UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ended February 28, 2017

OR

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

For the transition period from _________ to __________

Commission File No. 000-55383

FAIRWIND ENERGY INC.

(Exact name of registrant as specified in its charter)

Nevada	46-2876282
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

32932 Pacific Coast Highway, #14-254

Dana Point, California 92629

(Address of principal executive offices, zip code)

(949) 933-5411

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No x

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes o No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes o No o

APPLICABLE ONLY TO CORPORATE ISSUERS

As of April 11, 2017, there were 6,017,406 shares of common stock, $0.001 par value per share, outstanding.

 
FAIRWIND ENERGY INC.

(A Development Stage Company)

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED FEBRUARY 28, 2017

INDEX

Index		Page
Part I. Financial Information
Item 1.	Financial Statements	F-1
	Balance sheets at February 28, 2017 (Unaudited) and August 31, 2016.		F-2
	Statements of operations for the six and three months ended February 28, 2017 and February 29, 2016 (unaudited).		F-3
	Statements of cash flows for the six months ended February 28, 2017 and 2016 (unaudited).		F-4
	Notes to Financial Statements (unaudited).		F-5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.		4
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.		6
Item 4.	Controls and Procedures.		6
Part II. Other Information
Item 1.	Legal Proceedings.		7
Item 1A.	Risk Factors		7
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.		7
Item 3.	Defaults Upon Senior Securities.		7
Item 4.	Mine Safety Disclosures.		7
Item 5.	Other Information.		7
Item 6.	Exhibits.		8
Signatures			9

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of FairWind Energy Inc., a Nevada corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of oil and gas prices, the possibility that equipment development efforts will not produces equipment that prospective customers want to purchase, the Company’s need for and ability to obtain additional financing, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

FairWind Energy, Inc.

February 28, 2017 and February 29, 2016

Index to the Financial Statements

Contents	Page(s)
Balance sheets at February 28, 2017 (Unaudited) and August 31, 2016	F-2
Statements of operations for the three and six months ended February 28, 2017 and February 29, 2016 (Unaudited)	F-3
Statements of cash flows for the six months ended February 28, 2017 and February 29, 2016 (Unaudited)	F-4
Notes to the financial statements (Unaudited)	F-5

F-1

FairWind Energy, Inc.

Balance Sheets

	February 28, 2017			August 31, 2016
	(Unaudited)
Assets
Current Assets
Cash	$	1,239		$	619
Total current assets		1,239			619
Note Receivable
Note receivable		10,000			-
Computer Equipment
Computer equipment		1,328			1,328
Total property and equipment		1,328			1,328
Accumulated depreciation		(792	)		(660	)
Computer equipment, net		536			668
Total assets	$	11,775		$	1,287
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities
Derivative liability	$	256,547		$	-
Accounts payable		15,579			2,798
Accrued expenses		530			891
Total current liabilities		272,656			3,689
Long Term Liabilities
Convertible note payable (Note 4)		10,108			-
Convertible note payable, related-party (Note 6)		8,078			-
Total long term liabilities		18,186			-
Total Liabilities	$	290,842		$	3,689
Stockholders' Equity (Deficit)
Preferred stock par value $0.001: 25,000,000 shares authorized;
0 issued or outstanding		-			-
Common stock par value $0.001: 50,000,000 shares authorized;
6,017,406 shares issued and outstanding		6,017			6,017
Additional paid-in capital		728,557			719,468
Accumulated deficit		(1,013,641	)		(727,887	)
Total stockholders' equity (Deficit)		(279,067	)		(2,402	)
Total liabilities and stockholders' equity (Deficit)	$	11,775		$	1,287

See accompanying notes to the unaudited financial statements.

F-2

FairWind Energy, Inc.

