Gc China Turbine Corp (OTC:GCHT)

NEW YORK, May 18, 2012 /PRNewswire-Asia/ -- GC China Turbine Corporation ("GC China" or the "Company") (OTC.BB: GCHTE.OB) today announce that it will be unable to file its Annual Report on Form 10-K for the year ended December 31, 2011 (the "Form 10-K") on the previously anticipated date of May 15th, 2012 because of the extensive work required to re-audit the financial statements for the years ended December 31st 2010, 2009 and 2008 by the Company's new independent accounting firm. Additionally, due to this continued delay, the Company will also have to delay the filing of its quarterly report on Form 10-Q for the period ended March 31, 2012 (the "Form 10-Q").

GC China is currently working to finalize its Form 10-K and Form 10-Q and expects to file them before June 30th 2012. However, no assurance can be given as to the exact date that the Form 10-K and Form 10-Q will be completed and filed.

Gc China Turbine released the following commentary today.

NEW YORK, NY--(Marketwire - Oct 25, 2011) - GC China Turbine Corporation ("GC China" or the "Company") (OTCBB: GCHT) today announced that the previously appointed Special Committee of the Company's Board of Directors comprised of its independent directors, Cary Zhou and Marcus Laun (the "Special Committee") has completed its investigation of the facts and circumstances surrounding the allegations made in an anonymous email to Deloitte Touche Tohmastu CPA Ltd., the Company's former principal registered public accounting firm, concerning certain financial matters involving the Company's wholly-owned subsidiary Wuhan Guoce Nordic New Energy Co., Ltd. ("GC Nordic"). As a result of its investigation, the Special Committee has concluded that there is no merit to any of the allegations made in the anonymous email.

As previously disclosed in the Company's filings with the Securities and Exchange Commission, on September 22, 2011, Deloitte forwarded the anonymous email to the Company and requested that the Company investigate the allegations made therein. These allegations included alleged fraudulent fund transfers resulting in incorrect accounts payable balances, a fabricated contract for the purposes of transferring funds outside the Company, and a fake payment entry from a customer. In response, the Company's Board of Directors appointed a Special Committee consisting of the independent members of the Company's Board of Directors to investigate the allegations.

The Special Committee has concluded that the allegations set forth in the anonymous email are all without merit. The Special Committee conducted interviews and reviewed applicable financial records and verified third-party payment information and account balances. The foregoing investigation found no irregularities in the Company's payment processes or its accounting methods.

The Special Committee received full cooperation from management, employees and third parties whom it sought to interview.

Cary Zhou, Chairman of the Special Committee, said, "As a result of the Special Committee's work and its investigation, we have found no merit to any of the allegations contained in the anonymous email and have provided the Board of Directors with our full report. On behalf of the Special Committee, I want to acknowledge the cooperation and dedication of all the individuals who assisted with the Special Committee's investigation."

In 2010, GC China shipped 50 1MW turbine units to Xilinguole Tianhe Wind Energy Development Co., Ltd. for Phase 1 of the Tianhe project in Inner Mongolia. Installation of the turbines had been completed in early September of 2011. Currently, the turbines are undergoing performance tests. To date, and including the $8.7 million collected on the Tianhe project in the third quarter, GC China has collected ¥164.64 million (about $25.7 million) on this project.

Management continues to make its best efforts to achieve payment milestones, working with customers to collect aging receivables on its projects including the Tianhe project, Jilin Fengshen project, Daqing Longjiang project, and Wuhan Kaidi project. The Company anticipated that successful resolution on low-voltage ride-through (LVRT) issues for its turbines will have a positive impact on the timeline of collection of receivables from its customers. At this stage, the Company is actively discussing its plans for resolving LVRT issues for its turbines with the China Electric Power Research Institute (CEPRI) and is optimistic about solving the issues.

