UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13A-16 OR 15D-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2003
Commission File Number 0-29586
EnerNorth industries inc.
(FORMERLY: ENERGY POWER SYSTEMS LIMITED)
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(Address of Principal executive offices)
2 Adelaide Street West, Suite 301, Toronto, Ontario, M5H 1L6, Canada
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
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Indicate by check mark if the registrant is submitting the Form 6-K in paper as
permitted by Regulation S-T Rule 101(b)(7):
Yes No X
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934:
Yes No X
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If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3- 2(b):
82- _________
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
EnerNorth industries inc.
(formerly: Energy Power Systems Limited)
Date: February 28, 2003 By:____"Sandra J. Hall"____ ______
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Sandra J. Hall,
President, Secretary & Director
EnerNorth Industries Inc.
(Formerly Energy Power Systems Limited)
Consolidated Financial Statements
December 31, 2002
(Unaudited)
(Expressed in Canadian Dollars)
ENERNORTH INDUSTRIES INC.
CONSOLIDATED BALANCE SHEET
(EXPRESSED IN CANADIAN DOLLARS)
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DECEMBER 31, 2002 JUNE 30, 2002
(UNAUDITED) (AUDITED)
ASSETS
CURRENT
Cash $ 5,903,964 $ 5,610,621
Marketable securities 167,038 283,800
Receivables 6,316,190 5,218,201
Due from co-venturer 1,120,215 159,110
Inventories and work in progress 1,143,075 2,652,816
Prepaid expenses 113,563 59,618
Future income tax asset 61,473 61,473
------------------------------------------ ------------------- ---------------
TOTAL CURRENT ASSETS 14,825,518 14,045,639
Oil and gas interests (net of accumulated
depletion) 4,317,712 4,400,078
Capital assets (net of accumulated
amortization) 2,756,022 2,834,859
Investment 3,500,000 3,500,000
Future income tax asset 533,527 533,527
------------------------------------------ ------------------- ---------------
$ 25,932,779 $ 25,314,103
=================== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Bank indebtedness $ 1,978,601 $ 1,462,766
Accounts payable and accrued liabilities 3,396,786 4,022,114
Due to shareholders 315,000 628,346
Current portion of long-term debt 185,925 185,925
Future income tax liability 432,490 432,490
------------------------------------------ ------------------- ---------------
TOTAL CURRENT LIABILITIES 6,308,802 6,731,641
------------------------------------------ ------------------- ---------------
Long-term debt 406,296 501,670
Future income tax liability 22,110 22,110
------------------------------------------ ------------------- ---------------
TOTAL LIABILITIES 6,737,208 7,255,421
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SHAREHOLDERS' EQUITY
Capital stock 43,339,877 42,096,732
Deficit (24,144,306) (24,038,050)
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TOTAL SHAREHOLDERS' EQUITY $ 19,195,571 $ 18,058,682
------------------------------------------ ------------------- ---------------
$ 25,932,779 $ 25,314,103
=================== ===============
The accompanying notes to the financial statements are an integral part of these
financial statements
ENERNORTH INDUSTRIES INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
FOR THE SIX FOR THE THREE
MONTH PERIOD MONTH PERIOD
ENDING DECEMBER 31 ENDING DECEMBER 31
2002 2001 2002 2001
-----------------------------------------------------------------------------------------------------------------
Sales $ 15,023,874 $ 14,351,432 $ 4,561,000 $ 8,810,871
Cost of sales (including amortization
and depletion of $208,189;
2002 - $125,669) 13,079,915 12,473,356 3,904,089 7,933,115
--------------------------------------------------- -------------- -------------- -------------- --------------
Gross profit 1,943,959 1,878,076 656,911 877,756
--------------------------------------------------- -------------- -------------- -------------- --------------
Administrative expenses 2,006,852 1,210,579 1,110,135 550,556
Amortization of goodwill - 130,629 - 65,315
Amortization of capital assets 40,327 81,639 23,148 41,829
Interest and bank charges 79,639 42,576 39,431 10,561
Interest on long-term debt 25,203 32,471 13,737 15,045
--------------------------------------------------- -------------- -------------- -------------- --------------
