Interim Financial Statements for Dec 2005

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 2005

Commission File Number    0-29586

EnerNorth Industries Inc.
(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    

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        

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        

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 14, 2005                        By:____"Sandra J. Hall"____ ______
        Sandra J. Hall,
                                President, Secretary & Director
 

 
     
 





 
 

EnerNorth Industries Inc.
 
Consolidated Financial Statements
Second Quarter
December 31, 2004
(Unaudited)
(Expressed in Canadian Dollars)



Notice to Reader



Management has compiled the unaudited interim consolidated financial information of EnerNorth Industries Inc. consisting of the unaudited interim Consolidated Balance Sheet as at December 31, 2004, Consolidated Statements of Loss and Deficit and Consolidated Statements of Cash Flows for the six months ended December 31, 2004. All amounts are stated in Canadian Dollars. An accounting firm has not reviewed or audited these interim consolidated financial statements.






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

 
     
 


 
          
EnerNorth Industries Inc.
          
Consolidated Balance Sheets
          
(Expressed in Canadian dollars)
          
   December 31, 2004  
June 30, 2004
  
 
    
(unaudited) 
    
(audited
)
               
               
               
ASSETS
              
Current
              
Cash and cash equivalents
  
$
406,899
 
$
600,313
 
Marketable securities (Market value $997,531,
             
June 30, 2004 - 680,301)
    
519,439
   
521,039
 
Receivables
    
6,777,696
   
7,690,129
 
Inventories
    
403,011
   
466,969
 
Unbilled revenue
    
533,554
   
1,941,548
 
Due from co-venturer
    
1,135,295
   
923,168
 
Prepaid expenses
    
115,398
   
700,851
 
Investment
   
3,293,000
   
3,365,000
 
Total current assets
    
13,184,292
   
16,209,017
 
Oil and gas interests (net of accumulated
              
depletion)
    
3,948,256
   
3,750,817
 
Capital assets (net of accumulated
              
depreciation and amortization)
    
3,089,423
   
3,272,538
 
Future income tax asset
    
30,224
   
30,224
 
               
   
$
20,252,195
 
$
23,262,596
 
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current
              
Bank indebtedness
 
$
860,968
 
$
2,213,010
 
Accounts payable and accrued liabilities
    
4,156,781
   
4,368,412
 
Due to shareholder (Note 4a)
    
42,000
   
42,000
 
Current portion of long-term debt
   
226,499
   
226,499
 
Deferred revenue
    
-
   
351,782
 
Future income tax liability
    
276,648
   
276,648
 
Oakwell claim
   
7,328,460
   
7,915,681
 
Total current liabilities
    
12,891,356
   
15,394,032
 
               
Long-term debt
   
492,373
   
542,109
 
Future income tax liability
    
25,617
   
25,617
 
Site Restoration
    
222,580
   
135,819
 
Total liabilities
    
13,631,926
   
16,097,577
 
               
Minority interest
    
(9,953
)
  
75,141
 
               
Shareholders' equity
              
Capital stock (Note 7)
    
43,339,132
   
43,339,132
 
Deficit
    
(36,708,910
)
  
(36,249,254
)
Total shareholders' equity
  
$
6,630,222
 
$
7,089,878
 
               
   
$
20,252,195
 
$
23,262,596
 
               
               
The accompanying notes to the financial statements are an integral part of these financial statements
              

 

 
     
 

                   
                   
EnerNorth Industries Inc.
                  
Consolidated Statements of Loss and Deficit
                  
(Unaudited)
                  
(Expressed in Canadian dollars)
                  
   
For the six 
  
For the three 
  
   
months ended 
  
months ended 
  
   
December 31, 
  
December 31, 
  
     
2004
    
2003*
    
2004
    
2003*
  
                   
                   
                   
Revenue
                  
Oil and gas revenue
  
$
482,109
 
$
313,686
 
$
261,352
 
$
155,530
 
Royalties
    
91,944
   
55,780
   
34,597
   
29,862
 
     
390,165
   
257,906
   
226,755
   
125,668
 
                   
Expenses
                  
Operating and transportation
    
266,494
   
156,215
   
187,658
   
66,399
 
Administrative expenses
    
1,123,974
   
617,564
   
632,738
   
446,850
 
Depletion and accretion
    
361,613
   
236,212
   
218,029
   
125,247
 
Interest
    
1,183
   
3,642
   
933
   
3,129
 
     
1,753,264
   
1,013,633
   
1,039,358
   
641,625
 
Loss before the following
    
(1,363,099
)
  
(755,727
)
  
(812,603
)
  
(515,957
)
                   
Foreign exchange gain (loss)
    