• Sales for the three months ended March 31, 2011 were nil compared to US$11,997,927 for the three months ended March 31, 2010. No wind turbine was sold in the first quarter of 2011 while 20 wind turbines were sold in the first quarter of 2010.

• Net loss attributable to shareholders for the three months ended March 31, 2011 was US$927,053, a decrease of US$2,795,904 from net income attributable to shareholders of US$1,868,851 for the three months ended March 31, 2010. Net loss per basic and diluted share for the first quarter of 2011 was US $0.03 compared to net profit per basic and diluted share of US$0.02 for the same period last year

Results were negatively impacted primarily due to new regulatory requirements for the domestic Chinese wind turbine industry which require the Company to make upgrades to its 1MW wind turbines, which to date are the only wind turbines which it has commercialized into the domestic Chinese wind market.

As a result of many instances of wind turbines getting disconnected from the power grid in China, involving more than 1,300 wind turbines, China's State Electricity Regulatory Commission (SERC) has stated that wind turbines must have Low Voltage Ride Through ('LVRT') capability and that wind turbines without this technology must be upgraded as soon as possible. The SERC has not yet released a timetable for the upgrades.

In addition to the current 1.0MW two-blade wind turbine, the Company's 1.1MW turbine has been completed its designing process and is under prototype assembly stage at the moment. In addition, another 2.5MW turbine is also under development.  In contrast to the 1MW turbine, these two newly developed products will enable the Company to expand its business into wind farms that require turbines to have larger unit power and Low Voltage Ride Through Capability ("LVRT"), a new requirement issued by PRC's State Electricity Regulatory Commission for wind turbines to be capable to maintain continuous operation during and after abrupt voltage dips and allow the power grid to be adjusted more quickly, thereby improving the overall safety and stability of the grid.

As a result of new PRC requirements, certain orders previously announced by the Company that have not been executed may be cancelled as the 1.0MW turbine does not qualify for the LVRT requirements.  However, management does not anticipate that these LVRT requirements will affect GC China's current orders that have already been executed, while they may take effect in its future business activities.

The Company's development strategy for 2011 is focused on the further development and EU certifications of its 1.1MW and 2.5MW wind turbines while emphasizing low-cost control, suitable for its target markets. It expects to have its 1.1MW prototype and 2.5MW prototype turbines produced and EU certifications applied for in the second quarter and third quarter of 2011, respectively

GeoTeam Note: Adjuted EPS for 2010 vs. 2009:

• Full Year: $0.15 vs. $0.01
• Fourth Quarter:  $0.12 vs. $0.04

Our current contracts consist of 140 units of our 1.0 MW wind turbines as of both December 31, 2010 and 2009. The 140 units representing approximately US$121.5 million, was composed of 50 units in connection with the sales contract with Daqing Longjiang, offset by 10 units delivered, 50 units in connection with the sales contract with Wuhan Kaidi, offset by 10 units delivered, 50 units in connection with the sales contract with Kelipu, and 10 units in connection with the sales contract with Shenzhen Guohan. However, according to new PRC requirements, turbines that are connecting to the grid in the future will need to be equipped gradually with LVRT capability and larger unit power. As a result, the contracts of Kelipu and Shenzhen Guohan that have not been executed in the amount of US$36.3 million and US$8.2 million, respectively, may be cancelled as the 1.0MW turbine does not qualify for the LVRT requirements. As for orders by Daqing Longjiang and Wuhan Kaidi that have been executed and delivered, the Company will make best efforts in executing the remainder of the contracts. Nevertheless, to date, the Company has not received any demand from Daqing Longjiang and Wuhan Kaidi to execute the remainder of the contracts

GCHT Responds to SEC request to disclose information on 5 contracts:

Daqing Longjiang

Daqing Longjiang signed a wind turbine purchasing contract dated August 30, 2007 (the “DL Contract") with GC Nordic, the operating subsidiary of the Company, for 50 units of 1.0MW wind turbines.  Under the terms of the DL Contract, GC Nordic was obligated to deliver ten of the wind turbines within four months after signing the DL Contract, and the balance of 40 wind turbines are to be delivered within ten months after receiving notice from Daqing Longjiang requesting them.  The total contract is valued at approximately US$ 46 million.

