ottorock

KAL Energy: Avoid This Stock At All Costs

We have recently sent this mail to both KAL energy and to the company that issued the KALG.ob PR dated 14th June 2007.

Dear Sir/Madam,

It would seem you have not done sufficient due
diligence. Neither myself or anybody connected with
Hallgarten and Company, either directly or indirectly,
has any position either short or long in KAL Energy
Inc. Our note was a short call on your stock,
something that is perfectly valid.

This can be verified by reading our original article
available on our website, hallgartenco.com. We
will also be very happy to make a full disclosure to
any relevant authority.

We are not responsible for factual errors made by the
owners and operators of yahoo.com.

The title of your recent PR is misleading to your
shareholders, based on an error made by a third party
and should therefore be changed.

We are glad that you have finally seen fit to make a
fuller disclosure of company policy to your
shareholders regarding KALG.ob and its corporate
background.

Yours faithfully,
Mark Turner

KAL Energy: Avoid This Stock At All Costs

Paul,

KAL do not have a proven resource. It is a JORC compliant inferred resource.

All the information above comes from KALG.ob's own filings. To accuse me of bashing is to accuse the company of bashing itself

are you the same paul hendry that wrote the following on 6th May?

smallcap.seekingalpha....

.....the company being promoted by the owner of the elaborate 321energy.com website, KAL Energy, Inc. (KALB on the over-the-counter market), is a classic case of why I do not believe anything that anybody tells me about an OTCBB stock.

For instance, amidst the glowing recommendation by "Bob Moriarty" he says: ""I have a third party report on KAL Energy done by Tri-State Capital in early March. According to their figures, KAL Energy has a NPV (Net Present Value) of $776 million US. According to the stock market, the company has a market cap of about $91 million. I think Tri-State's figure is lot closer to reality and the stock remains very undervalued."

What Mr. Moriarty is not telling anyone is that "Tri-State-Capital" is not the independent invest advisory firm it sounds like. It's sole business appears to be creating hype for companies when it is hired to do so:

www.tristatecapital.co...

KAL Energy, Inc. likes Bob Moriarty a lot! They link to his article from their own website:

www.kalenergyinc.com/i...

Hey! www.kalenergyinc.com proudly links that exact same Tri-State-Capital article from their website too!:

www.kalenergyinc.com/i...

Read that report. It is basically 22 pages of "paid-for-hype". If you read carefully enough, you start finding little details such as:

"As of November 30, 2006, KAL Energy had current assets of $115,123, consisting of $11,123 in cash, $90,000 in a loan to Thatcher, and a note receivable of $14,000 from its former consultant.

KAL Energy: Avoid This Stock At All Costs

Paul,

The 204MT resource published yesterday is not a proven resource. It is an JORC compliant inferred resource. As it happens, in my opinion it is not the most important on the list. I do not have the slightest problem with the resource KAL has found and wants to develop.

Mining House describes themselves as a private equity group. If that is so, why don't they invest their private equity into the project? In that way, the shareholders who buy in at this level will not be subjected to the dilution that will wash away the advantage of buying in early.

If Mining House put up the $10M for the next stage of development, the investor (and also myself) would feel a lot more confident about buying in to the project. In fact, the board has just asked the public for the next $10m tranche. The placement is priced at $1.14 and closes on July 3rd. The bonus offered is that for every 2 shares you are given a warrant at $1.66 (2 year expiry date, 180 days to register).

My note is not about the Kalimantan projects or whether they have coal or not. It is about presenting the facts to the retail investor about the prospect on front of them and how the corporate stucture of a new company can easily be biased against the retail investor. I am not criticising the company just becuase it is new; on the contrary, i cover many juniors and there are a lot that take a much more investor-friendly attitude towards those who would buy in to the deal. Also, I can hardly be accused of "bashing" when every single piece of information in the above note has come from KAL Energy Inc's own filings! To accuse me of bashing is to accuse the company of bashing itself. It's all REG F (in the public domain).

However, what i have done is to publicize a few of the facts that the board at KAL would prefer to keep quiet and away from the wider public domain.

As for Bob Moriarty, I stand by every single word I wrote in the note. i also respect your right to disagree with me. These things are, after all, subjective.

Finally, are you the same paul hendry that wrote this about KALG on May 6th 2007?
smallcap.seekingalpha....

While tons of money have been made in the most recent up-cycle (about 7 years) in the coal business, and it may be a good investment for the future......

.....the company being promoted by the owner of the elaborate 321energy.com website, KAL Energy, Inc. (KALB on the over-the-counter market), is a classic case of why I do not believe anything that anybody tells me about an OTCBB stock.

For instance, amidst the glowing recommendation by "Bob Moriarty" he says: ""I have a third party report on KAL Energy done by Tri-State Capital in early March. According to their figures, KAL Energy has a NPV (Net Present Value) of $776 million US. According to the stock market, the company has a market cap of about $91 million. I think Tri-State's figure is lot closer to reality and the stock remains very undervalued."

What Mr. Moriarty is not telling anyone is that "Tri-State-Capital" is not the independent invest advisory firm it sounds like. It's sole business appears to be creating hype for companies when it is hired to do so:

www.tristatecapital.co...

KAL Energy, Inc. likes Bob Moriarty a lot! They link to his article from their own website:

www.kalenergyinc.com/i...

Hey! www.kalenergyinc.com proudly links that exact same Tri-State-Capital article from their website too!:

www.kalenergyinc.com/i...

Read that report. It is basically 22 pages of "paid-for-hype". If you read carefully enough, you start finding little details such as:

"As of November 30, 2006, KAL Energy had current assets of $115,123, consisting of $11,123 in cash, $90,000 in a loan to Thatcher, and a note receivable of $14,000 from its former consultant. This consultant repaid $31,000 of the $45,000 due and owing to the company. As of November 30, 2006, the company had liabilities of $55,766, consisting of accounts payable and accrued liabilities of $12,946 and a non-interest demand loan of $42,820"

This is supposed to be a company that has a current market value of between 91 Million and 776 Million dollars? "News" about this company was non-existent before January, and their has been a blizzard of it since then.

This company just raised 3.5 Million dollars for "phase 1 drilling" (testing). Next in the game plan is to raise 6 million dollars for "phase 2 drilling" (more testing). Guess what happens to the value of the current shareholders shares when they issue enough stock to raise that kind of money? Correct, it gets diluted. We won't address the dilutive effect of the "USD 50M+" they plan to raise in 2008 >> if