503,831
   
(152,824
)
  
264,712
   
(152,824
)
Oakwell claim
    
-
   
(1,603,000
)
      
(1,603,000
)
Interest income
    
164,849
   
59,067
   
67,207
   
19,301
 
Gain on sale of marketable securities
    
9,775
   
14,628
   
9,775
   
-
 
                   
Net loss from continuing operations before tax
    
(684,644
)
  
(2,437,856
)
  
(470,909
)
  
(2,252,480
)
                   
Income taxes
                  
Future (net of valuation provision)
    
-
   
301,083
   
-
   
234,555
 
Utilization of loss carryforwards
    
-
   
(301,083
)
  
-
   
(234,555
)
-
         
-
   
-
   
-
 
                   
Net loss from continuing operations
    
(684,644
)
  
(2,437,856
)
  
(470,909
)
  
(2,252,480
)
                   
Net income (loss) from discontinued
                 
operations (Note 6)
    
224,988
   
1,255,968
   
(77,945
)
  
895,518
 
                   
Net loss
    
($459,656
)
  
($1,181,888
)
  
($548,854
)
  
($1,356,962
)
                   
Deficit, beginning of period
    
(36,249,254
)
  
(32,085,526
)
  
(36,160,056
)
  
(31,910,452
)
Deficit, end of period
    
($36,708,910
)
  
($33,267,414
)
  
($36,708,910
)
  
($33,267,414
)
                   
Net loss per Common Share
                  
Net loss per share
    
($0.11
)
  
($0.29
)
  
($0.14
)
  
($0.33
)
Net loss from continuing operations per share
    
($0.17
)
  
($0.60
)
  
($0.12
)
  
($0.55
)
Weighted average common shares
                  
outstanding (thousands)
    
4,059
   
4,059
   
4,059
   
4,059
 
                   
Fully Diluted net loss per Common Share
                  
Net loss per share
    
antidilutive
    
antidilutive
    
antidilutive
    
antidilutive
  
                   
*Comparative figures have been reclassified to conform to the current periods financial statement
                 
presentation (See Notes 6 and 8) .
                  
                   
The accompanying notes to the financial statements are an integral part of these financial statements
        


 
     
 


                   
                   
EnerNorth Industries Inc.
                  
Consolidated Statements of Cash Flows
                  
(Unaudited)
                  
(Expressed in Canadian dollars)
                  
   
For the six months 
  
For the three months 
  
   
ended December 31 
  
ended December 31 
  
     
2004
    
2003
    
2004
    
2003
  
                   
 
                  
Cash provided by (used in)
                  
                   
Operating activities
                  
Net loss
    
($459,656
)
  
($1,181,888
)
  
($548,854
)
  
($1,356,962
)
Adjustments to reconcile net income to
                  
net cash provided by operating activities
                  
Amortization, depletion and accretion
    
517,075
   
384,788
   
290,382
   
190,775
 
Oakwell claim
    
-
   
1,603,000
       
1,603,000
 
Unrealized foreign exchange (gain) loss
   
(503,831
)
  
135,000
   
(264,712
)
  
135,000
 
Write down of capital assets
    
100,000
    -    
100,000
    -  
Minority Interest
    
(85,094
)
  
-
   
(111,859
)
   -  
Gain on sale of marketable securities
    
(9,775
)
  
(14,628
)
  
(9,775
)
  
-
 
     
(441,281
)
  
926,272
   
($544,818
)
  
571,813
 
Net change in non-cash working capital
                  
Receivables
    
912,433
   
753,154
   
($91,737
)
  
(777,691
)
Inventories and unbilled revenue
    
1,471,952
   
1,256,323
 
 
928,663
   
(468,102
)
Prepaid expenses
    
585,453
   
48,546
   
($52,958
)
  
42,441
 
Accounts payable and accrued liabilities
    
(211,631
)
  
(1,903,045
)
  
($22,176
)
  
783,590
 
Deferred revenue
    
(351,782
)
  
(236,441
)
  
($7,919
)
  
(178,471
)
     
1,965,144
   
844,809
 
 
209,055
   
(26,420
)
                   
Financing activities
                  
Bank indebtedness
    
(1,352,042
)
  
(1,023,512
)
  
($378,863
)
  
(276,498
)
Repayment of long term debt
    
(49,736
)
  
(86,297
)
  
($1,196
)
  
(40,085
)
Repayment to shareholders
    
-
   
(402,419
)
 
0
   
(154,676
)
     
(1,401,778
)
  
(1,512,228
)
  
($380,059
)
  
(471,259
)
     
       
     
Investing activities
                  
Purchase of capital assets
   
(79,323
)
  
(54,251
)
  
