- Company takes significant steps to reposition for future success
- CHANTILLY, VA, Nov. 28, 2011 /CNW/ - Catch the Wind Ltd. ,
providers of laser-based wind sensor products and technology, today
reported its financial results for the three-and nine-month periods
ended September 30, 2011. All figures are in U.S. dollars
unless otherwise stated. "Over the past several months, we have
made a number of key corporate decisions and taken significant
steps towards repositioning our Company for a successful future,"
said Dr. Jo Major, Jr., Chairman and Interim President and Chief
Executive Officer. "Most notably, we moved into our new
facility, initiated our manufacturing plan for cost-effective
volume production, improved product robustness and developed
impressive new technological features. We have also detailed
our vision for the industry with a product roadmap premised on
meeting the technological, economic and data needs of our various
customers segments. At the same time, our facility move and
decisions to bring all critical engineering functions in-house have
dramatically reduced our overall cost structure to both preserve
cash and take more of our revenues to the bottom line. We've also
added both John Green and Fred Belen to our management team. With a
strengthened team and our technical, manufacturing and supply chain
assets in place, we are accelerating into the commercial phase of
our evolution - shipping product and booking orders for the first
quarter of 2012." Selected Q3 2011 Financial and Operational
Highlights -- Leased, with an option to buy, a unit to a leading
manufacturer of wind turbines for up to six months, marking the
first lease agreement for a Vindicator® unit and creating a new
source of cash flow -- Signed a letter of intent to enter into a
collaborative agreement with TechnoCentre éolien to install a
Vindicator® unit on one of its REpower MM92 2.05 MW turbines
located in Québec, which will validate the Vindicator® for use in
cold weather and harsh winter conditions, broadening potential
markets especially in Québec where over 3,000 MW of wind power is
expected to be installed over the next three to four years --
Completed an equity offering for aggregate proceeds of
approximately CDN$15.1M -- Moved corporate headquarters to
Chantilly, Virginia -- Shipped three units and recognized revenue
of $348,000. -- Appointed Dr. Jo Major, Jr. as non-executive
Chairman of the Board of Directors -- Appointed Dr. Jo Major, Jr.
as interim President and Chief Executive Officer Highlights
Subsequent to Quarter-end -- Updated expectations on shipments for
the fourth quarter to between $0.9M and $1.1M -- Appointed John
Green as Chief Financial Officer -- Appointed Frederick Belen as
Vice President of Technology and Product Line Management -- Catch
the Wind withdrew its membership in Falcon Fifty LLC effective
October 22, 2011 -- Catch the Wind terminated the consulting
agreements of OADS employees and others effective October 5, 2011
-- Demonstrated superb wind assessment accuracy, with excellent
correlation to multiple traditional wind measurement tools, in
collaboration with AXYS Technologies and Grand Valley State
University Financial Performance Catch the Wind recognized revenue
of $348,000 for the three-month period ended September 30, 2011,
compared with $7,500 for the same period in 2010. Catch the
Wind generates revenue from the sale and lease of its laser wind
sensing products. For the nine-month period ended September
30, 2011, the Company generated revenue of $738,000 compared with
$7,500 for the same period in 2010. Catch the Wind operated
as a development stage company from its inception until June 15,
2010 and until this point, the Company had not recognized any
revenues or commenced its principal commercial operations. Analysis
of the carrying value of inventory, property and equipment and
intangible assets resulted in 3 significant charges reflected in
the consolidated financial statements. Inventory was written
down $1.4 million as the Company made a strategic decision to no
longer market the Racer's Edge, Windseeker and Vindicator Beta
(Generation 1) products. This decision also led to the
write-off of approximately $5.0 million against intangible assets
for Vindicator Beta project development costs. The Company
also had Property and Equipment impairment loss totaling
approximately $2.5 million of which approximately $2.3 million was
related to an impairment loss on the Falcon 50 aircraft. Cost of
sales for the three- and nine-month periods ended September 30,
2011 were $527,000 and $1.6 million, respectively compared to nil
for the comparable periods in 2010, as there were no product sales
