ITEM 1. DESCRIPTION OF BUSINESS
Company History
We were originally organized under the laws of the State of Colorado on August 9, 2002.
In March 2005, we adopted the current focus of our business, which is the development of an offshore sailing school with initial operations in the vicinity of the Great Barrier Reef of Australia. Rosewind Corporation’s mission is to train novice sailors to voyage offshore with safety and confidence. During 2005 and 2006, we purchased a sailing vessel located in Florida from our President, James Wiegand, in exchange for shares of our common stock. Our captain, Michael Wiegand, who is our President’s son, refitted the vessel and sailed single-handed to Australia to open the school where conditions are near-optimum. He was compensated with shares of our common stock for the value of his work as our captain.
We have borrowed money from our President and we have conducted a private placement and an IPO to provide funds to start our business and upgraded our vessel and its equipment.
Our vessel has just three usable berths while at sea. We plan to generate revenue from our sailing school, utilizing the services of our captain to operate our vessel on offshore voyages to intensely train two students. Our business model indicates we can achieve a positive cash flow as a public company if we can successfully sell and deliver, each quarter, six one week voyages with two students training on each voyage.
We have placed classified advertising in sailing magazines, mailed our brochure and conducted telephone sales to book students from our office in Colorado. We have been attempting to generate revenue from students since February 2008, but as August 31, 2010 and the date of this report we have trained one student on a two week voyage during early June of 2008 and second student on a one week voyage during April of 2009.
Securing and maintaining any licenses that may be deemed necessary by any governmental jurisdiction for commercial use of our sailing vessel will be expensive and time consuming. In the event we are unable or unwilling to comply, we could be forced to abandon efforts to secure licenses and certifications in Australia or other jurisdictions. This and numerous additional factors may delay or prevent us from generating revenue from our vessel and planned operations and our cash reserves could be depleted. An unfavorable outcome in connection with these and other risks is possible, however we are not presently able to predict the out come.
Principal Services and their Markets
The Company’s mission is to teach offshore sailing. Our philosophy is that people learn to sail across oceans best by direct experience. The “learn by doing experience” will enable the successful graduate to enjoy offshore cruising at a reduced level of risk by methodically preparing themselves and their boat.
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Our unique curriculum consists of a fast track experience for up to two student sailors who will voyage for a week or more under the direction of our Captain, Michael Wiegand. Topics covered will include:
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Marine Environment and Safety at Sea
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Life Rafts and Ditch Bags
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Medical Preparedness and First Aid
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Features of Offshore Capable Vessels
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Rigging and Deck Gear
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Tools, Mechanical and Electrical Skills
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Sails, Rope work and Sewing
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Sail Handling
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12 Volt Electrical Systems
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Boat Electronics, Instruments, Radio and Radar
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Auxiliary Diesel Maintenance and Repair
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Heavy Weather Seamanship
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Weather, Pilot Charts and Navigation
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Passagemaking
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Boat Maintenance, Provisioning and Waste Disposal
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Ships Papers, Zarpes and Permits
The tuition is US$1,750 per person, all inclusive. Students must provide their own air fare to and from the boat and must further provide their own clothing and personal safety equipment.
Marketing of our Service
Our President will book students and deposit prepaid tuition or deposits into the company’s bank account. He will utilize classified advertisements in sailing magazines to generate phone calls from potential students. We then mail a two page brochure, “crew data sheet” and a custom letter to prospective students. We have posted our brochure on our website: www.rosewindsailanddive.com
Competition
We may face competition from other companies that advertise in the classified section of sailing magazines for the limited number of potential students. We have not done any study of the training programs offered by other companies or informally by individual boat owners. We may face competition from sailing schools or individual boat owners offering larger and newer vessels, more experienced staff, greater business experience and asset and liability insurance, We have none of these resources. In addition, we will face competition based on numerous factors including marketing and sales capability from larger companies. We have only limited experience in these areas at this time and therefore we are at a competitive disadvantage.
Intellectual Property
We have no intellectual property.
Governmental Regulation
While at sea we are not subject to governmental regulation beyond the documentation of our vessel and registration of its radio. In the event that any portion of our shore based activities, consisting primarily of logistics, student rendevous and maintenance activities, were claimed to be in violation of the regulations of a country whose waters of port facilities we utilize, we may be forced to relocate, undergo delays and/or incur significant expenses in connection with licensing requirements or fines. We could be forced to suspend operations or face the impoundment of our vessel. We cannot assure you that in the future we will apply for or successfully obtain regulatory approvals.
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ENVIRONMENT
We believe that our operations comply in all material respects with applicable laws and regulations concerning the environment. While it is impossible to predict accurately the future costs associated with environmental compliance and potential remediation activities, compliance with environmental laws is not expected to require significant capital expenditures and has not had, and is not expected to have, a material adverse effect on our planned revenue or competitive position.
PRODUCT LIABILITY
Our service exposes the Company to liability claims by students and others. The company has no insurance. A liability or other legal claim could have a material adverse effect on our financial condition.
OUR FACILITIES
We conduct company administration, logistics and marketing from our US offices. We have no permanent base for our sailing vessel. Communication with our vessel is by satellite phone while at sea and by land telephone, cell phone, fax or internet, as available, while in port.
The following data includes our vessel’s size, age and other data extracted from the “Report of Survey.”
Other vessel equipment includes:
Propane stove and oven, refrigerated food storage, drip-pot diesel cabin heater, 120VAC/12DC electrical system, RIB tender with outboard, navigational equipment, charts and reference library.
SEASONALITY
Our business is materially affected by seasonal factors, including tropical storms, cyclones and hurricanes, which generally occur during the summer and fall seasons. We may relocate or curtail operations to reduce the risks associated with these and other violent weather phenomena.
EMPLOYEES
We have two employees.
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RISKS RELATED TO OUR BUSINESS
OUR PRIMARY ASSET, OUTSIDE OF CASH HELD IN BANKS , IS OUR VESSEL WHICH IS LOCATED IN THE MARSHALL ISLANDS. PURCHASERS OF OUR SECURITIES SHOULD CONSIDER THAT ASSETS LOCATED IN A FOREIGN JURISDICTION ARE NOT RECOVERABLE TO THE SAME EXTENT THAT THOSE SAME ASSETS WOULD BE RECOVERABLE IF LOCATED WITHIN THE JURISDICTION OF THE UNITED STATES.
In the event that a court or other governmental authority located in the United States should issue a writ to recover our vessel located in Australia or other foreign jurisdiction, for the benefit of any party, a significant difficulty would arise in enforcing such recovery. In the event that our vessel proves unrecoverable, the company will suffer a major financial loss and investors will lose all money invested in our stock.
WE INTEND TO UTILIZE OUR U.S. COAST GUARD DOCUMENTED VESSEL TO TRAIN STUDENTS OF OUR SAILING SCHOOL. WE HAVE IDENTIFIED, AND WE ARE IN COMPLIANCE WITH, THE APPLICABLE DOCUMENTATION AND REGISTRATION REQUIREMENTS OF THE U.S. COAST GUARD AND THE FEDERAL COMMUNICATIONS COMMISSION.
