|                                                                                   
|-----------------------------------------------------------------------------------
|SECURITIES AND EXCHANGE COMMISSION                                                 
|WASHINGTON, D.C. 20549                                                             
|                                                                                   
|FORM 10-Q                                                                          
|                                                                                   
|Quarterly
 Report Under Section 13 or 15(d)
 Of the Securities Exchange Act of 1934
|                                                                                   
|For
 the Quarter Ended March 31, 2010 
 Commission File No. 0-9996                 
|                                                                                   
|WIND ENERGY AMERICA INC.                                                           
|(Exact
 Name of Registrant as specified in its charter)                            

|                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------------------------
|(State
 or other jurisdiction of                                                                                                                                                                                                                                                                                                                                                                       |  |                                  
|incorporation
 or organization)                                                                                                                                                                                                                                                                                                                                                                        |  | (Federal
 IRS Identification No.)
|                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  
|Minnesota                                                                                                                                                                                                                                                                                                                                                                                              |  | 41-1387074                       
|                                                                                                                                                                                                                                                                                                                                                                                                       |  |                                  
|12100
 Singletree Lane, Suite 100, Eden Prairie, MN 55344 
 (Address of principal executive offices)                                                                                                                                                                                                                                                                                                  
|                                                                                                                                                                                                                                                                                                                                                                                                      
|(952)
 746-1313 
 (Issuers telephone number)                                                                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark
 whether the registrant (1) has filed all reports required to be filed by
 section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding
 12 months (or for such shorter period that the registrant was required to
 file such reports) and (2) has been subject to such filing requirements for
 the past 90 days. 
 YES  xNOo                             
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark
 whether the registrant has submitted electronically and posted on its
 corporate Web site, if any, every Interactive Data File required to be
 submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of
 this chapter) during the preceding 12 months (or for such shorter period that
 the registrant was required to submit and post such files). YES  oNOx
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark
 whether the registrant is a large accelerated filer, an accelerated filer, or
 a non-accelerated filer. See definition of accelerated filer and large
 accelerated filer in Rule 12b-2 of the Exchange Act. (Check one):                                                                                                                                                      
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Large accelerated filer oAccelerated fileroNon-accelerated
 fileroSmaller
 Reporting Companyx                                                                                                                                                                                                                                                                                                         
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate by check mark
 whether the registrant is a shell company (as defined in Rule 12b-2 of the
 Exchange Act): YES  oNOx                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Indicate the number of
 shares outstanding of each of the issuers classes of common stock as of the
 latest practicable date.                                                                                                                                                                                                                                                                        
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Class                                                                                                                                                                                                                                                                                                                                                                                                 
|                                                                                                                                                                                                                                                                                                                                                                                                      
|60,767,841 Common Shares
 (par value $.05/share) Outstanding at May 12, 2010                                                                                                                                                                                                                                                                                                                          
|                                                                                                                                                                                                                                                                                                                                                                                                      
|Transitional Small
 Business Disclosure Format (check One): YES  oNOx                                                                                                                                                                                                                                                                                                                                 

---



|                                                      
|------------------------------------------------------
|PART I.
 FINANCIAL INFORMATION                        
|                                                      
|Item 1. Financial Statements                          
|                                                      
|WIND ENERGY AMERICA INC. 
 CONSOLIDATED BALANCE SHEETS

|                                                                                                                                                                |  |             |             |         |   |             |  
|--------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----------- | ----------- | ------- | - | ----------- | -
|                                                                                                                                                                |  | March
 31   |             | June 30 |  
|                                                                                                                                                                |  | 2010        |             | 2009    |  
|                                                                                                                                                                |  | (UNAUDITED) |             |         |  
|ASSETS                                                                                                                                                          |  |             |             |         |   |             |  
|Current
 Assets:                                                                                                                                                |  |             |             |         |   |             |  
|Cash                                                                                                                                                            |  | $           | 115,220     |         | $ |            |  
|Accounts Receivable                                                                                                                                             |  |             | 10,768      |         |   |            |  
|Total Current Assets                                                                                                                                            |  |             | 125,988     |         |   |            |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Property,
 Plant & Equipment:                                                                                                                                   |  |             |             |         |   |             |  
|Wind
 Power Projects in Operation                                                                                                                               |  |             | 5,185,447   |         |   |            |  
|Wind
 Power Projects Under Construction                                                                                                                         |  |             | 5,220,460   |         |   | 8,397,815   |  
|Wind
 Power Projects In Development                                                                                                                             |  |             | 314,375     |         |   | 464,347     |  
|Accumulated
 Depreciation                                                                                                                                       |  |             | (34,367     | )       |   |            |  
|Net Property, Plant & Equipment                                                                                                                                 |  |             | 10,685,915  |         |   | 8,862,162   |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Investments:                                                                                                                                                    |  |             |             |         |   |             |  
|Mortgage
 Receivable                                                                                                                                            |  |             | 1,600,000   |         |   | 1,600,000   |  
|Investments
 in Operating Wind Power Projects                                                                                                                   |  |             | 4,900,000   |         |   | 4,900,000   |  
|Investment
 in Grand Sierra Resort Corporation                                                                                                                  |  |             |            |         |   | 15,000      |  
|Total Investments                                                                                                                                               |  |             | 6,500,000   |         |   | 6,515,000   |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Total Assets                                                                                                                                                    |  | $           | 17,311,903  |         | $ | 15,377,162  |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                                                                            |  |             |             |         |   |             |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Current
 Liabilities:                                                                                                                                           |  |             |             |         |   |             |  
|Checks
 Written in Excess of Cash in Bank                                                                                                                       |  | $           |            |         | $ | 5,110       |  
|Accounts
 Payable                                                                                                                                               |  |             | 128,840     |         |   | 45,498      |  
|Accrued
 Expenses                                                                                                                                               |  |             | 52,308      |         |   |            |  
|Accrued
 Interest                                                                                                                                               |  |             | 17,476      |         |   | 5,516       |  
|Advances
 from Related Party                                                                                                                                    |  |             | 85,000      |         |   |            |  
|Convertible
 Notes Payable                                                                                                                                      |  |             | 114,800     |         |   | 131,152     |  
|Deferred
 Compensation                                                                                                                                          |  |             | 135,000     |         |   |            |  
|Deferred
 Rental Income - Current Portion                                                                                                                       |  |             | 10,552      |         |   |            |  
|Loans
 Payable on Projects - Current Portion                                                                                                                    |  |             | 159,372     |         |   | 250,000     |  
|Total Current Liabilities                                                                                                                                       |  |             | 703,348     |         |   | 437,276     |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Deferred
 Rental Income - Long-Term Portion                                                                                                                     |  |             | 26,149      |         |   |            |  
|Loans
 Payable on Projects - Long-Term Portion                                                                                                                  |  |             | 2,166,073   |         |   |            |  
|Sale/Leaseback
 Rent Accrual                                                                                                                                    |  |             | 249,333     |         |   | 117,333     |  
|Sale/Leaseback
 Deferred Gain                                                                                                                                   |  |             | 617,317     |         |   | 651,402     |  
|Total Liabilities                                                                                                                                               |  |             | 3,762,220   |         |   | 1,206,011   |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Stockholders
 Equity:                                                                                                                                          |  |             |             |         |   |             |  
|Preferred stock: no par value, authorized 10,000,000 shares,
 none issued                                                                                       |  |             |            |         |   |            |  
|Common stock: $.05 par value, authorized 100,000,000
 shares 60,767,841 and 54,696,165 shares outstanding as of March 31, 2010 and
 June 30, 2009, respectively |  |             | 3,038,392   |         |   | 2,734,808   |  
|Additional paid-in capital                                                                                                                                      |  |             | 33,155,065  |         |   | 29,464,524  |  
|Accumulated deficit                                                                                                                                             |  |             | (22,643,774 | )       |   | (18,028,181 | )
|Total Stockholders Equity                                                                                                                                      |  |             | 13,549,683  |         |   | 14,171,151  |  
|                                                                                                                                                                |  |             |             |         |   |             |  
|Total Liabilities and Stockholders Equity                                                                                                                      |  | $           | 17,311,903  |         | $ | 15,377,162  |  

