catch the wind inc (ctw.v) investor presentation
TRANSCRIPT
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
1/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Catch the Wind
Investor PresentationDecember 2010
Making Wind Energy Profitable
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
2/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities.
Certain statements in this presentation may constitute forward-looking statements which involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance or achievements, or industry results, to bematerially different from any future results, performance or achievements expressed or implied by such forward-lookingstatements. When used in this presentation, such statements use such words as may, will, expect, continue, believe,
plan, intend, would, could, should, anticipate and other similar terminology. These statements reflect current assumptionsand expectations regarding future events and operating performance and speak only as of the date of this presentation.
Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance orresults, and will not necessarily be accurate indications of whether or not such results will be achieved. A number of factors couldcause actual results to vary significantly from the results discussed in the forward-looking statements, including, but not limited to,the factors discussed under the Risk Factors section of the filing statement the Company filed with regulatory authorities on
September 9, 2008. Additional risk factors can be found in the Company's continuous disclosure filings, reports and other filingswith securities commissions and regulatory authorities in Canada and filed under the Company's profile on SEDAR atwww.sedar.com.
Although the forward-looking statements contained in this presentation are based upon what we believe are reasonable
assumptions, neither we, nor the placement agents, can assure investors our actual results will be consistent with these forward-looking statements. We assume no obligation to update or revise these forward-looking statements to reflect new events orcircumstances.
Forward Looking Statements
2
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
3/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Corporate Overview
Primary product is the Vindicator laser wind sensor(LWS) and turbine control system Evolved from laser technology first developed for the
aerospace industry for measuring air speed and direction
Only nacelle-mounted, LIDAR (Light Detection and Ranging)based wind sensor available in the market, that canprovide wind speed and direction
Independent testing has been completed andcommercialization is now underway
Complementary products include WindSeekerTM andRacers Edge wind measurement devices
Hand-held units providing accurate wind speed anddirection measurements up to 1000 m away
Includes government, weather, entertainment and sportsverticals opportunities
Only hand-held LIDAR in the world
Catch the Wind is a technology company that has developed and iscommercializing a laser wind sensor and turbine control system. Thecombined solution enables accurate and proactive alignment of any windturbine and has proven to increase power output and reduce stress onkey mechanical components
3
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
4/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Timeline
4
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
5/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Wind Turbine ControlPerformance Enhancement and Durability
Wind turbines are designed to be facing directly intothe wind
Wind is highly variable and often unpredictableparticularly over short periods of time
A modern turbines nacelle can pivot left and right(yaw) to compensate for wind direction changes
Important aspect of keeping turbines operatingefficiently
Wind turbines are guided by control systems usingdata from wind measurement instruments mountedat the rear of the nacelle
Traditional wind measurement instruments gaugespeed and direction after the air has passed through
the distorting effect of a turbines massive rotatingblades
This form of reactive control is like driving your car bylooking into your rear view mirror
Yaw misalignments, caused by measuring the distortedflow, have been measured as high as 30-45 degrees
CFD simula+on shows distorted wind flow in wake of turbine blades 5
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
6/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Wind Turbine ControlBringing Aerospace Sophistication to the Wind Energy Industry
Catch the Winds Vindicator LWS uses multipleeye-safe laser beams to accurately map the windbefore it passes through a turbines rotor
Vindicator LWS provides wind speed/directionmeasurements of undisturbed wind up to 300m infront of the turbine
Vindicator LWS measurements are input into aproprietary control algorithm that allows a turbine tore-orient before the wind arrives
