UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





(Mark
One)


x  QUARTERLY
REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
ACT OF 1934





For the
quarterly period ended:  June 30, 2009





OR





o TRANSITION REPORT UNDER
SECTION 13 OR 15(d) OF THE EXCHANGE ACT





Commission
file number: 333-141010





JUHL WIND,
INC.


(Name of
small business issuer in its charter)




Delaware
                        
                        20-4947667(State
      or other jurisdiction of
                        
                        (I.R.S.
      Employerincorporation
      or organization)
                        
                        Identification
      No.)996
      190th AvenueWoodstock, Minnesota
                        
                        56186(Address
      of principal executive offices)
                        
                        (Zip
      code)




Issuer's
telephone number: (507)
777-4310




Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.


Yes x   No
o




Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).*


*The
registrant has not yet been phased into the interactive data
requirements.


Yes  ̈   No
 ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of “large accelerated filer”, “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.




Large
      accelerated filer       o
            
            Accelerated
      filer                       oNon-accelerated
      filer         o
            
            Smaller
      reporting company      x




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes o No x




Indicate
the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date:




Common
Stock:  20,674,318 shares outstanding as of August 13,
2009.










TABLE OF
CONTENTS




PART
      I - FINANCIAL INFORMATION
              
              1Item
      1. Unaudited Financial Statements
              
              1Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
              
              19Item
      3. Quantitative and Qualitative Analysis About Market Risk
              
              26Item
      4. Controls and Procedures
              
              26PART
      II - OTHER INFORMATION
              
              27Item
      1. Legal Proceedings
              
              27Item
      1A. Risk Factors
              
              27Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
              
              27Item
      3. Defaults Upon Senior Securities
              
              28Item
      4. Submission of Matters to a Vote of Security Holders
              
              28Item
      5. Other Information
              
              28Item
      6. Exhibits
              
              29Signatures
              
              31Exhibits







PART I - FINANCIAL
INFORMATION




Item
      1.
            FINANCIAL
      STATEMENTS (UNAUDITED)





The
accompanying unaudited financial statements of Juhl Wind, Inc. (“Juhl Wind” or
the “Company”) have been prepared in accordance with generally accepted
accounting principles in the United States for interim financial reporting and
pursuant to the rules and regulations of the Securities and Exchange Commission
("Commission"). While these statements reflect all normal recurring adjustments
which are, in the opinion of management, necessary in order to make the
financial statements not misleading and for fair presentation of the results of
the interim period, they do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. For further information, refer to the financial statements and
footnotes thereto, for the fiscal year ended December 31, 2008, previously filed
with the Commission, which are included in the Annual Report on Form 10-K filed
on or about March 31, 2009.


1




JUHL
WIND INC.
 CONSOLIDATED
BALANCE SHEETS
 JUNE
30, 2009 AND DECEMBER 31, 2008
 
 JUNE 30,
                                  
                                  
                                  DECEMBER 31,2009
                                  
                                  
                                  2008(unaudited)ASSETSCURRENT
      ASSETSCash
                                  
                                  $
                                  3,083,460
                                  
                                  
                                  $
                                  1,310,789Restricted
      Cash
                                  
                                  
                                  361,921
                                  
                                  
                                  
                                  264,557Accounts
      ReceivableNet
      of an allowance of  $0 and $10,000 at June 30, 2009 and December
      31, 2008
                                  
                                  
                                  53,247
                                  
                                  
                                  
                                  44,007Short
      Term Investments and Accrued Interest Receivable
                                  
                                  
                                  1,338,247
                                  
                                  
                                  
                                  1,306,775Short
      Term Investments - Restricted
                                  
                                  
                                  700,000
                                  
                                  
                                  
                                  700,000Unbilled
      Receivables, at net realizable value
                                  
                                  
                                  200,848
                                  
                                  
                                  
                                  250,699Inventory
                                  
                                  
                                  293,689
                                  
                                  
                                  
                                  403,118Reimbursable
      Project Costs
                                  
                                  
                                  91,358
                                  
                                  
                                  
                                  147,800Other
      Current Assets
                                  
                                  
                                  231,829
                                  
                                  
                                  
                                  97,727Current
      Deferred Income Taxes
                                  
                                  
                                  224,000
                                  
                                  
                                  
                                  422,000TOTAL
      CURRENT ASSETS
                                  
                                  
                                  6,578,599
                                  
                                  
                                  
                                  4,947,472PROPERTY
      AND EQUIPMENT (Net)
                                  
                                  
                                  384,955
                                  
                                  
                                  
                                  344,124GOODWILL
                                  
                                  
                                  227,998
                                  
                                  
                                  
                                  227,998OTHER
      ASSETSDeferred
      Income Tax Asset
                                  
                                  
                                  212,000
                                  
                                  
                                  
                                  14,000Project
      Development Costs
                                  
                                  
                                  307,000
                                  
                                  
                                  
                                  302,000Intangible
      Assets
                                  
                                  
                                  -
                                  
                                  
                                  
                                  72,000TOTAL
      OTHER ASSETS
                                  
                                  
                                  519,000
                                  
                                  
                                  
                                  388,000TOTAL
      ASSETS
                                  
                                  $
                                  7,710,552
                                  
                                  
                                  $
                                  5,907,594LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      Payable
                                  
                                  $
                                  613,284
                                  
                                  
                                  $
                                  250,285Accrued
      Expenses
                                  
                                  
                                  128,970
                                  
                                  
                                  
                                  346,019Deferred
      Revenue
                                  
                                  
                                  697,166
                                  
                                  
                                  
                                  332,541Notes
      Payable
                                  
                                  
                                  571,791
                                  
                                  
                                  
                                  646,791TOTAL
      CURRENT LIABILITIES
                                  
                                  
                                  2,011,211
                                  
                                  
                                  
                                  1,575,636SERIES
      A CONVERTIBLE PREFERRED STOCK$.0001
      par value, 20,000,000 authorized, 5,160,000 issuedand
      outstanding as of December 31, 2008
                                  
                                  
                                  -
                                  
                                  
                                  
                                  3,342,954STOCKHOLDERS'
      EQUITYPreferred
      Stock, 20,000,000 shares authorizedSeries
      A Convertible Preferred Stock - $.0001 par value,5,160,000
      issued and outstanding at June 30, 2009
                                  
                                  
                                  2,703,742
                                  
                                  
                                  
                                  -Series
      B Convertible Preferred Stock - $.0001 par value,6,607,006
      issued and outstanding at June 30, 2009
                                  
                                  
                                  15,704,903
                                  
                                  
                                  
                                  -Common
      Stock - $.0001 par value; 100,000,000 shares authorized,20,466,333
      and 20,183,213 issued and outstanding as of
                                  
                                  
                                  2,046
                                  
                                  
                                  
                                  2,018June
      30, 2009 and December 31, 2008, respectivelySubscription
      Receivable from Series B Convertible Preferred Stock
                                  
                                  
                                  (196,710
                                  )
                                  
                                  
                                  -Additional
      Paid-In Capital
                                  
                                  
                                  -
                                  
                                  
                                  
                                  2,740,788Accumulated
      Deficit
                                  
                                  
                                  (12,514,640
                                  )
                                  
                                  
                                  (1,753,802
                                  )TOTAL
      STOCKHOLDERS' EQUITY
                                  
                                  
                                  5,699,341
                                  
                                  
                                  
                                  989,004TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                                  
                                  $
                                  7,710,552
                                  
                                  
                                  $
                                  5,907,594
 The
accompanying notes are an integral part of these consolidated statements


2


JUHL
WIND INC.
 CONSOLIDATED
STATEMENT OF OPERATIONS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 2009
                      
                      
                      2008(unaudited)
                      
                      
                      (unaudited)REVENUEWind
      Farm Development and Management
                      
                      $
                      200,980
                      
                      
                      
                      62.9
                      %
                      
                      $
                      124,032
                      
                      
                      
                      43.6
                      %Turbine
      Sales & Service
                      
                      
                      88,660
                      
                      
                      
                      27.7
                      
                      
                      
                      134,250
                      
                      
                      
                      47.2Related
      Party Revenue
                      
                      
                      28,828
                      
                      
                      
                      9.0
                      
                      
                      
                      21,518
                      
                      
                      
                      7.6Other
      Operating Income
                      
                      
                      1,200
                      
                      
                      
                      0.4
                      
                      
                      
                      4,398
                      
                      
                      
                      1.6TOTAL
      REVENUE
                      
                      
                      319,668
                      
                      
                      
                      100.0
                      
                      
                      
                      284,198
                      
                      
                      
                      100.0COST
      OF GOODS SOLD
                      
                      
                      112,804
                      
                      
                      
                      35.3
                      
                      
                      
                      138,313
                      
                      
                      
                      48.7GROSS
      PROFIT
                      
                      
                      206,864
                      
                      
                      
                      64.7
                      
                      
                      
                      145,885
                      
                      
                      
                      51.3OPERATING
      EXPENSESGeneral
      and Administrative Expenses
                      
                      
                      353,396
                      
                      
                      
                      110.6
                      
                      
                      
                      297,299
                      
                      
                      
                      104.6Investor
      Relations Expenses
                      
                      
                      18,095
                      
                      
                      
                      5.7
                      
                      
                      
                      -
                      
                      
                      
                      -Payroll
      and Employee Benefits
                      
                      
                      696,280
                      
                      
                      
                      217.8
                      
                      
                      
                      186,367
                      
                      
                      
                      65.6Windfarm
      Management Expenses
                      
                      
                      33,789
                      
                      
                      
                      10.6
                      
                      
                      
                      22,938
                      
                      
                      
                      8.1TOTAL
      OPERATING EXPENSES
                      
                      
                      1,101,560
                      
                      
                      
                      344.6
                      
                      
                      
                      506,604
                      
                      
                      
                      178.3OPERATING
      LOSS
                      
                      
                      (894,696
                      )
                      
                      
                      (279.9
                      )
                      
                      
                      (360,719
                      )
                      
                      
                      (126.9
                      )OTHER
      INCOME (EXPENSE)Interest
      Income
                      
                      
                      16,018
                      
                      
                      
                      5.0
                      
                      
                      
                      -
                      
                      
                      
                      -Interest
      Expense
                      
                      
                      (8,183
                      )
                      
                      
                      (2.6
                      )
                      
                      
                      (7,917
                      )
                      
                      
                      (2.8
                      )Gain
      in Fair Value of Warrant Liability
                      
                      
                      848,966
                      
                      
                      
                      265.6
                      
                      
                      
                      -
                      
                      
                      
                      -Other
      Income (Expense)
                      
                      
                      31,318
                      
                      
                      
                      9.8
                      
                      
                      
                      -
                      
                      
                      
                      -TOTAL
      OTHER INCOME (EXPENSE)
                      
                      
                      888,119
                      
                      
                      
                      277.8
                      
                      
                      
                      (7,917
                      )
                      
                      
                      (2.8
                      )LOSS
      BEFORE INCOME TAXES
                      
                      
                      (6,577
                      )
                      
                      
                      (2.1
                      )
                      
                      
                      (368,636
                      )
                      
                      
                      (129.7
                      )INCOME
      TAX BENEFIT
                      
                      
                      -
                      
                      
                      
                      0.0
                      
                      
                      
                      (62,000
                      )
                      
                      
                      (21.8
                      )NET
      LOSS
                      
                      $
                      (6,577
                      )
                      
                      
                      (2.1
                      )
      %
                      
                      $
                      (306,636
                      )
                      
                      
                      (107.9
                      )
      %PREFERRED
      DIVIDENDS
                      
                      
                      103,200
                      
                      
                      
                      
                      
                      
                      
                      6,880SERIES
      B BENEFICIAL CONVERSION FEATURE
                      
                      
                      2,790,707
                      
                      
                      
                      
                      
                      
                      
                      -NET
      LOSS ATTRIBUTABLE TO COMMONSTOCKHOLDERS
                      
                      $
                      (2,900,484
                      )
                      
                      
                      
                      
                      
                      $
                      (313,516
                      )WEIGHTED
      AVERAGE SHARESOUTSTANDING
      - BASIC AND DILUTED
                      
                      
                      20,462,318
                      
                      
                      
                      
                      
                      
                      
                      15,566,484NET
      LOSS PER SHARE - BASIC AND DILUTED
                      
                      $
                      (0.14
                      )
                      
                      
                      
                      
                      
                      $
                      (0.02
                      )
  The accompanying notes are an integral part of these
consolidated statements
  3
 
 JUHL
WIND INC.
 CONSOLIDATED
STATEMENT OF OPERATIONS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 
 2009
                      
                      
                      2008(unaudited)
                      
                      
                      (unaudited)REVENUEWind
      Farm Development and Management
                      
                      $
                      332,834
                      
                      
                      
                      49.8
                      %
                      
                      $
                      263,330
                      
                      
                      
                      34.5
                      %Turbine
      Sales & Service
                      
                      
                      282,368
                      
                      
                      
                      42.3
                      
                      
                      
                      450,683
                      
                      
                      
                      59.0Related
      Party Revenue
                      
                      
                      50,813
                      
                      
                      
                      7.6
                      
                      
                      
                      43,283
                      
                      
                      
                      5.7Other
      Operating Income
                      
                      
                      1,929
                      
                      
                      
                      0.3
                      
                      
                      
                      6,232
                      
                      
                      
                      0.8TOTAL
      REVENUE
                      
                      
                      667,944
                      
                      
                      
                      100.0
                      
                      
                      
                      763,528
                      
                      
                      
                      100.0COST
      OF GOODS SOLD
                      
                      
                      283,956
                      
                      
                      
                      42.5
                      
                      
                      
                      296,161
                      
                      
                      
                      38.8GROSS
      PROFIT
                      
                      
                      383,988
                      
                      
                      
                      57.5
                      
                      
                      
                      467,367
                      
                      
                      
                      61.2OPERATING
      EXPENSESGeneral
      and Administrative Expenses
                      
                      
                      816,999
                      
                      
                      
                      122.3
                      
                      
                      
                      345,862
                      
                      
                      
