9-3-04

[Admin]

Good Morning,

I know you're packing for the long week-end so I won't keep you long. PW brought up an excellent point today regarding AZMN's 10-K. His point that the filings which BTW are ancient history, are in my opinion the precursors to our move back to the OTC:BB and ultimately the AMEX where we belong, and are in his words, "HUGE"!

I told you they were coming but nobody ever believes me. This is only the first in a succession of filings. He also pointed out that the language was bleak. If I'm not mistaken, the original claim where AZCO's enormous Mica and Feldspathic Hi-Tech Sand deposits reside, were originally owned by Floyd Bleak. Correct me if I'm wrong PW.

10-K language for an up and comer is intentionally negative to satisfy the SEC and protect investors. Slick accountants may attempt to blow past the regulators with forward looking statements that are without substance because by the time they are found out, they're long gone. Companies that paint a dismal picture deserve respect because they have a plan, and plan on sticking around.

Let's take a brief look at a portion of HDWR's 10-K when the stock was trading at .50 - Keep in mind we knew the people when Covol became HDWR.
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10K
In addition to patent protection, Covol also relies on trade secrets, know-how and confidentiality agreements to protect the Covol binder technologies. However, such methods may not afford complete protection and there can be no assurance that others will not independently develop such know-how or obtain access to Covol's know-how, concepts, ideas, and documentation.
In order for operating activities to produce significant positive cash flow, Covol and its licensees must successfully address certain operating issues and marketing difficulties. These problems have delayed Covol's expected growth in license fees, and have resulted in lower than expected cash flows and higher than expected capital requirements. Operating issues which must be addressed include, but are not limited to, feedstock availability, moisture content, Btu content, correct application of binder formulation, operability of equipment, product durability, resistance to water absorption and overall costs of operations, which in many cases to date have resulted in unit costs in excess of synthetic fuel sale prices. Marketing difficulties which must be addressed relate to market acceptance of products manufactured using Covol's technology. Industrial coal users must be satisfied that the synthetic fuel is a suitable substitute for standard coal products. Moisture content, hardness, special handling requirements and other characteristics of the synthetic fuel product may affect its marketability and its sales price. Many industrial coal users are also limited in the amount of synthetic fuel product they can purchase from Covol and its licensees because they have committed to purchase a substantial portion of their coal requirements through long-term coal contracts already in place. Reliance on spot markets and the overall downward trend in coal prices have generally produced lower sales prices as compared to long-term coal supply contracts common in the utility industry. Market acceptance of the synthetic fuel product appears to have improved during 1999 even though Covol's owned facilities and its licensees have only been able to secure long-term contracts for the sale of a small portion of their production. The suitability of synthetic fuel as a coal substitute, particularly the quality characteristics of synthetic fuel, and the traditional long-term supply contract practices of fuel buying in the utility industry, have made the identification of purchasers of synthetic fuel difficult. Covol

Headwaters technologies described above have not been commercially applied. No assurance can be given that Headwaters will be able to implement these applications profitably or that the development of these alternative applications will be the most profitable use of Headwaters' limited financial and managerial resources.

Failure by Headwaters or its licensees to maintain necessary permits to operate alternative fuel plants and to comply with permit requirements could have a material adverse effect on Headwaters or its licensees. Other developments, such as the enactment of more stringent environmental laws and regulations, could require Headwaters or its licensees to incur significant capital expenditures. If Headwaters or its licensees do not have the financial resources or are otherwise unable to comply with such laws and regulations, or if compliance substantially increases production costs, these results could also have a material adverse effect on Headwaters.
Net cash provided by operating activities during the year ended September 30, 2000 was $6,608,000 compared to $17,516,000 of cash used during the year ended September 30, 1999. Most of this change in cash flow from operating activities is attributable to the 2000 net income of $3,682,000 as compared to the 1999 net loss of $28,393,000.