See accompanying notes to the unaudited consolidated
financial statements

---



WIND ENERGY AMERICA INC. 
UNAUDITED STATEMENTS OF OPERATIONS

|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|---------------------------------------------- |  | --------------------------- | ---------- | -------------------------- | - | ---------- | - | --------- | ---------- | - | - | ---------- | -
|                                               |  | FOR THE
 THREE MONTHS ENDED |            | FOR THE
 NINE MONTHS ENDED |  
|                                               |  | March
 31                   |            | March
 31                  |   | March
 31  |   | March
 31 |           
|                                               |  | 2010                        |            | 2009                       |   | 2010       |   | 2009      |           
|                                              
|Revenue:                                       |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Revenue
 from Operating Wind Projects          |  | $                           | 12,472     |                            | $ |           |   | $         | 12,472     |   | $ |           |  
|Rental
 Income                                 |  |                             | 14,176     |                            |   | 8,764      |   |           | 52,712     |   |   | 53,086     |  
|Total revenues                                 |  |                             | 26,648     |                            |   | 8,764      |   |           | 65,184     |   |   | 53,086     |  
|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Expenses:                                      |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Operating
 Expenses of Wind Projects           |  |                             | 6,543      |                            |   |           |   |           | 6,543      |   |   |           |  
|Depreciation
 and Amorization of Wind Projects |  |                             | 34,367     |                            |   |           |   |           | 34,367     |   |   |           |  
|General
 & Administrative                      |  |                             | 408,358    |                            |   | 146,657    |   |           | 1,227,629  |   |   | 340,480    |  
|Professional
 Fees                             |  |                             | 38,713     |                            |   | 14,550     |   |           | 137,369    |   |   | 157,337    |  
|Management
 Fees                               |  |                             | 45,000     |                            |   | 56,180     |   |           | 3,035,407  |   |   | 236,583    |  
|Depreciation
 and Amorization - Other          |  |                             |           |                            |   |           |   |           |           |   |   | 20,130     |  
|Impairment
 and Abandonment Expense            |  |                             |           |                            |   |           |   |           | 212,240    |   |   | 2,557      |  
|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Total expenses                                 |  |                             | 532,981    |                            |   | 217,387    |   |           | 4,653,555  |   |   | 757,087    |  
|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Net
 Operating Loss                            |  |                             | (506,333   | )                          |   | (208,623   | ) |           | (4,588,371 | ) |   | (704,002   | )
|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Other Income
 and Expenses:                    |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Interest
 Income                               |  |                             | 30,000     |                            |   | 29,804     |   |           | 90,000     |   |   | 49,429     |  
|Amortization
 of Deferred Gain                 |  |                             | 10,973     |                            |   |           |   |           | 34,085     |   |   |           |  
|Warrant
 & Debt Discount Expense               |  |                             | (48,805    | )                          |   |           |   |           | (127,854   | ) |   |           |  
|Interest
 Expense                              |  |                             | (15,478    | )                          |   | (2,154     | ) |           | (23,453    | ) |   | (7,128     | )
|Total Other Income and Expenses                |  |                             | (23,310    | )                          |   | 27,650     |   |           | (27,222    | ) |   | 42,301     |  
|                                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Net Loss                                       |  | $                           | (529,643   | )                          | $ | (180,973   | ) | $         | (4,615,593 | ) | $ | (661,701   | )
|Per Share
 Data:                               |  |                             |            |                            |   |            |   |           |            |   |   |            |  
|Net Loss
 per Common Share                     |  | $                           | (0.01      | )                          | $ | (0.00      | ) | $         | (0.08      | ) | $ | (0.01      | )
|Weighted
 Average Shares Outstanding           |  |                             | 60,767,841 |                            |   | 51,439,601 |   |           | 57,732,003 |   |   | 50,677,942 |  

See accompanying notes to the unaudited consolidated
financial statements

---



WIND ENERGY AMERICA INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

|                                                                             |  |                           |            |          |   |            |  
|---------------------------------------------------------------------------- |  | ------------------------- | ---------- | -------- | - | ---------- | -
|                                                                             |  | FOR THE NINE MONTHS ENDED |           
|                                                                             |  | March 31                  |            | March 31 |  
|                                                                             |  | 2010                      |            | 2009     |  
|Cash flows
 used in continuing operations:                                   |  |                           |            |          |   |            |  
|Net Loss:                                                                    |  | $                         | (4,615,593 | )        | $ | (661,701   | )
|                                                                             |  |                           |            |          |   |            |  
|Adjustments
 to Reconcile Net Loss to Net Cash Used in Operating Activities: |  |                           |            |          |   |            |  
|Amortization of Deferred Gain                                                |  |                           | (34,085    | )        |   |           |  
|Depeciation and Amortization Expense                                         |  |                           | 34,367     |          |   | 20,130     |  
|Warrant and Debt Discount Expense                                            |  |                           | 127,854    |          |   |           |  
|Warrants for Stock Issued for Compensation to Non-Employees                  |  |                           | 2,627,075  |          |   |           |  
|Stock Based Compensation to Non-Employees                                    |  |                           | 103,750    |          |   | 33,000     |  
|Options Issued to Employees                                                  |  |                           | 513,357    |          |   |           |  
|Impairment and Abandonment Expense                                           |  |                           | 212,240    |          |   |           |  
|Changes in
 Operating Assets and Liabilities:                                |  |                           |            |          |   |            |  
|Increase in Accounts Receivable                                              |  |                           | (10,768    | )        |   | (227,771   | )
|Decrease in Checks Written in Excess of Cash in Bank                         |  |                           | (5,110     | )        |   |           |  
|Increase in Accounts Payable                                                 |  |                           | 83,343     |          |   | 74,157     |  
|Increase in Accrued Expenses                                                 |  |                           | 52,308     |          |   |           |  
|Increase in Accrued Interest                                                 |  |                           | 11,960     |          |   |           |  
|Increase in Sale Leaseback Rent Expense Accrual                              |  |                           | 132,000    |          |   |           |  
|Increase in Deferred Compensation                                            |  |                           | 135,000    |          |   |           |  
|Increase in Deferred Rental Income                                           |  |                           | 36,701     |          |   |           |  
|Net Cash Used in Operating Activities                                        |  |                           | (595,601   | )        |   | (762,185   | )
|                                                                             |  |                           |            |          |   |            |  
|Cash Flows
 Used in Investing Activities:                                    |  |                           |            |          |   |            |  
|Sale and Leaseback of Building                                               |  |                           |           |          |   | 1,380,650  |  
|Proceeds from Mortgage Receivable                                            |  |                           |           |          |   | 10,375     |  
|Additions to Wind Power Projects Under Construction                          |  |                           | (337,647   | )        |   | (1,104,441 | )
|Investments in Wind Power Projects In Development                            |  |                           | (47,268    | )        |   |           |  
|Net Cash Provided by (Used in) Investing Activities                          |  |                           | (384,915   | )        |   | 286,584    |  
|                                                                             |  |                           |            |          |   |            |  
|Cash Flows
 Provided by Financing Activities:                                |  |                           |            |          |   |            |  
|Common Stock Issued for Cash                                                 |  |                           | 526,170    |          |   | 391,700    |  
|Payment of Convertible Debenture                                             |  |                           | (20,000    | )        |   | (15,000    | )
|Proceeds from Convertible Notes                                              |  |                           |           |          |   | 10,000     |  
|Proceeds from Advance from Related Party                                     |  |                           | 85,000     |          |   |           |  
|Proceeds from Notes Payable on Projects                                      |  |                           | 405,000    |          |   |           |  
|Proceeds from Notes Borrowing                                                |  |                           | 99,566     |          |   |           |  
|Net Cash Provided by Financing Activities                                    |  |                           | 1,095,736  |          |   | 386,700    |  
|                                                                             |  |                           |            |          |   |            |  
|Net Increase (Decrease) in Cash and Cash Equivalents                         |  |                           | 115,220    |          |   | (88,901    | )
|                                                                             |  |                           |            |          |   |            |  
|Cash and Cash Equivalents at Beginning of Period                             |  |                           |           |          |   | 97,459     |  
|Cash and Cash Equivalents at End of Period                                   |  | $                         | 115,220    |          | $ | 8,558      |  
|                                                                             |  |                           |            |          |   |            |  
|Supplemental
 Cash Flow Information:                                         |  |                           |            |          |   |            |  
|Cash Paid During The Nine Months Ended March 31, 2010
 and 2009:             |  |                           |            |          |   |            |  
|Interest Expense                                                             |  | $                         | 38,158     |          | $ | 7,128      |  
|Income Taxes                                                                 |  | $                         |           |          | $ |           |  
|Stock Issued for Debt Payment                                                |  | $                         | 94,152     |          | $ |           |  
|Loans Payable Assumed with Acquisition of LLCs                              |  | $                         | 1,945,087  |          | $ |           |  
|Loan Payable Issued to Payoff Note Payable                                   |  | $                         | 250,000    |          | $ |           |  
|Sale of Building for Mortgage Receivable                                     |  | $                         |           |          | $ | 1,589,430  |  