                      45.3Investor
      Relations Expenses
                      
                      
                      52,921
                      
                      
                      
                      7.9
                      
                      
                      
                      -
                      
                      
                      
                      -Payroll
      and Employee Benefits
                      
                      
                      1,094,049
                      
                      
                      
                      163.8
                      
                      
                      
                      262,874
                      
                      
                      
                      34.4Windfarm
      Management Expenses
                      
                      
                      135,966
                      
                      
                      
                      20.4
                      
                      
                      
                      73,957
                      
                      
                      
                      9.7TOTAL
      OPERATING EXPENSES
                      
                      
                      2,099,935
                      
                      
                      
                      314.4
                      
                      
                      
                      682,693
                      
                      
                      
                      89.4OPERATING
      LOSS
                      
                      
                      (1,715,947
                      )
                      
                      
                      (256.9
                      )
                      
                      
                      (215,326
                      )
                      
                      
                      (28.2
                      )OTHER
      INCOME (EXPENSE)Interest
      Income
                      
                      
                      40,221
                      
                      
                      
                      6.0
                      
                      
                      
                      -
                      
                      
                      
                      -Interest
      Expense
                      
                      
                      (16,851
                      )
                      
                      
                      (2.5
                      )
                      
                      
                      (16,012
                      )
                      
                      
                      (2.1
                      )Gain
      in Fair Value of Warrant Liability
                      
                      
                      2,198,671
                      
                      
                      
                      329.2
                      
                      
                      
                      -
                      
                      
                      
                      -Other
      Expense
                      
                      
                      31,618
                      
                      
                      
                      4.7
                      
                      
                      
                      -
                      
                      
                      
                      -TOTAL
      OTHER INCOME (EXPENSE)
                      
                      
                      2,253,659
                      
                      
                      
                      337.4
                      
                      
                      
                      (16,012
                      )
                      
                      
                      (2.1
                      )INCOME
      (LOSS) BEFORE INCOME TAXES
                      
                      
                      537,712
                      
                      
                      
                      80.5
                      
                      
                      
                      (231,338
                      )
                      
                      
                      (30.3
                      )INCOME
      TAX BENEFIT
                      
                      
                      -
                      
                      
                      
                      0.0
                      
                      
                      
                      (62,000
                      )
                      
                      
                      -NET
      INCOME (LOSS)
                      
                      $
                      537,712
                      
                      
                      
                      80.5
                      %
                      
                      $
                      (169,338
                      )
                      
                      
                      (30.3
                      )
      %PREFERRED
      DIVIDENDS
                      
                      
                      206,400
                      
                      
                      
                      
                      
                      
                      
                      6,880SERIES
      B BENEFICIAL CONVERSION FEATURE
                      
                      
                      2,790,707
                      
                      
                      
                      
                      
                      
                      
                      -NET
      LOSS ATTRIBUTABLE TO COMMONSTOCKHOLDERS
                      
                      $
                      (2,459,395
                      )
                      
                      
                      
                      
                      
                      $
                      (176,218
                      )WEIGHTED
      AVERAGE SHARESOUTSTANDING
      - BASIC AND DILUTED
                      
                      
                      20,333,537
                      
                      
                      
                      
                      
                      
                      
                      15,383,333NET
      LOSS PER SHARE - BASIC AND DILUTED
                      
                      $
                      (0.12
                      )
                      
                      
                      
                      
                      
                      $
                      (0.01
                      )
  The accompanying
notes are an integral part of these consolidated statements


4


JUHL
WIND INC.
 CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009
 
 Convertible
                          
                          
                          ConvertiblePreferred Stock
                          
                          
                          Preferred Stock
                          
                          
                          Additional
                          
                          
                          
                          
                          
                          Stock
                          
                          
                          TotalCommon Stock
                          
                          
                          Series A
                          
                          
                          Series B
                          
                          
                          Paid-In
                          
                          
                          Accumulated
                          
                          
                          Subscription
                          
                          
                          EquityShares
                          
                          
                          Par
                          
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          Shares
                          
                          
                          Amount
                          
                          
                          Capital
                          
                          
                          Deficit
                          
                          
                          Receivable
                          
                          
                          (Deficit)BALANCE
      - December 31, 2008
                          
                          
                          20,183,213
                          
                          
                          $
                          2,018
                          
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          
                          -
                          
                          
                          $
                          -
                          
                          
                          $
                          2,740,788
                          
                          
                          $
                          (1,753,802
                          )
                          
                          $
                          -
                          
                          
                          $
                          989,004Cumulative
      effect of accounting change (note 4)
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (529,133
                          )
                          
                          
                          
                          
                          
                          
                          -
                          
                          
                          
                          (1,438,201
                          )
                          
                          
                          (10,609,482
                          )
                          
                          
                          
                          
                          
                          
                          (12,576,816
                          )ADJUSTED
      BALANCE- January 1, 2009  (unaudited)
                          
                          
                          20,183,213
                          
                          
                          
                          2,018
                          
                          
                          
                          -
                          
                          
                          
                          (529,133
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          1,302,587
                          
                          
                          
                          (12,363,284
                          )
                          
                          
                          -
                          
                          
                          
                          (11,587,812
                          )Removal
      of contingent redemption featureof
      Series A preferred stock
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          5,160,000
                          
                          
                          
                          3,342,954
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          3,342,954Net
      income
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          537,712
                          
                          
                          
                          
                          
                          
                          
                          537,712Stock-based
      compensation
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          498,221
                          
                          
                          
                          -
                          
                          
                          
                          
                          
                          
                          
                          498,221Common
      stock dividends issued to Series A preferred stockholders
                          
                          
                          283,120
                          
                          
                          
                          28
                          
                          
                          
                          -
                          
                          
                          
                          (316,479
                          )
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          507,231
                          
                          
                          
                          -
                          
                          
                          
                          
                          
                          
                          
                          190,780Beneficial
      conversion feature of Series B preferred stock
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          2,790,707
                          
                          
                          
                          (2,308,039
                          )
                          
                          
                          (482,668
                          )
                          
                          
                          
                          
                          
                          
                          -Issuance
      of Series B and conversion of Series A warrantsfor Series B
      preferred stock, less offering costs of $10,000
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          6,607,006
                          
                          
                          
                          12,914,196
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          
                          
                          
                          
                          12,914,196Subscription
      receivable issued for issuance of Series B preferred stock
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          
                          (196,710
                          )
                          
                          
                          (196,710
                          )Series
      A 8% preferred stock dividend
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          206,400
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          -
                          
                          
                          
                          (206,400
                          )
                          
                          
                          
                          
                          
                          
                          -BALANCE
      - June 30, 2009   (unaudited)
                          
                          
                          20,466,333
                          
                          
                          $
                          2,046
                          
                          
                          
                          5,160,000
                          
                          
                          $
                          2,703,742
                          
                          
                          
                          6,607,006
                          
                          
                          $
                          15,704,903
                          
                          
                          $
                          -
                          
                          
                          $
                          (12,514,640
                          )
                          
                          $
                          (196,710
                          )
                          
                          $
                          5,699,341
 
 The accompanying
notes are an integral part of these consolidated
statements


5


JUHL WIND INC.
 CONSOLIDATED
STATEMENTS OF CASH FLOWS
 FOR
THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008
 
 2009
                                  
                                  
                                  2008(unaudited)
                                  
                                  
                                  (unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Income (Loss)
                                  
                                  $
                                  537,712
                                  
                                  
                                  $
                                  (169,338
                                  )Adjustments
      to Reconcile Net Income (Loss) to Net CashProvided
      by Operating Activities:Depreciation
      and Amortization
                                  
                                  
                                  99,027
                                  
                                  
                                  
                                  23,792Stock-Based
      Compensation
                                  
                                  
                                  498,221
                                  
                                  
                                  
                                  71,045Provision
      for Uncollectible Accounts
                                  
                                  
                                  (10,000
                                  )
                                  
                                  
                                  45,446Gain
      on Warrant Liability Fair Value
                                  
                                  
                                  (2,198,671
                                  )
                                  
                                  
                                  -Liquidated
      Damages Expense
                                  
                                  
                                  (31,316
                                  )
                                  
                                  
                                  -Change
      in Assets and Liabilities, Net of Contributed Company:Accounts
      Receivable
                                  
                                  
                                  760
                                  
                                  
                                  
                                  77,307Unbilled
      Receivable
                                  
                                  
                                  49,851
                                  
                                  
                                  
                                  (116,350
                                  )Inventory
                                  
                                  
                                  109,429
                                  
                                  
                                  
                                  120,858Reimbursable
      Project Costs
                                  
                                  
                                  56,442
                                  
                                  
                                  
                                  -Other
      Current Assets
                                  
                                  
                                  (134,100
                                  )
                                  
                                  
                                  (1,654
                                  )Interest
      receivable on short term investments
                                  
                                  
                                  (27,483
                                  )
                                  
                                  
                                  -Accounts
      Payable
                                  
                                  
                                  362,999
                                  
                                  
                                  
                                  25,112Accrued
      Expenses
                                  
                                  
                                  5,049
                                  
                                  
                                  
                                  116,802Deferred
      Income Taxes
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (79,000
                                  )Deferred
      Revenue
                                  
                                  
                                  364,625
                                  
                                  
                                  
                                  135,279NET
      CASH FROM (USED IN) OPERATING ACTIVITIES
                                  
                                  
                                  (317,455
                                  )
                                  
                                  
                                  249,299CASH
      FLOWS FROM INVESTING ACTIVITIESCash
      Acquired from Community Wind Development Group, LLC
                                  
                                  
                                  -
                                  
                                  
                                  
                                  13,108Cash
      Paid for Short-term Investments
                                  
                                  
                                  (3,989
                                  )
                                  
                                  
                                  -Investment
      in Project Development Costs
                                  
                                  
                                  (5,000
                                  )
                                  
                                  
                                  (100,000
                                  )Payments
      for Property and Equipment
                                  
                                  
                                  (67,862
                                  )
                                  
                                  
                                  (7,695
                                  )NET
      CASH USED IN INVESTING ACTIVITIES
                                  
                                  
                                  (76,851
                                  )
                                  
                                  
                                  (94,587
                                  )CASH
      FLOWS FROM FINANCING ACTIVITIESChange
      in restricted cash
                                  
                                  
                                  (97,364
                                  )
                                  
                                  
                                  -Principal
      Payments on Notes Payable
                                  
                                  
                                  (75,000
                                  )
                                  
                                  
                                  (15,000
                                  )Proceeds
      received through the issuance ofSeries
      A preferred stock
                                  
                                  
                                  -
                                  
                                  
                                  
                                  4,099,825Proceeds
      received through the issuance ofSeries
      B preferred stock and conversion of warrants
                                  
                                  
                                  2,339,341
                                  
                                  
                                  
                                  -Distributions
      to Shareholders
                                  
                                  
                                  -
                                  
                                  
                                  
                                  (216,899
                                  )NET
      CASH FROM FINANCING ACTIVITIES
                                  
                                  
                                  2,166,977
                                  
                                  
                                  
                                  3,867,926NET
      INCREASE IN CASH
                                  
                                  
                                  1,772,671
                                  
                                  
                                  
                                  4,022,638CASH
      BEGINNING OF THE PERIOD
                                  
                                  
                                  1,310,789
                                  
                                  
                                  
                                  163,476CASH
      END OF THE PERIOD
                                  
                                  $
                                  3,083,460
                                  
                                  
                                  $
                                  4,186,114NONCASH
      INVESTING ACTIVITYEquity
      Contribution of Net Assets and Liabilities of CommonOwned
      Company by Shareholder
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  5,438NONCASH
      FINANCING ACTIVITYSubscription
      receivable from issuance of Series B preferred stock
                                  
                                  $
                                  196,710
                                  
                                  
                                  $
                                  -Private
      placement offering costs paid directly from gross proceeds
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  560,175Private
      placement offering costs included in accounts payable
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  31,9502008
      Private placement restricted cash deposit
                                  
                                  $
                                  -
                                  
                                  
                                  $
                                  500,000Series
      A preferred stock dividend
                                  
                                  $
                                  206,400
                                  
                                  
                                  $
                                  -Warrant
      liability recognition upon adoption of EITF 07-5
                                  
                                  $
                                  12,576,816
                                  
                                  
                                  $
                                  -Fair
      value of warrant liability exchanged on Series B preferred
      stock
                                  
                                  $
                                  10,378,145
                                  
                                  
                                  $
                                  -Accrued
      liquidated damages fees paid in the form of common stock
                                  
                                  $
                                  222,000
                                  
                                  
                                  $
                                  -
  The accompanying notes are an integral part of these
consolidated statements





6


JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 1.
              BACKGROUND,
      CHANGE OF CONTROL AND BASIS OF
PRESENTATION
 
 The
accompanying unaudited condensed consolidated interim financial statements have
been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission.  Certain information and footnotes disclosures
normally included in annual financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been condensed or omitted as permitted by such rules and
regulations.  These financial statements and related notes should be
read in conjunction with the financial statements and notes thereto included in
the Company’s audited financial statements for the year ended December 31, 2008
and 2007 contained in Form 10-K filed with the Securities and Exchange
Commission on March 31, 2009.
 
 In the
opinion of management, the interim financial statements reflect all adjustments
considered necessary for fair presentation.  The adjustments made to
these statements consist only of normal recurring adjustments.  The
results reported in these condensed consolidated interim financial statements
should not be regarded as necessarily indicative of results that may be expected
for the year ended December 31, 2009.
 
 Juhl
Wind, Inc. (“Juhl Wind”) conducts business under three subsidiaries, DanMar and
Associates, Inc. (“DanMar”), Juhl Energy Development, Inc. (“JEDI”), and Next
Generation Power Systems, Inc. (“NextGen”). The Company provides development,
management, and consulting services to wind farm projects throughout the
Midwestern U.S. and produces consumer-owned renewable energy products. All
intercompany balances and transactions are eliminated in
consolidation.
 
