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:  September 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:  20,914,318 shares outstanding as of November
11, 2009.







TABLE OF
CONTENTS




PART
      I - FINANCIAL INFORMATIONItem
      1. Unaudited Financial Statements
                3Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
                21Item
      3. Quantitative and Qualitative Analysis About Market Risk
                32Item
      4. Controls and Procedures
                32PART
      II - OTHER INFORMATIONItem
      1. Legal Proceedings
                34Item
      1A. Risk Factors
                34Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
                34Item
      3. Defaults Upon Senior Securities
                34Item
      4. Submission of Matters to a Vote of Security Holders
                34Item
      5. Other Information
                34Item
      6. Exhibits
                35Signatures
                36Exhibits




2


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” or “SEC”). 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.




3


JUHL
WIND INC.


CONSOLIDATED
BALANCE SHEETS


SEPTEMBER
30, 2009 AND DECEMBER 31, 2008





SEPTEMBER
      30,
                
                
                DECEMBER
      31,2009
                
                
                2008(unaudited)ASSETSCURRENT
      ASSETSCash
                
                $
                2,569,732
                
                
                $
                1,310,789Restricted
      Cash
                
                
                296,265
                
                
                
                264,557Accounts
      Receivable,  net of an allowance of $0 and $10,000 at September
      30, 2009 and December 31, 2008, respectively
                
                
                145,731
                
                
                
                44,007Short
      Term Investments and Accrued Interest Receivable
                
                
                1,352,633
                
                
                
                1,306,775Short
      Term Investments - Restricted
                
                
                700,000
                
                
                
                700,000Unbilled
      Receivables, at net realizable value
                
                
                65,271
                
                
                
                250,699Inventory
                
                
                362,376
                
                
                
                403,118Reimbursable
      Project Costs
                
                
                494,106
                
                
                
                147,800Other
      Current Assets
                
                
                201,595
                
                
                
                97,727Current
      Deferred Income Taxes
                
                
                31,000
                
                
                
                422,000TOTAL
      CURRENT ASSETS
                
                
                6,218,709
                
                
                
                4,947,472PROPERTY
      AND EQUIPMENT (Net)
                
                
                411,063
                
                
                
                344,124GOODWILL
                
                
                227,998
                
                
                
                227,998OTHER
      ASSETSDeferred
      Income Tax Asset
                
                
                405,000
                
                
                
                14,000Project
      Development Costs
                
                
                307,000
                
                
                
                302,000Intangible
      Assets
                
                
                -
                
                
                
                72,000TOTAL
      OTHER ASSETS
                
                
                712,000
                
                
                
                388,000TOTAL
      ASSETS
                
                $
                7,569,770
                
                
                $
                5,907,594LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      Payable
                
                $
                792,855
                
                
                $
                250,285Accrued
      Expenses
                
                
                113,089
                
                
                
                346,019Customer
      Deposits
                
                
                728,136
                
                
                
                238,375Deferred
      Revenue
                
                
                442,583
                
                
                
                94,166Notes
      Payable
                
                
                496,447
                
                
                
                646,791TOTAL
      CURRENT LIABILITIES
                
                
                2,573,110
                
                
                
                1,575,636SERIES
      A CONVERTIBLE PREFERRED STOCK$.0001
      par value, 20,000,000 authorized, 5,160,000 issued and outstanding as of
      December 31, 2008
                
                
                -
                
                
                
                3,342,954STOCKHOLDERS'
      EQUITYPreferred
      Stock, 20,000,000 shares authorizedSeries
      A Convertible Preferred Stock - $.0001 par value,
      4,820,000  issued and outstanding at September 30,
      2009
                
                
                2,531,797
                
                
                
                -Series
      B Convertible Preferred Stock - $.0001 par value, 6,607,006 issued and
      outstanding at September 30, 2009
                
                
                15,704,903
                
                
                
                -Common
      Stock - $.0001 par value; 100,000,000 shares authorized, 20,874,318 and
      20,183,213 issued and outstanding as of September 30, 2009 and December
      31, 2008, respectively
                
                
                2,087
                
                
                
                2,018Subscription
      Receivable from Series B Convertible Preferred Stock
                
                
                (196,710
                )
                
                
                -Additional
      Paid-In Capital
                
                
                509,661
                
                
                
                2,740,788Accumulated
      Deficit
                
                
                (13,555,078
                )
                
                
                (1,753,802
                )TOTAL
      STOCKHOLDERS' EQUITY
                
                
                4,996,660
                
                
                
                989,004TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                
                $
                7,569,770
                
                
                $
                5,907,594





The
accompanying notes are an integral part of these statements.




4





JUHL
WIND INC.


CONSOLIDATED
STATEMENT OF OPERATIONS


FOR
THE QUARTERS ENDED SEPTEMBER 30, 2009 AND 2008





2009
                
                
                2008(unaudited)
                
                
                (unaudited)REVENUEWind
      Farm Development and Management
                
                $
                35,335
                
                
                
                8.9
                %
                
                $
                121,529
                
                
                
                79.5
                %Turbine
      Sales & Service
                
                
                268,765
                
                
                
                67.3
                
                
                
                3,406
                
                
                
                2.2Related
      Party Revenue
                
                
                86,633
                
                
                
                21.7
                
                
                
                22,532
                
                
                
                14.8Other
      Operating Income
                
                
                8,363
                
                
                
                2.1
                
                
                
                5,344
                
                
                
                3.5TOTAL
      REVENUE
                
                
                399,096
                
                
                
                100.0
                
                
                
                152,811
                
                
                
                100.0COST
      OF GOODS SOLD
                
                
                230,907
                
                
                
                57.9
                
                
                
                84,048
                
                
                
                55.0GROSS
      PROFIT
                
                
                168,189
                
                
                
                42.1
                
                
                
                68,763
                
                
                
                45.0OPERATING
      EXPENSESGeneral
      and Administrative Expenses
                
                
                427,764
                
                
                
                107.2
                
                
                
                220,171
                
                
                
                144.1Investor
      Relations Expenses
                
                
                128,141
                
                
                
                32.1
                
                
                
                181,285
                
                
                
                118.6Payroll
      and Employee Benefits
                
                
                552,976
                
                
                
                138.6
                
                
                
                263,673
                
                
                
                172.6Windfarm
      Management Expenses
                
                
                10,872
                
                
                
                2.7
                
                
                
                41,287
                
                
                
                27.0TOTAL
      OPERATING EXPENSES
                
                
                1,119,753
                
                
                
