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EX-32.2 - EXHIBIT 32.2 - Aurum, Inc.a51688012ex32_2.htm
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EX-31.1 - EXHIBIT 31.1 - Aurum, Inc.a51688012ex31_1.htm
EX-21.1 - EXHIBIT 21.1 - Aurum, Inc.a51688012ex21_1.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-K


x
 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 
 ACT OF 1934
For the fiscal year ended: October 31, 2015
or
   
 
 TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
 
 ACT OF 1934
For the transition period from: _____________ to _____________

Commission File Number: 000-53861
AURUM, INC.
(Exact name of Registrant as specified in its charter)



Delaware
 
27-1728996
(State or Other Jurisdiction
 
(I.R.S. Employer
of Incorporation or Organization)
 
Identification No.)

 
Level 1A, 42 Moray Street, Southbank, Victoria, 3006 Australia
(Address of principal executive offices) (Zip Code)


011 (613) 8532 2878
(Registrant’s telephone number, including area code)
———————
N/A
 (Former name or former address, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None
     
     
     
     
Securities registered pursuant to Section 12(g) of the Act:
     
Title of each class
Common Stock, par value $.0001 per share
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
☐ Yes ☒ No
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
☐ Yes ☒ No
 
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.
☐ Yes ☒ No

 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate website, if any, every Interactive Data file required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for any such shorter period that the registrant was required to submit and post such file).
☒ Yes ☐ No
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.
 
Large accelerated filer ☐
Accelerated filer ☐
Non-accelerated filer ☐
Smaller reporting company ☒
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
☐ Yes ☒ No
 
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant’s most recently completed second fiscal quarter.
 
The aggregate market value based on the average bid and asked price on the over-the-counter market of the Registrant’s common stock (“Common Stock”) held by non-affiliates of the Company was US$2,000,000 as at April 30, 2015.
 
There were 135,850,000 outstanding shares of Common Stock as of September 22, 2017.

APPLICABLE ONLY TO REGISTRANTS 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 Section 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.
☐ Yes ☐ No
 
 
DOCUMENTS INCORPORATED BY REFERENCE
 
Not Applicable
_____________________
 

 


 
INDEX

PART I
     
1
4
7
8
8
8
     
PART II
     
9
10
11
15
15
15
15
16
     
PART III
     
17
20
22
24
28
     
PART IV
     
31
     
SIGNATURES
 

 
 
i
 

 
PART I

Information Regarding Forward Looking Statements

This report and other reports, as well as other written and oral statements made or released by us, may contain forward looking statements. Forward looking statements are statements that describe, or that are based on, our current expectations, estimates, projections and beliefs. Forward looking statements are based on assumptions made by us, and on information currently available to us. Forward-looking statements describe our expectations today of what we believe is most likely to occur or may be reasonably achievable in the future, but such statements do not predict or assure any future occurrence and may turn out to be wrong. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. The words "believe," "anticipate," "intend," "expect," "estimate," "project", "predict", "hope", "should", "may", and "will", other words and expressions that have similar meanings, and variations of such words and expressions, among others, usually are intended to help identify forward-looking statements.

Forward-looking statements are subject to both known and unknown risks and uncertainties and can be affected by inaccurate assumptions we might make.  Risks, uncertainties and inaccurate assumptions could cause actual results to differ materially from historical results or those currently anticipated.  Consequently, no forward-looking statement can be guaranteed.  The potential risks and uncertainties that could affect forward looking statements include, but are not limited to:
 
§
the risks of mineral exploration stage projects,
§
political risks in foreign countries,
§
risks associated with environmental and other regulatory matters,
§
exploration risks and competitors,
§
the volatility of gold and other mineral prices,
§
availability of financing,
§
movements in foreign exchange rates,
§
increased competition, governmental regulation,
§
performance of information systems,
§
ability of the Company to hire, train and retain qualified employees,
§
the availability of sufficient transportation, power and water resources, and
§
our ability to enter into key exploration and supply agreements and the performance of contract counterparties.
 
In addition, other risks, uncertainties, assumptions, and factors that could affect the Company's results and prospects are described in this report, including under the heading “Risk Factors” and elsewhere and may further be described in the Company's prior and future filings with the Securities and Exchange Commission and other written and oral statements made or released by the Company.

We caution you not to place undue reliance on any forward-looking statements, which speak only as of the date of this document.  The information contained in this report is current only as of its date, and we assume no obligation to update any forward-looking statements.

Item 1                                        Business

General

Our name is Aurum, Inc. and we sometimes refer to ourselves in this Annual Report as “Aurum”, the “Company” or as “we,” “our,” or “us.”
1


We were incorporated in the State of Florida on September 29, 2008 under the name Liquid Financial Engines, Inc. (“Liquid”) and we changed our name to Aurum, Inc. (“Aurum”) and our State of domicile to the State of Delaware.

Description of Business

Background

Aurum, Inc. was incorporated in Florida to initially develop and market financial software systems for banks, brokerage firms, pension funds, family offices, and hedge funds.

In July 2009, Golden Target Pty Ltd, an Australian corporation ("Golden") acquired a 96% interest in Aurum from Daniel McKelvey and certain other stockholders. Mr. McKelvey resigned as Sole Director and Officer of Aurum, Joseph Gutnick was appointed President, Chief Executive Officer and a Director and Peter Lee was appointed Chief Financial Officer and Secretary.

Commencing August 2009, the Company decided to focus on mineral exploration for gold and copper in the Lao Peoples Democratic Republic.

On January 20, 2010, the Company re-incorporated in the State of Delaware (the “Reincorporation”) through a merger involving Liquid Financial Engines, Inc. (“Liquid”) and Aurum, Inc., a Delaware Corporation that was a wholly owned subsidiary of Liquid. The Reincorporation was effected by merging Liquid with Aurum, with Aurum being the surviving entity. For purposes of the Company’s reporting status with the Securities and Exchange Commission, Aurum is deemed a successor to Liquid.


Corporate Developments

In December 2010, the Company executed a Management and Shareholders Agreement with Argonaut Overseas Investments Ltd (“AOI”), an indirectly wholly owned subsidiary of Argonaut Resources N.L., in respect to Argonaut’s 70% held, 55,105 acre Century Concession in Laos.

The agreement appointed Aurum as the manager of the Century Thrust Joint Venture Agreement, which existed between Argonaut and two other parties, and gave the Company the right to earn 72.86% of AOI’s interest in the Joint Venture which was equivalent to a 51% beneficial interest in the Century Concession. In order to acquire this interest, Aurum was required to spend US$6.5 million on exploration within five years.

The Century Concession has expired and the Company has been negotiating with the Lao Government to renew the Concession. The Company has recently been advised that the Government does not intend to renew the Concession. As a result, the Company no longer has any exploration interests in Laos.

On April 1, 2016 the Company announced that it had entered into an agreement with an Israeli company, PayItSimple Ltd and its subsidiaries (PayItSimple) whereby the Company would invest $15 million directly into PayItSimple by September 5, 2016 to acquire a 30% interest in PayItSimple, and a further $7.5 million into PayItSimple over 18 months to acquire a further 10% interest in PayItSimple, taking its holding to 40% of interest in PayItSimple.  PayItSimple owns a business known as Splitit. On April 6, 2016 the Company terminated the proposed acquisition of PayItSimple.
 
On June 27, 2016 the Company announced that it had entered into a binding term sheet with the shareholders of an Israeli company, Humavox Ltd (Humavox), a company that creates wireless charging solutions. In accordance with the proposed acquisition of Humavox, Aurum would acquire 100% of the shares of Humavox and 100% of the warrants and options to acquire shares of Humavox in exchange for the issue of shares of common stock of Aurum representing 50% of the shares of common stock of Aurum post issue on a fully-diluted basis, including the investment of an amount of US$16 million in Humavox.  The investment would take place in unconditional instalments over a period of 24 months following the closing. The closing of the merger was subject to certain closing conditions, including the investment in Humavox of the first instalment of the investment in the amount of $5.5 million. On July 29, 2016 the Company terminated the proposed acquisition of Humavox.
2

 
On July 19, 2017, the Company entered into a Term Sheet with Lior Wayn, Erez Glazer and Dr Guy Shalom, (collectively, the ‘’Sellers”)  for the acquisition of all of the issued shares of a medical technology business. The Company has a 120 day period to conduct due diligence and negotiate a formal share sale agreement.


