FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16
OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of May, 2002
ENERGY POWER SYSTEMS LIMITED
(FORMERLY: ENGINEERING POWER SYSTEMS LIMITED)
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(Address of Principal executive offices)
Suite 301, 2 Adelaide Street West, Toronto, Ontario, M5H 1L6
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(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover form 20-F or Form 40-F:
Form 20-F X Form 40-F
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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 12g3-2b 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.
ENERGY POWER SYSTEMS LIMITED
(formerly: Engineering Power Systems Limited)
Date: May 30, 2002 By:____"Sandra J. Hall"____ ______
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Sandra J. Hall, Secretary & Director
Energy Power
Systems Limited
Consolidated Financial Statements
March 31, 2002
(Unaudited)
(Expressed in Canadian Dollars)
ENERGY POWER SYSTEMS LIMITED
CONSOLIDATED BALANCE SHEET
(EXPRESSED IN CANADIAN DOLLARS)
MARCH 31, 2002 JUNE 30, 2001
(UNAUDITED) (AUDITED)
ASSETS
CURRENT
Cash $ 6,565,795 $ 1,242,621
Marketable securities 318,780 221,213
Receivables 3,379,568 4,331,086
Due from co-venturer 183,395 208,652
Inventories and work in progress 1,464,087 1,039,853
Prepaid expenses 104,257 67,329
Investments 3,500,000 3,500,000
Asset held for sale 220,000 -
Future income tax asset 235,000 235,000
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TOTAL CURRENT ASSETS 15,970,882 10,845,754
Oil and gas interests 4,654,646 2,017,493
Capital assets 2,721,386 3,268,096
Future income tax asset 862,749 862,000
Goodwill 1,860,885 2,056,832
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$ 26,070,548 $ 19,050,175
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LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Bank indebtedness $ 981,333 $ 829,001
Accounts payable and accrued liabilities 2,614,216 4,200,868
Due to shareholders 628,304 1,162,403
Current portion of long-term debt 182,151 182,151
Future income tax liability 266,000 266,000
TOTAL CURRENT LIABILITIES 4,672,004 6,640,423
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Due to shareholders, July 31, 2002 - 350,000
Long-term debt 548,977 646,311
Future income tax liability 56,000 56,000
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TOTAL LIABILITIES 5,276,981 7,692,734
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SHAREHOLDERS' EQUITY
Capital stock 41,803,760 32,207,289
Deficit (21,010,193) (20,849,848)
TOTAL SHAREHOLDERS' EQUITY $ 20,793,567 $ 11,357,441
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$ 26,070,548 $ 19,050,175
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The accompanying notes to the financial statements are an integral part of these
financial statements
ENERGY POWER SYSTEMS LIMITED
CONSOLIDATED STATEMENT OF EARNINGS AND DEFICIT
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
FOR THE NINE FOR THE THREE
MONTH PERIOD MONTH PERIOD
ENDING MARCH 31 ENDING MARCH 31
2002 2001 2002 2001
2001 2000 2001 2000
Sales $ 16,669,646 $ 15,205,077 $ 2,318,214 $ 2,416,087
Cost of sales (including depreciation
and depletion of $188,503;
2001 - $184,120) 14,435,648 13,660,117 1,962,292 2,296,118
-------------------------------------- -------------- -------------- -------------- --------------
Gross profit 2,233,998 1,544,960 355,922 119,969
-------------------------------------- -------------- -------------- -------------- --------------
Administrative expenses 1,710,290 1,871,817 499,711 912,380
Amortization of goodwill 195,943 195,943 65,314 65,314
Amortization of capital assets 100,053 116,528 18,414 40,998
Interest and bank charges 55,317 67,071 12,741 23,933
Interest on long-term debt 45,035 70,870 12,564 21,945
-------------------------------------- -------------- -------------- -------------- --------------
2,106,638 2,322,229 608,744 1,064,570
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Earnings (loss) before the following 127,360 (777,269) (252,822) (944,601)
Write down of asset held for sale (231,251) - -
Other income (expense) 11,335 89,975 (369) 54,349
-------------------------------------- -------------- -------------- -------------- --------------
NET LOSS FROM CONTINUING
OPERATIONS ($92,556) ($687,294) ($253,191) ($890,252)
DISCONTINUED OPERATIONS (67,789) 158,367 (67,789) 213,721
-------------------------------------- -------------- -------------- -------------- --------------
NET LOSS ($160,345) ($528,927) ($320,980) ($676,531)
Deficit, beginning of period (20,849,848) (17,214,932) (20,689,213) (17,067,328)
Deficit, end of period ($21,010,193) ($17,743,859) ($21,010,193) ($17,743,859)
-------------------------------------- -------------- -------------- -------------- --------------
NET LOSS FROM CONTINUING
OPERATIONS PER COMMON SHARE
Net loss per share ($0.01) ($0.17) ($0.03) ($0.22)
Weighted average common shares
outstanding (thousands) 7,982 4,052 7,982 4,052
FULLY DILUTED NET LOSS FROM