Statements of Operations

	For the Six Months Ended February 28, 2017			For the Three Months Ended February 28, 2017			For the Six Months Ended February 29, 2016			For the Three Months Ended February 29, 2016
	(Unaudited)			(Unaudited)			(Unaudited)			(Unaudited)
Revenue
Consulting services	$	-		$	-		$	30,000		$	15,000
Material sales		2,250			2,250			-			-
Total revenue		2,250			2,250						15,000
Costs of Goods Sold		-			-			-			-
Gross Margin		2,250			2,250			30,000			15,000
Operating Expenses
Professional fees		171,371			107,566			12,624			8,561
Research and development		1,357			1,357			1,998			1,250
Salary and wages - officers		40,139			20,086			9,117			1,940
General and administrative expenses		8,225			303			6,266			2,905
Total operating expenses		221,092			129,312			30,005			14,656
Loss from Operations		(218,842	)		(127,062	)		(5	)		344
Other (Income) Expense
Gain (loss) on fair value of derivative instruments		61,638			24,986			-			-
Amortization of derivative discount		4,376			2,565			-			-
Other (income) expense, net		66,014			27,551			-			-
Loss before Income Tax Provision		(284,856	)		(154,613	)		(5	)		344
Interest Expense		900			900
Income Tax Provision		-			-			-			-
Net Income (Loss)	$	(285,756	)	$	(155,513	)	$	(5	)	$	344
Loss per share
-Basic	$	(0.05	)	$	(0.03	)	$	(0.00	)	$	0.00
-Diluted	$	(0.05	)	$	(0.03	)	$	(0.00	)	$	0.00
Weighted average common shares outstanding
-Basic		6,017,406			6,017,406			5,992,406			5,992,406
-Diluted		6,017,406			6,017,406			5,992,406			5,992,406

 See accompanying notes to the unaudited financial statements. 

F-3

FairWind Energy, Inc.

Statements of Cash Flows

	For the Six Months			For the Six Months
	Ended			Ended
	February 28, 2017			February 29, 2016
	(Unaudited)			(Unaudited)
Cash Flows from Operating Activities
Net loss	$	(285,756	)	$	(5	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of derivative liabilties		61,638			-
Depreciation expense		132			132
Amortization expense		-			126
Amortization of discount on derivative liabilities		4,376			-
Capital contribution		40,000
Warrant expense		132,809			-
Changes in operating assets and liabilities:
Accounts payable		12,781			-
Accrued expenses		(360	)		(6,501	)
Net Cash Used in Operating Activities		(34,380	)		(6,248	)
Cash Flows from Investing Activities
Note receivable		(10,000	)
Net Cash Used in Investing Activities		(10,000	)		-
Cash Flows from Financing Activities
Proceeds from notes payable		45,000
Net Cash Provided by Financing Activities		45,000			-
Net Change in Cash		620			(6,248	)
Cash - beginning of reporting period		619			13,195
Cash - end of reporting period	$	1,239		$	6,947
Supplemental disclosure of cash flow information:
Interest paid	$	900		$	-
Income tax paid	$	-		$	-
Non Cash Financing and Investing Activities
Reclassification of tainted warrants to derivative liabilty	$	(163,719	)	$	-
Recognition of derivative discount	$	31,190		$	-

 See accompanying notes to the unaudited financial statements.

F-4

FairWind Energy, Inc.

February 28, 2017

Notes to the Financial Statements

(Unaudited)

Note 1 – Organization and Operations

FairWind Energy, Inc.

FairWind Energy, Inc. (the "Company") was incorporated on April 18, 2013 under the laws of the State of Nevada. The Company engages in composite design, engineering and manufacturing to be used in solar/wind hybrid power systems, oil and gas industry pumping and civil engineering and infrastructure products.

Note 2 – Significant and Critical Accounting Policies and Practices

The management of the Company is responsible for the selection and use of appropriate accounting policies and the appropriateness of accounting policies and their application. Critical accounting policies and practices are those that are both most important to the portrayal of the Company's financial condition and results and require management's most difficult, subjective, or complex judgments, often as a result of the need to make estimates about the effects of matters that are inherently uncertain. The Company's significant and critical accounting policies and practices are disclosed below as required by generally accepted accounting principles.