Forward Looking Statements Statements in this Management's Discussion and Analysis regarding Headwaters' expectations as to the operation of facilities utilizing Headwaters' technologies, the marketing of products, the receipt of licensing fees, royalties, and product sales revenues, the development, commercialization and financing of non-alternative fuel 20 technologies and other strategic business opportunities and acquisitions and other information about Headwaters that is not purely historical by nature, including those statements regarding Headwaters' future business plans, the operation of facilities, the availability of feedstocks, the marketability of the alternative fuel and the financial viability of the facilities, constitute forward looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Although Headwaters believes that its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations. In addition to matters affecting the alternative fuel industry or the economy generally, factors which could cause actual results to differ from expectations stated in these forward looking statements include, among others, the following: (1) The commercial success of Headwaters' technologies. (2) Operating issues for licensed facilities including feedstock availability, moisture content, Btu content, correct application of chemical reagent, significant chemical change, operability of equipment, production capacity, product durability, resistance to water absorption and overall costs of operations. (3) Marketing issues relating to market acceptance of products manufactured using Headwaters' technologies, including control of moisture content, hardness, special handling requirements and other characteristics of the alternative fuel product which affect its marketability and its sales price. (4) Securing of suitable facility sites, including permits and raw materials, for relocation and operation of facilities and product sales. (5) The market acceptance of products manufactured with Headwaters' technologies in the face of competition from traditional products. (6) Dependence on licensees to successfully implement Headwaters' chemical technologies and making license and other payments to Headwaters. (7) Maintenance of placed-in-service requirements under Section 29 of the tax code by alternative fuel manufacturing facilities. (8) Changes in governmental regulations or failure to comply with existing regulations that may result in operational shutdowns of licensee facilities. (9) The continued availability of tax credits to licensees under the tax code. (10) The commercial feasibility of Headwaters' alternative fuel technologies upon the expiration of tax credits. (11) Ability to meet financial commitments under existing contractual arrangements. (12) Ability to meet non-financial commitments under existing contractual arrangements. (13) Ability to commercialize the non-alternative fuel chemical technologies which have only been tested in the laboratory and not in full-scale operations. (14) Ability to commercialize the technology of others and to implement non-technology based business plans which are at an early stage of investigation and investment and which will require significant time, management, and capital investment. (15) Success in the face of competition by others producing alternative fuel and other products. (16) Sufficiency of intellectual property protections.
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Summary: No cash - No hope in SEC/speak!
Makes you want to run out and load the boat, huh?
However, a few very smart people understood what was really taking place. Since that bleak 10K a few years ago, here's what happened -



I'm working without a calculator at the moment but I think that's an increase of over 6000%
In other words, a $100K investment in a company with no money and no hope, is now worth $6,000,000.00

[Admin]