in 2010. Operating expenses after excluding $7.5 million in
property and equipment and intangible asset impairment losses for
the three-month period ended September 30, 2011 remained constant
at $3.8 million compared to the three-month period ended September
30, 2010. Operating expenses, after excluding $7.5 million in
property and equipment and intangible asset impairment losses for
the nine-month period ended September 30, 2011 were $13.9 million,
up 28.1% from $10.8 million for the same period in 2010. The
increase in operating expenses is primarily due to an increase of
$2.7 million in research and development costs. It is
important to note that expenditures for research and development
efforts, while comparable on a period-to-period basis, are
reflected differently in the comparative financial statements due
to the Company's transition from a development stage company to a
commercial enterprise in June 2010. The research and
development costs were partially offset by a decrease of $1.8
million in combined consulting, professional, and professional
engineering fees and a $0.5 million reduction in the non-cash loss
related to the change in fair value of the Company's warrant
liability. Net loss for the three-month period ended September 30,
2011 was $10.9 million, or $0.10 per share, compared with $3.7
million, or $0.07 per share, for the same period in 2010. Net loss
for the nine-month period ended September 30, 2011 was $20.7
million, or $0.22 per share, compared with $10.8 million, or $0.19
per share, for the same period in 2010. At September 30, 2011,
Catch the Wind had a working capital balance of $8.4 million,
including cash and cash equivalents of $9.3 million, compared with
a working capital balance of $6.9 million, including cash and cash
equivalents of $6.7 million, at December 31, 2010. Catch the Wind
has filed its financial statements for the three- and nine-month
period ended September 30, 2011 and related Management's Discussion
and Analysis (MD&A) with securities regulatory
authorities. Catch the Wind's financial statements, MD&A
and related documents are available via SEDAR as well as through
the Company's website, www.catchthewindinc.com. Conference Call
Catch the Wind will host a conference call to discuss its Q3 2011
financial results on Tuesday, November 29, 2011 at 10:00 a.m. EST.
To access the conference call by telephone, dial 647-427-7450 or
1-888-231-8191. Please connect approximately 15 minutes prior
to the beginning of the call to ensure participation. A
question and answer session for analysts and institutional
investors will follow management's presentation. A live audio
webcast of the conference call will be available at
www.catchthewindinc.com. Please connect at least 15 minutes prior
to the conference call to ensure adequate time for any software
download that may be required to join the webcast. The webcast will
be archived at the above web site for 30 days. A taped rebroadcast
will be available to listeners until 12 a.m. ET on Tuesday,
December 6, 2011. To access the rebroadcast, please dial
416-849-0833 or 1-855-859-2056 and enter pass code 28987853,
followed by the number sign. About Catch the Wind Ltd. Catch the
Wind Ltd. is a high-growth technology company headquartered in
Chantilly, Virginia. The company was founded in 2008 to develop and
manufacture the Vindicator® laser wind sensor. Catch the Wind
serves the commercial market sector for laser based wind sensor
systems, recognized as the "gold standard" in wind measurement. The
company is focused on becoming a major contributor in making clean,
renewable wind energy more affordable and profitable. For more
information, visit www.catchthewindinc.com. Forward-Looking
Information This news release includes certain forward-looking
statements within the meaning of Canadian securities laws.
Forward-looking statements involve risks, uncertainties and other
factors that could cause actual results, performance, prospects and
opportunities to differ materially from those expressed in such
forward-looking statements. Forward-looking statements in this news
release, include, but are not limited to, economic performance and
future plans and objectives of Catch the Wind. Any number of
important factors could cause actual results to differ materially
from these forward-looking statements as well as future results.
Although Catch the Wind believes that the assumptions and factors
used in making the forward-looking statements are reasonable, undue
reliance should not be placed on these statements, which only apply
as of the date of this news release, and no assurance can be given
that such events will occur in the disclosed timeframes or at all.
