Is Energy Power Systems the Enron of the OTC?
January 30, 2002
Is Energy Power Systems the Enron of the OTC?
“The company is the process of evolving its business model, patterning itself after vertically integrated Enron (NYSE: ENE).”
OTC Journal March 15, 2001
otcjournal.com
Stocklemon knows of an oil and gas company which: (a) has dealings with companies controlled by insiders; (b) is not understood by the same analysts who are promoting and selling the stock to their clients; and (c) is making their stock price look better with unfounded forward looking statements. Sound like Enron? Close, this company is called Energy Power Systems (OTCBB:EYPSF).
Do these Deals Have Enron Written All Over Them?
“Effective February 1, 2001 the Company and Rally Energy Corp., (“Rally”) entered into a Purchase and Sale Agreement whereby the Company acquired from Rally, Rally’s interest in the Sibbald Property in Alberta and minor interests Rally held in properties in Ontario. The purchase and sale could be construed as a related party transaction as Ms. Hall, a Director, Secretary and Vice President Corporate Affairs of the Company was at the time the Purchase and Sale Agreement was entered into also a director and officer of Rally Mr. Cassina, President, CEO and a Director of the Company was an insider of Rally up to January 2001 by virtue of Mr. Cassina controlling directly or indirectly approximately 14% of the issued and outstanding shares of Rally.”
freeedgar.com
500004&Extension=.tst&PathFlag=0&TextFileSize=62051&SFType=&SDFiled=&DateFiled=11/19/2001&
SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=6-K&CompanyName=
ENERGY+POWER+SYSTEMS+LTD
How Bout’ Another One For The Enron Files
“Effective March 1, 2001 the Company and Oil Springs Energy Corp. (“Oil Springs”) entered into a Purchase and Sale Agreement whereby the Company acquired an average 20% working interest in three producing gas properties located within Alberta in the areas known as Bigstone and Kaybob. Mr. Cassina is also a Director of Oil Springs. Mr. Cassina disclosed his respective positions to each board and abstained from voting on the resolutions for both the Company and Oil Springs. The purchase and sale was negotiated at arms length and the purchase price was determined pursuant to an independent evaluation assessed by a geological consultant to the Company.”
freeedgar.com
500004&Extension=.tst&PathFlag=0&TextFileSize=62051&SFType=&SDFiled=&DateFiled=11/19/2001&
SourcePage=FilingsResults&UseFrame=1&OEMSource=&FormType=6-K&CompanyName=ENERGY+POWER+SYSTEMS+LTD
What Happens When the Analysts Don’t Know the Company
It was only until after Enron collapsed that everyone came to realize that the analysts did not understand the business they were covering. It appears that we have a similar situation with EYPSF. The largest covering analyst of the stock is The OTC Journal. In a recent newsletter, which discussed the business of Energy Power Systems, The OTC Journal writes, “Test well drilling was announced by the company on January 15th, and it took the market a few days to wake up to this development.” Did The OTC Journal not read the full release? Are they not aware of the small position that the company has in the well? Furthermore, does The OTC Journal even know anything about oil and gas?
Much like those investment banking houses that put buy recommendations on Enron with the hope of attracting some banking business, Stocklemon believes that The OTC Journal has put out an uninformed analysis on EYPSF simply to justify the 125,000 free trading shares given to them in order to promote the stock.
If history proves right… The OTC Journal’s promotion alone will be the kiss of death for EYPSF, as exposed in the November 15, 2001 Stocklemon article on EYPSF. Please see “previous lemons”. It appears that the only statement made by The OTC Journal in connection with EYPSF that has any merit whatsoever is their initial comparison to Enron which was made back in March of 2001.
The Truth Behind The New Drill Site
The new drilling site in Mearon/Ladyfern that was announced by the company on the 15th of January is no immediate answer to revenues. Actually, Energy Power Systems does not even have the lease on that drilling land. The lease is controlled by two small Canadian oil companies, that are both public. Raven Energy, whose name is on the oil lease, eub.gov.ab.ca is traded under the symbols RVL.V on the Vancouver Exchange. The other is Firstland Oil, which trades as FLD.V on the Vancouver Exchange as well. If you want to invest in the project, these are the stocks to buy…..not EYPSF. These companies own the majority of the project, yet there stocks have not moved in the past month.
