-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Ey/5NTiJMCgwVDliyPFu4U387GUyuqx6WJc53A2LLAEPiRIW7p+tgPGhTPf/s0KO cCPgY6tHUR1Buw/3CQAcuQ== 0000820901-99-000015.txt : 19991123 0000820901-99-000015.hdr.sgml : 19991123 ACCESSION NUMBER: 0000820901-99-000015 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ARETE INDUSTRIES INC CENTRAL INDEX KEY: 0000820901 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-DIRECT MAIL ADVERTISING SERVICES [7331] IRS NUMBER: 841063149 STATE OF INCORPORATION: CO FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-16820-D FILM NUMBER: 99762250 BUSINESS ADDRESS: STREET 1: 3415 W BROADWAY CITY: COUNCIL BLUFFS STATE: IA ZIP: 51501 BUSINESS PHONE: 7123283040 MAIL ADDRESS: STREET 1: 2305 CANYON BLVD. STREET 2: SUITE 103 CITY: BOULDER STATE: CO ZIP: 80302 FORMER COMPANY: FORMER CONFORMED NAME: TRAVIS INDUSTRIES INC DATE OF NAME CHANGE: 19930614 10QSB 1 FORM 10-QSB - Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. For the period ended: September 30, 1999 or [ ] Transition Report Pursuance to Section 13 or 15(d) of the Securities Exchange act of 1934. For the transition period from to Commission File Number 33-16820-D ARETE INDUSTRIES, INC. (Exact name of registrant as specified in its charter) Colorado 84-1063149 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 2305 Canyon Blvd., Suite 103 Boulder, CO 80302 (Address of principal executive offices) (Zip Code) (303) 247-1313 (Registrant's telephone number, including area code) NOT APPLICABLE (Former name, former address and former fiscal year, if changed since last report.) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [ X ] Yes [ ] No APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. [ X ] Yes [ ] No APPLICABLE ONLY TO CORPORATE ISSUERS: As of November 5, 1999, Registrant had 292,315,516 shares of common stock, No par value, outstanding.
INDEX Page Number Part I. Financial Information Item I. Financial Statements Balance Sheet as of September 30, 1999 2 Statements of Operations, Three Months Ended September 30, 1999 and 1998 3 Statements of Operations, Nine Months Ended September 30, 1999 and 1998 4 Statements of Cash Flows, Three Months Ended September 30, 1999 and 1998 5 Statements of Cash Flows, Nine Months Ended September 30, 1999 and 1998 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Conditions and Results of Operations 8 Part II. Other Information 9
ARETE INDUSTRIES, INC. BALANCE SHEET September 30, 1999 (Unaudited) Current Assets Cash $ 81,163 Accounts receivable, net of allowance for doubtful accounts of $25,000 41,398 __________ Total Current Assets $ 122,561 Furniture and equipment, net of accumulated depreciation (Note 2) 46,079 Other Investments(Advance) 37,148 ___________ Total Assets $ 205,788 =========== Current Liabilities Accounts payable $ 368,608 Notes Payable (Note 2) 85,250 Other accrued expenses 290,890 ___________ Total Current Liabilities $ 744,748 Total Liabilities $ 744,748 Stockholders' (Deficit) Equity: Redeemable convertible preferred stock - no par Series A, 3,000 shares issued and outstanding, $30,000 face value 30,000 Common stock - No par value, 500,000,000 shares authorized; 287,915,516 shares issued and outstanding as of 9/30/99 (Note 3) 7,277,895 Accumulated deficit (7,589,559) Current Period Deficit (257,296) Total Stockholders' Equity (Deficit) (538,960) ___________ Total Liabilities and Stockholders' (Deficit) $ 205,788 ============ The accompanying notes are an integral part of the financial statements.
