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, 2010





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:  21,235,485 shares outstanding as of November 11,
2010.









TABLE OF
CONTENTS




PART
      I - FINANCIAL INFORMATION
            
            
            3Item
      1. Unaudited Financial Statements
            
            
            3Item
      2. Management's Discussion and Analysis of Financial Condition and Results
      of Operations
            
            
            26Item
      3. Quantitative and Qualitative Analysis About Market Risk
            
            
            37Item
      4. Controls and Procedures
            
            
            37PART
      II - OTHER INFORMATION
            
            
            38Item
      1. Legal Proceedings
            
            
            38Item
      1A. Risk Factors
            
            
            38Item
      2. Unregistered Sales of Equity Securities and Use of
    Proceeds
            
            
            38Item
      3. Defaults Upon Senior Securities
            
            
            38Item
      4. Submission of Matters to a Vote of Security Holders
            
            
            38Item
      5. Other Information
            
            
            38Item
      6. Exhibits
            
            
            39Signatures
            
            
            40Exhibits




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, 2009, previously filed
with the Commission, which are included in the Annual Report on Form 10-K filed
on or about March 31, 2010.




3




JUHL WIND INC.


CONSOLIDATED
BALANCE SHEETS


SEPTEMBER
30, 2010 AND DECEMBER 31, 2009





SEPTEMBER
      30
                  
                  
                  DECEMBER
      312010
                  
                  
                  2009(unaudited)ASSETSCURRENT
      ASSETSCash
                  
                  $
                  1,372,967
                  
                  
                  $
                  2,802,302Restricted
      Cash
                  
                  
                  115,066
                  
                  
                  
                  203,123Short
      Term Investments and Accrued Interest Receivable
                  
                  
                  1,041,361
                  
                  
                  
                  1,033,744Accounts
      Receivable
                  
                  
                  636,319
                  
                  
                  
                  1,617,974Short
      Term Investments - Restricted
                  
                  
                  417,320
                  
                  
                  
                  718,499Unbilled
      Receivables at Net Realizable Value
                  
                  
                  -
                  
                  
                  
                  49,002Promissory
      Note Receivable, Including Accrued Interest
                  
                  
                  8,363,825
                  
                  
                  
                  7,149,912Inventory
                  
                  
                  2,734,955
                  
                  
                  
                  352,410Reimbursable
      Project Costs
                  
                  
                  674,822
                  
                  
                  
                  597,368Costs
      and Estimated Profits in Excess of Billings
                  
                  
                  1,105,766
                  
                  
                  
                  769,070Other
      Current Assets
                  
                  
                  235,540
                  
                  
                  
                  123,157Current
      Deferred Income Taxes
                  
                  
                  -
                  
                  
                  
                  45,000TOTAL
      CURRENT ASSETS
                  
                  
                  16,697,941
                  
                  
                  
                  15,461,561PROPERTY
      AND EQUIPMENT (Net)
                  
                  
                  439,252
                  
                  
                  
                  430,039OTHER
      ASSETSDeferred
      Income Tax Asset
                  
                  
                  927,000
                  
                  
                  
                  614,000Project
      Development Costs
                  
                  
                  338,045
                  
                  
                  
                  307,000TOTAL
      OTHER ASSETS
                  
                  
                  1,265,045
                  
                  
                  
                  921,000TOTAL
      ASSETS
                  
                  $
                  18,402,238
                  
                  
                  $
                  16,812,600LIABILITIES
      AND STOCKHOLDERS' EQUITYCURRENT
      LIABILITIESAccounts
      Payable
                  
                  $
                  3,890,341
                  
                  
                  $
                  2,224,549Bank
      Notes Payable
                  
                  
                  411,167
                  
                  
                  
                  416,853Accrued
      Expenses
                  
                  
                  96,307
                  
                  
                  
                  118,571Customer
      Deposits
                  
                  
                  205,157
                  
                  
                  
                  383,000Deferred
      Revenue
                  
                  
                  988,667
                  
                  
                  
                  774,057Deferred
      Income Tax Liability
                  
                  
                  157,000
                  
                  
                  
                  -Promissory
      Note Payable, Including Accrued Interest
                  
                  
                  8,363,825
                  
                  
                  
                  7,149,912TOTAL
      CURRENT LIABILITIES
                  
                  
                  14,112,464
                  
                  
                  
                  11,066,942STOCKHOLDERS'
      EQUITYSeries
      A Convertible Preferred Stock - $.0001 par value,4,820,000
      issued and outstanding
                  
                  
                  2,527,731
                  
                  
                  
                  2,527,731Series
      B Convertible Preferred Stock - $.0001 par value,6,567,006
      issued and outstanding
                  
                  
                  12,819,116
                  
                  
                  
                  12,819,116Common
      Stock - $.0001 par value; 100,000,000 shares authorized,21,157,401
      and 20,982,860 issued and outstanding atSeptember
      30, 2010 and December 31, 2009, respectively
                  
                  
                  2,116
                  
                  
                  
                  2,098Additional
      Paid-In Capital
                  
                  
                  6,835,124
                  
                  
                  
                  6,089,361Accumulated
      Deficit
                  
                  
                  (17,894,313
                  )
                  
                  
                  (15,692,648
                  )TOTAL
      STOCKHOLDERS' EQUITY
                  
                  
                  4,289,774
                  
                  
                  
                  5,745,658TOTAL
      LIABILITIES AND STOCKHOLDERS' EQUITY
                  
                  $
                  18,402,238
                  
                  
                  $
                  16,812,600


The
accompanying notes are an integral part of these statements.




4




JUHL
WIND INC.


CONSOLIDATED
STATEMENT OF OPERATIONS


FOR
THE QUARTERS ENDED SEPTEMBER 30, 2010 AND 2009




2010
              
              
              2009(unaudited)
              
              
              (unaudited)REVENUEWind
      Farm Development and Management
              
              $
              110,008
              
              
              
              12.7
              %
              
              $
              44,431
              
              
              
              11.1
              %Related
      Party Revenue
              
              
              74,719
              
              
              
              8.6
              
              
              
              86,633
              
              
              
              21.7Turbine
      Sales & Service
              
              
              176,129
              
              
              
              20.3
              
              
              
              268,032
              
              
              
              67.2Construction
      Contract Revenue
              
              
              506,356
              
              
              
              58.4
              
              
              
              -
              
              
              
              0.0TOTAL
      REVENUE
              
              
              867,212
              
              
              
              100.0
              
              
              
              399,096
              
              
              
              100.0COST
      OF GOODS SOLD
              
              
              587,882
              
              
              
              67.8
              
              
              
              263,883
              
              
              
              66.1GROSS
      PROFIT
              
              
              279,330
              
              
              
              32.2
              
              
              
              135,213
              
              
              
              33.9OPERATING
      EXPENSESGeneral
      and Administrative Expenses
              
              
              249,903
              
              
              
              28.8
              
              
              
              342,216
              
              
              
              85.8Investor
      Relations Expenses
              
              
              43,435
              
              
              
              5.0
              
              
              
              128,141
              
              
              
              32.1Payroll
      and Employee Benefits
              
              
              495,270
              
              
              
              57.1
              
              
              
              545,605
              
              
              
              136.7Windfarm
      Management Expenses
              
              
              19,683
              
              
              
              2.3
              
              
              
              70,871
              
              
              
              17.8TOTAL
      OPERATING EXPENSES
              
              
              808,291
              
              
              
              93.2
              
              
              
              1,086,833
              
              
              
              272.4OPERATING
      LOSS
              
              
              (528,961
              )
              
              
              (61.0
              )
              
              
              (951,620
              )
              
              
              (238.5
              )OTHER
      INCOME (EXPENSE)Interest
      Income
              
              
              170,677
              
              
              
              19.7
              
              
              
              18,362
              
              
              
              4.6Interest
      Expense
              
              
              (166,582
              )
              
              
              (19.2
              )
              
              
              (6,094
              )
              
              
              (1.5
              )Other
      Income
              
              
              -
              
              
              
              0.0
              
              
              
              1,546
              
              
              
              0.4TOTAL
      OTHER INCOME, NET
              
              
              4,095
              
              
              
              0.5
              
              
              
              13,814
              
              
              
              3.5LOSS
      BEFORE INCOME TAX BENEFIT
              
              
              (524,866
              )
              
              
              (60.5
              )
              
              
              (937,806
              )
              
              
              (235.0
              )INCOME
      TAX BENEFIT
              
              
              -
              
              
              
              0.0
              
              
              
              -
              
              
              
              -NET
      LOSS
              
              
              (524,866
              )
              
              
              (60.5
              )%
              
              
              (937,806
              )
              
              
              (235.0
              )%PREFERRED
      DIVIDENDS
              
              
              97,471
              
              
              
              
              
              
              
              102,608SERIES
      B BENEFICIAL CONVERSION FEATURE
              
              
              -
              
              
              
              
              
              
              
              -NET
      LOSS ATTRIBUTABLE TOCOMMON
      STOCKHOLDERS
              
              
              (622,337
              )
              
              
              
              
              
              
              (1,040,414
              )WEIGHTED
      AVERAGE SHARESOUTSTANDING
      - BASIC & DILUTED
              
              
              21,156,736
              
              
              
              
              
              
              
              20,654,318NET
      LOSS PER SHAREBASIC
      & DILUTED
              
              $
              (0.03
              )
              
              
              
              
              
              $
              (0.05
              )




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, 2010 AND 2009




2010
              
              
              2009(unaudited)
              
              
              (unaudited)REVENUEWind
      Farm Development and Management
              
              $
              412,879
              
              
              
              13.0
              %
              
              $
              386,249
              
              
              
              36.2
              %Related
      Party Revenue
              
              
              236,618
              
              
              
              7.5
              
              
              
              137,446
              
              
              
              12.9Turbine
      Sales & Service
              
              
              988,789
              
              
              
              31.2
              
              
              
              533,776
              
              
              
              50.0Construction
      Contract Revenue
              
              
              1,531,775
              
              
              
              48.3
              
              
              
              9,569
              
              
              
              0.9TOTAL
      REVENUE
              
              
              3,170,061
              
              
              
              100.0
              
              
              
              1,067,040
              
              
              
              100.0COST
      OF GOODS SOLD
              
              
              2,442,183
              
              
              
              77.0
              
              
              
              576,675
              
              
              
              54.0GROSS
      PROFIT
              
              
              727,878
              
              
              
              23.0
              
              
              
              490,365
              
              
              
              46.0OPERATING
      EXPENSESGeneral
      and Administrative Expenses
              
              
              966,205
              
              
              
              30.5
              
              
              
              1,139,668
              
              
              
              106.8Investor
      Relations Expenses
              
              
              235,731
              
              
              
              7.4
              
              
              
              181,437
              
              
              
              17.0Payroll
      and Employee Benefits
              
              
              1,501,189
              
              
              
              47.4
              
              
              
              1,630,040
              
              
              
              152.8Windfarm
      Management Expenses
              
              
              66,250
              
              
              
              2.1
              
              
              
              206,787
              
              
              
              19.4TOTAL
      OPERATING EXPENSES
              
              
              2,769,375
              
              
              
              87.4
              
              
              
              3,157,932
              
              
              
