AYTU BIOPHARMA, INC - Quarter Report: 2010 November (Form 10-Q)

rosewind10q113010_11211.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington D.C. 20549

FORM 10-Q

QUARTERLY REPORT UNDER SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For Quarter Ended: November 30, 2010 Commission File Number 000-53121

ROSEWIND CORPORATION

(Exact name of registrant as specified in its charter)

COLORADO	47-0883144
(State or other jurisdiction of	(I.R.S. Employer Identification No.)
incorporation or organization)

16200 WCR 18 E, Loveland, Colorado	80537
(Address of principal executive offices)	(Zip code)

(970) 635-0346

(Registrant's telephone number, including area code)

___________________________________________

(Former name, former address and former fiscal year, if changed since last report.)

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act of 1934 during the past 12 months, and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] NO [ ]

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 definitions of “large accelerated filer,” “accelerated filer,” and “smaller reporting company” in Rule 12(b) of the Exchange Act.

Large accelerated filer [ ]	Accelerated filer [ ]
Non-accelerated filer [ ]	Smaller Reporting Company [X]

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 January 4, 2010, 4,076,322 shares of common stock, no par value of registrant were outstanding

	Page
PART I FINANCIAL INFORMATION
Item 1. Financial Statements for the period ended November 30, 2010
Consolidated Balance Sheets (Unaudited)	3
Consolidated Statements of Operations (Unaudited)	4
Consolidated Statements of Shareholders’ Equity (Deficit) (Unaudited)	5
Consolidated Statements of Cash Flows (Unaudited)	7
Notes to Consolidated Financial Statements	8

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	9
Item 3. Quantitative and Qualitative Disclosures About Market Risk	10
Item 4. Controls and Procedures	10
Item 4T. Controls and Procedures	10

PART II OTHER INFORMATION

Item 1. Legal Proceedings	11
Item 1A. Risk Factors	11
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	15
Item 3. Defaults Upon Senior Securities	15
Item 4. Submission of Matters to a Vote of Security Holders	16
Item 5. Other Information	16
Item 6. Exhibits	16

Signatures	17

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

ROSEWIND CORPORATION

(A Development Stage Company)

Balance Sheets

	November 30,			August 31,
	2010			2010
Assets	(unaudited)

Current Assets:
Cash	$	911		$	1,545
Prepaid asset		172			172

Total current assets		1,083			1,717

Property and equipment, net		23,906			25,374

Total assets	$	24,989		$	27,091

Liabilities and Shareholders’ Equity (Deficit)

Current liabilities:
Accounts payable	$	2,777		$	477
Accrued interest payable, related party		5,787			4,623
Loans payable to related party		83,848			77,599

Total current liabilities		92,412			82,699

Shareholders’ equity (deficit):
Common stock, no par value; 50,000,000 shares authorized,
3,585,668 and 3,469,500 shares issued and outstanding, respectively		241,250			235,250
Additional paid-in capital		23,951			23,051
Common stock subscription		—			1,000
Accumulated deficit		(500	)		(500	)
Deficit accumulated during development stage		(332,124	)		(314,409	)
Total shareholders' equity (deficit)		(67,423	)		(55,608	)

Total liabilities and shareholders' equity (deficit)	$	24,989		$	27,091

See accompanying notes to financial statements

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ROSEWIND CORPORATION

(A Development Stage Company)

Statements of Operations

(Unaudited)

							March 1,
							2005
							(Inception)
	For the Three Months Ended						Through
	November 30,						November 30,
	2010			2009			2010

Revenue	$	—		$	—		$	1,750

Operating expenses:
Professional fees		7,551			10,909			95,382
Contributed services, related party (Note 2)		900			910			19,461
General and administrative		8,100			6,656			204,351

Total operating expenses		16,551			18,475			319,194

Loss from operations		(16,551	)		(18,475	)		(317,444	)

Other Income (Expense)
Other income		—			242			274
Interest expense		(1,164	)		(833	)		(14,954	)

Total other expenses		(1,164	)		(591	)		(14,680	)

Net loss		(17,715	)		(19,066	)		(332,124	)

Other Comprehensive Income (Loss)

Gain (loss) on foreign currency exchange		—			158			—

Total Comprehensive Loss	$	(17,715	)	$	(18,908	)	$	(332,124	)

Basic and diluted loss per share	$	(0.01	)	$	(0.01	)

