UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549








FORM
10-Q




x
                QUARTERLY
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934




For the
quarterly period ended September 30, 2009





OR





 ̈
                TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934


Commission
file number: 001-53510





WINDTAMER
CORPORATION


(Exact
name of Registrant as specified in its charter)





New
      York
              16-1610794(State
      or other jurisdiction of incorporation or organization)
              (I.R.S.
      Employer Identification No.)6053
      Ely AvenueLivonia,
      NY
              14487(Address
      of principal executive offices)
              (Zip
      Code)





(585)
346-6442





Indicate
by check mark whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.    Yes   x   No  
 ̈





Indicate
by check mark 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 has been required to submit and post such files).*
Yes   ̈
No   ̈


*
Registrant is not yet required to submit Interactive Data Files pursuant to Rule
405 of Regulation S-T





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer  ̈
              Accelerated
      filer  ̈Non-accelerated
      filer  ̈(Do
      not check if a smaller reporting company)
              Smaller reporting companyx





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange


Act).
    Yes   ̈    No  x





As of
November 5, 2009, the Registrant had outstanding 114,481,000 shares common
stock, $0.0001 par value.





WINDTAMER
CORPORATION


TABLE
OF CONTENTS





PART
      I. FINANCIAL INFORMATIONItem
      1. Financial Statements
                              3Condensed
      Balance Sheets as of September 30, 2009 (unaudited) and December 31,
      2008
                              3Unaudited
      Condensed Statements of Operations for the Three Months and Nine Months
      EndedSeptember
      30, 2009 and 2008, and the Period from Date of Inception (March 30,
      2001)through
      September 30, 2009
                              4Unaudited
      Condensed Statements of Cash Flows for the Nine Months
    EndedSeptember
      30, 2009 and 2008, and the Period from Date of Inception (March 30,
      2001)through
      September 30, 2009
                              5Unaudited
      Statement of Stockholders' Equity from Inception through September 30,
      2009
                              .6Notes
      to Unaudited Condensed Financial Statements
                              7Item
      2.
                              Management’s
      Discussion and Analysis of FinancialCondition and Results of
      Operations.
                              12Item 4T.
                              Controls
      and Procedures
                              16PART
      II. OTHER INFORMATIONItem
      1.
                              Legal
      Proceedings
                              17Item
      1A.
                              Risk
      Factors
                              17Item
      2.
                              Unregistered
      Sales of Equity Securities and Use of Proceeds
                              22Item
      3.
                              Defaults
      Upon Senior Securities
                              22Item
      4.
                              Submission
      of Matters to a Vote of Security Holders
                              22Item
      5.
                              Other
      Information
                              22Item
      6.
                              Exhibits
                              23Signatures
                              
                              24Exhibits




2


PART
I – FINANCIAL INFORMATION





Item 1.
Financial Statements and Notes





WINDTAMER
CORPORATION


(A
Development Stage Company)


Balance
Sheets





September
                                              30,
                                            
                                            
                                            December
                                              31,2009
                                            
                                            
                                            2008(unaudited)ASSETSCurrent
      assetsCash
                                            
                                            $
                                            571,973
                                            
                                            
                                            $
                                            204,771Prepaid
      expenses and other current assets
                                            
                                            
                                            14,810
                                            
                                            
                                            
                                            8,739Total
      current assets
                                            
                                            
                                            586,783
                                            
                                            
                                            
                                            213,510Long-lived
      assetsIntangible
      assetsPatent
                                            
                                            
                                            34,862
                                            
                                            
                                            
                                            17,868Trademark
                                            
                                            
                                            4,525
                                            
                                            
                                            
                                            4,525Less
      accumulated amortization
                                            
                                            
                                            (1,934
                                            )
                                            
                                            
                                            (1,406
                                            )Total
      intangible assets
                                            
                                            
                                            37,453
                                            
                                            
                                            
                                            20,987Property
      and equipmentEquipment
                                            
                                            
                                            21,115
                                            
                                            
                                            
                                            10,268Furniture
      and fixtures
                                            
                                            
                                            14,215
                                            
                                            
                                            
                                            6,200Software
                                            
                                            
                                            7,465
                                            
                                            
                                            
                                            0Less
      accumulated depreciation
                                            
                                            
                                            (9,239
                                            )
                                            
                                            
                                            (1,779
                                            )Total
      property and equipment
                                            
                                            
                                            33,556
                                            
                                            
                                            
                                            14,689Total
      long-lived assets
                                            
                                            
                                            71,009
                                            
                                            
                                            
                                            35,676Total
      assets
                                            
                                            $
                                            657,792
                                            
                                            
                                            $
                                            249,186LIABILITIES AND STOCKHOLDERS'
      EQUITYCurrent
      liabilitiesAccounts
      payable
                                            
                                            $
                                            197,740
                                            
                                            
                                            $
                                            33,296Customer
      deposits
                                            
                                            
                                            60,000
                                            
                                            
                                            
                                            0Payroll
      liabilities
                                            
                                            
                                            6,982
                                            
                                            
                                            
                                            9,176Total
      current liabilities
                                            
                                            
                                            264,722
                                            
                                            
                                            
                                            42,472Commitments
      and Contingencies
                                            
                                            
                                            0
                                            
                                            
                                            
                                            0Stockholders'
      equityPreferred
      stock, 5,000,000 shares authorized, $.0001 par value; none issued or
      outstanding
                                            
                                            
                                            0
                                            
                                            
                                            
                                            0Common
      stock, 500,000,000 shares authorized, $0.0001 par value; 98,341,000 and
      80,640,000 shares issued and outstanding respectively
                                            
                                            
                                            9,834
                                            
                                            
                                            
                                            8,064Additional
      paid-in capital
                                            
                                            
                                            3,635,108
                                            
                                            
                                            
                                            1,430,199Deficit
      accumulated during development stage
                                            
                                            
                                            (3,251,872
                                            )
                                            
                                            
                                            (1,231,549
                                            )Total
      stockholders' equity
                                            
                                            
                                            393,070
                                            
                                            
                                            
                                            206,714Total
      liabilities and stockholders' equity
                                            
                                            $
                                            657,792
                                            
                                            
                                            $
                                            249,186





The
accompanying notes are an integral part of the financial
statements.


3


WINDTAMER
CORPORATION


(A
Development Stage Company)


Statement
of Operations (unaudited)





Three Months
                            Ended
                          
                          
                          Three Months
                            Ended
                          
                          
                          Nine Months
                            Ended
                          
                          
                          Nine Months
                            Ended
                          
                          
                          Period From
                            Date of Inception
                            (March 30, 2001)
                            throughSeptember 30,
                          
                          
                          September 30,
                          
                          
                          September 30,
                          
                          
                          September 30,
                          
                          
                          September 30,2009
                          
                          
                          2008
                          
                          
                          2009
                          
                          
                          2008
                          
                          
                          2009Research
      and development expenses:Compensation
      and payroll taxes
                          
                          
                          102,215
                          
                          
                          
                          5,538
                          
                          
                          
                          169,312
                          
                          
                          
                          58,140
                          
                          
                          
                          273,952Other
      research and development
                          
                          
                          176,206
                          
                          
                          
                          42,563
                          
                          
                          
                          500,382
                          
                          
                          
                          109,944
                          
                          
                          
                          691,195Total
      research and development expenses
                          
                          
                          278,421
                          
                          
                          
                          48,101
                          
                          
                          
                          669,694
                          
                          
                          
                          168,084
                          
                          
                          
                          965,147Selling,
      general and administrative expenses:Advertising,
      promotion and travel
                          
                          
                          6,658
                          
                          
                          
                          21,909
                          
                          
                          
                          58,951
                          
                          
                          
                          39,872
                          
                          
                          
                          114,512Amortization
      and depreciation
                          
                          
                          2,903
                          
                          
                          
                          534
                          
                          
                          
                          7,988
                          
                          
                          
                          1,603
                          
                          
                          
                          11,173Insurance
                          
                          
                          (2,513
                          )
                          
                          
                          6,552
                          
                          
                          
                          2,953
                          
                          
                          
                          7,054
                          
                          
                          
                          9,029Interest
      and penalties
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          1,000
                          
                          
                          
                          975
                          
                          
                          
                          1,975Office
      expense
                          
                          
                          9,391
                          
                          
                          
                          3,172
                          
                          
                          
                          19,099
                          
                          
                          
                          8,045
                          
                          
                          
                          29,770Compensation
      and payroll taxes
                          
                          
                          (84,221
                          )
                          
                          
                          25,728
                          
                          
                          
                          470,247
                          
                          
                          
                          156,017
                          
                          
                          
                          706,364Professional
      fees
                          
                          
                          141,373
                          
                          
                          
                          169,500
                          
                          
                          
                          660,027
                          
                          
                          
                          187,500
                          
                          
                          
                          1,256,800Public
      company expense
                          
                          
                          13,831
                          
                          
                          
                          0
                          
                          
                          
                          44,486
                          
                          
                          
                          0
                          
                          
                          
                          44,486Rent
      - equipment
                          
                          
                          5,846
                          
                          
                          
                          11,700
                          
                          
                          
                          13,081
                          
                          
                          
                          17,700
                          
                          
                          
                          35,002Occupancy
      expense
                          
                          
                          4,555
                          
                          
                          
                          0
                          
                          
                          
                          60,126
                          
                          
                          
                          0
                          
                          
                          
                          61,526State
      franchise tax
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          326
                          
                          
                          
                          0
                          
                          
                          
                          1,182Utilities
                          
                          
                          3,545
                          
                          
                          
                          548
                          
                          
                          
                          12,345
                          
                          
                          
                          1,838
                          
                          
                          
                          15,098Total
      selling, general and administrative expenses
                          
                          
                          101,368
                          
                          
                          
                          239,643
                          
                          
                          
                          1,350,629
                          
                          
                          
                          420,604
                          
                          
                          