CONTINUING OPERATIONS 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
ENERGY POWER SYSTEMS LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(EXPRESSED IN CANADIAN DOLLARS)
----------------------------------
FOR THE NINE MONTH PERIOD FOR THE THREE MONTH PERIOD
ENDING MARCH 31 ENDING MARCH 31
2002 2001 2002 2001
------------ ------------ ------------ ------------
OPERATING ACTIVITIES
Net loss from continuing operations ($92,556) ($687,294) ($253,191) ($890,252)
Adjustments to reconcile net loss to
net cash provided by operating activities
Amortization of goodwill 195,943 195,943 65,314 65,314
Amortization of capital assets 288,556 300,648 81,248 118,192
(Gain) loss on sale of capital assets (7,703) - 551 (1,977)
Write down of marketable securities 83,181 - - -
Write down of inactive capital assets 231,251 - - -
Future income tax asset (749) - - -
------------------------------------------ ------------ ------------ ------------ ------------
697,923 (190,703) (106,078) (708,723)
Net change in non-cash working capital
Receivables 951,518 924,476 3,162,214 828,871
Inventories and work in progress (424,234) 612,861 437,964 (77,314)
Due from co-venturer 25,257 (80,563) 373,926 378,613
Prepaid expenses (36,928) (41,629) 1,265 (35,866)
Accounts payable & accrued liabilities (1,586,632) (1,359,849) (2,862,424) (627,767)
------------------------------------------ ------------ ------------ ------------ ------------
CASH (USED IN) PROVIDED BY CONTINUING
OPERATIONS (373,096) (135,407) 1,006,867 (242,186)
CASH (USED IN) PROVIDED BY
DISCONTINUED OPERATIONS (67,789) 158,367 (67,789) 213,721
------------------------------------------ ------------ ------------ ------------ ------------
CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES (440,885) 22,960 939,078 (28,465)
------------------------------------------ ------------ ------------ ------------ ------------
FINANCING ACTIVITIES
Advances (repayment) of bank
indebtedness 152,332 (99,787) 73,246 179,528
Repayment of long term debt, net (165,133) (209,552) (51,372) (72,209)
Payments from related parties, net - 79,803 - 812,968
Repayment to shareholders (884,099) (2,269,699) (235,584) (1,051,220)
Issue of preference shares - 250,000 - 250,000
Issue of common shares 9,596,471 800,000 3,617,860 -
------------------------------------------ ------------ ------------ ------------ ------------
CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 8,699,571 (1,449,235) 3,404,150 119,067
------------------------------------------ ------------ ------------ ------------ ------------
INVESTING ACTIVITIES
Purchase of capital assets (96,253) (197,388) (7,263) (56,376)
Proceeds from sale of capital assets 21,700 - 9,700 -
Recovery of other assets - 3,279,861 - 1,650,399
Purchase of oil and gas interests (2,680,215) (1,196,470) (1,671,076) (1,196,470)
Marketable securities (180,744) - 45,144 -
------------------------------------------ ------------ ------------ ------------ ------------
CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (2,935,512) 1,886,003 (1,623,495) 397,553
------------------------------------------ ------------ ------------ ------------ ------------
NET INCREASE IN CASH 5,323,174 459,728 2,719,733 488,155
Cash, beginning of period 1,242,621 1,771,047 3,846,062 1,742,620
------------------------------------------ ------------ ------------ ------------ ------------
CASH, END OF PERIOD $ 6,565,795 $ 2,230,775 $ 6,565,795 $ 2,230,775
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The accompanying notes to the financial statements are an integral part of these
financial statements
ENERGY POWER SYSTEMS LIMITED
CONSOLIDATED STATEMENT OF SEGMENTED INFORMATION
(UNAUDITED) (EXPRESSED IN CANADIAN DOLLARS)
FOR THE NINE MONTHS ENDING MARCH 31, 2002
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Engineering
& Offshore Oil & Gas Corporate Total
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Revenue 16,268,041 401,605 - 16,669,646
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EBITDA 701,533 149,732 (127,719) 723,546
Amortization & depletion 441,437 43,062 - 484,499
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Segment operating margin 260,096 106,670 (127,719) 239,047
Write down of inactive capital assets 231,251 - - 231,251
Interest and income taxes 95,916 - 4,436 100,352
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Net earnings from continuing operations (67,071) 106,670 (132,155) (92,556)
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Capital assets and Oil & Gas Interests 2,721,386 4,654,646 - 7,376,032
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FOR THE NINE MONTHS ENDING MARCH 31, 2001
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Engineering
& Offshore Oil & Gas Corporate Total
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Revenue 15,083,201 121,876 - 15,205,077
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EBITDA (100,367) 82,665 (35,060) (52,762)
Amortization 473,814 22,777 - 496,591
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Segment operating margin (574,181) 59,888 (35,060) (549,353)
