Quarterly report pursuant to Section 13 or 15(d)

Stock transactions and preferred stock dividends

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Stock transactions and preferred stock dividends
9 Months Ended
Sep. 30, 2014
Stock transactions and preferred stock dividends

5. Stock transactions and preferred stock dividends

During the quarter ended September 30, 2014, the Company did not issue any common stock for compensation or services.

The Company agreed to repurchase 10 shares of Preferred Stock. The following are the details of the transaction:

On August 15, 2014, the remaining preferred shareholder made an agreement with The Company to redeem his 10 shares of Series A-1 Convertible Preferred Stock. The Company paid $77,500 for the shares as follows; $15,500 in cash and a promissory note for $62,000.

The Company agreed to repurchase 1,200,000 shares of its Common Stock. The following are the details of the transaction:

On December 10, 2013, Burlingame Equity Investors Master Fund LP (“Burlingame”), a significant stockholder of Arête Industries, Inc. (the “Company”) entered into conditional stock option agreements with Nicholas L. Scheidt, the Company’s Chief Executive Officer and Director, pursuant to which Mr. Scheidt was granted options to purchase up to 1,460,000 shares of Company common stock at $0.19 per share. Mr. Scheidt subsequently assigned the right to purchase 1,200,000 shares to the Company on January 27, 2014. On January 30, 2014, the Company entered into a Direct Stock Purchase Agreement with Burlingame pursuant to which the Company has purchased the 1,200,000 shares of its common stock from Burlingame at a price of $0.19 per share for total consideration of $228,000. In addition, Mr. Scheidt assigned an additional 141,873 shares of Company common stock underlying his option from Burlingame to Donald W. Prosser, the Company’s Chief Financial Officer and Director. Pursuant to this assignment, Mr. Prosser agreed to purchase the entire 141,873 shares of Company common stock from Burlingame at a price of US $0.19 per share for total consideration of $26,956. Furthermore, of these 141,873 shares, Mr. Prosser agreed to transfer 57,895 shares to William W. Stewart, a Director of the Company, for $11,000 or $0.19 per share and 13,158 shares to Apex Financial Services Corp, a company controlled by Mr. Scheidt, for $2,500 or $0.19 per share. Finally, Mr. Scheidt agreed to exercise the remaining 118,127 shares of Company common stock under his option from Burlingame at a price of $0.19 per share for total consideration of $22,444.