Basic and diluted weighted average
common shares outstanding		3,489,885			3,469,500

See accompanying notes to financial statements

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ROSEWIND CORPORATION

(A Development Stage Company)

Statements of Changes in Shareholders' Equity (Deficit)

														Deficit
							Accumulated							Accumulated
					Additional		Other		Common					During
	Common Stock				Paid-in		Comprehensive		Stock		Accumulated			Development
	Shares		Amount		Capital		Loss		Subscription		Deficit			Stage

Balance at March 1, 2005 (inception)		100,000	$	500	$	100	$	—	$	—	$	(500	)	$	—

Common stock issued in exchange for a
Sailing vessel at $0.034 per share		1,150,000		39,000		—		—		—		—			—

Net loss, period ended August 31, 2005		—		—		—		—		—		—			(18,677	)

Balance at August 31, 2005		1,250,000		39,500		100		—		—		(500	)		(18,677	)

Common stock issued for services
at $0.04 per share		700,000		28,000		—		—		—		—			—

Common stock issued for services to a
related party at $0.04 per share		700,000		28,000		—		—		—		—			—

Common stock issued for cash
at $0.10 per share		500,000		50,000		—		—		—		—			—

Contributed capital		—		—		1,965		—		—		—			—

Net loss, year ended August 31, 2006		—		—		—		—		—		—			(70,441	)

Balance at August 31, 2006		3,150,000		145,500		2,065		—		—		(500	)		(89,118	)

Contributed capital		—		—		925		—		—		—			—

Office space contributed by an officer		—		—		1,200		—		—		—			—

Services contributed by an officer		—		—		7,271		—		—		—			—

Foreign currency exchange gain		—		—		—		417		—		—			—

Net loss, year ended August 31, 2007		—		—		—		—		—		—			(48,954	)

Balance at August 31, 2007		3,150,000		145,500		11,461		417		—		(500	)		(138,072	)

Common stock issued for cash at $0.25 per share		239,000		59,750		—		—		—		—			—

Contributed capital		—		—		669		—		—		—			—

Office space contributed by an officer		—		—		1,200		—		—		—			—

Services contributed by an officer		—		—		2,674		—		—		—			—

Foreign currency exchange gain		—		—		—		32		—		—			—

Net loss, year ended August 31, 2008		—		—		—		—		—		—			(57,173	)

Balance at August 31, 2008		3,389,000	$	205,250	$	16,004	$	449	$	—	$	(500	)	$	(195,245	)

See accompanying notes to financial statements

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ROSEWIND CORPORATION

(A Development Stage Company)

Statements of Changes in Shareholders' Equity (Deficit)

(Continued)

							Accumulated									Accumulated
					Additional		Other			Common						During
	Common Stock				Paid-in		Comprehensive			Stock			Accumulated			Development
	Shares		Amount		Capital		Loss			Subscription			Deficit			Stage

Contributed capital		—	$	—	$	1,757	$	—		$	—		$	—		$	—

Office space contributed by
an officer		—		—		1,200		—			—			—			—

Services contributed by an officer		—		—		1,510		—			—			—			—

Foreign currency exchange loss		—		—		—		(1,214	)		—			—			—

Common stock issued for cash
at $0.20 per share		80,500		16,100		—		—			—			—			—

Net loss, year ended August 31, 2009		—		—		—		—			—						(58,894	)

Balance at August 31, 2009		3,469,500		221,350		20,471		(765	)		—			(500	)		(254,139	)

Office space contributed by
an officer		—		—		1,200		—			—			—			—

Services contributed by an officer		—		—		1,380		—			—			—			—

Common stock issued for cash
at $0.20 per share		44,500		8,900		—		—			—			—			—

Common stock issued for cash
at $0.15 per share		33,334		5,000		—		—			—			—			—

Foreign currency exchange gain		—		—		—		765			—			—			—

Common stock subscribed		—		—		—		—			1,000			—			—

Net loss, year ended August 31, 2010		—		—		—		—			—						(60,270	)

Balance at August 31, 2010		3,547,334		235,250		23,051		—			1,000			(500	)		(314,409	)

Office space contributed by
an officer (unaudited)		—		—		300		—			—			—			—

Services contributed by an officer (unaudited)		—		—		600		—			—			—			—

Common stock issued for cash
at $0.15 per share (unaudited)		33,334		5,000		—		—			—			—			—