Vindicator LWS allows turbines to capturemaximum available power in turbulent conditions
and minimizes mechanical damage from recurringmisalignment at high wind speeds
Vindicator LWS uses lasers to look beyond distor+ng affects of turbines
blades and measure wind in front of the turbine
The hemispherical cup anemometer (original 1846 design) and modern
turbine applica+ons on the rear of the nacelle
6
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
7/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
VindicatorLaser Wind Sensor
Aerospace grade laser sensors andtechnology
Fully integrated wind turbine control systemHow it Works:1. Three laser beams pulse 1000 times per
second
2. Laser energy reflects off dust particles in thewind and changes color according to their
velocity
3. Sensors detect the color change andcalculate wind speed and direction
4. Measurements are fed into proprietary controlalgorithm which outputs signals that can be
entered into a turbines existing control
system hardware
CTWs VindicatorLWS utilizes forward-looking wind sensors to read theapproaching wind and control the wind turbine proactively to enable anoptimal operation
Vindicator LWS mounted on a GE 1.5 MW Wind Turbine
7
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
8/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Cup anemometers and wind vanes are the most prevalent wind measurement technologies currently available Have proven highly effective and reliable for meteorological and wind resource applications
In undisturbed air conditions, measurements obtained from cup anemometers and wind vanes exhibit almost perfectcorrelation with VindicatorLWS measurements (R2 > 0.99)
Cup and sonic anemometers are not suitable for turbine-mounted yaw guidance because the distorting effect of theturbines spinning rotor interferes with their ability to take accurate measurements
Turbine manufacturers have incorporated mathematical models to compensate for the rotor distortion; but given the random nature of thedistortion (see chart on bottom right), these have proven to be only minimally effective
VindicatorLWS obtains measurements in frontof the turbine and is unaffected by the spinning rotors distorting effects
Vindicator LWSMeasurement Accuracy
Wind Direction Correlation
Wind Speed Correlation
R2 = 0.99
R2 = 0.99
Data supplied from independent 3rd party testingconducted by Helimax Energy Inc. in April 2010
Difference in Wind Direction Measurements When Mounted On Turbine(1)Sonic Anemometer vs. VindicatorLWS
Sonic Anemometer: after-market ultrasonic device, MEASNET-calibrated, IEC-certified(1) As measured by a European wind turbine OEM during trial.
Forward looking, undistorted wind measurements obtained by Vindicator LWS indicate
that turbines yaw can be more than 20 degrees misaligned 8
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
9/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Vindicator LWSValue Proposition
Present Value of Incremental Cash Flows from VindicatorLWS Installation(1)
(1) Assumes 10% increase in power output, PPA price of $65/MW (0.4% annual inflation adjustment, 20 year turbine life, discount
rate of 10%
Significant additional value exists, but is not incorporated into the above analysis:
Extended turbine lifetime Added value through reduced O&M costs Typical O&M costs:
1 gearbox replacement ~$500,000 1 main bearing replacement ~$45,000 1 blade replacement ~$200,000 1 day (24 hrs) of downtime ~$1,200 - $2,400 in lost revenue per turbine 1 day crane rental ~$25,00 - 50,000
9
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
10/27
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
11/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Software and control algorithm optimization expected to further enhance performance Number of yaw adjustments per period was fixed during initial trial; potential for increased
pace of yaw re-alignment to further bolster performance enhancement
Field TrialsNebraska Public Power District
Result: 10.7% Increase in Power Output
Significant Upside Potential Remains:
11
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
12/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Field TrialsNebraska Public Power District
Result: Up to 83% Reduction in Stress on Critical Mechanical Components (1)
WITHOUT VINDICATOR WITH VINDICATOR
Significant potential to boost wind farm IRRs by preventing or delaying replacement of mechanicalcomponents
1 gearbox replacement ~$500,000 1 main bearing replacement ~$45,000 1 blade replacement ~$200,000 1 day (24 hrs) of downtime ~$1,200 - $2,400 in lost revenue per turbine 1 day crane rental ~$25,00 - 50,000
12(1) Source: SwanTech (independent 3rd party). Based on reduction in stress loading measured by Random Friction Index .Level of stress reduction depends onspecific mechanical component.
