conmen alert_>Subj: Energy Power- Major News and The Wild Ride Continues- Hercules/Astralis
Date: 11/14/01 12:30:09 PM Eastern Standard Time
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[Image]November 14, 2001[Image] [Image]Volume IV, Issue 99[Image]
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To OTC Journal Members:
[Image]Astralis/Hercules Development (OTC BB: ASTR)[Image]
For those who didn't catch the news, yesterday Astralis/Hercules Development
announced the completion of the merger. Therefore, Hercules Development Group has
ceased to exist, and the stock symbol has now changed from HDVG to ASTR or
ASTR.OB if you get your quotes from Yahoo!. If you are a shareholder you now own
shares of Astralis, ticker symbol ASTR.
The completion of the merger eliminates one of the risk factors associated with
the stock, and opens the door for the company to move forward. More in future
editions.
[Image] Energy Power Systems (OTC BB: EYPSF) Releases Audited Year End Financial
Results- Roller Coaster Ride Continues
[Image] As we anticipated in our weekend edition, Energy Power Systems hit our
target price on Monday, and then continued higher to challenge the $6
level on Tuesday, trading to a high of $5.99.
Volume in this stock has been far beyond our expectations. Price appreciation has
kept pace with corporate developments. The stock has risen to higher levels along
with the company announcing new drilling and exploration programs.
The prolific volume in this stock has attracted the attention of institutional
short sellers, and yesterday at about 2:00 PM Eastern Time, short sellers
launched a cyber smear campaign on the company, and initiated one of the most
flawlessly executed bear raids on a stock we have ever seen. Congratulations to
the short sellers, it was impressive to watch.
There was a news release on Energy Power yesterday at about 2:00 announcing an
obscure web site had published a report bashing the stock with rumor and
innuendo, but no facts. Within seconds of the release the stock started dropping
like a rock. Short sellers savagely attacked the stock, providing the appearance
that the market was taking this smear campaign seriously. This is a psychological
game that these people have mastered.
The press release was published illegally, and the wire services have since
removed it. Later in the day, Energy Power released its 2001 year end audited
financial results (end of June).
As measured from the end of June 2000 to the end of June 2001, Energy Power's
revenues grew from $18.9 million(cdn) to $19.2 million(cdn), in line with
expectations. However, EBITDA profits surged from a loss of $.2 million (cdn) to
a gain of $.3 million (cdn).
The company also took $1.5 million (cdn) in non-cash write downs of assets,
thereby giving the appearance the company lost money. In fact, the company earned
about $.5 (cdn) million in positive cash flow for the year. The turn around was
attributed to the first revenues from the newly formed Oil and Gas Division,
which began operations on February 1st 2001.
September quarterly numbers are expected to be released later this week, and we
are anticipating further evidence of improving cash flows.
[Image]What To Do From Here[Image]
Now that the 2001 audit has been released the company will continue to pursue its
application for listing on the American Stock Exchange. If successful, we believe
the stock will trade in a more orderly fashion.
The stock has a history of trading up in exciting high volume spikes as depicted
in the chart. Tuesday's high volume run to $5.99 was the fifth surge of this kind
since February, and we fully expect this pattern to continue. Each surge has
taken the stock to a new high.
We believe this pull back represents an outstanding buying opportunity
compliments of the short sellers. For members who don't own the stock, or took
capital off the table early in the week, this is a welcome and unexpected chance
to get back on this speeding train.
The June financial results were a snapshot of past performance, but stocks
generally trade on perceptions of the future. Energy Power is currently drilling
on new sites in Ontario and Alberta. New contracts for the Engineering and
Offshore Division could materialize out of the multi billion dollar White Rose
project.
We expect financial performance to improve much more dramatically in the first
half of calendar 2002 as cash flow impact from drilling programs and existing
producing wells is reflected in the Income Statement. A major discovery is
always possible, and represents the dramatic upside in owning the stock. In the
meantime, the consistent cash flow from the 30 year old Engineering and Offshore
Division provides financial stability and minimizes your downside risk.
We also expect the Cyber Smear campaign to continue. It is estimated the public
float on Energy Power is about 4 million shares. With the stock trading over 1.5
million shares everyday, the entire float is changing hands every two or three
days, which is impossible. Short Sellers were extremely aggressive yesterday, and
therefore have a strong vested interest in driving the price down to frighten you
into selling them your shares at much lower levels. However, some day they will
have to buy these shares back, which could drive the price higher.