The documents and registrations we now have are believed sufficient. We have had discussions with the Coast Guard to verify that our students will be considered as crew on our US Coast Guard Documented vessel while in passage from a port in one foreign country to a port in a different foreign country. Under US Coast Guard policy, we need not obtain any additional foreign certification or licensing on our vessel to undertake this type of passage with student crew aboard. We have no present plan, and there is no foreseeable future need to apply to any foreign government for any type of document, registration, certification, or license, commercial or otherwise for our vessel. Securing and maintaining any additional licenses, should such be deemed necessary by any governmental jurisdiction for commercial use of our sailing vessel will be expensive and time consuming. Should this or any related, but presently unforeseen, requirement significantly delay or prevent us from generating revenue from our vessel and planned operations, then our cash reserves could become significantly depleted. An unfavorable outcome in connection with these risks will likely cause an investor to lose his entire investment.
SINCE WE HAVE LIMITED REVENUES AND OUR COMPANY IS NEW AND HAS ONLY RECENTLY COMENCED PLANNED OPERATIONS, WE WILL NOT BE ABLE TO GENERATE SIGNIFICANT REVENUE IN THE NEAR FUTURE. FURTHER, THERE IS NO ASSURANCE THAT WE WILL EVER GENERATE SIGNIFICANT REVENUE. WE HAVE NOT GENERATED SIGNIFICANT REVENUE SINCE INCEPTION AND WE HAVE EXPERIANCED LOSSES SINCE INCEPTION. FAILURE TO GENERATE SUFFICIENT REVENUE TO PAY EXPENSES AS THEY COME DUE WILL RESULT IN THE FAILURE OF OUR COMPANY AND THE COMPLETE LOSS OF ANY MONEY INVESTED TO PURCHASE OUR SHARES.
We estimate that our remaining cash is sufficient to sustain our business for a maximum of six months from the date of this report. Should student revenues not materialize as planned our business will need to find sources of cash to sustain operations. In the event that we are unable to find sufficient cash to sustain operations we would be forced to close our business and any investment in our shares would be a total loss.
AS A PUBLIC COMPANY, OUR COST OF DOING BUSINESS WILL INCREASE BECAUSE OF NECESSARY EXPENSES WHICH INCLUDE, BUT ARE NOT LIMITED TO, ANNUAL AUDITS, LEGAL COSTS, SEC REPORTING COSTS, COSTS OF A TRANSFER AGENT AND THE COSTS ASSOCIATED WITH NASD FEES AND COMPLIANCE. FURTHER, OUR MANAGEMENT MAY NEED TO INVEST SIGNIFICANT TIME AND ENERGY TO STAY CURRENT WITH THE PUBLIC COMPANY RESPOSIBILITIES OF OUR BUSINESS AND WILL THEREFORE HAVE LITTLE TIME AVAILABLE TO APPLY TO OTHER TASKS NECESSARY TO OUR SURVIVAL. IT IS POSSIBLE THAT THE BURDEN OF OPERATING AS A PUBLIC COMPANY WILL CAUSE US TO FAIL TO ACHIEVE PROFITABLILITY. IF WE EXHAUST OUR FUNDS, OUR BUSINESS WILL FAIL AND OUR INVESTORS WILL LOOSE ALL MONEY INVESTED IN OUR STOCK.
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We estimate that remaining a public company will cost us in excess of $20,000 annually. This is in addition to all of the other cost of doing business. Therefore, it is essential that we grow our business rapidly to achieve profits and maintain adequate cash flow to pay the cost of remaining public. If we fail to pay public company costs, as such costs are incurred, we will become delinquent in our reporting obligations and our shares may no longer remain qualified for quotation on a public market.
WE ARE AT AN EARLY STAGE OF DEVELOPMENT. WE HAVE BEGUN TO MARKET BUT HAVE NOT YET GENERATED SIGNIFICANT REVENUES. IF WE ARE UNSUCCESSFUL IN MARKETING OUR SERVICE, OUR SECURITIES MAY BE ILLIQUID OR WORTHLESS.
Our operations to date have consisted primarily of acquiring, refitting and relocating our sailing vessel. An ongoing commitment of substantial resources to refit and maintain our vessel with safety equipment is required to operate as a training vessel . We do not know if we will be able to complete these tasks. We have located only one paying students for training aboard our vessel. Accordingly, we do not know if and when we will generate significant revenue. Because of these uncertainties, we might never generate enough revenue to allow shareholders to recoup and profit from their investment.
SINCE WE HAVE A HISTORY OF OPERATING LOSSES AND EXPECT EXPENSES AND LOSSES TO INCREASE IN THE NEAR TERM, WE DO NOT KNOW IF WE WILL EVER BECOME PROFITABLE OR THAT OUR INVESTORS WILL EVER RECOUP OR PROFIT FROM THEIR INVESTMENT IN OUR SHARES.
From the date of incorporation to August 31, 2010, our accumulated losses are $ 314,909. Since inception we have earned no significant revenues. We expect expenses and losses to increase in the near term as we fund yacht maintenance, yacht upgrades and incur general and administrative and marketing expenses. We expect to continue to incur substantial operating losses unless and until sailing school operations generate sufficient revenues to fund continuing operations. As a result, investors might never recoup their investment or profit from their investment in our shares.
SINCE OUR SUCCESS IS DEPENDENT ON COMPLETION OF KEY TASKS INCLUDING MARKETING AND THE INTRODUCTION OF OUR SERVICES INTO A LIMITED AND SPECIALIZED MARKET, AND SINCE WE HAVE EXPERIENCE SETBACKS AND DISAPPOINTING RESULTS TO DATE , WE DO NOT KNOW IF WE WILL BE ABLE TO COMPLETE OUR KEY TASKS .
The actual results, if any, of marketing efforts and planned operations are difficult to predict and will vary dramatically due to factors we cannot presently control or predict. These factors could include, the world economy, weather, political instability, health risks in countries where students of the sailing school are required to rendezvous with our yacht, fluctuations in the value of local currency and fluctuations in availability of port facilities, airline fares, diesel fuel, repair parts, skilled technicians and various other factors potentially detrimental to planned operations that may arise without notice. Loss of the services of our President or of our Captain could force operations to be delayed or suspended. Our failure to achieve marketing and operational objectives will mean that investors will not be able to recoup their investment or to receive a profit on their investment.
WE WILL CONTINUE TO REQUIRE SUBSTANTIAL ADDITIONAL FUNDS FOR GENERAL AND ADMINISTRATIVE, REPAIRS, TRAVEL, SUPPLIES AND MARKETING COSTS. WE MIGHT NOT BE ABLE TO OBTAIN ADDITIONAL FUNDING ON ACCEPTABLE TERMS, IF AT ALL. WITHOUT ADDITIONAL FUNDING, WE WILL FAIL.
We will require substantial additional funds to achieve self sustaining operation of our sailing school. We may seek further funding through public or private equity or debt financings, collaborative arrangements with sailboat charter groups or agents or from other sources. Further equity financings may substantially dilute shareholders' investment in our shares. If we cannot obtain the required additional funding, then investors will not be able to recoup their investment or to profit from their investment.
In addition, we have limited experience in marketing and sales and we intend to develop only a very limit sales and marketing infrastructure to commercialize our service.
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SINCE WE HAVE ONLY ONE DIRECTOR WHO ALSO SERVES AS OUR PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY, DECISIONS WHICH AFFECT THE COMPANY WILL BE MADE BY ONLY ONE INDIVIDUAL. FURTHER, OUR CAPTAIN IS THE SON OF OUR SOLE DIRECTOR, PRESIDENT, CHIEF FINANCIAL OFFICER AND SECRETARY. IT IS LIKELY THAT CONFLICTS OF INTEREST WILL ARISE IN THE DAY TO DAY OPERATION OF OUR BUSINESS. SUCH CONFLICTS, IF NOT PROPERLY RESOLVED, COULD HAVE A MATERIAL NEGATIVE IMPACT ON OUR BUSINESS.