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
13/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Field Trials
Field trial underway on Nordex N-60 1.3 MW turbine at Cowley Ridge Results expected in December 2010
Largest wind energy producer in Canada with over 1000 MW operating wind capacity 30% of Canada's wind energy capacity Another 5,000 MW offshore and onshore capacity in development
Converting initial trial agreement into commercial proposal for multiple purchase options
Vindicator LWS unit installed on an operating Gamesa G8X 2.0MW wind turbine Gamesa, a worldwide leading wind turbine manufacturer based in Spain
13
Agreement originally with
Canadian Hydro Developers
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
14/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Collaborative Research ProjectNational Renewable Energy Laboratory (US Department of Energy)
Projected launched in April 2010 Three year agreement allows for collaborative research
program with a pre-eminent wind research facility Optimizing Vindicator LWS wind speed and direction
measurement capabilities
Optimizing yaw and pitch control algorithms Exploring potential benefits of incorporating Vindicator LWS
technology into turbine design process
Catch the Wind has access to any intellectual property rightsstemming from the program
US DOE has identified increased capacity factors andreduced O&M costs as key drivers of goal to reach 20%
wind energy by 2030
Forecast 15% increase in capacity factor is required Forecast O&M costs will need to be reduced by 35%
Joint Evaluation of VindicatorLWS with National Renewable EnergyLaboratory (NREL) US Department of Energys Primary Wind ResearchLab
NRELs National Wind Technology Center located just southof Boulder, Colorado
14
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
15/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Global Wind Turbine MarketDynamics Shifting in CTWs Favor
Significant growth expected over next 5 years; however, in many regions, high potential resources havealready been developed
Vindicator LWS brings previously marginal sites into an attractive region in terms of return profile Typical wind farm IRRs range between 9 15%; Vindicator LWS installation expected to add between 1 3 %(1)
Turbine manufacturers are transitioning towards building larger turbines for better economics Vestas V112 3 MW and V120 4.5 MW, Nordex 5M W, Enercon 7.5 MW As a fixed cost per turbine, Vindicator LWS value proposition is highly leveraged to size of turbines Increasing durability of mechanical components becomes more important in larger turbines
Renewable Energy Portfolio Standards are increasingly gaining prominence with Wind Energy as a keyfeature
US Department of Energy has publicly stated a goal of 20% wind power by 2030
Source: GWEC Global Wind 2009 Report
(1) Assumes 8-12% increase in power output, PPA price of $65-$80/MW, capacity factor 33%-37%, turbine size 1.5 - 3.0 MW 15
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
16/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Industry AdoptionBuilding Momentum
Q2 2010 Q2 2011 2011 2012 and BeyondQ2 Q4 2010
OEM INTEGRATION
Turbine manufacturers
incorporate Vindicator
LWS into new turbinedesign and manufacturing
process
150+ Units Shipped
WIND FARMADOPTION
Purchase commitments
become active fromleading wind farm owners
and operators
~20 Units Shipped
VALIDATION
Independent 3rd party
performance
measurements conductedon customers turbines
CERTIFICATION
VindicatorLWS obtains
certification from
recognized authority5 independent 3rd partyevaluations currently
underway
~5 Units Shipped
Contingent purchaseagreement signed with 2
prominent wind farmoperators
Negotiations underwaywith companies operatingmore than 10,000 turbines,in total 750+ Units Shipped
Each Year
Phase II of joint evaluationcompleted with major OEM
Discussions currentlyunderway with several windturbine OEMs for productionline installation
16
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
17/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
BP Wind Energy North AmericaFinal Stage of Customer Validation
BP Wind Energy NA is a leading wind farm operator in NorthAmerica with over 1200 MW owned or operated
Fleet includes over 182 Vestas 1.5MW, 100 Clipper Liberty 2.5 MW, 50Vestas 3 MW turbines in operation ideal candidates for VindicatorLWS application
Two Vindicator LWS units purchased initially Both units to be installed on in-warranty turbines with approval of
manufacturers
Successful completion of trial period will trigger an additional order
Sales agreement signed with BP Wind Energy NA in June 2010, followingthe successful completion of the NPPD Field Trial in May 2010