ARETE INDUSTRIES, INC. STATEMENTS OF OPERATIONS For the Three Months Ended September 30, (Unaudited) 1999 1998 Sales (1c,6) $ 252,786 $ 531,623 Cost of goods sold (exclusive of depreciation shown separately below) (1c,6) 363,873 459,911 ____________ ____________ Gross Profit (111,087) 71,712 Operating Expenses Depreciation (1d) - 10,924 Bad debts - (5,000) Rent 5,400 24,520 Salaries 58,170 28,378 Other operating expenses 81,824 81,753 Total Operating Expenses 145,394 140,575 _____________ _____________ Net Operating (Loss) $ (256,481) $ ( 68,863) Other Income (Expenses) Interest Income 201 - Miscellaneous Income - - Gain on sale of investment - 4,500 Interest (expense) (1,016) (1,238) _____________ _____________ Total Other $ (815) $ 3,262 Net (Loss) $ (257,296) $ (82,098) _____________ _____________ Net (Loss) per Share $ nil $ nil Weighted Average Shares Outstanding 285,663,342 226,184,655 The accompanying notes are an integral part of the financial statements.
ARETE INDUSTRIES, INC. STATEMENTS OF OPERATIONS For the Nine Months Ended September 30, (Unaudited) 1999 1998 Sales (1c) $ 681,888 $ 1,392,111 Cost of goods sold (exclusive of depreciation shown separately below) (1c) 716,642 1,139,437 ___________ ____________ Gross Profit (34,754) 252,674 Operating Expenses Depreciation (1d) - 37,629 Bad debts - 74,065 Rent 42,765 67,520 Salaries 283,033 182,330 Other operating expenses 203,843 293,632 Total Operating Expenses 529,641 655,176 ____________ ____________ Net Operating (Loss) $ (564,395) $ (402,502) Other Income (Expenses) Interest Income 621 376 Miscellaneous Income - - Gain on sale of investment 40,061 4,500 Interest (expense) (2,797) (23,105) Total Other $ 37,885 $ (18,229) _____________ ___________ Net (Loss) $ (526,510) $ (420,731) _____________ ___________ Net (Loss) per Share $ nil $ nil Weighted Average Shares Outstanding 272,707,956 226,184,655 The accompanying notes are an integral part of the financial statements.
ARETE INDUSTRIES, INC. STATEMENTS OF CASH FLOWS For the Three Months Ended September 30 (Unaudited) 1999 1998 Cash Flows from Operating Activities: Net (loss) $ (257,296) $ (84,526) Adjustments to reconcile net income (loss) to net cash used in operating activities Depreciation - 10,924 (Increase) Decrease in Prepaid Expenses 19,416 Ammortization of Management Fees - 14,583 Stock Issued for Services 44,338 80,000 Increase (Decrease) in Customer Deposits (Note 1e) (93,972) Increase (Decrease) in Accounts Payable, Accrued Expenses and Other 114,778 66,622 (Increase) Decrease in Accounts Receivable 79,327 25,290 _____________ ___________ Net Cash Provided by Operating Activities 563 18,921 _____________ ___________ Cash Flows from Investing Activities 1,040 - Purchase of Equipment (43,750) - ______________ ___________ (42,710) - Cash Flows from Financing Activities: Note Payable 44,250 - Proceeds from Issuance of Common Stock 22,100 - _____________ ___________ Net Cash (Used by) Financing Activities 66,350 - _____________ ___________ Increase (Decrease) in cash 24,203 18,921 Cash, beginning of period 56,960 12,198 ============= ========== Cash, end of period $ 81,163 $ - ============= ========== Interest paid $ 1,016 $ 16,040 ============= ========== Income taxes paid $ - $ - ============= =========== The accompanying notes are an integral part of the financial statements.
