Tuesday, November 30

Roswell agreement: two new reasons for termination

Ok, this is really overkill, but anyway, AEHITruth has a nice analysis of AEHI's oral $1M obligation to Gillispie and the two covenants in the Roswell put agreement that are breached by this obligation. So in total we now have this and the new breaches for a 3x overkill in automatic and permanent termination of the agreement.

AEHI NRC filing: expected fourth quarter of 2008

Isn't it amazing how some things just always seem to take a little longer than expected? Like AEHI's NRC filing originally expected for 2008, now for 2011.

And just one tiny issue: if local approvals go according to plan they'd still need to raise $100M for the initial phase. And as I've outlined here the Roswell agreement doesn't provide even close to that amount, is only available after shares are registered and has already automatically and permanently terminated due to AEHI's failure to file their SEC reports on time.

A quick look at written testimony

The last couple of written testimonies for the rezoning decision have come in last week and are now available at the P&Z website.

AEHI has repeatedly claimed that there are only very few opponents to this project. However the testimonies speak a different language. There is definitely major concern not only with the project itself but also with the procedures of public discourse. It doesn't seem clear at all that this will get approved.

I'd recommend to read this and this.

New seismic fault discovered in Idaho, close to Payette County

Reuters reports that "Idaho scientists find new seismic fault in Rockies".

"Scientists at Idaho State University have mapped a previously unknown and active seismic fault in the northern Rockies capable of unleashing an earthquake with a magnitude as high as 7.5."

"Glenn Thackray, chairman of the university's geosciences department, said the 40-mile-long fracture in the Earth's crust at the base of the Sawtooth Mountains near the tiny mountain town of Stanley is cause for some concern.

'There's a chance in the next few decades there will be an earthquake on this fault, and if it does happen it will be a rather large earthquake,' he said.

A 7.5 tremor is considered a major earthquake, capable of widespread heavy damage.

Such a temblor would be most keenly felt at an epicenter near Stanley, home to about 100 year-round residents, with moderate shaking expected to extend from the resort community of Sun Valley to the capital city of Boise, Thackray said."

Something that should be considered in the siting of a new nuclear power plan I suppose...

Monday, November 29

AEHI astroturfing on Yahoo message board

As is often the case with highly promoted companies it's next to impossible to have a reasonable conversion on Yahoo's AEHI message board because an ever changing cast of characters will try to undermine every critical posting using personal attacks and other manipulative behavior.

This led me early to the hypothesis that either AEHI's employees or paid consultants manipulate the sentiment on Yahoo's board. Because of a strange choice of words it's possible to prove beyond any reasonable doubt that this hypothesis is actually correct.

Let me demonstrate: just Google the term "reputations have been vetted". As one would expect you get almost no hits. This is just a really odd part of a sentence. Yet what you do find among the hits is this post from 9/10/10 by t_hadfield posing as independent investor.

Later on 10/5/10 the same expression was used on AEHI's blog to defend the company against the StreetSweeper's criticism. These are the only two original occurrences of the phrase on the internet according to Google.

Sunday, November 28

Friday, November 26

Don Gillispie Doesn't Remember Browns Ferry

You might remember the curious fact that Gillispie has this to say in his resume:

"As part of a three-man executive team, Gillispie assisted in overseeing the 2007 reopening of Browns Ferry Nuclear Plant unit three in Alabama before moving to Idaho to be near AEHI's first nuclear project."

However the unit actually restarted was unit 1. It seems strange that Gillispie would not notice this mistake if he had actually worked as part of the executive team on this project.

So I had a call with Masoud Bajestani at the Tennessee Valley Authority, the guy in charge of the reopening of Browns Ferry unit 1. I asked whether Gillispie had worked on the project in an executive capacity. His words:

"Gillispie worked for one week on an independent assessment."

When asked for the results of Gillispie's work Mr Bajestani said he didn't really know if anything came of it.

So at this point we know that the claimed MBA is a lie and that the work on Browns Ferry was enormously misrepresented.

Roswell equity line: already terminated!

On Wednesday AEHI filed form 8-k with the SEC which outlines the terms of the equity line they arranged with Roswell on 11/22/10. I've had the time to dig a little deeper into this document.