The commencement of drilling was such a non-event that even the majority owners of the well did not release a report on that day. If the majority owner did not find it important, than why did just a 12.5% player find it necessary to put out such a lengthy release on a test well? HYPE HYPE HYPE. As a matter of fact, the only mention of the well by Firstland was,
“FIRSTLAND and its partners have recently spudded and are currently drilling a 2850 meter new pool wildcat well in the Mearon (Ladyfern) area of northwest Alberta. FIRSTLAND has farmed out part of its interest to partners and will participate at completion point for a 35% working interest. The well is expected to reach total depth by mid-February.”
biz.yahoo.com
Compare that to the release issued by EYPSF on January 15 that made it seem as if this drill site was something that was going to make everyone rich. Just another example of forward looking statements that do not guarantee future revenue for the company….shades of Enron.
biz.yahoo.com
Let’s See Who Is Behind This
Just in case you have not figured this out by now, the directors of EYPSF are no strangers to public companies and the one thing they have showed a history of is how to separate an investor from his/her money. Below is a brief biography on the players involved in this alleged scheme.
EYPSF Board of Directors
Milton Klyman
Ian S. Davey
James C. Cassina
Sandra J. Hall
Ramesh K. Naroola
Past & Present Involvement
Milton Klyman
Director- Energy Power Systems Limited
Director- Blake River Explorations Ltd
Director- Bonanza Red Lake Explorations Inc
Secretary/Treasurer -Curran Bay Resource Ltd
Director- Destorbelle Mines Ltd
Director- Founder Resources Inc - (Van: FOD) Sep 27 Last trade $0.10
Secretary/Treasurer- Grand Oakes Resources Corporation
President- Harte Resources Corporation
Director- Agnico-Eagle Mines Ltd
Director- Sudbury Contact Mines Ltd
Secretary/Treasurer- United Pacific Capital Resources Corporation
Secretary Treasurer- Western Troy Capital Resources Inc
Secretary- Westhope Capital Corporation
Director- Windy Mountain Explorations Ltd
Ian S. Davey
Director- Energy Power Systems Limited
Director- First Strike Diamonds Inc. Van: (YFI- $0.010)
James C. Cassina
Director- Energy Power Systems Limited
Director- Investorlinks.Com Inc now API Electronics Group Inc. (Otcbb: APIEF- $1.75)
President- Bonanza Red Lake Explorations Inc.
(Name change 05/21/2001- OTCBB: EGNKF Eugenic Corp.) No longer trades
Director- Oil Springs Energy Corporation (Van: OSG- $0.02 )
Director- Opus Minerals Inc. (Cdn: OPUS, Otcbb: OPMNF)
Sandra J. Hall
Director- Energy Power Systems Limited
Director- Investorlinks.Com Inc now API Electronics Group Inc. (Otcbb: APIEF- $1.75) Controller- First Strike Diamonds Inc. (Van: YFI- $.01)
Director- Opus Minerals Inc. (Cdn: OPUS, Otcbb: OPMNF)
Director- Rally Energy Corp (Van: YNY: $0.45)
Elizabeth J Kirkwood
CEO- Cogent Capital Corporation
President- First Strike Diamonds Inc. Van: (YFI- $0.010)
Director- Intrepid Minerals Corporation
Director - Opus Minerals Inc. (Cdn: OPUS, Otcbb: OPMNF)
Director- Oil Springs Energy Corporation (Van: OSG- $0.02 )
President- HuCamp Mines Limited (Van: YHU- $0.35),
Even More Questionable Business Doings
According to 20-F all the directors and members of senior management ONLY hold 333,491 (4%) common shares. (Page 55)
sedar.com
Data%5CEPS%5CSEDAR%5CAIF%5C01dec28.pdf
No mention in the filings about who is affiliated with the companies that own preferred stock, or how these companies are involved with EYPSF.
Stocklemon hypothesizes that these are the insider’s foreign corporations, and they are using them to hold the stock until they are ready to sell.
Proof: (bottom of page 104 of 267 in 20-F)
“(vii) On February 2, 2001 the Company issued 1,200,000 Class A Preference Shares, Series 2 from treasury TO ARMS LENGTH PARTIES. Each Series 2 share carries a 5% cumulative preferred annual dividend….”
1,200,000 Series 2 shares were issued in Feb. 2001. Now only 400,000 remain. Don’t know when the first 400,000 were exercised.
Conclusion
Energy Power Systems is a shrewd stock promotion that has no foundation. Enron has taught us many lessons, one of them being do not invest in that we do not understand, regardless of the stock price. Stocklemon is relieved that no pension plans or mutual funds are invested in this stock and we believe that no individual investor should participate in this stock. Always speak to a registered investment advisor before buying or selling a security.
Disclaimer
Stocklemon.com does not guarantee in any way that it is providing all of the information that may be available. We recommend that you do your own due diligence before buying or selling any security.
At any times the principals of Stocklemon.com might hold a position in any of the securities profiled on the site. Stocklemon.com will not report when a position is initiated or covered. Each investor must make that decision based on his/her judgment of the market.
Copyright © 2002 Stocklemon.com. All rights reserved |