 Reverse
Acquisition
 On June
24, 2008, the owners of DanMar and Associates, Inc. and Juhl Energy Development,
Inc., both privately held companies under common control, exchanged all of their
outstanding shares of common stock in the companies for 15,250,000 shares of
common stock of MH&SC, Inc., a public company.  Upon the exchange
transaction (transaction), MH&SC, Inc. changed its name to Juhl Wind, Inc.
As a result of the transaction, DanMar and Associates, Inc. and Juhl Energy
Development, Inc. (the Companies) are now wholly-owned subsidiaries of Juhl
Wind, Inc. In essence, DanMar and Associates, Inc. and Juhl Energy Development,
Inc. merged into a public shell company with no or nominal remaining operations
and no or nominal assets and liabilities. In accordance with Statement of
Financial Accounting Standards No. 141, Business Combinations,JEDI
is considered the accounting acquirer in the exchange transaction. Consequently,
the assets and liabilities and the historical operations included in the
accompanying consolidated financial statements are those of the Companies and
are recorded at its historical cost basis.
 
 Acquisition
of Next Generation Power Systems
 On
October 31, 2008, the Company acquired all of the issued and outstanding shares
of common stock of Next Generation Power Systems, Inc. (“NextGen”), a company
under common control. In accordance with Statement of Financial Accounting
Standards No. 141R, Business Combinations, the acquisition was accounted for as
a combination of entities under common control (i.e. “as if pooling”) where the
assets and liabilities of those under common control are at historical cost and
at fair value for the noncontrolling interest. The assets and liabilities and
the historical operations of NextGen are included in the accompanying
consolidated financial statements for 2009 and 2008.
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
 
 CASH
 The
Company maintains cash balances at various financial institutions located in
Minnesota. At times throughout the year cash balances may exceed the Federal
Deposit Insurance Corporation insurance limits.  In August 2008, the
Company obtained an excess deposit insurance bond to insure deposits up to an
additional $2,400,000 beyond the FDIC coverage. The bond is effective August
2008 through February 2011.
 
 ACCOUNTS
      RECEIVABLE
 Credit
terms are extended to customers in the normal course of business.  The
Company performs ongoing credit evaluations of its customers’ financial
condition and, generally, requires no collateral.
  7
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 Trade
accounts receivable are recorded at their estimated net realizable value, net of
an allowance for doubtful accounts. The Company follows a policy of providing an
allowance for doubtful accounts.  Based on historical experience, and
its evaluation of the current status of receivables, the Company is of the
belief that such accounts will be collectible in all material respects after
consideration of the allowance shown in the financial statements. Accounts are
considered past due if payment is not made on a timely basis in accordance with
the Company’s credit terms.  Accounts considered uncollectible are
written off.
 
 UNBILLED
      RECEIVABLES
 Unbilled
receivables are generated when the revenue from a project has been earned by the
Company but has not been formally billed by the Company due to project relations
with the owners of the project. The unbilled receivables are recorded at their
estimated realizable value. The Company follows a policy providing an allowance
for doubtful accounts reserving for significant timing risk
and other risks associated with energy project development.
 
 INVENTORIES
 Inventories,
consisting primarily of parts and materials relating to the production of small
scale wind turbines, are stated at the lower of average cost or market
value.
 
 REIMBURSABLE
PROJECT COSTS
 Reimbursable
project costs represent advances made on behalf of wind farm entities to assist
them in the legal or other costs incurred in the initial development stages of
their respective wind farm project.
 
 PROJECT
DEVELOPMENT COSTS
 Project
development costs represent amounts paid by the Company for projects that Juhl
Wind is the wind farm developer and project owner. Such costs are carried as a
long-term asset until such time that the Company receives a reimbursement as a
part of the permanent financing of a commissioned wind farm project, or
alternatively, upon reimbursement by new project ownership.
 
 PROPERTY
AND EQUIPMENT
 Property
and equipment are stated at cost. Major renewals and improvements are
capitalized, while replacements, maintenance and repairs which do not improve or
extend the life of the respective assets are expensed currently. Property and
equipment are being depreciated over their estimated useful lives using the
straight-line method.
 
 LONG-LIVED
ASSETS
 Long-lived
assets, such as property, plant, and equipment, and purchased intangible assets
subject to amortization, are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of an asset may not be
recoverable. If circumstances require a long-lived asset be tested for possible
impairment, the Company first compares undiscounted cash flows expected to be
generated by an asset to the carrying value of the asset. If the carrying value
of the long-lived asset is not recoverable on an undiscounted cash flow basis,
impairment is recognized to the extent that the carrying value exceeds its fair
value. Fair value is determined through various valuation techniques including,
but not limited to, discounted cash flow models, quoted market values and
third-party independent appraisals.
 
 GOODWILL
 The
Company’s goodwill resulted from its business acquisition of the minority
interest of NextGen in October 2008. Goodwill and other intangible assets with
indefinite lives are not amortized but instead tested at least annually for
impairment. The Company must make assumptions regarding estimated future cash
flows and other factors to determine the fair value of the respective assets in
assessing the fair value of its goodwill and other intangible assets. We have
assessed the impairment of goodwill as of June 30, 2009 as required pursuant to
SFAS 142. No impairment of goodwill was considered necessary.
 
 STOCK
OPTION PLANS
 Upon
issuance of employee stock options on June 24, 2008 (inception date), the
Company adopted FASB Statement No. 123(R), Share-Based Payment (Statement
123(R)). This statement replaces FASB Statement No. 123, Accounting for
Stock-Based Compensation (Statement 123) and supersedes APB No. 25. Statement
123(R) requires that all stock-based compensation be recognized as an expense in
the financial statements and that such cost be measured at the fair value of the
award. The Company recognizes compensation expense based on the estimated grant
date fair value using the Black-Scholes option-pricing model.
  8
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 The
Company accounts for unit based instruments granted to nonemployees under the
fair value method of EITF 96-18, Accounting for Equity Instruments that are
Issued to Other Than Employees for Acquiring, or in Conjunction with Selling,
Goods or Services and EITF 00-18, Accounting for Recognition for Certain
Transactions Involving Equity Instruments Granted to Other than Employees. 
Under EITF 96-18 and EITF 00-18, unit based instruments usually are recorded at
their underlying fair value.  In certain instances the fair value of the
goods or services is used to determine the value of the equity instrument as it
is a better measure of fair value.
 
 FAIR
VALUE OF FINANCIAL INSTRUMENTS
 The
carrying value of cash and equivalents, restricted cash, short term investments,
receivables, payables, warrant liability approximates their fair value. The
carrying amounts of notes payable approximate fair value because of the short
maturity of these instruments.
 
 USE
OF ESTIMATES
 The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect certain reported amounts and disclosures. Those estimates and assumptions
affect the reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and expenses. The
Company uses estimates and assumptions in accounting for the following
significant matters, among others: revenue recorded from the development
agreements is a significant estimate based on a percentage of estimated project
costs; reliability of accounts receivable; valuation of deferred tax assets,
inventory, stock based compensation and warrants, goodwill, intangible asset,
income tax uncertainties, fair value of warrant liability, and other
contingencies. Revenue from the development agreements is adjusted to reflect
actual costs incurred by the project upon the commercial operation date.
Accordingly, actual revenue may differ from previously estimated amounts, and
such differences may be material to the financial statements. The Company
periodically reviews estimates and assumptions, and the effects of any such
revisions are reflected in the period in which the revision is
made.
 
 REVENUE
RECOGNITION
 Consumer-owned
energy products:
 Revenue
from the sale of small wind turbines and other renewable energy systems is
recognized upon shipment to the customer and transfer of ownership. Installation
services are recognized as revenue upon completion of the installation
services.  Deposits received from customers are included as Deferred
Revenue until shipment occurs.
 
 Wind
Farm Consulting, Development and Management Services:
 Consulting
Services
 Consulting
services fees are primarily fixed fee arrangements of a short-term duration and
are recognized as revenue on a completed contract basis.
 
 Wind
Farm Development Services
 The
Company normally earns a development service fee from each of the wind farm
projects that it develops in cooperation with wind farm investors. These
development services arrangements are evaluated under EITF 00-21, Revenue Arrangements with Multiple
Deliverables, which addresses certain aspects of accounting by a vendor
for arrangements under which the vendor will perform multiple revenue generating
activities.
 The
development services fee revenue is recognized as follows:
 ·
              Proceeds
      received upon the signing of a Development Services Agreement (generally
      10% of the total expected development fee) are amortized over the expected
      period of the development process, which is generally three years. The
      amortization period is re-assessed by management as new timelines are
      established for the project in-service date, and the amortization period
      is adjusted.
 ·
              The
      remaining proceeds are allocated to the following deliverables based on
      vendor specific objective evidence (VSOE) of each item: 1) achievement of
      a signed Power Purchase Agreement (PPA) with an electrical utility, and 2)
      final commissioning of the wind farm turbines.  Management has
      determined that these deliverables have stand-alone value, and performance
      of the undelivered services are considered probable and in the control of
      the Company.
 
 Wind
Farm Management Services
 Revenues
earned from administrative and management services agreements are recognized as
the services are provided. The administrative and management services agreements
call for quarterly payments in advance or arrears of services rendered based on
the terms of the agreement. The administrative and management services payments
in advance are carried as deferred revenue and recognized monthly as services
are performed.
  9
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 EARNINGS
PER SHARE
 Basic net
income (loss) per share is computed by dividing net income (loss) by the
weighted average number of shares outstanding during the
period.  Diluted net income per share is computed by dividing net
income by the weighted average number of shares and share equivalents
outstanding during the period. As of June 30, 2009, the Company had 1,685,000
unit equivalents outstanding relating to outstanding stock options and warrants.
As of June 30, 2008, the Company had 8,310,000 share equivalents outstanding
relating to outstanding stock options and warrants.  At June 30, 2009
and 2008, the effects of the share equivalents were excluded from the
computation of diluted shares outstanding as their effects would be
anti-dilutive, due to the Company’s net loss attributable for common
stockholders for these periods.
 
 INCOME
TAXES
 The
Company records income tax in accordance with FAS No. 109, “Accounting for
Income Taxes.”  Under the provisions of FAS 109, deferred income taxes
are provided for timing differences between financial statements and income tax
reporting, primarily from the use of accelerated depreciation methods for income
tax purposes, stock based compensation, accrued liabilities and warranty
costs.  The measurement of deferred tax assets and liabilities is
based on provisions of the enacted tax law; the effects of future changes in tax
laws or rates are not anticipated.
 
 RECLASSIFICATIONS
 Certain
reclassifications were made to the previously issued 2008 financial statements
in the statement of operations and the statement of stockholders’ equity in
order for comparability to the 2009. The 2008 financial statements have been
adjusted to show activity from the pooling of interests transaction with Next
Gen as discussed in Note 1.
 
 SUBSEQUENT
EVENTS
 The
Company has evaluated subsequent events through August 14, 2009, the date which
the financial statements were available to be issued.
 
 3.
              PRIVATE
      PLACEMENT OF SERIES A 8% CONVERTIBLE PREFERRED STOCK AND COMMON STOCK
      WARRANTS
 
 In June
2008, the Company completed a private placement consisting of shares of
newly-created Series A 8% Convertible Preferred Stock (Series A), and
detachable, five-year Class A, Class B and Class C warrants to purchase shares
of common stock at an exercise price of $1.25 (Class A), $1.50 (Class B) and
$1.75 (Class C) per share.  In total, the Company sold 5,160,000
shares of Series A Convertible Preferred Stock (convertible at any time into a
like number of shares of common stock) and Class A, Class B and Class C Warrants
to each purchase 2,580,000 shares of common stock, or an aggregate of 7,740,000
shares of common stock.  Such warrants were subsequently exercised or
exchanged in June 2009 (see Note 4).  We also issued 2,250,000 shares
of our common stock to Greenview Capital, LLC and unrelated designees at the
closing of the transaction in consideration for merger advisory
services.
 
 Conversion
Rights of Series A
 
 At any
time, each share of Series A is convertible into one share of common
stock.However, the number of shares of common stock issuable
upon conversion of Series A is subject to adjustment upon the occurrence of
certain customary events, including, among others, a stock split, reverse stock
split or combination of our common stock; an issuance of our common stock or
other securities as a dividend or distribution on the common stock; a
reclassification, exchange or substitution of the common stock; or a capital
reorganization of our company. Additionally, until June 24, 2010, the holders of
Series A will have “full-ratchet” anti-dilution price protection, with limited
exceptions for issuances under employee benefit plans and pursuant to
transactions involving a strategic partner preapproved by the holders on a
case-by-case basis. After June 24, 2010, the holders of Preferred Stock will
have “weighted average” anti-dilution price protection.
  10
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 Voting
Rights of Series A
 
 Holders
of Series A are not entitled to vote their shares with the holders of our common
stock, except for certain extraordinary corporate transactions, in which case
they vote as a separate class. Holders of Series A Convertible Preferred Stock
shall also have any voting rights to which they are entitled by Delaware
law.
 
 Liquidation
Rights of Series
A
 
 In the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
our company, including a merger or consolidation of our company with or into
another company, or any transfer, sale or lease by us of substantially all of
our assets, the holders of Series A will be entitled to receive out of our
assets available for distribution to stockholders, before any distribution is
made to holders of our common stock or any other series of our preferred stock,
liquidating distributions in an amount equal to $1.20 per share, plus accrued
but unpaid dividends.
 
 Redemption
Rights of Series A
 
 Series A
may not be redeemed by the Company at any time. The holders of the Preferred
Stock have redemption rights in the event of the inability of the Company to
register the underlying conversion shares and the shares issuable upon warrant
exercise.
 
 Dividends
Rights of Series A
 
 Series A
will be entitled to receive dividends at a rate of 8% per year, payable
quarterly in arrears in cash or shares of our common stock.
 