In the past, the company has issued shares for cash, assets and services at prices which were solely determined by James B. Wiegand. At that time, James B. Wiegand made a determination of both the value of services and assets exchanged for our shares, and, as well, the price per share used as compensation. Transactions of this nature were made at less than arms length and without input from a non-interested third party. Future transactions of a like nature could dilute the percentage ownership of the company represented by shares of an individual investor. While the company believes its past transactions were appropriate, and plans to act in good faith in the future, an investor in our shares will have no ability to alter such transactions as they may occur in the future and, further, may not be consulted by the company in advance of any such transactions. An investor who is unwilling to endure such potential dilution should not purchase our shares.
WE DEPEND UPON OUR KEY PERSONNEL AND THEY WOULD BE DIFFICULT TO REPLACE.
We believe that our success will depend on the continued involvement of our senior management, i.e. our President, James B. Wiegand, who is involved in other business activities and with whom we have no written employment agreement. Further, our Captain, Michael Wiegand, who is the son of our President, has no written employment contract with the Company. If our Captain or President becomes unwilling or unable to continue to serve then operations could be restricted, delayed or cease. If one or more members of our team were unable or unwilling to continue in their present roles our business would suffer or close down and investors would likely loose all money invested.
RISKS RELATED TO OUR INDUSTRY
SHAREHOLDERS RISK THAT WE WILL BE UNABLE TO SUCCESSFULLY MARKET OUR SERVICE. WE HAVE NOT YET ESTABLISHED THAT OUR SERVICE WILL BE SAFE, EFFECTIVE OR ACCEPTED IN THE MARKET.
The training of offshore sailors is a niche market of undefined size and our mission to serve this market is likely to meet with slow acceptance and minimal sales in the short term. As of the date of this report, we have trained only two students. The students responded to our classified advertisement . Our first student provided us with a handwritten letter of recommendation and we now provide prospective students with a copy of his letter and related editorial coverage that ran in a sailing magazine. We are exposed to the dangers of bad weather, commercial ship traffic and numerous other risks inherent in voyaging across oceans in a small boat. Our vessel could be disabled, damaged or lost at sea. A student or staff member could be injured or lost at sea in spite of precautions. In the event our company encounters a serious and sustained problem with its operations, shareholders would likely lose their entire investment
WE INTEND TO UTILIZE OUR VESSEL TO TRAIN STUDENTS OF OUR SAILING SCHOOL BUT WE HAVE NOT YET IDENTIFIED OR ATTEMPTED TO COMPLY WITH ANY APPLICABLE CERTIFICATION OR LICENSING REQUIREMENTS OF ANY JURISDICTION.
Securing and maintaining licenses deemed necessary by any governmental jurisdiction for commercial use of our sailing vessel will be expensive and time consuming. Should this or any related requirement significantly delay or prevent us from generating revenue from our vessel and planned operations, then our cash reserves could be depleted. An unfavorable outcome in connection with this risk is possible, however we will not be in a position to predict the outcome. In the event we are unable to comply, we could be forced to abandon efforts to secure licenses and certifications in Australia or other jurisdiction. A significantly unfavorable and continuing outcome in connection with these risks will likely cause an investor to lose his entire investment.
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REGULATORY AND LOCAL ADMINISTRATIVE AUTHORITIES HAVE THE POWER TO INTRODUCE NEW REGULATIOINS THAT REQUIRE ADDITIONAL, AND POTENTIALLY EXPENSIVE COMPLIANCE. SINCE WE HAVE NO HISTORY WITH OUR SERVICE, WE MIGHT BE UNABLE OR UNWILLING TO COMPLY WITH SUCH NEW REGULATON.
Changes in existing regulations, the adoption of new regulations or the erratic enforcement of or reinterpretation of existing statute could adversely affect the development and marketing of our service. Since we have limited operating history, government regulation could cause unexpected delays and adversely impact our business in areas where our inexperience might lead to failure in complying with applicable requirements. Such failure to comply might also result in criminal prosecution, civil penalties, recall or seizure of our vessel, or partial or total suspension of operations. Any of these penalties could delay or prevent the promotion, marketing or sale of our service. We have neither legal, lobbying or other resources to favorably alter the course of such developments, and should they occur, shareholders would likely lose their entire investment.
IF OUR COMPETITORS SUCCEED IN DEVELOPING COMPETING SERVICES EARLIER THAN WE DO, IN OBTAINING REGULATORY APPROVALS THAT MAY BECOME MANDANTORY FOR SUCH SERVICES MORE RAPIDLY THAN WE DO, OR IN DEVELOPING SERVICES THAT ARE MORE EFFECTIVE OR LESS EXPENSIVE THAN THE SERVICES WE DEVELOP, WE WILL HAVE DIFFICULTY COMPETING WITH THEM.
We might expend our resources to develop services that will face competition from our competitors and our services might not be successful in the marketplace. Our future success depends on our ability to timely identify new market trends and develop, introduce and support new and enhanced services on a successful and timely basis. We might not be successful in developing or introducing to the market our services.
EVEN IF WE CONTINUE TO EXPEND THE FUNDS NECESSARY TO MAINTAIN OUR YACHT TO THE HIGH STANDARD NECESSARY FOR SAFETY AT SEA AND CONTINUED OPERATION OF THE SAILING SCHOOL, AND EVEN IF OUR KEY PERSONNEL ARE AVAILABLE LONG TERM, WE HAVE NOT YET DEMONSTRATED SIGNIFICANT MARKET ACCEPTANCE AND OUR SERVICE MIGHT NOT GAIN MEANINGFUL MARKET ACCEPTANCE AMONG THE POSSIBLY LIMITED NUMBER OF PEOPLE WHO WANT TO LEARN TO VOYAGE UNDER SAIL.
The degree of market acceptance will depend on a number of factors, including:
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demonstration of the efficacy and safety of our training methods and planned curriculum;
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cost-effectiveness;
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potential advantages of alternative sailing schools which may offer similar opportunities;
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the effectiveness of marketing through classified advertisements.
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achieving market acceptance of our hands-on approach to the training of sailors.
OUR CAPTAIN, YACHT AND ALL COMPANY OPERATIONS ARE PRESENTLY UNINSURED AND WILL CONTINUE TO BE UNINSURED AND THUS WE ARE, AND WILL REMAIN, EXPOSED TO UNLIMITED POTENTIAL LIABILITY RISKS FROM CLIENTS, STAFF OR OTHERS.
Our planned sailing school operations create a risk of liability for injury or loss of life of participants. We manage our liability risks by following the proper protocols of good seamanship. We intend to operate without liability or asset loss or damage insurance. Such insurance is expensive and difficult to obtain. In the future, insurance coverage will not be available to us on acceptable terms, if at all. Further, without insurance our marketing efforts may not succeed and we may be barred from operating from otherwise available ports. As we are unable to obtain sufficient insurance coverage on reasonable terms or to otherwise protect against potential liability claims we might not be able to commercialize our sailing school. If we face a future liability claim or loss of our uninsured yacht we will suffer a material adverse effect on our financial condition and will likely cease operations, close the sailing school and our investors would lose their entire investment.
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ITEM 2.
ITEM 2. DESCRIPTION OF PROPERTY
DESCRIPTION OF PROPERTY
We currently maintain office space of approximately 200 square feet located at 16200 WCR 18E, Loveland, Colorado, 80537, in the home office of our President at a monthly rate of $100 pursuant to verbal agreement. Rent is contributed. We do not foresee need for additional space.