              296.0OPERATING
      LOSS
              
              
              (2,041,497
              )
              
              
              (64.4
              )
              
              
              (2,667,567
              )
              
              
              (250.0
              )OTHER
      INCOME (EXPENSE)Interest
      Income
              
              
              488,636
              
              
              
              15.4
              
              
              
              58,583
              
              
              
              5.5Interest
      Expense
              
              
              (467,391
              )
              
              
              (14.7
              )
              
              
              (22,945
              )
              
              
              (2.2
              )Gain
      on Warrant Liability Fair Value
              
              
              -
              
              
              
              0.0
              
              
              
              2,198,671
              
              
              
              206.1Other
      Expense
              
              
              -
              
              
              
              0.0
              
              
              
              33,140
              
              
              
              3.1TOTAL
      OTHER INCOME, NET
              
              
              21,245
              
              
              
              0.7
              
              
              
              2,267,449
              
              
              
              212.5LOSS
      BEFORE INCOME TAX BENEFIT
              
              
              (2,020,252
              )
              
              
              (63.7
              )
              
              
              (400,118
              )
              
              
              (37.5
              )INCOME
      TAX BENEFIT
              
              
              111,000
              
              
              
              3.5
              
              
              
              -
              
              
              
              -NET
      LOSS
              
              
              (1,909,252
              )
              
              
              (60.2
              )%
              
              
              (400,118
              )
              
              
              (37.5
              )%PREFERRED
      DIVIDENDS
              
              
              292,413
              
              
              
              
              
              
              
              309,008SERIES
      B BENEFICAL CONVERSION FEATURE
              
              
              -
              
              
              
              
              
              
              
              2,790,707NET
      LOSS ATTRIBUTABLE TOCOMMON
      STOCKHOLDERS
              
              $
              (2,201,665
              )
              
              
              
              
              
              $
              (3,499,833
              )WEIGHTED
      AVERAGE SHARESOUTSTANDING
      - BASIC AND DILUTED
              
              
              21,097,098
              
              
              
              
              
              
              
              20,442,651NET
      LOSS PER SHARE - BASIC & DILUTED
              
              $
              (0.10
              )
              
              
              
              
              
              $
              (0.17
              )




The
accompanying notes are an integral part of these statements.




6




JUHL
WIND INC.


CONSOLIDATED
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY


FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 2010


Convertible
              
              
              
              ConvertiblePreferred
      Stock
              
              
              
              Preferred
      Stock
              
              
              
              Additional
              
              
              
              
              
              
              
              TotalCommon
      Stock
              
              
              
              Series
      A
              
              
              
              Series
      B
              
              
              
              Paid-In
              
              
              
              Accumulated
              
              
              
              Stockholders'Shares
              
              
              
              Par
              
              
              
              Shares
              
              
              
              Amount
              
              
              
              Shares
              
              
              
              Amount
              
              
              
              Capital
              
              
              
              Deficit
              
              
              
              EquityBALANCE
      - December 31, 2009
              
              
              20,982,860
              
              
              $
              2,098
              
              
              
              4,820,000
              
              
              $
              2,527,731
              
              
              
              6,567,006
              
              
              $
              12,819,116
              
              
              $
              6,089,361
              
              
              $
              (15,692,648
              )
              
              $
              5,745,658Net
      loss
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (1,909,252
              )
              
              
              (1,909,252
              )Stock-based
      compensation
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              453,368
              
              
              
              -
              
              
              
              453,368Series
      A Preferred Stock dividend paid in common stock
              
              
              174,541
              
              
              
              18
              
              
              
              -
              
              
              
              (292,413
              )
              
              
              -
              
              
              
              -
              
              
              
              292,395
              
              
              
              -
              
              
              
              -Series
      A Preferred dividends
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              292,413
              
              
              
              -
              
              
              
              -
              
              
              
              -
              
              
              
              (292,413
              )
              
              
              -BALANCE
      September 30, 2010 (unaudited)
              
              
              21,157,401
              
              
              $
              2,116
              
              
              
              4,820,000
              
              
              $
              2,527,731
              
              
              
              6,567,006
              
              
              $
              12,819,116
              
              
              $
              6,835,124
              
              
              $
              (17,894,313
              )
              
              $
              4,289,774





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, 2010 AND 2009




2010
              
              
              2009(unaudited)
              
              
              (unaudited)CASH
      FLOWS FROM OPERATING ACTIVITIESNet
      Loss
              
              $
              (1,909,252
              )
              
              $
              (400,118
              )Adjustments
      to Reconcile Net Loss to Net CashUsed
      in Operating Activities:Depreciation
      and Amortization
              
              
              40,266
              
              
              
              113,927Stock-Based
      Compensation to Employees
              
              
              453,368
              
              
              
              716,198Provision
      for Uncollectible Accounts
              
              
              -
              
              
              
              (10,000
              )Gain
      on Warrant Liability Fair Value
              
              
              -
              
              
              
              (2,198,671
              )Liquidated
      Damages Expense
              
              
              -
              
              
              
              (32,540
              )Change
      in assets and liabilities:Accounts
      Receivable
              
              
              981,655
              
              
              
              (91,724
              )Unbilled
      Receivable
              
              
              49,002
              
              
              
              185,428Inventory
              
              
              (2,382,545
              )
              
              
              40,742Reimbursable
      Project Costs
              
              
              (77,454
              )
              
              
              (346,306
              )Other
      Current Assets
              
              
              (112,383
              )
              
              
              (103,868
              )Interest
      receivable on Short Term Investments
              
              
              702
              
              
              
              (34,451
              )Costs
      and Estimated Earnings in Excess of Billings
              
              
              (336,696
              )
              
              
              -Accounts
      Payable
              
              
              1,665,792
              
              
              
              542,570Accrued
      Expenses
              
              
              (22,264
              )
              
              
              7,562Deferred
      Income Taxes
              
              
              (111,000
              )
              
              
              -Customer
      Deposits
              
              
              (177,843
              )
              
              
              -Deferred
      Revenue
              
              
              214,610
              
              
              
              838,178NET
      CASH USED IN OPERATING ACTIVITIES
              
              
              (1,724,042
              )
              
              
              (773,073
              )CASH
      FLOWS FROM INVESTING ACTIVITIESProceeds
      from short-term investments
              
              
              292,860
              
              
              
              -Payments
      for short-term investments
              
              
              -
              
              
              
              (11,407
              )Payments
      for project development costs
              
              
              (31,045
              )
              
              
              (5,000
              )Payments
      for property and equipment
              
              
              (49,479
              )
              
              
              (108,866
              )NET
      CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
              
              
              212,336
              
              
              
              (125,273
              )CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      change in restricted cash
              
              
              88,057
              
              
              
              (31,708
              )Proceeds
      received through the issuance ofSeries
      B preferred stock and conversion of warrants
              
              
              -
              
              
              
              2,339,341Principal
      Payments on Notes Payable
              
              
              (5,686
              )
              
              
              (150,344
              )NET
      CASHFROM FINANCING ACTIVITIES
              
              
              82,371
              
              
              
              2,157,289NET
      INCREASE (DECREASE) IN CASH
              
              
              (1,429,335
              )
              
              
              1,258,943CASH
      BEGINNING OF THE PERIOD
              
              
              2,802,302
              
              
              
              1,310,789CASH
      END OF THE PERIOD
              
              $
              1,372,967
              
              
              $
              2,569,732NONCASH
      INVESTING ACTIVITYSeries
      A preferred stock dividend
              
              $
              292,413
              
              
              $
              309,008Subscription
      receivable from issuance of Series B preferred stock
              
              $
              -
              
              
              $
              196,710Warrant
      liability recognition upon adoption of accounting standard
              
              $
              -
              
              
              $
              12,576,816Promissory
      note receivable and payable on wind farm for constructionfinancing
              
              $
              1,213,913
              
              
              $
              -Fair
      value of warrant liability exchanged on Series B preferred
      stock
              
              $
              -
              
              
              $
              10,378,145Accrued
      liquidated damages fees paid in the form of common stock
              
              $
              -
              
              
              $
              240,490Preferred
      dividend payment in the form of common stock
              
              $
              292,413
              
              
              $
              -





The
accompanying notes are an integral part of these statements.




8


JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
  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, 2009 and 2008 contained in Form 10-K filed with the Securities and
Exchange Commission on March 31, 2010.
 
 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, 2010.
 
 Juhl
Wind, Inc. (“Juhl Wind”) conducts business under three subsidiaries, Juhl Energy
Services (formerly DanMar and Associates, Inc.) (“JES”), Juhl Energy
Development, Inc. (“JEDI”), and Next Generation Power Systems, Inc. (“NextGen”).
The Company provides development, construction, 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.
 
 2.
              SUMMARY
      OF SIGNIFICANT ACCOUNTING POLICIES
 
 CASH
 The
Company maintains cash balances at various financial
institutions.  Accounts are insured by the Federal Deposit Insurance
Corporation (“FDIC”) up to $250,000.  At times throughout the year
cash balances may exceed the FDIC 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 was effective August
2008 through February 2010, and subsequently was replaced in February 2010 with
a $1.7 million irrevocable letter of credit.  The Company monitors its
cash balances to ensure adequacy of collateral for depository balances at
financial institutions that exceed FDIC insured amounts.
 
 RESTRICTED
CASH
 The
Company maintains an escrow cash account funded by the proceeds received from
the preferred stock private placement in 2008 and the warrant exercise and
exchange in 2009.  The funds are to be used for investor relations
initiatives.
 
 SHORT
TERM INVESTMENTS
 Short-term
investments include certificates of deposits maintained at various financial
institutions. The certificates are intended to be held for investment purposes
through their maturity dates that occur at various times throughout
2010.  At September 30, 2010, the Company’s short-term investments
totaled approximately $1,041,000 which included accrued interest receivable. At
December 31, 2009, the Company’s short-term investments totaled approximately
$1,034,000 which included accrued interest receivable on those
investments.
 
 RESTRICTED
SHORT TERM INVESTMENTS
 Restricted
short-term investments include certificates of deposits maintained at various
financial institutions and totaled approximately $417,000 and $718,000 at
September 30, 2010 and December 31, 2009, respectively. These restricted
investments included accrued interest receivable. The certificates are intended
to be held for investment purposes through their maturity dates that occur at
various times throughout 2010.  These investments are held as
collateral against the Bank Notes Payable.
 
 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.
  9
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 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.
 
 INVENTORIES
 Inventories,
consisting primarily of parts and materials relating to the production of small
scale wind turbines and large scale turbines purchased for construction
projects, 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, preconstruction project costs, or other temporary advances
made prior to construction.
 
 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. The Company may
convert these costs into ownership in the project.
 
 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.
 
 Major
categories of property and equipment and their depreciable lives are as
follows:
 
 Building
      and Improvements
                          7-39
      YearsVehicles
                          5
      YearsMachinery
      and Shop Equipment
                          5-7
      Years
 
 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.
 
 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 equity based instruments granted to nonemployees under
the fair value method. Equity based instruments usually are recorded at
their underlying fair value.  In certain instances the fair value of the
goods or services are used to determine the value of the equity instrument as it
is a better measure of fair value.
 