See accompanying notes to the unaudited
consolidated financial statements

---



WIND ENERGY AMERICA INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

|   |                 
|-- | ----------------
|A. | Plain
 English

We will use such terms as
we, our and us in place of Wind Energy America Inc. or the Company.
When such terms are used in this manner throughout this document they are in
reference only to the corporation, Wind Energy America Inc. and its
subsidiaries, and are not used in reference to the board of directors,
corporate officers, management, or any individual employee or group of
employees.

|   |                            
|-- | ---------------------------
|B. | Forward-Looking
 Statements

This Form 10-Q includes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. All statements other than statements of
historical fact included in this Form 10-Q, including, without limitation, the
statements under both Notes to Unaudited Consolidated Financial Statements
and  Managements Discussion and Analysis and Results from Operations located
elsewhere herein regarding our financial position and liquidity, the amount of
and our ability to make debt service payments, our strategies, financial
instruments, and other matters, are forward-looking statements. Although we
believe that the expectations reflected in such forward-looking statements are
reasonable, we can give no assurance that such expectations will prove to have
been correct.

|   |                    
|-- | -------------------
|C. | Nature of
 Business

Since early 2007, we have
been engaged solely in the wind power segment of the renewable energy industry.
We own, either through wholly-owned subsidiaries, or though minority equity
interests, portions of 59.1 megawatts (MW) of nameplate wind generating
capacity. Through wholly-owned subsidiaries, we had 2.0MW in operation and
2.0MW of this capacity under construction as of March 31, 2010 in Osceola
County, Iowa. Also through wholly-owned subsidiaries, we had 0.8MW in operation
and 0.8MW of this capacity under construction in Lincoln County, Minnesota as
of March 31, 2010. We also own, through a wholly-owned subsidiary, minority
equity interests in three wind farms in Minnesota in an active wind energy
production region called Buffalo Ridge. These projects, in which we own a
minority equity interest, have a capacity of 53.5MW. We will not receive any
material revenue from these minority equity interests until these projects
reach certain milestones, the projects reach their flip dates, and our
minority equity interests are converted into larger percentage ownership.

|   |                 
|-- | ----------------
|D. | Current Strategy

Our current strategy is to
create value by:

|  |                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------
| | completing construction
 and commissioning of our remaining 2.0MW under construction in Osceola
 County, Iowa           
| | completing construction
 and commissioning of our remaining 0.8MW under construction in Lincoln
 County, Minnesota      
| | assuring the flip events
 in the three projects in which we own minority equity interests on Buffalo
 Ridge, Minnesota
| | developing our current
 pipeline of early-stage wind power development projects in Minnesota,
 Pennsylvania and Wyoming 
| | developing other
 early-stage wind power development projects that are currently under
 negotiation                     
| | selling selected assets
 which may be more valuable to certain buyers than they are to us on a
 case-by-case basis      

---



|   |                                           
|-- | ------------------------------------------
|E. | Summary of Significant Accounting Policies

Basis of Presentation

The unaudited interim
consolidated financial statements included herein have been prepared by us in
accordance with accounting principles generally accepted in the United States
of America and the rules of the Securities and Exchange Commission. The
consolidated financial statements include the accounts of Wind Energy America
Inc. and its various wholly-owned subsidiaries. Significant inter-company
accounts and transactions have been eliminated. We suggest that these interim
consolidated financial statements be read in conjunction with the audited
consolidated financial statements and notes thereto included in our Form 10-K
and Form 10-K/A for the year ended June 30, 2009, as filed with the SEC. We
believe that all adjustments, consisting of normal recurring adjustments,
necessary for a fair presentation of financial position and the results of
operations for the interim periods presented have been reflected herein and
that the disclosures made are adequate to make the information not misleading.
The results of operations for interim periods are not necessarily indicative of
the results to be expected for the full year. Notes to the consolidated
financial statements which would substantially duplicate the disclosure contained
in the audited consolidated financial statements for the most recent fiscal
year as reported in Form 10-K and Form 10-K/A have been omitted.

Consolidation Policy

The consolidated financial
statements include Wind Energy America Inc. and our wholly owned subsidiaries
Northern Alternative Energy Shaokatan, LLC (Shaokatan), NAE Shaokatan Power
Partners LLC (Power Partners), Zachary Ridge, LLC (ZR) and LJ Trust, LLC
(LJT), all being Minnesota limited liability companies. All liabilities
incurred and activities in which Wind Energy America Inc. and our LLC
subsidiaries are involved, have been conducted in the name of Wind Energy
America Inc. through March 31, 2010.

Shaokatan holds minority
equity interests in three wind farms, Shaokatan Hills, Lakota Ridge, and a
group of 16 small wind farms which are managed collectively and known as CHI
Energy. These minority equity interests owned by Shaokatan will not materially
participate in the revenues, liabilities, operations, or net income or loss of
each particular wind farm LLC until the minority equity interest converts or
flips into a material interest, and accordingly we had no material revenues
or liabilities to consolidate regarding Shaokatan as of March 31, 2010. A
detailed description of these minority equity interests owned by us via
Shaokatan is contained in Item 1 of the report on Form 10-K for fiscal year
ended June 30, 2009 and are an integral part to these notes to our consolidated
financial statements.

Power Partners consists of a
small wind farm in Lincoln County, Minnesota containing two wind
turbines of a total 1.6 MW capacity. During the quarter ended March 31, 2010,
0.8MW of this wind farm was commissioned, and we expect the remaining 0.8MW to
be commissioned during calendar year 2010.

Shaokatan and Power Partners
will each account for their respective future operations as their wind power
assets become operational or whenever the various minority equity interests
convert into material ownership interests, and thereafter any assets,
liabilities, income and losses will be consolidated into our financial
statements.

ZR and LJT are two wind
farms each consisting of one 2.0MW turbine located in Osceola County, Iowa. ZR
was commissioned during the quarter ended March 31, 2010. We expect LJT to be
commissioned during calendar year 2010.

Reclassifications

Certain prior period amounts
have been reclassified to conform with the current period presentation.

Critical Accounting Estimates

The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amount of revenue and expenses during the reporting period. Some significant
estimates are the valuation or impairment of property and equipment, the
valuation of warrants and options issued for compensation, and deferred income
taxes.

Our investments are stated
at the lower of cost or fair value in accordance with ASC 360, Accounting for
the Impairment or Disposal of Long-Lived Assets (ASC 360). The carrying value
of our investments in wind energy assets are carried at cost.

---



Cash Equivalents

We consider all highly
liquid debt instruments purchased with a maturity of three months or less to be
cash equivalents.

Revenue
Recognition

Revenue is recognized when
earned in accordance with applicable accounting standards and guidance,
including Staff Accounting Bulletin or SAB, No. 104, Revenue Recognition, as amended. We earn
revenue from the sale of electricity. We recognize revenue from the sale of
electricity under long-term Power Purchase Agreements (PPAs) based upon the
output delivered at rates specified under the contracts. Revenues from PPAs are included in
revenues in the accompanying consolidated statements of operations when it
becomes probable of receipt.

Operating
Expenses of Wind Projects

Operating
Expenses of Wind Projects includes operating expenses of operating wind assets.
Wind energy project operating expenses consist of such costs as operations and
maintenance expenses, insurance, professional fees, and other administrative
costs.

Carrying Value of Wind Energy Assets

A detailed breakdown of the
carrying value of our various wind energy assets is contained in the footnotes
of our audited consolidated financial statements included in our annual report
on Form 10-K and Form 10-K/A for the fiscal year ended June 30, 2009.

Property, Plant and
Equipment

Property,
plant and equipment are stated at cost, less accumulated depreciation. Renewals
and betterments that increase the useful lives of the assets are capitalized.
Repair and maintenance expenditures are expensed as incurred. Wind energy
project equipment and related assets are depreciated over their estimated
useful lives of 20 years on a straight-line basis.