                          2,286,917Total
      expenses
                          
                          
                          379,789
                          
                          
                          
                          287,744
                          
                          
                          
                          2,020,323
                          
                          
                          
                          588,688
                          
                          
                          
                          3,252,064Loss
      from operations
                          
                          
                          (379,789
                          )
                          
                          
                          (287,744
                          )
                          
                          
                          (2,020,323
                          )
                          
                          
                          (588,688
                          )
                          
                          
                          (3,252,064
                          )Non-operating
      revenueInterest
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          192Net
      loss before income taxes
                          
                          
                          (379,789
                          )
                          
                          
                          (287,744
                          )
                          
                          
                          (2,020,323
                          )
                          
                          
                          (588,688
                          )
                          
                          
                          (3,251,872
                          )Income
      taxes
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          0Net
      loss
                          
                          $
                          (379,789
                          )
                          
                          $
                          (287,744
                          )
                          
                          $
                          (2,020,323
                          )
                          
                          $
                          (588,688
                          )
                          
                          
                          (3,251,872
                          )Net loss per common share -
      basic and diluted
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.00
                          )
                          
                          $
                          (0.02
                          )
                          
                          $
                          (0.01
                          )
                          
                          
                          (0.05
                          )Weighted
      average number of common shares outstanding - basic and
      diluted
                          
                          
                          98,341,000
                          
                          
                          
                          79,540,000
                          
                          
                          
                          87,023,556
                          
                          
                          
                          70,840,000
                          
                          
                          
                          63,960,116





The
accompanying notes are an integral part of the financial
statements.




4





WINDTAMER
CORPORATION


(A
Development Stage Company)


Statements
of Cash Flows (unaudited)





Nine Months
                    
                    
                    Nine Months
                      Ended
                    
                    
                    Period from
                      Date of
                      Inception
                      (March 30,
                      2001)Ended
                      September 30,
                    
                    
                    September
                      30,
                    
                    
                    through
                      September 30,2009
                    
                    
                    2008
                    
                    
                    2009Operating activitiesNet
      loss
                    
                    $
                    (2,020,323
                    )
                    
                    $
                    (588,688
                    )
                    
                    $
                    (3,251,872
                    )Adjustments to reconcile net
      loss to net cash used in operating activities:Amortization
      and depreciation expense
                    
                    
                    7,988
                    
                    
                    
                    1,603
                    
                    
                    
                    11,173Stock-based
      compensation
                    
                    
                    649,024
                    
                    
                    
                    132,500
                    
                    
                    
                    1,059,775Changes
      in operating assets and liabilities:Increase
      in prepaid expenses and other current assets
                    
                    
                    (6,071
                    )
                    
                    
                    0
                    
                    
                    
                    (14,810
                    )Customer
      deposits
                    
                    
                    60,000
                    
                    
                    
                    0
                    
                    
                    
                    60,000Increase
      in trade accounts payable
                    
                    
                    164,444
                    
                    
                    
                    3,393
                    
                    
                    
                    197,740Increase
      (decrease) in payroll liabilities
                    
                    
                    (2,195
                    )
                    
                    
                    0
                    
                    
                    
                    6,982Net cash used in operating
      activities
                    
                    
                    (1,147,133
                    )
                    
                    
                    (451,192
                    )
                    
                    
                    (1,931,012
                    )Investing
      ActivitiesAcquisition
      of fixed assets
                    
                    
                    (26,327
                    )
                    
                    
                    (7,725
                    )
                    
                    
                    (42,795
                    )Acquisition
      of intangible assets
                    
                    
                    (16,994
                    )
                    
                    
                    (11,975
                    )
                    
                    
                    (39,387
                    )Net
      cash used in investing activities
                    
                    
                    (43,321
                    )
                    
                    
                    (19,700
                    )
                    
                    
                    (82,182
                    )Financing
      activitiesProceeds
      from issuance of common stock
                    
                    
                    741,000
                    
                    
                    
                    907,000
                    
                    
                    
                    1,791,510Proceeds
      from exercise of stock options
                    
                    
                    833,000
                    
                    
                    
                    0
                    
                    
                    
                    853,000Stock
      offering expenses paid
                    
                    
                    (16,344
                    )
                    
                    
                    (15,494
                    )
                    
                    
                    (59,343
                    )Net
      cash provided by financing activities
                    
                    
                    1,557,656
                    
                    
                    
                    891,506
                    
                    
                    
                    2,585,167Increase
      (decrease) in cash
                    
                    
                    367,202
                    
                    
                    
                    420,614
                    
                    
                    
                    571,973Cash
      - beginning
                    
                    
                    204,771
                    
                    
                    
                    30,410
                    
                    
                    
                    0Cash
      - ending
                    
                    $
                    571,973
                    
                    
                    $
                    451,024
                    
                    
                    $
                    571,973Supplemental
      Information:Income
      Taxes Paid
                    
                    $
                    0
                    
                    
                    $
                    0
                    
                    
                    $
                    0Interest
      Paid
                    
                    $
                    0
                    
                    
                    $
                    975
                    
                    
                    $
                    975





The
accompanying notes are an integral part of the financial
statements.


5





WINDTAMER
CORPORATION


(A
Development Stage Company)


Statements
of Stockholders' Equity (unaudited)


From
Inception through September 30, 2009





Treasury Stock
                          
                          
                          Common Stock
                          
                          
                          Additional
                          
                          
                          Deficit
                            Accumulated
                            During the
                          
                          
                          TotalNumber
                            of Shares
                          
                          
                          Par
                            Value
                          
                          
                          Number of
                            Shares
                          
                          
                          Par Value
                          
                          
                          Paid-In
                            Capital
                          
                          
                          Development
                            Stage
                          
                          
                          Stockholders'
                            EquityIssuance
      of common stock in exchange for services
                          
                          
                          
                          
                          
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          (3,000
                          )
                          
                          
                          
                          
                          
                          3,000Net
      loss for the period from March 30 through December 31,
2001
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (3,100
                          )
                          
                          
                          (3,100
                          )Balance,
      December 31, 2001
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          (3,000
                          )
                          
                          
                          (3,100
                          )
                          
                          
                          (100
                          )Expenses
      paid by shareholder
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          20,000
                          
                          
                          
                          
                          
                          
                          
                          20,000Issuance
      of common stock for cash
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          93,320
                          
                          
                          
                          9
                          
                          
                          
                          49,991
                          
                          
                          
                          
                          
                          
                          
                          50,000Net
      loss for 2002
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (61,348
                          )
                          
                          
                          (61,348
                          )Balance,
      December 31, 2002
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,093,320
                          
                          
                          
                          6,009
                          
                          
                          
                          66,991
                          
                          
                          
                          (64,448
                          )
                          
                          
                          8,552Expenses
      paid by shareholder
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          3,510
                          
                          
                          
                          
                          
                          
                          
                          3,510Treasury
      stock received at no cost
                          
                          
                          93,320
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          0Retirement
      of treasury stock
                          
                          
                          (93,320
                          )
                          
                          
                          
                          
                          
                          
                          (93,320
                          )
                          
                          
                          (9
                          )
                          
                          
                          9
                          
                          
                          
                          
                          
                          
                          
                          0Net
      loss for 2003
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (428
                          )
                          
                          
                          (428
                          )Balance,
      December 31, 2003
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          70,510
                          
                          
                          
                          (64,876
                          )
                          
                          
                          11,634Net
      loss for 2004
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (140
                          )
                          
                          
                          (140
                          )Balance,
      December 31, 2004
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          70,510
                          
                          
                          
                          (65,016
                          )
                          
                          
                          11,494Net
      loss for 2005
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (130
                          )
                          
                          
                          (130
                          )Balance,
      December 31, 2005
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          70,510
                          
                          
                          
                          (65,146
                          )
                          
                          
                          11,364Net
      loss for 2006
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (130
                          )
                          
                          
                          (130
                          )Balance,
      December 31, 2006
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          60,000,000
                          
                          
                          
                          6,000
                          
                          
                          
                          70,510
                          
                          
                          
                          (65,276
                          )
                          
                          
                          11,234Issuance
      of common stock for cash
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          1,400,000
                          
                          
                          
                          140
                          
                          
                          
                          69,860
                          
                          
                          
                          
                          
                          
                          
                          70,000Offering
      costs
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (16,741
                          )
                          
                          
                          
                          
                          
                          
                          (16,741
                          )Net
      loss for 2007
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (26,467
                          )
                          
                          
                          (26,467
                          )Balance,
      December 31, 2007
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          61,400,000
                          
                          
                          
                          6,140
                          
                          
                          
                          123,629
                          
                          
                          
                          (91,743
                          )
                          
                          
                          38,026Issuance
      of common stock for cash
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          18,140,000
                          
                          
                          
                          1,814
                          
                          
                          
                          905,186
                          
                          
                          
                          
                          
                          
                          
                          907,000Issuance
      of common stock under stock award agreement
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          700,000
                          
                          
                          
                          70
                          
                          
                          
                          34,930
                          
                          
                          
                          
                          
                          
                          
                          35,000Offering
      costs
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (26,258
                          )
                          
                          
                          
                          
                          
                          
                          (26,258
                          )Stock
      option expense
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          372,752
                          
                          
                          
                          
                          
                          
                          
                          372,752Issuance
      of stock under stock options
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          400,000
                          
                          
                          
                          40
                          
                          
                          
                          19,960
                          
                          
                          
                          
                          
                          
                          
                          20,000Net
      loss for 2008
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (1,139,806
                          )
                          
                          
                          (1,139,806
                          )Balance,
      December 31, 2008
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          80,640,000
                          
                          
                          
                          8,064
                          
                          
                          
                          1,430,199
                          
                          
                          
                          (1,231,549
                          )
                          
                          
                          206,714Issuance
      of common stock for cash
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          741,000
                          
                          
                          
                          74
                          
                          
                          
                          740,926
                          
                          
                          
                          
                          
                          
                          
                          741,000Offering
      costs
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (16,344
                          )
                          
                          
                          
                          
                          
                          
                          (16,344
                          )Stock
      option expense
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          349,023
                          
                          
                          
                          
                          
                          
                          
                          349,023Issuance
      of common stock under stock award agreement
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          300,000
                          
                          
                          
                          30
                          
                          
                          
                          299,970
                          
                          
                          
                          
                          
                          
                          
                          300,000Stock
      options exercised
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          16,660,000
                          
                          
                          
                          1,666
                          
                          
                          
                          831,334
                          
                          
                          
                          
                          
                          
                          
                          833,000Net
      loss for the period from January 1 through September 30,
    2009
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (2,020,323
                          )
                          
                          
                          (2,020,323
                          )Balance,
      September 30, 2009
                          
                          
                          0
                          
                          
                          
                          0
                          
                          
                          
                          98,341,000
                          
                          
                          
                          9,834
                          
                          
                          
                          3,635,108
                          
                          
                          
                          (3,251,872
                          )
                          
                          
                          393,070





The
accompanying notes are an integral part of the financial
statements.


