financial statements for the period ending march 31, 2006

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   May 2006

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: May 4, 2006               By:____”Sandra J. Hall”____ ______
Sandra J. Hall,
President, Secretary & Director
 
 
 

 






 

EnerNorth Industries Inc.
 

Consolidated Financial Statements
Third Quarter
March 31, 2006
(Unaudited)
(Expressed in Canadian Dollars)



Notice to Reader
 
Management has compiled the unaudited interim consolidated financial information of EnerNorth Industries Inc. consisting of the Consolidated Balance Sheet as at March 31, 2006, Consolidated Statements of Operations and Deficit and Consolidated Statements of Cash Flows and notes thereto for the period ended March 31, 2006. All amounts are stated in Canadian Dollars. An accounting firm has not reviewed or audited these interim consolidated financial statements.









1 King Street West, Suite 1502, Toronto, Ontario M5H 1A1
416-861-1484 www.enernorth.com
 
 
 
 
          
EnerNorth Industries Inc.
          
Consolidated Balance Sheets
          
(Expressed in Canadian dollars)
          
   
March 31, 2006
  
June 30, 2005
  
(unaudited)
          
(audited
)
               
               
               
ASSETS
              
Current
              
Cash and cash equivalents
  
$
1,183,378
  
$
5,286,315
  
Marketable securities (Market value $2,229,335,
             
June 30, 2005 - $2,600,725)
    
2,054,250
   
2,394,138
 
Receivables
    
1,721,297
   
677,704
 
Total current assets
    
4,958,925
   
8,358,157
 
               
               
Oil and gas interests (net of accumulated
              
depletion)
    
8,252,232
   
4,068,549
 
Investment (Note 5)
    
3,107,782
   
3,281,950
 
               
   
$
16,318,939
  
$
15,708,656
  
               
LIABILITIES AND SHAREHOLDERS' EQUITY
              
Current
              
Accounts payable and accrued liabilities
    
573,536
   
465,365
 
Due to shareholder
   
71,250
   
37,500
 
Oakwell claim (Note 8)
    
7,898,442
   
7,956,349
 
Total current liabilities
    
8,543,228
   
8,459,214
 
               
Site Restoration
    
252,826
   
173,204
 
Future income tax liability
    
-
   
-
 
Total liabilities
    
8,796,054
   
8,632,418
 
               
Shareholders' equity
              
Capital stock (Note 6)
    
43,577,303
   
43,339,132
 
Contributed surplus (Note 6)
    
152,845
   
149,109
 
Deficit
    
(36,207,263
)
  
(36,412,003
)
Total shareholders' equity
  
$
7,522,885
  
$
7,076,238
  
               
   
$
16,318,939
  
$
15,708,656
  
               
               
The accompanying notes are an integral part of these consolidated financial statements
              
 
 
                   
                   
EnerNorth Industries Inc.
                  
Consolidated Statements of Operations and Deficit
  
 
  
 
  
 
  
 
  
(Unaudited)
  
 
  
 
  
 
  
 
  
(Expressed in Canadian dollars)
                  
   
For the nine months
  
For the three months
  
   
ended March 31,
  
ended March 31,
  
     
2006
    
2005*
    
2006
    
2005*
  
                           
                           
Revenue
                          
Oil and gas revenue
  
$
908,498
  
$
753,987
  
$
203,386
  
$
271,878
  
Less: royalties
    
128,361
   
157,778
   
36,445
   
65,834
 
     
780,137
   
596,209
   
166,941
   
206,044
 
                           
Expenses
                          
Operating and transportation
    
282,318
   
354,811
   
84,637
   
88,317
 
Depletion and accretion
    
510,674
   
546,448
   
120,194
   
184,835
 
Administrative expenses
    
1,389,507
   
1,873,946
   
652,510
   
749,972
 
Interest
    
1,925
   
1,542
   
658
   
359
 
     
2,184,424
   
2,776,747
   
857,999
   
1,023,483
 
Loss before the following
    
(1,404,287
)
  
(2,180,538
)
  
(691,058
)
  
(817,439
)
                           
Foreign exchange gain (loss)
    
186,718
   
492,781
   
34,278
   
(11,050
)
Oakwell claim (Note 8)
    
(329,621
)
  
-
   
(131,660
)
  
-
 
Interest income
    
220,233
   
221,452
   
16,850
   
56,603
 
Cash distributions from marketable securities
    
178,668
   
-
   
69,021
   
-
 
Gain on sale of marketable securities
    
1,353,029
   
9,775
   
1,070,892
   
-
 
                           
Net income (loss) from continuing operations
    
204,740
   
(1,456,530
)
  
368,323
   
(771,886
)
                           