OK, now this is really bleak. Look at the dirty little store on the corner with cheap merchandise where you were embarrassed to be seen shopping. They had a plan, but they had to assure the public and the SEC that they had no money and no hope
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10K
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION Statements, other than those based on historical facts, including the Year 2000 statements, which address activities, events or developments that the Registrant expects or anticipates may occur in the future are forward-looking statements which are based upon a number of assumptions concerning future conditions that may ultimately prove to be inaccurate. Actual events and results may differ materially from anticipated results described in such statements. The Registrant's ability to achieve such results is subject to certain risks and uncertainties, including, but not limited to, economic and weather conditions which affect buying patterns of the Registrant's customers, changes in consumer spending and the Registrant's ability to anticipate buying patterns and implement appropriate inventory strategies, continued availability of capital and financing, competitive factors and other factors affecting business beyond the Registrant's control. Consequently, all of the forward-looking statements are qualified by these cautionary statements and there can be no assurance that the results or developments anticipated by the Registrant will be realized or that they will have the expected effects on the Registrant or its business or operations.
On January 22, 2002 ("Petition Date"), Kmart and 37 of its U.S. subsidiaries (collectively, the "Debtors") filed voluntary petitions for reorganization under Chapter 11 of the federal bankruptcy laws ("Bankruptcy Code" or "Chapter 11") in the United States Bankruptcy Court for the Northern District of Illinois ("Court") under case numbers 02 B 02462 through 02 B 02499.
The ability of Kmart to continue as a going concern is predicated upon numerous issues, including our ability to achieve the following: - having the Plan of Reorganization confirmed by the Court in a timely manner; - being able to successfully implement our business plans and otherwise offset the negative effects that the Chapter 11 filing has had on our business, including the loss in customer traffic and the impairment of vendor relations; - operating within the framework of our DIP Credit Facility and/or the Exit Financing Facility, including limitations on capital expenditures and its financial covenants, our ability to generate cash flows from operations or seek other sources of financing and the availability of projected vendor credit terms; and - attracting, motivating and/or retaining key executives and associates. These challenges are in addition to those operational and competitive challenges faced by Kmart in connection with our business as a discount retailer. See "Cautionary Statement Regarding Forward-Looking Information" in Item 7. Management's Discussion and Analysis of Results of Operations and Financial Condition.
Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, the following: GENERAL FACTORS - general economic conditions, - weather conditions, including those which affect buying patterns of our customers, - marketplace demand for the products of our key brand partners, as well as the engagement of appropriate new brand partners, - changes in consumer spending and our ability to anticipate buying patterns and implement appropriate inventory strategies, - competitive pressures and other third party actions, including pressures from pricing and other promotional activities of competitors, - our ability to timely acquire desired goods in appropriate quantities and/or fulfill labor needs at planned costs, - our ability to properly monitor our inventory needs and remain in-stock, - our ability to successfully implement business strategies and otherwise execute planned changes in various aspects of the business, - regulatory and legal developments, - our ability to attract, motivate and/or retain key executives and associates, - our ability to attract and retain customers, - other factors affecting business beyond our control, BANKRUPTCY RELATED FACTORS - our ability to continue as a going concern, - our ability to operate pursuant to the terms of the DIP Credit Facility , - our ability to obtain Court approval with respect to motions in the Chapter 11 proceeding from time to time, - our ability to confirm and consummate the Plan of Reorganization in a timely manner, - risks associated with third parties seeking and obtaining court approval to terminate or shorten the exclusivity period that we have to propose and confirm one or more plans of reorganization, for the appointment of a Chapter 11 trustee or to convert the cases to Chapter 7 cases, 12 - our ability to offset the negative effects that the filing for reorganization under Chapter 11 has had on our business, including the loss in customer traffic, the impairment of vendor relations and the constraints placed on available capital, - our ability to obtain and maintain normal terms with vendors and service providers, - the ability of our vendors to obtain satisfactory credit terms from factors and other financing sources, - our ability to maintain contracts, including leases, that are critical to our operations, - the potential adverse impact of the Chapter 11 cases on our liquidity or results of operations, - our ability to implement our long-term strategy and/or develop a market niche, and - our ability to fund and execute our business plan. Consequently, all of the forward-looking statements are qualified by these cautionary statements and there can be no assurance that the results or developments anticipated will be realized or that they will have the expected effects on our business or operations. The forward-looking statements contained herein or otherwise that we make or are made on our behalf speak only as of the date of this report, or if not contained herein, as of the date when made, and we do not undertake to update these risk factors or such forward-looking statements. Similarly, these and other factors, including the terms of the final reorganization plan, if any, ultimately confirmed, can affect the value of our various pre-petition liabilities, common stock and/or other equity securities. Until Kmart's Plan of Reorganization is confirmed by the Court, the recoveries of pre-petition claims holders are subject to change. Accordingly, no assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to each of these constituencies. If the final plan of reorganization confirmed by the Court is consistent with the Plan of Reorganization recently filed with the Court, it would result in the cancellation of the existing Kmart common stock with holders thereof receiving no distributions under the Plan of Reorganization other than, possibly, for a minor interest in a creditor litigation trust to be established pursuant to the Plan of Reorganization. In light of the foregoing, Kmart considers the value of the common stock to be highly speculative and cautions equity holders that the stock may ultimately be determined to have no value. Accordingly, Kmart urges that appropriate caution be exercised with respect to existing and future investments in Kmart common stock or any claims relating to pre-petition liabilities and/or other Kmart securities.