6





WINDTAMER
CORPORATION


(A
Development Stage Company)


Notes
To The Financial Statements


Nine-Month
Period Ended September 30, 2009


(Unaudited)





Note
1 – Description of Business and Summary of Significant Accounting
Policies





Description
of Business





WindTamer
Corporation (the Company) was incorporated on March 30, 2001 in the State of New
York as Future Energy Solutions, Inc. and in November 2008 changed its name to
WindTamer Corporation. The Company is an independent developer of wind turbine
technology to harness wind as a source of power generation. The Company has
operated as a development stage enterprise since its inception by devoting
substantially all of its efforts to planning, raising capital, research and
development, and developing markets for its products.





Basis of
Presentation





The
accompanying unaudited condensed financial statements have been prepared in
accordance with accounting principles generally accepted in the United States of
America (“GAAP”) for interim financial information and with the instructions to
Form 10-Q. Accordingly, they do not include all of the information required by
GAAP for complete annual financial statement presentation.





In the
opinion of management, all adjustments (consisting only of normal and recurring
adjustments) necessary for a fair presentation of the results of operations have
been included in the accompanying unaudited condensed financial statements.
Operating results for the nine-month period ended September 30, 2009, are not
necessarily indicative of the results to be expected for other interim periods
or the full fiscal year. These financial statements should be read in
conjunction with the consolidated financial statements and accompanying notes
contained in the WindTamer Corporation Form 10-K/A for the fiscal year ended
December 31, 2008.





Use
of Estimates





The
preparation of financial statements in conformity with generally accepted
accounting principles 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 amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.





Fixed
Assets





Fixed
assets are recorded at cost. Depreciation is computed using accelerated methods
over the shorter of the estimated useful lives or the related lease for
leasehold improvements. Leasehold improvements for space leased on a
month-to-month basis are expensed when incurred. For the nine-month period ended
September 30, 2009, approximately $37,000 of leasehold improvements are included
in operating expenses. Expenditures for renewals and betterments are
capitalized.  Expenditures for minor items, repairs and maintenance
are charged to operations as incurred.  Any gain or loss upon sale or
retirement due to obsolescence is reflected in the operating results in the
period the event takes place.





Revenue
Recognition





Revenue
is recognized when all of the following conditions are
satisfied:   (1) there is persuasive evidence of an arrangement;
(2) the service or product has been provided to the customer; (3) the amount of
fees to be paid by the customer is fixed or determinable; and (4) the collection
of our fees is reasonably assured. Amounts billed and/or collected prior to
satisfying our revenue recognition policy are reflected as customer
deposits.





Basic
and Diluted Loss Per Share





Basic
earnings per share reflects the actual weighted average of shares issued and
outstanding during the period.  Diluted earnings per share are
computed including the number of additional shares that would have been
outstanding if dilutive potential shares had been issued. In a loss year, the
calculation for basic and diluted earnings per share is considered to be the
same, as the impact of potential common shares is
anti-dilutive.


7


WINDTAMER
CORPORATION


(A
Development Stage Company)


Notes
To The Financial Statements


Nine-Month
Period Ended September 30, 2009


(Unaudited)





As of
September 30, 2009, there were 18,760,000 stock options outstanding that could
dilute future earnings.





Recent
Accounting Pronouncements




In June 2009, the FASB issued Statement
of Financial Accounting Standard (SFAS) No. 168, The FASB Accounting
Standard Codification and the Hierarchy of the Generally Accepted Accounting
Principles — a replacement of SFAS No. 162 (SFAS 168) , now Accounting
Standards Codification (ASC) 105, to become the source of authoritative U.S.
generally accepted accounting principles (“GAAP”) recognized by the FASB to be
applied by nongovernmental entities.Rules and interpretive releases of
the Securities and Exchange Commission (SEC) under authority of federal
securities laws are also sources of authoritative GAAP for SEC registrants. The
FASB will no longer issue new standards in the form of Statements, FASB Staff
Positions, or Emerging Issues Task Force Abstracts; instead the FASB will issue
Accounting Standards Updates. Accounting Standards Updates will not be
authoritative in their own right as they will only serve to update the
Codification. These changes and the Codification itself do not change GAAP.
ASC 105 is effective for
financial statements issued for interim and annual periods ending after
September 15, 2009 and first adopted in the quarterly financial statements
for the period ended September 30, 2009.




Other
than the manner in which new accounting guidance is referenced, the adoption of
these changes had no impact on the Financial Statements.





In
April 2009, the FASB staff issued FSP No. FAS 107-1 and APB 28-1,
Interim Disclosures about Fair Value of Financial Instruments (“FSP No. FAS
107-1 and APB 28-1”) , now ASC 825. ASC 825 amends prior standards to require
disclosures about fair value of financial instruments in interim financial
statements as well as in annual financial statements. The provisions of ASC 825
became effective on April 1, 2009, are being applied prospectively
beginning in the second quarter of 2009 and did not have a material impact on
the Company’s consolidated financial statements.  See “Fair Value of
Financial Instruments” included in “Note 1 for the related
disclosure.





In
May 2009, the FASB issued Statement No. 165, Subsequent Events (“FAS
165”), now ASC 855. The provisions of ASC 855 set forth the period after the
balance sheet date during which management of a reporting entity should evaluate
events or transactions that may have occurred for potential recognition or
disclosure in the financial statements, the circumstances under which an entity
should recognize events or transactions occurring after the balance sheet date
in its financial statements and the disclosures that an entity should make about
events or transactions that occurred after the balance sheet date. The
provisions of ASC 855 became effective for the Company on April 1, 2009,
are being applied prospectively beginning in the second quarter of 2009 and did
not have a material impact on the Company’s consolidated financial
statements.





Fair
Value of Financial Instruments





The
carrying amount of cash, accounts payable, customer deposits and accrued
expenses are reasonable estimates of their fair value due to their short
maturity.





Reclassifications





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





Note
2 - Going Concern





The
financial statements have been prepared assuming that WindTamer Corporation will
continue as a going concern. The Company is in a development stage and has had
no revenue. The lack of sales and recurring losses from operations raise
substantial doubt about the Company’s ability to continue as a going concern.
Continuation of the Company is dependent on achieving sufficiently profitable
operations and additional financing. The Company completed a private placement
of its common stock in July 2008 in which it raised gross proceeds of $977,000
and during the first three quarters of 2009 the Company conducted a private
placement, which resulted in proceeds of $741,000 as of September 30, 2009.
Exercises of stock option awards resulted in proceeds of $833,000 as of
September 30, 2009 and an additional $807,000 subsequent to September 30, 2009.
The Company plans to continue the launch of the commercialization of its
products utilizing its current working capital and future financing proceeds, if
necessary, and by outsourcing the manufacturing function and working with
regional distributors during 2009. There can be no assurance that any revenue
from operations will be sufficient. In the event it is not sufficient, the
Company will need to raise additional capital. There can be no assurance that
the Company will be successful in raising additional
capital.


8


WINDTAMER
CORPORATION


(A
Development Stage Company)


Notes
To The Financial Statements


Nine-Month
Period Ended September 30, 2009


(Unaudited)





Note
3 – Stockholders’ Equity





During
the nine months ended September 30, 2009, the Company sold 741,000 shares of
common stock for a price of $1 per share, resulting in net proceeds of $724,656
after $16,344 of related costs associated with the private placement that were
treated as a reduction to Additional Paid-In Capital.





During
the nine months ended September 30, 2009, 300,000 shares vested, which were
issued in accordance with the consulting agreement discussed further in Note 5.
In addition, 16,660,000 stock option awards were exercised for a price of $0.05
per share that resulted in proceeds of $833,000 as of September 30,
2009.





Note
4 – Stock Option Grants





For the
nine months ended September 30, 2009, the Company recorded compensation costs
for options and shares granted amounting to $649,024. This expense did not have
an impact on basic and diluted net loss per share for the nine months ended
September 30, 2009.





On August
21, 2009 Chief Operating Officer John Schwartz resigned from his position and as
an employee of the Company. Mr. Schwartz held an option to purchase 1,000,000
shares of common stock at $1.00 per share under the 2008 Equity Incentive Plan.
At the time of his resignation, Mr. Schwartz was vested in 50% of the stock
option award. Under the terms of the stock option award agreement he has 120
days from the effective date of his resignation to exercise those vested stock
options. After that time, the unexercised options will expire. The unvested
stock options under the stock option award were forfeited due to his
resignation. As a result, $164,400 of previously recorded stock based
compensation related to the unvested options was reversed.





