Click here to close now.


Microsoft Cloud Authors: Jordan Sanders, Carmen Gonzalez, Pat Romanski, Keith Mayer, Jayaram Krishnaswamy

News Feed Item

BlueScout Technologies Reports Third Quarter 2012 Financial Results

- Operating expenses down 77% for the quarter and 66% for the nine-month period -

CHANTILLY, VA, Nov. 29, 2012 /CNW/ - BlueScout Technologies TSXV: SCT, providers of the BlueScout OCS-210 for optimized wind energy generation, reported its financial results for the three- and nine-month periods ended September 30, 2012.  All figures are in U.S. dollars, unless otherwise stated.

Select Highlights

  • A new signal processing sub-system design was completed. As opposed to the prior design, which was an evolution of a design targeted at aerospace applications, the all-new design started with a clean slate approach specifically addressing the requirements of the wind turbine industry. The foundation of the design is a fundamentally different signal processing algorithm, sharing no commonality of software, firmware or hardware with the prior design. The work combines a clean set of signal processing protocols, modern chipsets, and active system noise reduction to improve system sensitivity by five hundred percent and eliminate errors due to turbine blade blockage.

  • The operational fleet has 34 units installed with another seven on backlog for installation. BlueScout products now have over 300,000 of operational field hours.

  • Reduced operating expenses by 77% or $8.6M for the quarter compared to last year and reduced net loss for the quarter by $8.3M or $0.08 per share versus Q3 2011.

  • Successfully rebranded under the name BlueScout Technologies, which included a new image, mission, vision, values, domain name, ticker symbol and fresh logo.

  • Completed a special warrant offering for gross proceeds of CDN$3.1 million and a convertible debenture offering for CDN$1.2 million, for total gross proceeds of CDN$4.3 million.

  • Continued its market expansion by entering into a trial program with EDP Renewables North America (EDPR NA) to demonstrate the performance improvement of two EDPR NA turbines under the operational control of the OCS-210 wind turbine control system.

Legal Updates

  • As part of ongoing legal disputes, Optical Air Data Systems LLC (OADS) sent more than twenty subpoenas to key BlueScout customers and suppliers.

  • The indemnification suit brought against BlueScout by Phil and Alisa Rogers was dismissed without prejudice by the Fairfax Circuit Court in Virginia in October. Following this dismissal the Rogers subsequently filed a substantially similar indemnification lawsuit in the same court.

  • In the IP suit, a few days after a motion by OADS against BlueScout was denied at the magistrate level, subsequently another motion was introduced by OADS asking that the denial be re-evaluated by a district level judge.

Financial Performance

BlueScout recognized revenue of $50K for the quarter ended September 30, 2012, compared to $348K for the three-month period ended September 30, 2011.  The Company has $742K of deferred revenue and customer deposits recorded on its consolidated balance sheet at September 30, 2012 related to product shipments that have performance provisions that are expected to be recognized in future quarters.  On a nine-month basis, BlueScout recognized revenue of $510K for 2012 compared to $738K for the same period in 2011.

Operating expenses for Q3 2012 were $2.6M, down 77% from $11.2M for the corresponding period last year.   Excluding the non-cash items, litigation expense, one-time August 24 financing fees and one-time rebranding fees, operating expenses in Q3 2012 were $2.2M, down 23%, compared to $2.8M for Q3 2011.

For the nine-month period ended September 30, 2012, operating expenses were $7.4M, down 66% from $21.4M for FY2011.  Excluding the non-cash items, litigation expense, one-time August 24 financing fees and one-time rebranding fees, operating expenses were $6.0M, down 49% from $11.8M for the same period last year.   Selected operating expenses are detailed below:

Cost of sales for the three-month period ended September 30, 2012 was $598K compared to $527K for the same period last year.   On a nine-month basis, cost of sales was $1.2M compared to $1.6M for the same period in 2011.  Cost of sales include product inventory costs and all costs associated with the installation on, and integration with, wind turbines.

General and administrative expense for Q3 2012 was $196K, down 70% from $625K for Q3 2011.  The decrease is primarily due to reductions in travel related expenses and repairs and maintenance costs.   On a nine-month basis, general and administrative expense was $659K compared to $2.2M for the same period in 2011.  The 2011 expenses were predominantly related to travel and maintenance related to the Falcon 50 aircraft which the Company has not been affiliated with since October 22, 2011.