Common stock subscribed (unaudited)		5,000		1,000		—		—			(1,000	)		—			—

Net loss, quarter ended November 30, 2010 (unaudited)		—		—		—		—			—						(17,715	)

Balance at November 30, 2010 (unaudited)		3,585,668	$	241,250	$	23,951	$	—		$	—		$	(500	)	$	(332,124	)

See accompanying notes to financial statements

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ROSEWIND CORPORATION

(A Development Stage Company)

Statements of Cash Flows

(Unaudited)

							March 1,
							2005
							(Inception)
	For the Three Months Ended						Through
	November 30,						November 30,
	2010			2009			2010
Cash flows from operating activities:
Net loss	$	(17,715	)	$	(19,066	)	$	(332,124	)
Adjustments to reconcile net loss to net cash
used by operating activities:
Depreciation expense		1,468			2,071			41,965
Contributed capital for operating expenses		900			910			23,851
Common stock issued for services		—			—			56,000
Changes in operating assets and liabilities:
(Increase) decrease in prepaid services		—			—			(172	)
Increase (decrease) in accounts payable
and accrued liabilities		3,464			4,991			15,478
Net cash used in
operating activities		(11,883	)		(11,094	)		(195,002	)

Cash flows from investing activities:
Cash paid for fixed assets		—			—			(26,870	)
Net cash used in
investing activities		—			—			(26,870	)

Cash flows from financing activities:
Common stock issued for cash		5,000			—			145,750
Proceeds from related party loans		6,249			927			76,933
Net cash provided by
financing activities		11,249			927			222,683

Net change in cash		(634	)		(10,167	)		811

Cash, beginning of period		1,545			13,612			100

Cash, end of period	$	911		$	3,445		$	911

Supplemental disclosure of cash flow information:
Cash paid during the period for:
Income taxes	$	—		$	—		$	—
Interest	$	—		$	—		$	2,251


NON CASH INVESTING AND FINANCING ACTIVITIES:		NONE			NONE			NONE

See accompanying notes to financial statements

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ROSEWIND CORPORATION

(A Development Stage Company)

Notes to Condensed, Unaudited Financial Statements

Note 1: Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company’s most recent audited financial statements and notes thereto included in its Form 10-K. Operating results for the three months ended November 30, 2010 are not necessarily indicative of the results that may be expected for the year ending August 31, 2011.

Note 2: 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.

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 3: Related Party Transactions

As of November 30, 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 demand and is secured by the sailing vessel. Accrued interest payable on the loan totaled $3,131 as of November 30, 2010.

The Company also has an unsecured promissory note to the sole officer and director for $49,065 for working capital. The loan carries a 6% interest rate and is due on demand. Accrued interest payable on the note totaled $2,656 as of November 30, 2010. Subsequent to quarter end, this note was converted into stock.

For the period ended November 30, 2010 the sole officer of the Company contributed services and rent valued at $900. This amount has been booked to additional paid in capital.

Note 4: Common Stock Transactions

During the three months ended November 30, 2010 the Company issued 33,334 shares of common stock for cash of $5,000. The Company also issued 1,000 shares of common stock in fulfillment of a subscription received in a prior period.

Note 5: Subsequent Events

Subsequent to quarter end, the Company consented to convert the unsecured promissory note to the sole officer and director into common stock at $0.10 per share. The notes were converted into 490,654 shares of common stock prior to the issuance of these financial statements.

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Part I. Item 2. Management’s Discussion and Analysis of Financial Conditions and Results of Operations

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-Q. This Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q 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 Quarterly Report on Form 10-Q 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.

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.

Financial Condition and Results of Operation

We are a development stage company. 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.

We have relocated and significantly prepared our vessel for operation as a sailing school, but, as of the date of this report we have collected full tuition from only one student. 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. We conduct company administration, logistics and marketing from our US offices.

During June of 2008 we completed a two week training voyage with our first student on a “share expense” basis. This voyage was from 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.

During April of 2009 we completed a one week training voyage with our second student. The student paid $1,750 for the training voyage and stated that he was pleased with the experience. As of the date of this report we continue to advertise our school and we are attempting to book additional voyages.

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We have had $1,750 in operating revenues since inception, March 1, 2005 through November 30, 2010 and the date of this report. We have incurred expenses totaling $334,148 as of November 30, 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 $(332,124) as of November 30, 2010. As of the date of this report our losses continue to mount.

