December 30, 2004 Interim Fin Stmts

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, 2004

Commission File Number      0-29586
 
 
(formerly: Energy Power Systems Limited)
(Address of Principal executive offices)


2 Adelaide Street West, Suite 301, Toronto, Ontario, M5H 1L6, Canada
(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      o    

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  o        No        x    

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   o        No       x         

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 27, 2004                         By: ____"Sandra J. Hall"____ ______
                    Sandra J. Hall,
                    President, Secretary & Director
 
 
 
  1  
 
 
 
 

Consolidated Financial Statements
Second Quarter
December 31, 2003
(Unaudited)
(Expressed in Canadian Dollars)










2 Adelaide Street West, Suite 301, Toronto, Ontario M5H 1L6
1-866-230-3305 www.enernorth.com
 
 
 
 
 
  2  
 
 


EnerNorth Industries Inc.
 
 
 
Consolidated Balance Sheets
 
 
 
(Expressed in Canadian dollars)
 
 
 
 
  
December 31, 2003
June 30, 2003
 
  
(unaudited)
(audited)
 
 
  
 
 
 
  
 
 
ASSETS
 
 
 
Current
   
 
    
 
  
Cash and cash equivalents
 
$
4,306,514
 
$
6,729,283
 
Restricted cash
 
1,218,070
 
 
1,218,070
 
Marketable securities
   
489,539
   
176,804
 
Receivables
   
5,750,310
   
6,503,464
 
Inventories
   
681,687
   
713,835
 
Unbilled revenue
   
456,631
   
1,680,806
 
Due from co-venturer
   
1,073,921
   
461,150
 
Prepaid expenses
   
192,179
   
240,725
 
Investment
   
3,365,000
   
-
 
  
 
 
Future income tax asset
   
-
   
-
 
   
 
 
Total current assets
   
17,533,851
   
17,724,137
 
 
    
 
    
 
  
Oil and gas interests (net of accumulated
   
 
    
 
  
depletion)
   
4,998,047
   
4,444,038
 
Capital assets (net of accumulated
   
 
    
 
  
depreciation and amortization)
   
3,093,947
   
3,166,786
 
Investment
   
-
   
3,500,000
 
  
 
 
Future income tax asset
   
-
   
-
 
  
 
 
 
    
 
    
 
  
  
$
25,625,845
 
$
28,834,961
 
  
 
 
 
    
 
    
 
  
LIABILITIES AND SHAREHOLDERS' EQUITY
 
 
  
Current
   
 
    
 
  
Bank indebtedness
 
$
1,013,421
 
$
2,036,933
 
Accounts payable and accrued liabilities
   
3,844,369
   
5,747,414
 
Due to shareholder (Note 3b)
   
-
   
402,419
 
Current portion of long-term debt
   
158,309
   
158,309
 
Deferred revenue
   
2,162,645
   
2,399,086
 
Future income tax liability
   
302,900
   
302,900
 
Oakwell claim (Note 4)
   
7,503,000
   
5,900,000
 
Total current liabilities
   
14,984,644
   
16,947,061
 
 
    
 
    
 
  
Long-term debt
   
463,209
   
528,020
 
Site Restoration
   
106,274
   
106,274
 
Future income tax liability
   
-
   
-
 
              
Total liabilities
   
15,554,127
   
17,581,355
 
  
 
 
 
    
 
    
 
  
Shareholders' equity
   
 
    
 
  
Capital stock (Note 5)
   
43,339,132
   
43,339,132
 
Deficit
   
(33,267,414
)
 
(32,085,526
)
Total shareholders' equity
 
$
10,071,718
 
$
11,253,606
 
  
 
 
 
    
 
    
 
  
  
$
25,625,845
 
$
28,834,961
 
  
 
 
 
    
 
    
 
  
 
    
 
    
 
  
The accompanying notes to the financial statements are an integral part of these financial statements
 
 
 
  3  
 
 


EnerNorth Industries Inc.
 