Construction
in progress expenditures, insurance, interest and other costs related to construction
activities are capitalized. As each project begins commercial operations,
construction in progress is reclassified to property, plant and equipment and
depreciated over the estimated useful lives of the underlying assets.

Depreciation expense was
also recorded on our books during fiscal year 2008 related to the building
(Midwest Center for Wind Energy) which was sold in a sale-leaseback transaction
in November, 2008. We depreciated the building on the straight line method over
40 years during its ownership.

Acquisitions

On
November 10, 2009 we completed the acquisitions of certain limited liability
companies which are necessary to complete our 4.0MW project in Osceola County,
Iowa. Of the 4.0MW capacity of this project, 2.0MW was commissioned in the
quarter ended March 31, 2010, and 2.0MW remains under construction as of March
31, 2010. The sellers of these LLCs are shareholders in Wind Energy America
Inc. The agreement to purchase these LLCs was signed in March 2009 and included
a cash payment of $355,000, a note payable of $250,000, and assumption of
certain loans resulting in a total acquisition price of $2.6 million. An
independent appraisal of the project values the LLCs at about $2.6 million,
therefore, the acquisition has been recorded at cost. In order to complete this
project and reach commercial operation, we have incurred additional costs which
have been added to the carrying value of this project including labor and
materials, capitalized insurance, interest and other costs.

Impairment

We review our assets on at
least an annual basis for potential economic impairment. As a portion of our
assets have not been placed in service as of March 31, 2010 we must evaluate
the remaining costs to complete the projects as well as the currently capitalized
costs. Our wind assets, when completed, have a megawatt generating capacity
which determines their current economic value. This value is generally
determined via a discounted cash flow analysis of the future electric revenues,
net of the costs of operating the wind turbines. During the nine months ended
March 31, 2010 we recognized an impairment expense of $212,240. This charge was
to reduce the carrying value on our books to zero of the capitalized
development costs of Zulu Wind LLC, NAE Allendorf, NAE Sibley, Sibley Hills,
Henry Hills, in addition to the investment in Grand Sierra Resort Corp. Henry
Hills is not the Osceola County, Iowa 4.0MW project which was referred to as
Henry Hills 4MW in previous filings, but rather was intended to be an expansion
project adjacent to the Osceola County, Iowa 4.0MW project. The impairment
expense was recognized as we believe that it is unlikely that we will develop
these projects or that any amount could be realized by the potential sale of
these projects and assets. Other than these impairments recognized, we believe
our wind assets can be completed at costs that are less than their current
economic value. Wind assets that generate electricity can generally be sold in
a marketplace based upon their discounted cash flows.

---



Stock-Based Compensation - Stock Options, Warrants and
Common Stock Grants

In 2006, we adopted the fair
value recognition provision which requires us to recognize in our financial
statements the cost of employee or director or consulting services received in
exchange for awards of equity instruments, based on the grant date fair value
of those awards. We currently use the Black-Scholes option valuation model to
calculate equity based compensation at the date of grant. The cost of these
equity awards will be recognized over the period during which an employee,
director or consultant is required to provide service in exchange for the
award.

During the nine months ended
March 31, 2010, we issued 475,000 unregistered common shares for services, of which
400,000 shares were issued to independent directors for serving on our Board of
Directors, and 75,000 shares were issued to independent consultants for
financial services. These transactions were recorded as management fees valued
at $.21 to $.25 per share. These awards of shares did not require any
additional performance for service after the grant date, therefore the entire
value of these grants was recognized during the nine months ended March 31,
2010.

In July 2009, we granted a
five-year warrant to our Chairman of the Board to purchase 1,000,000 shares of
our common stock at an exercise price of $.25 per share. This warrant does not
require any additional performance for service after the grant date, therefore
the entire value of this grant was recognized during the nine months ended
March 31, 2010.

In September 2009, we
granted five-year warrants to three directors, two former directors and a
former executive officer to purchase a total of 18,750,000 shares of our common
stock at an exercise price of $.20 per share. These warrants do not require any
additional performance of service after the grant date, therefore the entire
value of these grants were recognized during the nine months ended March 31,
2010.

During the nine-month period
ended March 31, 2010, we granted five-year warrants to an unaffiliated lender
to purchase a total of 125,000 shares of our common stock at an exercise price
of $.20 per share. Also, during the nine-month period ended March 31, 2010, we
granted options with no termination date to an unaffiliated lender to purchase
a total of 1,000,000 shares of our common stock at an exercise price of $.25
per share. These warrants and options were fully vested on the grant date,
therefore the entire value of these grants were recognized during the nine
months ended March 31, 2010.

On November 11, 2009 we
awarded stock options to our Chief Executive Officer and Chief Development
Officer, both of whom had been appointed to our Board of Directors on October
2, 2009. We also awarded stock options to our Chief Financial Officer. Each of
these three officers received a quantity of stock options in the amount of
one-twelfth of the total number of shares, warrants and options outstanding as
of October 1, 2009 and would carry an exercise price of $0.20 per share, which
was our closing stock price on the grant date. Twenty percent of these options
would vest on the grant date. The remaining eighty percent of these options
would become exercisable ratably over a 48-month period starting on the grant date.
These options expire at the end of five years. Since these options have a
service requirement, the cost of these options will be recognized on the same
basis as their vesting schedule described above.

Income Taxes

We account for income taxes
in accordance with ASC 740, which provides that deferred income tax assets and
liabilities are computed annually for differences between the financial
statement and income tax bases of assets and liabilities that will result in
taxable or deductible amounts in the future based on enacted tax laws and rates
applicable to the periods in which the differences are expected to affect
taxable income. The valuation allowances have been recognized as equal to the
income tax benefits in order to reduce the deferred tax assets to zero.

---



Common Stock Sales

During the nine months ended
March 31, 2010, we sold a total of 4,833,460 unregistered common shares to
various accredited investors in private placement transactions for aggregate
proceeds of $526,170, resulting in an average price of $.11 per share.

Satisfaction of Note

As of June 30, 2009 we had
borrowed $94,152 from an individual lender at 9% per annum on an unsecured
promissory note, which loan was callable by the lender upon 30 days notice to
us. As of September 15, 2009, the outstanding principal balance and accrued
interest of this loan was $95,917. All principal and accrued interest of this
loan was satisfied in full by us in September 2009 through issuance of 753,216
shares of our restricted common stock to the lender, approximately $.127 per
share.

Loss per Common Share

Basic loss per common share
is computed by dividing net loss by the weighted average number of common
shares outstanding. Diluted loss per common share is not shown, as the exercise
of stock options and warrants using the treasury stock method are dilutive to
the computation of loss per share.

Recent Accounting Pronouncements

In June 2009, the Financial
Accounting Standards Board (FASB) issued an update of Accounting Standards
Codification 105, Generally Accepted Accounting Principles (ASC 105) which
establishes the FASB Accounting Standards Codification TM (the ASC). The ASC
is the sole source of authoritative U.S. generally accepted accounting
principles (GAAP) recognized by the FASB to be applied by nongovernmental
entities. The ASC superseded all then-existing non-SEC accounting and reporting
standards. All other non-grandfathered, non-SEC accounting literature not
included in the ASC is no longer authoritative. While the ASC does not change
GAAP, it introduces a new structure that reorganizes the GAAP pronouncements
into accounting topics. All content of the ASC carries the same level of
authority. The ASC is effective for our financial statements as of September
30, 2009.

We have reviewed certain
other recent accounting pronouncements and determined that they will have no
present or future impact on our business.

|   |        
|-- | -------
|F. | History

Operations Prior
to Entering the Wind Power Business

Wind Energy America, Inc.
(formerly Dotronix, Inc), and (the Company), was founded in 1980 as a
Minnesota corporation. The Company changed control in January, 2007 and since
then has focused its efforts entirely on the development and acquisition of
wind energy assets for electric power production. As Dotronix, Inc., we
designed manufactured and marketed cathode ray tube (CRT) displays, which CRT
business was discontinued in 2005 when it became unprofitable. In 2006 we
acquired PuraMed products and created PuraMed BioScience, Inc. (PuraMed) as a
subsidiary which was spun-off on April 12, 2007. PuraMed now trades separately
as a publicly held company.