ARETE INDUSTRIES, INC. STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30 (Unaudited) 1999 1998 Cash Flows from Operating Activities: Net (loss) $ (526,510) $ (420,732) Adjustments to reconcile net income (loss) to net cash used in operating activities Depreciation - 37,629 (Increase)Decrease in Prepaid Expenses 10,979 9,737 amortization of Management Fees 27,083 Stock Issued for Services 197,561 398,335 Increase (Decrease) in Customer Deposits (Note 1e) (10,791) 16,028 Increase (Decrease) in Accounts Payable, Accrued Expenses and Other 362,036 (11,620) (Increase) Decrease in Accounts Receivable (26,680) (23,575) ____________ ____________ Net Cash Provided by Operating Activities 6,595 20,385 ___________ ____________ Cash Flows from Investing Activities (22,148) - ___________ ____________ Purchase of Equipment (46,079) - ___________ ____________ Cash Flows from Financing Activities: Repayment of Note Payable and Advances (48,800) - Note Payable 85,250 - Proceeds from Issuance of Common Stock 86,298 - ___________ ____________ Net Cash Added by (Used by) Financing Activities 122,748 - ___________ ____________ Increase (Decrease) in cash 61,116 20,385 Cash, beginning of period 20,047 (1,464) ___________ ___________ Cash, end of period $ 81,163 $ 18,921 =========== =========== Interest paid $ 2,797 $ 18,925 =========== =========== Income taxes paid $ - $ - =========== =========== The accompanying notes are an integral part of the financial statements. ARETE INDUSTRIES, INC. NOTES TO FINANCIAL STATEMENTS September 30, 1999 (Unaudited) (1) Summary of Significant Accounting Policies a) Condensed Financial Statements The financial statements included herein have been prepared by Management of Arete Industries, Inc. without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted as allowed by such rules and regulations, and management believes that the disclosures are adequate to make the information presented not misleading. The management of Arete Industries, Inc. believes that the accompanying unaudited condensed financial statements contain all adjustments (including normal recurring adjustments) necessary to present fairly the operations and cash flows for the periods presented. b) Change in Fiscal Year End. Effective the period ended December 31, 1998, the Company changed its fiscal year end to December 31, from March 31. c) Revenue Recognition. The Company recognizes revenue when goods are shipped and/or services are provided and when expenses are incurred. Prior period financial statements include a reclassification of postage expenses from cost of goods sold to a reduction of sales to be consistent with the presentation for the period ended September 30, 1999. d) Furniture and Equipment. All of the Company's operating equipment has been either liquidated or relocated to Denver, Colorado during previous periods. The Company's operating equipment is being carried at a fully depreciated value, or zero at this time, due to this equipment being held after the end of its depreciable life. During the current period, the company purchased its inserter equipment from the lessor for $43,750 by issuance of a note payable secured by the inserter equipment (See Note 2). e) Reclassification of Certain Liability. Following the end of the second quarter of fye 12/31/98, the Company reclassified certain Current Liabilities to Current Liabilities - Customer Deposits to account for advance customer payments received for services which were held pending completion of work as of the end of the reporting period. f) Basis of Presentation - Going Concern The accompanying financial statements have been prepared in conformity with generally accepted accounting principles, which contemplates continuation of the Company as a going concern. However, the Company has sustained recurring operating losses, has a net capital deficiency, and is delinquent on certain payroll taxes and on payment of creditor liabilities. In view of these matters, realization of certain of the assets in the accompanying balance sheet is dependent upon continued operations of the Company, which in turn is dependent upon the Company's ability to meet its financing requirements, raise additional capital, and the success of its future operations. Management believes that actions planned and presently being taken to revise the Company's operating and financial requirements provide the opportunity for the Company to continue as a going concern. 2) Sale and Purchase of Assets. During the current period, the company purchased its inserter equipment from the lessor with a note payable secured by the equipment. The Company sold a substantial portion of its operating assets and office furnishings as a part of the closure and outsourcing of its printing and direct mail operations for $40,061 recorded as a long term gain from sale of equipment. The balance of operating assets are at the end of their depreciable lives, are fully depreciated and are carried at $0 book value. 