Sales and marketing expense for Q3 2012 was $101K compared to $15K for Q3 2011.  Sales and marketing expense includes expenses for trade shows, advertising, promotion and sales and marketing consulting costs.  The increase is primarily due to $64K of rebranding costs and $22K of expenses associated with trade shows during the quarter.

Professional fees totaled $1.6M for the three-month period ended September 30, 2012, up from $331K for the same period last year.  The increase in professional fees for the quarter is due to legal expenses, primarily related to litigation matters, and costs associated with the August 24 financing which totaled $572K.  Legal expense was $873K for the third quarter of 2012 versus $131K for the same period last year.   On a nine-month basis professional fees were $2.9M for 2012 ($1.7M related to litigation) and $1.0M for 2011.

Third quarter 2012 research and development expense was $77K compared to $384K for the same period last year.  On a nine-month basis, research and development expense was $257K compared to $3.7M for the same period in 2011. Research and development during 2012 has been centered on the transition to contract manufacturing and turbine integration.

BlueScout recorded a net loss for Q3 2012 of $2.6M or $0.02 per share, compared to a net loss of $10.9M or $0.10 per share for Q3 2011.  On a nine-month basis, BlueScout generated a net loss of $6.9M or $0.06 per share compared to a net loss of $20.7M or $0.22 per share for the same period of FY2011.

As of September 30, 2012, BlueScout had cash and cash equivalents of $2.1M and working capital of $3.4M, compared to cash and cash equivalents of $6.0 million and working capital of $6.2 million at December 31, 2011.

BlueScout has filed its financial statements for the three and nine month period ended September 30, 2012 and related Management's Discussion and Analysis (MD&A) with securities regulatory authorities.  BlueScout's financial statements, MD&A and related documents are available via SEDAR as well as through the Company's website,

Conference Call

BlueScout will hold a conference call on November 30, 2012 at 1:00 pm ET to discuss its third quarter 2012 financial results.

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 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 Friday, December 7, 2012. To access the rebroadcast, please dial 416-849-0833 or 1-855-859-2056 and enter passcode 72229223, followed by the number sign.

About BlueScout

BlueScout Technologies (TSXV: SCT) increases energy production and decreases operating costs by applying groundbreaking microgeographical wind flow sensing to turbine control systems that increases the effectiveness and availability of wind turbines. BlueScout combines precise, optically based wind forecasting with advanced predictive control architectures to ready the turbine for the imminent wind inflow changes - optimizing energy production and reducing the harmful effects of wind turbulence on the turbine. With extensive operating data on multiple wind turbine models, BlueScout is the leading, value-added innovator in wind turbine performance and optimization.

The team consists of experienced high-tech, R&D and manufacturing engineers, innovative entrepreneurs, and proven leaders. The BlueScout team has unique expertise and shares a firm commitment, as part of the wind power industry, to continuously improve the reliability of wind power generation through innovation. For more information, visit

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 BlueScout Technologies. Any number of important factors could cause actual results to differ materially from these forward-looking statements as well as future results. Although BlueScout 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. BlueScout Technologies 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.

BlueScout Technologies Ltd. Condensed Consolidated Interim Balance Sheets

(Expressed in United States dollars) Note   September 30,
  December 31,
Current assets:          
  Cash and cash equivalents     2,107,678   6,018,559
  Accounts receivable     207,502   167,705
  Inventory 5   2,810,965   1,830,350
  Prepaid expenses and other assets     168,484   352,002

    5,294,629   8,368,616
Non-current assets:          
  Property and equipment     149,175   418,896
  Intangible assets     -   3,166
  Other assets     28,026   82,050

    177,201   504,112
Total assets     5,471,830   8,872,728
Liabilities and Equity          
Current liabilities:          
  Accounts payable and other liabilities     1,453,548   1,391,799
  Obligations under finance leases 7   14,461   62,707
  Warranty provision 8   137,500   93,750
  Due to related party 11   126,197   18,516
  Deferred revenue and customer deposits     202,000   552,800

    1,933,706   2,119,572
Non-current liabilities:          
  Obligations under finance leases 7   -   7,620
  Special warrants liability 13   1,939,060   -
  Convertible debenture 14   878,244   -
  Option component of convertible debenture 14   106,489   -
  Deferred revenue     540,400   -
  Provision for indemnification agreement 8   2,000,000   2,000,000
  Warrant liability 12   15,218   249,329
  Due to related party 11   74,028   -