                280.6
                
                
                
                706,416
                
                
                
                462.3OPERATING
      LOSS
                
                
                (951,564
                )
                
                
                (238.4
                )
                
                
                (637,653
                )
                
                
                (417.3
                )OTHER
      INCOME (EXPENSE)Interest
      Income
                
                
                18,362
                
                
                
                4.6
                
                
                
                19,813
                
                
                
                13.0Interest
      Expense
                
                
                (6,094
                )
                
                
                (1.5
                )
                
                
                (8,848
                )
                
                
                (5.8
                )Other
      Income (Expense)
                
                
                1,490
                
                
                
                0.4
                
                
                
                -
                
                
                
                0.0TOTAL
      OTHER INCOME
                
                
                13,758
                
                
                
                3.4
                
                
                
                10,965
                
                
                
                7.2LOSS
      BEFORE INCOME TAXES
                
                
                (937,806
                )
                
                
                (235.0
                )
                
                
                (626,688
                )
                
                
                (410.1
                )INCOME
      TAX BENEFIT
                
                
                -
                
                
                
                0.0
                
                
                
                (99,000
                )
                
                
                (64.8
                )NET
      LOSS
                
                $
                (937,806
                )
                
                
                (235.0
                )
      %
                
                $
                (527,688
                )
                
                
                (345.3
                )
      %PREFERRED
      STOCK DIVIDENDS
                
                
                102,608
                
                
                
                
                
                
                
                103,200NET
      LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
                
                $
                (1,040,414
                )
                
                
                
                
                
                $
                (630,888
                )WEIGHTED
      AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
                
                
                20,654,318
                
                
                
                
                
                
                
                20,050,000NET
      LOSS PER SHARE - BASIC AND DILUTED
                
                $
                (0.05
                )
                
                
                
                
                
                $
                (0.03
                )





The
accompanying notes are an integral part of these statements.




5





JUHL
WIND INC.


CONSOLIDATED
STATEMENT OF OPERATIONS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008





2009
                
                
                2008(unaudited)
                
                
                (unaudited)REVENUEWind
      Farm Development and Management
                
                $
                350,336
                
                
                
                32.8
                %
                
                $
                386,758
                
                
                
                42.1
                %Turbine
      Sales & Service
                
                
                568,967
                
                
                
                53.3
                
                
                
                454,089
                
                
                
                49.5Related
      Party Revenue
                
                
                137,446
                
                
                
                12.9
                
                
                
                65,709
                
                
                
                7.2Other
      Operating Income
                
                
                10,290
                
                
                
                1.0
                
                
                
                11,576
                
                
                
                1.2TOTAL
      REVENUE
                
                
                1,067,039
                
                
                
                100.0
                
                
                
                918,132
                
                
                
                100.0COST
      OF GOODS SOLD
                
                
                499,234
                
                
                
                46.8
                
                
                
                395,318
                
                
                
                43.1GROSS
      PROFIT
                
                
                567,805
                
                
                
                53.2
                
                
                
                522,814
                
                
                
                56.9OPERATING
      EXPENSESGeneral
      and Administrative Expenses
                
                
                1,225,813
                
                
                
                114.9
                
                
                
                554,049
                
                
                
                60.3Investor
      Relations Expenses
                
                
                181,437
                
                
                
                17.0
                
                
                
                181,285
                
                
                
                19.7Payroll
      and Employee Benefits
                
                
                1,647,025
                
                
                
                154.4
                
                
                
                525,548
                
                
                
                57.2Windfarm
      Management Expenses
                
                
                180,621
                
                
                
                16.9
                
                
                
                112,044
                
                
                
                12.3TOTAL
      OPERATING EXPENSES
                
                
                3,234,896
                
                
                
                303.2
                
                
                
                1,372,926
                
                
                
                149.5OPERATING
      LOSS
                
                
                (2,667,091
                )
                
                
                (250.0
                )
                
                
                (850,112
                )
                
                
                (92.6
                )OTHER
      INCOME (EXPENSE)Interest
      Income
                
                
                58,583
                
                
                
                5.5
                
                
                
                19,813
                
                
                
                2.2Interest
      Expense
                
                
                (22,945
                )
                
                
                (2.2
                )
                
                
                (24,859
                )
                
                
                (2.7
                )Gain
      in Fair Value of Warrant Liability
                
                
                2,198,671
                
                
                
                206.1
                
                
                
                -
                
                
                
                -Other
      Expense
                
                
                32,664
                
                
                
                3.1
                
                
                
                -
                
                
                
                -TOTAL
      OTHER INCOME (EXPENSE)
                
                
                2,266,973
                
                
                
                212.5
                
                
                
                (5,046
                )
                
                
                (0.5
                )LOSS
      BEFORE INCOME TAXES
                
                
                (400,118
                )
                
                
                (37.5
                )
                
                
                (855,158
                )
                
                
                (93.1
                )INCOME
      TAX BENEFIT
                
                
                -
                
                
                
                0.0
                
                
                
                (161,000
                )
                
                
                (17.5
                )NET
      LOSS
                
                $
                (400,118
                )
                
                
                (37.5
                )
      %
                
                $
                (694,158
                )
                
                
                (75.6
                )
      %PREFERRED
      STOCK DIVIDENDS
                
                
                309,008
                
                
                
                
                
                
                
                110,080SERIES
      B BENEFICIAL CONVERSION FEATURE
                
                
                2,790,707
                
                
                
                
                
                
                
                -NET
      LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS
                
                $
                (3,499,833
                )
                
                
                
                
                
                $
                (804,238
                )WEIGHTED
      AVERAGE SHARES OUTSTANDING - BASIC AND DILUTED
                
                
                20,442,651
                
                
                
                
                
                
                
                18,450,000NET
      LOSS PER SHARE - BASIC AND DILUTED
                
                $
                (0.17
                )
                
                
                
                
                
                $
                (0.04
                )





The
accompanying notes are an integral part of these statements.




6





JUHL WIND INC.


CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


FOR
THE YEAR ENDED DECEMBER 31, 2008 AND NINE MONTHS ENDED SEPTEMBER 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 5)
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (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 feature of Series A preferred
    stock
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      5,160,000
                      
                      
                      
                      3,342,954
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      3,342,954Net
      income (loss)
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (400,118
                      )
                      
                      
                      
                      
                      
                      
                      (400,118
                      )Stock-based
      compensation
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      716,198
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      
                      
                      716,198Common
      stock dividends issued to Series A preferred stockholders
                      
                      
                      351,105
                      
                      
                      
                      35
                      
                      
                      
                      -
                      
                      
                      
                      (419,679
                      )
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      627,596
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      
                      
                      207,952Beneficial
      conversion feature of Series B preferred stock
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      2,790,707
                      
                      
                      
                      (2,308,039
                      )
                      
                      
                      (482,668
                      )
                      
                      
                      
                      
                      
                      
                      -Issuance
      of Series B and conversion of Series A warrants for Series B preferred
      stock, less offering costs of $10,000
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      5,966,792
                      
                      
                      
                      12,914,196
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      
                      
                      
                      
                      12,914,196Subscription
      receivable issued for issuance of Series B preferred stock
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      640,214
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      (196,710
                      )
                      
                      
                      (196,710
                      )Issuance
      of Common Stock upon conversion of Series A Preferred
Stock
                      
                      
                      340,000
                      
                      
                      
                      34
                      
                      
                      
                      (340,000
                      )
                      
                      
                      (171,353
                      )
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      171,319
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      
                      -Series
      A 8% preferred stock dividend
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      309,008
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      (309,008
                      )
                      
                      
                      
                      
                      
                      
                      -BALANCE
      - September 30, 2009   (unaudited)
                      
                      
                      20,874,318
                      
                      
                      $
                      2,087
                      
                      
                      
                      4,820,000
                      
                      
                      $
                      2,531,797
                      
                      
                      
                      6,607,006
                      
                      
                      $
                      15,704,903
                      
                      
                      $
                      509,661
                      
                      
                      $
                      (13,555,078
                      )
                      
                      $
                      (196,710
                      )
                      
                      $
                      4,996,660





The
accompanying notes are an integral part of these statements.




7




JUHL WIND INC.


CONSOLIDATED
STATEMENTS OF CASH FLOWS


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008





2009
                      
                      
                      2008(unaudited)
                      
                      
                      (unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
                      
                      $
                      (400,118
                      )
                      
                      $
                      (694,158
                      )Adjustments
      to Reconcile Net Loss to Net Cash Used in Operating
      Activities:Depreciation
      and Amortization
                      
                      
                      113,927
                      
                      
                      
                      36,243Stock-Based
      Compensation
                      
                      
                      716,198
                      
                      
                      
                      174,083Provision
      for Uncollectible Accounts
                      
                      
                      (10,000
                      )
                      
                      
                      45,446Gain
      on Warrant Liability Fair Value
                      
                      
                      (2,198,671
                      )
                      
                      
                      -Non-cash
      Liquidated Damages Expense
                      
                      
                      (32,540
                      )
                      
                      
                      -Change
      in Assets and Liabilities, Net of Contributed Company:Accounts
      Receivable
                      
                      
                      (91,724
                      )
                      
                      
                      114,839Unbilled
      Receivable
                      
                      
                      185,428
                      
                      
                      
                      (34,275
                      )Inventory
                      
                      
                      40,742
                      
                      
                      
                      137,705Reimbursable
      Project Costs
                      
                      
                      (346,306
                      )
                      
                      
                      (147,000
                      )Other
      Current Assets
                      
                      
                      (103,868
                      )
                      
                      
                      (206,173
                      )Interest
      Receivable on Short Term Investments
                      
                      
                      (34,451
                      )
                      
                      
                      -Accounts
      Payable
                      
                      
                      542,570
                      
                      
                      
                      (5,233
                      )Accrued
      Expenses
                      
                      
                      7,562
                      
                      
                      
                      14,588Deferred
      Income Taxes
                      
                      
                      -
                      
                      
                      
                      (161,000
                      )Deferred
      Revenue and Customer Deposits
                      
                      
                      838,178
                      
                      
                      
                      233,622NET
      CASH USED IN OPERATING ACTIVITIES
                      
                      
                      (773,073
                      )
                      
                      
                      (491,313
                      )CASH
      FLOWS FROM INVESTING ACTIVITIESCash
      Acquired from Community Wind Development Group, LLC
                      
                      
                      -
                      
                      
                      
                      13,108Cash
      Paid for Short-term Investments
                      
                      
                      (11,407
                      )
                      
                      
                      -Investment
      in Project Development Costs
                      
                      
                      (5,000
                      )
                      
                      
                      -Payments
      for Property and Equipment
                      
                      
                      (108,866
                      )
                      
                      
                      (11,268
                      )NET
      CASH USED IN INVESTING ACTIVITIES
                      
                      
                      (125,273
                      )
                      
                      
                      1,840CASH
      FLOWS FROM FINANCING ACTIVITIESChange
      in Restricted Cash
                      
                      
                      (31,708
                      )
                      
                      
                      181,285Principal
      Payments on Notes Payable
                      
                      
                      (150,344
                      )
                      
                      
                      (35,359
                      )Proceeds
      Received Through the Issuance of Series A Preferred Stock
                      
                      
                      -
                      
                      
                      
                      4,099,825Proceeds
      Received Through the Issuance of Series B Preferred Stock and Conversion
      of Warrants
                      
                      
                      2,339,341
                      
                      
                      
                      -Distributions
      to Shareholders
                      
                      
                      -
                      
                      
                      
                      (216,899
                      )NET
      CASH FROM FINANCING ACTIVITIES
                      
                      
                      2,157,289
                      
                      
                      
                      4,028,852NET
      INCREASE IN CASH
                      
                      
                      1,258,943
                      
                      
                      
                      3,539,379CASH
      BEGINNING OF THE PERIOD
                      
                      
                      1,310,789
                      
                      
                      
                      163,476CASH
      END OF THE PERIOD
                      
                      $
                      2,569,732
                      
                      
                      $
                      3,702,855NONCASH
      INVESTING ACTIVITYEquity
      Contribution of Net Assets and Liabilities of Common Owned 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
                      
                      $
                      309,008
                      
                      
                      $
                      110,080Warrant
      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
                      
                      $
                      240,490
                      
                      
                      $
                      -





The
accompanying notes are an integral part of these statements.




8


JUHL
WIND, INC.


NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


FOR
THE NINE MONTHS ENDED SEPTEMBER 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. 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. 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.





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.





9




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 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 and no impairment of goodwill was considered
necessary.





STOCK
OPTION PLANS


The
Company recognizes compensation expense for employee stock options based on the
estimated grant date fair value using the Black-Scholes option-pricing model.
The Company accounts for unit based instruments granted to nonemployees under
the fair value method. 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.





10




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.