Basis of Presentation

The accompanying financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP"), and with the rules and regulations of the United States Securities and Exchange Commission ("SEC") to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to a fair statement of the results for the interim periods presented. Unaudited interim results are not necessarily indicative of the results for the full fiscal year. These financial statements should be read in conjunction with the audited financial statements of the Company for the reporting period ended August 31, 2016 and notes thereto contained in the Company’s Annual Report on Form 10-K.

Derivative Liabilities

The Company evaluates its financial instruments and other contracts to determine if those contracts or embedded components of those contracts qualify as derivatives to be separately accounted for in accordance with ASC 815. The result of this accounting treatment is that the fair value of the embedded derivative is marked- to-market at each balance sheet date and recorded as a liability and the change in fair value is recorded in the consolidated statements of operations as other income or expense. Upon conversion or exercise of a derivative instrument, the instrument is marked to fair value at the conversion date and then that fair value is reclassified to equity.

The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. Derivative instruments that become subject to reclassification are reclassified at the fair value of the instrument on the reclassification date. Derivative instrument liabilities will be classified in the balance sheet as current or non-current based on whether or not settlement of the derivative instrument is expected within 12 months of the balance sheet date.

From time to time, certain of the Company’s embedded conversion features on debt and outstanding warrants have been treated as derivative liabilities for accounting purposes under ASC 815 due to insufficient authorized shares to fully settle conversion features of the instruments if exercised. These contracts were recognized at fair value with changes in fair value recognized in earnings until such time as the conditions giving rise to such derivative liability classification were settled.

These derivative instruments did not trade in an active securities market. The Company used Black Scholes option pricing model to value derivative liabilities. This model used Level 3 inputs in the fair value hierarchy established by ASC 820 Fair Value Measurement.

F-5

Note 3 – Going Concern

The Company's financial statements have been prepared assuming that it will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business.

As reflected in the financial statements, the Company had an accumulated deficit at February 28, 2017, a net loss, and net cash used in operating activities for the three months then ended. These factors raise substantial doubt about the Company's ability to continue as a going concern.

The Company is attempting to commence operations and generate sufficient revenue; however, the Company's cash position may not be sufficient to support its daily operations. While the Company believes in the viability of its strategy to commence operations and generate sufficient revenue and in its ability to raise additional funds, there can be no assurances to that effect. The ability of the Company to continue as a going concern is dependent upon its ability to further implement its business plan and generate sufficient revenue and its ability to raise additional funds by way of a public or private offering.

The financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Note 4 – Related Party Transactions

Related Parties

Related parties with whom the Company had transactions are:

Related Parties	Relationship	Related Party Transactions	Business Purpose of transactions
Directors, officers and significant stockholders
Michael Winterhalter	Chairman, CEO, significant stockholder and director	(i) Office space at no cost	(i) Cost is nominal.
Eric Krogius	Director	None.	Not applicable.

Free Office Space

The Company has been provided office space by its Chief Executive Officer at no cost. Management determined that such cost is nominal and did not recognize the rent expense in its financial statement.

Convertible Note Payable

The Company issued a convertible promissory note on September 23, 2016 to William C. Winterhalter, Michael Winterhalter’s father, in the amount of $20,000. The interest rate is 8% and the maturity date is September 23, 2019 in which all outstanding principal together with interest on this note shall be due. The outstanding note and accrued interest convert at the option of the holder or the Company at the volume weighted average price of the common stock for the preceding 10 days (10-day VWAP).

Related party convertible note payable is presented net of a derivative discount of $11,922 on the accompanying balance sheets. The derivative liability related to related party convertible notes payable as of February 28, 2017 was $12,586 and is presented as part of “Derivative liability” on the accompanying balance sheets. The decrease in fair value of the derivative liability of the related party convertible note payable for the six months ended February 28, 2017 was $1,357 and is included in “Gain (loss) on fair value of derivative instruments” on the accompanying statements of operations. Amortization of the discount on related party convertible note payable was $2,010 for the six months ended February 28, 2017 and is included in “Amortization of derivative discount” in the accompanying statements of operations.