            The purchase price is up to USD$7,500,000 which is to be satisfied as follows:

a)
The sum of USD$100,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

b)
 A further USD$100,000 each month after the date in a) above for due diligence expenses, for 3 months,  payable to the Sellers for working capital purposes;

c)
An issue of fully paid ordinary shares of common stock of the Company to the value of USD$2,500,000 (less any payments made to the Sellers under (a) and (b) above) to the Sellers at an issue price of USD$0.22 per share of common stock (Consideration Shares);

d)
The issue to the Sellers of shares of common stock to the equivalent to USD$2,500,000 at the issue price of USD$0.22, subject to the Sellers achieving sales revenue of USD$100,000 within twelve months after the first anniversary of Completion; and

e)
The issue to the Sellers of shares of common stock to the equivalent to USD$2,500,000 at the issue price of USD$0.22, subject to the Sellers achieving sales revenue of USD$1,000,000 within twelve months after the first anniversary of Completion.

If the Transaction is terminated or is in the reasonable opinion of the Company unable to proceed at any point, the Vendors and the Sellers have agreed to convert any monies paid to the Sellers under (a) and (b) above into convertible securities in the Sellers.

As part of the agreement and as a condition to completion, the Company will raise USD$2,500,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

 
Employees

We use temporary employees for some of our activities. The services of our President, Chairman, Chief Executive Officer and Director, Joseph Gutnick, Executive General Manager, Craig Michael, our Chief Financial Officer and Secretary, Peter Lee, as well as clerical employees are provided to us on a part-time as needed basis pursuant to a Service Agreement (the “Service Agreement”) between us and AXIS Consultants Pty Limited (“AXIS”) effective from August 2009. AXIS also provides us with office facilities, equipment, administration and clerical services in Melbourne, Australia pursuant to the Service Agreement. The Service Agreement may be terminated by written notice by either party.
3


Other than this, we rely primarily upon consultants to accomplish our activities. We are not subject to a union labor contract or collective bargaining agreement.

SEC Reports

We file annual, quarterly, current and other reports and information with the SEC. These filings can be viewed and downloaded from the Internet at the SEC’s website at www.sec.gov.  In addition, these SEC filings are available at no cost as soon as reasonably practicable after the filing thereof on our website at auruminc.net. These reports are also available to be read and copied at the SEC’s public reference room located at Judiciary Plaza, 100 F Street, N.E., Washington, D.C. 20549. The public may obtain information on the operations of the public reference room by calling the SEC at 1-800-SEC-0330.

Item 1A Risk Factors

You should carefully consider each of the following risk factors and all of the other information provided in this Annual Report before purchasing our common stock.  An investment in our common stock involves a high degree of risk, and should be considered only by persons who can afford the loss of their entire investment. The risks and uncertainties described below are not the only ones we face. There may be additional risks and uncertainties that are not known to us or that we do not consider to be material at this time. If the events described in these risks occur, our business, financial condition and results of operations would likely suffer. Additionally, this Annual Report contains forward-looking statements that involve risks and uncertainties. Our actual results may differ significantly from the results discussed in the forward-looking statements. This section discusses the risk factors that might cause those differences.

Risk Factors

Risks of Our Business

We Lack an Operating History And Have Losses Which We Expect To Continue Into the Future.

To date we have no source of revenue. We have no operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

-
our ability to identify suitable opportunities
 
-
our ability to raise the capital necessary to conduct our activities; and
 
-
our ability to generate revenues and profitably operate our business.

 
Our Proposed Areas Of Operations May Be Located In Locations That Are Subject To Changes In Political Conditions And Regulations In Those Regions.   
 
Our proposed areas of operations may be located in locations that are subject to changes in political conditions and regulations. In the past some countries have been subject to political and social instability, changes and uncertainties which may cause changes to existing government regulations affecting resource exploration and mining activities. Civil or political unrest could disrupt our operations at any time.

We May Engage in Acquisitions, Strategic Investments, Strategic Partnerships or Alliances or Other Ventures that may or may not be Successful.
4


We may acquire or make strategic investments in businesses, technologies, services or products, or enter into strategic partnerships or alliances with third parties in order to enhance our business. It is possible that we may not be able to identify suitable acquisitions targets and candidates for strategic investments or partnerships, or if we do identify such targets or candidates, we may not be able to complete those transactions on terms commercially acceptable to us, or at all. The inability to identify suitable acquisition targets or investments or the inability to complete such transactions may affect our competitiveness and our growth prospects.

We may make strategic investments in early-stage start-up companies in order to gain experience in or exploit niche technologies. However, our investments may not be successful. The lack of profitability of any of our investments could have a material adverse effect on our operating results.

The Report Of Our Independent Registered Public Accounting Firm Contains An Emphasis of Matter Paragraph Questioning Our Ability To Continue As A Going Concern.

The report of our independent registered public accounting firm on our consolidated financial statements as of October 31, 2015 and 2014, and for the years ended October 31, 2015 and 2014, includes an emphasis of matter paragraph questioning our ability to continue as a going concern. This paragraph indicates that we have not yet commenced revenue producing operations and have an accumulated (deficit) of approximately $9,100,000 which raises substantial doubt about our ability to continue as a going concern.  Our consolidated financial statements do not include any adjustment that might result from the outcome of this uncertainty.

We Are A Small Operation And Do Not Have Significant Capital.

Because we will have limited working capital, we must limit our activities. If we are unable to raise the capital required to undertake adequate activities, we may miss opportunities to acquire suitable businesses. If we do not find suitable businesses we may be forced to cease operations and you may lose your entire investment.


World Economic Conditions Could Adversely Affect Our Results of Operations and Financial Condition

The effects of the global financial crisis are difficult to accurately predict. As a result of this crisis, conditions in the credit markets have become uncertain and risk adverse. These adverse conditions may make it harder for the Company to raise additional funds to finance the continued development of its business. Continued adverse economic conditions could adversely affect our liquidity, results of operations and financial condition.



Approximately 75% Of Our Common Stock Is Controlled By The Family Of Our Chairman, President and Chief Executive Officer

The family of Mr. Joseph Gutnick, our Chairman, President and Chief Executive Officer, beneficially owned 101.6 million shares of our common stock, which represented approximately 75% of our shares outstanding as of September 18 2017. Mr Joseph Gutnick has no beneficvial interest in the shareholdings of his family. As a result, Mr. Gutnicks’ family has and is expected to continue to have the ability to appoint our Board of Directors and to determine the outcome of all other issues submitted to our stockholders. The interests of Mr. Gutnicks’ family may not always coincide with our interests or the interests of other stockholders, and subject to his fiduciary duties as a director, he may act in a manner that advances his family’s best interests and not necessarily those of other stockholders. One consequence to this substantial influence or control is that it may not be possible for investors to remove management of the Company. It could also deter unsolicited takeover, including transactions in which stockholders might otherwise receive a premium for their shares over then current market prices.
5


We are substantially dependent upon AXIS To Carry Out Our Activities

We are substantially dependent upon AXIS for our senior management, financial and accounting, corporate legal and other corporate headquarters functions. For example, each of our officers is employed by AXIS and, as such, is required by AXIS to devote substantial amounts of time to the business and affairs of the other shareholders of AXIS.

Pursuant to a services agreement, AXIS provides us with office facilities, and some administrative personnel and services, management and geological staff and services. No fixed fee is set in the agreement and we are required to reimburse AXIS for any direct costs incurred by AXIS for us.  In addition, we pay a proportion of AXIS indirect costs based on a measure of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and indirect costs. AXIS has not charged a service fee for 2015. This service agreement may be terminated by us or AXIS on 60 days’ notice. See “Certain Relationships and Related Party Transactions.”  AXIS billed Aurum, Inc., as per the services agreement, for 2015 a total of $56,226 (2013: $71,597).