 FAIR
VALUE OF FINANCIAL INSTRUMENTS
 The
carrying value of cash, restricted cash, short term investments, accounts
receivable, accounts payable, promissory note receivable and payable, and other
working capital accounts approximates their fair value at September 30, 2010 and
December 31, 2009 due to the short maturity nature of these
instruments.
  10
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 Except
for those assets and liabilities which are required by authoritative accounting
guidance to be recorded at fair value in our Consolidated Balance Sheets, we
have elected not to record any other assets or liabilities at fair value. No
events occurred during 2010 which would require adjustment to the recognized
balances of assets or liabilities which are recorded at fair value on a
nonrecurring basis.
 
 The
Company has no assets and liabilities measured at fair value on a recurring
basis that require disclosure.
 
 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 and construction contract revenue; realizability of accounts and
promissory notes receivable; valuation of deferred tax assets, stock based
compensation and warrants, determination of the primary beneficiary of a
variable interest entity, 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
 Turbine
Sales and Service:
 Turbine
sales occur from small scale wind turbines that are internally re-manufactured
and sold by the Company, or through purchase and resale of larger scale wind
turbines to wind farm project owners. Revenue from the sale of small scale wind
turbines are recognized upon shipment to the customer as transfer of ownership
and risk of loss have been transferred to the customer.  Deposits
received from customers are included as deferred revenue until shipment occurs.
Revenues from the sale of larger scale wind turbines are generally recognized in
conjunction with the construction services percentage of completion accounting
discussed below. Commencement of revenue recognition is only after turbine
erection activities have begun.
 
 Turbine
services include time-and-material arrangements related to existing
installations of wind turbine equipment.  Revenue is recognized upon
completion of the maintenance services.
 
 Licensing
Revenue
 Revenues
earned from licensing agreements are amortized straight line over the term of
the agreement.
 
 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.
  11
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 Wind
Farm Development Services
 The
Company normally earns a development service fee from each of the wind farm
projects that it develops in cooperation with wind farm investors. These
development services arrangements are evaluated under authoritative revenue
guidance, which addresses certain aspects of accounting by a vendor for
arrangements under which the vendor will perform multiple revenue generating
activities.
 The
development services fee revenue is recognized as follows:
  ·
              Proceeds
      received upon the signing of a Development Services Agreement (generally
      10% of the total expected development fee) are amortized over the expected
      period of the development process, which is generally three years. The
      amortization period is re-assessed by management as new timelines are
      established for the project in-service date, and the amortization period
      is adjusted.
 
 ·
              The
      remaining proceeds are allocated to the following deliverables based on
      vendor specific objective evidence of each item: 1) achievement of a
      signed Power Purchase Agreement (“PPA”) with an electrical utility, or in
      the event that a PPA will not be sought, an interconnection application,
      and 2) final commissioning of the wind farm
      turbines.  Management has determined that these deliverables
      have stand-alone value, and performance of the undelivered services are
      considered probable and in the control of the
  Company.
  Wind
Farm Management Services
 Revenues
earned from administrative, 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.  Revenues from services work are
recognized when services are performed.
 
 Wind
Farm Construction Services
 We
recognize revenue on construction contracts on the percentage of completion
method with costs and estimated profits included in contract revenue as work is
performed. Construction contracts generally provide that customers accept
completion of progress to date and compensate us for services rendered
measured in terms of units installed, hours expended or some other measure of
progress. We recognize revenue on both signed contracts and approved change
orders. Percentage of completion for construction contracts is measured
principally by the percentage of costs incurred and accrued to date for each
contract to the estimated total cost for each contract at completion. We
generally consider contracts to be substantially complete upon departure from
the work site and acceptance by the customer. Contract costs include all direct
material, labor and insurance costs and those indirect costs related to contract
performance, such as indirect labor, supplies, tools, repairs and
depreciation costs. Changes in job performance, job conditions, estimated
contract costs and profitability and final contract settlements may result in
revisions to costs and income and the effects of these revisions are recognized
in the period in which the revisions are determined. Provisions for total
estimated losses on uncompleted contracts are made in the period in which such
losses are determined. The balances billed but not paid by customers pursuant to
retainage provisions in construction contracts will be due upon completion of
the contracts and acceptance by the customer. Based on our experience with
similar contracts in recent years, the retention balance at each balance sheet
date will be collected within the subsequent year.
 
 The asset
“Costs and estimated earnings in excess of billings on uncompleted contracts”
represents revenues recognized in excess of amounts billed which management
believes will be billed and collected within the next twelve
months.  The liability “Billings in excess of costs and estimated
earnings on uncompleted contracts” represents billings in excess of revenues
recognized. Costs and estimated earnings in excess of billings on uncompleted
contracts are amounts considered recoverable from customers based on different
measures of performance, including achievement of specific milestones, or
at the completion of the contract.
  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, 2010 and 2009,
respectively, the Company had 1,865,000 and 1,810,000 share
equivalents outstanding relating to outstanding stock options and warrants.
 At September 30, 2010 and 2009, 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.
  12
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 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.
 
 The
Company accounts for income tax uncertainties using a two-step approach to
recognizing and measuring tax benefits and liabilities when realization of the
tax position is uncertain. The first step is to determine whether the tax
positions meet 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%.
 
 The
Company recognizes in its financial statements only those tax positions that are
"more-likely-than-not" of being sustained upon examination by taxing
authorities, based on the technical merits of the position. The Company
performed a comprehensive review of its material tax positions in accordance
with recognition and measurement standards.  Based on this review, the
Company has concluded that there are no significant uncertain tax positions that
would require recognition or disclosure within the consolidated financial
statements.
 
 The
Company files income tax returns in the U.S. federal jurisdiction and various
state jurisdictions. With a few exceptions, the Company is no longer subject to
U.S. federal, state, or local income tax examinations by tax authorities for
years before 2006.  The Company's policy is to recognize interest and
penalties related to uncertain tax benefits in income tax expense. The Company
has no significant accrued interest or penalties related to uncertain tax
positions as of September 30, 2010 or December 31, 2009 and such uncertain
tax positions as of each date are insignificant.
 
 RECLASSIFICATIONS
 Certain
reclassifications were made to the previously issued 2009 financial statements
in the consolidated statement of operations  in order for the amounts
to be comparable to the classifications used in 2010. These reclassifications
had no effect on net loss, operating cash flow, or accumulated deficit as
previously reported.
 
 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. On June 24, 2010, the holders of Series A no
longer have “full-ratchet” anti-dilution price protection as it has changed
to  “weighted average” anti-dilution price protection.
  13
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 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.
 
 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. The Company has
accrued dividends to Series A totaling $98,500 as of September 30,
2010.
 
 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 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 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 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.  The Company issued approximately
146,000 shares of common stock in payment of this liability. As of September 30,
2010, there is no remaining liability on the consolidated 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 was paid in full on December
31, 2009.
  14
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 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.
 
 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
 
 Upon
adoption of new accounting guidance on January 1, 2009, the Company evaluated
whether its warrants or convertible preferred stock contain provisions that
protect holders from declines in the 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.
  15
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 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.  During the nine months ended
September 30, 2009, the Company recognized a gain of $2,198,671 related to this
warrant liability representing the reduced fair value of this liability compared
to the January 1, 2009 adoption date of this guidance. No gain or loss was
recognized in 2010 relating to the warrant liability.
 
 As
discussed in Note 4, the conversion of all classes of warrants to Series B
eliminated the derivative accounting related to these instruments. Therefore,
the warrants that were accounted for as a liability were reclassified to
stockholders’ equity at its then-current fair value at the date of the
exchange.  The Company has no warrants outstanding that require
derivative accounting.
 
 6.
              PROMISSORY
      NOTE RECEIVABLE
 
 In
November 2009, JEDI entered into a Development and Construction Services
Agreement (the “Development Agreement”), with a wind 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 subject to a Turbine Supply Agreement
between the project owner and the turbine supplier. JEDI 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 project’s
mechanical completion date (or approximately  August  29,
2010 ), and if this does not occur, the subcontractor may exercise legal
rights to demand payment from JEDI only as it relates to Juhl’s rights to its
promissory note and its Development Agreement, 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. If converted to equity, the Company estimates that the
equity fair value would be equal or greater than the carrying value of the
note receivable.  This estimate is based on electricity production and
the fair value of the Power Purchase Agreement (“PPA”) in place at the
completion of this project. The substantial completion of the project
occurred in February 2010. Neither JEDI nor its primary subcontractor have
collected on this note receivable as of September 30, 2010; however,
approximately $2,626,000 of the note was received in October 2010. The primary
subcontractor has not made a demand for payment from JEDI or exercised any
rights with respect to foreclosing on the note, as the parties are currently
seeking to close on the permanent financing for the underlying
project.
 
 The
balance of the Promissory Note Receivable was $8,363,825 and $7,149,912,
including accrued interest of approximately $475,000 and $24,300 at
September 30, 2010 and December 31, 2009, respectively. The Note carries an
interest rate of 8%.
  16
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 7.
              CONCENTRATIONS,
      RISKS AND UNCERTANTIES
 
 The
Company derived approximately 72% of its revenue for the nine-months ended
September 30, 2010 from five customers as a result of the construction
activities and turbine sales and services, and 49% of its revenue for the nine
months ended September 30, 2009 was from sales to six customers. At
September 30, 2010 and December 31, 2009, 82% and 95% of the Company's accounts
receivable were due from one and two customers,
respectively.
 
 8.
              ACCOUNTS
      RECEIVABLE
 
 Accounts
receivable consists of the following:
  September
      30,
                  2010
                
                
                December 31,
                  2009 *Wind
      farm development/management
                
                $
                587,572
                
                
                $
                310,108Turbine
      sales and service
                
                
                48,747
                
                
                
                1,307,866Subtotal
                
                $
                636,319
                
                
                $
                1,617,974
  
 
 9.
              INVENTORIES
  Inventories
consist of the following:
 
 September
      30,
                  2010
                
                
                December 31,
                  2009*Materials
      and supplies
                
                $
                264,516
                
                
                $
                298,145Wind
      turbines designated for construction contract
                
                
                2,470,439
                
                
                
                -Work
      -in-progress
                
                
                -
                
                
                
                54,265$
                2,734,955
                
                
                $
                352,410
 
 
 10.
              PROPERTY
      AND EQUIPMENT
  Property
and equipment consists of the following:
 
 September
      30, 2010
                
                
                December 31,
                  2009*Land
      and improvements
                
                $
                18,700
                
                
                $
                17,500Building
      and improvements
                
                
                268,525
                
                
                
                238,120Equipment,
      including vehicles
                
                
                407,692
                
                
                
                380,856Construction
      in process
                
                
                22,068
                
                
                
                31,030Subtotal
                
                
                716,985
                
                
                
                667,506Less
      accumulated depreciation
                
                
                (277,733)
                
                
                
                (237,467
                )Total
                
                $
                439,252
                
                
                $
                430,039
  
   17
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
  11.
                CONSTRUCTION
      CONTRACTS
  The
status of construction contracts is as follows:
  September
      30, 2010
                  (unaudited)
                
                
                December
      31, 2009*Costs
      incurred on uncompleted contracts
                
                $
                8,523,906
                
                
                $
                8,692,761Deferred
      turbine costs
                
                
                -
                
                
                
                249,500Estimated
      earnings recognized
                
                
                470,237
                
                
                
                412,840Less:  billings
      to-date
                
                
                (7,888,377
                )
                
                
                (8,586,031
                )Totals
                
                $
                1,105,766
                
                
                $
                769,070Included
      in the accompanying balance sheet under the following
      captions:Costs
      and estimated earnings in excess of billings
                
                $
                1,105,766
                
                
                $
                769,070
 
 
 
 12.
              INCOME
      TAXES
  The
Company files a consolidated tax return inclusive of each of its wholly-owned
subsidiaries, JES (formerly 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.
 