3) Common Stock Issued During the three month period ended September 30, 1999, 4,800,000 shares of common stock were issued as compensation payments to employees and consultants in lieu of cash compensation for accounting and bookkeeping, internet development services, sales and marketing consulting and salary for the Company's Chief Operating Officer. Stock issued to the General Manger of Aggression Sports, Inc. as compensation was booked as an advance to Aggression Sports, Inc. 4) Stock Options/Grants. Pursuant to the Company's 1999 Omnibus Stock Option and Incentive Plan (the "1999 Plan") which was adopted by the shareholders at the June 11, 1999 annual meeting of shareholders, the two outside directors, as administrators of the 1999 Plan, were issued formula awards of contingent bonuses of 1,250,000 common shares each, issuable in the amount of one quarter (1/4) of the total amount on the last day of each fiscal quarter beginning September 30, 1999 provided that such individual is a director or executive officer of the Company on that date. As part of the same award, each outside director was awarded an option to purchase $25,000 in Class A Preferred Stock, convertible into common shares at an initial conversion price of $0.00975 per share for a period of two years after the vesting date. The options vest quarterly commencing October 1, 1999 as to 1/2 of such shares, and the balance in equal amounts at the end of the next two fiscal quarters, again provided that the individual is a director or executive officer on such date. 5) Accrued Salary The Company's Chairman and CEO has been accruing all salary since February, 1999. Pursuant to his employment agreement, he has the right to exchange accrued salary at any time into shares of Class A Preferred Stock, Cash or Common Stock, at his option. The rights, preferences and privileges of such Preferred Stock has been previously disclosed in the Company's periodic reports. As of the end of the current period ended September 30, 1999, the CEO had accrued salary of $60,000 plus reimbursable expenses. 6) Extraordinary and Non-recurring Expenses During the period ended September 30, 1999, the Company continued to experience extraordinary and non-recurring expenses in connection with the closure of its print/mail facility in Iowa, tranferring administrative and accounting functions to Boulder, and moving customer services to Phoenix, Arizona. These expenses include severance payments to former employees, order cancellations and credits issued to customers and unresolved overcharges and billing errors from the Company's outsourcing supplier. On September 30, 1999, the Company terminated its outsourcing relationship with SourceOne Worldwide and initiated an outsourcing relationship nwith a third party coupon printing and direct mail company located in Mesa, Arizona. As of the end of the current period, the Company had a substantial disputed balance owing to its former outsourcing partner for significant overcharges which, as of the date of this report, has not been resolved to the Company's satisfaction. The effect of the dispute being resolved in the Company's favor would result in a decrease in sales from credits issued to customers, and a decrease in costs of goods sold from credits to the company from its outsourcing partner. The combination of the above effects would result in an increase in gross profit and an increase in net operating profit. Also, during the current period, the Company paid certain non-cash compensation to directors, executive officers, experts and consultants which expenses are attributable to the ongoing turnaround and restructuring project. ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Arete Industries, Inc. (the "Company") was organized as a Colorado corporation on June 21, 1987 under the name Travis Investments, Inc. and filed and completed its initial public offering as a blank check company in that year. By action approved by the shareholders on September 1, 1998, the name of the Company was changed to Arete Industries, Inc. The Company's core business is cooperative coupon direct mail advertising. In 1994 the Company filed for Chapter 11 Bankruptcy protection and, in 1995, the United States Bankruptcy Court approved the Company's Chapter 11 Plan of Reorganization. The Company emerged from its Chapter 11 bankruptcy with its cooperative coupon franchise business intact along with a small captive coupon printing and mailing operation located in Council Bluffs, Iowa. At that time, the Company's coupon advertising business began suffering from significant attrition in its customer base and diminishing revenues. Further, the print and mail operations were becoming increasingly unprofitable due to lack of a professional management team, extremely poor condition of the equipment and lack of capital investment by former management in customer service and a franchise sales and marketing program to replenish the franchisee network and increase the independent customer base. Prior management provided minimal capital to fund losses and pay certain debts, and funded most of the operating losses with issuance of common stock to employees, professionals and consultants. In May of 1998, the Company underwent a change in control and installed a new turnaround management team charged