ITEM 3.
ITEM 3. LEGAL PROCEEDINGS
There is no litigation or regulatory proceeding pending or threatened by or against us.
ITEM 4.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
During July of 2010 shareholders ratified an increase in authored shares of our common stock from 20,000 shares to 50,000 shares.
ITEM 5.
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
Our Common Stock is quoted on the OTCBB. The symbol is RSWN.
HOLDERS
As of the date of this report, there were approximately101 holders of our common stock.
We completed an Initial Public Offering of our Common Shares.
During the period from May 10, 2007 to November 10, 2007 we received Subscription Agreements and related investments from 63 persons to purchase 239,000 shares of our common stock at a purchase price of $0.25 per shares, all subject to our effective Registration Statement and Prospectus. All shares were sold by Management. Proceeds, amounting to $59,750 passed through escrow at Corporate Stock Transfer, Denver, Colorado and were deposited into our checking account.
Our Initial Public Offering closed on November 10, 2007.
DIVIDENDS
We have not declared or paid any cash dividends on our common stock nor do we anticipate paying any in the foreseeable future. Furthermore, we expect to retain any future earnings to finance our operations and expansion. The payment of cash dividends in the future will be at the discretion of our Board of Directors and will depend upon our earnings levels, capital requirements, any restrictive loan covenants and other factors the Board considers relevant.
WARRANTS OR OPTIONS
We have no outstanding warrant to purchase shares of our common stock.
EQUITY COMPENSATION PLANS
We currently have no equity compensation plans.
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RECENT SALES OF UNREGISTERED SECURITIES; USE OF PROCEEDS FROM REGISTERED SECURITIES
The following shares were issued under Section 4(2) of the Securities Act of 1933, as amended, and/or Regulation D promulgated by the Securities and Exchange Commission:
On March 1, 2005, we issued to James B. Wiegand 100,000 shares of our common stock in consideration of $500 in fees and expenses incurred as part of organizing the Company.
On March 4, 2005, we issued to James B. Wiegand 1,150,000 shares of our common stock in exchange for our sailing vessel.
On September 20, 2005, we issued to Max Gould 600,000 shares of our common stock in consideration for his services valued at $24,000.
On September 20, 2005, we issued to Michael Wiegand, our Captain and son of James B. Wiegand, 700,000 shares of our common stock in consideration for his services valued at $28,000.
On September 20, 2005, we issued to Sonja Gouak 50,000 shares of our common stock in consideration for her services valued at $2,000.
On September 20, 2005, we issued to Martha Sandoval 50,000 shares of our common stock in consideration for her services valued at $2,000.
On March 30, 2006, we issued Mr. Craig A. Olson 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Craig K. Olson 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mrs. Shirley Hale 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Larry Willis 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Neil Montagino 50,000 shares of our common stock in consideration for $5,000.
On March 30, 2006, we issued Mr. Roger May 50,000 shares of our common stock in consideration for $5,000.
On November 16, 2007, all proceeds from the sale of 238,000 common shares registered in connection with our IPO amounting to $59,750 were deposited into our checking account. This cash is being used to build our business under the plan detailed in our IPO Propspectus.
On February 6, 2009, we issued Stan Norfleet 10,000 shares of our common stock in consideration for $2,000.
On April 7, 2009, we issued Kendel and Margaret Woods 10,000 shares of our common stock in consideration for $2,000.
On April 7, 2009, we issued Beau Brooks 2,500 shares of our common stock in consideration for $500.
On May 7, 2009, we issued Carolyn Grobe 500 shares of our common stock in consideration for $100.
On May 7, 2009, we issued Fred Neal 5,000 shares of our common stock in consideration for $1,000.
On May 7, 2009, we issued Robert and Mary Schuster 5,000 shares of our common stock in consideration for $1,000.
On May 29, 2009, we issued Maxine Turill 2,500 shares of our common stock in consideration for $500.
On May 29, 2009, we issued Rory Kuenn 2,500 shares of our common stock in consideration for $500.
On May 29, 2009, we issued John Whitton 5,000 shares of our common stock in consideration for $1,000.
On July 6, 2009 , we issued Greg Howard 5,000 shares of our common stock in consideration for $1,000.
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On July 6, 2009 , we issued Brad Matousek 5,000 shares of our common stock in consideration for $1,000.
On August 20, 2009, we issued Susan Widmann 2,500 shares of our common stock in consideration for $500
On August 20, 2009, we issued Craig K. Olson 25,000 shares of our common stock in consideration for $5,000
On January 15, 2010, we issued Craig K. Olson 5,000 shares of our common stock in consideration for $1,000.
On February 22, 2010, we issued Dustin Sandoval 5,000 shares of our common stock in consideration for $1,000.
On March 10, 2010, we issued Rory Kuenn 2,500 shares of our common stock in consideration for $500.
On March 16, 2010, we issued John Casson 5,000 shares of our common stock in consideration for $1,000.
On March 17, 2010, we issued Steve Halliday 5,000 shares of our common stock in consideration of $1,000.
On March 17, 2010, we issued Melissa Halliday 5,000 shares of our common stock in consideration of $1,000.
On May 21, 2010, we issued Gary Miller 2,000 shares of our common stock in consideration of $400.
On May 21, 2010, we issued Ryan Kaszycki 2,500 shares of our common stock in consideration of $500.
On May 28, 2010, we issued Dan Murphy 2,500 shares of our common stock in consideration of $500.
On May 28, 2010, we issued Greg Howard 5,000 shares of our common stock in consideration of $1,000.
On June 3, 2010, we issued Mojdeh Javadi 5,000 shares of our common stock in consideration of $1,000.
On July 23, 2010, we issued Richard Giannotti 33,334 shaers of our common stock in consideration of $5,000.
PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
We made no purchases of our equity securities nor were any such purchases made by any purchaser affiliated with us.
OUR TRANSFER AGENT
We have appointed Standard Registrar and Transfer Agency, Albuquerque, New Mexico, as transfer agent for our Common shares. Standard is responsible for all record-keeping and administrative functions in connection with our common shares.
ITEM 6.
ITEM 6. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Forward-looking statements
The following discussion should be read in conjunction with the financial statements of Rosewind Corporation (the “Company”), which are included elsewhere in this Form 10-K. This Annual Report on Form 10-K contains forward-looking information. Forward-looking information includes statements relating to future actions, future performance, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other such matters of the Company. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information. Forward-looking information may be included in this Annual Report on Form 10-K or may be incorporated by reference from other documents filed with the Securities and Exchange Commission (the “SEC”) by the Company. You can find many of these statements by looking for words including, for example, “believes”, “expects”, “anticipates”, “estimates” or similar expressions in this Annual Report on Form 10-K or in documents incorporated by reference in this Quarterly Report on Form 10-Q. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information or future events.
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We have based the forward-looking statements relating to our operations on our management’s current expectations, estimates and projections about our Company and the industry in which we operate. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In particular, we have based many of these forward-looking statements on assumptions about future events that may prove to be inaccurate. Accordingly, our actual results may differ materially from those contemplated by these forward-looking statements. Any differences could result from a variety of factors, including, but not limited to general economic and business conditions, competition, and other factors.
Plan of Operation
We set sail on our first student training voyage in late May 2008. Our vessel, captained by Michael Wiegand, sailed from New Zealand to New Caledonia with one student aboard. The voyage required just over two weeks and was completed in June 2008. The student was a non-related third party voyaging on a “share expense” basis. While no net revenue was generated we gained valuable experience and written student feedback.