($57,247
)
  
(18,143
)
Oil and gas interests
    
(476,705
)
  
(790,221
)
  
($315,960
)
  
(162,246
)
Net change in due from co-venturer
    
(212,127
)
  
(612,771
)
 
194,952
   
(513,718
)
Marketable securities
    
11,375
   
(298,107
)
 
11,375
   
(95,000
)
     
(756,780
)
  
(1,755,350
)
  
($166,880
)
  
(789,107
)
                   
Decrease in cash
    
(193,414
)
  
(2,422,769
)
  
($337,884
)
  
(1,286,786
)
Cash, beginning of period
    
600,313
   
6,729,283
 
 
744,783
   
5,593,300
 
Cash, end of period
  
$
406,899
 
$
4,306,514
 
$
406,899
 
$
4,306,514
 
                   
                   
Cash, end of period consists of:
                  
Cash
  
$
406,899
 
$
1,942,218
 
$
406,899
 
$
1,942,218
 
Money market funds
    $
-
 
$
2,364,296
   $
-
 
$
2,364,296
 
                   
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 Months Ended December 31, 2004
(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, 2004. 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, 2004.
 
The Company’s primary activities are exploration, development and production of oil and gas. The unaudited consolidated financial results for the six month period ending December 31, 2004 and 2003 include the accounts of the Company and its wholly owned subsidiaries M&M Engineering Limited ("M&M") and its wholly owned subsidiary M&M Offshore Limited ("MMO"), 10915 Newfoundland Limited, 11123 Newfoundland Limited, it’s partnership Liannu LLP ("Liannu") and the proportionate share of its interests in joint ventures whose business focus is construction mechanical contracting and steel fabrication in Newfoundland. Minority interest represents the net residual interest in the equity of the partnership that belongs to the Company’s other partners in Liannu. The results of operations of its wholly owned subsidiaries are accounted for as discontinued operations (See Notes 6 and 8).
 
Operating results for the six months ended December 31, 2004 are not indicative of the results that may be expected for the full year ending June 30, 2005.
 
These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in Canada.
 
2.   Seasonality and Trend Information
 
Oil and gas production is not a seasonal business, but increased consumer demand or changes in supply in certain months of the year can influence the price of produced hydrocarbons, depending on the circumstances. Production from the Company's oil and gas properties is the primary determinant for the volume of sales during the year.
 
3.   Segmented information
 
The Company's operations consist of one operating segment, exploration, development and production of oil and gas. These operations consist of one cost centre, Canada.
 
 
 
4.   Related Party Transactions
 
Included in accounts receivable at December 31, 2004 are advances due from officers of the Company’s subsidiary in the amount of $14,425 (June 30, 2004 - $2,815).
 
These transactions were in the normal course of business and were measured at the exchange amount.
 
 
5.   Subsequent Events
 
a)   On February 1, 2005 the Company divested its interests in M&M (See Note 6).
 
b)   In January 2005, M&M formally withdrew from the North Eastern Constructors Limited ("NECL") joint venture.
 
 
 
 
EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Six Months Ended December 31, 2004
(Expressed in Canadian Dollars)
 
6.   Discontinued Operations
 
On February 1, 2005 the Company divested its interests in M&M for cash proceeds of Cdn. $7,361,999. The transaction was closed in escrow on February 1, 2005 pending completion of certain closing conditions that were satisfied on February 4, 2005. Under the terms of the Purchase and Sale Agreement, the parties agreed that M&M would have working capital of not less than Cdn $3,800,000 at closing and accordingly $250,000 is held in escrow for up to 30 days pending completion of the working capital calculation of M&M at February 1, 2005. The transaction is a purchase of 100% of the common shares and 100% of the preferred shares of M&M held by the Company. Prior to closing, the Company retracted preferred shares of M&M for Cdn $1,000,000 cash. The Company received shareholder approval for the transaction at a special meeting of shareholders held on January 26, 2005.
 
The results of M&M have been accounted for as discontinued operations. Estimated disposal costs have been included in the net income from discontinued operations.
 
7.   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, 2004
    
4,059,009
 
$
43,339,132
  
               
Balance, as at December 31, 2004
    
4,059,009
 
$
43,339,132
  
(b)   Common share purchase warrants outstanding consist of the following:

   
2004
2003
Exercise Price
Expiry Date
#
#
US$ 1.80
December 31, 2004
533,332
533,332
   
533,332
533,332
(c)   There were no Common share purchase options outstanding at December 31, 2004 and 2003.
 
8.   Comparative Figures
 
As a result of discontinued operations the comparative consolidated financial statements have been reclassified from statements previously presented to conform to the December 31, 2004 presentation.