with restoring the Company's core business to profitability by eliminating unprofitable operations, by expanding its customer base and by moving into higher, more profitable lines of business. In October, 1998 the Company was restructured to a holding company format and the print and direct mail was transferred to a wholly owned subsidiary, Global Direct Marketing Services, Inc. The structure was changed to facilitate acquisition or incubation of other business opportunities by the Company. The objective of management's turnaround efforts was to eliminate operating losses and to enable the Company to grow its core business as a platform for further expansion into higher margin sectors of the direct mail and direct marketing business. In November of 1998, the Company engaged Mr. Mike Lowe to be the managing director of Aggression Sports, Inc., dba Arete Outdoors, a minority (44%) owned subsidiary of the Company. Mr. Lowe has become a principal partner in the Arete Outdoors venture and will offer both his business management and startup expertise as well as his particularily well renowned product design, sourcing and marketing expertise in the specialty outdoor sports industry. Mr. Lowe recently was also appointed as Chief Operating Officer of the parent company, Arete Industries, Inc. to assist in executing the turnaround and ramp-up of the direct marketing business. To date, Aggression Sports, Inc., dba Arete Outdoors, has no revenues employees or operations. In January of 1999, the Company entered into a joint venture agreement with SourceOne Worldwide, a Denver based sales, marketing and customer service fulfillment company to help the Company shut down its operations in Iowa and set up new printing facilities located at SourceOne's facilities in Denver. Under the agreement, printing and direct mail operations were to be outsourced to SourceOne based on a favorable pricing matrix recommended by SourceOne to ensure positive gross profit during the transition phase of the venture. This venture began in February of 1999 and was terminated on September 30, 1999 due to repeated printing and mailing errors and the inability of SourceOne to meet the requirements of the Company's customers, either in pricing, quality or service. To stem an increasing loss of customers due to these problems, the Company determined to place its print and direct mail production work with much more suitable outside facility located in the Phoeniz, Az. area. Although management is dissappointed with the results of the SourceOne relationship, the joint venture made it possible for the Company to eliminateing the causes for ongoing operational losses making it possible to grow and enhance the current direct mail business and to take the Company in a new, more promising directions. During the current period, the Company hired two industry veterans to clean up, reposition and restructure the Company's direct mail advertising business to restore its profitability, make it competitive, to manage and service the current customer base and to design and launch a new franchise sales program to start in January, 2000. Effective October 1, 1999, the Company's pricing and cost structure now affords the Company the ability to operate profitably and the ability to grow without requiring substantial infusions of equity or debt for capital improvements, etc. Results of Operations The current period operating results reflects in total the effects of outsourcing all print and direct mail requirements to third parties and engaging the services of independent contractors by payment with common stock. These results reflect elimination of historical administrative and production overhead and introduction of direct pricing through by the Company's former outsourcing partner including excessive prices, failure to correct or credit the Company or its customers for numerous errors and mistakes leading to lost business, late billings and refusals of customers to pay for work performed. The Company's financial performance has also been adversely affected by continuing non-recurring expenses incurred in connection with the closing of its Iowa facilities, by moving and reconstructingfinancial and operating records, by applying credits applied to customers or which were taken by customers for untimely work, mistakes and poor performance of the former joint venture partner. The Company has made strides to reverse these effects by eliminating unprofitable operations, completely redesigning the franchise business from policies and procedures to product offering choices, costs and pricing, and by mounting an immediate campaign to recruit new franchisees and independent representatives to increase revenues and facilitate acquisition of additional direct marketing capabilities. The Company generated operating revenues of approximately $252,786 with cost of goods sold of $363,873 (or 144% of sales) during the quarter ended September 30, 1999. This is compared to operating revenues of $531,623 and cost of goods sold of approximately $459,911 (or 87% of sales) during the quarter ended September 30, 1998. The salary expenses of approximately $58,170 (or 23% of sales) were incurred during the quarter ended September 30, 1999, compared to $28,378 (or 6% of sales) in the quarter ended September 30, 1998. The increase in compensation was due to payment in common stock to directors, executives and consultants necessary to perform the ongoing turnaround of the direct mail business and the ongoing restructuring of the Company. The Company had a net loss of $257,296 (or 102.00% of sales) during the quarter ended September 30, 1999. Management was required to estimate its accounts receivable of $41,398 as of September 30, 1999 due to an unanticipated loss of billing information during the move to Denver and difficulty experienced by the Company coordinating with the accounting systems of its oursourcing partner. The Company continues to work on reconstructing its accounting and billing system and correcting errors. Liquidity and Capital Resources When the new Management team was installed in May of 1998, their investigations disclosed certain deficiencies in financial and management accounting systems. Management acted early on during their tenure to implement appropriate policies and procedures to correct these deficiencies. These efforts had positive effects of improving cash management and operating efficiencies. However, new management also determined that to restore the business to profitability, total revenues had to increase and to accomplish that task, substantial capital investment in facilities, equipment and management was imperative. Management believed at the time that acquiring the needed capital through debt or equity was not feasible without substantial dilution to current shareholders. Therefore, Management determined that the Company's facilities were incapable of rehabilitation and that outsourcing production was the only method of bringing the Company out of its predicament. The Company continues to have little or no sources of liquidity nor the means of attracting debt or equity investments on terms favorable to the Company. The Company experiences continuing operating losses which traditionally have been funded with issuance of common stock, by increasing accounts payable and accrued expenses and consuming either capital equipment or increasing short term debt. Management believes that by focusing on improving business fundamentals including increasing total sales, generating net revenue, eliminating fixed costs, cutting back all unnecessary overhead and outsourcing all production requirements, financial performance will improve and the Company will become attractive to investors, banks and new, more advantageous business alliances will become feasible. The Company had liabilities in excess of assets at September 30, 1999 of $538,960. At September 30, 1999, the Company had no material commitments for capital expenditures. PART II OTHER INFORMATION Item 1. Legal Proceedings. As disclosed under Subsequent Events in the compnay's second quarter report, for the period ending June 30, 1999, on August 2, 1999, the U.S. Securities and Exchange Commission filed a civil action in the U.S. District Court for the District of Colorado instituting injunctive proceedings against the Company, its current CEO and its former directors, under Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and further citing violations of Section 15(d) of the Exchange Act for Late and Missing filings of periodic reports under the Exchange Act. Item 2. Changes in Securities (a) Changes in Instruments Defining Rights of Security Holders. Previously reported. (b) Not Applicable (c) Item 701 Reg. SB. - There were no unregistered shares of common stock sold by the registrant during the period covered by this report. Item 3. Defaults Upon Senior Securities. None. Item 4. Submission of Matters to a Vote of Security Holders. None Item 5. Other Information. Subsequent Material Event. Effective November 15, 1999, Mr. Keith Talbot resigned as an officer and director of the Company. There were no material disputes cited by Mr. Talbot, with regard to conflicts with management or other members of the board of directors or pertaining to any material transaction or event involving either the Company or its management. Item 6. Exhibits and Reports on Form 8-K The following exhibits are attached:
Exhibit No. Page No. 27 Financial Data Schedule EX - 27
There were no Reports on Form 8-K filed during the period covered by this report. 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. ARETE INDUSTRIES, INC. Date: November 22, 1999 By: /s/ Thomas P. Raabe, CEO Principal Executive Officer, Principal Financial and Accounting Officer EX-27 2
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE AUDITED BALANCE SHEET OF ARETE INDUSTRIES, INC. AS OF September 30, 1999 AND THE RELATED STATEMENTS OF OPERATIONS, AND CASH FLOWS FOR THE PERIODS ENDED September 30, 1999 AND 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 9-MOS DEC-31-1999 SEP-30-1999 81,163 0 41,398 25,000 0 122,561 46,079 0 205,788 744,748 0 0 30,000 7,277,895 0 205,788 252,786 252,786 363,873 509,267 0 0 1,016 (257,296) 0 0 0 0 0 (257,296) 0 0
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