assist the Company in
      securing land, sale price for the electricity, financing of the project,
      and preferential tax treatment. Initially, the Company will be required to
      prepare a community wind assessment and a feasibility study for approval.
      Yangxi can terminate the agreement if the project is not under
      construction within 24 months of signing the agreement. As at December 31,
      2007, the Company has commenced construction on the plant and the
      agreement is in good standing.
  b)
              The
      Company entered into an agreement dated March 21, 2006, with the Zhanjiang
      Foreign Trade & Economic Bureau (“Zhanjiang”) for the development of a
      wind power generation project in Zhanjiang City in the Guangdong Province.
      The project is expected to produce up to 600,000 KW of electrical power
      per year, with Phase 1 being 100,000 KW per year. The Company had six
      months from the date of the agreement to begin Phase 1 (commenced) or
      Zhanjiang had the right to terminate the agreement. The Company granted a
      20% interest in this project to an investor.  Refer to Note
      5.
  c)
              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.      Business
Acquisition
  On April
11, 2006, the Company entered into an Asset Purchase Agreement, subsequently
replaced by a Share Exchange Agreement (the “Agreement”) with WEIC, a private
Canadian company, to acquire 100% of the outstanding and issued share capital of
WEIC in exchange for 11,000,000 restricted shares of the Company. WEIC was
founded in 2005 to build, own and operate wind farms on an international scale.
This acquisition was accounted for using the purchase method and the
consolidated financial statements include the results of operations for this
business from the date of acquisition.  In accordance with SFAS No.
141 “Business Combinations”, the Company allocated the purchase price to the
tangible and intangible assets acquired and liabilities assumed based on their
fair values at the acquisition date.  The excess purchase price over
those fair values was recorded as goodwill.  The fair values assigned
to tangible and intangible assets acquired and liabilities assumed are based on
an independent valuation analysis using estimates and assumptions provided by
management, and other information compiled by management.  In
accordance with SFAS No. 142 intangible assets with indefinite lives are not
amortized but will be reviewed at least annually for
impairment.
  F-14
 Table of Contents
 33
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 9.      Business
Acquisition (continued)
  On June
22, 2006, the Company issued 11,000,000 shares of common stock, which were being
held in the trust account of WEIC’s legal counsel, pending the closing of the
transaction.  On August 17, 2006, the transaction closed.
  The
purchase price was allocated to the following assets and
liabilities:
  Cash
              $
              2,194Prepaid expenses and
      deposits
              
              7,172Property and
      equipment
              
              12,324Customer
      relationships
              
              245,016Goodwill
              
              1,469,171Accounts payable, and accrued
      liabilities
              
              (2,277)Due to related
      parties
              
              (101,515)Paid
      by issuance of 11,000,000 shares of common stock
              $
              1,632,085
  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.
 
 10.           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, 2007, the Company had $10,541,507 of unused Canadian non-capital
losses available for carry forward for Canadian income tax purposes which begin
to expire in the year 2008. However, due to the reverse merger transaction in
2004, these losses are restricted and may only be applied toward future profits
derived from activities which are all or substantially all the same as the
activities which created the losses.
  Current
year net operating losses for Canadian income tax purposes are approximately
$1,207,026 and will expire in 2027.
  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,
                2007
                $
              
              December
      31,
                2006
                $Earnings
      (loss) before taxes
              
              (6,014,570)
              (2,493,352)Statutory
      rate
              
              35.0%
              35.0%Computed
      expected tax (recovery)
              
              (2,105,100)
              (872,673)Non-deductible
      expenses
              
              1,675,624
              115,358Temporary
      differences
              
              6,705
              2,305Change
      in valuation allowance
              
              422,527
              758,068Other
              
              244
              (3,058)Reported
      income taxes
              
              –
              –
  F-15
 Table of Contents
 34
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 10.           Income
Taxes (continued)
  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,
                2007
                $
              
              December
      31,
                2006
                $Deferred
      tax asset-
      Non-capital losses
              
              3,690,000
              3,267,000-
      Less valuation allowance
              
              (3,690,000)
              (3,267,000)Net
      deferred tax asset
              
              –
              –
 
 
 11.           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:
  For
      the Period From
                January
      1, 2007 to
                November
      24,
                2007
              
              Year
                Ended
                December
      31,
                  2006$
              
              $Revenue
              
              
              197,545
              135,339Cost
      of sales
              
              
              (70,652)
              (36,857)Gross
      Profit
              
              
              126,893
              98,482Operating
      ExpensesGeneral
      and administrative
              
