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 September
2006
Commission
File Number 0-29586
ENERNORTH
INDUSTRIES INC.
1
King
Street West, Suite 1502, Toronto, Ontario, M5H 1A1, 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 if the registrant is submitting the Form 6-K in paper as permitted
by Regulation S-T Rule 101(b)(7)
Yes
No
X
Note:
Regulation
S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if
submitted to furnish a report or other document that the registrant foreign
private issuer must furnish and make public under the laws of the jurisdiction
in which the registrant is incorporated, domiciled or legally organized (the
registrant’s “home country”), or under the rules of the home country exchange on
which the registrant’s securities are traded, as long as the report or other
document is not a press release, is not required to be and has not been
distributed to the registrant’s security holders, and, if discussing a material
event, has already been the subject of a Form 6-K submission or other Commission
filing on EDGAR.
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.
Date:
September 11, 2006 By:____”Sandra
J. Hall”____ ______
Sandra
J.
Hall,
President,
Secretary & Director
FORM
51-102F3
MATERIAL
CHANGE REPORT
| Item
1. |
Name
and Address of Company
|
EnerNorth
Industries Inc. ("EnerNorth")
1
King
Street West, Suite 1502
Toronto,
Ontario
M5H
1A1
| Item
2. |
Date
of Material Change
|
September
6, 2006 and September 8, 2006.
Press
release was issued by EnerNorth on September 8, 2006 and disseminated by
CCNMatthews via North American Disclosure wire service.
| Item
4. |
Summary
of Material Change
|
EnerNorth
announced that it has entered into an agreement with 1211115 Alberta Ltd.,
("1211115") and the shareholders of 1211115 to acquire all the issued and
outstanding shares of 1211115, a private company that is engaged in oil and
gas
production. EnerNorth has agreed to issue to the shareholders of 1211115
an
aggregate of 1,850,001 units of EnerNorth at CDN $1.25 per unit, and to issue
a
secured debenture to the debt holders of 1211115 in satisfaction of CDN
$237,500.00 of debt in 1211115 (the “Proposed Transaction”).
The
Proposed Transaction is subject to regulatory approval, including approval
from
the American Stock Exchange.
EnerNorth
also announced that is has paid $1.5 million to the Superior Court of Justice,
for the Province of Ontario (the “Court”), as required to be paid on or before
September 8, 2006 in order to be granted a stay of the decision of the Court
of
Appeal of Ontario to recognize and enforce a Judgment in favour of Oakwell
Engineering Limited (“Oakwell”) pending the Supreme Court of Canada's decision
on EnerNorth’s application for leave to appeal and, should leave be
granted, the appeal itself. EnerNorth further announced that it has served
its
leave application including its arguments, affidavits and supporting documents
it is in the process of being filed with the Supreme Court of
Canada.
| Item
5. |
Full
Description of Material Change
|
EnerNorth
announced that it has entered into an agreement with 1211115 and the
shareholders of 1211115 to acquire all the issued and outstanding shares of
1211115. EnerNorth has agreed to issue to the shareholders of 1211115 an
aggregate of 1,850,001 units of EnerNorth ("Units"), each Unit comprised of
one
common share with
an
attributed price of CDN $1.25 and one common share purchase warrant ("Warrant"),
each Warrant entitling the holder to purchase one common share of EnerNorth
at a
price of CDN $1.40 for a period of three years from the date of
issuance.
EnerNorth also agreed to
issue a
secured debenture to the debt holders of 1211115 in satisfaction of CDN
$237,500.00 of debt in 1211115.
Under
the
terms of the agreement, 1211115 advanced CDN $650,000 to EnerNorth (the
"Advance") upon execution of the agreement, which amount is immediately
repayable to 1211115 in the event the Proposed Transaction is not completed
by
October 2, 2006. If not repaid as required, the Advance is converted to a demand
promissory note, the repayment of which is secured by the unencumbered assets
of
EnerNorth. Furthermore in the event that the Proposed Transaction terminates
at
no fault of 1211115 or the shareholders of 1211115 then 650,000 compensation
warrants, each
compensation warrant entitling the holder to purchase one common share of
EnerNorth at a price of CDN $1.40 for a period of three years from the date
of
issuance, will
be
issued to the shareholders of 1211115.