 Certain
Covenant Rights and Registration Rights of Series A
 
 Series A
contains certain negative covenants, such as a limitation on indebtedness, a
limitation on increases in executive compensation, an incentive compensation
plan not to exceed 10% of our outstanding common equivalent shares, and
restrictions on mergers, acquisitions and other fundamental transactions,
without the prior written consent of a majority of the holders of Series
A, and certain other affirmative covenants.  All covenants expire if
Series A position held by its majority original investor falls below 20% of the
original Series A position held by it immediately following the closing of the
original offering. The Company is also required to issue registered common
shares upon conversion of Series A and exercise of the Class A, Class B and
Class C warrants.  If the underlying shares are not registered as
required in the Series A offering document, the Corporation would be required to
pay liquidated damages of 2% of the original purchase price per each 30 day
period or part thereof for any registration default up to a maximum of
12%.
 
 The
Company recorded a liability and corresponding expense at December 31, 2008 in
the amount of $258,879 to account for approximated liquidated damages and late
fees to the holders of the Series A preferred shares.  The liquidated
damages and late fees were related to the breach of covenants and rights
contained in the Registration Rights Agreement, primarily as a result of the
Company’s delay in successfully completing an effective registration statement,
and to a lesser extent, the timely payment of quarterly
dividends.  The Company and the holders of the Series A shares have
agreed in writing in March 2009 to pay the $258,879 in the form of shares of
common stock issuable over the period April 1 through October 1, 2009. In April
2009, the Company issued approximately 114,000 shares of common stock in payment
of approximately $222,000 of this liability. The Company anticipates that
approximately 23,000 additional shares of common stock will be issued in
connection with the payment of the remaining liability. As of June 30, 2009, the
remaining liability totals approximately $37,000, which is included in accrued
expenses on the balance sheet.
  11
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 4.
              ISSUANCE
      OF SERIES B CONVERTIBLE PREFERRED
STOCK
  On June
29, 2009, the Company entered into a Warrant Amendment Agreement with the
holders of the Company’s Class A, Class B and Class C warrants, whereby the
holders and the Company agreed that such warrants would be exercisable solely
for the Company’s new Series B Convertible Preferred Stock (Series
B).  In conjunction with this agreement, the holders of all classes of
warrants exchanged their warrants, cash of approximately $2,339,000 and a
subscription receivable totaling approximately $197,000 for 6,607,006 shares of
the Company’s Series B. The subscription receivable along with accrued interest
is due in full on December 31, 2009 and accrues interest at a rate of 8% per
year.
 
 Series B
contains the following terms:
 
 Conversion  Rights
of Series B
 
 At any
time, each share of Series B is convertible into one share of common
stock.  However, the number of shares of common stock issuable upon
conversion of Series B is subject to adjustment upon the occurrence of certain
customary events, including, among others, a stock split, reverse stock split or
combination of our common stock; an issuance of our common stock or other
securities as a dividend or distribution on the common stock; a
reclassification, exchange or substitution of the common stock; or a capital
reorganization of our company. The conversion price is reduced 25% if the
Company fails to obtain combined revenues equal to at least $10,000,000 for the
six months ending December 31, 2009.
 
 Voting
Rights of Series B
 
 Holders
of Series B are not entitled to vote their shares with the holders of our common
stock, except for certain extraordinary corporate transactions, in which case
they vote as a separate class. Holders of Series B shall also have any voting
rights to which they are entitled by Delaware law.
 
 Liquidation
Rights of Series B
 
 In the
event of any voluntary or involuntary liquidation, dissolution or winding-up of
our company, the holders of Series B will be entitled to receive out of our
assets available for distribution to stockholders, a pro rata liquidating
distribution on a pari passu basis with holders of the Company’s common stock
based on the number of shares convertible from the then outstanding Series B
shares.  Liquidation does not include a change in control transaction
or a merger or consolidation of the Company, any sale of all or substantially
all of its assets in one transaction or series of related transactions, or any
tender offer or exchange offer to which the holders of common stock are
permitted to tender or exchange their shares for other securities, cash or
property. Liquidation Rights of our Series A is expressly senior to the rights
of Series B.
 
 Redemption
Rights of Series B
 
 Series B
may not be redeemed by the Company at any time.
 
 Dividends
Rights of Series B
 
 Series B
has no cumulative preferred dividend provisions.  Series B shall
participate in any dividends declared and paid by Juhl on its common stock on an
as-converted basis.
 
 Anti-Dilution
Rights of Series B
 
 Series B
contains provisions whereby at any time at least 25% of the Series B is
outstanding, the Company may not issue rights, options or warrants to all
holders of common stock entitling them to subscribe for or purchase shares of
common stock at a price per share that is lower than the volume weighted average
price on the date of the Series B agreement without issuing the same rights,
options or warrants to all Holders on an as-converted to common stock
basis.
  12
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 5.
              WARRANT
      LIABILITY
 
 The
Company adopted Emerging Issues Task Force Issue No. 07-5,Determining Whether an Instrument
(or Embedded Feature) is Indexed to an Entity’s Own Stock (“EITF 07-5”)
effective January 1, 2009. The adoption of EITF 07-5’s requirements can affect
the accounting for warrants and many convertibleinstruments with
provisions that protect holders from a decline in the stock price (or
“down-round” provisions). For example, warrants with such provisions willno longer be recorded
in equity. Down-round provisions reduce the exercise price of a warrant or
convertible instrument if a company either issues equity shares for a price that
is lower than the exercise price of those instruments or issues new warrants or
convertible instruments that have a lower exercise price. We evaluated whether
our warrants or convertible preferred stock contain provisions that protect
holders from declines in our stock price or otherwise could result in
modification of the exercise price and/or shares to be issued under the
respective warrant or preferred stock agreements based on a variable that is not
an input to the fairvalue of a
“fixed-for-fixed” option. The Company determined that the all of the outstanding
warrants (until June 29, 2009 upon which all such warrants were either exercised
or exchanged) contained such provisions thereby concluding they were not indexed
to the Company’s own stock and must be treated as a derivative liability under
SFAS 133.  Prior to the adoption of EITF 07-05 on January 1, 2009, the
warrants were considered equity instruments.  The Company determined
that while its convertible preferred stock (Series A and Series B) contains
certain anti-dilution features, the conversion feature embedded within its
convertible preferred stock does not require bifurcation under the guidance of
SFAS 133.
 
 In
accordance with EITF 07-5 and SFAS 133, the Company, beginning on January 1,
2009, recognized these warrants as liabilities at their respective fair values
on each reporting date. The cumulative effect of the change in accounting for
these instruments of $12,576,816 was recognized as an adjustment to the opening
balance of stockholders’ equity at January 1, 2009. The amounts recognized in
the consolidated balance sheet as a result of the initial application of EITF
07-5 on January 1, 2009 were determined based on the amounts that would have
been recognized if EITF 07-5 had been applied from the issuance date of the
instruments and the amounts recognized in the consolidated balance sheet upon
the initial application of EITF 07-5.  In addition, the carrying value of
Series A was reduced by $529,133 upon the adoption of EITF 07-5.  This
reduction was due to the initial valuation allocated to preferred stock was
determined using the relative fair value of Series A and the related warrants
issued in the original transaction.  If the initial transaction would
have been accounted for under EITF 07-5, Series A would have been valued using
its residual value as the full fair value of the warrants would have had to been
first allocated from the net proceeds of the transaction and then the remainder
to the value of convertible preferred stock.
 
 As
discussed in note 4, the conversion of all classes of warrants to Series B
eliminated the derivative accounting related to the warrant liability that was
required under the adoption of EITF 07-5. Therefore, the warrants that were
accounted for as a warrant liability were reclassified to stockholders’ equity
at its then-current fair value at the date of the exchange.  Prior to
the exchange, the Company re-measured the fair value of these instruments as of
June 29, 2009, and recorded an $848,966 gain to the statement of operations for
the three month period ended June 30, 2009 as the fair value of the warrant
liability decreased to $10,378,145.  This amount is included in
stockholders’ equity as a component of the carrying value of Series
B.
 
 The
Company determined the fair value on June 29, 2009 of the warrant liability
using the Black-Scholes valuation model. The assumptions used are noted in the
following table:
 
 Expected
      term
                  
                  
                  4
      yearsRisk-free
      interest rate
                  
                  
                  2.97
                  %Expected
      volatility
                  
                  
                  104
                  %Dividend
      yield
                  
                  
                  0
                  %
 
 Expected
volatility is based on historical volatility of peer companies operating in a
similar industry. The warrants have a transferability provision and based on
guidance provided in SAB 107 for options issued with such a provision, we used
the full contractual term as the expected term of the warrants. The risk free
rate is based on the five-year U.S. Treasury security rates.
  13
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 As a
result of the exchange, the Company has no warrants outstanding that require
derivative accounting under SFAS 133.
 
 6.
              CONCENTRATIONS,
      RISKS AND UNCERTANTIES
 The
Company derived approximately 61% and 55% of its revenue from sales to five
customers in 2009 and six customers in 2008, respectively. At June 30, 2009 and
December 31, 2008, 56% and 63% of the Company's accounts receivable were due
from four customers.  One customer comprises approximately 80% the
Company’s unbilled receivables as of June 30, 2009 and December 31,
2008.
 
 7.
              INVENTORIES
 Inventories
consist of the following:
 
 June 30,
                      2009
                    
                    
                    December 31,
                      2008*Materials
      and supplies
                    
                    $
                    293,689
                    
                    
                    $
                    351,213Work
      –in-progress
                    
                    
                    -
                    
                    
                    
                    51,905$
                    293,689
                    
                    
                    $
                    403,118
 
 *Derived
from December 31, 2008 audited financial statements
 
 8.
              PROPERTY
      AND EQUIPMENT
 Property
and equipment consists of the following:
 
 June 30,
                        2009
                      
                      
                      December 31,
                        2008*Land
                      
                      $
                      17,500
                      
                      
                      $
                      17,500Building
      and improvements
                      
                      
                      238,120
                      
                      
                      
                      238,120Equipment,
      including vehicles
                      
                      
                      336,184
                      
                      
                      
                      268,326Subtotal
                      
                      
                      591,804
                      
                      
                      
                      523,946Less
      Accumulated depreciation
                      
                      
                      (206,849
                      )
                      
                      
                      (179,822
                      )Total
                      
                      $
                      384,955
                      
                      
                      $
                      344,124
 
 *Derived
from December 31, 2008 audited financial statements
 
 9.
              INCOME
      TAXES
 The
Company files a consolidated tax return inclusive of each of its wholly-owned
subsidiaries, DanMar, JEDI, and NextGen. The Company’s provision for income
taxes includes only the effects of operating activities subsequent to the dates
of acquisition as disclosed in Note 1 above, since each of the entities had
elected Subchapter S status for all periods prior to acquisition. Upon
acquisition, the Subchapter S elections were automatically terminated. No
provision for income taxes is shown for the six month period ended June 30, 2008
since all the operating entities were taxed as Subchapter S corporations a
significant portion of that period.
 
 At the
time the S corporation elections were terminated , the Company recorded deferred
tax assets and liabilities arising from the anticipated timing differences
recorded in the financial statements and income tax returns for various accrued
expenses and the methods used in computing depreciation.
  14
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 The
components of the deferred income tax asset and liability as of June 30, 2009
are as follows:
 Current
      Deferred Income Tax Asset:Accrued
      Vacation and Officer’s Compensation
                        
                        $
                        12,000Liquidated
      Damages Provision
                        
                        
                        14,000Reserves
      for Warranty
                        
                        
                        12,000Net
      Operating Loss Carryforward
                        
                        
                        186,000Total
                        
                        $
                        224,000Non-Current
      Deferred Income Tax Asset:Net
      Operating Loss Carryforward
                        
                        
                        629,000Less
      Valuation Allowance
                        
                        
                        (397,000
                        )Total
                        
                        $
                        232,000Non-current
      Deferred Income Tax LiabilityDepreciation
                        
                        $
                        20,000
  The
following represents the reconciliation of the statutory federal tax rate and
the effective tax rate for the year ended June 30, 2009:
 Statutory
      Tax Rate
                      
                      $
                      182,000
                      
                      
                      
                      34.0
                      %States
      Taxes, Net of Federal Benefit
                      
                      
                      32,000
                      
                      
                      
                      6.0Nondeductible
      Expenses
                      
                      
                      (647,000
                      )
                      
                      
                      (120.9
                      )Increase
      in Valuation Allowance
                      
                      
                      397,000
                      
                      
                      
                      74.1Other,
      Net
                      
                      
                      36,000
                      
                      
                      
                      6.8$
                      -
                      
                      
                      
                      0.00
                      %
 
 In
assessing the realization of deferred tax assets, the Company’s management
considers whether it is more likely than not that some portion or all of the
deferred tax assets will not be realized.  The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable income
during the periods in which those temporary differences become
deductible.  The Company’s management considers the scheduled reversal
of deferred tax liabilities, projected future taxable income, and tax planning
strategies in making this assessment.  As of June 30, 2009, a
valuation allowance of $397,000 has been recognized for deferred tax
assets.
 
 At June
30, 2009, the Company has a federal net operating loss carryforward of
approximately $2 million which will begin to expire in the year
2028.
 
 We
adopted provisions of , Accounting for Uncertainty in Income
Taxes – an interpretation of FASB Statement No. 109 (FIN No. 48) in June
2008, upon becoming a corporation, with no cumulative effect adjustment
required. FIN 48 clarifies the requirements of SFAS 109, Accounting for Income Taxes,
relating to the recognition of income tax benefits. FIN 48 provides a two-step
approach to recognizing and measuring tax benefits when realization of the
benefits is uncertain. The first step is to determine whether the benefit meets
the more-likely-than-not condition for recognition and the second step is to
determine the amount to be recognized based on the cumulative probability that
exceeds 50%. In accordance with FIN No. 48, we have adopted a policy under
which, if required to be recognized in the future, we will classify interest
related to the underpayment of income taxes as a component of interest expense
and we will classify any related penalties in general and administrative
expenses in the consolidated statement of operations.
 