We conducted our second student training voyage in April 2009. Net revenue of $1,750 was earned for the one week voyage. The student was a non-related third party.
Subject to local weather conditions we plan to generate revenue as soon as more students can be located and booked. From March 1, 2005 (inception), through August 31, 2010 and the date of this Form 10-K, we had $1,750 of operating revenues. Going forward, we intend to generate revenue from student tuition.
The typhoon season imposes seasonal limitations for the operation of small sailing vessels offshore. Cyclone activity, which occurs seasonally, will have an adverse effect on bookings and revenues. We are evaluating the seasonal relocation of our vessel as a potential strategy to partially offset loss of revenue caused by weather and cyclone restrictions.
Additionally, we may complete significantly less than the six one week training voyages each quarter because we may not be able to book 100% of available voyage dates and there may be cancellations or other events that are beyond our control. Therefore, we are unable to predict the annual cash flow and profitability of the sailing school once sailing school operations are commenced.
Our captain has found our vessel to be sound and seaworthy during his 2005-2006 voyage from Florida to Ecuador. After minor modifications to the deck plan our captain single-handed our vessel from Ecuador to Australia and has thus demonstrated that our vessel can be sailed by our captain with no assistance from others. We believe this is key to our business plan in that the clients we are training will not need to contribute to the operation of the vessel should they become incapacitated during a voyage.
Our target client will likely be a novice sailing enthusiast looking to crew or who is shopping for, or has just purchased a cruising sailboat. The training conducted by our sailing school will help the student select and equip a sailing vessel and prepare for crossing an ocean safely and confidently. We will admit less experienced sailors than those who can qualify themselves as experienced crew. In return for the higher cost, our week of training at sea delivered to our students at sea will be more personalized and structured than the typical “share expenses” crew opportunity. Potential crew and novice yacht owners use classified advertisements as one method to locate a sailboat with plans for a specific voyage where they may gain experience. Generally, this is arranged by paying a portion of the expenses of the voyage. We may reject the applications of prospective students who are not, in our opinion, physically and mentally prepared for the challenge of ocean voyaging.
We have initiated marketing efforts with advertisements designed to attract students to our sailing school As of the date of this report, we have seen only very limited results from our advertising. We anticipate that by continuing to advertise we can locate and book students and thereafter begin generating revenue from training voyages.
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Marketing expenses are budgeted at $250 per month, maximum. We believe we can reach an enthusiastic and qualified group of prospective clients through classified advertising in sailing magazines that cater to people who dream of someday crossing oceans in their own cruising boat. We believe this is a cost effective way to reach adventurous boaters who have serious sailing ambitions.
We believe that we will be most successful by advertising consistently each month. This was done during the periods preceding our training voyages. Our advertisements contain our office phone number and the address of our website. Callers either reach James Wiegand or a recorded message with an opportunity to leave a name and phone number for a return call.
As of the date of this report, our advertising program has produced only disappointing results. We have received very few calls from prospective students. The two students we have trained to date located us through our classified advertisement. We plan to continue monthly advertising and have, on occasion, added a photo of our vessel to run with the copy. We have also soliciting editorial coverage for our sailing school. One editorial has been written and published in the November 2008 edition of “Cruising World” magazine. Improved response to our advertising was noted . Significant improvement in our revenues has not materialized to date.
Vessel Upgrades. We conducted an IPO by management and completed the minimum offering on November 9, 2007 raising over $56,000. This money has been used in our sailing school where expenses for vessel upgrades and maintenance, operations and public company costs are substantial. We are making efforts to keep costs to a minimum consistent with the requirements of safety at sea and good seamanship.
Estimated Quarterly Operating Expenses (Assuming six, one week training voyages per Quarter)
Estimated Annual Public Company Costs
We believe that while our cost of operating as a public company is higher than for a similar private company, our cost of capital as a public company will be less than it would be for a similar private company and further, as our business grows a smaller portion of our annual expenses will ultimately be composed of public company expense.
Our Expected Cash flow. Optimum Outcome.
We estimate that our quarterly cash flow, without allowances for extraordinary events or ongoing maintenance and miscellaneous costs will be positive once we average six training voyages per quarter. In view of the disappointing results of our marketing program to date, there can be no assurance that we will be able to book and complete any training voyages or generate any revenue.
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Vessel Maintenance
The survey done on our vessel in 2005 states that the design and construction of our vessel is sound. The survey also states that our vessel needs proper ongoing maintenance to safely undertake ocean voyages. Consistent with the surveyor’s recommendations we undertook a two month refit prior to the voyage from Florida to Australia. This included the replacement of all standing rigging, installation of a new diesel auxiliary engine and many additional upgrades needed for eventual use of the vessel for student training.
Our current maintenance strategy is to perform a major haul-out annually during the local cyclone season when we cannot go to sea for training voyages. During our September-October 2008 haul-out in Brisbane, Australia we incurred expenses of approximately $8,000 for repairs and maintenance. We anticipate further maintenance and upgrade expenses will be required to ready our vessel for the training voyages we are now attempting to book. Vessel maintenance costs will likely increase as level of use and age increases. This could have a material adverse effect on our cash flow.
Our Potential for Growth.
Our business model indicates we can achieve a positive cash flow as a public company if we can successfully sell and deliver, each quarter, six one week voyages with two students training on each voyage. Our vessel has three usable berths (beds) while at sea. As of the date of this report we have failed to generate significant revenue. We continue our efforts to book students for our planned voyages.
Financial Condition and Results of Operation
We are a development stage company. We have relocated and significantly prepared our vessel for operation as a sailing school, but, as of August 31, 2010 and the date of this report we have completed the training of only one regular paying student.
During June of 2008 we completed a two week training voyage with a student on a “share expense” basis. This voyage was for Nelson, New Zealand to Noumea, New Caledonia. No net revenue was generated. We confirmed the viability of our curriculum and we received a positively worded testimonial letter from the non-related third party student.
We conducted our second student training voyage in April 2009. Net revenue of $1,750 was earned for the one week voyage. The student was a non-related third party.
We have had operating revenues of $1,750 since inception, March 1, 2005 through August 31, 2010 and the date of this report. We have incurred operating expenses totaling $302,643 as of August 31, 2010. Such expenses consisted primarily of general and administrative, professional fees and services in connection with our Registration Statement and costs incurred to refurbish and relocate our sailing vessel. We have generated an accumulated deficit of $ 319,409 as of August 31, 2010. As of the date of this report our losses continue to mount.
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Our net loss increased by $1,376 or 2% to $60,270 from $58,894 for the year ended August 31, 2010 compared with the prior year ended August 31, 2009. This was primarily attributed the net effect of the following four factors:
1.
General and administrative expenses decreased by $3,605, or 10.7%, to $29,471 for the year ended August 31, 2010 from $33,576 for the prior year ended August 31, 2009. We attribute this decrease in expenses to fewer costs incurred to maintain and upgrade our training vessel.
2.
Professional fees increased by $2,904 or 13.6% to $24,190 for the year ended August 31, 2010 from $21,286 for the prior year ended August 31, 2009. This is attributable to increased frequency and cost of accounting and auditing services.
3.
Revenue decreased by $1,750 to $0 for the year ended August 31, 2010 from $1,750 for the year ended August 31, 2009. This is attributable to decreased revenue for sailing school operations. We believe student revenue was negatively effected by the impaired US economy.