Two
directors of EnerNorth are also minority shareholders of 1211115, and as a
result each is a related party (as defined in Ontario Securities Commission
Rule 61-501 "Issuer Bids, Insider Bids, Business Combinations and Related
Party Transactions"), and the acquisition of 1211115 is a related party
transaction. EnerNorth's Board formed an independent committee of disinterested
directors to the transaction to consider whether the transaction is in the
best
interests of EnerNorth. The independent committee has concluded, on review
of
the Proposed Transaction, an independent engineering report on the reserves
of
1211115, and a fairness opinion from an independent investment advisor, that
EnerNorth should complete the Proposed Transaction as it is in the best interest
of EnerNorth and improves its financial condition.
The
Proposed Transaction is subject to the approval of necessary regulatory
authorities, including the American Stock Exchange.
EnerNorth,
is experiencing serious financial difficulty as a result of the recent Ontario
Court of Appeal decision imposing a condition that EnerNorth pay $1.5 million
into court on or before September 8, 2006 in granting EnerNorth's stay of
execution of the Oakwell claim pending the Supreme Court of Canada's
decision on EnerNorth’s application for leave to appeal and, should leave
be granted, the appeal itself. EnerNorth has a significant a working
capital deficiency due to the Oakwell Claim and the current obligation to pay
$1.5 million in cash into court to stay the Oakwell Claim. EnerNorth considered
the transaction with 1211115 and determined that the transaction is in the
best
interests of EnerNorth. The transaction improves the working capital deficiency
of EnerNorth considerably, increases its oil and gas reserve assets and the
net
cash flow from the producing oil and gas assets will be applied to current
and
future obligations of EnerNorth.
The
Board
of EnerNorth formed the independent committee to review and approve the Proposed
Transaction. There is no prior valuation of EnerNorth relating to this
transaction. The transaction would not be subject to the formal valuation
requirements of Ontario Securities Commission Rule 61-501 by virtue of
subsection 5.5(8) and is exempt from minority shareholder approval requirements
by virtue of subsection 5.7(6), as at the time the transaction was entered
into
with 1211115 and the shareholders of 1211115, EnerNorth was in serious financial
difficulty, the transaction was designed to improve the financial position
of
EnerNorth by providing necessary cash, increasing its oil and gas assets and
increasing its cash flow, and EnerNorth was not subject to bankruptcy or
insolvency processes. EnerNorth formed an independent committee of 3 directors,
who have determined that EnerNorth was in serious financial difficulty and
that
the transaction was designed to improve its financial position. The independent
committee also concluded that the terms of the transaction are reasonable in
the
circumstances for EnerNorth. As a result, the independent committee has
unanimously approved the acquisition of 1211115 on the proposed terms.
The
Proposed Transaction was disclosed in a press release dated September 8, 2006.
Due to the sudden financial difficulty of EnerNorth, and the urgency of the
matters including the need to obtain the cash required to make the $1.5 million
cash payment into Court, disburse it according to approved procedures, finalize
and submit EnerNorth’s leave application as well as arguments, affidavits and
supporting documents with the Supreme Court of Canada there was limited time
available to negotiate and effect the Proposed Transaction. In the event that
regulatory and all other required approvals are obtained prior to October 2,
2006, then EnerNorth will close the Proposed Transaction according to the terms
of its agreement. In such an event, this Material Change Report may not have
been filed 21 days before the actual closing date.
| Item
6. |
Reliance
on subsection 7.1(2) or (3) of National Instrument
51-102
|
Not
Applicable.
| Item
7. |
Omitted
Information
|
No
information has been omitted from this Material Change Report.
The
following senior officer of EnerNorth is knowledgeable about the material change
and the Report and may be contacted by the Commission as follows:
Sandra
J.
Hall
President
and Secretary
EnerNorth
Industries Inc.
Telephone: (416)
861-1484
Facsimile: (416)
861-9623
DATED
September 11, 2006.
| |
|
ENERNORTH
INDUSTRIES INC.
“Sandra
J. Hall”
Per:
|
| |
|
|