              
              376,651
              311,248Net
      Operating Loss
              
              
              (249,758)
              (212,766)Other
      expensesGain
      on settlement of debt
              
              
              –
              3,785Net
      Loss
              
              
              (249,758)
              (208,981)
   As at
December 31, 2007 and 2006, assets and liabilities of the discontinued retail
and wholesale foods division have been reported as discontinued
operations.
  December
      31,
                2007
                $
              
              December
      31,
                2006
                $Accounts
      receivable
              4,190
              279Inventory
              5,389
              15,424Current
      assets of discontinued operations
              9,579
              15,703Property
      and equipment, net
              2,224
              2,870Assets
      held for sale
              2,224
              2,870Accounts
      payable
              (14,038)
              (9,989)Current
      liabilities of discontinued operations
              (14,038)
              (9,989)
 
 F-16
 Table of Contents
 35
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 12.           Segmented
Information
  The
Company operates as one operating segment which is wind power projects in China.
The Chief Executive Officer is the Company’s Chief Operating Decision Maker
(CODM) as defined by SFAS 131, “Disclosure about Segments of an Enterprise and
Related Information.” The CODM allocates resources and assesses the performance
of the Company based on the results of operations.
 13.           Subsequent
Events
  a)
              On
      January 7, 2008, the Company issued 342,442 common shares of the Company
      at $0.11 per common share for a fair value of US$37,668 (CDN$38,000) to
      settle debt valued at $48,977, resulting in a gain on settlement of debt
      of $10,977.
  b)
              On
      January 17, 2008, the Company accepted subscriptions for 10,000,000 common
      shares of the Company at $0.05 per share for proceeds of
      $500,000.
  c)
              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.
  d)
              On
      March 6, 2008, the Company issued 2,050,000 common shares of the Company
      at $0.06 per common share for consulting services with a fair value of
      $121,130 (US$123,000).
  e)
              On
      March 26, 2008, the Company issued 3,500,000 common shares of the Company
      at $0.06 per common share for consulting services with a fair value of
      $213,780 (US$210,000).
  14.           Restatement
  The
Company has restated its financial statements as at December 31, 2007 and for
the year ended December 31, 2007 to record a correction to the stock based
compensation recognized in the year.  The effect of the restatement is
to increase net loss by $416,520 for the year ended December 31, 2007. Net loss
per share was unchanged.
  a)
              Balance
      Sheet
 As
      At December 31, 2007As
      Reported
                $
              
              
              Adjustment
                $
              
              
              As
      Restated
                $Stockholder’s
      Equity (Deficit)Additional
      paid-in capital
              
              
              14,067,909
              
              
              
              416,520
              
              
              
              14,484,429Accumulated
      deficit
              
              
              (13,672,431
              )
              
              
              (416,520
              )
              
              
              (14,088,951
              )
  b)
              Statements
      of Operations
 For
      the Year ended December 31, 2007As
      Reported
                $
              
              
              Adjustment
                $
              
              
              As
      Restated
                $Operating
      ExpensesGeneral
      and Administrative
              
              
              3,793,477
              
              
              
              416,520
              
              
              
              4,209,997Net
      Loss from Continuing Operations
              
              
              (5,262,648
              )
              
              
              (416,520
              )
              
              
              (5,679,168
              )Net
      Loss before Discontinued Operations
              
              
              (5,348,292
              )
              
              
              (416,520
              )
              
              
              (5,764,812
              )Net
      Loss for the Year
              
              
              (5,598,050
              )
              
              
              (416,520
              )
              
              
              (6,014,570
              )
  F-17
 Table of Contents
 36
 Welwind
Energy International Corporation
 Notes to
the Consolidated Financial Statements
 (Expressed
in Canadian Dollars)
 14.           Restatement
(continued)
  c)
              Statement
      of Cash Flows
 For
      the Year ended December 31, 2007As
      Reported
                $
              
              Adjustment
                $
              
              As
      Restated
                $Operating
      ActivitiesNet
      loss for the year
              (5,598,050)
              (416,520)
              (6,014,570)Adjustments
      to reconcile net loss to net cash used in operating
      activities:Stock-based
      compensation
              2,778,401
              416,520
              3,194,921
 
 F-18
 Table of Contents
 37
 Item
8.    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
8A(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, 2007.
 