Grand Sierra Resort Corp.

In 2006, we purchased for
$415,000 a total of 1,037,500 shares of common stock of Grand Sierra Resort
Corp. (Grand Sierra), resulting in an ownership interest in Grand Sierra of
slightly less than 1%. Grand Sierra is a private company incorporated in the
State of Nevada. We accounted for our investment in Grand Sierra using the cost
method. During the past fiscal year ended June 30, 2009, we recorded an
impairment expense of $400,000 regarding our Grand Sierra investment. During
the nine months ended March 31, 2010, we recorded an impairment expense for the
remaining $15,000 carrying value of our investment in Grand Sierra Resort Corp.

---



Entry into the
Wind Energy Business

Averill Wind Farm

In early 2007, we entered
into our first transaction to engage in the industry of generating electricity
from wind power turbines, which consisted of our purchase of a $200,000 equity
interest in Averill Wind, LLC, a 10MW wind farm under development in Minnesota
near Fargo/Moorhead. We still own a minority interest in the Averill Wind Farm
project and intend to develop it into an operating wind energy project if
preliminary evaluations justify continuance of our development efforts.

Shaokatan Hills/Lakota Ridge and CHI Energy Wind Farms

During the second half of
calendar 2007, we purchased from Northern Alternative Energy Inc. its
subsidiary Northern Alternative Energy Shaokatan LLC (Shaokatan), which we
paid for in two portions; $2,300,000 in cash for a minority equity interest in two
wind farms in Minnesota called Shaokatan Hills and Lakota Ridge, and $200,000
in cash and 4,000,000 shares of our common stock valued at $.60 per share for a
minority equity interest in a group of 16 small wind farms collectively known
and managed as CHI Energy. Further detailed information on these wind farms and
a description of the minority equity interests in them is contained in Item 2
(Managements Discussion and Analysis of Financial Condition and Results of
Operations) following in this quarterly report.

Acquisition of Boreal Assets

In February 2008, we
acquired assets from Boreal Energy, Inc. (Boreal) consisting primarily of a
pipeline of proposed projects in various stages of development, and other
assets exchanged by Boreal with a third party prior to the final closing of
this acquisition in September 2008. These Boreal assets were purchased by us in
consideration for 28,500,000 shares of unregistered common stock of Wind Energy
America Inc. There was no material relationship between Boreal and Wind Energy
America Inc. or their respective officers, directors or affiliates prior to
this transaction.

Through an exchange
transaction conducted by Boreal prior to the final closing of the Boreal asset
purchase, we acquired the Midwest Center for Wind Energy (MCWE) and adjoining
160 acres of land in Lincoln County, Minnesota, four Gamesa wind turbines having
aggregate rated capacity of 5.6MW, and the Viking Wind Farm project in Martin
County, Minnesota. For a more detailed description of this Boreal asset
purchase, the assets acquired and exchanged thereby, and the accounting
treatment of the transaction, see the following Item 2 of this quarterly report
as well as our annual report filed with the SEC on Form 10-K and Form 10-K/A
for the fiscal year ended June 30, 2009, which can be accessed at www.sec.gov.

Acquisition of Zachary Ridge, LLC and LJ Trust, LLC

On November 10, 2009, we
acquired 100% ownership of Zachary Ridge, LLC and LJ Trust, LLC. These LLCs
hold the power purchase agreements, interconnect agreements and land leases
that are an integral part needed to complete commissioning of the 4.0 MW
project obtained as part of the Boreal asset acquisition. As part of this
acquisition, we assumed all outstanding loans of the LLCs and paid an
additional $605,000 in cash. Subsequent to this acquisition, one of the two 2.0
MW turbines has been commissioned and began generating power in January 2010,
with the other turbine expected to be commissioned during
calendar year 2010 once needed repairs and testing are completed.

Item 2.
Managements Discussion and Analysis of Financial Condition and Results of
Operations

Description of Business

Since early 2007, we have
been engaged solely in the wind power segment of the renewable energy industry.
We own, either through wholly-owned subsidiaries, or through minority equity
interests, portions of 59.1 megawatts (MW) of nameplate wind generating
capacity. Through wholly-owned subsidiaries, we had 2.0MW in operation and
2.0MW of this capacity under construction as of March 31, 2010 in Osceola
County, Iowa. Also through wholly-owned subsidiaries, we had 0.8MW in operation
and 0.8MW of this capacity under construction in Lincoln County, Minnesota as
of March 31, 2010. We also own, through a wholly-owned subsidiary, minority
equity interests in three wind farms in Minnesota in an active wind energy
production region called Buffalo Ridge. These projects in which we own minority
equity interests have a capacity of 53.5MW. We will not receive any material
revenue from these minority equity interests until these projects reach certain
milestones, the projects reach their flip dates, and our minority equity
interests are converted into larger percentage ownership.

---



History

Operations Prior to Entering the Wind Power Business

Wind Energy America, Inc.
(formerly Dotronix, Inc), and (the Company), was founded in 1980 as a
Minnesota corporation. The Company changed control in January, 2007 and since
then has focused its efforts entirely on the development and acquisition of
wind energy assets for electric power production. As Dotronix, Inc., we
designed manufactured and marketed cathode ray tube (CRT) displays, which CRT
business was discontinued in 2005 when it became unprofitable. In 2006 we
acquired PuraMed products and created PuraMed BioScience, Inc. (PuraMed) as a
subsidiary which was spun-off on April 12, 2007. PuraMed now trades separately
as a publicly held company.

Grand Sierra Resort Corp.

In July 2006 we formed a
Minnesota corporate subsidiary, Grand Realty Group Inc., for the purpose of
acquiring an equity interest in Grand Sierra Resort Corp. (Grand Sierra), a
private company incorporated in Nevada. Grand Sierra purchased the Reno Hilton
Hotel/Casino complex in Reno, Nevada in June 2006 from Harrahs Entertainment
Inc. and promptly changed its name to Grand Sierra Resort & Casino. This
Grand Sierra complex includes a large casino gaming area, hotel rooms, many
condominium units, and various retail businesses. Through certain warrant
rights held by the Company, the Company in 2006 purchased a total of 1,037,500
shares of Grand Sierra common stock for $415,000 representing approximately an
ownership of 1% of Grand Sierra. Although we continue to hold its common stock interest in Grand Sierra, a
recent impairment evaluation of this asset has resulted in our Grand Sierra
investment being written down to zero.

Entry into the Wind Energy Business

In early 2007, we purchased
a $200,000 equity interest in Averill Wind, LLC. a Minnesota company. Averill
is a 10MW wind farm near Fargo/Moorhead, Minnesota, a region of the country
that is favorable for electricity generation through wind power. We have been
in discussion with the principal equity owners of Averill regarding possible
financing and development of Averill.

In May 2007, we invested
$100,000 in an Interconnection System Impact Study to potentially connect 300MW
of wind generated electricity to Excel Energys ZULU substation in southeast
Lincoln County, Minnesota. We must supply 50% of the capital to become an equal
partner in the proposed 300MW wind farm. This ZULU wind farm cannot be
developed until a planned large power transmission line is completed from Minneapolis
to Buffalo Ridge. In the nine months ended March 31, 2010 we recognized an
impairment expense and wrote the carrying value of this project on our books to
zero as we believe it is unlikely we will realize any value from this project.

During the second half of
calendar 2007, we purchased from Northern Alternative Energy Inc. its
subsidiary Northern Alternative Energy Shaokatan LLC (Shaokatan), which we
paid for in two portions; $2,300,000 in cash for a minority equity interest in two
wind farms in Minnesota called Shaokatan Hills and Lakota Ridge, and $200,000
in cash and 4,000,000 shares of our common stock valued at $.60 per share for a
minority equity interest in a group of 16 small wind farms collectively known
and managed as CHI Energy. These three wind farms lie on Buffalo Ridge, which
is in southwestern Minnesota and which contains a prime wind regime in the USA
for efficient generation of electricity from wind power turbines, and is
well-known in the alternative energy industry for its high and consistent wind
speeds. Together, Shaokatan Hills and Lakota Ridge, contain 33 modern wind
turbines having a total rated power capacity of 23MW. We have only a negligible
revenue or profit sharing percentage interest until the ownership of the
minority equity interests convert into 80% ownership of the two wind farms.
Over the past few years, these 33 turbines have generated electricity at an
average annual rate of 68,300,000 kilowatt hours (kwh). CHI Energy is 16
separate small wind farms which are managed and maintained collectively and
contains 46 modern wind turbines having a total rated power capacity of
30.36MW, and for the past several years they have generated electricity at an
average annual rate of 93,000,000 kilowatt hours (kwh). We will not begin to
receive any material revenues until they flip which we estimate will begin
happening during the fourth quarter of calendar year 2010, after which our
revenue interest will convert to 30% and eventually to 49% when certain debt on
the wind farms is satisfied.