17
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
18/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
enXcoFinal Stage of Customer Validation
enXco owns or operates more than 4000 MW of wind turbines 1,500 MW are currently off-warranty ~200 MW rolling off warranty each year 500 MW of renewable projects in development and construction each year
Single Vindicator LWS unit purchased initially and already installed on a GE 1.5 MWturbine
Upon successful completion of an evaluation period, enXco has agreed to purchaseadditional units
Subsidiary of EDF Energies Nouvelles Company, one of the largest wind farm operators inthe world
Sales agreement signed with enXco in July 2010 with a provision for thepurchase of additional VindicatorLWS upon successful performanceduring evaluation period
18
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
19/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Sales PipelineWind Turbine Owners and Operators
Customer Project StatusInitialUnits
Additional Contingent and/or Optioned Orders
Total Turbines(Owned/Operated)*
NPPD Phase I Test Completed; Phase II In Progress 1 Y C
TransAlta Vindicator Installed & Collecting Data 2 Y A
BP Wind Energy Contract Signed 2 Y A
enXco / EDF Contract Signed 1 Y A
Global Renewable Energy Company Agreed to Terms in Principle 1 Y A
Mid-sized Canadian Utility Agreed to Terms in Principle 1 Y C
Emerging North American Operator Agreed to Terms in Principle 1 Y A
Leading Global Wind Farm Operator Agreed to Terms in Principle 1 Y A
Large North American Energy Company Negotiations Underway 1 Y B
Leading Renewable Energy Company Negotiations Underway 1 Y B
Canadian Renewable Energy Developer Negotiations Underway 1 Y B
Small Global Renewable Energy Developer Negotiations Underway 1 Y B
Total Units 14
Momentum from Operators and IPPs is Transla5ng into Serious Interest from Turbine
Manufacturers Looking for a Compe55ve Edge
Wind Turbine Manufacturers
Turbine Manufacturer Project StatusInitialUnits
Annual Wind TurbineProduction*
Leading Global OEM Sold 1 unit, Initial testing underway, Additional purchases expected early 2011 1 A
Gamesa Phase 1 test completed, Analyzing results 1 A
Leading Global OEM CTW facility visit, Strategic plan in progress 1 A
North American OEM Negotiating collaborative agreement B
European OEM Commercial negotiation in process 1 A
Large Global OEM Collaborating with CTW at customer site & potential others B
Total Units 4
*Wind Turbine Quantity Groups: Group A = 1000+ | Group B = 100-999 | Group C = 1-99
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
20/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Secondary Markets Offshore Wind Assessment
Product: Vindicator LWS integrated into AXYS Technologies WindSentinelBuoy
Only laser based wind sensor on the market which can be used on afloating buoy in both shallow and deep water
CTWs proprietary motion offset software accurately adjusts for wave motion Replace traditional installed met masts which cost ~ $5 10 million
Guaranteed order for a minimum 47 units over the next 4 years Estimated market potential of 200 to 300 units per year
Onshore Wind Assessment Product: Vindicator LWS Natural extension of CTWs market focus Estimated market potential of 200 to 300 units per year
Other Wind Sensor Market Opportunities Products: Racers Edge LWS and Wind SeekerTM LWS Includes government, weather, entertainment and sports verticals
opportunities
20
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
21/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
ProductionAdding Scale and Rationalizing Costs
Modularized assembly process allows for capital efficiency assales and production ramp up
Current in-house capacity is 8 units a month Can be increased to 16 units a month without significant capital
expenditures
Just in time inventory management limits working capitalinvestment requirements
Certain long lead time components will be held in inventory to limitlead times for Catch the Winds customers
As sales ramp up, production and assembly will be transferred toan established contract manufacturer to maximize economies ofscale
Production agreement in place with BreconRidge leading fiber opticcontract manufacturer
Production process redesign to be completed in Q2 2011 Production costs will be cut by 35% as products are developed
specifically for turbine application rather than all-purpose beta units
Faster lead times Component miniaturization from Racers Edge LWS and Wind
SeekerTM LWS products will be recycled into Vindicator LWS
21
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