[Admin]

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Looks like no more "Blue Light Specials", so the world goes short, and then a bold vision creates one of the greatest turn around stories of the century. From bankruptcy to this in just over a year?



439%! The same $100k just became almost half a million in 1/4th the time.
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Now let's look at some glowing 10-K's

If you had purchased $100,000.00 of Nortel stock one year ago, it would now be worth $4,900.00.

With Enron, you would have had $1,600.50 left of the original $100.000.00.

With WorldCom, you would have had less than $500.00 left.

They all had very NICE 10-k's. Go read them............

My point is this, if my personal projection for AZMN based simply on it's proven reserves is $5.00 - that's an increase of 2,400% from today's close. Keep in mind that's my personal projection, but $100K becomes $2,400,000.00. Even a $2.00 share price becomes $1,000,000.00. These are my opinions, my projections, my legacy.

Don't chase the bull! - Ride it!

As always, Pray Hard and Trade Safe!

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Between the Lines

COURAGE

You remember the prophet Elijah. He was a 9th century prophet. In the long memory of the people of God, few individuals have made as dramatic an impact as the prophet Elijah. Elijah is supposed to announce the coming of the Messiah. Even today at the Jewish Seder feast the door is opened to let Elijah in and a glass of wine is poured for him. Again and again in the pages of the Hebrew Bible he is depicted as having that ability to thrust himself into threatening situations. The first view we get of him is of a rugged man living in a most dangerous way--out alone in the wilds of nature (I Kings 17:1-7). Remember this was a time of wild animals and bandits when people moved about in clan groupings. But Elijah was one of the first true individualists.

He also had the courage to go against prevailing customs and norms. This is illustrated in the incident that occurred while Elijah was boarding with a widow in Phoenicia (I Kings 17:8-24). One day the widow's son became ill and stopped breathing. Elijah took the boy up on the roof and not only prayed for him, but proceeded to engage in some sort of mouth-to-mouth resuscitation--a practice unheard of in an era when everyone was frightened of corpses and refused even to touch a dead body.

Perhaps the most memorable examples of Elijah's kind of bold courage come with his encounter with the royal family. Elijah appears on the scene when the Hebrew people are divided into two kingdoms. Ahab was king of Israel. Ahab married a Phoenician princess named Jezebel. To this political marriage in a backwater kingdom this fancy princess brings with her 450 prophets of Baal and 400 priests of Asherah (or Astarte). Jezebel is the original "she who must be obeyed". When Jezebel orders, Ahab jumps! She orders the altars of Yahweh torn down and the Priests of the God of Abraham, Isaac, and Israel killed. Enter Elijah from Tishbeh. He denounces the queen and king and all who are going along with this affront to God. He announces that the drought that is happening is a judgment from God. Ahab meets Elijah on the road and accuses him of being a "troubler of Israel," but courageously Elijah tells Ahab that he is the one who is bringing trouble on Israel. Elijah says the country cannot go on worshiping two gods, like hopping first on one leg and then the other.

Commentators have pointed out the contrast between the kind of religion Baalism represents and the religion of the Hebrew people. The former sees life as fundamentally circular in nature--a series of cycles going around and around without really getting anywhere. The main goal of such religion was security and comfort. Placating the gods and getting by were the overall aims. In contrast the religion of Yahweh saw history as linear rather than cyclical. History was going somewhere and God was out ahead, beckoning human beings to become what they were not yet but could be. John Claypool comments, "Sooner or later every one of us has to decide what kind of religion we are going to practice. Comfort or challenge--which will it be? Will we settle into a state of cynicism and resignation, seeking only to make a better place for ourselves in the world as it is? Or will we dare to become adults and venture forth to make the world a better place--together with Jesus to become creative change-agents? Will we resign ourselves passively to the goal of surviving with as little discomfort as possible? Or will we attempt to create something even at the cost of risk and suffering?"

Blessings
CT
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