---



In February 2008, we
purchased various wind energy assets from Boreal Energy Inc. (Boreal) for
28,500,000 of our common shares. Push down accounting was utilized to value the
tangible assets of Boreal conservatively at a market value of $9,084,503. The
major tangible asset of Boreal was its minority equity interest in Navitas
Energy, Inc. which was valued at $11,384,721, and incident to the purchase of
Boreal assets, this investment in Navitas was exchanged for assets of Navitas.
The principal Boreal shareholders have since liquidated a majority of our
common shares they obtained when the Boreal assets were sold to us, and they
are no longer involved with us and our business. We did not absorb the
personnel or operations of Boreal in the transaction, nor did we assume any
liabilities of Boreal.

In exchange for the minority
interest in Navitas we received two turbines and related electric generating
equipment with a 4.0MW capacity in Osceola County, Iowa valued at $4,752,000,
and two turbines with 1.6MW capacity and electric generating equipment in
Lincoln County, Minnesota valued at $2,019,600. Other assets transferred
include 160 acres of land in Lincoln County, Minnesota valued at $320,000, a
building with repair facilities and eight motel rooms, a large meeting room,
and offices valued at $1,992,905. A 100MW project in the preliminary
development phase referred to as the Viking Wind Energy Project in Martin
County, Minnesota was valued at $583,250.

Current Strategy

Our current strategy is to
create value by:

|  |                                                                                                                         
|- | ------------------------------------------------------------------------------------------------------------------------
| | completing construction
 and commissioning of our remaining 2.0MW under construction in Osceola
 County, Iowa           
| | completing construction
 and commissioning of our remaining 0.8MW under construction in Lincoln
 County, Minnesota      
| | assuring the flip events
 in the three projects in which we own minority equity interests on Buffalo
 Ridge, Minnesota
| | developing our current
 pipeline of early-stage wind power development projects in Minnesota,
 Pennsylvania and Wyoming 
| | developing other
 early-stage wind power development projects that are currently under
 negotiation                     
| | selling selected assets
 which may be more valuable to certain buyers than they are to us on a
 case-by-case basis      

We intend to use our current
assets as a starting point from which to develop, acquire, build and operate a
large and diversified portfolio of profitable wind energy assets. Since early
2007, we have acquired substantial wind farm assets including interests in
operating wind farms, wind farms under construction and wind farms in various
stages of design and development. Currently, our wind energy assets are located
primarily along Buffalo Ridge, a geological formation which extends
southeasterly from eastern South Dakota across southwestern Minnesota and into
northwestern Iowa. Buffalo Ridge is well-known in the alternative energy
industry for its high quality wind energy resources. We also have early-stage
wind development projects in Minnesota, Pennsylvania and Wyoming and are negotiating with
landowners in other states to develop additional wind power projects.
Attractive wind power projects have a combination of good wind resources,
attractive electricity prices, lack of local political opposition, few, if any,
environmental sensitivities, available transmission and willing landowners.

Comparison of Three-Month Periods
Ended March 31, 2010 and 2009

Revenues

During
the three months ended March 31, 2010, we commissioned and placed into service
a 2.0MW wind turbine in Osceola County, Iowa and a 0.8MW turbine in Lincoln
County, Minnesota. While these turbines are in a break-in period in order to
get them operating at full capacity, we did earn $12,472 in revenue from
electricity sales during the three months ended March 31, 2010. We did not have
any operating wind projects during the three months ended March 31, 2009.

We
also recognized $14,176 in rental income from our lodging and meeting facility
at the Midwest Center for Wind Energy (MCWE) during the three months ended
March 31, 2010. This is an improvement over the three months ended March 31,
2009 due to stronger meeting and lodging volume and price increases.

Operating Expenses of Wind Projects

Operating
expenses of wind projects include operating and maintenance expenses, insurance
and administrative costs directly related to wind projects which have been
placed in service. We incurred $6,543 in operating expenses for wind projects
during the three months ended March 31, 2010 for the two turbines which have
been placed in service. Since there were no turbines placed in service during
the three months ended March 31, 2009, we did not have any expenses during that
period.

---



Depreciation and Amortization of Wind Projects

When
a wind turbine is placed in service, the capitalized cost of that turbine is
depreciated over a 20 year period on a straight line basis. During the three
months ended March 31, 2010, we recognized $34,367 in depreciation and
amortization expense related to operating wind projects. Since we had no
operating wind projects during the three months ended March 31, 2009, we had no
such expense during that period.

General and Administrative Expenses

General and administrative
expenses relate to the cost of operating the MCWE, employee expenses including
compensation and other employee related costs, and other administrative costs.
These expenses in the three months ended March 31, 2010 were $261,701 higher
than in the comparable 2009 period. Virtually the entire amount of this
increase is attributable to employee expenses. In November 2009 we hired as full
time employees three executives in the positions of Chief Executive Officer,
Chief Development Officer and Chief Financial Officer. There were no employees
in the three months ended March 31, 2009. Included in the figures for the three
months ended March 31, 2010 is $96,255 in option expenses for these three
employees. Each of these three officers received a quantity of stock options in
the amount of one-twelfth of the total number of shares, warrants and options
outstanding as of October 1, 2009 and carry an exercise price of $0.20 per
share, which was our closing stock price on the grant date. Twenty percent of
these options vested on the grant date. The remaining eighty percent of these
options will become exercisable ratably over a 48-month period starting on the
grant date. These options expire at the end of five years. The cost of these
options are being recognized on the same basis as their vesting schedule
described above. There was no such employee option expense in the 2009
comparable period.

Professional Fees

Professional fees relate to
third-party legal and accounting services provided to us. In the three months
ended March 31, 2010 our total professional fees was $24,163 higher than the
comparable period in 2009. The higher expenses are due to increased legal,
accounting and auditing fees.

Management Fees

Management fees relate to
cash and other compensation paid to non-employees for certain management and
financing services. Some of these service providers are current members of our
Board of Directors, past members of our Board of Directors, as well as other
third-parties. For the three months ended March 31, 2010 the management fees
were $11,180 lower than they were in the comparable 2009 period. The decrease
in these expenses is due to the reduced effort devoted to financing activities.

Included in management fees
is the management and consulting agreement between us and our Chairman of the
Board. Under this agreement, our Chairman earns $15,000 per month for
management and consulting services, therefore, during the three months ended
December March 31, 2010, we recognized $45,000 in expense under this agreement.
There was no similar expense during the comparable 2009 period. The entire
amount is deferred and is payable at the earlier of the end of calendar year
2010 or when we have sufficient available funds to pay this liability. The full
details of this agreement are included as an exhibit to Form 8-K filed with the
Securities and Exchange Commission on July 9, 2009.

Interest Income

Our interest income is
entirely earned from our Mortgage Receivable on the MCWE. This mortgage
receivable has a principal balance of $1.6 million, carries a coupon of 7.5%,
pays us a monthly interest-only amount of $10,000 and is due in 2023. The
amount of interest earned on this Mortgage Receivable in the three months ended
March 31, 2010 was approximately equal to that earned in the comparable 2009
period.

Warrant and Debt Discount Expense

Warrant and debt discount
expense is expense recognized for the granting of warrants and options related
to the issuance of convertible notes payable. During the three months ended
March 31, 2010, we granted 625,000 options with no termination date with an
exercise price of $0.25 per share to the holder of one of our convertible notes
payable. The value of these options using the Black-Scholes formula was
$48,805. There was no such expense during the comparable 2009 period.

---



Interest Expense

Interest expense is
recognized on notes payable and loans payable on projects after they have been
placed into service. When interest expense is incurred as part of project
construction, then the interest is capitalized as part of the project cost. In
the three-month period ended March 31, 2010 the amount of interest capitalized
was $24,526. During the three months ended March 31, 2010 our interest expense
recognized was $13,324 higher than the comparable 2009 period. The higher
interest expense is due to increased notes payable to fund our operations plus
the interest expense recognized on our projects placed in service.