Management
has valued the options at their date of grant utilizing the Black-Scholes Option
Pricing Model. The following weighted-average assumptions were utilized in the
fair value calculations for options granted:





Nine Months Ended
                  
                  
                  Nine Months EndedSeptember 30, 2009
                  
                  
                  September 30, 2008Expected
      dividend yield
                  
                  
                  0
                  %
                  
                  
                  0
                  %Expected
      stock price volatility
                  
                  
                  40%
      - 50
                  %
                  
                  
                  35.21
                  %Risk-free
      interest rate
                  
                  
                  1.46
      - 2.90
                  %
                  
                  
                  2.1
                  %Expected
      life of options
                  
                  3 -
      10 years
                  
                  
                  3
      years




The
following table summarizes the status of the Company’s aggregate stock options
granted:





Number of
                                  Shares
                                  Remaining
                                  Options
                                
                                
                                Weighted
                                  Average
                                  Exercise
                                  Price
                                
                                Weighted-
                                  Average
                                  Remaining
                                  Contractual
                                  Term
                                
                                Aggregate
                                  Intrinsic
                                  ValueOutstanding
      at January 1, 2009
                                
                                
                                34,200,000
                                
                                
                                $
                                .05Options
      granted
                                
                                
                                1,870,000
                                
                                
                                $
                                1.00Options
      exercised during the nine months ended September 30, 2009
                                
                                
                                (16,660,000
                                )
                                
                                $
                                .05Options
      canceled during the nine months ended September 30, 2009
                                
                                
                                (650,000
                                )
                                
                                $
                                1.00Outstanding
      at September 30, 2009
                                
                                
                                18,760,000
                                
                                
                                $
                                .11
                                
                                2.3
      years
                                
                                $
                                16,663,000Exercisable
      at September 30, 2009
                                
                                
                                17,450,000
                                
                                
                                $
                                .08
                                
                                2.0
      years
                                
                                $
                                16,093,000




9


WINDTAMER
CORPORATION


(A
Development Stage Company)


Notes
To The Financial Statements


Nine-Month
Period Ended September 30, 2009


(Unaudited)





The
weighted average fair value of options granted during the nine months ended
September 30, 2009 was approximately $.46.





The
following table summarizes the status of the Company’s aggregate non-vested
shares granted:





Non-vested Shares
                  
                  Number of
                    Non-vested
                    Shares
                  
                  
                  Weighted Average
                    Fair Value
                    at Grant DateNon-vested
      at December 31, 2008
                  
                  
                  300,000
                  
                  
                  $
                  .05Vested
                  
                  
                  (300,000
                  )
                  
                  $
                  1.00Non-vested
      at September 30, 2009
                  
                  
                  0
                  
                  
                  
                  -




As of
September 30, 2009, the unrecognized compensation cost related to non-vested
share based compensation arrangements granted under the plan was approximately
$228,209.  These costs are expected to be recognized by the third
quarter of 2010.





Note
5 – Consulting Agreement





In
October 2008, the Company entered into an agreement with an individual to
provide management consulting services through September 30, 2009.  As
compensation, the Company would pay $1,000 for each full week during the
term.  The Company also entered into a Stock Award Agreement with this
individual on the same date.  The consultant received one million
shares of common stock, vesting according to a schedule.  The Company
is valuing the stock on each vesting date using the fair market value of the
common stock..  The fair value of the equity instrument is recognized
as an expense over the period the related service is performed.  The
Company issued 100,000 shares of common stock to the consultant upon signing the
consulting agreement and 600,000 shares vested from the date of the agreement to
December 31, 2008 upon the satisfaction of other performance criteria. During
the year ended December 31, 2008, the Company recognized $35,000 of stock based
compensation related to this award. The Company issued the final 300,000 shares
of common stock to the consultant upon meeting performance criteria in the first
quarter of 2009 and recognized $300,000 of stock based compensation during the
nine months ended September 30, 2009.





Note
6 – Related Party Transactions





Certain services amounting to $130,298,
were provided to the Company by immediate family members of an officer/
shareholder of the Company. This amount includessalary earned by Amy
Brock of $ 31,293 for the nine months ended September 30, 2009, of which
$10,245 was earned during the three months ended September 30, 2009, and $99,005
paid to R.B. Brock Construction for consulting services rendered during the nine
months ended September 30, 2009 in connection with production model development,
assembly, and installation, of which $19,605 was earned during the three months
ended September 30, 2009.





Note
7 – Commitments and Contingencies





The
Company entered into an agreement with Alternative Wind Resources, LLC ("AWR")
to produce a 15kWh prototype wind turbine unit by May 30, 2009, in which AWR
agreed to reimburse the Company for engineering and materials costs for
development of this larger prototype unit.  AWR also agreed to provide
the Company with a purchase order for one thousand (1,000) 15kWh units within
one year after delivery of the prototype. As of September 30, 2009 the prototype
has not been completed or delivered to AWR.  AWR provided a $50,000
deposit for the orders, but has not yet provided, and may never provide, the
purchase order.  The agreement also grants AWR the exclusive right to
purchase all 15kWh and larger wind turbine units for wind farm and industrial
uses and development.  On April 29, 2009 the Company also granted AWR
an option for 60 days to enter into an exclusive license agreement with the
Company for 50 years for the sale of the Company’s 15 kWh wind turbines and
larger upon the payment of a $6.0 million license fee. The option was subject to
extension if the due diligence provided to AWR by the Company was not reasonably
acceptable. AWR paid a $10,000 fee for the option. The payments from AWR,
aggregating $60,000 have been included in customer deposits. On September
10, 2009, the Company received a letter from counsel to AWR purporting to
terminate the March 2009 agreement and the April 2009 option described above in
Note 7 and demanding the return of $60,000 provided to the
Company.


10


WINDTAMER
CORPORATION


(A
Development Stage Company)


Notes
To The Financial Statements


Nine-Month
Period Ended September 30, 2009


(Unaudited)





The
Company filed its New York State corporate income tax return during July 2009,
and anticipates a refund in the amount of $31,217 upon approval by state tax
authorities. This refund will be recorded when received by the
Company.





On August
20, 2009, the Company entered into a lease for its current office space in
Geneseo, New York for $1,400 per month which commenced on November 1, 2009
and expire October 31, 2011. Future commitments by year under this lease
are as follows:





Year
                  
                  RentalCommitment2009
                  
                  $
                  2,8002010
                  
                  $
                  16,8002011
                  
                  $
                  14,000





Note
8 – Subsequent Events





Stock
option award grantees exercised 16,140,000 options during November
2009.  The exercise price for all options exercised was $0.05
resulting in proceeds of $807,000. On November 4, 2009, the Board of Directors
granted options to purchase an aggregate of 1,100,000 shares of the Company’s
common stock to a non-executive employee and three consultants at an exercise
price of $1.00 per share under the Company’s 2008 Equity Incentive
Plan.





These
financial statements have not been updated for subsequent events occurring after
November 5, 2009, the date these financial statements were available to be
issued.


11


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





The
following discussion should be read in conjunction with the historical financial
statements and the related notes and the other financial information included
elsewhere in this report. This discussion contains forward-looking statements
that involve risks and uncertainties. Our actual results could differ materially
from those anticipated in these forward-looking statements as a result of any
number of factors, including those set forth under “Risk Factors” and under
other captions contained elsewhere in this report.





Overview





We are a
development-stage company that plans to provide wind powered generators for the
production of electrical power. We plan to market the generators for use in
residential and commercial electrical power production.





We were
formed in 2001. To date our operations have consisted of research and
development activities.   We have had no significant revenues to date.
During this time we have focused on research and development of our patented
technology and production of Wind Tamer prototypes. We have collected a variety
of test data related to the performance of the machine. We launched the
commercialization of our products and marketing it to customers in the third
quarter of 2009 but have not yet begun large-scale manufacturing.





In the
future, we intend to develop Wind Tamer units of several sizes and capabilities
for the residential, commercial, industrial, recreational, portable and low-head
hydro renewable energy markets and transportation markets.  We believe
our wind turbine technology will reduce the costs and increase the efficiency of
wind turbine electrical production and ultimately replace conventional wind
turbine technology. We also believe that our current Wind Tamer turbines are
competitive with fossil-fueled generators, opening up new markets for the
machine.





On
November 25, 2008, we effected a 20-for-1 split of our outstanding shares of
common stock resulting in there then being approximately 79,640,000 common
shares outstanding. In addition, the Company’s authorized shares were increased
to 500,000,000 common shares, and 5,000,000 preferred shares. The shares of
preferred stock are undesignated “blank check” shares. All share and per share
amounts have been retroactively restated for the stock split.





Financial
Operations





The
Company expects to incur substantial additional costs, including costs related
to ongoing research and development activities. We have utilized the proceeds
raised from our private placements conducted in 2008 and 2009 to sustain our
operations and produce our Wind Tamer prototype units.  Our future
cash requirements will depend on many factors, including continued progress in
our research and development programs, the costs involved in filing, prosecuting
and enforcing patents, competing technological and market development and the
cost of product commercialization. We do not expect to generate a positive cash
flow from operations at least until the commercial launch of our first products,
which started in the late third quarter of 2009, and possibly later if we are
unable to establish satisfactory manufacturing and distribution
relationships, or our products are not initially accepted by the market.
Accordingly, we may require additional external financing to sustain our
operations if we cannot achieve positive cash flow from our anticipated
operations.  Additionally, even if we are able to achieve positive
cash flow from operations following the initial launch of our planned products
we may continue to seek to raise additional capital to accelerate the growth of
our planned operations or build on our manufacturing and distribution
infrastructure. Success in our future operations is subject to a number of
technical and business risks, including our continued ability to obtain future
funding, satisfactory product development, and market acceptance for our
products as further described above under the heading “Risk
Factors.”





Results
of Operations





We are a
development stage company and have generated no significant revenues since our
inception in 2001. We did not generate any revenue for the nine months ended
September 30, 2009 and 2008.