 The
Company has 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, accounting methods used in computing
depreciation and revenue recognition and benefits from net operating loss
carryforwards.
 
 The
income tax benefit for the nine month periods ended September 30, 2010 and 2009
consists of the following components:
 
 2010
                
                
                2009Current
                
                $
                -
                
                
                $
                -Deferred
                
                
                (111,000
                )
                
                
                -Total
      income tax benefit
                
                $
                (111,000
                )
                
                $
                -
 
 18
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 The
components of the deferred income tax asset and liability as of September 30,
2010 and December 31, 2009 are as follows:
 
 2010
                
                
                2009*Current
      deferred income tax asset:Accrued
      vacation and officer’s compensation
                
                $
                18,000
                
                
                $
                12,000Reserves
      for warranty and doubtful accounts
                
                
                17,000
                
                
                
                26,000Net
      operating loss carryforward
                
                
                -
                
                
                
                440,000Less
      valuation allowance
                
                
                -
                
                
                
                (268,000
                )Total
                
                $
                35,000
                
                
                $
                210,000
 
 Non-current
      deferred income tax asset:Stock
      compensation expense
                
                $
                616,000
                
                
                $
                431,000Deferred
      revenue/other
                
                
                384,000
                
                
                
                224,000Net
      operating loss carryforward
                
                
                1,213,000
                
                
                
                310,000Less
      valuation allowance
                
                
                (1,257,000
                )
                
                
                (320,000
                )Total
                
                $
                956,000
                
                
                $
                645,000Current
      deferred income tax liability:Completed
      contract accounting
                
                $
                192,000
                
                
                $
                165,000Non-current
      deferred income tax liabilityDepreciation
                
                $
                29,000
                
                
                $
                31,000
 
 Deferred
income taxes are presented on the balance sheet under the following captions at
September 30, 2010 and December 31, 2009:
 
 2010
                
                
                2009*Current
      assets
                
                $
                -
                
                
                $
                45,000Current
      Liabilities
                
                
                (157,000
                )
                
                
                -Noncurrent
      assets
                
                
                927,000
                
                
                
                614,000Total
                
                $
                770,000
                
                
                $
                659,000
 
 
 
 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, 2010, a valuation
allowance of $1,257,000 has been recognized for deferred tax
assets.
 
 At
September 30, 2010, the Company has approximately a $3.0 million federal net
operating loss carryforward which will expire in the year 2029.
  19
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 The
following represents the reconciliation of the statutory federal tax rate and
the effective tax rate for the nine months ended September 30,
2010:
 
 Statutory
      tax rate
                      
                      $
                      (687,000
                      )
                      
                      
                      34.0
                      %States
      taxes, net of federal benefit
                      
                      
                      (121,000
                      )
                      
                      
                      6.0Nondeductible
      income/expenses
                      
                      
                      6,000
                      
                      
                      
                      (.3
                      )Other,
      net
                      
                      
                      22,000
                      
                      
                      
                      (1.1
                      )Increase
      in valuation allowance
                      
                      
                      669,000
                      
                      
                      
                      (33.1
                      )$
                      (111,000
                      )
                      
                      
                      5.5
                      %
 
 13.
              PROMISSORY
      NOTE PAYABLE
 
 In
November 2009, JEDI entered into a Balance of Plant Construction Services
Agreement (the “Construction Agreement”), with a subcontractor relating to a
wind project.  Under the Construction Agreement, the JEDI contracted
with the subcontractor for the construction services for certain aspects of the
project’s balance of plant. The Project’s balance of plant involves the
installation of ten 2.0 MW wind turbine generators. The subcontractor has 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 Construction Agreement, the primary
subcontractor’s note must be paid within 180 days of the mechanical completion
of the project (or approximately August 29, 2010), and if this does not occur,
the subcontractor may exercise legal rights to demand payment from JEDI only as
it relates to Juhl’s rights to its Development Agreement with the project
owners, including a right of foreclosure on the note delivered to the
subcontractor by JEDI, which could, in turn, allow for conversion of amounts to
project equity by the subcontractor. The substantial completion of the project
occurred in February 2010. JEDI paid  approximately $2,626,000 of the
note in October 2010. The primary subcontractor has not made a demand for
payment from JEDI or exercised any rights with respect to foreclosing on the
note, as the parties are currently seeking to close on the permanent financing
for the underlying project.
 
 The
balance of the Promissory Note Payable was $8,363,825 and $7,149,912, including
accrued interest of approximately $475,000 and $24,300 at September 30, 2010 and
December 31, 2009, respectively. The Note carries an 8% interest
rate.
 
 14.
              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, 2010, the Company has 1,652,111 shares available for award under
the plan.
 
 Stock
Options
 
 The
Company has granted to key employees and directors of the Company 1,215,000
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, the company expensed
approximately $453,000 and $716,000 of stock compensation in the nine-month
period ended September 30, 2010 and 2009, respectively.
  20
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 A summary
of the Company’s stock option plan as of September 30, 2010 and changes during
the period then ended is listed below:
  Outstanding
      at January 1, 2010
              
              
              1,745,000Granted
              
              
              —Exercised
              
              
              —Expired
              
              
              —Forfeited
              
              
              (30,000
              )Outstanding
      at September 30, 2010
              
              
              1,715,000Options
      exercisable at the end of the period
              
              
              1,074,154
 
 As of
September 30, 2010, there was approximately $596,000 total unrecognized
compensation expense cost.  This cost is expected to be recognized
over a weighted-average period of 2 years.
 
 Warrants
 
 The
Company has issued common stock warrants to individuals or firms for consulting
and investor relations services. A summary of the warrants are as
follows:
 
 Issue date
              
              Number of warrants
              
              Expiration Date
              Exercise Price per
                shareDecember
      2008
              
              
              50,000
              
              June
      2013
              $7.00
      - $10.00December
      2009
              
              
              100,000
              
              December
      2014
              $1.25Total
              
              
              150,000
 
 All of
the warrants are vested and allow the holder to purchase common stock at the
exercise prices shown above.  To determine fair value of the warrants
issued for the purposes of measuring stock compensation expense, the Company
uses the Black-Scholes pricing model with the following assumptions, dividend
yield of 0%, expected volatility of 96-102%, risk-free interest rate of 4%, and
expected life of 5 years.  The Company recognized no stock
compensation expense to non-employees during the three and nine-month periods
ending September 30, 2010 and 2009.
 
 15.
              LICENSING
      ARRANGEMENT
  In July
2009, NextGen entered into a 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 nine-month periods ended September 30, 2010 and
2009, licensing revenue of approximately $37,000 and $8,000, respectively, is
included in Turbine Sales and Service revenue in the financial
statements.  Licensing deferred revenue of approximately $942,000 and
$512,000 is included on the balance sheet as of September 30, 2010 and December
31, 2009, respectively, in deferred revenue.
  16.
              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.
  21
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 The
following is information for each segment for the nine-month periods ended
September 30, 2010 and 2009:
 
 Wind Farm
                Development
                and
                Management
              
              
              Consumer-
                Owned
                Renewable
                Energy
              
              
              ConsolidatedFor
      the Nine-Month Period Ended September 30, 2010Wind
      farm development/mgmt
              
              $
              408,229
              
              
              $
              4,650
              
              
              $
              412,879Turbine
      sales and service
              
              
              235,303
              
              
              
              753,486
              
              
              
              988,789Related
      party revenue
              
              
              236,618
              
              
              
              -
              
              
              
              236,618Construction
      contract revenue
              
              
              1,526,257
              
              
              
              5,518
              
              
              
              1,531,775Total
      revenue
              
              $
              2,406,407
              
              
              $
              763,654
              
              
              $
              3,170,061Loss
      from operations
              
              $
              (1,726,131
              )
              
              $
              (315,366
              )
              
              $
              (2,041,497
              )Other
      income (loss), net
              
              
              37,440
              
              
              
              (16,195
              )
              
              
              21,245Loss
      before income tax benefit
              
              $
              (1,688,691
              )
              
              $
              (331,561
              )
              
              $
              (2,020,252
              )Identifiable
      assets at September 30, 2010
              
              $
              11,849,481
              
              
              $
              377,721
              
              
              $
              12,227,202Corporate
      assets
              
              
              
              
              
              
              
              
              
              
              6,175,036Total
      assets at September 30, 2010
              
              
              
              
              
              
              
              
              
              $
              18,402,238
  Wind Farm
                Development
                and
                Management
              
              
              Consumer-
                Owned
                Renewable
                Energy
              
              
              ConsolidatedFor
      the Nine-Month Period Ended September 30, 2009Wind
      farm development/management
              
              $
              350,334
              
              
              $
              33,955
              
              
              $
              384,289Turbine
      Sales and Service
              
              
              -
              
              
              
              533,776
              
              
              
              533,776Related
      party revenue
              
              
              137,446
              
              
              
              -
              
              
              
              137,446Construction
      contract revenue
              
              
              -
              
              
              
              9,569
              
              
              
              9,569Other
              
              
              1,960
              
              
              
              -
              
              
              
              1,960Total
      revenue
              
              $
              489,740
              
              
              $
              577,300
              
              
              $
              1,067,040Loss
      from operations
              
              $
              (2,275,799
              )
              
              $
              (391,768
              )
              
              $
              (2,667,567
              )Other
      income (loss), net
              
              
              2,290,394
              
              
              
              (22,945
              )
              
              
              2,267,449Income
      (loss) before income taxes
              
              $
              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
 
 22
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 17.
              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.
  18.
              COMMITMENTS
      AND CONTINGENCIES
 
 Construction
Services Agreements
 The
Company enters into construction services agreements with third parties for the
construction of wind projects. The construction services agreements provide for
a fixed price or cost-plus arrangements, subject to change orders pursuant to
changes in work scope or work conditions. The construction fees are generally
billable on a monthly basis. At September 30, 2010, the Company was
substantially complete with the construction of two wind projects in Minnesota
with a combined estimated contract value of $9 million, and was in the beginning
stages of one additional project.
 
 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 3% to 5% of the total project cost. The development fees are
generally paid by the project owners in installments:   upon
signing of the development agreement (ranging from 2-10% of the fee), signing of
the power purchase agreement (approximately 5% of the fee), upon availability of
funding and signing of the PPA (approximately 40% of the fee), and the remaining
50% is due at the commercial operation date of the project. As of September 30,
2010, 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.
 
 Turbine
Supply
 The
Company may enter into turbine supply agreements whereby it will purchase wind
turbines from turbine equipment suppliers and resell the components to wind
project owners. The Company incurs risks of ownership during the course of
shipment and delivery to the project site. The Company passes through the
warranty and performance obligations of the manufacturer onto the project
owners.
 