 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,
2007.
  (2)    Management’s
Annual 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, 2007 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, 2007, the Company determined that there were control
deficiencies that constituted material weaknesses, as described
below.
  1.
              The
      Company has restated its consolidated financial statements for the periods
      ended June 30, 2007 and September 30, 2007, to reflect additional
      consulting expenses related to shares issued for services. The Company had
      previously recorded 6,000,000 common shares issued for cash at $0.05 per
      share for proceeds of $347,100 (US$300,000) as stock subscriptions
      receivable, with an additional $416,520 recognized as stock-based
      compensation. The Company restated its consolidated financial statements
      for the above periods to properly record the issuance of 6,000,000 common
      shares for consulting services with a fair value of $763,620. Due to this
      material weakness, management has concluded that the controls over
      accounting for share based payments were not operating effectively.
      Specifically, controls were not effective to ensure that significant
      non-routine transactions, accounting estimates, and other adjustments were
      appropriately reviewed, analyzed, and monitored on a timely basis. A
      material weakness in the period-end financial reporting process could
      result in the Company not being able to meet its regulatory filing
      deadlines and, if not remediated, has the potential to cause a material
      misstatement or to miss a filing deadline in the
  future.
  2.
              Due
      to the significant number and magnitude of out-of-period adjustments
      identified during the year-end closing process, management has concluded
      that the controls over the period-end financial reporting process were not
      operating effectively. Specifically, controls were not effective to ensure
      that significant non-routine transactions, accounting estimates, and other
      adjustments were appropriately reviewed, analyzed, and monitored on a
      timely basis. This was evidenced by a significant number of out-of-period
      adjustments noted during the year-end closing
  process
  Table of Contents
 38
 3.
              Certain
      entity level controls establishing a “tone at the top” were considered
      material weaknesses. The Company has no audit committee and there is an
      inadequate amount of oversight by the Company’s board of directors in the
      financial statement reporting process. There is no policy on fraud and no
      code of ethics at this time, though the Company plans to implement such
      policies in fiscal 2008.  A whistleblower policy is not
      necessary given the small size of the
  organization.
  4.
              Solely
      with respect to our operations in China, the Company has inadequate
      controls over cash transactions with no evidence of review by senior
      management. Specifically, the Company has not obtained dual check
      signatures on a consistent basis as required and there was no review of
      monthly bank account reconciliations by senior
  management.
  5.
              The
      Company has no system of internal controls relating to its operations in
      China. This includes approvals for expenditures by either senior
      management or the Board of Directors and no evidence of review of monthly
      bank account reconciliations by senior
  management.
  Management
is currently evaluating remediation plans for the above control
deficiencies.
  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, 2007 based on criteria established in Internal Control—Integrated
Frameworkissued by COSO.
  Manning
Elliott LLP, 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, 2007.
  (3)    Changes in
Internal Controls.     During the period ended
December 31, 2007, 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, 2007, 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.
  Item 8B.   Other Information
  None.
 
 PART III
 
 Item 9.
Directors, Executive Officers, Promoters, Control Persons and
Corporate Governance; Compliance With Section 16(a) of the Exchange
Act
 
 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
              
              39
              
              Chief
      Executive Officer, Chief Financial Officer, Secretary, Chairwoman and
      Director
              
              2004Shannon
      de Delley
              
              40
              
              Director
              
              2006Patrick
      Higgins
              
              39
              
              Director
              
              2005Pan
      Huifang
              
              38
              
              Director
              
              2006Chong-Jian
      Zhao
              
              49
              
              Director
              
              2006Feng
      Junyi
              
              46
              
              Director
              
              2007Baldwin
      Kam Tao Cheng
              
              58
              
              Director
              
              2007
  All
directors serve until their successors have been duly elected and qualified,
unless they earlier resign.
  Table of Contents
 39
 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.
 
 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.
 
 Table of Contents
 40
 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
 
 Chong-Jian
Zhao
 
 Mr. Zhao
was employed for 15 years as a Logistics and Economic Development Director for
Yanjaing Bureau of Import Export before co-founding Welwind Energy International
in Calgary, Alberta. He currently acts as Managing Director for Welwind --
China.
 
 Mr. Zhao
was born in China. In 1977, he worked in the Young Kwong City Science and
technology office for 6 years.  In order to get more experience with
international trade, he moved to the government office of Commerce & Trade
Bureau.  In 1993, he started his own business and has been an entrepreneur
since then.
 
 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.
 
 Table of Contents
 41
 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.
 
 
 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.
  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 2006 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.
 
 Table of Contents
 42
 Item
10.   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, 2007 by (1) each person who served as the
principal executive officer of the Company during fiscal year 2007; (2) the
Company’s most highly compensated executive officers as of December 31, 2007
with compensation during fiscal year 2007 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, 2007.
  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
              
              2007
              
              $
              120,000
              
              $
              —
              
              —
              
              
              —
              
              —
              
              —
              
              —
              
              $
              120,000Chief
      Executive Officer
              
              2006
              
              $
              120,000
              
              $
              —
              
              —
              
              —
              
              —
              
              —
              
              —
              
              $
              120,000
  
 There
were no stock options granted or exercised by the named executive directors in
2007.
 
