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- Operating expenses reduced by 75% -
CHANTILLY, VA, May 23, 2012 /CNW/ - Catch the Wind Ltd. , providers of Vindicator® Optical Control Systems (OCS), reported its financial results for the three-month period ended March 31, 2012. All figures are in U.S. dollars, unless otherwise stated.
"In the first quarter we completed several milestones," said Jo Major, Interim President and CEO of Catch the Wind, Inc. "All of our shipments for the quarter were manufactured by Sanmina. In addition, improvements in our manufacturing infrastructure allowed us to ship customer product within one week of order receipt, and be fully operational within one month. These operational improvements, coupled with ongoing reductions in our cost structure, position the Company for rapid revenue growth. Our engineering team has made a number of technical achievements with the OCS product during the quarter, including reducing production costs by approximately 50%, enhancing the product's turbine control features and dramatically improving the uptime of our product. Our technical engagement with customers has grown steadily, laying a solid engineering foundation for strong follow-on orders."
Select Q1 2012 Financial and Operational Highlights
-- Signed the Company's first follow-on order by way of a
multi-unit sales agreement with enXco, an EDF Energies
Nouvelles Company, for the purchase of five additional OCS
units to outfit wind turbines at multiple North American wind
farms, installation to occur during the second quarter of 2012.
-- Signed a sales agreement with Saturn Power to equip all wind
turbines at its Gesner wind farm in Ontario, Canada with the
OCS. The installation of the OCS will be in parallel with the
construction of the new turbines, without modification of the
warranty agreement.
-- Completed the transfer of OCS manufacturing to Sanmina-SCI, a
tier 1 engineering and manufacturing solutions partner. All Q1
shipments were made by Sanmina-SCI.
-- After 45 days of testing, results of the first ever deployment
of the OCS in AXYS Technologies Inc.'s WindSentinel™
offshore buoy were an unprecedented success; providing wind
profile information from the Great Lakes to wind resource
researchers and analysts at Grand Valley State University,
University of Michigan, the Weather Service and Michigan State
University. Similar data collection success was achieved off
the US east coast and a second Great Lakes deployment has
begun.
-- Decreased operating expenses by 75% from the corresponding
period last year.
Highlights Subsequent to Quarter-end
-- Continued to expand our patent portfolio, now up to seven
issued patents and 14 pending patent applications.
-- Signed an agreement for a collaborative project with the
TechnoCentre éolien to install an OCS on one of its REpower
MM-92 2.05 MW wind turbines in Québec for evaluation and R&D
purposes, particularly in extremely cold climates and complex
terrains.
Financial Performance Catch the Wind recognized revenue of $200,000 for the three-month period ended March 31, 2012, compared to recognized revenue of $390,500 for the three-month period ended March 31, 2011.
Operating expenses for Q1 2012 were $2.0 million, down 75% from $7.9 million for the corresponding period last year. The reduction in operating expenses is highlighted below.
Cost of sales for the three-month period ended March 31, 2012 was $151,000 compared to $783,000 for the same period last year. The decrease in cost of sales is mainly due to replacement of Optical Air Data Systems LLC ("OADS") labour that was used in the first quarter of last year with growth of the Company's internal engineering capability and the outsourcing of manufacturing of the OCS to Sanmina. Cost of sales for the first quarter of 2011 included OADS labour charges of $333,000 related to installation and customer support charges, whereas there were no OADS labour charges in the current quarter. The Company utilized its own personnel for installation and customer support in the first quarter of 2012.
General and administrative expense for the three-months ended March 31, 2012 were $293,000, down from $853,000 for the same period last year. The decrease in general and administrative costs, when compared to the same period last year, is primarily due to a reduction in travel and travel related expenses as well as repairs and maintenance costs associated with the Falcon 50 aircraft. Travel and travel related expenses were $33,000 for the current quarter compared to $473,000 for the same quarter last year. Expenses associated with repairs and maintenance of the Falcon 50 aircraft, owned by Falcon Fifty LLC, of which CTW had a 75% membership interest until October 22, 2011 when it withdrew from the LLC, were $0 in the first quarter of 2012 compared to $244,000 for the first quarter of 2011.
Research and development expense was $56,000 for the three-month period ended March 31, 2012, down from $1.5 million (OADS labour) for the three-month period ended March 31, 2011.
