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Part I.
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 our business plan, 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. 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. As of the date of this report, our vessel has returned to the United States and is located in San Francisco Bay at San Leandro Marina. We are advertising for students and plan to generate revenue from training voyages that originate in California.
We have borrowed money from our President and we have conducted a private placement, an IPO, and multiple follow up private placements 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 our vessel on offshore voyages to intensely train up to two students. While our business model indicates we can achieve a positive cash flow if we sell and deliver, each quarter, six one week voyages with two students training on each voyage, we have not achieved that goal.
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 of August 31, 2012 and the date of this report we have trained one student on a two week voyage during early June of 2008, a second student on a one week voyage during April of 2009 and a third student has received sailing instruction on Puget Sound during 2012.
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. Our vessel is foreign built and as such commercial activity within U.S. waters is governed by regulations of the US Department of Transportation. On August 17, 2012 we were notified by them that our application for a waiver of certain regulations that would normally be applicable to our vessel has been approved. This decision allows our vessel to engage in limited commercial activity in US waters, but only within those U.S. waters associated with Washington, California, Hawaii, Texas and Florida. In accordance with this waiver, our current certificate of documentation, dated October 4, 2012 contains a limited “coastwise endorsement.” 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 outcome.
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. Topics covered will include:
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Marine Environment and Safety at Sea
Life Rafts and Ditch Bags
Medical Preparedness and First Aid
Features of Offshore Capable Vessels
Rigging and Deck Gear
Tools, Mechanical and Electrical Skills
Sails, Rope work and Sewing
Sail Handling
12 Volt Electrical Systems
Boat Electronics, Instruments, Radio and Radar
Auxiliary Diesel Maintenance and Repair
Heavy Weather Seamanship
Weather, Pilot Charts and Navigation
Passagemaking
Boat Maintenance, Provisioning and Waste Disposal
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 We have recently activated a second website www.rosewindcorporation.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 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 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 vessel maintenance were found 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. As of August 31, 2012 and the date of this report our vessel is authorized to conduct sailing school activites in U.S. waters only within the waters associated with the states of Washington, California, Hawaii, Texas and Florida. We cannot assure you that in the future we will apply for, or successfully obtain, additional 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.