 10.
              STOCK-BASED
      COMPENSATION
 The
Company has a incentive compensation plan to provide stock options, stock
issuances and other equity interests in the Company to employees, directors,
consultants, independent contractors, and advisors of the Company and other
person who is determined by the Committee of the Board of Directors of the
Company to have made (or expected to make) contributions to the Company. As of
June 30, 2009, the Company has 1,762,111 shares available for award under the
plan.
  15
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 The
Company has granted to key employees and directors of the Company, 1,135,000
options to purchase common shares under the above plan.  In addition,
the Company issued an additional 500,000 stock options to a director in June
2009 outside of the plan. The outstanding stock options carry an exercise price
ranging from of $1.00-$2.11 per share and expire ten years from the date of
grant.  The fair value of each option grant is estimated on the date
of grant using the Black-Scholes option-pricing model with the following
assumptions, underlying price ranging from $1.00 to $3.05, dividend yield of 0%,
expected volatility ranging from 96% to 104%, risk-free interest rate of 4%, and
average expected life of 6 years. Based on pricing model it was determined that
approximately $404,683 of option related compensation was expensed in the
three-month period ending June 30, 2009 and $498,221 for the six month period
ended June 30, 2009. For the period ended June 30, 2008 option related
compensation expense totaled approximately $2,200.
 
 A summary
of the Company’s outstanding stock options as of June 30, 2009 and changes
during the period then ended is listed below:
 
 Outstanding
      at December 31, 2008
                    
                    
                    620,000Granted
                    
                    
                    1,015,000Exercised
                    
                    
                    -Expired
                    
                    
                    -Forfeited
                    
                    
                    -Outstanding
      at June 30, 2009
                    
                    
                    1,635,000Options
      exercisable at the end of the period
                    
                    
                    497,907
 
 As of
June 30, 2009, there was approximately $1,868,000 of total unrecognized
compensation expense cost.  This cost is expected to be recognized
over a weighted-average period of 3 years.
 
 In June
2008, the Company agreed to issue 50,000 common stock warrants to an investor
relations consulting firm. These warrants vested over a six-month service period
ending December 19, 2008 at which they were formally issued. These warrants
allow the holder to purchase common stock at an exercise price of $7.00 for
25,000 and $10.00 for the other 25,000 shares. To determine fair value of the
warrants the Company uses the Black-Scholes pricing model with the following
assumptions, dividend yield of 0%, expected volatility of 96%, risk-free
interest rate of 4%, and expected life of 5 years.  The Company
recognized no expense during the period ended June 30, 2009. For the period
ended June 30, 2008, the Company recognized approximately $6,400 in compensation
expense related to this warrant.
 
 11.
              FAIR
      VALUE MEASUREMENTS
 
 There
were no financial assets or liabilities requiring fair value measurements as
guided by Statement of Financial Accounting Standards No. 157 as of June 30,
2009.
 
 The
reconciliation of beginning and ending balances for financial assets and
liabilities measured at fair value using significant unobservable inputs (Level
3) are as follows:
 
 Warrant liabilityBeginning
      Balance, January 1, 2009
                          
                          $
                          -Recognition
      upon adoption of EITF 07-5
                          
                          
                          12,576,816Gain
      on warrant liability fair value adjustment
                          
                          
                          (2,198,671
                          )Reclassification
      to equity (see Note 5)
                          
                          
                          (10,378,145
                          )Ending
      Balance, June 30, 2009
                          
                          $
                          -Total
      unrealized gain included in earnings which are attributable to the change
      in unrealized gains or losses related to liability no longer held at the
      reporting date
                          
                          $
                          2,198,671
  16
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 The
Company’s Level 3 liability consists of the common stock warrants held by the
preferred shareholders subject to redemption discussed in Note 5.  The
fair value of the liability for the preferred stock warrants subject to
redemption is estimated using the Black-Scholes option pricing model using
internal observable and unobservable market input assumptions.
 
 12.
              BUSINESS
      SEGMENTS
 The
Company groups its operations into two business segments–Wind Farm Development
and Management  and Consumer-owned Renewable Energy products. 
The Company's business segments are separate business units that offer different
products. The accounting policies for each segment are the same as those
described in the summary of significant accounting policies. Corporate assets
include: cash and cash equivalents, short-term investments, deferred income
taxes, and other assets.
 
 The
following is information for each segment for the six-month periods ended June
30, 2009 and 2008:
 
 Wind Farm
                        Development
                        and
                        Management
                      
                      
                      Consumer-
                        Owned
                        Renewable
                        Energy
                      
                      
                      ConsolidatedFor
      the Six-Month Period Ended June 30, 2009Wind
      farm development/mgmt
                      
                      $
                      332,834
                      
                      
                      $
                      -
                      
                      
                      $
                      332,834Consumer-owned
      renewable energy
                      
                      
                      -
                      
                      
                      
                      282,368
                      
                      
                      
                      282,368Related
      party revenue
                      
                      
                      50,813
                      
                      
                      
                      -
                      
                      
                      
                      50,813Other
                      
                      
                      1,929
                      
                      
                      
                      -
                      
                      
                      
                      1,929Total
      revenue
                      
                      $
                      385,576
                      
                      
                      $
                      282,368
                      
                      
                      $
                      667,944Loss
      from operations
                      
                      $
                      (1,471,647
                      )
                      
                      $
                      (244,300
                      )
                      
                      $
                      (1,715,947
                      )Other
      income (loss), net
                      
                      
                      2,270,510
                      
                      
                      
                      (16,851
                      )
                      
                      
                      2,253,659Income
      (Loss) before income tax benefit
                      
                      $
                      798,863
                      
                      
                      $
                      (261,151
                      )
                      
                      $
                      537,712Identifiable
      assets at June 30, 2009
                      
                      $
                      1,149,491
                      
                      
                      $
                      1,013,047
                      
                      
                      $
                      2,162,538Corporate
      assets
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      5,548,014Total
      assets at June 30, 2009
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      $
                      7,710,552
  17
  JUHL
WIND, INC.
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
THE QUARTERS ENDED JUNE 30, 2009 AND 2008
 
 Wind Farm
                      Development
                      and
                      Management
                    
                    
                    Consumer-
                      Owned
                      Renewable
                      Energy
                    
                    
                    ConsolidatedFor
      the Six-Month Period Ended June 30, 2008Wind
      farm development/mgmt Management
                    
                    $
                    263,330
                    
                    
                    $
                    -
                    
                    
                    $
                    263,330Consumer-owned
      renewable energy
                    
                    
                    -
                    
                    
                    
                    450,683
                    
                    
                    
                    450,683Related
      party revenue
                    
                    
                    43,283
                    
                    
                    
                    -
                    
                    
                    
                    43,283Other
                    
                    
                    6,232
                    
                    
                    
                    -
                    
                    
                    
                    6,232Total
      revenue
                    
                    $
                    312,845
                    
                    
                    $
                    450,683
                    
                    
                    $
                    763,528Income
      (loss) from operations
                    
                    $
                    (250,426
                    )
                    
                    $
                    35,100
                    
                    
                    $
                    (215,326
                    )Other
      income (loss), net
                    
                    
                    -
                    
                    
                    
                    (16,012
                    )
                    
                    
                    (16,012
                    )Income
      (loss) before income taxes
                    
                    $
                    (250,426
                    )
                    
                    $
                    19,088
                    
                    
                    $
                    (231,338
                    )Identifiable
      assets at June 30, 2008
                    
                    $
                    833,263
                    
                    
                    $
                    574,460
                    
                    
                    $
                    1,407,852Corporate
      assets
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    4,499,742Total
      assets at June 30, 2008
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    $
                    5,907,594
 
 13.
              TRANSACTIONS
      WITH RELATED PARTIES
 The
Company provides wind farm management services to entities that are controlled
by theCompany’s Chief Executive Officer and family members. This revenue is
shown on the face of the consolidated statement of operations.  The
fees are billed at rates similar to fee structures charged to unrelated parties.
 
 14.
              COMMITMENTS
      AND CONTINGENCIES
 Development
Agreements
 The
Company enters into development agreements with third parties for the
development of wind projects. The development agreements call for development
fees ranging from 1% to 5% of the total project cost. The development fees are
due in three installments. Ten percent is due at the development agreement
signing. Another 40% is due at the signing of the PPA agreement, and the
remaining 50% is due at the commercial operation date of the project. As of June
30, 2009 and December 31, 2008, the Company was involved with various
development agreements at different stages within the contracts. The Company was
also involved with several new projects for which development agreements have
not been signed.
 
 Management
Agreements
 The
Company has three agreements in place for operational wind projects to perform
management services for those projects. The agreements provide monthly
management fees equal to 2% of the project’s gross sales. These agreements also
provide payments for general and administrative fees, maintenance fees, and any
other out-of-pocket expenses for the project. The contracts expire at various
dates through 2015. The agreements may be terminated by the wind farm upon the
last day of the month that is at least 30 days after the Company has received
written notice of the intent to terminate the agreement.
 
 Administrative
Services Agreements
 The
Company has four agreements in place for operational wind projects to perform
administrative services for those projects. These agreements provide quarterly
payments in advance or in arrears of services performed. Payments range from
$4,500 to $5,000 per quarter, and will continue through the Change of Percentage
Ownership Date, as defined by the administrative services agreements, and will
be renewed annually without any additional action. The agreements may be
terminated by the wind farm upon at least 90 days written notice to the
Company.
 
 15.
              SUBSEQUENT
      EVENT
 In July
2009, NextGen entered into an non-exclusive Manufacturing License and Reseller
agreement with an unrelated company.  Under the terms of the
agreement, NextGen will receive a license fee totaling $1,000,000 along with
royalty fees from sales for each turbine sold.
  18




Item
      2.
            MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS





The
following discussion should be read in conjunction with our financial statements
and the notes thereto which appear elsewhere in this report. The results shown
herein are not necessarily indicative of the results to be expected in any
future periods. This discussion contains forward-looking statements based on
current expectations, which involve uncertainties. Actual results and the timing
of events could differ materially from the forward-looking statements as a
result of a number of factors.





Forward-Looking
Statements





The
following discussion and analysis is provided to increase the understanding of,
and should be read in conjunction with, the Financial Statements of the Company
and Notes thereto included elsewhere in this Report. Historical results and
percentage relationships among any amounts in these financial statements are not
necessarily indicative of trends in operating results for any future period. The
statements, which are not historical facts contained in this Report constitute
"forward-looking statements" within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements are based on currently available
operating, financial and competitive information, and are subject to various
risks and uncertainties. Future events and the Company's actual results may
differ materially from the results reflected in these forward-looking
statements. Factors that might cause such a difference include, but are not
limited to, dependence on existing and future key strategic and strategic
end-user customers, limited ability to establish new strategic relationships,
ability to sustain and manage growth, variability of operating results, the
Company's expansion and development of new service lines, marketing and other
business development initiatives, the commencement of new engagements,
competition in the industry, general economic conditions, dependence on key
personnel, the ability to attract, hire and retain personnel who possess the
technical skills and experience necessary to meet the service requirements of
its clients, the potential liability with respect to actions taken by its
existing and past employees, risks associated with international sales, and
other risks described herein and in the Company's other SEC
filings.





Overview
of Our Business





Juhl Wind
provides development, management and consulting services to wind farm projects
throughout the Midwestern U.S. and also sells consumer-owned renewable energy
products such as remanufactured small wind turbines and solar
systems.  Our ultimate goal is to build medium to large-scale wind
farms jointly owned by local communities, farm owners and our company. The wind
farms are connected to the general utility electric grid to produce clean,
environmentally-sound wind power for use by the electric power
industry.





We
specialize in the development of community wind power systems, and we believe
that we are among the leaders in the field. Our growth strategy is anchored by
the competitive advantage of our portfolio of completed projects coupled with
the projects we currently have under development. Our plan is to continue to
provide the full range of development services across each phase of development,
which we expect will grow our revenue and profitability from each project under
development.





Since
1999, we have developed 14 wind farms, accounting for more than 117 megawatts of
wind power, that currently operate in the Midwest region of the United States.
We are presently engaged in various aspects of the development of 24 wind farms
totaling an additional 425 megawatts of community wind power
systems.





Our
projects are based on the formation of partnerships with the farmers upon whose
land the wind turbines are installed.  Over the years, this type of
wind power has been labeled “community wind power” because the systems are
locally owned by the farmers themselves and/or other local stakeholders. Our
Chairman and Chief Executive Officer, Dan Juhl, was one of the creators of
community wind power in the United States. Community wind power is a specialized
sector in the wind energy industry that differs from the large, utility-owned
wind power systems that are also being built in the United
States.  Community wind power is a form of community-based energy
development (C-BED). Various states, including Minnesota, have enacted C-BED
initiatives, which include mechanisms to support community wind power and are
intended to make it easier for community wind power projects to be successful
without putting an excessive burden on utilities.





Historically,
landowners in rural areas could only benefit from the development of wind farms
in their community by leasing their land to large wind developers. These large
developers would then sell the wind energy to the local utility company and
retain a majority of the project’s profits. We provide what we believe is a
better alternative for local communities by specifically concentrating on C-BED
community wind power projects that are locally owned by farmers, investors,
businesses, schools, utilities, or other public or private local entities. As a
result, we believe that community wind power projects keep more dollars in local
communities, preserve local energy independence, and protect the environment.
Our goal, and Mr. Juhl’s focus over the past years, is to share ownership with
farmers and to build a network of farmer-owned community wind power
systems.





Dan Juhl,
our CEO, is an acknowledged expert in the wind power field and is considered a
pioneer in the wind industry having been active in the field since
1978.  He was a leader in the passage of specific legislation
supporting wind power development in the states of Minnesota and
Nebraska.  John Mitola, our President, is also considered an expert in
the energy field having focused his career on energy efficiency, demand side
management and independent power development.   He has
significant experience in the energy industry and electric industry regulation,
oversight and governmental policy.


19





Our
management team has been involved in the wind power industry for more than 30
years. We have experience in the design, manufacture, maintenance and sale of
wind turbines, as well as the full-scale development of wind farms. We hold
contract rights, are involved with projects in development and under
negotiation, and provide development activities in the wind power industry. Our
contract rights relate to administrative services agreements which call for
management and administrative services to be provided for seven existing
Minnesota wind farm developments. Our assets include eight development services
agreements, ten projects in early development stages, and six agreements to
conduct wind power feasibility studies.