 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 2007 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,
2007.
 
 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
 43
 DIRECTOR
COMPENSATION
 Cash
Compensation
  Directors
receive no cash compensation for services rendered.
  Director
Compensation
  The
following table shows the overall compensation earned for the 2007 fiscal year
with respect to each person who was a director as of December 31,
2007.
  DIRECTOR COMPENSATIONName 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
              
              $
              —
              
              176,922
              
              $
              —
              
              —
              
              —
              
              126,186
              
              $
              298,823Shannon
      de Delley
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              10,000
              
              $
              10,000DirectorPatrick
      Higgins
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              —DirectorPan
      Huifang
              
              $
              —
              
              254,540
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              254,540Chong-Jian
      Zhao
                Director
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              —Feng
      Junyi
                Director
              
              $
              —
              
              —
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              —Baldwin
      Cheng
              
              $
              —
              
              219,621
              
              $
              —
              
              —
              
              —
              
              —
              
              $
              219,621
 
 
 (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
 44
 Item
11.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 December 31, 2007, 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 154,572,395 common shares outstanding as of December 31, 2007.
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
              
              10,545,259
              
              7.15%Shannon
      de Delley
              
              5,000,000
              
              3.39%Patrick
      Higgins
              
              0
              
              0David
      Wing Yiu Cho
              
              2,000,000
              
              1.36%Chong-Jian
      Zhao
              
              11,000,000
              
              7.45%Feng
      Junyi
              
              30,000,000
              
              20.33%Larry
      McNabb
              
              8,486,000
              
              5.75%Luo
      Yizi
              
              13,000,000
              
              8.80%Pan
      Huifang
              
              2,000,000
              
              1.36%
 
 
 Changes
in Control
 
 We know
of no plans or arrangements that will result in a change of control at our
company.
 
 Item
12.   Certain Relationships and Related
Transactions
 
 Any
agreements with officers, directors and/or key employees effectuated in 2007
should be listed here....
 
 Table of Contents
 45
 Item
13.  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
 
 Item
14.   Principal Accounting Fees and
Services
  During
the year ended December 31, 2007, we engaged Manning Elliott LLP as our
independent auditor.  For the year ended December 31, 2007, we were billed
by Manning Elliott LLP, aggregate fees as discussed below.
  ·Audit Fees:Fees for audit services totaled $69,475 and $60,000 in 2007 and
      2006, respectively, including fees associated with the annual audit and
      the reviews of our quarterly reports on Form
  10-QSB.
  ·Audit-Related
      Fees:  Fees for audit-related services totaled $0 in 2007 and
      2006, respectively.  Audit-related services principally included
      accounting consultations.
  ·Tax
      Fees:  We did not engage Manning Elliott LLP for any tax
      related services during 2007 or
2006.
  ·All Other
      Fees:Fees for other services not included in the above were
      $0 in both 2007 and 2006.
  Audit
Fees
 
 During
the year ended December 31, 2007, the aggregate fees billed or estimated to be
billed to us for professional services rendered by Manning Elliott LLP 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 $69,475.
 
 Audit-Related
Fees
 
 During
fiscal 2007, there were no fees billed to us for any other products or services
provided by Manning Elliott LLP other than the services reported
above.
  Tax
Fees.
 
 During
fiscal 2007, there were no fees billed to us for any other products or services
provided by Manning Elliott LLP other than the services reported
above.
 
 All Other
Fees.
 
 During
fiscal 2007, there were no fees billed to us for any other products or services
provided by Manning Elliott LLP other than the services reported
above.
  Table of Contents
 46
 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 9th day of
June, 2008.
  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
              
              June
      9, 2008Tammy-Lynn
      McNabb/s/
      Shannon
      de Delley
              
              Director
              
              June
      9, 2008Shannon
      de Delley/s/
      Patrick
      Higgins
              
              Director
              
              June
      9, 2008Patrick
      Higgins/s/
      Chong-Jian
      Zhao
              
              Director
              
              June
      9, 2008Chong-Jian
      Zhao/s/
      Feng
      Junyi
              
              Director
              
              June
      9, 2008Feng
      Junyi
 /s/
      Pan
      Huifang
              
              Director
              
              June
      9, 2008Pan
      Huifang/s/
      Baldwin
      Kam Tao Cheng
              
              Director
              
              June
      9, 2008Baldwin
      Kam Tao Cheng
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