 
 
Consolidated Statements of Loss and Deficit
 
 
(Unaudited)
 
 
 
 
 
(Expressed in Canadian dollars)
 
 
 
 
  
For the six
For the three
 
  
month period
month period
 
  
ending December 31 
ending December 31
 
    
2003
   
2002
   
2003
   
2002
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Sales
 
$
16,822,513
 
$
15,023,874
 
$
9,870,251
 
$
4,561,000
 
Cost of sales (including
   
 
    
 
    
 
    
 
  
depreciation and depletion of
   
 
    
 
    
 
    
 
  
$335,156; 2002 - $208,189)
   
14,140,325
   
13,079,915
   
8,184,128
   
3,904,089
 
    
   
   
   
 
Gross profit
   
2,682,188
   
1,943,959
   
1,686,123
   
656,911
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Administrative expenses
   
2,354,490
   
2,006,852
   
1,469,826
   
1,110,135
 
Amortization of capital assets
   
49,632
   
40,327
   
15,971
   
23,148
 
Interest
   
59,904
   
79,639
   
36,909
   
39,431
 
Interest on long-term debt
   
24,921
   
25,203
   
11,712
   
13,737
 
    
2,488,947
   
2,152,021
   
1,534,418
   
1,186,451
 
  
 
 
 
 
Income (loss) before the following
   
193,241
   
(208,062
)
 
151,705
   
(529,540
)
 
    
 
    
 
    
 
    
 
  
Oakwell claim
   
(1,603,000
)
 
-
   
(1,603,000
)
 
-
 
Other income
   
227,871
   
101,806
   
94,333
   
101,806
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Net loss before tax
   
($1,181,888
)
 
($106,256
)
 
($1,356,962
)
 
($427,734
)
 
    
 
    
 
    
 
    
 
  
Income taxes
   
 
    
 
    
 
    
 
  
Future
   
301,083
   
-
   
234,555
   
-
 
Utilization of loss carryforwards
   
(301,083
)
 
-
   
(234,555
)
 
-
 
  
 
 
 
 
-
         
-
   
-
   
-
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Net loss
   
($1,181,888
)
 
($106,256
)
 
($1,356,962
)
 
($427,734
)
 
    
 
    
 
    
 
    
 
  
Deficit, beginning of period
   
(32,085,526
)
 
(24,038,050
)
 
(31,910,452
)
 
(23,716,572
)
Deficit, end of period
   
($33,267,414
)
 
($24,144,306
)
 
($33,267,414
)
 
($24,144,306
)
 
 
 
 
 
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Net loss per Common Share
   
 
    
 
    
 
    
 
  
Net loss per share
   
($0.29
)
 
($0.03
)
 
($0.33
)
 
($0.11
)
Weighted average common shares
 
 
    
 
    
 
  
outstanding (thousands)
   
4,059
   
4,059
   
4,059
   
4,028
 
 
    
 
    
 
    
 
    
 
  
Fully Diluted net loss per Common Share
 
 
    
 
    
 
  
Net loss per share
   
antidilutive
   
antidilutive
   
antidilutive
   
antidilutive
 
 
    
 
    
 
    
 
    
 
  
The accompanying notes to the financial statements are an integral part of these financial statements


 
  4  
 
 
 

 
  
 
 
 
 
  
EnerNorth Industries Inc.
 
 
 
 
 
Consolidated Statements of Cash Flows
 
 
(Unaudited)
 
 
 
 
 
(Expressed in Canadian dollars)
 
  
For the six month period
For the three month period
 
  
ending December 31
ending December 31
   
2003
   
2002
   
2003
   
2002
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Cash provided by (used in)
   
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Operating activities
   
 
    
 
    
 
    
 
  
Net loss
   
($1,181,888
)
 
($106,256
)
 
($1,356,962
)
 
($427,734
)
Adjustments to reconcile net loss to
   
 
    
 
    
 
    
 
  
net cash provided by operating activities
 
 
    
 
    
 
  
Amortization and depletion
   
384,788
   
248,516
   
190,775
   
113,718
 
(Gain) loss on sale of capital assets
   
-
   
-
   
-
   
-
 
Write down of marketable securities
   
-
   
-
   
-
   
-
 
Oakwell claim
   
1,603,000
   
-
   
1,617,628
   
-
 
Unrealized foreign exchange
   
 
    