Net income from discontinued
                         
operations (Notes 4 and 7)
    
-
   
337,355
   
-
   
112,367
 
Gain on disposition of discontinued operations
    
-
   
1,847,642
   
-
   
1,847,642
 
                           
Net income
    
204,740
   
728,467
   
368,323
   
1,188,123
 
                           
Deficit, beginning of period
    
(36,412,003
)
  
(36,249,254
)
  
(36,575,586
)
  
(36,708,910
)
                           
Deficit, end of period
    
($36,207,263
)
  
($35,520,787
)
  
($36,207,263
)
  
($35,520,787
)
                           
Net income per common share
  
$
0.05
  
$
0.18
  
$
0.09
  
$
0.29
  
                           
Net income (loss) from continuing operations per
                          
common share
  
$
0.05
    
($0.36
)
$
0.09
    
($0.19
)
                           
Weighted average common shares
                          
outstanding (thousands)
    
4,063
    
4,059
    
4,073
    
4,059
  
                           
Fully diluted net income per common share
  
$
0.04
  
$
0.16
  
$
0.08
  
$
0.26
  
                           
*Comparative figures have been reclassified to conform to the current periods financial statement presentation (See Notes 4 and 7).
                          
                           
The accompanying notes are an integral part of these consolidated financial statements
                          
 
 
                   
                   
EnerNorth Industries Inc.
                  
Consolidated Statements of Cash Flows
                  
(Unaudited)
                  
(Expressed in Canadian dollars)
                  
   
For the nine months
      
For the three months
      
   
ended March 31,
      
ended March 31,
      
     
2006
    
2005*
    
2006
    
2005*
  
                           
Cash provided by (used in)
                          
                           
Operating activities
                          
Net income (loss) from continuing operations
  
$
204,740
    
($1,456,530
)
$
368,323
    
($771,886
)
Adjustments to reconcile net income (loss) to
                          
net cash provided by operating activities
                          
Depletion and accretion
    
510,674
   
546,448
   
120,194
   
184,835
 
Oakwell claim
    
(57,907
)
  
-
   
112,863
   
-
 
Stock based compensation
    
3,736
   
149,446
   
-
   
149,446
 
Unrealized foreign exchange (gain) loss
    
174,168
   
(370,646
)
  
(37,910
)
  
133,185
 
Gain on sale of marketable securities
    
(1,353,029
)
  
(9,775
)
  
(1,070,892
)
  
-
 
     
(517,618
)
  
(1,141,057
)
  
(507,422
)
  
(304,420
)
Net change in non-cash working capital
                          
Receivables
    
(1,043,593
)
  
653,221
   
(82,328
)
  
(238,488
)
Accounts payable and accrued liabilities
    
108,171
   
175,478
   
(14,379
)
  
(78,116
)
Cash used by operating activities
                          
from continuing operations
    
(1,453,040
)
  
(312,358
)
  
(604,129
)
  
(621,024
)
Cash provided by operating activities
                          
of discontinued operations
    
-
   
1,868,433
   
-
   
211,955
 
     
(1,453,040
)
  
1,556,075
   
(604,129
)
  
(409,069
)
                           
Financing activities
                          
Due to shareholders (net)
    
33,750
   
(42,000
)
  
52,500
   
(42,000
)
Issue of common shares
    
238,171
   
-
   
238,171
   
-
 
Financing activities of discontinued operations
    
-
   
(2,981,618
)
  
-
   
(1,579,840
)
     
271,921
   
(3,023,618
)
  
290,671
   
(1,621,840
)
                   
Investing activities
                          
Oil and gas assets
    
(4,635,320
)
  
(589,270
)
  
(2,497,925
)
  
(112,565
)
Site restoration liability assumed
    
20,585
   
-
   
20,585
   
-
 
Purchase of marketable securities (net)
    
1,692,917
   
(1,487,867
)
  
1,979,244
   
(1,499,242
)
Proceeds from sale of discontinued operations
    
-
   
8,111,989
   
-
   
8,111,989
 
Investing activities of discontinued operations
    
-
   
896,809
   
-
   
1,188,259
 
     
(2,921,818
)
  
6,931,661
   
(498,096
)
  
7,688,441
 
                           
Increase (decrease) in cash
    
(4,102,937
)
  
5,464,118
   
(811,554
)
  
5,657,532
 
Cash, beginning of period
    
5,286,315
   
600,313
   
1,994,932
   
406,899
 
Cash, end of period
  
$
1,183,378
  
$
6,064,431
  
$
1,183,378
  
$
6,064,431
  
                           
Cash, end of period consists of:
                          
Cash
  
$
461,180
  
$
264,855
  
$
461,180
  
$
264,855
  
Money market funds
  
$
722,198
  
$
5,799,576
  
$
722,198
  
$
5,799,576
  
                           
*Comparative figures have been reclassified to conform to the current periods financial
                         
statement presentation (See Notes 4 and 7) .
                          