We are one of seven companies that AXIS provides services to. Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and certain mining and exploration staff.  A number of arrangements and transactions have been entered into from time to time between such companies. Currently, there are no material arrangements or planned transactions between the Company and any of the other affiliated companies other than AXIS.  However, it is possible we may enter into such transactions in the future which could present conflicts of interest. In addition, there may be conflicts among the Company and the other companies that AXIS provides services to with respect to access to executive and administrative personnel and other resources.

Historically, AXIS has allocated corporate opportunities to each of the companies engaged in the exploration and mining industry after considering the location of each of the companies’ operations and the type of commodity for which each company explores within its geographic region. At present, there are no conflicts among the Company and the other companies with respect to the principal geographic areas in which they operate and/or the principal commodities that they are searching for.

The Company has received advances from AXIS in connection with the ongoing business relationship between the two parties, which have been disclosed in the Company’s SEC reports, but which are not specifically provided for in the AXIS Services Agreement. Historically, the shortfall in our cash receipts has been covered by cash advances from AXIS. The purpose of such advances is to assist us in meeting our ongoing cash flow requirements. The parties are in discussions in relation to the Company providing security to AXIS for the amount outstanding however no agreement has been reached to-date. Mr. Peter Lee is Chief Financial Officer & Company Secretary of AXIS and owes fiduciary obligations to both parties. It is the intention of the Boards of Directors of AXIS and the Company that this issue be resolved in a manner that is fair to all parties and equitable to the shareholders of each, but there are no agreements or understandings addressing the priority or dispensation of fiduciary duties with respect to the discussions to resolve the amount outstanding owed to AXIS or any other conflict of interest with AXIS or other affiliates. See Item 13 “Certain Relationships and Related Transactions, and Director Independence.”
6


Future Sales of Common Stock Could Depress The Price Of Our Common Stock

Future sales of substantial amounts of common stock pursuant to Rule 144 under the Securities Act of 1933 or otherwise by certain stockholders could have a material adverse impact on the market price for the common stock at the time. As at September 22, 2017, there were 135,850,000 outstanding shares of common stock which are deemed “restricted securities” as defined by Rule 144 under the Securities Act or control securities. Under certain circumstances, these shares may be sold without registration pursuant to the provisions of Rule 144. In general, under rule 144, a person (or persons whose shares are aggregated) who has satisfied a six-month holding period and who is not an affiliate of the Company may sell restricted securities without limitation as long as the Company is current in its SEC reports. A person who is an affiliate of the Company may sell within any three-month period a number of restricted securities and/or control securities which does not exceed the greater of one (1%) percent of the shares outstanding or the average weekly trading volume during the four calendar  weeks preceding the notice of sale required by Rule 144. In addition, Rule 144 permits, under certain circumstances, the sale of restricted securities by a non-affiliate without any limitations after a one-year holding period. Any sales of shares by stockholders pursuant to Rule 144 may have a depressive effect on the price of our Common stock.

Our Common Stock Is Traded Over the Counter, Which May Deprive Stockholders Of The Full Value Of Their Shares

Our common stock is quoted via the Over The Counter Market (OTC).  As such, our common stock may have fewer market makers, lower trading volumes and larger spreads between bid and asked prices than securities listed on an exchange such as the New York Stock Exchange or the NASDAQ Stock Market. These factors may result in higher price volatility and less market liquidity for the common stock.

A Low Market Price May Severely Limit The Potential Market For Our Common Stock

Our common stock is currently trading at a price substantially below $5.00 per share, subjecting trading in the stock to certain SEC rules requiring additional disclosures by broker-dealers. These rules generally apply to any equity security that has a market price of less than $5.00 per share, subject to certain exceptions (a “penny stock”). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and institutional or wealthy investors. For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale.  The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market.  Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer.  Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stock.  The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock.

The Market Price Of Your Shares Will Be Volatile.

The stock market price of mineral exploration companies like us has been volatile. Securities markets may experience price and volume volatility. The market price of our stock may experience wide fluctuations that could be unrelated to our financial and operating results. Such volatility or fluctuations could adversely affect your ability to sell your shares and the value you might receive for those shares.

Item 1B                          Unresolved Staff Comments

As of October 31, 2015, we do not have any Securities and Exchange Commission staff comments that have been unresolved for more than 180 days.
7


Item 2                                        Properties

The Company occupies certain executive and office facilities in Melbourne, Victoria, Australia which are provided to it pursuant to the Service Agreement with AXIS. See “Item 1 - Business- Employees” and “Item 13 - Certain Relationships and Related Transactions”.

Item 3                                        Legal Proceedings

There are no pending legal proceedings to which the Company is a party, or to which any of its property is the subject, which the Company considers material.

Item 4                                        Mine Safety Disclosures

Not Applicable
8

PART II

Item 5
Market for Common Equity and Related Stockholder Matters

Market Information

Our common stock is traded in the over-the-counter market under the symbol “AURM”.

The following table sets out the high and low bid information for the Common Stock as reported by the National Quotation Service Bureau for each period/quarter indicated in US$:

Calendar Period
High Bid (1)
Low Bid (1)
     
2014
   
First Quarter
0.50
0.50
Second Quarter
0.50
0.50
Third Quarter
0.50
0.50
Fourth Quarter
0.50
0.32
     


2015
   
First Quarter
0.32
0.32
Second Quarter
0.63
0.31
Third Quarter
0.55
0.55
Fourth Quarter
0.55
0.55


(1) The quotations set out herein reflect inter-dealer prices without retail mark-up, markdown or commission and may not necessarily reflect actual transactions.

As of October 31, 2015 and September 22, 2017, there were 135,600,000 and 135,850,000 shares of common stock issued and outstanding, respectively.

Dividends

To date we have not paid any cash dividends on our common stock and we do not expect to declare or pay any cash dividends on our common stock in the foreseeable future. Payment of any dividends will depend upon our future earnings, if any, our financial condition, and other factors deemed relevant by the Board of Directors.

On September 29, 2009, the Company’s Board of Directors declared an 8-for-1 stock split in the form of a stock dividend that was payable in October, 2009 to stockholders of record as of October 23, 2009. An aggregate of 92,400,000 shares of common stock were issued in connection with this dividend.

Shareholders

As of September 22, 2017, the Company had approximately 29 shareholders of record. Within the holders of record of the Company's Common Stock are depositories such as Cede & Co., a nominee for The Depository Trust Company (or DTC), that hold shares of stock for brokerage firms which, in turn, hold shares of stock for one or more beneficial owners. Accordingly, the Company believes there are many more beneficial owners of its Common Stock whose shares are held in "street name", not in the name of the individual shareholder.
 
9

 
Transfer Agent

Our United States Transfer Agent and Registrar is Continental Stock Transfer & Trust Company.

Item 6
Selected Financial Data

Our selected financial data presented below for each of the years in the two-year period ended October 31, 2015 and the balance sheet data at October 31, 2015 and 2014 have been derived from consolidated financial statements, which have been audited by PKF O’Connor Davies, LLP (“PKF”). The selected financial data should be read in conjunction with our consolidated financial statements for each of the years in the two-year period ended October 31, 2015, and Notes thereto, which are included elsewhere in this Annual Report.

Statement of Operations Data

   
2015
US$
   
2014
US$
 
             
Revenues
   
-
     
-
 
     
-
     
-
 
                 
Costs and expenses
   
120,052
     
356,462
 
                 
(Loss) from operations
   
(120,052
)
   
(356,462
)
                 
Other income
   
66,646
     
-
 
Foreign currency exchange gain
   
1,226,376
     
542,739
 
Provision for income taxes
   
-
     
-
 
                 
Net income
   
1,172,970
     
186,277
 
                 
   
$
     
$
   
Net income per share
   
0.01
     
0.00
 
                 
Weighted average number
of shares used per share calculation (000’s)
   
113,244
     
105,600
 
                 
Balance Sheet Data
               
   
$
     
$
   
Total assets
   
197
     
4,036
 
Total liabilities
   
(1,272,182
)
   
(7,506,767
)
                 
Stockholders’ Equity (deficit)
   
(1,271,985
)
   
(7,502,731
)

 
10

 
Item 7.
Management’s Discussion and Analysis of Financial Condition or Plan of Operation

General

The following discussion and analysis of our financial condition and plan of operation should be read in conjunction with the consolidated financial statements and accompanying notes and the other financial information appearing elsewhere in this report.  This report contains numerous forward-looking statements relating to our business. Such forward-looking statements are identified by the use of words such as believes, intends, expects, hopes, may, should, plan, projected, contemplates, anticipates or similar words. Actual operating schedules, results of operations, ore grades and mineral deposit estimates and other projections and estimates could differ materially from those projected in the forward-looking statements.