2,152,021 1,497,894 1,186,451 683,306
-------------- -------------- -------------- --------------
Earnings (loss) before the following (208,062) 380,182 (529,540) 194,450
Write down of inactive capital assets - (231,251) - (231,251)
Other income 101,806 11,704 101,806 (212,583)
--------------------------------------------------- -------------- -------------- -------------- --------------
NET EARNINGS (LOSS) ($106,256) $ 160,635 ($427,734) ($249,384)
Deficit, beginning of period (24,038,050) (20,849,848) (23,716,572) (20,439,829)
Deficit, end of period ($24,144,306) ($20,689,213) ($24,144,306) ($20,689,213)
==================================================== =========== ============= ============= =============
NET EARNINGS (LOSS) PER COMMON SHARE
Net earnings (loss) per share ($0.01) $ 0.02 ($0.04) ($0.04)
Weighted average common shares
outstanding (thousands) 12,083 7,120 12,083 7,120
FULLY DILUTED NET EARNINGS (LOSS) PER COMMON SHARE
Net earnings (loss) per share antidilutive $ 0.02 antidilutive antidilutive
Weighted average fully diluted common shares
outstanding (thousands) na 7,883 na na
The accompanying notes to the financial statements are an integral part of these
financial statements
ENERNORTH INDUSTRIES INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
----------------------------------
FOR THE SIX MONTH PERIOD FOR THE THREE MONTH PERIOD
ENDING DECEMBER 31 ENDING DECEMBER 31
2002 2001 2002 2001
------------ ------------ ------------ ------------
OPERATING ACTIVITIES
Net earnings (loss) ($106,256) $ 160,635 ($427,734) ($249,384)
Adjustments to reconcile net earnings to
net cash provided by operating activities
Amortization of goodwill - 130,629 - 65,315
Amortization and depletion 248,516 207,308 113,718 105,911
Gain on sale of capital assets - (8,254) - (8,254)
Write down of marketable securities - 83,181 - 83,181
Gain on sale of marketable securities (60,195) - (60,195) -
Write down of inactive capital assets - 231,251 - 231,251
Future income taxes, net - (749) - (4)
-------------------------------------------- ------------ ------------ ------------ ------------
82,065 804,001 (374,211) 228,016
Net change in non-cash working capital
Receivables (1,097,989) (2,210,696) 5,482,254 (1,720,806)
Inventories and work in progress 1,509,741 (862,198) (161,696) 120,256
Prepaid expenses (53,945) (38,193) (60,450) (3,181)
Accounts payable and accrued liabilities (625,328) 960,792 (4,528,679) 703,958
-------------------------------------------- ------------ ------------ ------------ ------------
CASH USED IN OPERATIONS (185,456) (1,346,294) 357,218 (671,757)
-------------------------------------------- ------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Bank indebtedness 515,835 79,086 (247,837) (507,512)
Long term debt, net (95,374) (113,761) (47,797) (61,276)
Repayment to shareholders (313,346) (333,515) - (333,692)
Issue of common shares 1,243,145 5,978,611 1,243,145 5,155,365
-------------------------------------------- ------------ ------------ ------------ ------------
CASH PROVIDED BY FINANCING ACITIVITIES 1,350,260 5,610,421 947,511 4,252,885
-------------------------------------------- ------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of capital assets (49,010) (88,990) (22,983) (61,228)
Proceeds from sale of capital assets - 12,000 - 12,000
Oil and gas interests (38,305) (1,009,139) 48,817 (893,201)
Due from co-venturer (961,103) (348,669) (36,271) (73,511)
Marketable securities 176,957 (225,888) 177,392 (67,483)
-------------------------------------------- ------------ ------------ ------------ ------------
CASH USED IN INVESTING ACTIVITIES (871,461) (1,660,686) 166,955 (1,083,423)
-------------------------------------------- ------------ ------------ ------------ ------------
NET INCREASE IN CASH 293,343 2,603,441 1,471,684 2,497,705
Cash, beginning of period 5,610,621 1,242,621 4,432,280 1,348,357
-------------------------------------------- ------------ ------------ ------------ ------------
CASH, END OF PERIOD $ 5,903,964 $ 3,846,062 $ 5,903,964 $ 3,846,062
============================================ ============ =========== =========== ============
CASH, END OF PERIOD CONSISTS OF:
Cash $ 3,177,573 $ 3,846,062 $ 3,177,573 $ 3,846,062
Cash equivalents $ 2,726,391 - $ 2,726,391 -
The accompanying notes to the financial statements are an integral part of these
financial statements
ENERNORTH INDUSTRIES INC.