The
Company’s involvement in the sale of consumer-owned renewable energy products
commenced in November 2008 as a result of the acquisition of Next Generation
Power Systems, Inc. (“NextGen”).  Prior to the acquisition, Dan Juhl
had been a controlling shareholder in NextGen since it was organized in
2004.  The NextGen business restores small wind turbines in the 30 KW
class for sale to consumers for on-site electricity
generation.  NextGen also provides solar-powered systems that allow
small businesses and consumers to generate or store electrical power for on-site
use or emergency backup.   In July 2009, NextGen entered into a
20 year, non-exclusive Manufacturing License and Reseller Agreement with an Ohio
entity for purposes of expanding  production and sale of small wind
turbines. The agreement, among other things, specifies a sales territory, sales
quota and requirements with regard to establishing a production facility.
NextGen received $300,000 in cash in July as a part of this agreement with
additional licensing payments of approximately $58,000 due over a twelve month
period beginning September 1, 2009.





Our
strategy is to leverage our portfolio of existing projects and to take on new
developments located in the Midwestern United States and Canada, where proper
conditions exist for successful developments: acceptable wind resources,
suitable transmission access and an appropriate regulatory framework providing
acceptable power purchase agreements and long-term utility agreements. Based on
our pipeline of projects, we believe that we will experience consistent growth
in the number of projects completed and the number of projects for which we are
providing operational oversight. We expect that the continued growth in our
project pipeline will act as a key competitive advantage as the community wind
power industry grows throughout the United States and Canada.





Factors
Affecting Our Operating Results





Demand





Demand
for wind power in the United States is growing rapidly and we believe the call
for growth in community wind power is increasing as well. Community wind systems
will make up a segment of this growth, leading to what we estimate will be
significant growth in community wind systems.





Growth in
wind power is being driven by several environmental, socio-economic and energy
policy factors that include:





·
            ongoing increases in electricity
      demand due to population growth and growth in energy consuming devices
      such as computers, televisions and air conditioning
      systems,





·
            the increasing cost of the
      predominant fuels required to drive the existing fleet of conventional
      electric generation such as coal, natural gas, nuclear and
      oil,





·
            the increasing cost and
      difficulty faced in the construction of conventional electric generation
      plants,





·
            existing and growing legislative
      and regulatory mandates for “cleaner” forms of electric generation,
      including state renewable portfolio standards and the U.S. federal tax
      incentives for wind and solar
generation,





·
            ongoing improvements to wind
      power systems making them more cost effective and improving availability
      to meet demand, and





·
            worldwide concern over greenhouse
      gas emissions and calls to reduce global warming due to the carbon dioxide
      produced by conventional electric
  generation.





In light
of these factors and the resulting increase in demand for wind power, we believe
that we are uniquely positioned to experience significant year-over-year growth
and development of specific community wind farms throughout the United States.
We can provide full-scale development of wind farms across the range of required
steps including performing initial feasibility studies, assisting in power
purchase negotiations, arranging equity and debt project financing, providing
equipment and  construction services, and managing
operations.


20




Debt and Equity Financing
Markets
 
 Wind farm
development projects are dependent on the ability to raise debt and equity
financing to fund the turbine and substation components, construction costs and
other development expenses. We assist project owners in identifying sources of
debt and equity capital as a part of our development efforts. We have expended
significant efforts in 2009 on behalf of two construction-ready wind farm
projects to identify sources of debt and equity financing in order to proceed to
the actual construction phase.  It is our belief that many wind farm
project owners across the U.S. are facing similar difficulties in arranging
project financing as well.  The difficulties in obtaining financing is
 especially  evident within banking institutions who have liquidity
issues resulting from the recent recessionary conditions and  a banking
crisis that has led to U.S. government bailout programs and tight regulatory
conditions.  The slowdown in new wind farm construction has led to increase
in wind turbine inventory around the country, and we are observing that turbine
suppliers are also becoming a source of capital in the construction financing of
wind farm projects.  We expect credit conditions to improve and we will
assist project owners in examining federal and loan guarantee programs as an
additional means of securing project financing.


Site
Selection





Wind,
however, is intermittent and electricity generated from wind power can be highly
variable. Good site selection and advantageous positioning of turbines on a
selected site are critical to the economic production of electricity by wind
energy. In our experience, the primary cost of producing wind-powered
electricity is the turbine equipment and construction cost. As an intermittent
resource, wind power must be carefully positioned into the electric grid along
with other generation resources and we believe Juhl Wind has demonstrated the
expertise necessary to work with local electric utilities to effect the proper
integration plan.  As such, we intend to continue to identify new
sites to produce wind energy through the community wind  power model
throughout the United States and Canada with a focus on the Midwestern region of
the U.S.





Recent Developments in
Government Regulation





Recently
enacted governmental regulations which affect the wind industry in general and
the Company in particular include the following measures:





Production Tax Credits
(PTC).  The PTC provides wind energy generators with a credit
against federal income taxes, annually adjusted for inflation, for a duration of
ten years from the date that the wind turbine is placed into service. In 2007,
the PTC was $20 per megawatt hour. Wind energy generators with insufficient
taxable income to benefit from the PTC may take advantage of a variety of
investment structures to monetize the tax benefits.





The PTC
was originally enacted as part of the Energy Policy Act of 1992 for windparks
placed into service after December 31, 1993 and before July 1, 1999. The PTC
subsequently has been extended six times, but has been allowed to lapse three
times (for periods of three, six and nine months) prior to retroactive
extension. Currently, the PTC is scheduled to expire on December 31,
2012.  This expiration date reflects a three-year extension passed
under the American Recovery and Reinvestment Act enacted in February
2009.





American Recovery and Reinvestment
Act of 2009 (the “Recovery Act”). On February 13, 2009 the
11th
Congress passed a stimulus package known as The American Recovery and
Reinvestment Actof 2009 (the
“Recovery Act”).  The Recovery Act has the potential to substantially
impact the market for renewable energy initiatives. Approximately $40 billion in
spending was appropriated for clean energy initiatives and an additional $20
billion is estimated for new and modified tax incentives.  The
Recovery Act contains a number of provisions that focus on the growth of the
wind industry.  Some of the pertinent provisions of the Recovery Act
include the following: (i) three-year extension of the federal wind energy
production tax credit (PTC) so that eligible projects placed in service by the
end of 2012 will qualify for the credit; (ii) option for a thirty percent (30%)
investment tax credit (ITC) instead of the PTC; (iii) option to convert the ITC
into a grant for wind projects placed in service before 2013;
(iv)  eliminates the dollar cap on residential small wind and solar
for ITC purposes, and (v) additional loan guarantees, bonds and tax
incentives.   These programs enacted under the Recovery Act allow
community wind farms, such as our Company, to take advantage of these funding
opportunities.





Basis
of Presentation





Our
financial statements are prepared in accordance with the rules and regulations
of the SEC.





On June
24, 2008, we entered into a Securities Exchange Agreement with Juhl Energy
Development, Inc. (“Juhl Energy”) and DanMar and Associates, Inc. (“DanMar”)
(the “share exchange transaction”), as previously reported.  At that time,
we succeeded to the wind farm development and management business of Juhl Energy
and DanMar, and Juhl Energy and DanMar became our wholly-owned
subsidiaries.





For
accounting purposes, Juhl Energy was the acquirer in the share exchange
transaction, and consequently the transaction is treated as a recapitalization
of the company.  DanMar was accounted for in a manner similar to
pooling of interests due to common control ownership.





On
October 31, 2008, we acquired all of the issued and outstanding shares of common
stock of NextGen.  Our acquisition of NextGen was accounted for in a
manner similar to pooling of interests due to common control ownership. The
assets and liabilities of NextGen were combined at historical cost for the
portion (54%) under common control and at fair value for the non-controlling
interest.  The revenue and expense activities of NextGen are included
in the accompanying statement of operations for the periods ended June 30, 2009
and 2008. The following discussion of our financial condition and results of
operations should be read in conjunction with our financial statements and
related notes included in this prospectus.





Juhl
Energy, DanMar and NextGen’s financial statements are our historical financial
statements.




Significant
Accounting Estimates




We review
all significant estimates affecting our consolidated financial statements on a
recurring basis and record the effect of any necessary adjustment prior to their
publication. Uncertainties with respect to such estimates and assumptions are
inherent in the preparation of financial statements; accordingly, it is possible
that actual results could differ from those estimates and changes to estimates
could occur in the near term. The preparation of our consolidated financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of the contingent
assets and liabilities at the date of the consolidated financial statements and
the reported amounts of revenue and expenses during the reporting period.
Estimates and judgments are used when accounting for revenue, stock-based
compensation, allowance for doubtful accounts, impairment of goodwill and
intangible assets, deferred income taxes, and contingencies among
others.


21





Our
management has discussed the development and selection of these significant
accounting estimates with our board of directors and our board of directors has
reviewed our disclosures relating to them.





Results of Operations




Comparison
of Three-Month Periods and Six-Month Periods Ended June 30, 2009 and
2008





Overview




Our
general activity for the three months ended June 30, 2009 was primarily focused
on the bringing two projects, Valley View and Grant County, forward to
construction in summer 2009. We also are involved with the ongoing development
of 24 wind farms we have under development with various parties and in various
stages of development. Our management believes that we are poised for growth as
we now have improved our balance sheet liquidity necessary to work through our
current projects under development and ability to develop future
projects.





Our
projects are based on the formation of partnerships with the farmers upon whose
land the wind turbines are installed. Revenue is also derived from our work in
the development of wind farms throughout the development process including four
major components: feasibility studies, development fees, operations and
management oversight and construction management fees.





We hold
contract rights, are involved with projects in development and under
negotiation, and provide development activities in the wind power industry. Once
wind farms are operational, we seek contract rights to provide administrative
services agreements which call for management and administrative services to be
provided to the operating wind farm. Our assets include eight development
services agreements, ten projects in early development stages, and six
agreements to conduct wind power feasibility studies.





Due to
the anticipated increased demand for electricity from alternative energy sources
in 2009 and beyond, together with the stimulus from new federal government
regulations, we believe the demand for wind energy developments and
consumer-owned renewable energy products will be stable or will increase in the
foreseeable future. We anticipate growing revenues on an annual basis beginning
in 2009; however, revenue will be subject to shifts in timing due to project
development delays resulting from our ability to obtain financing and the
construction season in the Upper Midwest climate.





During
the last fiscal year, we added new projects under development, underscoring the
demand in the market and specifically for our form of community wind
power.  We encountered difficult economic conditions with respect to
the financing of wind development projects, and as such, we commissioned no new
wind farm projects during 2008.  We continue to identify additional
debt and equity financing sources in order to begin construction on two to three
projects in 2009.





Revenue





Total
revenue increased by approximately $36,000, or 12.6%, from approximately
$284,000 for the quarter ended June 30, 2008, to approximately $320,000 for the
quarter ended June 30, 2009.  Total Revenue decreased by approximately
$96,000, or 12.6% from approximately  $764,000 for the quarter ended
June 30, 2008, to approximately $668,000 for the six month period ended June 30,
2009.





In the
wind farm development and management segment, which includes all related party
revenue, revenue increased by approximately $84,000, or 57.5%, from
approximately $146,000 for the quarter ended June 30, 2008
to approximately $230,000 for the quarter ended June 30,
2009.  Revenue increased by approximately $78,000, or 25.5%, from
approximately $306,000 for the six months ended June 30, 2008 to approximately
$384,000 for the six months ended June 30, 2009.  This increase is
primarily attributable to an increase in the performance of feasibility
consulting services together with wind farm maintenance service
work.  We did not have any new development projects become operational
in the six months ended June 30, 2009 due to the difficulty in obtaining project
financing, primarily from the lending community. We expect project financing
conditions to improve in the second half of 2009 due to the federal government
intervention within the banking sector in the form of loan guarantees and the
focus of the recent federal stimulus package as it relates to the energy
industry.





Turbine
Sales and Service revenue, which essentially is our consumer-owned
renewable energy segment, decreased by approximately $46,000, or 34%, from
approximately $134,000 for the quarter ended June 30, 2008
to approximately $88,000 for the quarter ended June 30,
2009.  Revenue decreased by approximately $169,000,
or  37.5%, from approximately $451,000 for the six months ended June
30, 2008 to approximately $282,000 for the six months ended June 30,
2009.  This decrease was primarily attributable to a higher sales
dollar volume in 2008 associated with tower components and installation whereas
in 2009 the units sold did not require the special tower
components.  We currently have sixteen wind turbines in backlog with
expected ship dates in the third quarter or early fourth quarter depending on
our the timing of  new components from suppliers.


22





Cost
of Goods Sold





All of
the costs classified in cost of goods sold relate to the NextGen segment and
includes the purchase of previously used turbines, replacement parts,
subcontract refurbishment services and project installation
costs.  Costs of goods sold decreased by approximately $25,000, or
18.1%, from approximately $138,000 for the quarter ended June 30, 2008
to approximately $113,000 for the quarter ended June 30,
2009.  Cost of good sold decreased by approximately $12,000, or 4%,
from approximately $296,000 for the six months ended June 30, 2008 to
approximately $284,000 for the six months ended June 30,
2009.  Despite the decrease in Turbine Sales and Service of $169,000
for the six months ended June 30, 2009, cost of goods sold remained somewhat
flat as the 2009 costs include the amortization of $72,000 in fair value of the
customer backlog that had been recorded in conjunction with the October 2008
NextGen acquisition, together with a writedown of certain inventory components
as a result of manufacturing and turbine design changes adopted by NextGen
management.