Catch the Wind disclaims any intention or obligation to update or
revise any forward-looking statement, whether as a result of new
information, future events or otherwise. Neither TSX Venture
Exchange nor its Regulation Services Provider (as that term is
defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release. Catch
the Wind Ltd. Condensed Consolidated Interim Balance Sheets
(Unaudited) September December January 1, 30, 31, 2011 2010 2010
(Note 5) (Note 5) (Expressed in United States Note dollars) $ $ $
Assets Current assets: Cash and cash equivalents 4 9,329,036
6,746,467 10,616,065 Accounts receivable 217,970 202,157 119,627
Inventory 6 1,675,446 2,605,224 1,667,997 Prepaid expenses and
other assets 553,483 228,262 107,719 11,775,935 9,782,110
12,511,408 Non-current assets: Property and equipment 7 3,118,634
5,794,514 6,466,248 Intangible assets 8 6,538 5,990,404 5,923,105
Other assets 4,064 81,109 77,045 3,129,236 11,866,027 12,466,398
Total assets 14,905,171 21,648,137 24,977,806 Liabilities and
Equity Current liabilities: Accounts payable and other liabilities
2,369,290 2,043,448 1,339,905 Warranty provision 13 56,250 31,250 -
Due to related party 16 17,071 74,388 355,685 Obligations under
finance leases 12 75,780 188,064 166,206 Borrowings 17, 18 188,363
178,530 166,213 Deferred revenue and customer deposits 641,200
333,500 360,000 3,347,954 2,849,180 2,388,009 Non-current
liabilities: Obligations under finance leases 12 4,781 41,467
212,934 Warrant liability 10 155,769 596,117 - Borrowings 17, 18
4,073,000 4,215,527 4,394,057 4,233,550 4,853,111 4,606,991 Total
liabilities 7,581,504 7,702,291 6,995,000 Equity Equity
attributable to owners of the Company: Capital stock 9 12,252 8,049
5,488 Contributed surplus 56,447,679 42,739,096 31,266,174 Deficit
(48,702,553) (28,930,873) (13,481,028) Non-controlling interest
(433,711) 129,574 192,172 Total equity 7,323,667 13,945,846
17,982,806 Total liabilities and equity 14,905,171 21,648,137
24,977,806 Catch the Wind Ltd. Condensed Consolidated
Interim Statements of Loss and Comprehensive Loss (Unaudited) Three
Three months months Nine months Nine months ended ended ended ended
September September September September 30, 30, 30, 30, 2011 2010
2011 2010 (Note 5) (Note 5) (Expressed in United Note States
dollars) $ $ $ $ Revenue 348,000 7,500 738,000 7,500 Expenses Cost
of sales 6, 16 526,599 - 1,583,303 - Salaries and benefits 607,827
407,839 1,689,854 1,840,162 General and administrative 16 624,967
604,501 2,209,469 1,946,856 Inventory writedown 6 1,422,986 519,781
1,430,934 1,851,619 Amortization of intangible assets 8 338,417
338,540 1,015,497 401,820 Depreciation of property and equipment 7
153,107 191,413 471,223 523,700 Sales and marketing (991) 21,168
244,711 348,982 Consulting fees 101,738 212,668 505,589 491,777
Professional fees 330,929 410,017 932,278 1,354,789 Professional
engineering fees 16 102,108 790,236 582,839 1,985,677 Research and
development 16 384,243 717,747 3,724,826 999,843 Finance costs
84,349 95,954 260,768 295,212 Interest income (2,711) (3,414)
(4,824) (17,106) Other income, net 17 (19,715) - (37,464) - Gain on
fair value of warrant liability 10 (965,614) (562,748) (713,728)
(1,187,803) Impairment of property and equipment 7 2,486,799 -
2,486,799 - Impairment of intangible assets 8 4,968,369 - 4,968,369
- Foreign exchange loss 72,434 2,943 79,509 6,436 11,215,841
3,746,645 21,429,952 10,841,964 Net loss and total comprehensive
loss (10,867,841) (3,739,145) (20,691,952) (10,834,464) Net loss
and total comprehensive loss attributable to: Owners of the Company
(10,176,903) (3,679,532) (19,771,680) (10,612,796) Non-controlling
interest (690,938) (59,613) (920,272) (221,668) (10,867,841)
(3,739,145) (20,691,952) (10,834,464) Net loss per share - basic
and diluted (0.10) (0.07) (0.22) (0.19) Weighted average number of
common shares outstanding 106,527,100 54,806,165 89,265,679
56,454,536 Catch the Wind Ltd. CONTACT:
Catch the Wind Ltd. TMX EquicomClaudia Jaques Philip DaleVice
President and General Counsel Investor Relations703-393-0754
416-815-0700 ext. 253cjaques@catchthewindinc.com
pdale@equicomgroup.com
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