Wuhan Kaidi

Wuhan Kaidi signed a purchase contract on September 1, 2008 (the “WK Contract”) with GC Nordic for 50 units of 1.0MW wind turbines. Under the terms of the WK Contract, GC Nordic is obligated to deliver 50 wind turbines, and the purchase price is due in several installments.  The total contract is valued at approximately US$ 47 million.

Shenzhen Guohan Investment Group

Shenzhen Guohan signed a purchase contract with GC Nordic on December 1, 2009 for 10 units of 1.0MW wind turbines.  The parties have agreed to delay the implementation of this contract until the wind farm permitting procedure and infrastructure are completed.  Therefore, the Company has not yet delivered any wind turbines under this contract.  The total contract is valued at approximately US$ 8 million.

Guoneng Fengshen

Effective February 9, 2010, the Company signed a sales contract for 50 wind turbine units.  The total contract is valued at approximately US$ 36 million.

China Guodian

The Company entered into a wind power equipment contract with China Guodian, effective June 18, 2010, for 50 wind turbine units.  The total contract is valued at approximately US$ 34 million.

GC China Turbine Q3010 (Qtr End 9/30/2010) Earnings Call and Corporate Update Transcript
 
Operator
 
Good day morning everyone, and welcome to GC China’s Third Quarter Conference Call. This call is being recorded. All participants will be in a listen-only mode until we reach the question and answer session.
 
With us on the call this morning are GC China’s Chairman Mr. Hou Tiexin, Ms. Ping Ye, GC China’s recently appointed CFO, Ms. Qi Na, Mr. Zhu Wenyao, Ms. Guo Lihua, Ms. Qin Wen, Mr. Kevin Guoce, Mr. Marcus Laun, Director and the host of the call, and Todd Pitcher, investor relations representative of Aspire Clean Tech Communications, an affiliate of Hayden Communications, International.
 
For opening remarks, I would like to turn the call over to Mr. Todd Pitcher. Please go ahead sir.
 
Todd Pitcher
 
Thanks, and welcome to the call. Before we begin, please note that various remarks management may make on this conference call about GC China Turbine’s future expectations, plans and prospects constitute forward-looking statements for the purpose of the Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995.
 
Actual results may differ materially from those indicated by such forward-looking statements, as a result of various important factors, including those discussed in the Risk Factors section of our annual report on Form 10-K for the fiscal year ended December 31, 2009, which is filed with the SEC. These forward looking statements represent the company’s expectations only as of today and should not be relied upon as representing the company’s views as of any subsequent date. While GC China Turbines anticipates that the subsequent events and developments may cause the company’s views to change, the company specifically disclaims any obligation to update these forward-looking statements.
 
All of our SEC filings can be accessed from the Investors’ page of our website at www.gcchinaturbine.com
 
I would like to take this opportunity to welcome Ms. Ping Ye to the Company. Ms. Ye joined the Company on November 8, and brings a tremendous amount of value to the business, both in terms of enhancing corporate governance and controls of financial reporting, to ensure a greater level of transparency and commitment to setting an appropriate tone for operational and shareholder related matters, as well as in terms of her experience in the financial markets and aptitude for working with high growth businesses.
 
Ms. Ping Ye is a licensed Certified Public Accountant in the United States since 2000.  Formerly, she served as VP of Finance and Accounting at an insurance brokerage firm that was a Goldman Sachs portfolio company.  Earlier Ms. Ye held various positions in accounting and finance at several global financial service companies and world-renowned institutes in both United States and China.  She has authored numerous tax related articles for Chinese newspapers.  Ms. Ye received a BBA from Baruch College, City University of New York and an MBA from The Wharton School, University of Pennsylvania.
 