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 and Maintenance Services


Revenues
earned from administrative, management and maintenance 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. Maintenance services are generally
billed on a time and materials basis.





Licensing
Revenue


Revenues
earned from licensing agreements are amortized straight line over the term of
the agreement.





11




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 September 30, 2009, the Company had
1,810,000 unit equivalents outstanding relating to outstanding stock options and
warrants. As of September 30, 2008, the Company had 8,310,000 share equivalents
outstanding relating to outstanding stock options and warrants.  At
September 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


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,
warranty costs, and net operating losses that are available to offset future
taxable income.  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 November 13, 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 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 Series A will have
“weighted average” anti-dilution price protection.





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 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.





12




Redemption
Rights of Series A





Series A
may not be redeemed by the Company at any time.





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
and July 2009, the Company issued approximately 135,000 shares of common stock
in payment of approximately $240,500 of this liability. The Company anticipates
that approximately 11,000 additional shares of common stock will be issued in
connection with the payment of the remaining liability. As of September 30,
2009, the remaining liability totals approximately $18,000, which is included in
accrued expenses on the balance sheet.





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.





13




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.





5.
            WARRANT
      LIABILITY





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.  Prior to 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 or liability treatment.





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.
In addition, the carrying value of Series A was reduced by $529,133 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.  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.





14




As
discussed in note 4, the conversion of all classes of warrants to Series B
eliminated the derivative accounting related to the warrant liability.
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 therefore; 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.





As a
result of the exchange, the Company has no warrants outstanding that require
derivative accounting.





6.
            CONCENTRATIONS,
      RISKS AND UNCERTANTIES


The
Company derived approximately 46% and 50% of its revenue from sales to six
customers in 2009 and 2008, respectively. At September 30, 2009 and December 31,
2008, 69% and 56% of the Company's accounts receivable were due from four
customers.  At September 30, 2009 and December 31, 2008. 100% and 80%
of the Company’s unbilled receivables were attributable to three customers and
one customer, respectively.





7.
              INVENTORIES


Inventories
consist of the following:





September30,
                    2009
                  
                  
                  December31,
                    2008*Materials
      and supplies
                  
                  $
                  316,401
                  
                  
                  $
                  351,213Work
      –in-progress
                  
                  
                  45,975
                  
                  
                  
                  51,905$
                  362,376
                  
                  
                  $
                  403,118





*Derived
from December 31, 2008 audited financial statements





8.
            PROPERTY
      AND EQUIPMENT


Property
and equipment consists of the following:





September30,2009
                    
                    
                    December31,2008*Land
                    
                    $
                    17,500
                    
                    
                    $
                    17,500Building
      and improvements
                    
                    
                    238,120
                    
                    
                    
                    238,120Equipment,
      including vehicles
                    
                    
                    365,428
                    
                    
                    
                    268,326Construction
      in process
                    
                    
                    11,765
                    
                    
                    
                    -Subtotal
                    
                    
                    632,813
                    
                    
                    
                    523,946Less
      Accumulated depreciation
                    
                    
                    (221,750
                    )
                    
                    
                    (179,822
                    )Total
                    
                    $
                    411,063
                    
                    
                    $
                    344,124





15




*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.





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.





The
components of the deferred income tax asset and liability as of September 30,
2009 and December 31, 2008 are as follows:





2009
                    
                    
                    
                    2008
                    *Current
      Deferred Income Tax Asset:Accrued
      Vacation and Officer’s Compensation
                    
                    $
                    12,000
                    
                    
                    $
                    9,000Liquidated
      Damages Provision
                    
                    
                    7,000
                    
                    
                    
                    104,000Reserves
      for Warranty
                    
                    
                    12,000
                    
                    
                    
                    68,000Net
      Operating Loss Carryforward
                    
                    
                    -
                    
                    
                    
                    241,000Total
                    
                    $
                    31,000
                    
                    
                    $
                    422,000Non-Current
      Deferred Income Tax Asset:Stock
      Compensation Expense
                    
                    
                    325,000
                    
                    
                    
                    38,000Net
      Operating Loss Carryforward
                    
                    
                    1,013,000
                    
                    
                    
                    -0-Less
      Valuation Allowance
                    
                    
                    (915,000
                    )
                    
                    
                    -0-Total
                    
                    $
                    423,000
                    
                    
                    $
                    38,000Non-current
      Deferred Income Tax LiabilityDepreciation
                    
                    $
                    18,000
                    
                    
                    $
                    24,000





*Derived
from December 31, 2008 audited financial statements





The
following represents the reconciliation of the statutory federal tax rate and
the effective tax rate for the nine month period ended September 30,
2009:





Statutory
      Tax Rate
                  
                  $
                  (137,000
                  )
                  
                  
                  34.0
                  %States
      Taxes, Net of Federal Benefit
                  
                  
                  (24,000
                  )
                  
                  
                  6.0Nondeductible
      Expenses
                  
                  
                  (846,000
                  )
                  
                  
                  210.3Adjustment
      to Net Operating Loss
                  
                  
                  114,000
                  
                  
                  
                  (28.4
                  )Increase
      in Valuation Allowance
                  
                  
                  915,000
                  
                  
                  
                  (227.4
                  )Other,
      Net
                  
                  
                  (22,000
                  )
                  
                  
                  5.5$
                  -
                  
                  
                  
                  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 September 30, 2009, a
valuation allowance of $915,000 has been recognized for deferred tax
assets.





16




At
September 30, 2009, the Company has a federal net operating loss carryforward of
approximately $2.5 million which will begin to expire in the year
2028.





The
Company uses 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%. 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
September 30, 2009, the Company has 1,637,111 shares available for award under
the plan.





The
Company has granted to key employees and directors of the Company, 1,260,000
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 $217,977 of option related compensation was expensed in the
three-month period ending September 30, 2009 and $716,198 for the nine month
period ended September 30, 2009. For the nine-month period ended September 30,
2008 option related compensation expense totaled approximately
$174,083.





A summary
of the Company’s outstanding stock options as of September 30, 2009 and changes
during the period then ended is listed below:





Outstanding
      at December 31, 2008
                  
                  
                  620,000Granted
                  
                  
                  1,140,000Exercised
                  
                  
                  -Expired
                  
                  
                  -Forfeited
                  
                  
                  -Outstanding
      at September 30, 2009
                  
                  
                  1,760,000Options
      exercisable at the end of the period
                  
                  
                  562,903





As of
September 30, 2009, there was approximately $1,311,000 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 September 30, 2009. For the period
ended September 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 of
September 30, 2009.