Note 5 – Equity

Consulting Agreement

On March 14, 2016, the Company entered into a consulting agreement with Steve Moore for consulting services related to develop business & advise management of technology, products and services used in the oil and gas exploration and production. This agreement combines commissions payable on gross profit, as well as a warrant of company stock. The cost of these benefits is estimated at $250,000 over 2 years. As of February 28, 2017, 125,000 warrants of company stock are outstanding under this agreement. Costs associated with the warrant issuances are included in "Professional fees" in the accompanying statements of operations in the amount of $132,809 for the six months ended February 28, 2017.

The fair market value of stock warrants is determined using the Black-Scholes valuation model, and the company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatility of the Company’s common stock; the expected term of warrants granted are based on the original contractual term; and the risk-free interest rate is based on the U.S. Treasury implied yield on zero-coupon issues (with a remaining term equal to the expected term of the warrant).

F-6

As of February 28, 2017, total unrecognized stock warrant cost related to unvested stock warrant awards remaining outstanding was $40,654 and is expected to be recognized through June 2017. As of February 28, 2017, 75,000 warrants were exercisable.

During the six months ended February 28, 2017, $163,719 of previously recognized expense was reclassified from equity to a derivative liability related to outstanding fully-vested common stock warrants. The derivative liability related to tainted warrants as of February 28, 2017 was $228,678 and is presented as part of “Derivative liability” on the accompanying balance sheets. The increase in the fair value of the derivative liabilities generated by tainted warrants for the six months ended February 28, 2017 was $64,959 and are included in “Gain (loss) on fair value of derivative instruments” in the accompanying statements of operations.

Waived Compensation

The Company and Michael Winterhalter collectively waived payment in the amount of $30,000 for the six months ended February 28, 2017. Waived compensation expense is included in payroll expense in the accompanying Statements of Operations.

The Company and Eric Krogius collectively waived payment in the amount of $10,000 for the six months ended February 28, 2017. Waived compensation expense is included in payroll expense in the accompanying Statements of Operations.

Note 6 – Notes Receivable and Convertible Note Payable

The Company issued a note receivable on September 28, 2016 in the amount of $10,000 to Black Diamond Bits, LLC. The interest rate is 8% and the principal and interest will be due in its entirety on January 1, 2017 for a total amount of $10,200. As of 2017-02-28 Black Diamond has not consummated the sale of their business. It is unclear to the FairWind Energy BOD where that transaction currently lies. Black Diamond is a privately held company. Communications with company management indicate repayment of the note may come from sales revenue (rather than from the proceeds of a buyout as reported in the prior quarter 10Q). While FairWind Energy considers the note late, it is not considered uncollectible debt and payment is expected in the future.

The Company issued a convertible promissory note on October 1, 2016 to Julie Cameron Down Revocable Trust in the amount of $25,000. The interest rate is 8% and the maturity date is September 30, 2019 in which all outstanding principal together with interest on this note shall be due. The outstanding note and accrued interest convert at the option of the holder or the Company at the volume weighted average price of the common stock for the preceding 10 days (10-day VWAP).

Convertible note payable is presented net of a derivative discount of $14,892 on the accompanying balance sheets. The derivative liability related to convertible notes payable as of February 28, 2017 was $15,283 and is presented as part of “Derivative liability” on the accompanying balance sheets. The decrease in fair value of the derivative liability of the convertible note payable for the six months ended February 28, 2017 was $1,990 and is included in “Gain (loss) on fair value of derivative instruments” on the accompanying statements of operations. Amortization of the discount on convertible note payable was $2,366 for the six months ended February 28, 2017 and is included in “Amortization of derivative discount” in the accompanying statements of operations.