If the cyber smear campaign concerns you, sell the stock and get out. You don't
have the stomach for the dirty tricks in this end of the market, and this is not
for you.
However, if you look at support levels for the stock as depicted in our chart,
the stock is now a buy, and should be sold on high volume surges to the upside.
This story continues to get more interesting all the time. The price is like the
weather in Montana, if you don't like it, wait a day. It's going to change.
Here is the complete text of the news release for your review:
Tuesday November 13, 8:34 pm Eastern Time
Press Release
SOURCE: Energy Power Systems Limited
Energy Power Systems Limited - Announcement
TORONTO--(BUSINESS WIRE)--Nov. 13, 2001--Energy Power Systems Limited (OTCBB:
EYPSF - news; www.epsx.com; ``Energy Power'' or the ``Company'') announces that
it has issued audited consolidated financial statements for the year ended June
30, 2001. These statements reflect the following activities of Energy Power and
it's subsidiaries operating as an Engineering & Offshore Division and an Oil &
Gas Division:
* consolidated revenues of $19.2 million for the year ended June 30, 2001
($18.9 million -2000);
* consolidated gross profits of $2.5 million for the year ended June 30, 2001
($3.8 - 2000);
* consolidated EBITDA of $0.2 million for the year ended June 30, 2001 ($0.3
million negative EBITDA -2000);
* consolidated loss from continuing operations of $1 million for the year
ended June 30, 2001. Profit from continuing operations would have been $0.5
million before a non-cash charge of $1.5 million. ($1.4 million - 2000);
* and consolidated basic and fully diluted loss per share from continuing
operations of $0.23 ($0.46 per share - 2000).
Energy Power's consolidated revenues of $19.2 million for the year ending June
30, 2001 increased by 1% from $18.9 million reported during the same period the
previous year. Increased activity from the Company's Engineering and Offshore
Division and new sources of revenue from the Company's Oil and Gas Division,
which commenced February 1, 2001, contributed to this revenue growth.
Consolidated EBITDA of $0.2 million for the twelve-month period ending June 30,
2001 was substantially higher against a consolidated EBITDA loss of $0.3 million
reported for the previous twelve month period, a swing of $0.5 million. The
consolidated EBITDA increase was largely due to the benefits of a corporate
restructuring initiated at the end of fiscal 2000 as well as the additional cash
flow from the introduction of the Oil and Gas Division. ``It was our corporate
objective at the end of last year to turn the Company cash flow positive this
fiscal year,'' stated Scott Hargreaves CFO, ``to achieve this we eliminated two
non-core subsidiaries and created the Oil & Gas Division. We are most pleased
with the positive trending improvement in cash flow as EBITDA increased $0.5
million for the twelve month period ending June 30, 2001.''
Consolidated loss from continuing operations for the twelve month period ending
June 30, 2001 was $1.0 million, 29% less than the loss from continuing
operations reported for the previous twelve month period. Profit from continuing
operations would have been $0.5 million before a non-cash charge of $1.5
million.
The Engineering and Offshore Division is currently working on a backlog of
contracts to carry over the next fiscal year and beyond. Further development of
Atlantic Canada's offshore infrastructure could feed further growth for the
Engineering and Offshore Division. In addition the Oil and Gas Division is
adding positive cash flow to fund corporate operations and future development
and growth strategies. At present the Company is expanding its exploration,
drilling and development program to increase oil & gas reserves and production.
About Energy Power Systems Limited
Energy Power is an integrated energy source and service company operating as an
Oil & Gas Division and an Engineering and Offshore Division.
The Company had approximately 7.3 million shares of common stock issued and
outstanding at the week ending November 10, 2001.
For further information contact:
Scott T. Hargreaves, CA, CFA
Chief Financial Officer
Telephone: (416) 861-1484
Certain of the statements contained in this news release are forward-looking
statements. While these statements reflect the Corporation's current beliefs,
they are subject to uncertainties and risks that could cause actual results to
differ materially. These factors include, but are not limited to, the demand for
the Corporation's products and services, economic and competitive conditions,
access to debt or equity capital on favorable terms, and other risks detailed in
the Corporation's Form 20-F and Annual Report.
--------------------------------------------------------------------------------
Contact:
Energy Power Systems Limited
Scott T. Hargreaves, CA, CFA, 416/861-1484
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