4.
Interest expense increased by $731 or 23% to $3,803 for the year ended August 31, 2010 from $3,072 for the year ended August 31, 2009. This is attributable to an increase in notes payable.
Liquidity and Capital Resources
Management completed an Initial Public Offering of our common stock and proceeds of the offering were transferred from escrow to our bank on November 16, 2007.
On January 22, 2009 management initiated sale of a Regulation D Private Placement of up to 125,000 shares of its common stock at a price of $0.20 per share. The offering was completed during June 2010 with 125,000 restricted shares issued in consideration of $25,000 in offering proceeds. All proceeds have been deposited into the company’s bank and utilized for operations.
During July of 2010 management initiated sale of a Regulation D Private Placement of up to 133,334 shares of its common stock at a price of $0.15 per share. At August 31, 2010, 33,334 restricted shares had been issued in consideration of $5,000 in offering proceeds. All proceeds have been deposited into the company’s bank and utilized for operations.
At August 31, 2010, we had $1,545 in cash and a working capital deficit of $80,982. As of the date of this report our liquidity and capital resources continue to decline.
ITEM 7.
ITEM 7. FINANCIAL STATEMENTS.
The financial statements and supplementary data required by this item are submitted on page 17 of this report.
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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors
Rosewind Corporation (a development stage company)
Loveland, Colorado
We have audited the accompanying balance sheets of Rosewind Corporation (a development stage company) as of August 31, 2010 and 2009, and the related statements of operations, stockholders' equity (deficit), and cash flows for each of the two years in the period ended August 31, 2010, and from inception on March 1, 2005 through August 31, 2010. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rosewind Corporation (a development stage company) as of August 31, 2010 and 2009, and the results of its operations and its cash flows for each of the two years in the period ended August 31, 2010, and from inception on March 1, 2005 through August 31, 2010, in conformity with U.S. generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 4 to the financial statements, the Company has incurred significant losses since inception, raising substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 4. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ HJ & Associates, LLC
HJ & Associates, LLC
Salt Lake City, Utah
November 23, 2010
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ROSEWIND CORPORATION
(A Development Stage Company)
Balance Sheets
See accompanying notes to financial statements.
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ROSEWIND CORPORATION
(A Development Stage Company)
Statements of Operations
See accompanying notes to financial statements.
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ROSEWIND CORPORATION
(A Development Stage Company)
Statements of Changes in Shareholders' Equity (Deficit)
See accompanying notes to financial statements.
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ROSEWIND CORPORATION
(A Development Stage Company)
Statements of Cash Flows
(Unaudited)
See accompanying notes to financial statements.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Rosewind Corporation (the “Company”) was initially incorporated on August 9, 2002 in the State of Colorado. On August 13, 2005, the Company issued its sole officer and director 100,000 shares of its no par common stock as payment for $500 in fees and expenses incurred as part of organizing the Company. During October 2002, the sole officer and director contributed $100 to the Company in order to open a bank account in the Company’s name. Following the cash contribution, the Company remained inactive through June 1, 2004 when the corporation was dissolved.
In March 2005, the sole officer and director decided to reinstate the Company and develop an offshore sailing school near the Australian Great Barrier Reef. Although the Company was officially reinstated with the State of Colorado on April 21, 2005, the accompanying financial statements report March 1, 2005 as the date of inception for accounting purposes, which was the date the Company commenced its operating activities.
b. Accounting Method
The Company’s financial statements are prepared using the accrual method of accounting. The Company has elected an August 31 year-end.
c. Estimates
The preparation of financial statements in conformity with generally accepted accounting principles in the United States of America 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.
d. Income Taxes
Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Income Taxes (Continued)
Net deferred tax assets consist of the following components as of August 31:
The income tax provision differs from the amount of income tax determined by applying the U.S. income tax rate to pretax income from continuing operations for the years ended August 31, 2010 and 2009 due to the following:
At August 31, 2010, the Company had net operating loss carryforwards of approximately $300,300 that may be offset against future taxable income as long as the “continuity of ownership” test is met. No tax benefit has been reported in the August 31, 2010 financial statements since the potential tax benefit is offset by a valuation allowance of the same amount.
Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carryforwards for Federal income tax reporting purposes are subject to annual limitations. Should a change in ownership occur, net operating loss carryforwards may be limited as to use in future years.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
d. Income Taxes (Continued)
The Company has analyzed filing positions in all of the federal and state jurisdictions where it is required to file income tax returns, as well as all open tax years in these jurisdictions. The Company has identified its federal tax return and its state tax return in Colorado as “major” tax jurisdictions, as defined. The initial returns for the Company have not yet been filed. All years are open to examination by the IRS. No reserves for uncertain tax positions have been recorded.
e. Loss per Common Share
The Company reports net loss per share using a dual presentation of basic and diluted loss per share. Basic net loss per share excludes the impact of common stock equivalents. Diluted net loss per share utilizes the average market price per share when applying the treasury stock method in determining common stock equivalents. At August 31, 2010 there were no variances between the basic and diluted loss per share as there were no potentially dilutive securities outstanding.
f. Development Stage
The Company is in the development stage in accordance with ASC Topic 915 “Development Stage Entities”. As of August 31, 2010 the Company has devoted substantially all of its efforts to financial planning and acquiring and reconditioning a sailing vessel.
g. Property and Equipment
The Company’s capital assets consist of one sailing vessel, a 1982/86 Jason 35 Cutter rig, and an inflatable boat which are stated at the lower of cost or market. Depreciation is calculated using the straight-line method over the estimated useful life of the vessel and related improvements, ranging from five to ten years. Expenditures for additions and improvements are capitalized, while repairs and maintenance costs are expensed as incurred. The cost and related accumulated depreciation of any capital assets that are sold or otherwise disposed of are removed from the accounts and any gain or loss is recorded in the year of disposal.
Fixed assets and related depreciation for the years ended August 31 are as follows:
Depreciation expense was $9,184 and $8,283 for the years ended August 31, 2010 and 2009, respectively.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
h. Revenue Recognition
Revenue will be recognized when the services are provided and collection is reasonably assured.
i. Foreign Currency Translation
Expenses incurred and paid in foreign currency have been translated to U.S. currency for reporting purposes.
j. Advertising
The Company follows the policy of charging the costs of advertising to expense as incurred. The Company recognized $1,146 and $1,040 of advertising expense during the years ended August 31, 2010 and 2009, respectively.
k. Newly Adopted Accounting Pronouncements
New accounting pronouncements that have a current or future potential impact on our financial statements are as follows:
Accounting Standards Update (ASU) No 2010-09 amends Topic 855 “Subsequent Events” to remove the requirement for an SEC filer to disclose a date through which subsequent events have been evaluated in both issued and revised financial statements. It was determined that the requirements to disclose the date that the financial statements are issued potentially conflicted with some of the Securities and Exchange Commission’s (SEC) guidance. The amendment is effective for interim or annual periods ending after June 15, 2010. Certain Revenue Arrangements that include Software Elements, and various other ASU’s No. 2009-2 through ASU No.2010-19 contain technical corrections to existing guidance or affect guidance to specialized industries or entities were recently issued. These updates have no current applicability to the Company or their effect on the financial statements would not have been significant.