17




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, September 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





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.





11.
            LICENSING
      ARRANGEMENT


In July
2009, NextGen entered into an non-exclusive Manufacturing License and Reseller
agreement with an unrelated company. The agreement provides that NextGen will
license its small turbine technology and, among other things, grants a right to
manufacture units over a (20) year period. The agreement also provides for
exclusive distribution rights  in certain areas of the United
States.  NextGen will receive payments of $1 million for granting
these rights under this agreement.  Revenue will be amortized over the
20 year period.   For the period ended September 30, 2009,
licensing revenue of $8,333 is included in other revenue in the financial
statements.  Licensing deferred revenue of approximately $408,000 is
included on the balance sheet as of September 30, 2009 in deferred
revenue.





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.





18




The
following is information for each segment for the nine-month periods ended
September 30, 2009 and 2008:


Wind Farm
                    Development
                    and
                    Management
                  
                  
                  Consumer-
                    Owned
                    Renewable
                    Energy
                  
                  
                  ConsolidatedFor
      the Nine-Month Period EndedSeptember
      30, 2009Wind
      farm development/mgmt
                  
                  $
                  350,336
                  
                  
                  $
                  -
                  
                  
                  $
                  350,336Consumer-owned
      renewable energy
                  
                  
                  -
                  
                  
                  
                  568,967
                  
                  
                  
                  568,967Related
      party revenue Other
                  
                  
                  137,446
      1,957
                  
                  
                  
                  -
      8,333
                  
                  
                  
                  137,446
      10,290Total
      revenue
                  
                  $
                  489,739
                  
                  
                  $
                  577,300
                  
                  
                  $
                  1,067,039Loss
      from operations
                  
                  $
                  (2,275,323
                  )
                  
                  $
                  (391,768
                  )
                  
                  $
                  (2,667,091
                  )Other
      income (loss), net
                  
                  
                  2,289,918
                  
                  
                  
                  (22,945
                  )
                  
                  
                  2,266,973Income
      (Loss) before income tax benefit
                  
                  $
                  14,595
                  
                  
                  $
                  (414,713
                  )
                  
                  $
                  (400,118
                  )Identifiable
      assets at September 30, 2009
                  
                  $
                  1,655,208
                  
                  
                  $
                  1,072,161
                  
                  
                  $
                  2,727,369Corporate
      assets
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  4,842,401Total
      assets at September 30, 2009
                  
                  
                  
                  
                  
                  
                  
                  
                  
                  $
                  7,569,770





Wind Farm
                  Development
                  and
                  Management
                
                
                Consumer-
                  Owned
                  Renewable
                  Energy
                
                
                ConsolidatedFor
      the Nine-Month Period EndedSeptember
      30, 2008Wind
      farm development/mgmt Management
                
                $
                386,758
                
                
                $
                -
                
                
                $
                386,758Consumer-owned
      renewable energy
                
                
                -
                
                
                
                454,089
                
                
                
                454,089Related
      party revenue
                
                
                65,709
                
                
                
                -
                
                
                
                65,709Other
                
                
                11,576
                
                
                
                -
                
                
                
                11,576Total
      revenue
                
                $
                464,043
                
                
                $
                454,089
                
                
                $
                918,132Income
      (loss) from operations
                
                $
                (749,681
                )
                
                $
                (100,431
                )
                
                $
                (850,112
                )Other
      income (loss), net
                
                
                19,813
                
                
                
                (24,859
                )
                
                
                (5,046
                )Income
      (loss) before income taxes
                
                $
                (729,868
                )
                
                $
                (125,290
                )
                
                $
                (855,158
                )Identifiable
      assets at September 30, 2008
                
                $
                1,364,783
                
                
                $
                496,810
                
                
                $
                1,861,593Corporate
      assets
                
                
                
                
                
                
                
                
                
                
                3,838,528Total
      assets at September 30, 2008
                
                
                
                
                
                
                
                
                
                $
                5,700,121





13.
            TRANSACTIONS
      WITH RELATED PARTIES


The
Company provides wind farm management services to entities that are controlled
by the Company’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.





19




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
September 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


Subsequent
to the close of the third quarter, JEDI entered into a Development and
Construction Services Agreement (the “Development Agreement”), with a
project.  Under the Development Agreement, the Owner contracted with
JEDI for the development, design, construction, installation, and financing of
the project’s balance of plant. The Project’s balance of plant involves the
installation of ten 2.0 MW wind turbine generators, which are the subject
to a Turbine Supply Agreement between the project owner and the turbine
supplier. JEDI, together with the other primary suppliers of the project, have
also agreed to take a promissory note for a portion of the expected $8.5 million
construction cost of the project together with security interest that is junior
to the turbine supplier. JEDI’s primary subcontractor has also agreed to assist
JEDI in its financing by deferring payment of its services through the
acceptance of a promissory note until permanent financing is placed on the
project.  As a part of this Development Agreement, the primary
subcontractor’s note must be paid within 180 days of the substantial completion
of the project, and if this does not occur, the subcontractor may exercise legal
rights to demand payment from JEDI, including a right of foreclosure on the note
delivered to JEDI by the project owners, which could, in turn, allow for
conversion of amounts to project equity by JEDI or its primary
subcontractor.




20




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, systems operation and maintenance, construction
management, oversight and general consulting services to wind farm projects
throughout the Midwestern United States. 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, environmentally concerned
investors, 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 approximately 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
28 wind farms totaling an additional 450 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.




21


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
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.





Mr. 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 this 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.





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 six existing Minnesota
wind farm developments.  Our assets include nine development services
agreements, fourteen projects in early development stages, and five 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 significant 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 July as a part of this agreement with additional
licensing payments of $700,000 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 the
following important  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.




22


In order
to maintain our competitive advantage in the community wind power industry, we
have entered into a frame order agreement with a wind turbine generator supplier
for the supply and purchase of wind turbine generators for certain of our
community wind power projects through December 31, 2012.   This
agreement gives us the assurance that we will have access to wind turbine
generators for our community wind power projects currently in
development.  Other features of this agreement with this turbine
manufacturer is that the turbine manufacturer is committed to participate in
financing certain projects and will provide us the ability to acquire equity in
the turbine manufacturer under certain conditions.  The frame order
agreement does not contain any minimum purchase commitment for wind turbines,
although it does allow the Company to obtain an incentive in the form of stock
warrants for the purchase of ownership interests of the turbine supplier if
certain purchase levels are reached.