Operating
Expenses





General and Administrative
Expenses.  General and administrative expenses increased by
approximately $56,000, or 18.9%, from approximately $297,000 for the
quarter ended June 30, 2008 to approximately $353,000 for the quarter ended
June 30, 2009.  General and administrative expenses increased by
approximately $471,000, or 136%, from approximately $346,000 for the six months
ended June 30, 2008 to approximately $817,000 for the six months ended June 30,
2009. The large increase was primarily attributable to approximately $315,000 of
professional fees incurred in connection with the increased costs of being a
public reporting company, subsequent audit costs over the NextGen acquisition,
securities registration filings, legal services for legislative support, and
accounting services support. Of this amount, we believe that approximately
$225,000 represent one-time costs associated with these professional
services.  The increase in general and administrative expenses in 2008
also included increased expenses for travel and supplies in relation to the
increased number of employees and activity surrounding project management,
NextGen operations and administration. General and administrative expenses
in 2008 also included a provision for bad debts of approximately
$45,000.





Costs
incurred in connection with the closing of the 2008 private placement and 2009
warrant exercise were netted against the proceeds from the sale of our Series A
Convertible Preferred Stock and Series B Convertible Preferred Stock, and
therefore are not included in general and administrative expenses.





Payroll and Employee
Benefits.Payroll and employee benefits expenses increased by
approximately $510,000, or 274%, from approximately $186,000 for the
quarter ended June 30, 2008 to approximately $696,000 for the quarter ended
June 30, 2009.  Payroll and employee benefits expenses increased by
approximately $831,000, or 316%, from approximately $263,000 for the six months
ended June 30, 2008 to approximately $1,094,000 for the six months ended June
30, 2009. With regard to the six month increase of $831,000, approximately
$498,000 was
attributable to stock-based compensation expense related to stock options,
$75,000 was attributable to an increased number and rate of compensation for
executive officers,  and the remaining part of the increase was
primarily attributable to salaries and benefits for the addition of seven
employees over the prior year.





Wind Farm Management
Expenses.Wind farm management expenses increased by
approximately $11,000, or 46.5%, from approximately $23,000 for the quarter
ended June 30, 2008 to approximately $34,000 for the quarter ended June 30,
2009.  Wind farm management expenses increased by approximately
$62,000, or  83.8%, from approximately $74,000 for the six months
ended June 30, 2008 to approximately $136,000 for the six months ended June 30,
2009. This increase of $74,000 was primarily due to the incurrence of one-time
costs incurred to upgrade wind farm facilities as requested by the major equity
investor in the projects.





Investor Relations Expenses.We recorded $18,000 of investor relations expenses in the quarter ended
June 30, 2009, and approximately $53,000 for the six months ended June 30, 2009.
These expenses were paid from a restricted cash fund stemming from the 2008
private placement and the June 2009 warrant exercise and
exchange.  There were no investor relations expenses in quarter ended
June 30, 2008.





Other income
(expense).Effective January 1, 2009, the Company adopted the
provisions of Emerging Issues Task Force 07-5 whereby the the detachable
warrants issued in conjunction with the 2008 private placement must be accounted
for as a derivative instrument. During the quarter and six months ended June 30,
2009, we recorded a gain of approximately $849,000 and $2,199,000, respectively,
from the change in the fair value of the underlying warrants using the Black
Scholes method. In the future, we will be not making additional adjustments to
the fair value of these warrants as the warrants are no longer
outstanding  as a result of either exercise or exchange of such
warrant instruments on June 29, 2009.





Operating
Loss


Our
Operating Loss increased by approximately $534,000, or 148%, from
approximately $361,000 for the quarter ended June 30, 2008
to approximately $895,000 for the quarter ended June 30,
2009.  Operating Loss increased by approximately $1,500,000, from the
operating loss of approximately $215,000 for the six months ended June 30, 2008
to operating loss of approximately $1,715,000 for the six months ended June 30,
2009.   The increase in operating loss is primarily attributable
to the growth in general and administrative and payroll-related expenses as
described above.





Net
Income (Loss)


Net loss
decreased by approximately $300,000, or 97.8%, from approximately $307,000
for the quarter ended June 30, 2008 to approximately $7,000 for the quarter
ended June 30, 2009.  Net income increased by approximately
$707,000,from the net loss of approximately $169,000 for the six months ended
June 30, 2008 to net income of approximately $538,000 for the six months ended
June 30, 2009.  Our net income is significantly impacted by the fair
value accounting over the warrant derivatives in the first six months of 2009 as
described above under other income (expense).


23





Accounts
Receivable





Traditional
credit terms are extended to customers in the normal course of business. We
perform ongoing credit evaluations of our customers’ financial condition and
generally require no collateral.





Property,
Plant and Equipment





As of
June 30, 2009 and December 31, 2008, we held $385,000 and $344,000 in net book
value of property, plant and equipment, respectively. These assets included
land, buildings, office equipment, shop equipment and service
vehicles.





Liquidity
and Capital Resources





At June
30, 2009, we carried $5,121,000 in cash and short term-investments on the
balance sheet primarily due to the 2008 private placement and the recent
infusion of approximately $2,339,000 from the June 2009 exericse by holders of
Series A Warrants.  However, $700,000 of the short-term investments
has been designated as security for the bank notes payable of approximately
$572,000 and therefore have been reflected in current assets as a restricted
asset. In order to provide additional protection to our cash, we obtained an
excess deposit insurance bond (at a cost of $7,089) for our wholly-owned
subsidiary, Juhl Energy, with respect to cash and certificates of deposit
carried in Juhl Energy’s name at First Farmers & Merchants National Bank.
The insurance bond increased our deposit insurance protection by $2.4 million
and is effective through February 25, 2011. In addition,  insurance
coverages are available through the Federal Deposit Insurance Corporation to
adequately insure the deposits.





We have
incurred additional operating costs, especially in the area of professional
fees, since becoming a public reporting company. At the same time, we will
continue our internal efforts to arrange financing terms for each wind farm
project under development. The ability to obtain debt and equity financing is a
material factor in producing our future revenue streams and cash flow. We expect
to generate positive cash flow when we close on equity and debt financings and
begin construction of two projects, Grant County and Valley View. Construction
is expected to begin in the third quarter of 2009. As a part of any debt or
equity financing commitments with these projects,  we may be required
or acquiesce to deferment of our development and construction services fees to
the completion and closing of the respective projects. In the event that we
agree to such a deferment, our operating cash flows will therefore be delayed
until the successful completion of the project.





Due to
the anticipated increased demand for power from alternative energy sources in
2009, we believe the demand for our services, and therefore our revenues, will
be stable or will increase in the foreseeable future. Based on our anticipated
level of revenues, we believe that funds generated from operations, together
with existing cash and cash available from construction and consulting
activities, will be sufficient to finance our operations and planned capital
expenditures through the next 24 months.





We will
continue to pursue new community wind farm developments to maintain an active
backlog of projects. However, we cannot assure you that these actions will be
successful. Should volumes and revenues decline to a level significantly below
our current expectations, we would reduce capital expenditures and implement
cost-reduction initiatives which we believe would be sufficient to ensure that
funds generated from operations, together with existing cash and available
borrowings under any open credit agreement.





Net cash
generated used in operating activities increased by approximately $566,000, from
the net cash generated from operating activities of approximately $249,000 for
the six months ended June 30, 2008 to net cash used in operating activities of
approximately $317,000 for the six months ended June 30, 2009.  The
change in net cash used in operating activities of  $566,000 is
primarily due to the increased operating expenses such as payroll and
professional services fees. These increased expenses were highlighted above in
the discussion and analysis of operating expenses.  We were able to
secure customer deposits for ten small wind turbines in the second quarter which
provided $380,000 of cash flow from operations, and this is included in deferred
revenue.





Net cash
used in investing activities decreased by approximately $18,000, from the net
cash used in investing activities of approximately $95,000 for the six months
ended June 30, 2008 to net cash used in operating activities of approximately
$77,000 for the six months ended June 30, 2009.  The change in net
cash used in investing activities in 2008 primarily relates to reinvestment of
cash into reimbursable project costs incurred on wind farm projects where Juhl
Wind is currently the project developer. The net cash used in investing
activities in 2009 primarily relates to the purchase of equipment and a
vehicle.





Net cash
provided by financing activities decreased by approximately $1,701,000, from the
net cash provided by financing activities of approximately $3,868,000 for the
six months ended June 30, 2008 to net cash provided by financing activities of
approximately $2,167,000 for the six months ended June 30,
2009.  Additional financing activities in 2009 included $2,339,000 in
cash received from the exercise and exchange of the Series A Warrants and
issuance of Series B Preferred Stock in June 2009. This exercise of the Series A
Warrants also involved a $196,710 receivable in the form of a 8% promissory note
from one of our current stockholders with payment due by December 31,
2009.


24





We
maintain an investor relations cash escrow account that was initially funded by
$500,000 of proceeds received from the 2008 private placement, which occurred
during the second quarter of 2008, and an additional $250,000 received from the
exercise of Series A warrants and issuance of Series B Preferred Stock in June
2009.  The funds are to be used only for investor relations
initiatives.  As of June 30, 2009, we had a balance of approximately
$362,000 in the account.





Impact
of Inflation





We expect
to be able to pass inflationary increases on to our customers through price
increases, as required, and do not expect inflation to be a significant factor
in our business.





Seasonality





Although
our operating history is limited, we do not believe our services are seasonal
except for future wind farm construction revenue which may be impacted by
climate in the Upper Midwest.





Off-Balance
Sheet Arrangements





There are
no off-balance sheet arrangements between us and any other entity that have, or
are reasonably likely to have, a current or future effect on our financial
condition, changes in financial condition, revenues or expenses, results of
operations, liquidity, capital expenditures or capital resources that is
material to stockholders.





Critical
Accounting Policies





The
preparation of our consolidated financial statements in conformity with
accounting principles generally accepted in the United States of America
requires our management to exercise its judgment. We exercise considerable
judgment with respect to establishing sound accounting policies and in making
estimates and assumptions that affect the reported amounts of our assets and
liabilities, our recognition of revenues and expenses, and disclosures of
commitments and contingencies at the date of the financial
statements.





On an
ongoing basis, we evaluate our estimates and judgments. We base our estimates
and judgments on a variety factors including our historical experience,
knowledge of our business and industry, current and expected economic
conditions, the composition of our products/services and the regulatory
environment. We periodically re-evaluate our estimates and assumptions with
respect to these judgments and modify our approach when circumstances indicate
that modifications are necessary.





While we
believe that the factors we evaluate provide us with a meaningful basis for
establishing and applying sound accounting policies, we cannot guarantee that
the results will always be accurate. Since the determination of these estimates
requires the exercise of judgment, actual results could differ from such
estimates. A description of significant accounting policies that require us to
make estimates and assumptions in the preparation of our consolidated financial
statements is as follows:





Revenue
Recognition.We receive a down payment upon the acceptance of
a development contract by the wind farm owner. With no work performed on the
contract, the down payment is considered deferred revenue and is recognized over
the estimated life of the contract. We recognize additional revenue from
development contracts upon completion of each of the two deliverables in the
development contract.  The first deliverable is the acceptance of the
power purchase agreement by the wind farm owner and power company. The
compensation relating to the acceptance of the power purchase agreement is
recognized on the date the agreement is executed. The second deliverable is the
commercial operation date of the project. Revenue is recognized for this
deliverable when the project becomes commercially operational according to the
power company.





We have
signed administrative services agreements with several wind turbine projects to
provide management and bookkeeping services. The administrative services
agreements call for quarterly payments in advance or arrears of services
rendered based on the terms of the agreement. The administrative service
payments are carried as deferred revenue and recognized monthly as services are
performed.





Capitalization and Investment in
Wind Farm Project Assets.Our wind farms have four basic phases: (i)
development (which includes pre-development consulting), (ii) financing and
applications, (iii) engineering and construction, and (iv) operation and
maintenance. During the pre-development phase, milestones are created to ensure
that a project is financially viable. Project viability is obtained when it
becomes probable that costs incurred will generate future economic benefits
sufficient to recover these costs.





Examples
of milestones required for a viable wind project include the
following:





·
              the
      identification, selection and acquisition of sufficient land for control
      of the land area required for a wind
farm,


·
            the
      confirmation of a regional electricity market and the availability of
      RECs,


·
            the
      confirmation of acceptable wind resources (feasibility
      study),


·
            the
      confirmation of the potential to interconnect to the electric transmission
      grid, and


·
            the
      determination of limited environmental
  sensitivity.


25





Wind farm
project costs are generally funded through 50% equity and 50% debt from outside
investors and local banks. We do not invest our capital in the projects we
develop, with the exception of reimbursable project advances from time to time.
We have established relationships with equity investment partners, as well as
with local banks, and these relationships have culminated in the successful
funding of several projects. The investment community and marketplace have
demonstrated a strong appetite for investments in wind energy in the recent
past. These investors recognize a determined rate of return and return of
capital typically over a ten year period.  Development fees are
generated by us throughout all phases of project development and represent our
revenue. Expenses incurred relating to operations are applied under generally
accepted accounting principles.





Item
      3.
            QUANTITATIVE
      AND QUALITATIVE ANALYSIS ABOUT MARKET
RISK





Not
applicable.





Item
      4.
            CONTROLS
      AND PROCEDURES





Evaluation
of Disclosure Controls and Procedures





Based on
management’s evaluation (with participation of our President and Chief Financial
Officer (CFO), as of the end of the period covered by this report, our President
and CFO have concluded that our disclosure controls and procedures (as defined
in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended (the Exchange Act), are ineffective to provide reasonable assurance that
information required to be disclosed by us in reports that we file or submit
under the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in SEC rules and forms, and is accumulated and
communicated to management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding
required disclosure.





Changes
in Internal Control over Financial Reporting





There
were changes to our internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the
period covered by this report that may have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting. For a discussion of the changes made, refer to the Remediation of
Material Weaknesses in Internal Control over Financial Reporting.





Management’s
Report on Internal Control over Financial Reporting





Management
is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange
Act.  Internal control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements in accordance with U.S. generally
accepted accounting principles. Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also,
projection of any evaluation of effectiveness to future periods is subject to
the risk that controls may become inadequate because of changes in conditions,
or that the degree of compliance with the policies or procedures may
deteriorate.