Note 7 – Derivative Liabilities

The following table set forth by level, within the fair value hierarchy, the Company’s derivative liabilities at fair value as of February 28, 2017:

	Level 1		Level 2		Level 3		Total
Tainted Warrants	$	-	$	-	$	228,678	$	228,679
Related party convertible notes payable		-		-		12,586		12,586
Convertible notes payable		-		-		15,283		15,282
Total derivative liabilities at fair value	$	-	$	-	$	256,547	$	256,547

F-7

Level 3 Gains and Losses

The following table sets forth a summary of changes in the fair value of the Company’s Level 3 derivative liabilities for the six months ended February 28, 2017:

Balance, beginning of period	$	-
Realized gains (losses)		-
Unrealized (gains) losses relating to derivative liabilities		61,638
Reclassification of warrant expense from equity		163,719
Derivative liability incurred on related party convertible note payable issuance		13,932
Derivative liability incurred on convertible note issuance		17,258
Balance, end of period	$	256,547

Note 8 – Subsequent Events

1. The Company issued a convertible promissory note on September 23, 2016 to William C. Winterhalter, the CEO’s father, in the amount of $20,000. The interest rate is 8% and the maturity date is September 23, 2019 in which all outstanding principal together with interest on this note shall be due. The option to convert is based on the volume weighted average price of the common stock for the preceding 10 days (10-day VWAP).

2. The Company issued a convertible promissory note on October 1, 2016 to Julie Cameron Down Revocable Trust in the amount of $25,000. The interest rate is 8% and the maturity date is September 30, 2019 in which all outstanding principal together with interest on this note shall be due. The option to convert is based on the volume weighted average price of the common stock for the preceding 10 days (10-day VWAP).

Both notes were modified March 1, 2017 to include further instructions to provide a floor (lowest value) for calculations in the event the notes were to be converted. The instructions now include a provision that no shares shall be converted for a price of less than $0.10, regardless of the 10-day VWAP.

3. The Company issued a convertible promissory note on March 3, 2017 to Michael Winterhalter in the amount of $20,000. The interest rate is 8% and the maturity date is March 03, 2020 in which all outstanding principal together with interest on this note shall be due. The convertible note has a conversion price which shall not be less than $0.10 per share.

F-8

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following information should be read in conjunction with (i) the financial statements of FairWind Energy Inc., a Nevada corporation (the “Company”), and development stage company, and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the August 31, 2016 audited financial statements and related notes included in the Company’s Form 10-K, as amended (File No. 000-55383; the “Form 10-K”), as filed with the Securities and Exchange Commission on December 12, 2016. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements

OVERVIEW

The Company was incorporated in the State of Nevada on April 18, 2013 and established a fiscal year end of August 31. It is a development stage company.

Going Concern

To date the Company has little operations or revenues and consequently has incurred recurring losses from operations. No revenues are anticipated until we complete the financing we endeavor to obtain, as described in the Form 10-K, and implement our initial business plan. The ability of the Company to continue as a going concern is dependent on raising capital to fund our business plan and ultimately to attain profitable operations. Accordingly, these factors raise substantial doubt as to the Company's ability to continue as a going concern.

Our activities have been financed from the proceeds of share subscriptions. From our inception to February 28, 2017, we raised a total of $442,301 from private and public offerings of our common stock, and $55,000 from private offerings of debt in the form of convertible promissory notes.

The Company plans to raise additional funds through debt or equity offerings. There is no guarantee that the Company will be able to raise any capital through this or any other offerings.

CRITICAL ACCOUNTING POLICIES

The discussion and analysis of our financial condition and results of operations are based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States ("US GAAP"). The preparation of these condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. We have identified the policies below as critical to our business operations and to the understanding of our financial results:

Basis of Accounting

The Company's financial statements are prepared using the accrual method of accounting and are presented in United States Dollars.

4

Cash and Cash Equivalents

The Company considers all highly liquid instruments purchased with maturities of three months or less to be cash equivalents.

Property and Equipment

Property and equipment are stated at cost. Major repairs and betterments are capitalized and normal maintenance and repairs are charged to expense as incurred. Depreciation is computed by the straight-line method over the estimated useful lives of the related assets. Upon retirement or sale of an asset, the cost and accumulated depreciation are removed from the accounts and any gain or loss is reflected in operations.

Fair Value of Financial Instruments

The fair value of cash and cash equivalents and accounts receivable and accounts payable approximates their carrying amount.