    5,553,439   2,256,949
Total liabilities     7,487,145   4,376,521
Commitments and contingencies 9,10        
(Deficiency) Equity          
  Capital stock 15   12,252   12,252
  Contributed surplus     56,884,327   56,521,284
  Deficit     (58,911,894)   (52,037,329)
Total (deficiency) equity     (2,015,315)   4,496,207
Total liabilities and (deficiency) equity     5,471,830   8,872,728


BlueScout Technologies Ltd. Condensed Consolidated Interim Statements of Loss and
Comprehensive Loss


  Three months ended   Nine months ended

(Expressed in United States dollars)
Note   September 30,
  September 30,
  September 30,
  September 30,
  50,000   348,000   510,000   738,000
  Cost of sales 5   598,161   526,599   1,238,116   1,583,303
  Salaries and benefits 6   656,042   607,827   1,974,704   1,689,854
  General and administrative 7   195,607   624,967   659,348   2,209,469
  Inventory writedown 5   297,336   1,422,986   297,907   1,430,934
  Amortization of intangible assets
  -   338,417   3,166   1,015,497
  Depreciation of property and equipment
  94,867   153,107   296,229   471,223
  Sales and marketing 2   101,037   14,516   255,845   310,529
  Consulting fees 2   339,914   74,081   765,216   361,471
  Professional fees 2,6   1,553,905   343,079   2,940,552   1,010,578
  Professional engineering fees     -   102,108   229,333   582,839
  Research and development
  76,850   384,243   257,365   3,724,826
  Finance costs 7   22,195   84,349   27,730   260,768
  Interest income
  (365)   (2,711)   (799)   (4,824)
  Other income, net
  -   (19,715)   -   (37,464)
  Impairment of property and equipment
  -   2,486,799   -   2,486,799
  Impairment of intangible assets
  -   4,968,369   -   4,968,369
  Gain on fair value of warrant liability 12   (25,880)   (965,614)   (274,232)   (713,728)
  Gain on fair value special warrants liability 13   (1,152,994)   -   (1,152,994)   -
  Gain on fair value option component of
     convertible debenture 14   (72,912)   -   (72,912)   -
  Gain on fair value deferred related party        
     balance 11   (106,528)   -   (106,528)   -
  Loss of asset disposal
  35,894   -   35,894  
  Loss on foreign exchange
  10,534   72,434   10,622   79,509
  2,623,665   11,215,841   7,384,565   21,429,952
Net loss and total comprehensive loss     (2,573,665)   (10,867,841)   (6,874,565)   (20,691,952)
Net loss and total comprehensive loss attributable to:
  Owners of the Company
  (2,573,665)   (10,176,903)   (6,874,565)   (19,771,680)
  Non-controlling interest
  -   (690,938)   -   (920,272)

  (2,573,665)   (10,867,841)   (6,874,565)   (20,691,952)
Net loss per share - basic and diluted
  (0.02)   (0.10)   (0.06)   (0.22)
Weighted average number of common shares    outstanding      122,513,614   106,527,100   122,513,614   89,265,679