Our net loss decreased by $1,351 or 7% to $17,715 from $19,066 for the three month period ended November 30, 2010 compared with the prior three month period ended November 30, 2009. This was primarily attributed the net effect of the following two factors:

1.	Professional expense decreased by $3,358, or 31% for the three month period ended November 30, 2010. We attribute this to a decrease in accounting fees paid.

2.	General and administrative expenses increased by $1,444, or 21%, for the three month period ended November 30, 2010. We attribute this to an increase in boat repair and maintenance costs.

3.	Interest expense increased by $331, or 40% for the quarter ended November 30, 2010. This is attributable to an increase in the unsecured notes payable balance.

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.

At November 30, 2010, we had $911 in cash and a working capital deficit of $(91,329). As of the date of this report our liquidity and capital resources continue to decline and our ability to consistently generate student revenue remains unproven.

Item 2. Quantitative and Qualitative Disclosures About Market Risk

No response required.

Item 3. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our disclosure controls and procedures are designed to ensure that information required to be disclosed in reports that we file or submit under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the United States Securities and Exchange Commission. Our Chief Executive Officer has reviewed the effectiveness of our "disclosure controls and procedures" (as defined in the Securities Exchange Act of 1934 Rules 13a-14(c) and 15d-14(c)) within the end of the period covered by this Quarterly Report on Form 10-Q and has concluded that the disclosure controls and procedures are effective to ensure that material information relating to the Company is recorded, processed, summarized, and reported in a timely manner. There were no changes in our internal controls or in other factors that could materially affect these controls subsequent to the last day they were evaluated by our Chief Executive Officer, who is our principal executive officer and our principal financial officer.

Changes in Internal Controls over Financial Reporting

There have been no changes in our internal control over financial reporting during the last quarterly period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part 2. Other Information

Item 1 - Legal Information.

No response required.

Item 1A. Risk Factors

RISKS RELATED TO OUR BUSINESS

OUR SOLE ASSET, OUTSIDE OF CASH HELD IN OUR BANK IN THE UNITED STATES, IS OUR VESSEL WHICH IS PRESENTLY AT SEA, BOUND FOR JAPAN.. 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 loose 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 loose his entire investment.

SINCE WE HAVE GENERATED NO SIGNIFICANT REVENUES AND OUR COMPANY IS NEW AND HAS ONLY RECENTLY COMENCED PLANNED OPERATIONS, WE MAY 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.

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.

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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.

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 and advertising our sailing school. We have committed substantial resources to maintain our vessel and upgrade safety equipment for operation as a training vessel. We have located and trained only one paying student 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 November 30, 2010, our accumulated losses are $ (332,124). Since inception we have earned only very limited 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.

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WE WILL CONTINUE TO REQUIRE SUBSTANTIAL ADDITIONAL FUNDS FOR GENERAL AND ADMINISTRATIVE, REPAIRS, TRAVEL AND 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

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 BUSINES.

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 lose all money invested.

Mr. James B. Wiegand will contribute an average of approximately one hour per week to the affairs of the Company.

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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 CONSISTANTLY 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. As of the date of this report, we have trained only two students. Both students responded to our classified advertisement but the first student and was booked on a one time “share expense” basis such that we could initiate our training operations without further delay. The first student provided us with a handwritten letter of recommendation and we now provide a copy of this letter to prospective students. Now that we have had a paying student, we do not presently anticipate making any more voyages where students are trained on a “share expense” basis. 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 client 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 loose his entire investment.

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.

Unanticipated 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 loose 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.

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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:

● demonstration of the efficacy and safety of our training methods and planned curriculum;

● cost-effectiveness;

● potential advantages of alternative sailing schools which may offer similar opportunities;

● the effectiveness of marketing through classified advertisements.

● 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 loose their entire investment.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

We are conducting a private placement of restricted shares of our common stock under exemptions from registration which are available to us. Accordingly, all share certificates issued in the private placement bear a restricted legend.

Item 3 - Defaults Upon Senior Securities.

No response required.

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

No response required.

Item 5 - Other Information.

No response required.

Item 6 - Exhibits and Reports on Form 8-K.

	(a) Exhibits:

	31.1: Certification of Principal Executive and Financial Officer
	32.1: Section 1350 Certification


	(b) Reports on Form 8-K:

	None.

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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.

		ROSEWIND CORPORATION
		(Registrant)


DATE: January 13, 2011	BY:	/s/ James B. Wiegand
		James B. Wiegand
		President

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