This is Ms. Ye’s first quarterly call with GC China, and while she is fast becoming an expert on the business, we will allow Marcus Laun, a director of the Company, to lead the Q&A session at the end of this call.
 
Thank you, and now I will turn the call over to Ms. Ye.
 
Ping Ye
 
Thanks Todd, and good morning everyone. It is good to join the team at GC China, which is in the midst of a strong growth transition, adding several new customers, expanding its wind turbine portfolio to address new and larger market opportunities both in China as well as into the European energy markets. This is truly an exciting time and I will look forward to working with Chairman Hou, Ms. Qi Na and the rest of the GC China management team to manage this growth and drive value to our shareholders.
 
 
 
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Market Conditions and Business Outlook
 
Now, let me review some of our key results and provide some insights regarding our future outlook. In our fiscal third quarter, revenues were $4.1 Million. Our expectations of revenue were higher going into the quarter.  The results were due to the fact that a customer pushed delivery of 23 assembled turbines due for q3 shipment back to q4 this year.  2010 will be our first full year shipping turbines, and as such revenues are more unpredictable because our customer base is small, and one customer’s issues can have a dramatic impact on our business within an individual quarter.  We remain on track to ship 100 turbines in the fiscal year 2010, and continue to see strong demand for our turbines in the market. This is reflected by a growing list of customers and backlog of turbines scheduled to ship in fiscal year 2011, which I will discuss a bit later.
 
China’s economy continues to boom, driving demand for energy. GC China’s success in growing its wind turbine business is directly linked to this demand.  China installed more than 13 gigawatts of wind power in 2009. Expectations are for another 16 gigawatts to be installed in 2010.
 
China is expected to surpass the U.S. as the world’s largest wind power market this year, and industry estimates are that China will have installed as much as 200 gigawatts, or more, by 2020.
 
Now, I will turn the conversation to GC China’s continued innovation, which is fundamental to our strategy to continue growing our wind turbine sales. Our focus is to provide customers with highly optimized and differentiated wind turbines that will enable them to become market leaders.
 
Technological innovation at GC China is achieved on a daily basis at our R&D center in Stockholm. We are in the process of developing and commercializing several new turbines that we believe will enable us to increase demand and opportunities in the market.
 
We will be shipping our 1.1MW turbines in 2011. This turbine is an improvement on our current 1MW turbine offering several advantages including pitch control, modification into a double-fed asynchronous generator, equipped with a low voltage across function and modification of the hydraulic-drive yaw system into electric drive. These technical enhancements will allow us to obtain more sales as to the wind farms that have Low Voltage Across Function requirements, on the other hand it will broaden our sales scope. We expect to ship 50 to 100 1.1MW turbines in 2011.
 
In the first quarter of 2011, we expect our design of 2.5MW turbines to be completed and ready for purchasing prototype components. The design evaluation for the 2.5MW prototype is expected to be completed by the third quarter of 2011 and we expect to begin sales  of these turbines before year-end 2011. We are also working towards the completion of development of a 3MW turbine, which is also expected to be completed in 2011.
 
With respect to testing and certification, certification includes two parts, design assessment and wind turbine testing. Our plan is to complete design assessment for the 2.5MW wind turbine in August, 2011. With respect to testing, our plan is to commence on-side testing in September 2011, which is expected to be completed by the end of 2011.
 
The Company plans to commence volume production of its 2.5 and 3MW turbines in 2012.
 
We are broadening our capabilities, our product lines and addressable markets to insure GC China’s continued strong track record of profitable growth.
 
In the fourth quarter, we intend to provide further information to our shareholders about our plans for marketing and sales into Europe. Our Stockholm-based R&D center is instrumental in our strategy, and we are currently making progress with a Polish energy firm developing plans that we expect to drive substantial sales into the Polish wind energy market as early as 2011 and going forward. EU certification is under way.
 
