Cash Flows

ARÊTE INDUSTRIES, INC. AND SUBSIDIARIES
 
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended
 
   
2010
    
2011
  
             
Cash flows from operating activities:
            
    Net (loss) income
   $ (712,040 )   $ 856,870  
    Adjustments to reconcile net inome (loss) to net
                
      cash used in operating activities:
                
          Depreciation and amortization
     33,174       111,240  
          Stock issued for services, notes payable, and
                
            interest on notes
     24,500       469,500  
          Non cash compensation for services
     331,599       426,876  
         Sale of oil & gas assets gain
     -       (2,479,934 )
         Changes in assets and liabilities:
                
            Accounts receivable
     10,916       (969,372 )
            Accounts payable
     177,730       683,169  
            Accrued expenses
     121,089       179,143  
Total adjustments
     699,008       (1,579,378 )
                 
Net cash (used in) operating activities
     (13,032 )     (722,508 )
                 
Cash flows from investing activities:
                
     Purchase of furniture and equipment
     -       (2,850 )
     Purchase of oil and gas properties
     -       (5,682,211 )
                 
Net cash (used in) investing activities
     -       (5,685,061 )
                 
Cash flows from financing activities:
                
     Notes payable receipts
     -       2,100,000  
     Payments made on notes payable
     -       (430,000 )
     Proceeds from sale of common stock
     -       203,500  
     Proceeds from sale of preferred stock
     -       5,023,371  
     Receipt of advances - related parties
     -       2,850  
     Payment of advances - related parties
     -       (9,256 )
                 
Net cash provided by financing activities
     -       6,890,465  
                 
Net increase (decrease) in cash and cash equivalents
     (13,032 )     482,896  
Cash and cash equivalents at beginning of period
     16,764       15,990  
                 
Cash and cash equivalents at end of period
   $ 3,732     $ 498,886  
                 
Supplemental disclosure of cash flow information:
                
      2010       2011  
    Interest paid during the period
   $ -     $ 141,996  
    Income taxes paid during the period
   $ -     $ -