Net (loss)

Net loss for the three month
period ended March 31, 2010 was $529,643 compared to a net loss of $180,973 for
the comparable 2009 period, an increased net loss of $348,670. The increased
loss is attributable to higher employee-related costs, higher depreciation
expense, higher professional fees, higher warrant and debt discount expense and
higher interest expense.

Comparison
of Nine-Month Periods Ended March 31, 2010 and 2009

Revenues

During
the nine months ended March 31, 2010, we commissioned and placed into service a
0.8MW wind turbine in Osceola County, Iowa and a 0.8MW turbine in Lincoln
County, Minnesota. While these turbines are in a break-in period in order to
get them operating at full capacity, we did earn $12,472 in revenue from
electricity sales during the nine months ended March 31, 2010. We did not have
any operating wind projects during the nine months ended March 31, 2009.

We
also recognized $52,712 in rental income from our lodging and meeting facility
at the Midwest Center for Wind Energy (MCWE) during the nine months ended
March 31, 2010. This is approximately the same amount as was earned during the
nine months ended March 31, 2009.

Operating Expenses of Wind Projects

Operating
expenses of wind projects includes operating and maintenance expenses,
insurance and administrative costs directly related to wind projects which have
been placed in service. We incurred $6,543 in operating expenses for wind
projects during the nine months ended March 31, 2010 for the two turbines which
have been placed in service. Since there were no turbines placed in service
during the nine months ended March 31, 2009, we did not have any expenses
during that period.

Depreciation and Amortization of Wind Projects

When
a wind turbine is placed in service, the capitalized cost of that turbine is
depreciated over a 20 year period on a straight line basis. During the nine
months ended March 31, 2010, we recognized $34,367 in depreciation and
amortization expense related to operating wind projects. Since we had no
operating wind projects during the nine months ended March 31, 2009, we had no
such expense during that period.

General and Administrative Expenses

General and administrative
expenses relate to the cost of operating the MCWE, employee expenses including
compensation and other employee related costs, and other administrative costs.
These expenses in the nine months ended March 31, 2010 were $887,149 higher
than in the comparable 2009 period. $681,794 of this increase is attributable
to employee expenses. In the nine months ended March 31, 2010 we hired as full
time employees three executives in the positions of Chief Executive Officer,
Chief Development Officer and Chief Financial Officer. There were no employees
in the comparable 2009 period. Included in the figures for the nine months
ended March 31, 2010 is $513,357 in option expenses for these three employees.
Each of these three officers received a quantity of stock options in the amount
of one-twelfth of the total number of shares, warrants and options outstanding
as of October 1, 2009 and carry an exercise price of $0.20 per share, which was
our closing stock price on the grant date. Twenty percent of these options
vested on the grant date. The remaining eighty percent of these options will
become exercisable ratably over a 48-month period starting on the grant date.
These options expire at the end of five years. The cost of these options are
being recognized on the same basis as their vesting schedule described above.
There was no such employee option expense in the 2009 comparable period.

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Professional Fees

Professional fees relate to
third-party legal and accounting services provided to us. In the nine months
ended March 31, 2010 our total professional fees were $19,968 lower than the
comparable period in 2009. The hiring of our three fill-time employees has
allowed us to rely less on outside professional services.

Management Fees

Management fees relate to
cash and other compensation paid to non-employees for certain management and
financing services. Some of these service providers are current members of our
Board of Directors, past members of our Board of Directors, as well as other
third-parties. For the nine months ended March 31, 2010 the management fees
were $2,798,824 higher than they were in the comparable 2009 period. Of this
increase, $2,730,825 is related to stock and warrant grants awarded to current
members of the Board of Directors, past members of the Board of Directors and
other third parties for management and financing efforts.

During the nine months ended
December 31, 2009, we issued 475,000 unregistered common shares for services,
of which 400,000 shares were issued to independent directors for serving on our
Board of Directors, and 75,000 shares were issued to independent consultants
for financial services. These transactions were recorded as management fees
valued at $.21 to $.25 per share. These awards of shares did not require any
additional performance for service after the grant date, therefore the entire
value of these grants were recognized during the nine months ended March 31,
2010.

In July 2009, we granted a
five-year warrant to our Chairman of the Board to purchase 1,000,000 of shares
of our common stock at an exercise price of $.25 per share. This warrant did
not require any additional performance for service after the grant date,
therefore the entire value of this grant was recognized during the nine months
ended March 31, 2010.

In September, 2009, we
granted five-year warrants to three directors, two former directors and a
former executive officer to purchase a total of 18,750,000 shares of our common
stock at an exercise price of $.20 per share. These warrants did not require
any additional performance for service after the grant date, therefore the
entire value of these grants were recognized during the nine months ended March
31, 2010.

Also included in management
fees is the management and consulting agreement between us and our Chairman of
the Board. Under this agreement, our Chairman earns $15,000 per month for
management and consulting services, therefore, during the nine months ended
March 31, 2010, we recognized $135,000 in expense under this agreement. There
was no similar expense during the nine months ended March 31, 2009. The entire
amount is deferred and is payable at the earlier of the end of calendar year
2010 or when we have sufficient available funds to pay this liability. The full
details of this agreement are included as an exhibit to Form 8-K filed with the
Securities and Exchange Commission on July 9, 2009.

Impairment and Abandonment Expense

During the nine months ended
March 31, 2010 we recognized an impairment expense of $212,240. This charge was
to reduce the carrying value on our books to zero of the capitalized development
costs of Zulu Wind LLC, NAE Allendorf LLC, NAE Sibley LLC, Sibley Hills LLC,
Henry Hills LLC, in addition to the investment in Grand Sierra Resort Corp.
Henry Hills is not the Osceola County, Iowa 4.0MW project which was referred to
as Henry Hills 4MW in previous filings, but rather was intended to be an
expansion project adjacent to the Osceola County, Iowa 4.0MW project. The
impairment expense was recognized as we believe that it is unlikely that we
will develop these projects or that any amount could be realized by the
potential sale of these projects and assets. During the nine months ended March
31, 2009, we recognized a $2,557 impairment for the Great Plains project.

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Depreciation and Amortization  Other

Depreciation and
amortization  other is the depreciation and amortization expense on assets
which are not wind power projects. During a portion of the nine months ended
March 31, 2009 we did own our MCWE facility and were depreciating it over 40
years on a straight line basis. We sold this facility in a sale-leaseback
transaction in November 2008, therefore, there was no such expense during the
nine months ended March 31, 2010.

Interest Income

Our interest income is
entirely earned from our Mortgage Receivable on the MCWE. This mortgage receivable
has a principal balance of $1.6 million, carries a coupon of 7.5%, pays us a
monthly interest-only amount of $10,000 and is due in 2023. The higher interest
income in the nine months ended March 31, 2010 than in the comparable 2009
period is due to that the mortgage was outstanding for all of this nine month
period and was outstanding for only part of the comparable 2009 period.

Warrant and Debt Discount Expense

Warrant and debt discount
expense is expense recognized for the granting of warrants and options related
to the issuance of convertible notes payable. During the nine-month period
ended March 31, 2010, we granted five-year warrants to an unaffiliated lender
to purchase a total of 125,000 shares of our common stock at an exercise price
of $.20 per share. Also, during the nine-month period ended March 31, 2010, we
granted options with no termination date to an unaffiliated lender to purchase
a total of 1,000,000 shares of our common stock at an exercise price of $.25
per share. These warrants and options were fully vested on the grant date,
therefore the entire value of these grants were recognized during the nine
months ended March 31, 2010. The value of these warrants and options using the
Black-Scholes formula was $127,854. There was no such expense during the
comparable 2009 period.

Interest Expense

Interest expense is
recognized on notes payable and loans payable on projects after they have been
placed into service. When interest expense is incurred as part of project
construction, then the interest is capitalized as part of the project cost. In
the nine-month period ended March 31, 2010 the amount of interest capitalized
was $36,916. During the nine months ended March 31, 2010 our interest expense
recognized was $16,325 higher than the comparable 2009 period. The higher
interest expense is due to increased notes payable to fund our operations plus
the interest expense recognized on our projects placed in service.