12




Our
operating expenses for the three months ended September 30, 2009 were $379,789
as compared to the $287,744 for the three months ended September 30, 2008. 
Our operating expenses for the nine months ended September 30, 2009 were
$2,020,323 as compared to $588,688 for the nine months ended September 30, 2008,
and $3,252,064 since inception.  The increase in operating expenses from
the third quarter and first nine months of 2008 to the same periods in 2009 was
due to the increase in operating activities in 2009 as compared to 2008, as we
begin to build our first production models and prepare our operations to begin
our first sales.  Our operating expenses have consisted primarily of
compensation, consulting fees and research and development expenses. The
increase in operating expenses for the three months ended September 30, 2009
included an increase in research and development expenses of $278,421 compared
to $48,101 for the three months ended September 30, 2008.  This increase
during the quarter was partially offset by a decrease in selling, general and
administrative expenses, or SG&A expenses due to forfeiture of unvested
options by a terminated employee of $164,400 in the three months ended September
30, 2009.  The increase in operating expenses for the nine months ended
September 30, 2009 included an increase in research and development expenses of
$501,610 and an increase in SG&A expenses of $930,025 as compared to the
nine months ended September 30, 2008.  This increase in research and
development expenses was comprised primarily of labor and materials for the
construction, testing and refinement of our production models. This increase in
SG&A expenses was comprised primarily of compensation and professional fees,
including stock-based compensation expense for employees and consultants of
$649,024 and $132,500 in the nine months ended September 30, 2009 and September
30, 2008, respectively.
 
 We
incurred net losses of $379,789 and $287,744, for the three months ended
September 30, 2009 and 2008, respectively, $2,020,323 and $588,688 for the nine
months ended September 30, 2009 and 2008, respectively and $3,251,872,
cumulative since inception.
 
 During
the next twelve months, we expect to take the following steps in connection with
the further development of our business and the implementation of our plan of
operations.
 
 We have
begun working with component manufacturers to build our first production
models.  We intend to begin working with distributors for the Wind Tamer
for domestic sale and to license our technology for manufacture and distribution
overseas.  We initially plan to begin to market units from 1.8 to 15
kilowatts for residential, commercial and industrial use. We have begun
manufacturing production models and we have begun sales efforts, but have not
yet consummated any sales. Once we have started sales, we plan to pursue
licensing opportunities later in 2009.  At this time, however, we have no
definitive distribution or licensing agreements or arrangements to do so and
there can be no assurance that we will be able to enter into successful
arrangements by that time or at all.
  We have
utilized the proceeds we raised from our private placements conducted in 2008
and 2009 to implement our business plan and build prototypes of our Wind Tamer
units.  We plan to utilize these remaining proceeds in the manufacture and
commercialization of our products and technology.  We will also have to
expand our management team and sales and marketing team to accommodate our
growth and expansion. We anticipate having products ready for market in 2009 but
cannot be sure that this will be the case. We plan to hire approximately 25 to
50 persons over the next 12 months in the areas of sales, administration,
engineering and product assembly. During this period we plan to outsource
manufacturing function to local manufacturers to begin sales which we believe
will demonstrate commercial application of our planned products.
  In March
2009, we entered into an agreement with Alternative Wind Resources, LLC to
produce a 15kWh prototype wind turbine unit by May 30, 2009 in which
it agreed to reimburse us for engineering and materials costs for
development of this larger prototype unit.  The customer also agreed to
provide the Company with a purchase order for one thousand (1,000) 15kWh units
within one year after delivery of the prototype. The agreement also grants
Alternative Wind Resources, LLC the exclusive right to purchase all 15kWh and
larger wind turbine units for wind farm and industrial uses and development. The
customer provided a $50,000 deposit for the orders, but has not yet provided,
and may never provide, the purchase order.  We have not yet delivered the
15kWh prototype required under the agreement.  In April 2009 we also
granted the customer an option for 60 days to enter into an exclusive license
agreement with us for 50 years for the sale of our 15 kWh wind turbines and
larger upon the payment of $6.0 million license fee. The option was subject to
extension if our due diligence provided to them was not reasonably acceptable.
Alternative Wind Resources, LLC paid a $10,000 fee for the option, but never
paid the $6.0 million license fee. Alternative Wind Resources, LLC, sent us a
letter dated September 10, 2009 purporting to terminate the agreement and option
and demanding return of the $60,000 paid under these agreements for the failure
to deliver a prototype and the failure to provide due diligence requested 
under the option.  Specifically, section 4 of the option agreement required
that the Company provide Alternative Wind Resources, LLC
with documentation on our fluid driven vacuum enhanced generator
patent (United States Patent No. 6655907 issued December 2, 2003), information
about our patent applications, and evidence that WindTamer has the authority to
grant such exclusive rights to Alternative Wind Resources, LLC.  The
Company provided copies of our patent for that subject matter as well as patent
pending applications.  The Company believes that it has complied with these
provisions of the agreement and intends to dispute Alternative Wind Resources,
LLC’s claims that it did not provide such information.  We plan to proceed
with termination of the agreement and option and also dispute these claims for
payment although there can be no assurance that we will be successful.  If
we are not successful, the claim for $60,000 could have a material adverse
effect on our capital plans over the next twelve months and could require
that we raise additional capital sooner than planned, if we are not able to
generate sufficient capital from operations.
  13
  There can
be no assurance that our management will be successful in completing our product
development programs, implementing the corporate infrastructure to support
operations at the levels called for by our business plan, conclude a successful
sales and marketing plan with third parties to attain significant market
penetration or that we will generate sufficient revenues to meet our expenses or
to achieve or maintain profitability.
 
 Liquidity
and Capital Resources
 
 As of
September 30, 2009, we had a working capital of $322,061 as compared to $171,038
of working capital as of December 31, 2008. The increase in working capital is
attributed to net proceeds of approximately $1.6 million received in our private
placement of common stock as well as proceeds from the exercise of certain
consultant stock options between February and July 15, 2009, offset by the use
of capital in the development of our production models and related expenses
during the first nine months of 2009.  Our principal source of liquidity
has been from our founder, and proceeds of $977,000 from a private placement of
our common stock completed in 2008 and approximately $1.6 million of proceeds
from two private placements conducted in 2009. Stock option exercises resulted
in additional proceeds of $807,000 subsequent to September 30,
2009.
 
 We have
begun implementing our plan of operation with the design and development of
prototypes for our planned products.  We have also begun establishing
relationships with third party manufacturers in connection with the
commercialization of our products.  We launched the commercialization of
our planned products in the third quarter of 2009.  We believe that we will
need additional capital to continue the launch of the commercialization of our
planned products and meet anticipated demand over the next twelve months. 
We raised approximately $1.6 million in private equity financing in 2009. 
We believe that we will need approximately $1.5 to $2.5 million of additional
capital over the next twelve months for commercialization of our products and
technology needed to bring our business to a level to be able to sustain
positive cash flow from operations. If we are unable to generate this amount
from our planned operations, we will need to seek additional financing.  We
may also seek additional financing to build internal manufacturing
capacity.  We believe that we will need approximately $6.0 to $7.0 million
to do so.  The common stock sold in the private placement financings will
not be and has not been registered under the Securities Act of 1933,
as amended, or the Securities Act, and may not be offered or sold in the United
States absent registration or an applicable exemption from registration
requirements.  There can be no assurance that we will be successful in
raising any needed amounts on these terms for these uses or that these amounts
will be sufficient for our plans.  This disclosure relating to our equity
financing from private sources does not constitute an offer to sell or the
solicitation of an offer to buy any of our securities, and is made only as
required under applicable law and related reporting requirements, and as
permitted under Rule 135c under the Securities Act.
 
 There can
be no assurance that any revenues from these planned operations will be
sufficient to satisfy all of our cash requirements and implement our plan of
operations for the next twelve month period.  In such event, we may need to
raise additional capital through debt or equity financing. Additionally, even if
we are able to achieve cash flow from operations following the initial launch of
our planned products we may seek to raise additional capital to accelerate the
growth of our planned operations or build on our manufacturing and distribution
infrastructure.
  Due to
the uncertainty of our ability to meet our current operating and capital
expenses, in their report on our audited annual financial statements as of and
for the years ended December 31, 2008 and 2007, our independent auditors
included an explanatory paragraph regarding concerns about our ability to
continue as a going concern. Our financial statements contain additional note
disclosures describing the circumstances that led to this disclosure by our
independent auditors. There is substantial doubt about our ability to continue
as a going concern as the continuation and expansion of our business is
dependent upon obtaining further financing, successful and sufficient market
acceptance of our products, and, finally, achieving a profitable level of
operations.
  14
 
 The
issuance of additional equity securities by us may result in a significant
dilution in the equity interests of our current shareholders. Obtaining
commercial loans, assuming those loans would be available, will increase our
liabilities and future cash commitments. There is no assurance that we will be
able to obtain further funds required for our continued operations or that
additional financing will be available to us when needed or, if available, that
it can be obtained on commercially reasonable terms. If we are not able to
obtain the additional financing on a timely basis, we will not be able to meet
our other obligations as they become due and we will be forced to scale down or
perhaps even cease our operations. Furthermore, our ability to raise additional
capital may be made more difficult by the global financial crisis.
 
 Off-Balance
Sheet Arrangements
 
 We have
no significant off-balance sheet arrangements that have, or are reasonably
likely to have, a current or future effect on our financial condition, changes
in financial condition, revenues or expenses, results of operations, liquidity,
capital expenditures, or capital resources that is material to
shareholders.
 
