Catch the Wind Reports Third Quarter 2011 Financial Results

    




 - 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. [e-mail]           [e-mail] 


    

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