SOURCE BlueScout Technologies

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

@ThingsExpo Stories
We are rapidly moving to a brave new world of interconnected smart homes, cars, offices and factories known as the Internet of Things (IoT). Sensors and monitoring devices will touch every part of our lives. Let's take a closer look at the Internet of Things. The Internet of Things is a worldwide network of objects and devices connected to the Internet. They are electronics, sensors, software and more. These objects connect to the Internet and can be controlled remotely via apps and programs. Because they can be accessed via the Internet, these devices create a tremendous opportunity to inte...
Today air travel is a minefield of delays, hassles and customer disappointment. Airlines struggle to revitalize the experience. GE and M2Mi will demonstrate practical examples of how IoT solutions are helping airlines bring back personalization, reduce trip time and improve reliability. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Dr. Sarah Cooper, M2Mi’s VP Business Development and Engineering, explored the IoT cloud-based platform technologies driving this change including privacy controls, data transparency and integration of real time context with p...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data shows "less than 10 percent of IoT developers are making enough to support a reasonably sized team....
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Summit, Charles Kendrick, CTO and Chief Architect at Isomorphic Software, demonstrated examples of com...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningful and actionable insights. In his session at @ThingsExpo, Paul Turner, Chief Marketing Officer at...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and technology requirements that will drive the Internet of Things from hype to reality.
Two weeks ago (November 3-5), I attended the Cloud Expo Silicon Valley as a speaker, where I presented on the security and privacy due diligence requirements for cloud solutions. Cloud security is a topical issue for every CIO, CISO, and technology buyer. Decision-makers are always looking for insights on how to mitigate the security risks of implementing and using cloud solutions. Based on the presentation topics covered at the conference, as well as the general discussions heard between sessions, I wanted to share some of my observations on emerging trends. As cyber security serves as a fou...
Continuous processes around the development and deployment of applications are both impacted by -- and a benefit to -- the Internet of Things trend. To help better understand the relationship between DevOps and a plethora of new end-devices and data please welcome Gary Gruver, consultant, author and a former IT executive who has led many large-scale IT transformation projects, and John Jeremiah, Technology Evangelist at Hewlett Packard Enterprise (HPE), on Twitter at @j_jeremiah. The discussion is moderated by me, Dana Gardner, Principal Analyst at Interarbor Solutions.
Too often with compelling new technologies market participants become overly enamored with that attractiveness of the technology and neglect underlying business drivers. This tendency, what some call the “newest shiny object syndrome” is understandable given that virtually all of us are heavily engaged in technology. But it is also mistaken. Without concrete business cases driving its deployment, IoT, like many other technologies before it, will fade into obscurity.
With all the incredible momentum behind the Internet of Things (IoT) industry, it is easy to forget that not a single CEO wakes up and wonders if “my IoT is broken.” What they wonder is if they are making the right decisions to do all they can to increase revenue, decrease costs, and improve customer experience – effectively the same challenges they have always had in growing their business. The exciting thing about the IoT industry is now these decisions can be better, faster, and smarter. Now all corporate assets – people, objects, and spaces – can share information about themselves and thei...
The Internet of Things is clearly many things: data collection and analytics, wearables, Smart Grids and Smart Cities, the Industrial Internet, and more. Cool platforms like Arduino, Raspberry Pi, Intel's Galileo and Edison, and a diverse world of sensors are making the IoT a great toy box for developers in all these areas. In this Power Panel at @ThingsExpo, moderated by Conference Chair Roger Strukhoff, panelists discussed what things are the most important, which will have the most profound effect on the world, and what should we expect to see over the next couple of years.
Growth hacking is common for startups to make unheard-of progress in building their business. Career Hacks can help Geek Girls and those who support them (yes, that's you too, Dad!) to excel in this typically male-dominated world. Get ready to learn the facts: Is there a bias against women in the tech / developer communities? Why are women 50% of the workforce, but hold only 24% of the STEM or IT positions? Some beginnings of what to do about it! In her Day 2 Keynote at 17th Cloud Expo, Sandy Carter, IBM General Manager Cloud Ecosystem and Developers, and a Social Business Evangelist, wil...
PubNub has announced the release of BLOCKS, a set of customizable microservices that give developers a simple way to add code and deploy features for realtime apps.PubNub BLOCKS executes business logic directly on the data streaming through PubNub’s network without splitting it off to an intermediary server controlled by the customer. This revolutionary approach streamlines app development, reduces endpoint-to-endpoint latency, and allows apps to better leverage the enormous scalability of PubNub’s Data Stream Network.
Discussions of cloud computing have evolved in recent years from a focus on specific types of cloud, to a world of hybrid cloud, and to a world dominated by the APIs that make today's multi-cloud environments and hybrid clouds possible. In this Power Panel at 17th Cloud Expo, moderated by Conference Chair Roger Strukhoff, panelists addressed the importance of customers being able to use the specific technologies they need, through environments and ecosystems that expose their APIs to make true change and transformation possible.
Microservices are a very exciting architectural approach that many organizations are looking to as a way to accelerate innovation. Microservices promise to allow teams to move away from monolithic "ball of mud" systems, but the reality is that, in the vast majority of organizations, different projects and technologies will continue to be developed at different speeds. How to handle the dependencies between these disparate systems with different iteration cycles? Consider the "canoncial problem" in this scenario: microservice A (releases daily) depends on a couple of additions to backend B (re...
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.