 Critical
Accounting Policies
  As of
September 30, 2009, the Company’s critical accounting policies and estimates
have not changed materially from those set forth in the Company’s Annual Report
on Form 10-K/A for the year ended December 31, 2008, except as
follows.
  On
September 30, 2009, the Company adopted changes issued by the Financial
Accounting Standards Board (“FASB”) to the authoritative hierarchy of
GAAP.  These changes establish the FASB Accounting Standards
CodificationTM
(“Codification”) as the source of authoritative accounting principles recognized
by the FASB to be applied by nongovernmental entities in the preparation of
financial statements in conformity with GAAP. Rules and interpretive releases of
the Securities and Exchange Commission (SEC) under authority of federal
securities laws are also sources of authoritative GAAP for SEC
registrants.  The FASB will no longer issue new standards in the form of
Statements, FASB Staff Positions, or Emerging Issues Task Force Abstracts;
instead the FASB will issue Accounting Standards Updates. Accounting Standards
Updates will not be authoritative in their own right as they will only serve to
update the Codification. These changes and the Codification itself do not change
GAAP.  Other than the manner in which new accounting guidance is
referenced, the adoption of these changes had no impact on the Financial
Statements.
  Stock
Based Compensation
  In
December 2004, FASB issued SFAS No. 123R, Share-Based Payment (“SFAS
No. 123R”), now ASC 718.  ASC 718 establishes standards for the accounting
for transactions in which an entity exchanges its equity instruments for goods
or services.  It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity’s equity instruments or that may be settled by the issuance of
those equity instruments.  ASC 718 focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions.  ASC 718 requires that the compensation cost relating to
share-based payment transactions be recognized in the financial
statements.  That cost will be measured based on the fair value of the
equity or liability instruments issued.
  The
Company’s accounting policy for equity instruments issued to consultants and
vendors in exchange for goods and services follows the provisions of EITF 96-18,
“Accounting for Equity Instruments That are Issued to Other Than Employees for
Acquiring, or in Conjunction with Selling, Goods or Services,” now ASC 505 and
EITF 00-18, “Accounting Recognition for Certain Transactions Involving Equity
Instruments Granted to Other Than Employees,” now ASC 505.  The measurement
date for the fair value of the equity instruments issued is determined at the
earlier of (i) the date at which a commitment for performance by the
consultant or vendor is reached or (ii) the date at which the consultant or
vendor’s performance is complete. In the case of equity instruments issued to
consultants, the fair value of the equity instrument is recognized over the term
of the consulting agreement.  Stock-based compensation related to
non-employees is accounted for based on the fair value of the related stock or
options or the fair value of the services, which ever is more readily
determinable in accordance with SFAS 123(R), now ASC 718.
  15
  Management
has valued the options at their date of grant utilizing the Black-Scholes Option
Pricing Model.  Since there is not a public market for the Company shares,
the fair value of the underlying shares was determined based on recent
transactions by the Company to sell shares to third parties.  Further, the
excepted volatility was calculated using the historical volatility of a similar
public entity in the alternative electricity industry in accordance with
Question 6 of SAB Topic 14.D.1, ASC 718.  In making this determination and
finding another similar company, the Company considered the industry, stage of
life cycle, size and financial leverage of such other entities.  Based on
the development stage of the Company, similar companies with enough historical
data are not available.   The Company was able to find one entity that
met the industry criterion and as a result has based its expected volatility off
this company’s historical stock prices for a period similar to the expected term
of the option.  The company used is larger and at a later stage in its life
cycle.  Our actual volatility could vary from the estimate used based on
this company, which could have a material impact on future results of
operations.  The risk-free interest rate is based on the implied yield
available on U.S. Treasury issues with an equivalent term approximating the
expected life of the options depending on the date of the grant and expected
life of the options.  The expected life of options used was based on the
contractual life of the option granted.  The Company determined the
expected dividend rate based on the assumption and expectation that earnings
generated from operations are not expected to be adequate to allow for the
payment of dividends in the near future.
 
 Information
Concerning Forward-Looking Statements
 
 All
statements in this Form 10-Q, future filings by the Company with the Securities
and Exchange Commission (“Commission”), the Company’s press releases and oral
statements by authorized officers of the Company, other than statements of
historical facts, that address future activities, events or developments are
“forward-looking statements.”
 
 These
forward-looking statements include, but are not limited to, statements relating
to our anticipated financial performance, business prospects, new developments,
new merchandising strategies and similar matters, and/or statements preceded by,
followed by or that include the words “believes,” “could,” “expects,”
“anticipates,” “estimates,” “intends,” “plans,” “projects,” “seeks,” or similar
expressions. We have based these forward-looking statements on certain
assumptions and analyses made by us in light of our experience and on our
assessment of historical trends, current conditions, expectations, and
projections about expected future developments and events, as well as on other
factors we believe are appropriate under the circumstances and other information
currently available to us. These forward-looking statements are subject to
risks, uncertainties and assumptions, including those described under the
heading “Risk Factors” appearing in Item 1A of Part II of this Report and in
Item 1A of Part I of the Company’s 10-K/A filed with the Commission, for the
fiscal year ended December 31, 2008, that may affect the operations,
performance, development and results of our business. You are cautioned not to
place undue reliance on these forward-looking statements, which speak only as of
the date stated, or if no date is stated, as of the date hereof.
 
 Although
we believe that the expectations reflected in the forward-looking statements are
reasonable, there can be no assurance that such expectations or any of the
forward-looking statements will prove to be correct, and actual results could
differ materially from those projected or assumed in the forward-looking
statements. Our future financial condition and results of operations, as well as
any forward-looking statements, are subject to inherent risks and uncertainties.
All forward-looking statements and reasons why results may differ contained
herein are made as of the date hereof, and we assume no obligation to update any
such forward-looking statement or reason why actual results might differ. All of
the forward-looking statements contained herein are qualified by these
cautionary statements.
 
 Item
4T. Controls and Procedures
 
 The
Company’s management has established disclosure controls and procedures designed
to ensure that information required to be disclosed by the Company in the
reports that it files or submits under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) is recorded, processed, summarized and reported
within time periods specified in the SEC rules and forms. Such disclosure
controls and procedures include, without limitation, controls and procedures
designed to ensure that information required to be disclosed by the Company in
the reports that it files or submits under the Exchange Act is accumulated and
communicated to the Company’s management to allow timely decisions regarding
required disclosure.
  16
  Based on
the evaluation of the effectiveness of our disclosure controls and procedures,
our Chief Executive Officer and Chief Financial Officer concluded that our
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) were not effective as of September 30, 2009. This conclusion is
based on the Company’s failure to timely disclose as a material agreement the
Option Agreement between the Company and Alternative Wind Resources, LLC, dated
April 29, 2009.
 
 We are
committed to improving our disclosure controls and procedures.  As part of
this commitment, we have taken steps to improve our disclosure controls and
procedures.  These steps include: (i) updating our disclosure controls and
procedures to require that all agreements entered into by the Company be
provided to multiple individuals within the management team for evaluation; (ii)
requiring that management confer with the Company’s legal counsel and
independent auditors when questions as to the materiality or disclosure
requirements for agreements arise; and (iii) providing additional education to
the management team regarding the Company’s reporting requirements and
obligations.
 
 We will
continue to monitor and evaluate the effectiveness of our internal controls and
procedures and our internal controls over financial reporting on an ongoing
basis and are committed to taking further action and implementing additional
enhancements or improvements, as necessary and as funds allow.  There can
be no assurance, however, that our disclosure controls and procedures will
detect or uncover all failures of persons within the Company to disclose
material information otherwise required to be set forth in our periodic reports.
There are inherent limitations to the effectiveness of any system of disclosure
controls and procedures, including the possibility of human error and the
circumvention or overriding of the controls and procedures. Accordingly, even
effective disclosure controls and procedures can only provide reasonable, not
absolute, assurance of achieving their control objectives.
  Changes
in Internal Control Over Financial Reporting
  There was
no change in the Company’s internal control over financial reporting that
occurred during the quarter ended September 30, 2009 that has materially
affected, or is likely to materially affect, the Company’s internal control over
financial reporting.
 
 Part
II – OTHER INFORMATION
 
 Item
1. Legal Proceedings
 
 From time
to time we are involved with legal proceedings, claims and litigation arising in
the ordinary course of business. As of the date of this report we are not a
party to any material pending legal proceedings.
 
 Item
1A. Risk Factors
  The
Company’s risk factors have not changed materially from the risk factors
previously disclosed in the Company’s Annual Report on Form 10-K/A for the year
ended December 31, 2008, except as follows:
  We
have a limited operating history, which may make it difficult for investors to
predict future performance based on current operations.
 
 We have limited operating history upon
which investors may base an evaluation of our potential future performance. We
have had no significant revenues to date. As a result, there can be no assurance
that we will be able to develop consistent revenue sources, or that our
operations will be profitable. Our prospects must be considered in light of the
risks, expense and difficulties frequently encountered by companies in early
stage of development.
  17
  Any forecasts we make about our
operations, including, without limitation, when we will begin sales and plans
for fundraising, may prove to be inaccurate.  For instance, we planned to
begin sales of our products in the first half of 2009 but did not meet that goal
as we continued to refine the development of our production models.  We now
expect this to begin in the third quarter of 2009 although there can be no
assurance that we will be successful in meeting this target.  Additionally,
we had planned on raising $20 million in a private placement, but we later
determined to cease raising funds in that private placement after raising only
$741,000.  We stopped raising funds after only $741,000 because we
reassessed our cash needs and also determined that the appropriate focus of our
executive management should be on product development rather than fundraising,
and further concluded that it was not in the best interest of the Company to
raise more than $741,000 at this time.
 
 We must, among other things, determine
appropriate risks, rewards and level of investment in each project, respond to
economic and market variables outside of our control, respond to competitive
developments and continue to attract, retain and motivate qualified employees.
There can be no assurance that we will be successful in meeting these challenges
and addressing such risks and the failure to do so could have a materially
adverse effect on our business, results of operations and financial
condition.
 
 We
will need additional capital to sustain our operations and may seek further
financing to accelerate our growth, which we may not be able to obtain on
acceptable terms. If we are unable to raise additional capital, as needed, the
future growth of our business and operations would be severely
limited.
 
 A limiting factor on our growth,
including our ability to enter our proposed markets, attract customers, and
deliver our product in the targeted electrical power production markets, is our
limited capitalization compared to other companies in the industry.
 