CONSOLIDATED STATEMENT OF SEGMENTED INFORMATION
(UNAUDITED) (EXPRESSED IN CANADIAN DOLLARS)
FOR THE SIX MONTHS ENDING DECEMBER 31, 2002
--------------------------------------------------
Industrial
& Offshore Oil & Gas Corporate Total
----------- ---------- ---------- -----------
Revenue 14,759,060 264,814 - 15,023,874
----------- ---------- ---------- -----------
Interest expense 101,949 - 2,893 104,842
----------- ---------- ---------- -----------
Amortization and depletion 127,845 120,671 - 248,516
----------- ---------- ---------- -----------
Net earnings (loss) 599,412 (26,657) (679,011) (106,256)
----------- ---------- ---------- -----------
Capital assets and
oil and gas interests 2,815,436 4,317,712 - 7,133,148
----------- ---------- ---------- -----------
FOR THE SIX MONTHS ENDING DECEMBER 31, 2001
----------------------------------------------------
Industrial
& Offshore Oil & Gas Corporate Total
----------- ---------- ---------- -----------
Revenue 14,099,725 251,707 - 14,351,432
----------- ---------- ---------- -----------
Interest expense 70,762 - 4,285 75,047
----------- ---------- ---------- -----------
Amortization and depletion 309,229 28,708 - 337,937
----------- ---------- ---------- -----------
Net earnings (loss) 226,411 66,141 (131,917) 160,635
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Capital assets and
oil and gas interests 3,011,268 2,997,924 - 6,009,192
----------- ---------- ---------- -----------
FOR THE THREE MONTH PERIOD ENDING DECEMBER 31, 2002
----------------------------------------------------
Industrial
& Offshore Oil & Gas Corporate Total
----------- ---------- ---------- -----------
Revenue 4,452,743 108,257 - 4,561,000
----------- ---------- ---------- -----------
Interest expense 52,048 - 1,120 53,168
----------- ---------- ---------- -----------
Amortization and depletion 66,996 46,722 - 113,718
----------- ---------- ---------- -----------
Net earnings (loss) (90,091) (4,896) (332,747) (427,734)
----------- ---------- ---------- -----------
FOR THE THREE MONTH PERIOD ENDING DECEMBER 31, 2001
----------------------------------------------------
Industrial
& Offshore Oil & Gas Corporate Total
----------- ---------- ---------- -----------
Revenue 8,697,501 113,370 - 8,810,871
----------- ---------- ---------- -----------
Interest expense 21,321 - 4,285 25,606
----------- ---------- ---------- -----------
Amortization and depletion 156,872 14,354 - 171,226
----------- ---------- ---------- -----------
Net earnings (loss) (97,027) 28,212 (180,569) (249,384)
----------- ---------- ---------- -----------
The accompanying notes to the financial statements are an integral part of these
financial statements
ENERNORTH INDUSTRIES INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTH PERIOD ENDING DECEMBER 31, 2002
---------------------------------------------------------
(EXPRESSED IN CANADIAN DOLLARS)
1. BASIS OF PRESENTATION
These unaudited interim consolidated financial statements have been prepared by
management following the same accounting policies and methods of computation as
the audited consolidated financial statements for the year ended June 30, 2002.
These interim financial statements should be read in conjunction with the
Company's audited consolidated financial statements together with notes for the
year ended June 30, 2002. The unaudited consolidated financial results for the
six month period ending December 31, 2002 and 2001 include the accounts of the
Company and its wholly owned subsidiary M&M Engineering Limited, a Newfoundland
and Labrador company, and M&M's wholly-owned subsidiary M&M Offshore Limited, a
Newfoundland and Labrador company. Operating results for the six months ended
December 31, 2002 are not indicative of the results that may be expected for the
full year ending June 30, 2003.
2. SEGMENTED INFORMATION
The Company's operations are separated into two distinct segments; the
Industrial & Offshore Division, consisting of the consolidated operations of M&M
Engineering Limited, a wholly owned subsidiary, and the Oil & Gas Division
performing oil and gas exploration and production. M&M is an industrial
contracting company performing fabrication and installation of process piping,
installation of production equipment, steel tank erection, specialized welding
services and industrial maintenance. Results for the six month period and three
month period ending December 31, 2002 and December 31, 2001 are presented in the
Consolidated Statement of Segmented Information.
3. SUBSEQUENT EVENTS
Effective February 11, 2003 the Company filed Articles of Amendment changing its
name from Energy Power Systems Limited to EnerNorth Industries Inc. and
consolidating its common shares on the basis of one new common share for every
three old common shares.