 
    
 
    
 
  
loss on investment
   
135,000
   
-
   
135,000
   
-
 
Gain on sale of marketable
   
 
    
 
    
 
    
 
  
securities
   
(14,628
)
 
(60,195
)
 
(14,628
)
 
(60,195
)
 
 
 
 
 
 
    
926,272
   
82,065
   
571,813
   
(374,211
)
Net change in non-cash working capital
 
 
    
 
    
 
  
Receivables
   
753,154
   
(1,097,989
)
 
(777,691
)
 
5,482,254
 
Inventories and unbilled revenue
   
1,256,323
   
1,509,741
   
(468,102
)
 
(161,696
)
Prepaid expenses
   
48,546
   
(53,945
)
 
42,441
   
(60,450
)
Accounts payable and
   
 
    
 
    
 
    
 
  
accrued liabilities
   
(1,903,045
)
 
(625,328
)
 
783,590
   
(4,528,679
)
Restricted cash
   
-
   
-
   
-
   
-
 
Deferred revenue
   
(236,441
)
 
-
   
(178,471
)
 
-
 
    
844,809
   
(185,456
)
 
(26,420
)
 
357,218
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Financing activities
   
 
    
 
    
 
    
 
  
Bank indebtedness
   
(1,023,512
)
 
515,835
   
(276,498
)
 
(247,837
)
Repayment of Long term debt
   
(86,297
)
 
(95,374
)
 
(40,085
)
 
(47,797
)
Repayment to shareholders
   
(402,419
)
 
(313,346
)
 
(154,676
)
 
-
 
Issue of common shares
   
-
   
1,243,145
   
-
   
1,243,145
 
    
(1,512,228
)
 
1,350,260
   
(471,259
)
 
947,511
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Investing activities
   
 
    
 
    
 
    
 
  
Purchase of capital assets
   
(54,251
)
 
(49,010
)
 
(18,143
)
 
(22,983
)
Proceeds from sale of capital assets
   
-
   
-
   
-
   
-
 
Oil and gas interests
   
(790,221
)
 
(38,305
)
 
(162,246
)
 
48,817
 
Due from co-venturer
   
(612,771
)
 
(961,103
)
 
(513,718
)
 
(36,271
)
Marketable securities
   
(298,107
)
 
176,957
   
(95,000
)
 
177,392
 
    
(1,755,350
)
 
(871,461
)
 
(789,107
)
 
166,955
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Increase (decrease) in cash
   
(2,422,769
)
 
293,343
   
(1,286,786
)
 
1,471,684
 
Cash, beginning of period
   
6,729,283
   
5,610,621
   
5,593,300
   
4,432,280
 
Cash, end of period
 
$
4,306,514
 
$
5,903,964
 
$
4,306,514
 
$
5,903,964
 
  
 
 
 
 
 
    
 
    
 
    
 
    
 
  
 
    
 
    
 
    
 
    
 
  
Cash, end of period consists of:
   
 
    
 
    
 
    
 
  
Cash
 
$
1,942,218
 
$
3,177,573
 
$
1,942,218
 
$
3,177,573
 
Money market funds
 
$
2,364,296
 
$
2,726,391
 
$
2,364,296
 
$
2,726,391
 
 
    
 
    
 
    
 
    
 
  
The accompanying notes to the financial statements are an integral part of these financial statements      
 
  




 
  5  
 
 

 
EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Six Month Period Ending December 31, 2003
(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, 2003. 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, 2003. The unaudited consolidated financial results for the six month period ending December 31, 2003 and 2002 include the accounts of the Company and its wholly owned subsidiary M&M Engineering Limited, a Newfoundland and Labrador company, M&M’s wholly-owned subsidiary M&M Offshore Limited, a Newfoundland and Labrador company, 10915 Newfoundland Limited, 11123 Newfoundland Limited and the proportionate share of its interests in joint ventures whose business focus is construction, mechanical contracting and steel fabrication. Operating results for the six months ended December 31, 2003 are not indicative of the results that may be expected for the full year ending June 30, 2004.