 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.
 
 Turbine
Maintenance Agreements
 The
Company has agreements in place to perform turbine maintenance services for two
wind farm projects, and from time to time will engage in additional maintenance
services on a time and materials basis. The agreements provide quarterly or
annual payments on a per-turbine basis. The agreements at various dates
through 2014. The agreements may only be terminated in the event of
non-performance.
 
 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
$4,000 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.
  23
 JUHL
WIND, INC.
 NOTES
TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 FOR
SEPTEMBER 30, 2010 AND 2009
 19.
              NON-CONSOLIDATED
      VARIABLE INTEREST ENTITIES
 
 Generally
accepted accounting principles provide a framework for identifying variable
interest entities (VIE’s) and determining when a company should include the
assets, liabilities, non-controlling interest, and results of activities of a
VIE in its consolidated financial statements.  In general, a VIE is a
corporation, partnership, limited liability corporation, trust, or any other
legal structure used to conduct activities or hold assets that either (1) has an
insufficient amount of equity to carry out its principal activities without
additional subordinated financial support, (2) has a group of equity owners that
are unable to make significant decisions about its activities, or (3) has a
group of equity owners that do not have the obligation to absorb losses or the
right to receive returns generated by its operations.   A VIE
should be consolidated if a party with an ownership, contractual, or other
financial interest in the VIE (a variable interest holder) has the power to
direct the VIE’s most significant activities and the obligation to
absorb losses or right to receive benefits of the VIE that could be significant
to the VIE.  A variable interest holder that consolidates the VIE is
called the primary beneficiary.  Upon consolidation, the primary
beneficiary generally must initially record all of the VIE’s assets,
liabilities, and non-controlling interests at fair value and subsequently
account for the VIE as if it were consolidated based on majority voting
interest.
 
 As more
fully described in Note 6,  Juhl Energy Development (JEDI) entered
into a Development and Construction Services Agreement in November 2009 with a
limited liability company which was formed to own a wind farm  project
in Minnesota.  Under this agreement, JEDI contracted with the existing
owners of the wind farm project for the development, design, construction,
installation, and construction period financing of the project’s balance of
plant.  JEDI 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 defer payment of its services through the
acceptance of a promissory note until permanent financing is placed on the
project.  The Company does not maintain any ownership interest in the
special purpose entity. The Company has determined that this limited liability
company is a VIE.
 
 A major
wind turbine manufacturer has also accepted a note receivable for approximately
$30 million as their turbines are being constructed on the wind farm within this
limited liability company.  The turbine manufacturer has more risk
exposure as it relates to this entity and has been granted certain decision
rights, superior to JEDI, that most significantly impact the economic
performance of the limited liability company.  Based on this analysis,
JEDI has determined that the wind turbine manufacturer is the primary
beneficiary for this VIE.
  The
Company’s evaluation of whether it qualifies as the primary beneficiary of VIEs
is highly complex and involves significant judgments, estimates and assumptions.
The Company generally utilizes expected cash flow scenarios to determine our
interest in the expected losses or residual returns of VIEs and perform
qualitative analysis of the activities that most significantly impact the VIEs’
economic performance and whether we have the power to direct those
activities.
 
 At
September 30, 2010, the Company held the following investments that were
evaluated against the criteria for consolidation and determined that it is not
the primary beneficiary of the investments and therefore consolidation in the
Company’s financial statements is not required:
  Asset types
              
              Purpose
              
              Book ValuePromissory
      note receivable
              
              Construction
      contract note with owners
              
              $
              8,363,825Reimbursable
      project costs
              
              Cost
      advances to wind farm project
              
              
              221,844Costs
      and profits in excess of billings
              
              Construction
      contract
              
              
              617,217Promissory
      note payable
              
              Construction
      contract note with subcontractor
              
              
              (8,363,825
              )
 
 24
 
 20.
              SUBSEQUENT
      EVENT
 In
October 2010, the Company's board of directors approved a Stock Repurchase
Program whereby the Company will utilize a maximum of $200,000 to purchase
outstanding shares of its common stock in the open market. The Repurchase
Program will continue until such time as the total program amount is utilized or
the program is terminated by the Company.
  25





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 Securities and Exchange
Commission filings.





Definitions





We use
the following electrical power abbreviations throughout this report: “kW” means
kilowatt, or 1,000 watts of electrical power; “MW” means megawatt, or 1,000 kW
of electrical power; “GW” means gigawatt, or 1,000 MW of electrical power; “TW”
means terawatt, or 1,000 GW of electrical power; and “kWh,” “MWh,” “GWh,” and
“TWh” mean an hour during which 1kW, MW, GW or TW, as applicable, of electrical
power has been continuously produced.  Capacity refers to rated
capacity.  References in this report to “NCF” mean net capacity factor, or
the measure of a wind energy project’s actual production expressed as a
percentage of the amount of power the wind energy project could have produced
running at full capacity for a particular period of time, and references to
“RECs” mean renewable energy certificates or other renewable energy attributes,
as the context requires.





Overview
of Our Business





Juhl Wind
is a leader in community wind power development and management, focused on wind
farm projects primarily in the United States and Canada.  Juhl Wind
services all aspects of wind farm development including full development and
ownership of wind farms, general consultation on wind farm projects,
construction management of wind farm projects and systems operation and
management of completed wind farms.   Additionally, we sell
renewable energy products such as remanufactured small wind turbines and solar
systems to consumers, directly and through our dealer network.  The
goal of Juhl Wind is to build 5 to 80 megawatt (MW) size wind farms that are
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, which results in
land owners owning a portion of the long term equity in the wind farm that
resides on their land. Our growth strategy is anchored by the competitive
advantage of our portfolio of completed projects coupled with our projects 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.





Since
1999, we have developed 16 wind farms, accounting for approximately 137
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
26 wind farms totaling approximately 438 megawatts of community wind
power.





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




26





Community
Wind Power





Our
projects are based on the formation of partnerships with the local owners 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 land owners (often farmers).  Our Chairman and
Principal Executive Officer, Daniel J. 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 and Nebraska (where we
have projects in development), have enacted C-BED initiatives, which include
mechanisms to support community wind power and are intended to make it easier
for community wind power projects to be successful without putting an excessive
burden on utilities.





Historically,
landowners in rural areas could only benefit from the development of wind farms
in their community by leasing their land to large wind developers. These large
developers would then sell the wind energy to the local utility company and
retain a majority of the project’s profits. We provide what we believe is a
better alternative for local communities by specifically concentrating on C-BED
wind power projects that include local ownership.  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 for the past 30 years, is to share ownership with
local interests and to build a network of farmer-owned community wind power
systems.




Management





Mr. Juhl
is an 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, as well as largely contributing to the
development of the currently accepted, financial, operational and legal
structure providing local ownership of medium-to-large scale wind
farms.  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.





Further,
the rest of 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.




Business
Strategy





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 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.





Integral
to Juhl Wind’s development effort is the joint ownership structure created by
the community wind model.  On implementing this model, a group of
landowners are typically placed into the membership of the local entity,
typically a limited liability company. By design, Juhl Wind’s projects are
smaller as compared to larger wind farm projects, which make wind farm
development less burdensome, including reducing the difficulties in locating
available sites for wind farms, wind turbine supply, local construction,
electrical interconnection and debt financing.   Thus, Juhl
Wind’s projects cost less to build than large scale, multi-national or electric
utility owned wind farms.  Our typical community wind farm projects
range in size from 10 to 50 megawatts, equivalent to $20 to $100 million
development costs for the projects.  Based on this size, community
wind farms are a viable and a relatively undiscovered niche in the
market.




Juhl Wind
develops its community wind projects similar to the way any utility or
independent power developer builds and operates traditional power
plants.  Juhl Wind is the developer for the wind farms and in most
cases, becomes an administrative and operations manager for the project
companies. On occasion, we will also perform services as a turbine maintenance
provider.  The wind farms are built to meet wind power production
goals established by the electric utility buyer through a power purchase
agreement (the “PPA”).  This PPA typically provides for a 20 year term
in the agreement from the electric utility.  Since the primary cost of
wind power is the initial capital cost of the system, each wind farm benefits
from a steady stream of reliable revenue and cash flow for decades.




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 are that the turbine manufacturer may 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.  In addition to the frame order
agreement, we have entered into a non-binding term sheet with a turbine supplier
to provide wind turbine generators for four projects currently under development
totaling approximately 150 MW. The procurement of these wind turbines are
subject to the completion of definitive agreements for the terms of supply,
construction and financing arrangements.




27




Our
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. (“Next Gen”).  Prior to the acquisition, Dan Juhl
had been a significant shareholder in NextGen since it was organized in
2004.   NextGen primarily restores small wind turbines in the 30 KW
class for sale to consumers for on-site electricity generation generally in
rural business settings.  NextGen is currently completing the research
and design of a 35 kw class wind turbine for purposes of sales under its own
brand starting in 2011.   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. In conjunction with this agreement, NextGen has collected licensing
fees of $1 million as of September 30, 2010.





Factors
Affecting Our Operating Results





Demand





Demand
for wind power in the United States has grown rapidly. We believe that the
market for community wind power will be maintained as a model for ongoing
installations of wind power given the constraints of transmission capacity and
utility power purchases that are currently affecting the growth of larger scale
projects.   In addition, we believe that there is impetus in the
United States to increase its generation of electrical power through renewable
energy means.





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
      fluctuating costs 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, including the
      Recovery and Reinvestment Act enacted in February
  2009,





·
            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 long-term 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 on behalf of our construction-ready wind farm projects to
identify sources of debt and equity financing in order to proceed to the actual
construction phase.  The debt and equity sources include financiers
who are based in foreign countries and have experience in wind energy
projects.  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 U.S. based banking
institutions who face tight regulatory lending conditions resulting from the
recent recessionary economy and  a banking crisis that led to U.S.
government bailout programs in 2008.  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 seeking
foreign sources of debt and equity capital as well as examining federal and loan
guarantee programs as an additional means of securing project
financing.




28





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 affect 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 duration of ten years
from the date that the wind turbine is placed into service. In 2010, the PTC is
$22 per megawatt hour (or 2.2 cents per kilowatt 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 parks
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.





Renewable Energy Certificates
(REC).  A
REC is a stand-alone tradable instrument representing the attributes associated
with one megawatt hour of energy produced from a renewable energy source. These
attributes typically include reduced air and water pollution, reduced greenhouse
gas emissions and increased use of domestic energy sources. Many states use RECs
to track and verify compliance with their RPS programs. Retail energy suppliers
can meet the requirements by purchasing RECs from renewable energy generators,
in addition to producing or acquiring the electricity from renewable sources.
Under many RPS programs, energy providers that fail to meet RPS requirements are
assessed a penalty for the shortfall, usually known as an alternative compliance
payment. Because RECs can be purchased to satisfy the RPS requirements and avoid
an alternative compliance payment, the amount of the alternative compliance
payment effectively sets a cap on REC prices. In situations where REC supply is
short, REC prices approach the alternative compliance payment, which in several
states is approximately $50 to $59 per megawatt hour. As a result, REC prices
can rival the price of energy and RECs can represent a significant additional
revenue stream for wind energy generators. In our community wind projects, the
rights to the RECs are maintained by the power purchaser, such as a utility
company, as a part of a power purchase contract.