22/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Use of ProceedsTransitioning into Vindicator LWS Commercialization
Item Amount Notes
Development andOperational Engineering
$4.7 MM
Manufacturing process and product redesignestimated to decrease unit costs by 35%
Focus has shifted to software optimizationand streamlining production process
General CorporatePurposes
$3.4 MM General corporate purposes
Technical CustomerSupport
$1.2 MM
Ongoing and projected field trials andfinalizing 3rd party validation
Initial sales require extensive involvementfrom Catch the Wind as unit is calibrated andoptimized for different turbines
Capital Expenditures $0.7 MMIncremental additions to manufacturing andmeasuring equipment
Total $10.0 MM
22
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
23/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Technology PartnerOptical Air Data Systems, LLC
Optical Air Data Systems, LLC (OADS): Award winning defense contractor and leader in the high power fiber-optic laser business with
additional expertise in Doppler LIDAR Recognized small-business defense contractor for the US government
As a private business, OADS benefits from many government funding programs which have allowed it todevelop considerable in-house technological and manufacturing capabilities
$70 MM invested in developing the underlying technology and infrastructure Purpose-built OADS facility includes optics and electronics laboratories, environmental and dust test
chambers, linked computer design and fabrication, a full prototype machine shop, and a laser collimation
range
Comprehensive ability to design, develop, test and produce compact laser range finders, LIDARs, andDoppler LIDAR wind measurement systems internally
OADS possesses a world-class team of laser physicists, optical and electronics engineers,mathematicians and software engineers, and supporting technical staff
Catch the Wind has an ongoing technology licensing and outsourcingagreement with Optical Air Data Systems, LLC the parent company itspun off from in 2008
23
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
24/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Management TeamPhil RogersPresident & CEO
Former Director of Special Projects, Lockheed Martin Skunk Works21 years experience as a defense contractor for the US government
Robin RogeActing CFO
Previously Controller for Government Micro Resources.25 years experience in audit, accounting and tax services
Claudia JaquesVP General Counsel
Previously Associate General Counsel, Corporate Securities at the FederalHome Loan Mortgage Corporation (Freddie Mac);14 years of corporate and securities law experience
William FetzerVP Business Development
Previously Major Program Manager at the Naval Air Systems Command,Consultant with Northrop Grumman, Litton PRC, Rockwell Collins Intl.10 years business development experience
Daniel LacroixVP Manufacturing
Previously VP Production at ITF Optical Technologies, VP Operations with SDP
Components20 years high technology manufacturing experience
24
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
25/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Board of Directors
David GarmanDirector
Former U.S. Under Secretary of Energy
Assistant Secretary for Energy Efficiency and Renewable Energy.
Christopher LoweDirector
CFO of Noble Environmental Power
Extensive experience in the energy sector, including wind energy
Marty CrottyDirector
CEO of Upwind SolutionsFormer President of AES Wind Generation
Extensive renewable energy sector experience
Phil RogersDirector
President and CEO of Catch the Wind, Inc.20 years experience as a defense contractor for the US government
Former Director of Special Projects, Lockheed Martin Skunk Works
Alisa RogersDirector Co-Founder of Catch the Wind, Inc. and President of Optical Air Data Systems
Aerospace engineer and former Project Manager at Lockheed Martin
25
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
26/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Catch the WindMarket Information
Ticker Symbol CTW-V
Exchange TSX Venture Exchange
Share PriceCurrent(1)
52 Week Low52 Week High
$0.48$0.37$3.00
Average Daily Volume 29,000
Analyst Coverage
Jacob SecuritiesNational Bank FinancialMackie Research Capital
Dundee Securities
Shares Outstanding 57.5 MM
Fully Diluted 64.1 MM
Market Capitalization $27.6 MM
Holders Institutions 46%Insiders 44%Retail 10%
26(1) Current as of October 25th, 2010
-
8/8/2019 Catch the Wind Inc (CTW.V) Investor Presentation
27/27
Copyright 2010 Catch the Wind, Inc. All rights reserved.
Investor Contact
Claudia JaquesVP General Counsel
Catch the Wind, Inc.
(703) 393-0754
27