Management
has conducted, with the participation of our Chief Executive Officer and Chief
Financial Officer, an assessment, including testing of the effectiveness, of our
internal control over financial reporting as of June 30, 2009. Management’s
assessment of internal control over financial reporting was conducted using the
criteria in Internal Control over Financial Reporting – Guidance for Smaller
Public Companies issued by the Committee of Sponsoring Organizations of the
Treadway Commission (“COSO”).




A
material weakness is a deficiency, or a combination of deficiencies, in internal
control over financial reporting, such that there is a reasonable possibility
that a material misstatement of the Company’s annual or interim financial
statements will not be prevented or detected on a timely
basis.   In connection with management’s assessment of our
internal control over financial reporting as required under Section 404 of the
Sarbanes-Oxley Act of 2002, we identified the following material weaknesses in
our internal control over financial reporting as of June 30, 2009:




1.           The
Company has not established adequate financial reporting monitoring activities
to mitigate the risk of management override, specifically:




a.           Delegation
of authority has not been formally documented;




b.           Insufficient
oversight of accounting principle implementation; and




c.           Insufficient
oversight of external audit functions;




2.           There
is a strong reliance on the external auditors to review and adjust the annual
and quarterly financial statements, to monitor new accounting principles, and to
ensure compliance with GAAP and SEC disclosure requirements;


26


3.           There
is a strong reliance on the external attorneys to review and edit the annual and
quarterly filings and to ensure compliance with SEC disclosure requirements;
and


4.           We
have not adequately divided, or compensated for, incompatible functions among
personnel to reduce the risk that a potential material misstatement of the
financial statements would occur without being prevented or
detected.




Because
of the material weaknesses noted above, management has concluded that we did not
maintain effective internal control over financial reporting as of June 30,
2009, based on Internal Control over Financial Reporting – Guidance for Smaller
Public Companies issued by COSO.




Remediation
of Material Weaknesses in Internal Control Over Financial Reporting




Management
is in the process of addressing its material weaknesses in an effort to improve
its system of internal control over financial reporting through the following
actions:




1.
              The
      Company hired a Chief Financial Officer in January 2009 to provide
      oversight of the internal control systems, compliance with the GAAP and
      SEC disclosure requirements, and supervision of the accounting
      functions.





2.
            In
      March 2009, the Board of Directors approved the adoption of a Disclosure
      Control policy, which includes, among other things, a Disclosure Committee
      consisting of the CEO, President and CFO. This Committee will be
      responsible for managing the identification and disclosure of information
      in our SEC filings and public
statements.





3.
            The
      Company has assessed control risks with the assistance of an outside
      consultant who has experience with Sarbanes Oxley compliance and has
      documented key accounting control areas. We expect to continue this effort
      in 2009 to meet attestation
standards.





4.
            We
      have established a formal delegation policy within the Company which
      provides business rules in conjunction with signing and approval authority
      by Company employees.





5.
            As
      a small business, the Company does not have the resources to fund
      sufficient staff to ensure a complete segregation of responsibilities
      within the accounting function.  However, Company management
      does review, and will increase the review of, financial statements and
      bank reconciliations on a monthly basis, together with the adoption of a
      monthly financial closing process. These actions, in addition to the
      improvements identified above, will minimize risk of a potential
      material misstatement
occurring.




The
foregoing initiatives will enable us to improve our internal controls over
financial reporting. Management is committed to continuing efforts aimed at
improving the design adequacy and operational effectiveness of its system of
internal controls.  The remediation efforts noted above will be
subject to the Company’s internal control assessment, testing and evaluation
process.





PART II - OTHER
INFORMATION





Item
1. LEGAL PROCEEDINGS





None





Item
1A. RISK FACTORS





Not
applicable.





Item
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





On June 29, 2009, the Company entered into an
agreement (“Warrant Amendment Agreement”) with the holders of the Company’s
Series A, Series B and Series C Warrants (“Existing Warrants”) whereby the
holders and the Company agreed that the Existing Warrants would be exercisable
solely for the Company’s Series B Convertible Preferred Stock as constituted by
the Certificate of Designation of Preferences, Rights and Limitations of Series
B Convertible Preferred Stock.  In conjunction with the Warrant
Amendment Agreement, the holders of the Company’s Series A Warrants exercised
2,036,840 warrants at a price of $1.25 per share for net proceeds to the Company
of approximately $2,546,050.   The Company used intends to
utilize the net proceeds for working capital purposes.





On June
29, 2009, the Company entered into an agreement (“Securities Exchange
Agreement”) with the holders of the Company’s Series A, Series B and Series C
Warrants whereby the holders and the Company agreed to exchange the holders’
remaining Series A Warrants, and all of their Series B and Series C Warrants for
4,570,166 shares of the Company’s Series B Convertible Preferred Stock as
constituted by the Certificate of Designation of Preferences, Rights and
Limitations of Series B Convertible Preferred Stock.


27





On June
26, 2009, the Company filed with the Secretary of State of Delaware a
Certificate of Designation of Preferences, Rights and Limitations of Series B
Convertible Preferred Stock in connection with the Warrant Amendment Agreement
and Securities Exchange Agreement described above.





The
Company issued the Series B Convertible Preferred Stock in reliance upon an
exemption from registration provided under Section 4(2) of the Securities Act of
1933 as a transaction not involving a public offering.





The
Warrant Amendment Agreement, Securities Exchange Agreement and Certificate of
Designation of Preferences, Rights and Limitations of Series B Convertible
Preferred Stock were reported in the Company’s Current Report on Form 8-K filed
with the U. S. Securities and Exchange Commission on July 1, 2009.





Item
3. DEFAULTS UPON SENIOR SECURITIES.





None





Item
4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.





None.





Item
5. OTHER INFORMATION.





a)
            None


b)
            None





Memorandum
of Understanding





On April
13, 2009, the Company and the holders of the Company’s Series A 8% Convertible
Preferred Stock entered into a Memorandum of Understanding regarding the
registration of Holder Registrable Securities (as defined in the Registration
Rights Agreement dated as of June 24, 2008) under the Company’s Form S-1
Registration Statement filed on October 22, 2008 and subsequently amended (the
“Juhl Registration Statement”).  Pursuant to this Memorandum of
Understanding, the parties confirmed, acknowledged and agreed regarding the pro
rata reduction of Registrable Securities between the Holder Registrable
Securities and Greenview Capital Registrable Securities (as defined in the
Registration Rights Agreement), in order to comply with U. S. Securities and
Exchange Commission guidance with respect to the amount of securities eligible
for registration on the Juhl Registration Statement.





Amendment
of Registration Rights Agreement and Rights of Series A Convertible Preferred
Stock.





On May
13, 2009, the Company and the holders of the Company’s Series A 8% Convertible
Preferred Stock entered into an agreement amending the penalty provisions
(including liquidated damages) provided in the Registration Rights Agreement
dated June 24, 2008 for failure to timely file and obtain effectiveness of a
registration statement.  Under this agreement, the Company agreed to issue
additional common stock to the holders of the Series A Convertible Preferred
Stock at a price equal to 75% of the average of the immediately preceding 20
days’ daily volume weighted average price.  This issuance of common
stock was in lieu of the liquidated damages set forth under the Registration
Rights Agreement and constituted a waiver and deletion of redemption rights
provided by the Company’s Certificate of Designation of Preferences, Rights and
Limitations of Series A 8% Convertible Preferred Stock filed with the Delaware
Secretary of State on June 24, 2008.





On June
11, 2009, the Company filed with the Secretary of State of Delaware an Amended
and Restated Certificate of Designation of Preferences, Rights and Limitations
of Series A 8% Convertible Preferred Stock to reflect these agreements with the
holders of the Series A Preferred Stock.





This
amendment of the Registration Rights Agreement, rights of Series A 8%
Convertible Preferred Stock and Amended and Restated Certificate of Designation
of Preferences, Rights and Limitations of Series A 8% Convertible Preferred
Stock were reported in the Company’s Current Report on Form 8-K filed with the
U. S. Securities and Exchange Commission on June 15, 2009.


28





Declaration
of Effectiveness of Registration Statement on Form S-1





On June
24, 2009, the U. S. Securities and Exchange Commission declared the Company’s
Registration Statement on Form S-1, as amended, effective.  Our
Registration Statement provided for the sale of up to 1,700,000 shares of our
common stock, in accordance with the terms set forth therin, by selling
stockholders as listed therein.





Employment
Agreement with John J. Brand




On
January 26, 2009, the Board of the Company appointed John J. Brand as Chief
Financial Officer (“CFO”) of the Company under an employment arrangement with
the understanding that the Company and Mr. Brand would enter into a formal
written employment agreement following the first six months of Mr. Brand’s
employment with the Company.  On August 13, 2009, the Company and Mr.
Brand entered into an Executive Employment Agreement whereunder the Company will
employ Mr. Brand as CFO for a term beginning as of August 13, 2009 and ending on
December 31, 2011.  Mr. Brand’s initial monthly salary of the employment
agreement will be $10,417 and will increase to $12,500 based on the occurrence
of certain business events.  The Company will pay Mr. Brand an annual
performance bonus of a maximum of his annual salary upon reaching certain goals
established by senior management and approved by the board of directors. 
In connection with his employment agreement, Mr. Brand also received, in
addition to an existing stock option grant in January 2009 to purchase an
aggregate of 100,000 shares of our common stock exercisable at $1.95 per share
according to the following vesting schedule:  25,000 shares on January 26,
2009; 25,000 shares on July 26, 2009; 25,000 shares on January 26, 2010; and
25,000 shares on July 26, 2010,  an additional stock option grant
simultaneously with the Executive Employment Agreement to purchase an aggregate
of 150,000 shares of our common stock exercisable at the closing price per share
on August 13, 2009 with such options vesting over four years beginning September
1, 2009 through September 1, 2012.  Mr. Brand will receive an
automobile allowance of $750 per month and other employee benefits provided to
similarly-situated employees.  In the event Mr. Brand terminates his
employment for good reason as defined within the agreement, he will receive
severance compensation in the amount equal to 90 days’ pay.
  Grant
of Options to Director General Wesley Clark





On June
29, 2009, the Company granted stock options to its Director, General Wesley
Clark, to purchase 500,000 shares of the Company’s common stock outside the
Company’s stock option plan exercisable at $2.00 per share according to the
following vesting schedule:  166,666 shares on June 26, 2009; 166,667
shares on June 26, 2010; and 166,667 shares on June 26, 2011.





Item 6. EXHIBITS





Exhibits
required by Item 601 of Regulation S-K


No.
                    
                    Description3.1
                    
                    Articles
      of Incorporation of the Company 13.2
                    
                    Certificate of Amendment to
      Certificate of Incorporation amending, among other things, the name of MH
      & SC, Incorporated to Juhl Wind, Inc. filed June 20, 2008, and
      effective June 24, 2008, with the Delaware Secretary of State23.3
                    
                    Certificate
      of Designation of Preferences, Rights and Limitations of Series A 8%
      Convertible Preferred Stock of Juhl Wind, Inc. filed June 24, 2008, with
      the Delaware Secretary of State23.4
                    
                    Amended
      and Restated Certificate of Designation of Preferences, Rights and
      Limitations of Series A 8% Convertible Preferred Stock of Juhl Wind, Inc.
      filed June 11, 2009, with the Delaware Secretary of State33.5
                    
                    Certificate
      of Designation of Preferences, Rights and Limitations of Series B
      Convertible Preferred Stock of Juhl Wind, Inc. filed June 26, 2009, with
      the Delaware Secretary of State 43.6
                    
                    Bylaws
      of the Company110.1
                    
                    Memorandum
      of Understanding dated April 13, 2009 between Juhl Wind, Inc. and each of
      Vision Opportunity Master Fund, Ltd., Daybreak Special Situations Master
      Fund, Ltd., Bruce Meyers and Imtiaz Khan510.2
                    
                    Wavier
      Agreement dated May 13, 2009, between Juhl Wind, Inc. and each of Vision
      Opportunity Master Fund, Ltd., Daybreak Special Situations Master Fund,
      Ltd., Bruce Meyers and Imtiaz Khan610.3
                    
                    Warrant
      Amendment Agreement dated June 29, 2009, between Juhl Wind, Inc. and each
      of Vision Opportunity Master Fund, Ltd., Daybreak Special Situations
      Master Fund, Ltd., Bruce Meyers and Imtiaz Khan7




29


10.4
                
                Securities
      Exchange Agreement dated June 29, 2009, between Juhl Wind, Inc. and each
      of Vision Opportunity Master Fund, Ltd., Daybreak Special Situations
      Master Fund, Ltd., Bruce Meyers and Imtiaz Khan710.5
                
                Form
      of Employment Agreement, dated August 13, 2009, between Juhl Wind, Inc.
      and John J. Brand31.1
                Certification
      of Principal Executive Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200231.2
                Certification
      of Principal Financial Officer Pursuant to Section 302 of the
      Sarbanes-Oxley Act of 200232.1
                Certification
      of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      200232.2
                Certification
      of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as
      Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of
      2002




1Incorporated
herein by reference from the Company’s Registration Statement on Form S-B filed
with the Securities and Exchange Commission on March, 31, 2007.




2Incorporated
herein by reference from the Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 24, 2008.





3Incorporated
herein by reference from the Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on June 15, 2009.





4Incorporated
herein by reference from the Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 1, 2009.





5Incorporated
herein by reference to the exhibits included with Amendment No. 2 to our
Registration Statement on Form S-1 (registration no. 333-154617), filed with the
Securities and Exchange Commission on April 15, 2009.





6Incorporated
herein by reference to the exhibits included with our Quarterly Report on Form
10-Q for the quarter ended March 31, 2009, filed with the Securities and
Exchange Commission on May 15, 2009.





7 Incorporated
herein by reference from the Company’s Current Report on Form 8-K filed with the
Securities and Exchange Commission on July 1, 2009.


30





SIGNATURES





In
accordance with the requirements of the Securities Exchange Act of 1934, the
registrant caused duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.





JUHL WIND, INC.(Registrant)Date:  August
      14, 2009
                  /s/
      John MitolaJohn
      MitolaPresident


31