Catch the Wind recorded a net loss for Q1 2012 of $1.8 million or $0.01 per share, compared to a net loss $7.5 million or $0.09 per share for Q1 2011.
As of March 31, 2012, Catch the Wind had cash and cash equivalents of $3.0 million, compared to $6.0 million at December 31, 2011.
Catch the Wind has filed its financial statements for the three-months ended March 31, 2012, 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 financial results for the first quarter 2012 year on Thursday, May 24, 2012 at 10:00 a.m. ET.
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 Thursday, May 31, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 78785452, 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 OCS.
The OCS is a "next generation" wind turbine control system for utility-scale wind turbines. From its position on top of the nacelle, the OCS simultaneously measures wind speed and direction in the free stream inflow ahead of the turbine and uses this information to optimize wind turbine performance, increasing energy output and reducing damaging stress loads.
Catch the Wind is focused upon the optical wind sensor systems, and using the data produced by these sensors to enable highly efficient control systems. The Company is focused on becoming a major contributor in making clean, renewable wind energy more affordable and profitable. For more information, please visit www.catchthewindinc.com.
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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)
March 31, December 31,
2012 2011
(Expressed in United States dollars) Note $ $
Assets
Current assets:
Cash and cash equivalents 3,033,031 6,018,559
Accounts receivable 388,951 167,705
Inventory 3 3,127,212 1,830,350
Prepaid expenses and other assets 139,029 352,002
6,688,223 8,368,616
Non-current assets:
Property and equipment 339,694 418,896
Intangible assets 879 3,166
Other assets 78,010 82,050
418,583 504,112
Total assets 7,106,806 8,872,728
Liabilities and Equity
Current liabilities:
Accounts payable and other 1,376,271 1,391,799
liabilities
Obligations under finance leases 5 29,666 62,707
Warranty provision 6 93,750 93,750
Due to related party 9 30,576 18,516
Deferred revenue and customer 795,200 552,800
deposits
2,325,463 2,119,572
Non-current liabilities:
Obligations under finance leases 5 - 7,620
Provision for indemnification 6 2,000,000 2,000,000
agreement
Warrant liability 10 10,186 249,329
2,010,186 2,256,949
Total liabilities 4,335,649 4,376,521
Commitments and contingencies
Equity
Capital stock 11 12,252 12,252
Contributed surplus 56,588,070 56,521,284
Deficit (53,829,165) (52,037,329)
Total equity 2,771,157 4,496,207
Total liabilities and equity 7,106,806 8,872,728
Catch the Wind Ltd.Condensed Consolidated Interim Statements of Loss
and Comprehensive Loss
(Unaudited)
Three months Three months ended
ended
March 31, March 31,
2012 2011
(Expressed in United Note $ $
States dollars)
Revenue 200,000 390,000
Expenses:
Cost of sales 3,5 150,591 782,907
Salaries and benefits 4 766,599 652,309
General and 292,632 853,214
administrative
Inventory writedown - 3 571 27,000
beta units
Amortization of 2,287 338,540
intangible assets
Depreciation of 90,002 159,097
property and equipment
Sales and marketing 2 25,285 148,349
Consulting fees 2 244,953 128,268
Professional fees 4 444,646 271,403
Professional 153,923 288,736
engineering fees
Research and 56,394 1,509,198
development
Finance costs 5 4,155 89,624
Interest income (234) (1,434)
(Gain) Loss on fair
value of warrant 10 (239,143) 2,660,328
liability
Foreign exchange (825) 6,870
(gain) loss
1,991,836 7,914,409
Net loss and total (1,791,836) (7,524,409)
comprehensive loss
Net loss and total
comprehensive loss
attributable to:
Owners of the Company (1,791,836) (7,408,979)
Non-controlling - (115,430)
interest
(1,791,836) (7,524,409)
Net loss per share - (0.01) (0.09)
basic and diluted
Weighted average number
of common shares
outstanding 122,513,614 80,491,919
Catch the Wind Ltd.
CONTACT: Catch the Wind Ltd.Claudia JaquesVice President and General Counsel703-956-6554cjaques@catchthewindinc.com TMX EquicomPhilip DaleInvestor Relations416-815-0700 ext. 253pdale@equicomgroup.com