                           
The accompanying notes are an integral part of these consolidated financial statements
                          
 
 
 
 
EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Period Ended March 31, 2006
(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, 2005. 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, 2005. For further detailed discussions please refer to the Company’s Management Discussion and Analysis of Financial Condition and Operating Results for the three and nine month period ending March 31, 2006.

The Company’s primary activities include investment in, exploration, development and production of oil and gas. The unaudited consolidated financial results for the periods ending March 31, 2006 and 2005 include the accounts of the Company and its subsidiaries Sawn Lake Resources Ltd. (“Sawn”) and Euro India Canara Private Limited (“EIPCL”) which is carried on the balance sheet at nil. The results of operations of its former wholly owned subsidiaries, held through M&M Engineering Limited (“M&M”) are accounted for as discontinued operations (See Notes 4 and 7).

Operating results for the three and nine month periods ending March 31, 2006 are not indicative of the results that may be expected for the full year ending June 30, 2006.

The Company’s ability to continue as a going concern is primarily dependent upon the enforceability of the Oakwell Claim (see Note 8). If the application of the judgment becomes enforceable in Canada then there would be a material and adverse impact on the Company’s financial condition.

These consolidated financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company not be able to continue in the normal course of operations. If the “going concern” assumption is not appropriate for these consolidated financial statements then adjustments may be necessary to the carrying value of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications used.

These consolidated financial statements have been prepared by management in accordance with accounting principles generally accepted in Canada.

On March 31, 2006 the Company acquired 100% of the shares of Sawn for gross proceeds of $2,349,715. Sawn is an Alberta Company with interests in oil and gas properties located in Alberta and Saskatchewan. The allocation of the purchase price was as follows:

Current assets
  
$
32,718
  
Oil and gas assets
    
2,339,474
  
Payables
    
1
  
Site restoration liabilities
  
$
(20,585
)
Net assets acquired *
  
$
2,351,608
  

*Including transaction costs of $1,893

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 in the oil and gas industry, which includes investment in, exploration, development and production of oil and gas. These operations consist of one cost centre, Canada.



4.  
Discontinued Operations

On February 1, 2005 the Company divested of its interests in M&M for cash proceeds of Cdn. $7,361,989. The transaction was a sale 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 results of M&M have been accounted for as discontinued operations. Estimated disposal costs have been included in the net income from discontinued operations.
 
 
 
EnerNorth Industries Inc.
Notes to Unaudited Consolidated Financial Statements
For the Period Ended March 31, 2006
(Expressed in Canadian Dollars

5.  
Investment

As of March 31, 2005 the Company owns 11,848,200 common shares, par value Indian Rupees (“INR”) 10 in Konaseema Gas Power Limited (formerly known as Konaseema EPS Oakwell Power Limited).

6.  
Share Capital
 
         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, 2005
4,059,009
$43,339,132
Exercise of common share purchase options
15,000
13,171
Issued pursuant to acquisition of Sawn
103,212
225,000
Balance, as at March 31, 2006
4,177,221
$43,577,303

Contributed Surplus
 
Value
Balance, as at June 30, 2005
$149,109
Issuance of options
3,736
Balance, as at March 31, 2006 and May 2, 2006
$152,845

Common share purchase options

Exercise
Expiry
2006
2005
Price
Date
#
#
US$0.75
February 28, 2010
585,000
600,000
US$1.77
July 15, 2008
15,000
-
Balance, as at March 31, 2006
600,000
600,000
 
 
Of the options priced at US$1.77, 10,000 vest July 15, 2006 and 5,000 vest on July 15, 2007.

7.  
Comparative Figures

As a result of discontinued operations the comparative unaudited consolidated financial statements have been reclassified from statements previously presented to conform to the March 31, 2006 presentation.

8. Oakwell Claim

The Oakwell Claim relates to a Singapore judgment against the Company plus costs and interest. On August 2, 2005 the Superior Court for the Province of Ontario ruled that the Singapore judgment was enforceable in Ontario with costs. The Company filed a notice of appeal of the August 2, 2005 ruling. The appeal was heard on April 10, 2006 and judgment was reserved.

9. Related Party Transactions

During the nine month period ended March 31, 2006 the Company paid Chadha & Co., a company controlled by Namita Chadha who was appointed a director of EIPCL, $23,524 for services rendered on behalf of the Company (2005 - $17,109).

During the nine month period ended March 31, 2006 the Chairman, a director and shareholder of the Company was awarded $71,250 as compensation for services rendered on behalf of the Company.