It's an interesting agreement which I encourage you to read. I'll stay at the high level and just make a couple of points:

  1. AEHI needs to register the underlying shares with the SEC. Whether that will succeed is a big question given the likely focus the SEC has on the company currently. If the registration statement is not approved within one year the agreement terminates.
  2. Once the registration statement is effective AEHI can put a maximum of 1,500,000 shares every four weeks to Roswell for a period of three years, for a total of 58.5M shares or $37.4M at current market prices.
  3. Roswell will sell these shares into the market during a 15 business day period. They'll sell on average 100k shares per day if AEHI wants to take advantage of the entire 58.5M capacity of the agreement. I would estimate the real volume of the stock to be lower than 400k per day. So at 100k additional shares we're talking an 25% increase of selling pressure. That means much lower prices!
  4. AEHI can set a minimum price for the stock it sells to Roswell. That limits the volume that can be sold during a put. In the calculation of that volume limit (fake?) block trades >20k are not included!
  5. The agreement terminates if a SEC enforcement action occurs, if company or director or executives pursue actions that result in a civil judgement or a criminal conviction for fraud or misrepresentation or a felony against the company or its officers !!
In summary there are very substantial doubts whether the company will be able to pay its planned obligations with this equity line.

But there's one more very interesting thing: 

AEHI's right to put shares automatically and permanently terminates if any SEC filing since 12/31/2009 was not made on time.

Lets look at the 8-k filing for the change in articles of incorporations which became effective on 2/16/2010. It was filed on 2/24/2010, or 6 business days after the change. According to the SEC's form 8-k instructions the filing was due within 4 business days. Therefore the filing was two days late.

That means that AEHI's Roswell equity line has already automatically and permanently terminated!

I'll notify AEHI by email and lets see if they announce this material event within 4 business days on form 8-k! 

Updated attachments for AEHI testimony

It turns out that some readers could not download and unzip the attachments to the written testimony on Windows machines. I've zipped the file again on a Windows machine and it now unzips on both Windows XP and OS X.

Thursday, November 25

Written Testimony for Payette Zoning Commission

On 12/2 the Payette County planning and zoning commission will have its first public hearing. They have asked for written testimony until this Friday 11/26. AEHI has asked their readers on Facebook to provide testimony to the commission. I've willingly obliged.

AEHI's application and written testimony received so far are available on the internet. I hope that my submission will appear there soon, too. Until then here's a pre-release of the document. The internet can be a dynamic place so I created an archive of all the supporting material. You can find it here.

Roswell funding: AEHI was "about to sign" on 11/1/10

You'll remember the 11/1/10 announcement:

"AEHI Signs $150 Million Funding Commitment with Institutional Investor Roswell Capital Partners to Fund Nuclear Power Plant Site

BOISE, Idaho, November 1, 2010 - Alternate Energy Holdings, Inc. (OTCQB: AEHI,
www.aehipower.com/), announced today the signing of a $150M Equity Funding Facility with Alpharetta, Georgia based Roswell Capital Partners, which is designed to fund the initial phase of a nuclear power plant project in Payette County, Idaho. The funding proceeds will be applied towards the land, water rights and the Nuclear Regulatory Commission application."

I don't know about you, but I read that as if the company had ACTUALLY signed something. Not true! What the company meant to say according to the just now released form 8-k  was:

"On November 1, 2010, the Company issued a press release announcing that it was about to enter into a definitive agreement with the investors."

Well that's convenient! Because according to the instructions for form 8-k:

"Companies have four business days to file a Form 8-K for the events specified in the items in Sections 1-6 and 9 above."

After that clarification about its original press release AEHI proudly claims:

"This Current Report 8-K is filed within the prescribed time frame following the execution of the definitive agreement."

I doubt that the SEC will be amused!

Gillispie has a verbal agreement to take $1M out of the company at will

AEHI Truth has a nice article including an email exchange with AEHI's representatives.


"Mr. Gillispie started the company out of his own retirement funds and the board has agreed he is entitled to be re-reimbursed in cash over $1 million if  he wanted to take it for startup costs and also, he worked the first 5 years like the directors without a salary."

Potential investor:

"Is the potential cash reimbursement of over $1 million shown as an amount due or account payableto an officer of the company?"


"No, it was an offered orally, but he never claimed it so it is not on the books as the company needs the money….this company is like his son..everything to help it succeed…"

Starting a blog on AEHI

I've been commenting on the business practices of Alternate Energy Holding (AEHI) on yahoo's finance forums for some time. This week there were two occasions during which I needed to go through my background material on AEHI. This meant going through the AEHI message board on AEHI and looking through my various notes and wasn't very streamlined.

So it occurred to me that it might be a good idea to aggregate my thoughts and other public opinions about the company here in one place. This is primarily to help me keep track of it all. But I hope it will also be helpful to others interested in AEHI.