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.





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.   During the third quarter of
2009, we focused primarily on moving forward with the financing, development and
construction phase of the 20 MW  wind generation facility in Grant
County, Minnesota,consisting of 10 wind
turbine generators and related interconnection facilities.  It is our
belief that many wind farm project owners across the U.S. are facing similar
difficulties in arranging project financing as well, particularly construction
financing.  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.




23


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 wind
farms  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 cash 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.




24


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 September 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.





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 Nine-Month Periods Ended September 30, 2009 and
2008





Overview




Our
general activity for the three months ended September 30, 2009 was primarily
focused on the bringing two wind farm projects in Minnesota, Woodstock and Grant
County, forward to construction beginning in October of 2009.  The 20
megawatt Grant County wind farm project  commenced preliminary
construction activities in October 2009, which is expected to be completed in
the first quarter of 2010.  The .75 megawatt Woodstock wind farm
project is expected to commence construction during the fourth quarter of 2009,
and completion is expected during the first half of the next fiscal
year.  We also are involved with the ongoing development of 26
additional wind farms that 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.




25


Our wind
farm 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,
construction and operations and management oversight .





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. In addition, we occasionally provide
turbine maintenance services on a time and materials basis as requested by
project owners.





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 a steep increase in revenue in the fourth
quarter of 2009 as a result of the commencement of construction services on two
wind farm projects in Minnesota.    However, revenue is
subject to shifts in timing due to delays in construction caused by Upper
Midwest climate or other unforeseen circumstances.  The timing of our
development fee revenue is also dependent on the ability of the wind farm
projects to obtain permanent debt and equity financing.





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 and through September 30, 2009.  In 2009, we
have worked to align ourselves with environmentally concerned investors to
provide financing options for investment in our projects.  During the
third quarter, we worked to move forward on construction on one of our projects
under development, the Grant County wind farm, which is approximately a 20 MW
wind generation facility in Grant County, Minnesota, consisting of 10 wind
turbine generators and related interconnection facilities in Grant County,
Minnesota (the “Project”).





Subsequent
to the close of the third quarter, as part of the Project, Juhl Energy entered
into a Development and Construction Services Agreement (the “Development
Agreement”), with each of the individual wind generator companies (a “Generator
LLC”) who are also the members of Grant County Wind, LLC, a Minnesota limited
liability company (each  Generator LLC and Grant County Wind, LLC,
collectively the “Owner”).  Under the Development Agreement, the Owner
contracted with Juhl Energy for the development, design, construction,
installation, and financing of the Project’s balance of plant on property in
which Owner will have control or an ownership interest. The Project’s balance of
plant involves the installation of ten (10) 2.0 MW wind turbine generators,
which are the subject of a Turbine Supply Agreement between the Owner and the
turbine supplier. Juhl Energy, together with the other primary suppliers of the
Project, has also agreed to take a promissory note for a portion of the expected
$8.5 million construction cost of the Project together with security interest
that is junior to the turbine supplier. Juhl Energy’s primary subcontractor has
also agreed to assist Juhl Energy in its financing by deferring payment of its
services through the acceptance of a promissory note until permanent financing
is placed on the Project.   As a part of this Development
Agreement, the primary subcontractor’s note must be paid within 180 days of the
substantial completion of the project, and if this does not occur, the
subcontractor may exercise legal rights to demand payment from Juhl, including a
right of foreclosure on the note delivered to Juhl Energy by the Owners, which
could, in turn, allow for conversion of amounts to project equity by Juhl Energy
or its primary subcontractor.





Further
in the third quarter, in order to continue our ability to develop projects in
our pipeline, Juhl Energy has entered into a Frame Order Agreement with a
turbine supplier (“Turbine Supplier”), whereby Turbine Supplier will supply
certain wind turbine generators for our community wind power projects. 
This Frame Order Agreement defines certain terms and conditions, including the
scope of supply, pricing, and warranties of the wind turbine generators, that
will be included in each Project Turbine Supply Agreement.  Each
Project Turbine Supply Agreement will govern the supply and purchase of certain
Turbine Supplier wind turbine generators for individual community wind power
projects between October 1, 2009 and December 31, 2012.  Further, in
addition to the rights and benefits provided under the Frame Order Agreement,
Juhl Energy may be entitled to acquire equity in the parent company of the
Turbine Supplier (“Parent”) through the issuance of warrants for the purchase of
ordinary stock in the Parent, which shall be exercisable upon achieving certain
milestones based on volume of turbines purchased, during the term of the Frame
Order Agreement.  In addition, as part of the overall working
relationship with the Turbine Supplier, we have entered into a letter of
understanding whereby an affiliate of the Turbine Supplier  has agreed
to invest equity into certain of our community wind power projects that
use  its wind turbines.  We believe
the  relationship with this Turbine Supplier will benefit our
continued growth in the community wind power industry with the development and
completion of further community wind power projects.




26


Revenue





Total
revenue increased by approximately $246,000, or 161%, from approximately
$153,000 for the quarter ended September 30, 2008, to approximately $399,000 for
the quarter ended September 30, 2009.  Total revenue increased by
approximately $149,000, or 16.2% from approximately $918,000 for the nine
month period ended September 30, 2008, to approximately $1,067,000 for the nine
month period ended September 30, 2009.





In the
wind farm development and management segment, which includes all related party
revenue, revenue decreased by approximately $22,000, or  15.3%, from
approximately $144,000 for the quarter ended September 30, 2008
to approximately $122,000 for the quarter ended September 30,
2009.  Revenue increased by approximately $35,000, or 7.8%, from
approximately $452,000 for the nine months ended September 30, 2008 to
approximately $487,000 for the nine months ended September 30,
2009.  This decrease is primarily attributable to a delay in
development of projects due to unforseen delays in financing, construction,
and turbine supply.  We did not have any new development projects
become operational in the nine months ended September 30, 2009 due to the
difficulty in obtaining project financing, primarily from the lending community.
We expect project financing conditions to improve in the fourth quarter of 2009
and into 2010 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, increased by approximately $266,000, from
approximately $3,000 for the quarter ended September 30, 2008
to approximately $269,000 for the quarter ended September 30,
2009.  Revenue increased by approximately $114,000,
or  25.3%, from approximately $454,000 for the nine months ended
September 30, 2008 to approximately $569,000 for the nine months ended September
30, 2009.  The prior year revenues were impacted by the predecessor
company’s need to focus on customer warranty and turbine design issues, together
with its focus on preparation for sale of the turbine business to Juhl
Wind.  The increase is also attributable to an increased volume of
turbine units shipped in 2009. We currently have twelve wind turbines in backlog
with expected ship dates in the fourth quarter depending on the timing
of new components from suppliers.