 We will need additional capital to
bring our operations to a sustainable level over the next twelve months. 
The Company raised $741,000 in its recent private placement completed July 14,
2009 and received $833,000 in early July 2009 from the exercise of stock options
by certain optionholders.  After consideration of the Company’s
then-current financial situation and the appropriate focus of the Company’s
executive management on product development rather than fundraising, it was
determined that no further funds were required to be raised at that time. 
However, if we are unable to generate any additional needed capital from our
planned operations, we will need to seek additional financing.  We may also
seek additional financing to accelerate our growth.  If we raise additional
funds through the issuance of equity or convertible debt securities, the
percentage ownership of the Company held by existing shareholders will be
reduced and our shareholders may experience significant dilution. In addition,
new securities may contain rights, preferences or privileges that are senior to
those of our common stock. If we raise additional capital through issuance of
debt, this will result in increased interest expense.  There can be no
assurance that acceptable financing necessary to further implement our plan of
operation can be obtained on suitable terms, if at all. Our ability to develop
our business could suffer if we are unable to raise additional funds on
acceptable terms, which would have the effect of limiting our ability to
increase our revenues or possibly attain profitable operations in the
future.
 
 We
depend on outside consultants with whom we do not have agreements which could
have an adverse effect on our business if they were to discontinue providing
services.
 
 We are a development stage company and
have only 4 employees.  We have utilized the services of outside
consultants to assist in developing and implementing our business plan and
operations.  These consultants have assisted us primarily with the
assembly, construction and design of Wind Tamer turbine prototypes and
production models, and component parts related thereto, the development and
planning of manufacturing and distribution logistics and strategy, and advice
and assistance on our management structure, business development and product
marketing strategy.  We do not have long-term agreements with them to
perform services for us and they could stop providing services for us at any
time.  As a result, if several of these consultants were to discontinue
providing services for us before we are able to hire additional full-time
employees or make arrangements with additional consultants, it would have an
adverse effect on our business.
 
 We
may not be successful in developing and sustaining the alliances necessary for
the successful penetration of our target markets.
 
 Our business plan contemplates that we
establish and sustain relationships with manufacturers or third-party
wholesalers or retailers for the production and marketing of Wind Tamer. We have
begun establishing manufacturing relationships and we are pursuing relationships
to market our products.  There can be no assurance that we will be
successful in developing or sustaining the necessary relationships. If we are
not successful in securing or sustaining these critical alliances on reasonable
terms, we may not generate sufficient revenue to conduct our operation or become
profitable.
  18
 
 Our
agreement with an early stage company for the order of some of our initial
turbines contains uncertainty regarding the term and pricing and an exclusivity
provision which could have an adverse effect on our growth and development, and
we could be deemed in breach of the agreement and required to return payments
made to us.
 
 We entered into an agreement with an
early stage company which planned to offer WindTamer turbines to its customers,
to produce a 15kWh prototype wind turbine unit.  The agreement also calls
for the order of 1,000 turbines from us and provides the customer with an
exclusive right to purchase from us all 15kWh and larger wind turbines for wind
farms and industrial uses and development for an undefined period.  The
agreement contemplated the 15kWh prototype would be delivered by May 30, 2009,
but we have not yet delivered the 15kWh prototype. In April 2009 we also granted
the customer an option for 60 days to enter into an exclusive license agreement
with us for 50 years for the sale of our 15 kWh wind turbines and larger upon
the payment of a $6.0 million license fee. The option was subject to extension
if our due diligence provided to them was not reasonably acceptable. The
customer paid a $10,000 fee for the option but has not paid the $6.0 million
license fee. We received a letter from the customer dated September 10, 2009
purporting to terminate the agreement based on our failure to deliver the
prototype, and the option based on the failure to provide due diligence, and
demanding the return of $60,000 provided to the Company. Specifically, section 4
of the option agreement required that the Company provide the customer with
documentation on our fluid driven vacuum enhanced generator patent (United
States Patent No. 6655907, issued December 2, 2003), information about our
patent applications, and evidence that WindTamer has the authority to grant such
exclusive rights to Alternative Wind Resources, LLC.  The Company provided
copies of our patent for that subject matter as well as patent pending
applications.  The Company believes that it has complied with these
provisions of the agreement and intends to dispute the customer's claims that it
did not provide such information.  The Company plans to proceed to
terminate the agreements and to dispute these requests although there can be no
assurance that it will be successful. If we are not successful in disputing the
claims we may be required to return the $60,000 in payments which could have a
material adverse effect on our capital plans over the next twelve months, and
could require that we raise additional capital sooner than planned if we are not
able to generate sufficient capital from operations.
 
 If the agreement or option is not
ultimately deemed terminated, the exclusivity provision could limit our ability
to expand our customer base in these markets in the future which also could have
an adverse effect on our growth and development.
 
 If
we fail to protect our intellectual property, our planned business could be
adversely affected.
 
 Our viability will depend on our
ability to develop and maintain the proprietary aspects of our technology to
distinguish our product from our competitors’ products and services. To protect
our proprietary technology, we rely primarily on a combination of
confidentiality procedures, copyright, trademark and patent laws.
 
 We hold a United States patent for the
design of our Wind Tamer power generator wind turbine. We also have five pending
patent applications related to the original technology and for which we plan to
make foreign filings. In addition, we are developing a number of new innovations
for which we intend to file patent applications. No assurance can be given that
any of these patents will afford meaningful protection against a competitor or
that any patent application will be issued. Patent applications filed in foreign
countries are subject to laws, rules, regulations and procedures that differ
from those of the United States, and thus there can be no assurance that foreign
patent applications related to United States patents will issue. If these
foreign patent applications issue, some foreign countries provide significantly
less patent protection than the United States. The status of patents involves
complex legal and factual questions and the breadth of claims issued is
uncertain. Accordingly, there can be no assurance that our patents, and any
patents that may be issued to us in the future, will afford protection against
competitors with similar technology. No assurance can be given that patents
issued to us will not be infringed upon or designed around by others or that
others will not obtain patents that we would need to license or design
around.  We are not aware of any infringement by us or broad claims against
which we may infringe. However, if such an infringement claim is brought against
our technology and is successful, such claimants could require us to obtain
licenses and there can be no assurance that any necessary licenses would be
available on reasonable terms, if at all.
  19
 
 Despite our efforts to protect our
proprietary rights, unauthorized parties may attempt to copy aspects of our
products or obtain and use information that we regard as proprietary.
Unauthorized use of our proprietary technology could harm our business.
Litigation to protect our intellectual property rights can be costly and
time-consuming to prosecute, and there can be no assurance that we will be able
to enforce our rights or prevent other parties from developing similar
technology or designing around our intellectual property.
 
 If
our products and technology do not achieve market acceptance, we may not
generate sufficient revenue to conduct our operations or become
profitable.
 
 We are a development stage company and
have generated no significant revenues to date. Although we have patented the
technology used in the Wind Tamer, we have just begun attempts to market our
products. We cannot assure you that a sufficient number of customers will
purchase our products. The failure of the Wind Tamer or other products we
develop to be accepted in the commercial marketplace would have a material
adverse effect on our business. Our technology and products may not compete with
conventional wind turbines and other technologies, including fossil-fueled
generators, on the basis of performance and cost or to achieve market
acceptance. This failure to compete could also have a material adverse effect on
our business.  As a result, the value of your investment could be
significantly reduced or completely lost.
 
 The
expiration or cancellation of federal tax benefits and state regulatory benefits
for renewable energy generation would adversely affect our
development.
 
 Financial incentives to purchasers of
our wind turbines will be helpful in our development and growth.   In
its Small Wind Turbine Global Market Study, the American Wind Energy Association
in June 2008 concluded that the single most effective driver for the wind power
industry has been, and continues to be, financial incentive programs offered by
select states. A small number of states have reduced their incentive levels on a
per-project basis in order to cut costs while assisting the same (or larger)
amount of consumers, while other states have increased their incentive programs
with funds from the American Recovery and Reinvestment Act passed in February
2009.  The state incentive programs are supplemented by additional federal
support for the wind power industry.  For instance, there is a Federal
Investment Tax Credit of 30% for the purchase and installation of qualifying
small wind electric systems.  This credit is currently scheduled to expire
on December 31, 2016. Additionally, there is a Federal Production Tax Credit,
which provides a $.021 per kWh benefit for the first 10 years of facilities
operation which is currently set to expire on December 31, 2013. These credits
can help make wind turbines more attractive than other power generation
products.  States offering financial incentives include, for instance, New
York State which currently offers cash rebates that range from $2,400 to
$150,000 for installation of small-wind energy turbines depending on the size
and location.  This rebate is scheduled to expire on December 31, 2009.
Other specific state incentive programs include: a 100% personal property tax
exemption for eligible properties in Michigan which is currently set to expire
December 31, 2012; a rebate program in California for wind systems up to 50kW
with an incentive of $2.50/W for the first 7.5 kW and $1.50/W for increments
between 7.5 kW and 30 kW which currently has no expiration date; and a 15%
personal tax credit for taxpayers with renewable energy systems installed at
their primary residence in Massachusetts which currently has no expiration
date.
 
 Since we have only just begun to market
our products and have a limited operating history, we cannot be sure that these
incentives will help our products compete with other power generation products.
As a result, there can be no assurance that they will be helpful. Additionally,
if these incentives or similar incentives in one or more states or the federal
government are repealed, reduced, or not renewed, demand for our products and
future development efforts would be adversely affected. Furthermore, the current
economic crisis could make the repeal, reduction, or non-renewal of these
incentives by certain states or the federal government more
likely.
  20
 
 Deteriorative
changes in the currently reported condition of the small wind energy industry
market would adversely affect our development.
 