  1. 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 and three month periods ending December 31, 2003 and December 31, 2002 are presented in the Consolidated Statements of Segmented Information below:


For the six months ending December 31, 2003
 
  
 
 
 
 
 
  
 
 
 
 
 
    
Industrial & Offshore
    
Oil & Gas
   
Corporate
   
Total
 
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Revenue
   
16,564,607
   
257,906
   
-
   
16,822,513
 
Interest expense
   
81,183
   
-
   
3,642
   
84,825
 
Amortization and depletion
   
148,576
   
236,212
   
-
   
384,788
 
Net earnings (loss)
   
1,255,968
   
(134,521
)
 
(2,303,335
)
 
(1,181,888
)
Capital assets and
   
 
    
 
    
 
    
 
  
oil and gas interests
   
3,093,947
   
4,998,047
   
-
   
8,091,994
 
 
    
 
    
 
    
 
    
 
  
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
   
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 three months ending December 31, 2003
 
   
 
 
 
 
    
 
    
 
    
 
    
 
  
 
    
Industrial & Offshore 
    
Oil & Gas
   
Corporate
   
Total
 
   
 
 
 
 
 
    
 
    
 
    
 
    
 
  
Revenue
   
9,744,583
   
125,668
   
-
   
9,870,251
 
Interest expense
   
45,492
   
-
   
3,129
   
48,621
 
Amortization and depletion
   
65,528
   
125,247
   
-
   
190,775
 
Net earnings (loss)
   
895,518
   
(65,978
)
 
(2,186,502
)
 
(1,356,962
)
 
    
 
    
 
    
 
    
 
  
For the three months 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
   
(90,091
)
 
(4,896
)
 
(332,747
)
 
(427,734
)



 
  6  
 
 
EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Six month period ending December 31, 2003
(Expressed in Canadian Dollars)
 

  1. Related Party Transactions
        a)    During the six month period ending December 31, 2003 a director of the Company was paid US$20,000 (approximately Cdn$26,000)
          under a nine month consulting agreement that commenced September 1, 2003.
 
b)    During the six month period ending December 31, 2003 the Company repaid $402,419 to a shareholder and a director of the Company.

        These transactions were in the normal course of business of the Company and were measured at the exchange amount.

  1. Subsequent Events
 
In January 2004, the Company received a further decision from the High Court of the Republic of Singapore with respect to interest calculated on a US$4.21 million (approximately Cdn$5.4 million) award to Oakwell Engineering Limited ("Oakwell").

The Judge awarded Oakwell interest of approximately US $1.21 million for a total award of US$5.42 million plus certain legal costs, the extent of which is yet to be known. As a result of the judgment the Company accrued an additional provision of Cdn$1.6 million for the Oakwell Claim.

In January 2004, the Company filed its appeal documents with the Court of Appeal of the Republic of Singapore and the Appeal Court date has been set for April 26, 2004.


  1. Share Capital

 

  (a)    Authorized and Issued:


Authorized:
 
 
 
              
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
   
 
    
 
  
              
Common shares
   
 
    
 
  
 
     #     
Consideration
 
  
 
 
Balance, as at June 30, 2003
   
4,059,009
 
$
43,339,132
 
 
    
 
    
 
  
Balance, as at December 31, 2003
   
4,059,009
 
$
43,339,132
 
  
 
 
 
(b)    Common share purchase warrants outstanding consist of the following:
 

Exercise
Expiry
2003
2002
Price
Date
#
#
US$ 13.35
March 13, 2003
-
13,333
US$ 1.80
December 31, 2004
533,332
-
 
 
533,332
13,333
(c)    Common share purchase options outstanding consist of the following:
 

Exercise
Expiry
 
2003
2002
Price
Date
Holder
#
#
$12.00
June 14, 2005
Consultant
-
7,000
$18.90
January 8, 2006
Directors and employees
-
91,333
 
 
 
-
98,333