The Company has reviewed all other recently issued, but not yet adopted, accounting standards in order to determine their effects, if any, on its consolidated results of operation, financial position or cash flows. Based on that review, the Company believes that none of these pronouncements will have a significant effect on its current or future earnings or operations.
l. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
NOTE 2 - RELATED PARTY TRANSACTIONS
As of August 31, 2010, the Company has a secured promissory note to the sole officer and director for $34,783 for working capital. The loan carries a 6% interest rate and is due on demand and is secured by the sailing vessel. Accrued interest payable on the loan totaled $2,609 as of August 31, 2010.
As of August 31, 2010, the Company also has an unsecured promissory note to the sole officer and director for $42,816 for working capital. The loan carries a 6% interest rate and is due on demand. Accrued interest payable on the note totaled $2,014 as of August 31, 2010.
Effective June 8, 2010, the Company resolved that upon written notice from the sole officer and director, the Company will agree to convert all, or any portion of the principal and accrued interest due and payable on either promissory note, into the Company’s common shares at a fixed conversion rate of $0.10 per share. There is no beneficial conversion as $0.10 per share was the closing stock price at the date of the agreement.
For the years ended August 31, 2010 and 2009 the sole officer of the Company contributed services valued at $1,380 and $1,510, respectively. This amount has been booked to additional paid in capital.
Additional paid in capital has been increased as a result of expenses paid by the officer on behalf of the Company.
NOTE 3 - COMMON STOCK TRANSACTIONS
Effective June 18, 2010 The Company’s Articles of Incorporation were amended to increase the aggregate number of shares authorized from 20,000,000 to 50,000,000 shares of common stock having no par value per share.
The Company received $1,000 to be used as subscription to purchase 5,000 shares of common stock at $0.20 per share. As of August 31, 2010 none of these shares have been issued.
During the year ended August 31, 2010, the Company issued 77,834 shares of common stock for cash of $13,900.
NOTE 4 - GOING CONCERN
The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. As shown in the accompanying financial statements, the Company is a development stage enterprise with losses since inception and a limited operating history. These factors, among others, may indicate that the Company will be unable to continue as a going concern for a reasonable period of time.
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ROSEWIND CORPORATION
(A Development Stage Company)
Notes to the Financial Statements
August 31, 2010 and 2009
NOTE 4 - GOING CONCERN (continued)
The financial statements do not include any adjustments relating to the recoverability and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. The Company’s continuation as a going concern is dependent upon its ability to generate sufficient cash flow to meet its obligations on a timely basis and ultimately to attain profitability. The Company intends to seek additional funding through equity offerings to fund its business plan. There is no assurance that the Company will be successful in raising additional funds.
NOTE 5 - SUBSEQUENT EVENT
The Company has evaluated subsequent events from the balance sheet date through the date the financials were issued, and has determined there are no events that would require discloser herein.
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ITEM 8.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS AND ACCOUNTING AND FINANCIAL DISCLOSURE
None.
ITEM 8A. CONTROLS AND PROCEDURES.
Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
Under the supervision and with the participation of our principal executive officer and principal financial officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended (the Exchange Act). Accordingly, we concluded that our disclosure controls and procedures as defined in Rule 13a-15(e) under the Exchange Act were effective as of August 31, 2010 to ensure that information required to be disclosed in reports we file or submit under the Exchange Act is recorded, processed, and summarized and reported within the time periods specified in SEC rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions as appropriate to allow timely decisions regarding required disclosure.
Management’s Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) and 15d-(f) under the Exchange Act. Our internal control over financial reporting are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with U. S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
i.
pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets;
ii.
provide reasonable assurance that transactions are recorded as necessary to permit the preparation of our consolidated financial statements in accordance with U. S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
iii.
provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on the consolidated financial statements.
Management assessed the effectiveness of the Company’s internal control over financial reporting as August 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework.
Management has concluded that our internal control over financial reporting was effective as of August 31, 2010.
Inherent Limitations Over Internal Controls
Internal control over financial reporting cannot provide absolute assurance of achieving financial reporting objectives because of its inherent limitations, including the possibility of human error and circumvention by collusion or overriding of controls. Accordingly, even an effective internal control system may not prevent or detect material misstatements on a timely basis. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
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Changes in Internal Control Over Financial Reporting.
We have made no change in our internal control over financial reporting during the last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Attestation Report of the Registered Public Accounting Firm.
This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management's report in this annual report on Form 10-K.
ITEM 8B. OTHER INFORMATION.
None.
Part III
ITEM 9.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.
Our directors, executive officers and other significant employees, their ages, positions held and duration each person has held that position, are as follows:
BUSINESS EXPERIENCE
James B. Wiegand is a promoter of the company.
BUSINESS EXPERIENCE Following is a brief account of the education and business experience of each director, executive officer and key employee during at least the past five years, indicating each person's principal occupation during the period, and the name and principal business of the organization by which he was employed.
MR. JAMES B. WIEGAND is our President and Sole Director since August 9, 2002. He is also president and director of several blank check and development stage companies including Pinel Bay Corporation, Ambermax Corporation and several similar entities. He obtained his Bachelor of Science in Mechanical Engineering at the University of Denver in 1969. Mr. Wiegand’s course work at the University of Denver included a minor in business. In 1972 Mr. Wiegand founded Solar Energy Research Corporation and took the company public in 1975, serving as president and director until October 1996. During the period from 1985 until 1992 Mr. Wiegand also held various sales, sales management, banking and investment banking positions with American Solar. Western Federal Savings and Loan, American Remodeling and RAF Financial. In 1992 Mr. Wiegand left employment as a stock broker with RAF Financial to reorganize Solar Energy Research for its 2,200 shareholders. In 1996 Solar Energy Research closed a $50,000,000 reverse acquisition of Telegen Corporation. During 1997 and 1998 Mr. Wiegand and family bought and refitted a sailboat for a one year cruise in the Bahamas. In 1998 Mr. Wiegand founded Dotsero Imports and spent the following two years importing and distributing a private label Tequila until the distillery was sold and the brand discontinued in 2000.
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The following table summarizes Mr. Wiegand’s activities with blank check and other companies during the past five years:
See Accompanying notes below.
_______________
Note 1.
James Wiegand acquired control shares from CMS on 1/28/2002. New management was issued control shares in connection with Share Purchase Agreement. New management undertook an audit of its housing business. Further fillings to update progress of the transaction are delinquent.
Note 2.
James Wiegand acquired control shares from CMS on 1/28/2002. New management was issued control shares in exchange for control of its plant pharmaceutical company. Company has changed its name to Mazal Plant Pharmaceutical. New management has filed to register certain shares. Trades on pink sheets with symbol “MZPP”.
Note 3.
James Wiegand acquired control shares from CMS on 1/28/2002. Control shares were sold to new management. New management has not yet acquired an operating business.
Note 4.
James Wiegand incorporated Rexray Corporation and completed a private placement of common shares. Rexray acquired the assets of Cytodyn of New Mexico and changed its name to Cytodyn Corporation. New Management registered certain shares and is preparing to submit its AIDS infusion drug, Cytolin, for FDA Phase II/III Testing. Cytodyn’s common shares trade on the OTCBB with the symbol “CYDYE”.
Note 5.
James Wiegand incorporated Jackray Corporation and completed a private placement of common shares. Control shares were sold to new management on September 30, 2006
Note 6.
James Wiegand incorporated Claire Coast Corporation and completed a private placement of common shares. Control shares were sold to new management on September 30, 2006.
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Note 7
James Wiegand Incorporated Pinel Bay Corporation and completed a private placement of common shares. To date Pinel Bay has been unable to complete a business combination. On October 30,2009 Pinel filed Form 15 and terminated reporting.