Foreign Currency Translation

The Company has had operations in Laos and administrative functions based in Australia.  The Laos operations functional currency is USD but also uses Laos LAK (Lao Kip “LAK”) and Thai BHT (Thai Baht “BHT”).  Australian administrative operations are in AUD (“A$”). The income and expenses of its foreign operations are translated into US dollars at the average exchange rate prevailing during the period. Assets and liabilities of the foreign operations are translated into US dollars at the period-end exchange rate. The following table shows the period-end rates of exchange of the Australian dollar, Lao Kip and Thai Baht compared with the US dollar during the periods indicated.

  

Year ended
October 31
     
       
2015
US$1.00
=
A$1.4008
       
2014
US$1.00
=
A$1.1371
 
US$1.00
=
LAK$8,104.39
 
US$1.00
=
BHT$32.5541

Overview

Aurum, Inc. ("Aurum” or the “Company") was incorporated in the State of Florida in September 2008. The principal stockholder of Aurum is Golden Target Pty Ltd., an Australian corporation (“Golden”), which owned 74.93% of Aurum as of October 31, 2015. On January 20, 2010, the Company re-incorporated in the state of Delaware (the “Reincorporation”) through a merger involving Liquid Financial Engines Inc. and Aurum, Inc., a Delaware Corporation that was a wholly owned subsidiary of Liquid. The Reincorporation was effected by merging Liquid with Aurum, with Aurum being the surviving entity. For purposes of the Company’s financial reporting status, Aurum is deemed a successor to Liquid.

In July 2009, Golden acquired an approximate 96% interest in Aurum from certain stockholders. In connection therewith, the Company appointed a new President/Chief Executive Officer/Director and Chief Financial Officer/Secretary.

Commencing August 2009, the Company decided to focus on mineral exploration for gold and copper in the Lao Peoples Democratic Republic. The Century Concession has expired and the Company had been negotiating with the Lao Government to renew the Concession. The Company was advised that the Government does not intend to renew the Concession. As a result, the Company no longer has any exploration interests in Laos.
11


The Company has now commenced a search for new gold projects that the Company may be able to acquire an interest in. The Company’s planned operations have not commenced and are considered to be in the exploration stage.

In August 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company. AXIS has some common management and is incorporated in Australia. AXIS is paid by each company it manages for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, legal, human resources, company secretarial, land management, certain exploration and mining support, financial, accounting advice and services. AXIS procures items of equipment necessary in the conduct of the business of the Company. AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company. We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company.  In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilization of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. Under the agreement, we are not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first requests AXIS to provide the service and AXIS fails to provide the service within one month. As our arrangements with AXIS have evolved, the arrangements have changed, which have verbally been agreed to by AXIS, as a result of the requirements of certain suppliers to be able to deal directly with us. In these cases, AXIS does not charge us a management or service fee in respect to these arrangements with suppliers who deal with us directly. The types of services that are provided directly to us include audit and tax services, legal services, stock transfer services, drilling services, leases of some offices, finance leases, financing facilities in our name, Delaware franchise tax.

Results of Operations

Year ended October 31, 2015 versus Year ended October 31, 2014

We have not generated any revenues since inception. As set out in Management’s Discussion and Analysis of Financial Condition and Results of Operation – Overview, the Company is managed by AXIS. Certain costs and expenses are incurred by the Company and certain costs and expenses are incurred by AXIS on behalf of the Company and billed to the Company by AXIS. The total amount of expenses billed to the Company by AXIS in fiscal 2015 was $56,226 (2014: $71,597). The discussion in the next paragraphs relates to costs and expenses of the Company, incurred by both the Company; and by AXIS that are billed to the Company.

Total costs and expenses have decreased from $356,462 for the year ended October 31, 2014 to $120,052 for the year ended October 31, 2015. The decrease in the total costs and expenses was a result of:

i)
an increase in legal, accounting and professional costs from $60,319 in fiscal 2014 to $70,266 in fiscal 2015. Included within legal, accounting and professional costs for the year ended October, 31 2015 is $9,371 for stock transfer agent fees for management of the share register (2014: $8,073); $59,743 (2014: $51,552) for audit and tax fees and professional services in relation to consolidated financial statements in the quarterly reports on Form 10-Q and annual reports on Form 10-K; and $1,152 (2014: $694) for legal expenses.

ii)
a decrease in administrative costs from $110,847 in fiscal 2014 to $49,636 in fiscal 2015. Included within administrative costs for the year ended October, 31 2014 is $40,362 (2014: $67,541) for charges by AXIS for salaries incurred on behalf of the Company which relate to amounts paid to the President and Chief Executive Officer, Secretary and Chief Financial Officer and other staff of AXIS who provide services to the Company; $(7,650) for lodgement of company filings with the SEC (2014: $26,167); insurance costs of $11,733 (2014: $8,744); bank charges for $72 (2014: $312); franchise tax of $837 (2014: $697); $621 for contractor and consultant costs (2014: $2,072); and storage costs of $1,901 (2014: $5,314).  The decrease is primarily as a result of a decrease in the cost of services provided by AXIS in accordance with the service agreement. The total administrative expenses include AXIS billings of $55,944 for 2015 (2014: $71,217).
 

12

 
iii)
a decrease in the exploration expense from $185,296 in fiscal 2014 to $nil in fiscal 2015. The Century Concession expired in fiscal 2014. The total exploration expenses include AXIS billings of $nil for 2015 (2014: $380).

As a result of the foregoing, the loss from operations decreased from $356,462 for the year ended October 31, 2014 to $53,406 for the year ended October 31, 2015.

Other income increased for $nil in fiscal 2014 to $57,809 in fiscal 2015.
 
The Company recorded a foreign currency exchange gain of $1,226,376 for the year ended October 31, 2015 (2014: $542,739) primarily due to revaluation of amounts payable to affiliates in Australian dollars

Net income was $1,172,970 for the year ended October 31, 2015 compared to net income of $186,277 for the year ended October 31, 2014.

Liquidity and Capital Resources

For the year ended October 31, 2015, net cash used in operating activities was $95,929 consisting primarily of the net income of $1,172,970, adjusted for non-cash items being foreign currency gain of $1,226,376 and a decrease in accounts payable and accrued expenses of $43,486. Net cash used in investing activities was $nil and net cash provided by financing activities was $91,311 being advances from affiliates.

As of October 31, 2015, the Company has short term obligations of $205,354 comprising accounts payable and accrued expenses, and had long term obligations of $1,066,827 comprising advances payable to affiliates.

During 2015, AXIS charged the Company $55,944 for management and administration services and $282 for exploration services. The net amount owed by the Company to AXIS at October 31, 2015 of $834,327 is included under non-current liabilities.

In July 2015, the Company issued 30,000,000 shares of common stock to AXIS Consultants Pty Ltd as repayment of a debt of $5,057,776.

The Company has $197 in cash at October 31, 2015.

The Company has funded operations since inception through issuance of shares and advances from affiliated entities. The Company’s ability to continue operations for the foreseeable future is dependent upon future funding from affiliated entities, capital raisings, or its ability to commence revenue producing operations and positive cash flows, of which there can be no assurance. AXIS has advised it does not currently intend to require repayment of these advances prior to October 31, 2016, accordingly the Company has decided to classify the amounts payable as non-current in the accompanying balance sheets.