American Recovery and Reinvestment
Act of 2009 (the “Recovery Act”). On February 13, 2009, the
U.S. Congress passed a stimulus package known as The American Recovery and
Reinvestment Act  of 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.  According
to a discussion at Windindustry.org, the Recovery Act’s goal opens up new
sources of funding for renewable energy at a time when the wind energy industry
is set for even more growth.  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.





Under the
Recovery Act, wind facilities that qualify for the PTC can now make an
irrevocable decision to take 30% ITC in lieu of the PTC.  In order to
do so, the project must be placed into service by December 31, 2012, and the PTC
will no longer be available for the project.  This has the potential
to attract more investors who may not have enough passive activity income to
realize the PTC.  Which credit a taxpayer uses will depend upon an
analysis of the project revenue and cost projections as well as analysis of the
investor tax appetite.





Further,
if the project qualifies for the PTC or the ITC and is placed into service
before the end of calendar year 2010 (or if the project meets certain tests by
the end of calendar year 2010 and is placed into service before 2013), the
project can choose to apply to the Treasury Department for a cash grant that is
equal to 30% of the qualified costs of the project.  This cash grant
is in lieu of both the PTC and ITC.  This means the value of the ITC
can be realized, even if the taxpayer cannot take advantage of the
credit.  The rules and application guidelines for this program are
currently being established by the Department of Energy.  We believe
that the cash grant program will allow us to enhance our ability to attract
equity investors for our community wind projects.




29





The
Recovery Act removes the $4,000 cap on small wind credit so taxpayers can now
take the full 30% credit for a qualified small wind system.  It also
provides for an additional $1.6 billion for Clean Renewable Energy Bonds (CREBs)
that are used to finance renewable energy.  Previously, these bonds
have been given at 0% interest rate, and the bondholder receives a tax credit in
lieu of bond interest.





The
Department of Energy received an extension of its authority to provide loan
guarantees for qualified technologies under Title XVII of the federal Energy
Policy Act of 2005 and an additional $6 billion for this
program.  Eligible technologies include electricity-generating
renewable energy projects.





Basis
of Presentation





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





On June
24, 2008, we entered into a Securities Exchange Agreement with Juhl Energy
Development, Inc. (“Juhl Energy”) and Juhl Energy Services, Inc. (formerly known
as DanMar and Associates, Inc.) (“Juhl Energy Services”) (the “share exchange
transaction”), as previously reported.  At that time, we succeeded to the
wind farm development and management business of Juhl Energy and Juhl Energy
Services, and Juhl Energy and Juhl Energy Services 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.  Juhl Energy Services was accounted for in a manner
similar to pooling of interests due to common control ownership.




In
October 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,
2010 and 2009. 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, Juhl Energy Services (formerly known as DanMar and Associates) and
NextGen’s financial statements are our historical financial
statements.




In May
2010, we formed Juhl Wind Asset Investment, Inc., (formerly Juhl Wind Project
Lending, Inc.) in the state of Delaware, as our wholly-owned
subsidiary.  As of September 30, 2010, this entity has had no
operational activity. Its revenue and expense activities will be reported on our
financial statements on a consolidated basis in a similar manner as to Juhl
Energy Services, Juhl Energy and NextGen.





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. The
Company uses estimates and assumptions in accounting for the following
significant matters, among others: revenue recorded from the development
agreements  and construction contracts; realizability of accounts and
notes receivable; valuation of deferred tax assets, stock based compensation and
warrants, determination of the primary beneficiary of a variable interest
entity, 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.





As of
September 30, 2010, we have an $8,364,000 million promissory note receivable and
approximately $522,000 in accounts receivable that are recorded based on our
assumption of collectability of funding from two wind farm
customers.  We have concluded that such amounts will be collectable
from cash of approximately $2,626,000 already received after September 30, 2010
in combination with other project financing arrangements that are in process at
the time of this filing.   We have provided further discussion
with respect to the funding and collectability status in the Overview of our
Results of Operations and the Liquidity and Capital Resources sections
below.




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.




30





Results of
Operations




Comparison
of Three-Month Periods and Nine-Month Periods Ended September 30, 2010 and
September 30, 2009





Overview




Our wind
farm development projects most commonly involve a development fee contract with
the entities specifically formed by local landowners upon whose land the wind
turbines are installed. Revenue is also derived from our work in the development
of wind farms throughout the development process including four major
components: feasibility studies, development fees, operations and management
oversight, and construction fees. In addition, we occasionally provide turbine
maintenance services on a contractual or time and materials basis as requested
by project owners.





Due to
the anticipated increased demand for electricity from alternative energy sources
in 2010 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 an increase in revenues in 2010 as a result of
construction and development services on wind farm development
projects.  However, revenue will be subject to shifts in timing due to
the ability for the projects to obtain financing and also with respect to delays
in construction caused by Upper Midwest climate or other unforeseen
circumstances.




Our
general activity for the three months ended and nine months ended September 30,
2010 was primarily focused on completing the financing of two community wind
farm projects in Minnesota, namely Woodstock and Grant County, and efforts
necessary to prepare for the commencement of construction of an additional four
projects.




Grant County. The 20 megawatt
Grant County wind farm project (the “GCW Project”) commenced construction during
the fourth quarter of 2009, and reached substantial completion in February 2010
and was declared commercially operational by the utility in August 2010 at an
approximate cost of $44 million.  The GCW Project has successfully
produced energy since achieving substantial completion and has been selling all
of its energy production to the power purchaser at a reduced trial energy rate
up until the commercial operation date (COD) and at full contract rates since
COD. The project had been directed by potential equity funding sources to defer
its commercial operation date until the closing of equity and debt financing
arrangements that had been subject to term sheet understandings reached in March
2010.   In early July 2010, we learned that the project’s
expected equity investor would be unable to complete its proposed equity
investment.  In response to this withdrawal, the project moved to
declare its commercial operation status, and the project’s principal interim
lender (the turbine supplier), along with the project construction contractors,
Juhl Energy and its prime subcontractor, reached a memorandum of understanding
to forego any foreclosure proceedings for payments that had been deferred under
promissory notes (approximately $30 million by the turbine supplier and
approximately $8.2 million by Juhl). The parties also agreed to retain an
experienced capital-raising firm to acquire full or partial funding of the
project.  This process has led to the receipt of four possible binding
proposals on the GCW Project in early November, and we are working closely with
the capital-raising firm and the interim lender to determine a course of action
which will ultimately lead to establishing the permanent equity investor in the
GCW Project. In addition, we are assisting the GCW Project in due diligence
activities to close on an indicative debt financing term sheet understanding
with a banking institution for approximately $18 million. We expect the debt
financing to close in December 2010.   Furthermore, the GCW Project
received approximately $12,564,000 from the U.S. Treasury in October 2010, of
which $2,626,000 was used to reduce the carrying amount of our note receivable
from $8,364,000 to $5,738,000.   We believe that the promissory note
receivable shown in our financial statements is collectable and that there is
sufficient basis to maintain the carrying amount of the promissory note for the
following reasons:  the project’s successful wind farm operating
history since substantial completion in February 2010,  the existence
of a bank debt financing proposal, collection of the U.S. Treasury cash grant,
the strong likelihood of completion of the capital-raising process to achieve
final equity or overall sale of the project assets, and an understanding with
the existing senior lender to defer any foreclosure rights until November 2010
and its likelihood to continue its deferral of actions with the recent
successful receipt of financing proposals.








Woodstock.  The .75
megawatt Woodstock wind farm project commenced construction during the fourth
quarter of 2009, and the project was commissioned in the second quarter of
2010.  The project cost of approximately $1.8 million was financed
with approximately $900,000 of equity investment, a loan facility of $.6
million, along with expected U.S. Treasury cash grant proceeds of approximately
$500,000.  In addition, the loan facility allows an additional
$300,000 of credit pending satisfactory turbine operating history.




Additional
Projects.   We have commenced construction of four wind
farm projects totaling approximately 52 MW of wind generation facilities in
Minnesota during the third and fourth quarters, including the
following:





·
            Adams
      Project, which is a 20 MW project, located in Meeker County, Minnesota,
      where we are providing full development and limited construction
      management services;


·
            Danielson
      Project, which is a 20 MW project, located in Meeker County, Minnesota,
      where we are providing full development and limited construction
      management services;


·
            Valley
      View Project, which is a 10 MW project, located in Minnesota, where we are
      providing general consultation, development, and full construction
      services for the project.  Once the project is completed, we
      will also expect to provide systems operation and
    management.


·
            Winona
      Project, which is a 2 MW project, located in Winona County, Minnesota,
      where we are providing general consultation, development, and full
      construction services for the project.  Once the project is
      completed, we will also expect to provide systems operation and
      management.




31




In
addition to construction planning activities, we were also focused on obtaining
debt and equity financing arrangements amidst difficult economic conditions with
respect to the financing of wind development projects, and we have worked to
align ourselves with lending institutions, environmentally friendly investment
sources, and industry suppliers to provide financing options for investment in
these construction-ready projects and other upcoming
projects.





Revenue





Total
revenue increased by approximately $468,000, or  117.3%, from
approximately $399,000 for the quarter ended September 30, 2009, to
approximately $867,000 for the quarter ended September 30, 2010.  
Total revenue increased by approximately $2,103,000, or 197.1% from
approximately $1,067,000 for the nine month period September 30, 2009, to
approximately $3,170,000 for the nine month period ended September 30,
2010.  The increase of $2,103,000 in revenue is primarily attributable
to approximately $1,353,000 of construction contract revenue from three wind
farm construction projects during the first nine months of 2010, and
approximately $455,000 from turbine sales and service, and $170,000 from the
installation of meteorological towers.





Turbine
sales and service revenues increased by approximately $455,000 for the
nine-month period ended September 30, 2010, over September 30, 2009, as a result
of turbine revenue from the Woodstock wind farm project of approximately
$252,000 together with approximately a $203,000 increase in small
turbine-related sales in our NextGen subsidiary.   The $203,000
increase in NextGen, which is essentially our consumer-owned renewable energy
segment, occurred even though our small turbine unit sales included the same
number of shipment units in both 2009 and 2010 (eight). The increase occurred as
a result of higher average unit prices of turbines sold in 2010, together with
additional revenues earned from customer maintenance fees and a $29,000 increase
in licensing revenue from the twenty-year licensing
arrangement.  NextGen had no backlog as of September 30, 2010 as it
has sold out of its previous turbine inventory that had been acquired for
refurbishment.  NextGen is currently testing and evaluating a new 35
KW class wind turbine model which it expects to begin production and
distribution in the first quarter 2011.





Cost
of Goods Sold





Cost of
goods sold increased by approximately $324,000, or 122.8% from
approximately $263,000 for the quarter ended September 30, 2009
to approximately $588,000 for the quarter ended September 30,
2010.   Cost of goods sold increased by approximately $1,865,000, or
323.5% from approximately $577,000 for the nine month period ended September 30,
2009, to approximately $2,442,000 for the nine month period ended September 30,
2010.  The increase in cost of goods sold for the quarter and nine
months ended September 30, 2010 is primarily attributable to approximately
$461,000 and $1,551,000, respectively, of wind farm construction costs relating
to subcontracted services and materials for the Grant County, Woodstock and
Valley View wind farm projects.   The remainder of the increase
in cost of goods sold of approximately $314,000 for the nine month period ended
relates to $146,000 of met tower construction costs, $96,000 to support wind
farm management and maintenance operations,  and the remainder
relates to increased product costs for the NextGen small turbine sales and
supplies.  Cost of goods sold in the quarter ended 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.





