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Microcap & Penny Stocks : ARET (Formerly KLHE) -- Ignore unavailable to you. Want to Upgrade?

To: Novice Bob who wrote (3495)	2/16/1998 8:15:00 AM
From: (Bob) Zumbrunnen	Read Replies (1) \| Respond to of 4594

This company seems to have a great deal of trouble getting their financial data in order, for the last 60 days I have been hearing the same story "they almost have them completed" You're feeling the same frustration I am right now. And in my case it's compounded by remembering something that maybe nobody else does. When I first met with Delmar (August? September?), I was told that the financials were being worked on, along with other things. Granted, the financials haven't been the only job by a long shot, nor the most important one, but we're rapidly approaching a point where they will become vitally important. I don't know what the deadline is for BB companies getting current on financials or being removed to the pink sheets, but it's closer now than it was a month ago. I've also been feeling (and voicing) frustration everytime Delmar tells me "I expect them by the end of this week". They had the financials in their possession at one point, had finished the management statements, but sent them back to the auditors because of a disagreement over the handling of liabilities. I'm a bit puzzled by this, though, as we're talking about the financials for a reporting period that ended over a year ago; not current financials. In my experience, auditors have always gotten their way. They deal with the numbers the way GAAP says they should, and don't consider management's wishes, statements, or business plan reason enough to deviate from those practices. Additionally, the bean counters I've dealt with have a tendency to get it right the first time. However, Delmar seems optimistic that the disagreement is at or near a resolution and that he'll prevail. For my part, I've decided to quit worrying about it. I no longer consider my long-term view viable because the current situation isn't sufficiently indicative of those great things happening. It was different 3 months ago when we'd just gotten a $4M gig, expected K's and Q's in January, additional news on BW at the beginning of January, a pending yes or no on at least one of the FLR gigs, and the future looked promising. Two months have elapsed, though, with no change. This company's past is full of anticipated (and even "done deal") projects that never came to fruition and in December I really thought we were past those days. Now I'm beginning to wonder. I'm simply going to quit worrying about this one for a while. Will just forget it exists and check back in about a month and see if anything has changed. Enough time will have elapsed by then for the financials to have either come out or for one to assume they never will. Additionally, construction season will have started in this area, and we'll be able to see whether or not the $4M hydroponics deal is really happening. While I'm on the subject, I think I know now what the stock price is valued the way it is in the face of that hydroponics contract. It has always puzzled me that a reasonable P/E of 15 would've put the stock price around 4 cents, yet it has languished at 2 cents. I now think the reason for this is that the folks who've followed this company for a LONG time know that other projects have been announced in the past, only to never be heard about again. Perhaps those folks don't consider this one anymore a done deal than if it were only in the proposal stage? If it sounds like I'm pessimistic, I'm not really. I'm simply having trouble being as optimistic as I used to be. Best for me to simply pretend this company doesn't exist for a while, as my anxiety regarding financials and possible pending news is really wearing me out, and does zippo to get results out of the company. Best to let the chips fall where they may, while looking in another direction, I think. Here's hoping I'm pleasantly surprised in a month.

To: Novice Bob who wrote (3495)	2/16/1998 11:57:00 AM
From: Michael Harb	Read Replies (4) \| Respond to of 4594

<<Do you have knowledge of what some of the other requirements will be for ARET to remain a listed company. I would think there would be more requirements in addition to filing financials. There must also be criteria regarding the worth of the company, accounting methods, time frames for reporting, etc.>> Currently, to my knowledge, the NASD has only "proposed" that they may require OTC-BB companies in the near future to file independently audited financials to maintain their listings. As far as things such as capitalization reqs, #mm's, #shareholders. These things are requirements for Nasdaq listing. I haven't heard any other requirements discussed for the BB. As far as accounting methods etc. They will have to comply with the same GAAP (Generally Accepted Accounting Principles) that all other independently audited companies must comply with. FYI, GAAP are the accounting industry rules which govern things such as how different types of assets are amortized, how inventory is valued and so on. Does seem like the financials are taking a little while, doesn't it. It doesn't concern me much at this point yet. There is no rush to get them done. It would of course be nice to have for us investors. But the NASD won't be kicking companies off the BB without giving them sufficient time to comply. I don't think the NASD would give any less than 1 year to comply. JMHO. I am a CPA, but have never practiced as such (I hate accounting, yuk!). (Before you ask, I'm a Human Resource software consultant and work with payroll, benefit, personnel systems so it isn't a total waste). I mention that because I know enough to know that pulling together ARET's financials may be complicated by two things. One -- Recently coming out of bankruptcy. This probably throws several kinks into an otherwise standard audit and compilation that your local CPA firm doesn't deal with so often. Two -- Not filing for the past year or two. I forget the last time they filed but when you let a good deal of time lapse it becomes exponentially more difficult to accurately reconstruct past events. The first audit a CPA firm does is very difficult. Substantial audits are academic, building from the last one. Now there may be a lot of issues deciding what accounting methods to use in different situations. Everything is not always cut and dry. ---For Example. GAAP may say to amortize (depreciate) office computer equipment over a 5 year period. Maybe the company bought used 486's cheap instead of new P-333's. The company could argues that the 486's they have should be written down over 2 year instead. This is a very simplistic example. But there are potentially hundreds of such points where you could debate with the CPA firm. The CPA firm may not know your type of business well, so you may need to explain to them why some industry-related piece of equipment (or whatever) needs special treatment. Once all such accounting treatments are established and the past couple years are put on paper, future filings will be a piece of cake. So I wouldn't worry about that. The filing of financials doesn't concern me at present. I know they are working on them. More concerned about getting some contracts. Whew...This is turning into a Bob Z. length post...LOL.. Bob, you heard any thing about when word might be given on the Flour Daniels deal? mike