The Company continues to search for additional sources of capital, including capital raisings from share issuances, however no agreements or arrangements have been made as of this date and there can be no assurance funding will be successfully obtained. Even if it is obtained, there is no assurance that it will not be secured on terms that are highly dilutive to existing shareholders.
 
13


The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of Aurum as a going concern. However, Aurum has limited assets, negative working capital, has not yet commenced revenue producing operations and has sustained recurring losses since inception.

Impact of Australian Tax Law

In July, 2009 the management and control of Aurum was effectively transferred to Australia making the company an Australian resident corporation for tax purposes under Australian law. Australian resident corporations are subject to Australian income tax on their non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income provided the tax credit does not exceed 30% of the foreign source income.

Under the U.S. Australia tax treaty, a U.S. corporation such as us is subject to Australian income tax on net profits attributable to the carrying on of a business in Australia through a “permanent establishment” in Australia. A “permanent establishment” is a fixed place of business through which the business of an enterprise is carried on. The treaty limits the Australian tax on interest and royalties paid by an Australian business to a U.S. resident to 10% of the gross interest or royalty income unless it relates to a permanent establishment. Although we consider that we do not have a permanent establishment in Australia, the Company may be deemed to have such an establishment due to the location of its administrative offices in Melbourne. In addition we may receive interest or dividends from time to time.

Impact of Australian Governmental, Economic, Monetary or Fiscal Policies

Although Australian taxpayers are subject to substantial regulation, we believe that our operations are not materially impacted by such regulations nor is it subject to any broader regulations or governmental policies than most Australian taxpayers.

Impact of Recent Accounting Pronouncements

For a discussion of the impact of recent accounting pronouncements on the Company’s consolidated financial statements, see Note 4 to the Company’s consolidated financial statements which are included elsewhere in this Annual Report.
 
14

 
Item 7A.
Quantitative and Qualitative Disclosures about Market Risk
 
At October 31, 2015, the Company had no outstanding borrowings under Loan Facilities.
 
 
Item 8.
Financial Statements
 
See F Pages
 
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
 
 
There have been no changes in accountants or any disagreements with accountants on any matter of accounting principles or practices or financial statement disclosures during the two years ended October 31, 2015.
 
Item 9A
Controls and Procedures
 
 
(a)
Evaluation of disclosure controls and procedures
 
Our principal executive officer and our principal financial officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 as amended) as of the end of the period covered by  this report. Based on that evaluation, such principal executive officer and principal financial officer concluded that the Company’s disclosure controls and procedures were effective as of the end of the period covered by this report at the reasonable level of assurance.
 
(b)
Management’s Report on Internal Control over Financial Reporting
 
Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange act Rules 13a-15(f) under the Securities Exchange Act of 1934, as amended.  Under the supervision of management and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the 1992 framework in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on our evaluation of internal control over financial reporting, our management concluded that our internal controls over financial reporting was effective as of October 31, 2015.
 
(c)
Attestation report of the Registered Public Accounting Firm
 
This Annual Report on Form 10-K does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s independent registered public accounting firm pursuant to an exemption for smaller reporting companies under Section 989G of the Dodd-Frank Wall Street Reform and Consumer Protection Act.
 
(d)
Change in Internal Control over Financial Reporting
 
There were no changes in the Company’s internal control over financial reporting identified in connection with the evaluation of such internal control that occurred during the Company’s last fiscal quarter that have materially affected, or are reasonably likely to materially affect the Company’s internal control over financial reporting.
15

 
(e)
Other
 
We believe that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected. Therefore, a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Our disclosure controls and procedures are designed to provide such reasonable assurances of achieving our desired control objectives, and our principal executive officer and principal financial officer have concluded, as of October 31, 2015, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.
 
Item 9B                          Other Information

None.
 
16


 
PART III

Item 10.                          Directors and Executive Officers and Corporate Governance

The following table sets forth our directors and officers, their ages and all offices and positions with our company.  Officers and other employees serve at the will of the Board of Directors.

Name
Age
Position(s) Held
     
Joseph Gutnick
64
Chairman of the Board, President, Chief
Executive Officer and Director
     
Peter Lee
59
Secretary, Chief Financial Officer
and Principal Accounting Officer

Director Qualifications

The following paragraphs provide information as of the date of this report about our sole director as well as about each executive officer. The information presented includes information each director has given us about his age, all positions he holds, his principal occupation and business experience for the past five years, and the names of other publicly-held companies of which he currently serves as a director or has served as a director during the past five years.  In addition to the information presented below regarding our director’s specific experience, qualifications, attributes and skills that led our Board to the conclusion that he should serve as a director, we also believe that our director has demonstrated an ability to exercise sound judgment, as well as a commitment of service to Aurum and our Board. Finally, we value his significant experience in the mining industry and other public and board committees.

Joseph Gutnick

Mr. Gutnick is a leading mining industry entrepreneur and has been President and a Director since July 2009, and has been the Chief Executive Officer since April 2012. In addition, Mr. Gutnick was Chief Executive Officer from July 2009 until June 2011. He is currently President, Director and CEO of Golden River Resources Corporation (for more than 10 years) which is a  US corporations listed on the OTC market in the USA; and President and CEO of Northern Capital Resources Corp and  Great Central Resources Corporation, US corporations. Mr. Gutnick was previously a Director of the World Gold Council. He has previously been a Director of Legend International Holdings Inc. (since 2004), Consolidated Gems, Inc, Merlin Diamonds Limited, Top End Minerals Limited Acadian Mining Corporation, Quantum Resources Limited and Royal Roads Corporation in the last five years. He is a Fellow of the Australasian Institute of Mining & Metallurgy and the Australian Institute of Management and a Member of the Australian Institute of Company Directors.

Mr. Gutnick’s extensive experience in leading teams in building and operating major mining operations in Australia as well as his experience in founding and serving as the chief executive officer and chairman of a number of public companies will provide our Board with valuable executive leadership and management experience.

Peter Lee

Mr. Peter Lee has been Secretary since July 2009 and Chief Financial Officer and Principal Accounting Officer since January 2015. Mr. Lee is a Member of the Institute of Chartered Accountants in Australia, a Fellow of Governance Institute of Australia Ltd., a Member of the Australian Institute of Company Directors and holds a Bachelor of Business (Accounting) from Royal Melbourne Institute of Technology. He has over 30 years commercial experience and is currently Director, CFO and Secretary of Golden River Resources Corporation (for more than 10 years), and CFO and Secretary of Consolidated Gems, Inc. (since 2009), which are US corporations listed on the OTC market in the USA; CFO and Secretary of Northern Capital Resources Corp and Great Central Resources Corporation, US Corporations; and CFO and Secretary of Merlin Diamonds Limited, listed on the Australian Securities Exchange. He was a Director of Acadian Mining Corporation, Quantum Resources Limited and CFO, Secretary of Legend International Holdings Inc and a Director, CFO and Secretary of Top End Minerals Limited in the last five years.
 
17

 
The Company’s Directors have been appointed for a one-year term  which will continue until their successors have been elected and qualified.

The Director and Senior Executives devote sufficient amounts of their business time to the affairs of the Company to advance its activities.

Directors need not be stockholders of the Company or residents of the State of Delaware. Directors are elected for an annual term and generally hold office until the next Directors have been duly elected and qualified. Directors may receive compensation for their services as determined by the Board of Directors. A vacancy on the Board may be filled by the remaining Directors even though less than a quorum remains. A Director appointed to fill a vacancy remains a Director until his successor is elected by the Stockholders at the next annual meeting of Shareholder or until a special meeting is called to elect Directors.

Mr. Simon Lee, who was CFO of the Company resigned as of January 22, 2015.

Involvement on Certain Material Legal Proceedings During the Last Ten Years

No director, officer, significant employee or consultant has been convicted in a criminal proceeding, exclusive of traffic violations.  No director, officer, significant employee or consultant has been permanently or temporarily enjoined, barred, suspended or otherwise limited from involvement in any type of business, securities or banking activities. No director, officer or significant employee has been convicted of violating a federal or state securities or commodities law.