Interest and income taxes 133,401 - 4,540 137,941
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Net earnings from continuing operations (707,582) 59,888 (39,600) (687,294)
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Capital assets 4,878,794 1,173,693 - 6,052,487
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FOR THE THREE MONTHS ENDING MARCH, 2002
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Engineering
and Offshore Oil & Gas Corporate Total
------------- --------- ---------- -----------
Revenue 2,168,316 149,898 - 2,318,214
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EBITDA (136,120) 54,883 (87) (81,324)
Amortization & depletion 132,208 14,354 - 146,562
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Segment operating margin (268,328) 40,529 (87) (227,886)
Write down of inactive capital assets - - - -
------------- --------- ---------- -----------
Interest and income taxes 25,154 - 151 25,305
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Net earnings from continuing operations (293,482) 40,529 (238) (253,191)
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FOR THE THREE MONTHS ENDING MARCH 31, 2001
------------------------------------------
Engineering
and Offshore Oil & Gas Corporate Total
------------- --------- ---------- -----------
Revenue 2,294,211 121,876 - 2,416,087
------------- --------- ---------- -----------
EBITDA (552,952) 82,665 (130,693) (600,980)
Amortization 160,729 22,777 - 183,506
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Segment operating margin (713,681) 59,888 (130,693) (784,486)
Interest and income taxes 42,331 - 3,547 45,878
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Net earnings from continuing operations (756,012) - (134,240) (890,252)
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The accompanying notes to the financial statements are an integral part of these
financial statements
ENERGY POWER SYSTEMS LIMITED
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE NINE MONTH PERIOD ENDING MARCH 31, 2002 (CANADIAN DOLLARS)
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1. BASIS OF PRESENTATION
These unaudited interim consolidated financial statements have been prepared
following the same accounting policies and methods of computation as the
consolidated financial statements for the year ended June 30, 2001. These
interim financial statements should be read in conjunction with the Company's
consolidated financial statements together with notes for the year ended June
30, 2001.
2. SEGMENTED INFORMATION
The Company's operations are separated into two distinct segments; the
engineering and offshore division, consisting of the operations of M&M
Engineering Limited, a wholly owned subsidiary, and the oil and gas division
performing oil and gas exploration and production. M&M is an engineering and
construction company, performing installation, erection, welding, maintenance
and ancillary fabrication services.
3. DISCONTINUED OPERATIONS
Effective June 30, 2001 the Company adopted a formal plan to dispose of its
power segment of business (the "Power Division"). The Company intends to
exercise its option under the terms of the Revised VBC Agreement to cause VBC to
purchase the Company's equity shares in the Konaseema EPS Oakwell Power Limited.
4. SUBSEQUENT EVENTS
(a) Subsequent to the period ending March 31, 2002 70,000 warrants expired.
(b) Subsequent to the period ending March 31, 2002 48,500 options were
exercised at a price of $6.30 per share.
5. SHARE CAPITAL
(a) Authorized and Issued:
Authorized:
-----------
Unlimited number of Common Shares, without par value
Unlimited number of Class B Special 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
Balance, as at June 30, 2001. . . . . . . . . . . 6,273,419 $ 31,007,289
Issued pursuant to exercise of options. . . . . . 229,000 621,000
Issued pursuant to private placement. . . . . . . 1,107,726 6,735,471
Issued pursuant to conversion of preferred shares 960,000 1,200,000
Issued pursuant to exercise of warrants . . . . . 1,960,000 2,240,000
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Balance, as at March 31, 2002 . . . . . . . . . . 10,530,145 $ 41,803,760
Preference shares
Balance, as at June 30, 2001. . . . . . . . . . . 1,200,000 $ 1,200,000
Converted into common shares. . . . . . . . . . . (1,200,000) (1,200,000)
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Balance, as at March 31, 2002 . . . . . . . . . . - -
Total stated capital as at March 31, 2002 . . . . - $ 41,803,760
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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 96,000
$0.52 December 28, 2002 - 1,000,000
$0.80 January 16, 2003 - 500,000
US$4.45 May 9, 2002 35,000 -
US$4.45 May 16, 2002 35,000 -
US$ 4.45 March 13, 2003 40,000 -
206,000 1,818,917
(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 - 145,000
$4.00 June 14, 2005 Directors and consultants 21,000 -
$6.30 January 8, 2006 Directors and employees 322,500 -
343,500 145,000