 Several factors have helped the
renewable energy markets, including the small wind energy markets.  These
factors include, policy support from the state and federal legislatures, rising
and volatile prices of conventional electricity, consumer education, and an
increased public concern for environmental issues which favor continued
development.  There can be no assurance that these conditions will continue
to exist throughout our development and continued operation.  As a result,
it is possible that these conditions could deteriorate or worsen in a manner
that would adversely affect demand for our planned products and future
development efforts.  Furthermore, the current economic crisis including
the crisis in the credit markets could make the deterioration of the conditions
of the small wind energy industry market more likely.
 
 We
will initially rely on independent manufacturers and suppliers for our products
which could delay our progress and later cause delay and damage customer
relationships.
 
 We plan to target power generator
manufacturers and wholesalers to form alliances for the mass production and
distribution of our products. We currently have no large scale manufacturing
capabilities. If we are unable to reach satisfactory arrangements to begin
building our products, our business could be adversely affected. Furthermore,
once we enter into such relationships, we may not have long-term written
agreements with any third-party manufacturers or suppliers. At this time we have
no such long-term written agreements.  As a result, any of these
manufacturers or suppliers could unilaterally terminate their relationships with
us at any time. Establishing relationships with new manufacturers would require
a significant amount of time and would cause us to incur delays and additional
expenses, which would also adversely affect our business and results of
operations.
 
 In addition, a manufacturer’s failure
to ship products to us in a timely manner or to meet the required quality
standards could cause us to miss the delivery date requirements for customers
for those items. This, in turn, may cause customers to cancel orders, refuse to
accept deliveries or demand reduced prices. This could adversely affect our
business and results of operations.
 
 There
is currently no public market for our shares, and if an active market does not
develop, investors may have difficulty selling their shares.
 
 There is currently no public trading
market for our common stock. A registered broker-dealer has filed a Form 211
with the Financial Industry Regulatory Authority on our behalf that would permit
our common stock to be quoted for trading on the OTCBB.  However, the
filing of the Form 211 does not guarantee the listing of our common stock on the
OTCBB, and we cannot be sure that such an effort will be successful. If and when
our stock does begin trading, we cannot predict the extent to which investor
interest in the Company will lead to the development of an active trading market
or how liquid that trading market might become. If a trading market does not
develop or is not sustained, it may be difficult for investors to sell shares of
our common stock at a price that is attractive. As a result, an investment in
our common stock may be illiquid and investors may not be able to liquidate
their investment readily or at all when they desire to sell.
 
 We
may issue additional shares of common stock in the future, which could cause
dilution to all shareholders.
 
 We have a large amount of authorized
but unissued common stock which our Board of Directors may issue without
stockholder approval.  We will need additional capital to bring our
operations to a sustainable level over the next twelve months, and may seek this
capital in the form of equity financing.  We may also seek to raise
additional equity capital in the future to fund business alliances, develop new
prototypes, and grow our manufacturing and sales capabilities organically or
otherwise. Any issuance of additional shares of our common stock will dilute the
percentage ownership interest of all shareholders and may dilute the book value
per share of our common stock.
 
 If
we fail to maintain an effective system of disclosure controls and procedures,
we may not be able to accurately report information required to be disclosed by
the Company under the Securities Exchange Act of 1934, as amended. As a result,
current and potential shareholders could lose confidence in our public
reporting, which could have a negative impact on our stock price.
 
 Pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002, we are required to include in our Quarterly Reports
on Form 10-Q and our Annual Report on Form 10-K our assessment of the
effectiveness of our disclosure controls and procedures.  Our Chief
Executive Officer and Chief Financial Officer determined that our disclosure
controls and procedures were ineffective as of September 30, 2009.  The
ineffectiveness of our disclosure controls and procedures related to the
Company’s failure to timely disclose a material agreement.  If we cannot
adequately maintain the effectiveness of our disclosure controls and procedures,
current and potential shareholders could lose confidence in our public reporting
and we may be subject to liability and/or sanctions or investigation by
regulatory authorities, such as the Securities and Exchange Commission, either
of which could adversely affect our financial results and the market price of
our common stock.
  21
 
 Item
2.  Unregistered Sales of Equity Securities and Use of
Proceeds
 
 Reference
is made to Item 15. "Recent Sales of Unregistered Securities During the Past 3
Years" on page II-2 of our Registration Statement on Form S-1 filed with the
Securities and Exchange Commission on October 21, 2009 for a summary of our
previously reported sales of unregistered securities. Since the date of the
Registration Statement on Form S-1 filed October 21, 2009, there have been no
material developments in previously reported sales of unregistered securities,
except as set forth below.
 
 On
November 5, 2009, the Company issued 15,340,000 shares of common stock to 100
Demetrios Inc., 200 Anastasios Inc., 300 Ioannis Inc., 400 Terry Inc., 500 Sofia
Inc., 111 EJH, Inc., 609 MTH, Inc., 10 EJH, Inc., and Charles LaLoggia, upon the
exercise of vested stock options initially granted to consultants Michael
Hughes, Peter Kolokouris and Charles LaLoggia in July and November 2008. 
The options had an exercise price of $0.05 per share and the Company received
total proceeds of $767,000.  The transactions were exempt from registration
under Sections 4(2) and 4(6) of the Securities Act.  The shares were issued
in transactions not involving a public offering and only to accredited
investors.   Each of the option holders is an accredited investor as
defined under the Securities Act, was knowledgeable about the Company’s
operations and financial condition and had access to such information. The
transactions did not involve any form of general solicitation. The shares issued
upon exercise of the options are restricted from resale and were acquired for
investment purposes only.
 
 On
November 5, 2009, the Company issued 400,000 shares of common stock each to
Jesse Brock and Richard Brock, at the exercise price of $0.05 per share, for
total proceeds of $40,000 upon the exercise of options granted under the
Company’s 2008 Equity Incentive Plan in November 2008, before the Company became
subject to the reporting requirements of Section 13 or 15(d) of the
Exchange Act.  The transactions were exempt from registration
under Rule 701 of the Securities Act. The shares were issued in
transactions not involving a public offering.  Jesse Brock is the son, and
Richard Brock is the brother of the Company’s Chairman and Chief Executive
Officer, Gerald Brock.  Jesse Brock served as a consultant to the Company
and assisted in building WindTamer prototypes.  Richard Brock has also
served as a consultant to the Company in connection with production model
development, assembly, and installation. Each person was knowledgeable about the
Company's operations and financial condition and had access to such information.
The transactions did not involve any form of general solicitation. The shares
issued upon exercise of the options are restricted from resale and were acquired
for investment purposes only.
 
 Item
3.  Defaults Upon Senior Securities
 
 None.
 
 Item
4.  Submission of Matters to a Vote of Security Holders
 
 None
 
 Item
5.  Other Information
 
 None
  22
  Item
6.  Exhibits
 
 (a)
                        
                        Exhibits:10.1
                        
                        Form
      of Lock-Up Agreement with Eugene R. Henn, George Naselaris, and Anthony C.
      Romano Jr., each dated as of July 10, 2009 (incorporated herein by
      reference to Exhibit 10.1 of the Current Report on Form 8-K filed by
      WindTamer Corporation dated July 15, 2009 (File No.
      000-53510)).10.2
                        
                        Lock-Up
      Agreement with Gerald E. Brock dated as of July 10, 2009 (incorporated
      herein by reference to Exhibit 10.2 of the Current Report on Form 8-K
      filed by WindTamer Corporation dated July 16, 2009 (File No.
      000-53510)).10.3
                        
                        Lock-Up
      Agreement with John Schwartz dated as of July 10, 2009 (incorporated
      herein by reference to Exhibit 10.3 of the Current Report on Form 8-K
      filed by WindTamer Corporation dated July 16, 2009 (File No.
      000-53510)).10.4
                        
                        Lock-Up
      Agreement with Jesse Brock dated as of July 10, 2009 (incorporated herein
      by reference to Exhibit 10.4 of the Current Report on Form 8-K filed by
      WindTamer Corporation dated July 16, 2009 (File No.
      000-53510)).10.5
                        
                        Employment
      Agreement between WindTamer Corporation and Gerald Brock effective as of
      July 14, 2009 (incorporated herein by reference to Exhibit 10.1 of the
      Current Report on Form 8-K filed by WindTamer Corporation dated July 16,
      2009 (File No. 000-53510)).10.6
                        
                        Form
      of WindTamer Corporation Stock Option Award Agreement with
      employees/consultants under 2008 Equity Incentive Plan (incorporated by
      reference herein to Exhibit 10.15 to the Registration Statement on Form
      S-1 of WindTamer Corporation dated July 16, 2009 (File No.
      333-157304)).10.7
                        
                        Agreement
      for Limited Research between WindTamer Corporation and Clarkson University
      dated August 18, 2009 (incorporated by reference herein to Exhibit 10.1 to
      the Current Report on Form 8-K filed by WindTamer Corporation dated August
      21, 2009 (File No. 000-53510)).10.8
                        
                        Lease
      Agreement between WindTamer Corporation and Court Street Complex, LLC
      dated August 20, 2009 (incorporated by reference herein to Exhibit 10.2 to
      the Current Report on Form 8-K filed by WindTamer Corporation dated August
      21, 2009 (File No. 000-53510)).10.9
                        
                        Option
      Agreement between WindTamer Corporation and Alternative Wind Resources,
      LLC, dated April 29, 2009 (incorporated by reference herein to Exhibit
      10.24 to the Registration Statement on Form S-1 of WindTamer Corporation
      dated September 16, 2009 (File No. 333-157304)).31.1
                        
                        Certification
      Pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of 1934,
      as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of
      2002.32.1
                        
                        Certification
      Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of
      the Sarbanes-Oxley Act of
2002.
  23
  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.
 
 WINDTAMER
      CORPORATION(Registrant)November
      5, 2009By:
                  
                  /s/ GERALD E. BROCKName:
                  
                  Gerald
      E. BrockTitle:
                  
                  Chief
      Executive Officer andChief
      Financial Officer
  24