Net (loss)

Net loss for the nine month
period ended March 31, 2010 was $4,615,593 compared to $661,701 for the
comparable 2009 period, an increased loss of $3,953,892. The increased loss is
attributable to the $2,798,824 increase in management fees, $887,149 increase
in general and administrative expenses, $209,683 increased impairment and
abandonment expense, and a $127,584 increase in warrant and debt discount
expense.

Liquidity and Capital Resources

Cash Flow Information

Operating activities

Net cash used by operations
during the nine-month period ended March 31, 210 was $595,601 which was an
improvement of $166,584 compared to the comparable 2009 period. The net
improvement is attributable to sources of cash flows resulting from changes in
sale leaseback rent accrual, deferred compensation, accrued expenses and
deferred rental income. While the net loss for the nine months ended was
$4,615,593 significant amounts included in this period were non-cash expenses
including $2,627,075 for warrant grants, $513,357 for employee option grants,
$212,240 in impairment and abandonment expense, $127,854 in warrant and option
grants related to borrowings, $103,750 for restricted stock grants, $135,000 in
deferred compensation expense and $132,000 in sale leaseback rent expense
accrual.

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Investing activities

Net cash used in investing
activities during the nine-month period ended March 31, 2010 was $384,915
compared to a source of cash flows from investing activities of $286,584 during
the comparable 2009 period. During the nine-month period ended March 31, 2010
we acquired certain limited liability companies and related infrastructure
equipment required to complete our 4.0MW project in Osceola County, Iowa and incurred additions to wind power projects under construction
of $337,647. During the comparable period of 2009 our additions to wind
projects under construction was $1,104,441. Also during the nine months ended
March 31, 2009 we realized $1,380,650 in net proceeds from the sale leaseback
of the MCWE. There was no similar transaction in the nine months ended March
31, 2010.

Financing activities

Net cash provided by
financing activities during the nine-month period ended March 31, 2010 was
$1,095,736 which was $709,036 more than the comparable 2009 period. The largest
source of cash was the sale of 4,843,460 unregistered shares of our common
stock to accredited investors for net proceeds of $526,170. We increased our
borrowing by $405,000 on the bank facility related to our 4.0MW project in
Osceola County, Iowa. We also increased our borrowing from notes payable by
$99,566 to fund our operations. We also received an advance of $85,000 from our
Chairman to fund our operations during the nine months ending March 31, 2010.

Plan of Operation and Liquidity

In the nine months ended
March 31, 2010 we incurred an operating cash flow loss of $595,601. In
addition, we are experiencing a continuing operating cash flow deficiency of
$100,000 per month. However, we are pursuing, and will continue to pursue,
additional sources of cash including debt and/or equity financing, and selling
certain assets or interests in certain assets held by us. In comparison to our
continuing operating expenses of approximately $100,000 per month, we expect to
be able to draw down $255,000 in additional bank financing associated with our
project in Osceola County, Iowa in calendar year 2010. We are also
reducing certain expenditures and creating ongoing sources of cash from our
operating assets in an effort to provide funds and cash flow to meet our
obligations on a timely basis and to support our wind project development
activities.

As a result of the preceding
described cash flows for the nine-month period ended March 31, 2010, our cash
position increased by an amount of $115,220 during this nine-month period from
$-0- at June 30, 2009 to $115,220 at March 31, 2010.

On November 10, 2009, we
closed a financing facility with an Iowa commercial bank (the bank) to
provide funding through loan agreements between the bank and ZR and LJT, our
wholly-owned subsidiaries. This financing facility would provide up to $2,446,000
if fully funded under the terms of the loan agreements. This funding facility
relates to our two wind farms in Osceola County, Iowa which is comprised of two
2.0MW Gamesa turbines. This
banking facility provided an initial advance of $400,000 to the LLCs, of which
$250,000 satisfied a Promissory Note owed by us to the previous owners of the
LLCs, and the balance of $150,000 is being utilized to purchase parts and
services to complete the commissioning of the Gamesa turbines on the two
projects. The bank has provided an additional $255,000 draw on this facility as
a result of the commissioning of ZR. The bank also will provide a second
advance in the amount of up to $255,000 when LJT is commissioned, which
commercial operation date must be confirmed to the bank by our third-party
operations and maintenance contractor.

Our primary focus for the
next few months is to complete commissioning of our wind farm projects in
Minnesota and Iowa where we own existing Gamesa turbines as well as to commence
development of at least one of our pipeline projects. We intend to obtain the
needed funding through private placements of equity or debt securities, or bank
financing secured by our assets, or sale of interests in our wind energy
projects, or perhaps a combination of these sources. There is no assurance,
however, that we can obtain any material funding through any source. If we
cannot obtain such anticipated funding, we will be unable to implement our
business plan effectively to develop the wind energy assets we now own.

We cannot foresee what
impact the current unprecedented volatility in worldwide credit and equity
markets will have on our ability to obtain future substantial financing. Since
September 2008, an unprecedented turmoil in equity and credit markets has
occurred resulting in devastating losses in stock markets, dramatic decreases
in liquidity in credit markets, bank failures, hedge fund closures and massive
market intervention by the United States and many foreign governments. Because
of the drastic nature of these market events, and because equity and credit
markets remain highly volatile currently, we cannot predict what effect these
events will have on our ability to obtain future substantial financing as
needed.

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If additional funds are
raised by the issuance of convertible debt or equity securities or by any
exercise of outstanding options or warrants, our existing shareholders will
most likely experience dilution in their ownership interests.

Off Balance Sheet Transactions,
Arrangements, or Obligations

We have no material off
balance sheet transactions, arrangements or obligations.

Item 3.
Quantitative and Qualitative Disclosures About Market Risk

As a smaller reporting
company (as defined by §229.10(f)(1)), we are not required to provide the information
required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure
Controls and Procedures

Our management, with the
participation of our Chief Executive Officer and our Chief Financial Officer,
carried out an evaluation of the effectiveness of our disclosure controls and
procedures (as defined in the Securities Exchange Act of 1934 (the Exchange
Act) Rules 13a-15(e) and 15-d-15(e)) as of the end of the period covered by
this report (the Evaluation Date). Based upon that evaluation, our Chief
Executive Officer and our Chief Financial Officer concluded that, as of the
Evaluation Date, our disclosure controls and procedures are effective to ensure
that information required to be disclosed by us in the reports that we file or
submit under the Exchange Act (i) is recorded, processed, summarized and
reported, within the time periods specified in the SECs rules and forms and
(ii) is accumulated and communicated to our management, including our Chief
Executive Officer and our Chief Financial Officer, as appropriate to allow
timely decisions regarding required disclosure.

Changes in Internal Control Over Financial Reporting

There has been no change in
our internal control over financial reporting that occurred during the
quarterly period covered by this report that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.

PART II-OTHER INFORMATION

Item 1. Legal
Proceedings

We know of no material,
active or pending legal proceedings against our company, nor are we involved as
a plaintiff in any material proceeding or pending litigation. There are no
proceedings in which any of our directors, officers or affiliates, or any
registered or beneficial shareholder, is an adverse party or has a material
interest adverse to our interest.

Item 1A. Risk
Factors

As a smaller reporting
company (as defined by §229.10(f)(1)), we are not required to provide the
information required by this item.

Item 2. Unregistered Sales of Equity
Securities

From January 1, 2010 through
March 31, 2010: none.

Item 3. Defaults
Upon Debt Securities

None

Item 4.
Submission of Matters to a Vote of Security Holders

The Registrant did not
submit any matters to a vote of its security holders during the nine-months
ended March 31, 2010.

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Item 5. Other
Information

None

Item 6. Exhibits

EXHIBIT INDEX

31.1 Certification of Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2 Certification of Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1 Certification pursuant
to Section 906 of the Sarbanes-Oxley Act of 2002

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SIGNATURES

Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned thereunto duly authorized.

|                    |                          |                      | 
|------------------- | ------------------------ | -------------------- | 
|Dated: May 12, 2010 | Wind Energy America Inc.
|                    |                          |                      | 
|                    | By:                      | /s/ Melvin E. Wentz  | 
|                    | Melvin E. Wentz         
|                    | Chief Executive Officer  |                     
|                    |                          |                     
|                    | By:                      | /s/ Colin S. Jackson | 
|                    | Colin S. Jackson         |                     
|                    | Chief Financial Officer  |                     

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