On August 27, 2013 the Supreme Court of Australia found in favour of a shareholder of an entity of which Joseph Gutnick is a director in respect of the purchase of shares in that entity from Mr. Gutnick by that shareholder.  The Court found and made orders that (i) notwithstanding that the purchase by the plaintiff was for a total of A$1,000,000, the investor was not a sophisticated investor within the meaning of the Corporations Act 2011 (Cth) by reason of the fact that the investment funds were paid by a number of instalments.  The Court held that only a purchase where a minimum of A$500,000 was paid as a first payment qualified the purchaser as a sophisticated investor and thereby exempted the seller from providing a disclosure statement.  In consequence, the Court ordered the shares purchase agreement be rescinded and declared void and that Mr. Gutnick repay the plaintiff the $1,000,000 purchase price.

On November 24, 2015, Legend International Holdings Inc. announced that it had entered into a Convertible Bond and Subscription Agreement (“Bond Agreement”) and Security Bond Deed, both dated November 24, 2015 with Queensland Phosphate Pty Ltd (“QPL”). Pursuant to those documents, the Company was advised on March 16, 2016 that QPL had appointed receivers and managers to Paradise Phosphate Limited (“PPL”) and the Company’s shareholding in PPL on March 11, 2016.

On October 21, 2015, Legend International Holdings Inc. announced that Indian Farmers Fertilizer Co-Operative and its Dubai domiciled subsidiary Kisan International Trading had filed a claim in the Victorian Supreme Court (Australia) to enforce an order of the Singapore International Arbitration Centre against the Company and Mr Joseph Gutnick. Under the order, the Company and Mr Gutnick are to pay IFFCO and Kisan a total of US$12.35 million and US$28.05 million, plus interest and costs, respectively.  Following on from that decision, Indian Farmers Fertilizer Co-Operative and its Dubai domiciled subsidiary Kisan International Trading have served a letter of demand on the Company for AUD$25,027,208. Legend and Mr Gutnick challenged the enforcement of the order in the Supreme Court of Victoria Australia but were unsuccessful and the Court ordered that Legend be placed in liquidation.
 
18


 
Mr Gutnick was a Director and Mr Lee was Chief Financial Officer and Secretary of Legend and PPL.

Following the decision of the Supreme Court in Victoria, Mr Gutnick declared personal bankruptcy.

Board, Audit Committee and Remuneration Committee Meetings

Our Board of Directors currently consists of one director. During fiscal 2015, our Board of Directors met once.

We do not have a nominating committee. Historically our entire Board has selected nominees for election as directors. The Board believes this process has worked well thus far particularly since it has been the Board's practice to require unanimity of Board members with respect to the selection of director nominees. In determining whether to elect a director or to nominate any person for election by our stockholders, the Board assesses the appropriate size of the Board of Directors, consistent with our bylaws, and whether any vacancies on the Board are expected due to retirement or otherwise. If vacancies are anticipated, or otherwise arise, the Board will consider various potential candidates to fill each vacancy. Candidates may come to the attention of the Board through a variety of sources, including from current members of the Board, stockholders, or other persons. The Board of Directors has not yet had the occasion to, but will, consider properly submitted proposed nominations by stockholders who are not directors, officers, or employees of Aurum, Inc. on the same basis as candidates proposed by any other person. We do not have a policy with respect to the use of diversity as a criteria for Board membership and do not consider diversity in the selection of our Directors.
 
Audit Committee

At October 31, 2015, the Company had not formed an audit committee or adopted an audit committee charter. In lieu of an audit committee, the Company's Board of Directors assumes the responsibilities that would normally be those of an audit committee. Given the limited scope of the Company’s operations to date, the Board of Directors does not at present have a director that would qualify as an audit committee financial expert under the applicable federal securities law regulations.
 
Remuneration Committee

At October 31, 2015, the Company had not formed a remuneration committee or adopted a remuneration committee charter. In lieu of a remuneration committee, the Company's board of directors assumes the responsibilities that would normally be those of a remuneration committee.
 
Code of Ethics

We have adopted a Code of Conduct and Ethics and it applies to all Directors, Officers and employees. A copy of the Code of Conduct and Ethics is on our website at auruminc.net. We will provide a copy of the Code of Conduct and Ethics any person without charge.  If you require a copy, contact us by facsimile or email and we will send you a copy.
 
19


 
Stockholder Communications with the Board

Stockholders who wish to communicate with the Board of Directors should send their communications to the Chairman of the Board at the address listed below.  The Chairman of the Board is responsible for forwarding communications to the appropriate Board members.

Mr. Joseph Gutnick
Aurum, Inc.
PO Box 6315 St. Kilda Road
Central Melbourne, Victoria 8008 Australia

Section 16(a) Beneficial Ownership Reporting Compliance

Pursuant to Section 16(a) of the Securities Exchange Act of 1934, our Directors, executive officers and beneficial owners of more than 10% of the outstanding Common Stock are required to file reports with the Securities and Exchange Commission concerning their ownership of and transactions in our Common Stock and are also required to provide to us copies of such reports.  Based solely on such reports and related information furnished to us, we believe that in fiscal 2015 all such filing requirements were complied with in a timely manner by all Directors, executive officers and greater than 10% stockholders.

Item 11.                          Executive Compensation.

The following table sets forth the annual salary, bonuses and all other compensation awards and pay outs on account of our Chief Executive Officer for services rendered to us during the fiscal years ended October 31, 2015 and October 31, 2014. No other executive officer received more than US$100,000 per annum during this period. The amounts listed below were paid by us to AXIS, which provides the services of Mr. Gutnick.

Summary Compensation Table
Name and
Principal
Position
Year
Salary
Bonus
Stock
Awards
Option
Awards
Non-Equity
Incentive Plan
Compensation
Change in
Pension Value
and
Nonqualified
Deferred
Compensation
Earnings
All Other
Compensation
Total
Joseph
Gutnick,
Chairman
of the
Board,
President
and CEO (1)
2015
2014
-
$ 3,004
-
-
-
-
-
-
-
-
-
-
-
-
-
$ 3,004

1.
Joseph Gutnick appointed July 23, 2009, resigned as CEO on June 6, 2011 and was reappointed on April 30, 2012.

We have a policy that we will not enter into any transaction with an officer, Director or affiliate of the Company or any member of their families unless the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to the Company at the time authorised.

Outstanding Equity Awards at Fiscal Year-End

None.

Principal Officers Contracts

The principal officers do not have any employment contracts.
20

2010 Stock Option Plan

The 2010 Plan provides for the granting of options. The maximum number of shares available for awards is 10% of the issued and outstanding shares of common stock on issue at any time (on a fully diluted basis). If an option expires or is cancelled without having been fully exercised or vested, the remaining shares will generally be available for grants of other awards.

The 2010 Plan is administered by the Board of Directors.

Any employee, director, officer, consultant of or to the Company or an affiliated entity (including a company that becomes an affiliated entity after the adoption of the 2010 Plan) is eligible to participate in the 2010 Plan if the Board, in its sole discretion, determines that such person has contributed significantly or can be expected to contribute significantly to the success of the Company or an affiliated entity. During any one year period, no participant is eligible to be granted options to purchase more than 5% of our issued and outstanding shares of common stock or if they provide investor relations activities, or are a consultant to the Company, 2% of the issued and outstanding shares of common stock in any 12 month period.

Options granted under the 2010 Plan are to purchase Aurum common stock.  The term of each option will be fixed by the Board, but no option will be exercisable more than 10 years after the date of grant.  The option exercise price is fixed by the Board at the time the option is granted.  The exercise price must be paid in cash. Options granted to participants vest and have a term of 10 years, unless otherwise decided by the Board at the time of issue.

No award is transferable, or assignable by the participant except upon his or her death.

The Board may amend the 2010 Plan, except that no amendment may adversely affect the rights of a participant without the participant’s consent or be made without stockholder approval if such approval is necessary to qualify for or comply with any applicable law, rule or regulation the Board deems necessary or desirable to qualify for or comply with.