In August
2009, we reported that the NextGen business entered into a $1 million, 20 year
licensing and distribution arrangement with an Ohio company.  The
revenue for this arrangement is being amortized over the twenty year period of
the agreement. Revenue of $8,300 was included in the quarter ended September 30,
2009 from this arrangement.





Cost of Goods
Sold





All of
the costs classified in cost of goods sold relate to the consumer-owned
renewable energy segment and includes the purchase of previously used turbines,
refurbishment parts, project installation costs and one-time amortization of
costs associated with the purchase of the NextGen business.  Costs of
goods sold increased by approximately $147,000, or 174% from
approximately $84,000 for the quarter ended September 30, 2008
to approximately $231,000 for the quarter ended September 30,
2009.  Cost of goods sold increased by approximately $104,000, or
26.3%, from approximately $395,000 for the nine months ended September 30, 2008
to approximately $499,000 for the nine months ended September 30,
2009.  Cost of goods sold in 2009 includes 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.




27


Operating
Expenses





General and Administrative
Expenses.  General and administrative expenses increased by
approximately $208,000, or 94.3%, from approximately $220,000 for the
quarter ended September 30, 2008 to approximately $428,000 for the quarter
ended September 30, 2009.  General and administrative expenses
increased by approximately $672,000, or 121.2%, from approximately $554,000 for
the nine months ended September 30, 2008 to approximately $1,226,000 for the
nine months ended September 30, 2009. The increase was primarily attributable to
approximately $350,000 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 over 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.





Payroll and Employee
Benefits.Payroll and employee benefits expenses increased by
approximately $289,000, or 110%, from approximately $264,000 for the
quarter ended September 30, 2008 to approximately $553,000 for the quarter
ended September 30, 2009.  Payroll and employee benefits expenses
increased by approximately $1,121,000, or  213%, from approximately
$526,000 for the nine months ended September 30, 2008 to approximately
$1,647,000 for the nine months ended September 30, 2009. With regard to the nine
month increase of $1,121,000, approximately $668,000 of the increase was
attributable to the increase in employee-based stock-based compensation expense
over the nine months ended 2008  related to stock options, $110,000
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  eight employees over the
prior year.





Wind Farm Management
Expenses.Wind farm management expenses decreased by
approximately $30,000, or 73.7%, from approximately $41,000 for the quarter
ended September 30, 2008 to approximately $11,000 for the quarter ended
September 30, 2009.  Wind farm management expenses increased by
approximately $69,000, or  62%, from approximately $112,000 for the
nine months ended September 30, 2008 to approximately $181,000 for the nine
months ended September 30, 2009. The quarter-over-quarter decrease in expenses
results from the termination of one wind farm administrative services agreement
and the related contracted services are no longer being incurred. The
year-to-date increase  in expenses 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 project.





Investor Relations Expenses.Investor relations expenses decreased by approximately $53,000, or 29.2%,
from approximately $181,000 for the quarter ended September 30, 2008
to approximately $128,000 for the quarter ended September 30,
2009.  Investor relations expenses on a year-to-date basis were flat,
at $181,000 for both the nine months ended September 30, 2009 and
2008.  These expenses were paid from a restricted cash fund stemming
from the 2008 private placement and the June 2009 warrant exercise and
exchange.





Other income
(expense).The Company, beginning on January 1, 2009, recognized its
warrants (issued in connection with the 2008 private placement) as liabilities
at their respective fair values.This accounting
treatment was required under generally accepted accounting principles whereby
the detachable warrants must be accounted for as a derivative instrument. As of
the nine month period ended September 30, 2009, we recorded a gain of
approximately $2,199,000 from the change in the fair value of the underlying
warrants using the Black Scholes method.  The quarter ended September
30, 2009 did not include any 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.




28


Operating
Loss





Our
Operating Loss increased by approximately $314,000, or 49.2%, from
approximately $638,000 for the quarter ended September 30, 2008
to approximately $952,000 for the quarter ended September 30,
2009.  Operating Loss increased by approximately $1,817,000, from the
operating loss of approximately $850,000 for the nine months ended September 30,
2008 to operating loss of approximately $2,667,000 for the nine months ended
September 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
Loss





Net loss
increased by approximately $410,000, or 77.7%, from approximately $528,000
for the quarter ended September 30, 2008 to approximately $938,000 for the
quarter ended September 30, 2009.  Net loss decreased by approximately
$294,000, or 42.4%, from the net loss of approximately $694,000 for the nine
months ended September 30, 2008 to net loss of approximately $400,000 for the
nine months ended September 30, 2009.  Our net loss is significantly
impacted by the fair value accounting over the warrant derivatives and
subsequent gain reported in the first nine months of 2009 as described above
under other income (expense).





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
and Equipment





As of
September 30, 2009 and December 31, 2008, we held $411,000 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
September 30, 2009, we carried approximately $4,622,000 in cash, restricted
short term investments 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 exercise 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 $496,000 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 coverage is 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
related to the Grant County wind farm project. Construction is commenced in
October 2009 and is expected to be completed in January 2010.  As a part of
the financing commitments with the Grant County wind farm project, we
agreed to defer our development and construction service fees to the completion
and permanent financing of the project.  Our operating cash flows will
therefore be delayed until the successful completion of the Grant County wind
farm 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.




29


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
used in operating activities increased by approximately $282,000, from the net
cash used in operating activities of approximately $491,000 for the nine months
ended September 30, 2008 to net cash used in operating activities of
approximately $773,000 for the nine months ended September 30, 2009.  The
change in net cash used in operating activities of $282,000 is primarily
due to the increased operating expenses such as payroll and professional
services fees as highlighted above in the discussion and analysis of operating
expense , along with making reimbursable cost advances to future project
developments.  To offset the impact of these costs and expenses on our
operating cash flow, we collected $465,000 of customer deposits for twelve small
wind turbines and we received approximately $417,000 in cash from the licensing
and distributor arrangement in the NextGen business.





Net cash
used in investing activities increased by approximately $127,000, from the net
cash generated from investing activities of approximately $2,000 for the nine
months ended September 30, 2008 to net cash used in operating activities of
approximately $125,000 for the nine months ended September 30, 2009.  The
change in net cash used in investing activities in 2008 primarily relates to
reinvestment of cash into wind farm projects where Juhl Wind is currently the
project developer, together with the purchase of production equipment for
NextGen.