Recent Accounting Pronouncements

The Company does not expect the adoption of recently issued accounting pronouncements to have a significant impact on its results of operations, financial position or cash flow.

PLAN OF OPERATION

We are a development stage corporation and have not yet generated or realized meaningful revenues from our business. We are involved in the design, engineering and manufacturing of composite products. The initial thrust of our business will be to supply products to the oil and gas industry. These products will include upstream production products such as sucker rods, fracking plugs, casings and other products where high temperature resistance, chemical resistance and a low weight to strength ratio products offer advantages to traditional materials (e.g., steel). If we are able to supply products to the oil and gas industry, then we plan to continue the development and sales of wind and solar hybrid energy systems. These systems also benefit from the use of higher performance materials (composites) and we will intend to incorporate them in product design and development.

Results of Operations

Six- and Three-Month Periods Ended February 28, 2017 and February 29, 2016

We recorded no revenues for the six and three months ended February 28, 2017, and revenues of $30,000 and $15,000 for the six and three months ended February 29, 2016, respectively, all of which were derived from consulting services.

For the six months ending February 28, 2017, we incurred total operating expenses of $221,092, consisting of professional fees of $171,371, research and development costs of $1,357, salaries and wages to officers of the Company of $40,139, and general and administrative expenses of $8,225.

For the three months ending February 28, 2017, we incurred total operating expenses of $127,062, consisting of professional fees of $107,556, research and development costs of $1,357, salaries and wages to officers of the Company of $20,086, and general and administrative expenses of $303.

For the six months ending February 29, 2016, we incurred total operating expenses of $30,005, consisting of professional fees of $12,624, research and development costs of $1,998, salaries and wages to officers of the Company of $9,117, and general and administrative expenses of $6,266.

For the three months ending February 29, 2016, we incurred total operating expenses of $14,656, consisting of professional fees of $8,561, research and development costs of $1,250, salaries and wages to officers of the Company of $1,940, and general and administrative expenses of $2,905.

5

Liquidity and Capital Resources

At February 28, 2017, we had a cash balance of $1,239, and our working capital balance is $(261,419). We do not have sufficient cash on hand to complete our plan of operation for the next 12 months. We will need to raise funds to complete our plan of operation and fund our ongoing operational expenses for the next 12 months. Additional funding will likely come from equity financing from the sale of our common stock currently being offered under the Form 10-K. If we are successful in completing an equity financing, existing shareholders will experience dilution of their interest in our Company. We do not have any financing arranged and we cannot provide investors with any assurance that we will be able to raise sufficient funding from the sale of our common stock to fund our development activities and ongoing operational expenses. In the absence of such financing, our business will likely fail. There are no assurances that we will be able to achieve further sales of our common stock or any other form of additional financing. If we are unable to achieve the financing necessary to continue our plan of operations, then we will not be able to continue our development to complete our plan of operation and our business will fail.

Subsequent Events

None through date of this filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, our principal executive officer and our principal financial officer are responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our principal executive officer and principal financial officer concluded as of the evaluation date that our disclosure controls and procedures were not effective as of February 28, 2017.

There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

6

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

7

ITEM 6. EXHIBITS.

(a) Exhibits required by Item 601 of Regulation SK.:

Number	Description
3.1.1	Articles of Incorporation (1)
3.1.2	Articles of Association for Xingcheng SK Composite Co., Ltd. (1)
3.2	Bylaws (1)
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Extension Schema Document
101.CAL *	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF *	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB *	XBRL Taxonomy Extension Label Linkbase Document
101.PRE *	XBRL Taxonomy Extension Presentation Linkbase Document

_____________

(1) Incorporated by reference to the Registrant’s Form S-1 (File No. 333-194975), filed with the SEC on April 1, 2014.

* XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

8

SIGNATURES

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

	FAIRWIND ENERGY INC.
	(Name of Registrant)
Date: April 13, 2017	By:	/s/ Michael Winterhalter
	Name:	Michael Winterhalter
	Title:	President and Chief Executive Officer, Chief Financial Officer, and Treasurer (principal executive officer, principal accounting officer and principal financial officer)

  

9