Subject to earlier termination by the Board, the 2010 Plan has an indefinite term except that no Incentive Stock Options (“ISO”) may be granted following the tenth anniversary of the date the 2010 Plan is approved by stockholders.

There are no current plans or arrangements to grant any options under the 2010 Plan other than those already issued.

Compensation Pursuant to Plans

The Company does not have any pension or profit sharing plans.

Compensation of Directors

The Company’s directors did not receive any compensation during fiscal 2015 other than as disclosed in the Summary Compensation Table.

It is our policy to reimburse Directors for reasonable travel and lodging expenses incurred in attending Board of Directors meetings.
 
21

 
Securities authorized for issuance under equity compensation plans
 
The following table sets forth, as of October 31, 2015, information regarding options under our 2010 stock option plan, our only active plan.  The 2010 Plan has not been approved by our stockholders.  Outstanding options under this plan that are forfeited or cancelled will be available for future grants. All of the options are for the purchase of our common stock.


 
Plan Category
 
 
 
Number of securities to
be issued upon exercise
of outstanding options
(a)
 
 
 
Weighted average
Exercise price of
outstanding options
(b)
 
Number of securities
remaining available for
future issuances under
equity compensation plans
(excluding securities
reflected in column (a))
(c)
             
Equity compensation
plans approved by
security holders
 
 
-
 
-
 
-
             
Equity compensation
plans not approved
by security holders
 
 
3,250,000
 
 
$1.00
 
 
7,635,000
 
             
   Total
 
3,250,000 (1)
     
7,635,000 (1)
 
 
 
(1)
The maximum number of shares available for issuance under the 2010 stock option plan is equal to 10% of the issued and outstanding shares (on a fully diluted basis) of common stock, at any time.
 
 
As a result of the termination of the employees holding the options, the employees had a period of 90 days from the date of termination to exercise the options. The holders did not exercise the options therefore the options expired in April 2014 and May 2015.
 

 
Item 12.                          Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding the beneficial ownership of our common stock by each person or entity known by us to be the beneficial owner of more than 5% of the outstanding shares of common stock, each of our directors and named executive officers, and all of our directors and executive officers as a group as of September 22, 2017.

Title of
Class
Name and Address
of Beneficial Owner*
Amount and nature of
Beneficial Owner
  Percentage
of class (1)
Shares of Common Stock
Shares of Common Stock
Joseph Gutnick
All officers and Directors
as a group
101,600,000
101,600,000
74.92
74.92
*
Unless otherwise indicated, the address of each person is c/o Aurum, Inc., Level 1A, 42 Moray Street, Southbank, Victoria 3006 Australia

Notes:

(1)
Based on 135,600,000 shares outstanding as of September 22, 2017. Gives effect to an 8 for 1 stock split in the form of a dividend that was effected as of October 23, 2009.
(2)
Includes 101,600,000 shares owned by Golden Target Pty Ltd, of which the family of Mr. Joseph Gutnick are the sole Directors and stockholders.

Item 13.                          Certain Relationships and Related Transactions and Director Independence

In August 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company. AXIS has some common management and is incorporated in Australia. Mr. Peter Lee is Chief Financial Officer and Company Secretary of AXIS and owes fiduciary duties to both parties. AXIS’ principal business is to provide geological, management and administration services to companies. We are one of six companies that AXIS provides services to, namely Merlin Diamonds Limited, Northern Capital Resources Corp, Golden River Resources Corporation, Great Central Resources Corp, Aurum Inc., and Consolidated Gems Inc.

Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and certain mining and exploration staff.  A number of arrangements and transactions have been entered into from time to time between such companies.  It has been the intention of the companies and respective Boards of Directors that each of such arrangements or transactions should accommodate the respective interest of the relevant companies in a manner which is fair to all parties and equitable to the shareholders of each. Currently, there are no material arrangements or planned transactions between the Company and any of the other companies other than AXIS.
 
22

 
AXIS is paid by each company for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, human resources, company secretarial, land management, certain exploration and mining support including provision of exploration managers and geologists, financial, accounting advice and services.  AXIS also provides for the Company various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company.

We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilisation of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first request AXIS to provide the service and AXIS fails to provide the service within one month.

The Service Agreement may be terminated by AXIS or ourselves upon 60 days prior notice. If the Service Agreement is terminated by AXIS, we would be required to independently provide, or to seek an alternative source of providing, the services currently provided by AXIS.  There can be no assurance that we could independently provide or find a third party to provide these services on a cost-effective basis or that any transition from receiving services under the Service Agreement will not have a material adverse effect on us.  Our inability to provide such services or to find a third party to provide such services may have a material adverse effect on our operations.

The arrangement with AXIS has changed since it was originally entered into as the relationship has evolved as a result of the requirements of certain suppliers to be able to deal directly with us. In these cases, AXIS does not charge us a management or service fee in respect to these arrangements with suppliers who deal with us directly. The types of services that are provided directly to us include audit and tax services, legal services, stock transfer services, drilling services, assay laboratory services, leases of some offices, finance leases and Delaware franchise tax.
 
In accordance with the Service Agreement, AXIS provides the Company with the services of our Chief Executive Officer, Chief Financial Officer and clerical employees, as well as office facilities, equipment, administrative and clerical services. We pay AXIS for the actual costs of such facilities plus a maximum service fee of 15%.  AXIS billed Aurum $56,226 (2014: $71,597) as per the services agreement for 2015.

During the year ended October 31, 2015, AXIS provided services in accordance with the services agreement and incurred direct costs on behalf of the Company of $56,226 (2014: $71,597), and advanced  the Company $23,180 (2014: $170,991). For the year ended October 31, 2015, the foreign currency translation effect of the amount owed to AXIS was a gain of approximately $1,224,634 (2014: $542,982). During fiscal 2015, the Company issued 30,000,000 shares of common stock to AXIS as repayment of a debt of $5,057,776. At October 31, 2015, the Company owed AXIS $834,327 (2014: $7,025,426). The Company has received advances from AXIS in connection with the ongoing business relationship between the two parties, which have been disclosed in the Company’s SEC reports, but which are not specifically provided for in the AXIS Services Agreement. Historically, the shortfall in our cash receipts has been covered by cash advances from AXIS. The purpose of such advances is to assist us in meeting our ongoing cash flow requirements. The parties are in discussions in relation to the Company providing security to AXIS for the amount outstanding however no agreement has been reached to-date. Mr. Peter Lee is Chief Financial Officer & Company Secretary of AXIS and owes fiduciary obligations to both parties. It is the intention of the Boards of Directors of AXIS and the Company that this issue be resolved in a manner that is fair to all parties and equitable to the shareholders of each, but there are no agreements or understandings addressing the priority or dispensation of fiduciary duties with respect to the discussions to resolve the amount outstanding owed to AXIS or any other conflict of interest with AXIS or other affiliates. At October 31, 2015, the Company owed the former Managing Director of its Laos operation $232,500 (2014: $232,500). The Company intends to repay these amounts with funds raised either via additional debt or equity offerings. AXIS and the former Managing Director have advised they do not currently intend to require repayment of these advances prior to October 31, 2016, accordingly, the Company has decided to classify the amounts payable as non-current in the accompanying balance sheets.

23

 
Transactions with Management

We have a written policy that we will not enter into any transaction with an Officer, Director or affiliate of us or any member of their families unless the transaction is approved by a majority of our disinterested non-employee Directors and the disinterested majority determines that the terms of the transaction are no less favourable to us than the terms available from non-affiliated third parties or are otherwise deemed to be fair to us at the time authorised.

Item 14.                          Principal Accounting Fees and Services

The following table shows the audit fees that were billed or are expected to be billed by PKF for fiscal 2015 and 2014.
 
 

   
2015
   
2014
 
             
Audit fees
 
 
$31,000
   
 
$37,035
 
Tax fees
 
 
$6,242
   
 
$3,356
 
Total
 
 
$37,742
   
 
$40,391
 

Audit fees were for the audit of our annual consolidated financial statements, review of consolidated financial statements included in our 10-Q quarterly reports, and services that are normally provided by independent auditors in connection with our other filings with the SEC. This category also includes advice on accounting matters that arose during, or as a result of, the audit or review of our interim consolidated financial statements.