Net cash
provided by financing activities decreased by approximately $1,872,000, from the
net cash flow provided from financing activities of approximately $4,029,000 for
the nine months ended September 30, 2008 to net cash provided by financing
activities of approximately $2,157,000 for the nine months ended September 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.





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 September 30, 2009, we had a balance of
approximately $296,000 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.




30


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.





Revenues
earned from licensing agreements are amortized straight line over the term of
the agreement.





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.




31


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 Principal Executive Officer, which
is our President, and Principal Financial Officer, which is our Chief Executive
Officer, an assessment, including testing of the effectiveness, of our internal
control over financial reporting as of September 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 September 30,
2009:




32


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;




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 September 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
      through 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 continue to 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.




33


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





None.





Item
3. DEFAULTS UPON SENIOR SECURITIES.





None





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





None.





Item
5. OTHER INFORMATION.





a)
              Noneb)
              None





Employment
Agreement with John J. Brand




As
previously reported on our Form 10-Q filed for the period ended June 30, 2009
with the SEC on August 14, 2009 (the “June 30 10Q”), the Company and Mr. Brand
entered into an Executive Employment Agreement, as of August 13, 2009 (“Brand
Employment Agreement”), whereunder the Company will employ Mr. Brand as Chief
Financial Officer.  Terms of the Brand Employment Agreement were set
forth in detail in the June 30 10Q.   The Brand Employment
Agreement is included as an exhibit to this quarterly report on Form 10Q for the
period ended September 30, 2009 as incorporated by reference to the June 30
10Q.





Waiver
Agreement





On
September 23, 2009, the Company and each of the purchasers of its Series A
Preferred Stock entered into a Waiver Agreement waiving certain provisions of
the Warrant Amendment Agreement among the same parties dated March 27,
2009.  The Waiver Agreement was included as an exhibit to the
Company’s Registration Statement on Form S-1 filed with the Securities and
Exchange Commission on September 30, 2009.




34


Amended
and Restated Certificate of Designation of Preferences, Rights and Limitations
of Series B Convertible Preferred Stock





The
Company amended its Certificate of Designation of Preferences, Rights and
Limitations of Series B Convertible Preferred Stock to supply inadvertently
omitted information absent from the original Certificate.  The Amended
and Restated Certificate of Designation of Preferences, Rights and Limitations
of Series B Convertible Preferred Stock was filed with Delaware Secretary of
State on September 28, 2009 and reported in the Company’s Current Report on Form
8-K filed with the Securities and Exchange Commission on September 28,
2009.




Filing
of Registration Statement on Form S-1





On
September 30, 2009, the Company filed a Registration Statement on Form S-1 with
the Securities and Exchange Commission providing for the sale of up to
1,700,000 shares of our common stock underlying our Series B Preferred Stock, in
accordance with the terms set forth therein, by selling stockholders as listed
therein.  Such Registration Statement was declared effective by the
Securities and Exchange Commission on October 14, 2009.





Grant
County Project





Effective 
November 6, 2009 (the closing of which was fully completed on November 11,
2009), as part of the Grant County Wind Farm Project (the “Project”), Juhl
Energy entered into a Development and Construction Services Agreement (the
“Development Agreement”), with each of the individual wind generator companies
(a “Generator LLC”) who are also the members of Grant County Wind, LLC, a
Minnesota limited liability company (each  Generator LLC and Grant
County Wind, LLC, collectively the “Owner”).  Under the Development
Agreement, the Owner contracted with Juhl Energy for the development, design,
construction, installation, and financing of the Project’s balance of plant on
property in which Owner will have control or an ownership interest. The
Project’s balance of plant involves the installation of ten (10) 2.0 MW wind
turbine generators, which are the subject of a Turbine Supply Agreement between
the Owner and the turbine supplier. Juhl Energy, together with the other primary
suppliers of the Project, have also agreed to take a promissory note for a
portion of the expected $8.5 million construction cost of the Project together
with security interest that is junior to the turbine supplier. Juhl Energy’s
primary subcontractor has also agreed to assist Juhl Energy in its financing by
deferring payment of its services through the acceptance of a promissory note
until permanent financing is placed on the Project.   As a part
of this Development Agreement, the primary subcontractor’s note must be paid
within 180 days of the substantial completion of the project, and if this does
not occur, the subcontractor may exercise legal rights to demand payment from
Juhl, including a right of foreclosure on the note delivered to Juhl Energy by
the Owners, which could, in turn, allow for conversion of amounts to project
equity by Juhl Energy or its primary subcontractor.  Such Development
Agreement is included as an exhibit to this quarterly report on Form 10-Q for
the period ended September 30, 2009.





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 State
      23.3
                      
                      Amended
      and Restated Certificate of Designation of Preferences, Rights and
      Limitations of Series B Convertible Preferred Stock of Juhl Wind, Inc.
      filed September 28, 2009, with the Delaware Secretary of State43.4
                      
                      Bylaws
      of the Company1




35




10.1
                
                Form
      of Employment Agreement, dated August 13, 2009, between Juhl Wind, Inc.
      and John J. Brand310.2
                
                Waiver
      Agreement dated September 23, 2009 between Juhl Wind, Inc and each of
      Vision Opportunity Master Fund, Ltd., Daybreak Special Situations Master
      Fund, Ltd., Bruce Meyers and Imtiaz Khan510.3
                
                Development
      and Construction Services Agreement, dated November 6, 2009, by and
      between Grant County Wind, LLC, a Minnesota limited liability company
      (“GCW”) and ten additional signatories who are each individual wind
      generator companies and the members of GCW (each a “Generator LLC”, the
      Generator LLCs and GCW, collectively “Owner”) and Juhl Energy Development,
      Inc., a Minnesota corporation (excluding exhibits)31.1
                
                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 to the exhibits included with our Quarterly Report on Form
10-Q for the quarter ended June 30, 2009, filed with the Securities and Exchange
Commission on August 14, 2009.





4Incorporated
herein by reference to the exhibits included with our Current Report on Form 8-K
dated September 28, 2009 and filed with the Securities and Exchange Commission
on September 28, 2009





5Incorporated
herein by reference to the exhibits included with our Registration Statement on
Form S-1 (registration no. 333-162232) filed with the Securities and Exchange
Commission on September 30, 2009





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:  November
      13, 2009
              /s/ John MitolaJohn
      MitolaPresident





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