According to the European Wind Energy Association, in 2009, 10.1GW of wind power was installed in the EU, more than any other electricity generating technology. Investment in new European wind farms in 2009 reached 13 billion euros. At year end, 74.7GW of wind energy was installed in the EU, and the AWEA expects that installations will grow to 230GW by 2020 and 400GW by 2030.
 
 
 
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Financial Discussion
 
From a financial perspective, our third quarter was a disappointment due to the fact that we were unable to ship 23 turbines to a customer, and unable to record revenues accordingly. We generated $4 million in revenues, delivering gross margins of 24.3% and a net loss of $63 thousand, or ($0.00) per diluted share.
 
On year-over-year basis, for Q310, our revenues of $4 million compared to approximately $2.4 million for the same period last year. Our gross profit of $994 thousand compared to $177 thousand for the same period last year and our Q3 net loss of $64 thousand compared to a net loss of $1.3 million;
 
Nine month revenues were $27.1 million, compared to $2.3 million for the same nine month period last year, with gross profit of $6.7 million compared to $177 thousand and net income of $3.4 million compared to a net loss of $1.7 million;
 
As a result of the delay in shipments of 23 turbines, we sold 7 turbines in Q310.  We sold 47 turbines through the nine months ended September 30, 2010. We are reiterating our previously stated guidance of shipments of 100 turbines in the current fiscal year, and based on current customer negotiations and contracts for next year, our expectations are to ship 150 to 200 turbines in 2011.
 
At September 30, 2010, GC China had $1.2 million in cash and cash equivalents, and accounts receivable of $28.0 million. This compares to $12.4 million in cash and cash equivalents and accounts receivable of  $29.2 million at June 30, 2010.
 
Out of the $28.0 million accounts receivables as of September 30, 2010, $17.1 million is for unbilled receivables and the remaining $10.8 million is for billed receivables.   Unbilled receivable represents amounts earned under sales contracts but not billable at the respective balance sheet dates.   These amounts become billable according to the contract terms once GC China performs certain steps in the fulfillment of the contract terms.
 
 It is important to note that unbilled receivables do not in any way refer to technical issues or defectiveness of products, but to the steps that have not yet been performed by the company as per contractual terms. For example, when the wind turbine is delivered but not yet installed. As such the Company is adopting progress billing based on project progress as specified in the contracts.  Progress billing normally consists of advance billing, progress billing, delivery billing, installation billing, testing billing, warranty and other items.
 
With respect to mitigating future risk in terms of collecting accounts receivables, with new contracts GC China is adopting a new standard contract that has more firm restrictions on delivery and acceptance terms.
 
The company has also established a team which is dedicated to collect the receivables and is currently adopting rigorous working evaluation objectives.  The team conducts regular tracking on the receivables as well as negotiations with customers. Through our recent efforts of communication with the customer who has outstanding A/R with us, the customer agreed to pay some of the billed receivables at the year end.
 
The Company currently has a loan line in the amount of $17.9 million (RMB 120 million) composed by $4.5 million(RMB 30 million) performance security and $13.4 million (RMB 90 million) working capital loan, and interest rate of 6.37% from a PRC bank. As of today, the company has used $9.0 million (RMB 60 million) working capital loan. As of September 30, 2010, there are $4.5 million (RMB 30 million) working capital loan and $4.5 million (RMB 30 million) performance security available for future borrowing. In addition, the Company is currently negotiating additional lines of credit with other PRC banks which it expects to be approved by December, 2010.
 
Based on anticipation of receipt of at least $4.10 million in accounts receivable in the fourth quarter, and the Company’s current and expected funds available under certain loan facilities, GC China anticipates that it has sufficient capital on hand and available to fulfill its shipment commitment through year end.
 
We are disappointed that we were unable to meet our sales and shipment objectives in the third quarter due to circumstances that were beyond our control. However, our relationship with this customer remains strong, and we have confirmed with the customer that this slippage will be made up in the fourth quarter, We will ship, and the customer will take receipt of these 23 turbines during this period.
 