Note 8
James Wiegand Incorporated Ambermax Corporation and completed a private placement of common shares. To date Ambermax has been unable to complete a business combination. On December 19, 2008 Ambermax filed Form 15 and terminated reporting.
Note 9
James Wiegand Incorporated Ambermax II Corporation and completed a private placement of common shares. To date Ambermax II has been unable to complete a business combination. On November 21, 2008 Ambermax II filed Form 15 and terminated reporting.
Resume of Michael Wiegand
Michael Wiegand, age 23, participated in the “Gifted and Talented” program throughout elementary and middle school, authoring a school website under a federal grant that he independently applied for and obtained. Thereafter, age 10, Michael lived with his family aboard a forty-two foot sailing ketch, cruising the Bahamas for a year while home schooling. Upon returning to shore life in Colorado, Michael Wiegand completed extra-curricular courses in basic accounting, advertising and employee management and worked at the Boyd Lake Marina during the summer where he did general maintenance, serviced boats and sold gas. Self employed creating web sites, and delivering news papers, he left high school a few years early, passed his GED and scored well on the SAT. He opted not to enter college, choosing instead to work full time for Mechanical Insulation Systems, Inc, installing thermal insulation and later training and managing new employees. At age 17, Michael Wiegand refitted the Company’s thirty-five foot cutter and began the first leg of his sailing voyage, solo, bound for Australia. While Michael is a published writer, he holds no licenses or certificates which qualify him to work as an officer on any ship in any waters. He completed his solo sailing voyages to Australia and New Zealand and is presently operating Six String as a training vessel.
Each director and executive officer holds office until the next annual meeting of shareholders or until his successor has been duly elected and qualified. Other than the Father-Son relationship between James B. Wiegand and Michael Wiegand, there are no family relationships among the persons described below.
ITEM 10.
ITEM 10. EXECUTIVE COMPENSATION.
EXECUTIVE COMPENSATION
The following table presents all information regarding the compensation awarded to, earned by, or paid to named executive offices for the fiscal year ended August 31, 2010 and during the last five fiscal years.
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SUMMARY COMPENSATION TABLE
_____________
(1) James B. Wiegand received 100,000 shares for $500 in fees and expenses paid on behalf of the Company during 2005.
ITEM 11.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table lists, as of August 31, 2010, the number of shares of our common stock beneficially owned by (i) each person or entity known to us to be the beneficial owner of more than 5% of the outstanding common stock; (ii) each of our officers and directors; and (iii) all of our officers and directors as a group. Information relating to beneficial ownership of common stock by our principal stockholders and management is based upon information furnished by each person using "beneficial ownership" concepts under the rules of the Securities and Exchange Commission. Under these rules, a person is deemed to be a beneficial owner of a security if that person has or shares voting power, which includes the power to vote or direct the voting of the security, or investment power, which includes the power to vote or direct the voting of the security. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Under the Securities and Exchange Commission rules, more than one person may be deemed to be a beneficial owner of the same securities, and a person may be deemed to be a beneficial owner of securities as to which he or she may not have any pecuniary beneficial interest. Except as noted below, each person has sole voting and investment power.
The percentages below are calculated based on 3,547,334 shares of common stock which are issued and outstanding. Unless otherwise indicated, the business address of each such person is c/o Rosewind Corporation, 16200 WCR 18E, Loveland, Colorado 80537.
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___________________
(1) James B. Wiegand, our President received 100,000 shares of our common stock in consideration for his services and an additional 1,150,000 shares in consideration for our sailing vessel.
(2) Katherine Gould received 600,000 shares of our common stock from the estate of her husband, Max Gould. The shares were originally issued to Max Gould in consideration for his services rendered.
(3) Michael Wiegand, son of our President, received 700,000 shares of our common stock as compensation for his services rendered as Captain.
ITEM 12.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On March 1, 2005, we issued to James B. Wiegand 100,000 shares of our common stock in consideration of $500 in fees and expenses incurred as part of organizing the Company.
On March 4, 2005, we issued to James B. Wiegand 1,150,000 shares of our common stock in exchange for our sailing vessel.
On September 20, 2005, we issued to Max Gould 600,000 shares of our common stock in consideration for his services valued at $24,000.
On September 20, 2005, we issued to Michael Wiegand, our Captain and son of James B. Wiegand, 700,000 shares of our common stock in consideration for his services valued at $28,000.
On September 20, 2005, we issued to Sonja Gouak 50,000 shares of our common stock in consideration for her services valued at $2,000.
On September 20, 2005, we issued to Martha Sandoval 50,000 shares of our common stock in consideration for her services valued at $2,000.
On March 30, 2006, we issued Mr. Craig A. Olson 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Craig K. Olson 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mrs. Shirley Hale 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Larry Willis 100,000 shares of our common stock in consideration for $10,000.
On March 30, 2006, we issued Mr. Neil Montagino 50,000 shares of our common stock in consideration for $5,000.
On March 30, 2006, we issued Mr. Roger May 50,000 shares of our common stock in consideration for $5,000.
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As of August 31, 2010, the Company has a secured promissory note to the sole officer and director for $34,783 for working capital. The loan carries a 6% interest rate, matures on November 30, 2010 and is secured by the sailing vessel. Accrued interest payable on the loan totaled $2,609 as of August 31, 2010.
The Company also has an unsecured convertible promissory note dated June 8, 2010 to the sole officer and director for $42,816 for working capital. Conversion is at the option of the note holder at the rate of $0.10 per share of common stock. The loan carries a 6% interest rate and is due on demand. Accrued interest payable on the note totaled $2,014 as of August 31, 2010.
For the years ended August 31, 2010 and 2009 the sole officer of the Company contributed services valued at $2,580 and $2,710, respectively. This amount has been booked to additional paid in capital.
Other than as set forth above, none of the following parties has, during the last two years, had any material interest, direct or indirect, in any transaction with us or in any presently proposed transaction that has or will materially affect us:
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any of our directors or officers;
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any person proposed as a nominee for election as a director;
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any person who beneficially owns, directly or indirectly, shares carrying more than 5% of the voting rights attached to our outstanding shares of common stock; or
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any relative or spouse of any of the foregoing persons who has the same house as such person.
ITEM 13.
ITEM 13. EXHIBITS AND REPORTS OF FORM 8-K
Exhibits
Reports on 8-K
No reports were filed on Form 8-K this fiscal year.
ITEM 14.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES
Audit Fees
During the fiscal year ended August 31, 2010, we incurred approximately $11,500 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal years ended August 31, 2010.
During the fiscal year ended August 31, 2009, we incurred approximately $16,500 in fees to our principal independent accountants for professional services rendered in connection with the audit and reviews of our financial statements for fiscal year ended August 31, 2010.
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Audit-Related Fees
The aggregate fees billed during the fiscal years ended August 31, 2010 and 2009 for assurance and related services by our principal independent accountants that are reasonably related to the performance of the audit or review of our financial statements (and are not reported under Item 9(e)(1) of Schedule 14A was $0 and $0, respectively.
Tax Fees
The aggregate fees billed during the fiscal years ended August 31, 2010 and 2009 for professional services rendered by our principal accountant tax compliance, tax advice and tax planning was $0 and $0, respectively.
All Other Fees
The aggregate fees billed during the fiscal years ended August 31, 2010 and 2009 for products and services provided by our principal independent accountants (other than the services reported in Items 9(e)(1) through 9(e)(3) of Schedule 14A was $0 and $0, respectively.
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant has caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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