Operating
Expenses





General and Administrative
Expenses.   General and administrative expenses decreased by
approximately $92,000 or 27.0%, from approximately $342,000 for the quarter
ended September 30, 2009, to approximately $250,000 for the quarter ended
September 30, 2010.   General and administrative expenses decreased by
approximately $173,000, or 15.2% from approximately $1,139,000 for the nine
months ended September 30, 2009, to approximately $966,000 for the nine months
ended September 30, 2010.   The overall decrease of general and
administrative expenses for the quarter and nine month periods ended September
30, 2010, is primarily attributable to reduced level of  professional
services costs of $68,000 and $273,000, respectively.  In our 2009
filings, we had mentioned that professional fees had included costs that we did
not expect on a recurring basis from our costs of maintaining public reporting
company status, subsequent audit costs over NextGen acquisition, and securities
registration filings.





Payroll and Employee
Benefits. Payroll and employee benefit expenses decreased by
approximately $50,000, or 9.2%, from approximately $546,000 for the quarter
ended September 30, 2009 to approximately $495,000 for the quarter ended
September 30, 2010.   Payroll and employee benefit expenses decreased
by approximately $129,000, or 7.9% from approximately $1,630,000 for the nine
months ended September 30, 2009 to approximately $1,501,000 for the nine months
ended September 30, 2010.  The $129,000 decrease over the nine months
ended September 30, 2010 was attributable to approximately a $263,000 decrease
in employee-based stock-based compensation expense over the quarter ended
September 30, 2009, offset by $134,000 for increased salaries, payroll taxes and
benefits  to officers and the addition of four employees over the
prior year.




32




Wind Farm Management
Expenses. Wind farm management expenses decreased by
approximately $51,000, or 72.2%, from approximately $71,000 for the quarter
ended September 30, 2009 to approximately $20,000 for the quarter ended
September 30, 2010.   Wind farm management expenses decreased by
approximately $141,000, or 68.0% from approximately $207,000 for the nine
months ended September 30, 2009 to approximately $66,000 for the nine months
September 30, 2010.  The year-to-date decrease in expenses resulted
primarily from the incurrence of one-time management costs during the nine
months ended September 30, 2009 relating to time and materials arrangements
requested by certain wind farm facilities under management.





Investor Relations Expenses.
Investor relations expenses decreased by approximately $85,000, or 66.1%, from
approximately $128,000 for the quarter ended September 30, 2009
to approximately $43,000for the quarter ended September 30,
2010.   Investor relations expenses increased by approximately $55,000
or 30.4% from approximately $181,000 for the nine months ended September 30,
2009 to approximately $236,000 for the nine months ended September 30,
2010.  The year-to-date increase stems from expanded investor
relations communications in 2010 to increase exposure of Juhl Wind.




Other Income
(expenses). 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
our detachable warrants stemming from the private placement be accounted for as
a derivative instrument. As a result of revaluing the warrants, we recorded a
gain of approximately $2,199,000 for the nine month period ended September 30,
2009 from the change in the fair value of the underlying warrants using the
Black Scholes method.  As a result of the exercise or exchange of
such warrant instruments on June 29, 2009, no further adjustments are necessary
to the fair value of these warrants in 2010.   Other income and
expenses for the three and nine-months ended September 30, 2010 include
approximately $161,000 and $451,000, respectively, of interest income earned and
interest expense incurred with respect to the promissory notes held in
conjunction with construction of the GCW Project.





Operating
Loss





Our
Operating loss decreased by approximately $423,000, or 44.4%, from
approximately $952,000 for the quarter ended September 30, 2009
to approximately $529,000 for the quarter ended September 30,
2010.   Operating loss decreased by approximately $626,000, or 23.5%
from approximately $2,667,000 for the nine months ended September 30, 2009 to
approximately $2,041,000 for the nine months ended September 30, 2010.  The
decrease in operating loss of $423,000 for the quarter ended September 30, 2010
is attributable to an increase in gross margins of approximately $90,000 from
construction income and turbine maintenance services that occurred in 2010 but
not in 2009, improvement in gross margins from our NextGen business of
approximately $54,000, together with a decrease in all of our operating expense
categories of $279,000.  The decrease in operating loss of $626,000
for the nine months ended is primarily attributable to the decrease in payroll
expenses of $129,000 and general and administrative expenses of $173,000 as
described above, along with increased gross margins from our turbine and
construction revenues of $237,000.





Net
Loss





Net loss
decreased by approximately $413,000, from net loss of
approximately $938,000 for the quarter ended September 30, 2009 to a
net loss of approximately $525,000 for the quarter ended September 30, 2010.
 Net loss increased by approximately $1,509,000, from a net loss of
approximately $400,000 for the nine months ended September 30, 2009 to a net
loss of approximately $1,909,000 for the nine months ended September 30,
2010.  Our net loss for the prior period ended September 30, 2009 was
significantly impacted by the fair value accounting over the warrant derivatives
and subsequent non-cash gains of approximately $2,199,000 reported for the nine
months ended September 30, 2009, as described above under other income
(expenses).




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.





Accounts
receivable include $522,000 due from a wind farm project for the sale of a wind
turbine. This amount was subsequently collected in October 2010.





Property
and Equipment





As of
September 30, 2010 and December 31, 2009, we held approximately $439,000 and
$430,000 in net book value of property and equipment, respectively. These assets
included land, buildings, office equipment, shop equipment and service
vehicles.




33







Liquidity
and Capital Resources





At
September 30, 2010, we carried approximately $2,831,000 in cash and short
term-investments on the balance sheet primarily due to the 2008 private
placement and the additional infusion of approximately $2,339,000 from the June
2009 exercise by holders of Series A Warrants.  However, approximately
$417,000 of the short-term investments has been designated as security for the
bank notes payable of approximately $411,000 and therefore has been reflected in
current assets as a restricted asset. In order to provide additional protection
to our cash reserves, we have obtained a $1.7 million letter of credit facility
that provides security for the deposits that may not otherwise be insured
through the Federal Deposit Insurance Corporation.





We will
continue our internal efforts to assist our project owners in arranging
financing terms for each project under development. The ability to assist
project owners with obtaining debt and equity financing is a material factor in
producing our future revenue streams and cash flow.  With respect to
our liquidity, we are currently involved with completing the permanent financing
activities with respect to two wind farm projects:





·
            Grant County (“GCW
      Project”). Construction of the GCW Project commenced in October
      2009 and was substantially completed during the first quarter of
      2010.  Our balance sheet at September 30, 2010 includes a
      promissory note receivable of approximately $8,364,000 stemming from a
      financing arrangement of the construction services provided to the GCW
      Project. In October 2010, we collected approximately $2,626,000, or 31% of
      the note receivable balance. We expect that the Grant County project
      owners will close on a proposed bank debt funding arrangement in the
      fourth quarter 2010 which will provide partial funding for the project’s
      senior interim lender. Also in the fourth quarter, we expect that the
      project owners will obtain additional equity capital which
      will   provide repayment of our promissory note including
      interest.  Upon receipt of payment, we will be required to repay
      the promissory note payable of approximately $8,364,000 (now reduced to
      $5,738,000 as a result of the cash collections and payments on the note
      payable subsequent to September 30, 2010) to our primary subcontractor on
      the project. Our Board of Director has authorized an equity investment of
      up to $500,000 in the Grant County wind project as may be required by the
      final financing terms and conditions. If such an investment were to occur,
      we would expect to provide this investment using proceeds of our
      contractual development fee of approximately $1.8 million to be received
      at closing pending the successful financing for the GCW Project. The
      development fee will not be recognized as earned until financing
      arrangements are completed and it is possible that a significant portion
      of JEDI’s $1.8 million development fee may be at risk in the process of
      consummating the permanent financing of the GCW
  Project.





·
            Woodstock . The
      Woodstock project was fully commissioned in June 2010. We assisted the
      project in raising the equity and permanent bank loan with respect to this
      project. As of September 30, 2010, we had a remaining accounts receivable
      of approximately $522,000.  Subsequent to September 30, we
      collected this receivable in its entirety through funds that the Woodstock
      project had obtained from the Section 1603  U.S. Treasury cash
      grant program.




We
believe that we would be able to more quickly bring wind farm projects through
the early development and construction stages if we were able to access a
funding mechanism that we could utilize in sponsoring our wind farm
developments.   Like much of the U.S. economy that relies on
extension of credit, the community wind industry in general has experienced
difficulties in obtaining sources of funding from the current equity and debt
financing marketplace, as cited above under Factors Affecting Our Operating
Results.  In February 2010, we signed an engagement agreement in
principle with a full service investment banking firm, Rodman & Renshaw
(“Rodman”), for purposes of receiving investment advisory services, including a
potential underwritten registered stock offering. This non-binding agreement
outlines conditions and assumptions for a possible underwritten offering of
units comprising shares of a new class of its preferred stock (or possibly a
unit consisting of preferred and common shares), with proceeds from the sale of
the preferred stock portion of the “units” used to primarily make investments in
the community wind farm projects under development by the Company and with the
sale of any portion of the common stock of the “units” to be used for
operations. The investments in the community wind farm projects are anticipated
to take the form of subordinated debt or mezzanine equity, and investment
returns for such securities would be provided from interest earned on
investments in such wind farm projects.  Rodman, along with any other firms
managed by them in an underwriting, would be paid what we believe to be industry
standard success fees for their underwriting services. The terms of any offered
securities are currently being negotiated between management, counsel and
Rodman.  The Company anticipates registering this offering of a new
class of its preferred stock with the U.S. Securities and Exchange Commission
during the fourth quarter of this year.





In the
fourth quarter 2010, we have four wind farm projects under
construction.  The construction costs for three of the projects are
being financed through turbine suppliers and balance of plant providers and
therefore, we expect to have minimal cash requirements during construction for
those three projects. The fourth project will require outlays of approximately
$1.2 million for balance of plant construction and turbine delivery. We are
currently in the process of obtaining temporary bank financing available to meet
the cash requirements for the project, and we believe that we will be successful
in that regard. This temporary financing will require us to post collateral in
the form of our rights to specific project assets along with a corporate
guarantee.  We have development fees that will be contractually owed
to us upon commercial operation and final financing of the four projects. The
approximate amount of development and construction management fees that we
expect to receive upon successful completion of the projects is approximately
$4,800,000. The four projects are expected to be commercially operational and
financing completed by May 1, 2011.




34




Due to
the anticipated increased demand for power from alternative energy sources in
2010 and beyond, we believe the demand for our services, and therefore our
revenues, will be stable or 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
services, will be sufficient to finance our operations and planned capital
expenditures through the next 24 months.