If we can make up for our third quarter slippage, we still anticipate meeting our 2010 objective for shipments of 100 turbines, with revenues of $58 million and net income of $8.2 million..
 
Our expected order book for 2011 presently consists of 6 projects in the Jilin and Inner Mongolia provinces, and is a mix of 150 to 200 turbines deployed amongst six customers. Several of these customers have plans to substantially expand these existing projects and we believe this will contribute to additional growth for our business in the longer-term.
 
Our existing customers are strong. Our two customers in 2010 are multi-billion dollar organizations and this ensures that our receivables are of the highest quality. Tianhe Wind Power Development Co. is a project company under the Guodian Group, which is one of China’s five-largest power generation groups employing 110,000 employees across 16 regions and provinces. It has 13 large subsidiaries, 2 scientific research institutes and nearly 200 primary power generation enterprises. As of June, 2010, its total assets reached $68.5 billion, and it had a total controlled installed capacity of 84.7 thousand MW, including 71.3 thousand MW by coal-fired, representing 84.14% of total installed capacity; 8.0 thousand MW by hydropower (including 3.9MW tidal generation ), 9.43% of total installed capacity; 5.4 thousand MW by wind power capacity, 6.37% of total installed capacity; 55 MW by biomass, accounting for 0.06% of total installed capacity.
 
Guoneng Fengshen is a high-tech joint-stock enterprise specializing in wind farm projects investments and operation.  The enterprise holds an agreement with the People's Government of Taonan of Jilin Province for the development of 500 megawatts of wind farms in Yongmao, Taonan. Currently, 200MW of the project has been established under the auspices of the Jilin Provincial Government. 50MW out of the aforementioned 200MW has obtained construction approval from the Jilin Provincial Development and Reform Commission. An additional 50MW has entered into the approvals process with the Jilin Provincial Grid Connection System and we expect approval by the first half of next year.
 

Key Highlights

• On year-over-year basis, for Q310, revenues of $4 million compared to approximately $2.4 million for the same period last year.

• Gross profit of $994 thousand compared to $177 thousand for the same period last year

• Q3 net loss of $64 thousand compared to $1.3 million;

• Sold 7 turbines in Q310 and 47 turbines through the nine months ended September 30, 2010.

Mr. Hou Tie Xin, Chairman of the Board of GC China, said that, "While we were not able to record and book revenues on 23 turbines in the Q3 that we had anticipated, due to lack of a full preparation for taking delivery by a customer during the period, those revenues will be recognized in the Q4 of this year. We remain on track to ship 100 turbines in fiscal year 2010, and continue to see strong demand for our turbines in the market and expect to announce expansion of our footprint from China into the European wind energy markets in fiscal year 2010."

GC China Turbine Corp.  today announced a shareholder update on financial and operational performance.
 
Mr. Hou Tie Xin, Chairman of the Board of GC China, said that, "We are pleased to announce that GC China remains on track to meet its financial guidance, as provided in our second quarter conference call, with

2010

• Revenues of $58 million

• Net income of $8.2 million for the current fiscal year

• As of the end of this year, the Company will accomplish the shipments of a total of 100 units of wind turbines to two of our key customers which we anticipate to be grid-connected as well by year end."

For the third quarter ended September 30, 2010

• Revenues in the range of $16 million to $18 million

• Gross margins approximately 25%

• Net income of $1.6 to $1.8 million

• EPS of $0.03 
   
   
  "We are comfortable that our existing working capital is sufficient to support our planned turbine production and shipments through year end, and we expect to announce in the coming weeks that we will receive an additional $7.35 million in receivables from Guodian group, in addition to receivables from other customers that have been previously reported by the Company. We have also obtained a credit of $4.41 million from the China Merchants Bank, and we are coordinating additional working capital access of $8.82 million through another Chinese bank. We look forward to providing further disclosure in the future to our shareholders with respect to these developments," Mr. Hou added.
   