4. SHARE CAPITAL
(a) Authorized and Issued:
Authorized:
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Unlimited number of Common Shares, without par value
Unlimited number of Class A Preference Shares, Series I
Unlimited number of Class A Preference Shares, Series II
Issued
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Common shares
# Consideration
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Balance, as at June 30, 2002 10,578,645 $ 42,096,732
Issued pursuant to private placement 1,600,000 1,243,145
Balance, as at December 31, 2002 12,178,645 $ 43,339,877
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(b) Common share purchase warrants outstanding consist of the following:
EXERCISE EXPIRY 2002 2001
PRICE DATE # #
$8.00 March 9, 2002 - 222,917
$9.60 October 4, 2002 - 96,000
US$4.45 May 9, 2002 - 35,000
US$4.45 May 16, 2002 - 35,000
US$4.45 March 13, 2003 40,000 -
US$0.60 December 20, 2004 1,600,000 -
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640,000 388,917
=================================================================
(c) Common share purchase options outstanding consist of the following:
EXERCISE EXPIRY 2002 2001
PRICE DATE HOLDER # #
1.50 February 6, 2005 Directors and employees - 5,000
4.00 June 14, 2005 Directors and consultants 21,000 66,000
6.30 January 8, 2006 Directors and employees 274,000 322,500
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295,000 393,500
======================================================================
-4 -
-1-
CERTIFICATION
I, Sandra J. Hall, President, certify that:
1. I have reviewed the unaudited Interim Consolidated Financial Statements
for the six-month period ended December 31, 2002 of EnerNorth Industries Inc.
(formerly: Energy Power Systems Limited;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures and internal
controls and procedures for financial reporting (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b) Designed such internal controls and procedures for financial
reporting, or caused such internal controls and procedures for financial
reporting to be designed under their supervision, to provide reasonable
assurances that the registrant's financial statements are fairly presented in
conformity with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and internal controls and procedures for financial reporting as
of the end of the period covered by this report ("Evaluation Date");
d) Presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures and internal controls and procedures for
financial reporting based on our evaluation as of the Evaluation Date;
e) Disclosed to the registrant's audit committee of the board of
directors (or persons fulfilling the equivalent function):
(i) All significant deficiencies and material weaknesses in the
design or operation of internal controls and procedures for financial reporting
which could adversely affect the registrant's ability to record, process,
summarize and report financial information required to be disclosed by the
registrant in the reports that it files or submits under the Act (15 U.S.C. 78a
et seq.), within the time periods specified in the U.S. Securities and Exchange
Commission's rules and forms; and
(ii) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls and procedures for financial reporting; and
f) Indicated in this report any significant changes in the registrant's
internal controls and procedures for financial reporting or in other factors
that could significantly affect internal controls and procedures for financial
reporting made during the period covered by this report, including any actions
taken to correct significant deficiencies and material weaknesses in the
registrant's internal controls and procedures for financial reporting.
Date: February 28, 2003
-------------------
"Sandra J. Hall"
------------------
Sandra J. Hall
President
CERTIFICATION
I, Scott T. Hargreaves, Chief Financial Officer, President, certify that:
1. I have reviewed the unaudited Interim Consolidated Financial Statements
for the six-month period ended December 31, 2002 of EnerNorth Industries Inc.
(formerly: Energy Power Systems Limited;
2. Based on my knowledge, this report does not contain any untrue statement
of a material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements were
made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the registrant as
of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures and internal
controls and procedures for financial reporting (as defined in Exchange Act
Rules 13a-14 and 15d-14) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our supervision, to
ensure that material information relating to the issuer, including its
consolidated subsidiaries, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b) Designed such internal controls and procedures for financial
reporting, or caused such internal controls and procedures for financial
reporting to be designed under their supervision, to provide reasonable
assurances that the registrant's financial statements are fairly presented in
conformity with generally accepted accounting principles;
c) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and internal controls and procedures for financial reporting as
of the end of the period covered by this report ("Evaluation Date");
d) Presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures and internal controls and procedures for
financial reporting based on our evaluation as of the Evaluation Date;
e) Disclosed to the registrant's audit committee of the board of
directors (or persons fulfilling the equivalent function):
(i) All significant deficiencies and material weaknesses in the
design or operation of internal controls and procedures for financial reporting
which could adversely affect the registrant's ability to record, process,
summarize and report financial information required to be disclosed by the
registrant in the reports that it files or submits under the Act (15 U.S.C. 78a
et seq.), within the time periods specified in the U.S. Securities and Exchange
Commission's rules and forms; and
(ii) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal
controls and procedures for financial reporting; and
f) Indicated in this report any significant changes in the registrant's
internal controls and procedures for financial reporting or in other factors
that could significantly affect internal controls and procedures for financial
reporting made during the period covered by this report, including any actions
taken to correct significant deficiencies and material weaknesses in the
registrant's internal controls and procedures for financial reporting.
Date: February 28, 2003
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"Scott T. Hargreaves"
-----------------------
Scott T. Hargreaves
Chief Financial Officer