We will
continue to pursue new community wind farm developments to maintain an active
backlog of projects. However, we cannot assure that 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 $951,000, from the net
cash used in operating activities of approximately $773,000 for the nine months
ended September 30, 2009 to net cash used in operating activities of
approximately $1,724,000 for the nine months ended September 30,
2010.  The increase in net cash used in operating activities
of $951,000 is primarily due to the use of cash to fund day-to-day
operating costs of the business,  reduction in customer deposits
collected for small turbine sales transactions, and costs of project
construction.   We will continue to manage payments of accounts
payable related to project-related expenses to coincide with the billings on
these projects and to obtain temporary financing arrangements, if considered
necessary, to provide cash for project construction.




Net cash
provided by investing activities increased by approximately $338,000, from the
net cash used in investing activities of approximately $125,000 for the nine
months ended September 30, 2009 to net cash provided by operating activities of
approximately $212,000 for the nine months ended September 30,
2010.  The change in net cash used in investing activities for the
quarter ended September 30, 2010 primarily relates to the maturity of
approximately $293,000 of short-term investments that were converted into
operating cash reserves.  We invested approximately $80,000 into new
property and equipment additions and projects under development by
us.




Net cash
flow provided by financing activities decreased by approximately $2,075,000,
from the net cash flow provided from financing activities of approximately
$2,157,000 for the nine months ended September 30, 2009 to net cash provided by
financing activities of approximately $82,000 for the nine months ended
September 30, 2010.  The decrease is primarily attributable to
$2,339,000 in additional equity funding received in 2009.




We
maintain an investor relations cash escrow account that was initially funded by
$500,000 of proceeds received from the 2008 private placement, 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, 2010 and December
31, 2009, we had a balance of approximately $115,000 and $203,000, respectively,
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.  Our wind farm development revenues may
similarly be affected because a portion of these revenues are associated with
our ability to reach final completion of the underlying projects.





Off-Balance
Sheet Arrangements





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





Critical
Accounting Policies





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





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




35





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.





Turbine
Sales and Service:




Turbine sales occur from small scale
wind turbines that are internally re-manufactured and sold by the Company, or
through purchase and resale of larger scale wind turbines to wind farm project
owners. Revenue from the sale of small scale wind turbines are recognized upon
shipment to the customer as transfer of ownership and risk of loss have been
transferred to the customer.  Deposits received from customers are
included as deferred revenue until shipment occurs. Revenues from the sale of
larger scale wind turbines are generally recognized in conjunction with the
construction services percentage of completion accounting discussed below.
Commencement of revenue recognition is only after turbine erection activities
have begun.  Turbine services include
time-and-material arrangements related to existing installations of wind turbine
equipment.  Revenue is recognized upon completion of the maintenance
services.





Licensing
Revenue




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





Wind
Farm Consulting, Development and Management Services:




Consulting
Services




Consulting
services fees are primarily fixed fee arrangements of a short-term duration and
are recognized as revenue on a completed contract basis.





Wind
Farm Development Services




The
Company normally earns a development service fee from each of the wind farm
projects that it develops in cooperation with wind farm investors. These
development services arrangements are evaluated under authoritative guidance
relating to “Revenue
Arrangements with Multiple Deliverables,” which addresses certain aspects
of accounting by a vendor for arrangements under which the vendor will perform
multiple revenue generating activities.





The
development services fee revenue is recognized as follows:




Proceeds
received upon the signing of a Development Services Agreement (generally 10% of
the total expected development fee) are amortized over the expected period of
the development process, which is generally three years. The amortization period
is re-assessed by management as new timelines are established for the project
in-service date, and the amortization period is adjusted. The remaining proceeds
are allocated to the following deliverables based on vendor specific objective
evidence (“VSOE”) of each item: 1) achievement of a signed Power Purchase
Agreement (“PPA”) with an electrical utility, and 2) final commissioning of the
wind farm turbines.  Management has determined that these deliverables
have stand-alone value, and performance of the undelivered services are
considered probable and in the control of the Company.




Wind
Farm Management Services




Revenues
earned from administrative, 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.  Revenues from services work are
recognized when services are performed.




36





Wind
Farm Construction Services




We
recognize revenue on construction contracts on the percentage of completion
method with costs and estimated profits included in contract revenue as work is
performed. Construction contracts generally provide that customers accept
completion of progress to date and compensate us for services rendered measured
in terms of units installed, hours expended or some other measure of progress.
We recognize revenue on both signed contracts and change orders. Percentage of
completion for construction contracts is measured principally by the percentage
of costs incurred and accrued to date for each contract to the estimated total
cost for each contract at completion. We generally consider contracts to be
substantially complete upon departure from the work site and acceptance by the
customer. Contract costs include all direct material, labor and insurance costs
and those indirect costs related to contract performance, such as indirect
labor, supplies, tools, repairs and depreciation costs. Changes in job
performance, job conditions, estimated contract costs and profitability and
final contract settlements may result in revisions to costs and income and the
effects of these revisions are recognized in the period in which the revisions
are determined. Provisions for total estimated losses on uncompleted contracts
are made in the period in which such losses are determined. The balances billed
but not paid by customers pursuant to retainage provisions in construction
contracts will be due upon completion of the contracts and acceptance by the
customer. Based on our experience with similar contracts in recent years, the
retention balance at each balance sheet date will be collected within the
subsequent fiscal year.




Accounting for Derivatives.
  We adopted guidance issued by the Financial Accounting Standards
Board (“FASB”) relating to “Determining Whether an Instrument
(or Embedded Feature) is Indexed to an Entity’s Own Stock ” effective
January 1, 2009.  The adoption of this guidance affected the
accounting for warrants and many convertible instruments with provisions that
protect holders from a decline in the stock price (or “down-round” provisions).
For example, warrants with such provisions will no longer be recorded in equity.
Down-round provisions reduce the exercise price of a warrant or convertible
instrument if a company either issues equity shares for a price that is lower
than the exercise price of those instruments or issues new warrants or
convertible instruments that have a lower exercise price. We evaluated whether
our warrants or convertible preferred stock contain provisions that protect
holders from declines in our stock price or otherwise could result in
modification of the exercise price and/or shares to be issued under the
respective warrant or preferred stock agreements based on a variable that is not
an input to the fair value of a “fixed-for-fixed” option. We determined that the
all of the outstanding warrants contained such provisions thereby concluding
they were not indexed to our own stock and must now be treated as a derivative
liability. Prior to the adoption of this guidance, the warrants were considered
equity instruments. We determined that while our convertible preferred stock
contains certain anti-dilution features, the conversion feature embedded within
our convertible preferred stock does not require bifurcation. At each reporting
date, we are required to estimate the fair value of the warrants and record this
change in value in earnings as gain or loss.  Upon the conversion of
all warrants as part of the 2009 warrant exchange, no equity instruments subject
to derivative accounting under this guidance were outstanding as of June 30,
2009.  The warrant liability of $10,378,146 at June 29, 2009 was
reclassified to equity upon recording the 2009 warrant exchange.




Variable Interest Entities -
The Company has determined that one of its wind farm projects is a variable
interest entity (“VIE”), but the Company believes the turbine manufacturer has
more risk exposure as it relates to this entity and has been granted certain
decision rights, superior to the Company, that most significantly impact the
economic performance of the limited liability company associated with the wind
farm project.  Based on this analysis, the Company has determined that
the wind turbine manufacturer is the primary beneficiary for this VIE, and
therefore consolidation is not required under generally accepted accounting
principles.  The Company has properly disclosed this relationship
within the consolidated financial statements.







Item
      3.
            QUANTITATIVE
      AND QUALITATIVE ANALYSIS ABOUT MARKET
RISK





Not
applicable.





Item
      4.
            CONTROLS
      AND PROCEDURES




Evaluation
of disclosure controls and procedures




Our
President and Chief Financial Officer (collectively the “Certifying Officers”)
maintain a system of disclosure controls and procedures that is designed to
provide reasonable assurance that information, which is required to be
disclosed, is accumulated and communicated to management timely. The Certifying
Officers have concluded primarily based on the material weakness in internal
control over financial reporting as reported in the Company’s Annual Report on
Form 10-K filed on March 31, 2010 that the disclosure controls are ineffective
as of September 30, 2010. Under the supervision and with the participation of
management, as of the end of the period covered by this report, the Certifying
Officers evaluated the effectiveness of the design and operation of our
disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)
under the Exchange Act).





Changes
in Internal Control Over Financial Reporting





There
have been no changes in our internal controls over financial reporting for the
nine-month period ended September 30, 2010 that have materially affected, or are
reasonably likely to materially affect, our internal control over financial
reporting.




37




PART
II - OTHER INFORMATION


Item
      1.
              LEGAL
      PROCEEDINGS


None


Item
      1A.
                RISK
      FACTORS


Not
applicable.


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


On October 12, 2010, the Board of Directors of Juhl
Wind, Inc. (the "Company") authorized John Mitola, our President, to enter into
our Company's repurchase program that allows the Company to purchase up to
$200,000 of shares of its common stock from and after October 12,
2010.




On
October 12, 2010, the Company entered into a trading plan in accordance with
Rule 10b5-1 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), to facilitate repurchases of its common stock (the "Rule 10b5-1
plan").  The Rule 10b5-1 plan became effective on October 12, 2010 and
will terminate in accordance with its terms. Repurchases may occur pursuant to
the Rule 10b5-1 plan until the Company has repurchased shares of common stock
equal to $200,000 or until the Rule 10b5-1 plan is
terminated.   The Company may repurchase shares authorized under
its Rule 10b5-1 plan, if at all, through open market purchases in accordance
with Rule 10b-18 of the Exchange Act or pursuant to additional Rule 10b5-1
plans.  The number of shares to be repurchased and the timing of the
repurchases will be based on the level of available cash and other factors,
including market conditions, the terms of any applicable 10b5-1 plans and
self-imposed black-out periods.




The Rule
10b5-1 plan allows the Company to execute trades during periods when it would
ordinarily not be permitted to do so because it may be in possession of material
non-public information, because of insider trading laws or due to self-imposed
trading blackout periods. A broker chosen by the Company will have the
authority, under the prices, terms and limitations set forth in the Rule 10b5-1
plan, including compliance with Rule 10b-18 of the Exchange Act, to repurchase
shares on the Company's behalf. Because the repurchases under the Rule 10b5-1
plan will be triggered by certain share prices, there is no guarantee as to the
exact number of shares that will be repurchased under the Rule 10b5-1 plan, or
that there will be any repurchases at all pursuant to the Rule 10b5-1
plan.


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




38




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 A 8% Convertible Stock of Juhl Wind, Inc. filed June
      11, 2009 with the Delaware Secretary of State. 43.4
            
            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 State 33.5
            
            Bylaws
      of the Company 131.1
            
            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





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




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





3
            Incorporated
      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




4
            Incorporated
      herein by reference to the exhibits included with Amendment No. 4 to our
      Registration Statement on Form S-1 (registration no. 333-154617), filed
      with the U.S. Securities and Exchange Commission on June 12,
      2009.




5
            Incorporated herein by reference to the
      exhibits included with our Quarterly Report on Form 10-Q for the quarter
      ended March 31, 2010, filed with the Securities and Exchange Commission on
      May 17, 2010.




39




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 15, 2010
            
            /s/
      John MitolaJohn
      MitolaPresident




40