  

Removing Gc China Turbine from the GeoSpeicial on the Radar list.

It appears that the company will not come close to meeting profit targets.

The current investment climate calls for an attention to quality that GCHT does not currently possess:

• Short-term debt to equity ratio is 37.1%
• Current ratio is less than 2 to 1.

We will revisit if profit trends improve.

Added to the GeoSpecial list on October 9, 2009 @ $1.25.

Catalyst: Involved in the “Hot clean energy industry; Aggressive growth targets.
Peak performance: Reached a high of $4.07 on November 5, 2009.
Current Price: $1.50 

Current road block: Dilution; still needs to successfully execute business plan.

As the company just recorded its first profitable quarter we will keep the stock coded as a GeoSpecial list for long-term aggressive investors. We are not too excited over the current share count of  60,169,633, which does not leave much maneuverability for reasonable equity financing options. And we view a dilutive event as a high probability scenario which could ultimately influence GCHT's GeoSpecial standing:

"We believe that our existing capital resources are sufficient to meet our current obligations and operating requirements, but will not be sufficient to meet our more aggressive growth plans and that we will need to raise additional capital in the next 12 months."

This a company we likely will not invest in anytime soon.

Please note: On July 6, 2010, the GeoTeam® removed all Chinese stocks that were on GeoBargains and GeoSpecial lists to respective Radar lists as we complete our "quality assessment."

***Very Important GeoTeam® note. We have yet to verify if the Chinese filings for ChinaHybrid stocks we monitor match respective SEC filings. We are in the process of completing this task. Although we are not totally convinced that SAIC filings are an accurate represenation of financial statements the issue is impacting stock prices. Conservative investors may want to limit exposure or buy put options on stocks, that have this availability, as insurance against long positions, until we publish our findings. Odds are we will identify some promising companies that will fail this litmus test.

see relevant articles

See Presentation

On September 30, 2009, GC China Turbine Corp. (GCHT.OB) entered into a voluntary share exchange transaction with wind turbines manufacturer GC Nordic based in China pursuant to a Share Exchange Agreement. 

We are coding GCHT as a GeoSpecial ($1.25).  We will request an interview.

Merger Details:

• Immediately after the Exchange Transaction and automatic notes conversion, the Company will have 52,570,015 shares of common stock issued and outstanding.

• The consummation of the Exchange Transaction is also contingent on:

(a) a minimum of $ 8,000,000 being subscribed for, and funded into escrow, by certain accredited and institutional investors  for the purchase of 6,400,000 shares of the Company’s Common Stock.

(b) the closing of a debt financing transaction with Clarus Capital Ltd. for the aggregate amount of $1,000,000, which shall be convertible into the Company’s Common Stock at $2.00 per share and have a 2 year repayment.

• Estimated Total diluted share count: 61 million

Company Details:

• GC Nordic is the only manufacturer of 1 Mw 2-bladed wind turbine systems in China.
• Initial sales efforts have been rewarded with contracts of approximately $128 million.
• GC Nordic's technology is based on a 10 year, $75 million research and development investment by the government of Sweden. The development project that created the technology has been operating for 10 years with 98% output availability during this period.
• The wind power industry in China is booming. Chinese government guidelines mandate that 30,000 MW of wind power be installed by 2020.
• The Chinese government has mandated that 70% of wind components be sourced domestically by 2010.
• Currently, GC Nordic is executing three contracts of 50 units with three entities.

Source: Marketwire (October 6, 2009), SEC Form 8K (October 6, 2009)

Financial forecasts provided by the Company:

^a The Company did not provide EPS estimates. The GeoTeam used an estimated diluted share count of 61 million to calculate an implied EPS figure. A more thorough analysis would be ultimately be necessary to determine long-term capital needs which could effect outstanding shares.