As part of its duties, our Board pre-approves audit and non-audit services performed by our independent auditors in order to assure that the provision of such services does not impair the auditors’ independence.  Our Board does not delegate to management its responsibilities to pre-approve services performed by our independent auditors.
 
24


 
PART IV

Item 15.                          Exhibits, Financial Statement Schedules

(a)
Financial Statements and Notes thereto.

The Consolidated Financial Statements and Notes thereto listed on the Index at page 28 of this Annual Report on Form 10-K are filed as a part of this Annual Report.

(b)
Exhibits

The Exhibits to this Annual Report on Form 10-K are listed in the Exhibit Index at page 28 of this Annual Report.
 
25



SIGNATURES


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has caused this Annual Report to be signed on its behalf by the undersigned, thereunto duly authorised.
 
 
 
 
 
AURUM, INC.
 
 
 
 
 
 
 
(Registrant)
 
 
 
 
 
 
 
 
 
 
By:
/s/ Peter Lee
 
 
 
Peter Lee
 
 
 
Chief Financial Officer
 
 
 
(Principal Financial Officer)
 
 
 
 
 
 
 
 
 
 
 
 
 
Dated: September 22, 2017
 
 
 
26

 


FORM 10-K Signature Page


Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons in the capacities and on the dates indicated.


Signature
Title
Date
 
 
 
 
 
 
 
 
 
 
 
 
 1.
  /s/ Joseph Gutnick
 
 
Chairman, President and Chief Executive Officer.
 
September 22, 2017
 
Joseph Gutnick
 
 
 
27


 


EXHIBIT INDEX


Incorporated by
Reference to:  
Exhibit 
No
 
Exhibit 
       
(1)
(1)
(1)
(2)
(3)
(4)
(5)
 
*
 
*
   
 
*
   
       
101
   
The following materials from the Aurum Inc. Annual Report on Form 10-K for year ended October 31, 2015 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations , (iii) the Statements of Stockholders’ Equity (Deficit), (iv) the Statements of Cash Flows and (v) related notes.

*Filed herewith

Footnotes:
 
(1)
Incorporated by reference to the Registrant’s Information Statement on Schedule 14C filed on December 21, 2009.
(2)
Incorporated by reference to the Company’s 10-Q filed on March 16, 2011.
(3)
Incorporated by reference to the Company’s 10-K filed on January 27, 2011.
(4)
Incorporated by reference to the Company’s 8-K filed on February 25, 2011.
(5)
Incorporated by reference to the Company’s 8-K filed on April 6, 2011.
 

28

 
Consolidated Financial Statements as of October 31, 2015 and 2014 and for the years ended October 31, 2015 and 2014.

Aurum, Inc.
Audited Consolidated Financial Statements for the Company as of October 31, 2015 and 2014 and for the years ended October 31, 2015 and 2014.

29

 
 
 

 
AURUM, INC.


Consolidated Financial Statements

October 31, 2015 and 2014

(with Report of Independent Registered Public Accounting Firm)

 
 
 
 
 
 

 
 
 
 
F - 2

 
Report of Independent Registered Public Accounting Firm


To the Board of Directors and Stockholders of Aurum, Inc.

We have audited the accompanying consolidated balance sheets of Aurum, Inc. as of October 31, 2015 and 2014, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for the years ended October 31, 2015 and 2014. These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  We were not engaged to perform an audit of the Company’s internal control over financial reporting.  Our audits include consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.  Accordingly, we express no such opinion.  An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Aurum, Inc. at October 31, 2015 and 2014, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As described in note 1, at October 31, 2015, the Company has limited assets, negative working capital, has not yet commenced revenue producing operations and has a retained (deficit) of approximately $9,100,000. These conditions raise substantial doubt about the Company’s ability to continue as a going concern.  The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.  Management’s plans in regard to these matters are also discussed in note 3.





/s/ PKF O’Connor Davies, LLP



New York, NY
September 21, 2017
 
F - 3


 

AURUM, INC.
Consolidated Balance Sheets
October 31, 2015 and 2014

   
2015
US$
   
2014
US$
 
ASSETS
           
             
Current Assets:
           
Cash
   
197
     
3,073
 
Prepayments
   
-
     
963
 
Total Current Assets
   
197
     
4,036
 
                 
Total Assets
   
197
     
4,036
 
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
               
                 
Current Liabilities:
               
Accounts payable and accrued expenses
   
205,355
     
248,841
 
Total Current Liabilities
   
205,355
     
248,841
 
                 
Non-Current Liabilities:
               
Payable to affiliates
   
1,066,827
     
7,257,926
 
Total Non-Current Liabilities
   
1,066,827
     
7,257,926
 
                 
Total Liabilities
   
1,272,182
     
7,506,767
 
                 
Stockholders’ Equity (Deficit):
               
Common stock: $.0001 par value
500,000,000 shares authorised
135,600,000 shares issued and outstanding (2014: 105,600,000)
   
13,560
     
10,560
 
Additional paid-in-capital
   
7,794,983
     
2,740,207
 
Retained (deficit)
   
(9,080,528
)
   
(10,253,498
)
Total Stockholders’ Equity (Deficit)
   
(1,271,985
)
   
(7,502,731
)
                 
Total Liabilities and Stockholders’ Equity (Deficit)
   
197
     
4,036
 
 
See Notes to Consolidated Financial Statements                 
 
F - 4

 
AURUM, INC.
Consolidated Statements of Operations

   
Year
Ended
October 31,
2015
US$
   
Year
Ended
October 31,
2014
US$
 
             
Revenues
   
-
     
-
 
                 
Cost and expenses
               
Legal, accounting & professional
   
70,266
     
60,319
 
Administration expenses
   
49,636
     
110,847
 
Exploration expenses
   
-
     
185,296
 
Interest expense, net
   
150
     
-
 
 
Total costs and expenses
   
120,052
     
356,462
 
 
(Loss) from operations
   
(120,052
)
   
(356,462
)
                 
Other income
   
66,646
     
-
 
Foreign currency exchange gain
   
1,226,376
     
542,739
 
 
Income before income tax
   
1,172,970
     
186,277
 
                 
Provision for income tax
   
-
     
-
 
 
Net income
   
1,172,970
     
186,277
 
                 
Basic and diluted net income per common
equivalent shares
   
0.01
     
0.00
 
                 
Weighted average number of common equivalent
shares used per share calculation (in 000’s)
   
113,244
     
105,600
 
                 
                 

 
See Notes to Consolidated Financial Statements                
F - 5


AURUM, INC.
Consolidated Statements of Stockholders’ Equity (Deficit)
October 31, 2015


 
 
 
 
 
Shares
Common
Stock
Amount
 
Additional
Paid-in
Capital
Accumulated
(Deficit)
 
 
 
Total
   
US$
US$
US$
US$
 
Balance, October 31, 2013
 
105,600,000
10,560
2,740,207
(10,439,775)
(7,689,008)
 
Net income
 
-
-
-
186,277
186,277
 
Balance, October 31, 2014
 
105,600,000
10,560
2,740,207
(10,253,498)
(7,502,731)
 
Issuance of common stock
 
30,000,000
3,000
5,054,776
-
5,057,776
 
Net income
 
-
-
-
1,172,970
1,172,970
 
Balance, October 31, 2015
 
135,600,000
13,560
7,794,983
(9,080,528)
(1,271,985)

 See Notes to Consolidated Financial Statements
F - 6

 
AURUM, INC.
Consolidated Statements of Cash Flows



   
Year
Ended
October
31, 2015
   
Year
Ended
October
31, 2014
 
   
US$
   
US$
 
             
CASH FLOW FROM OPERATING ACTIVITIES
           
             
Net income
   
1,172,970
     
186,277
 
                 
Adjustments to reconcile net income to net cash (used) in operating activities:
               
Foreign currency exchange (gain)
   
(1,226,376
)
   
(542,739
)
Depreciation
   
-
     
423
 
                 
Changes in operating assets and liabilities:
               
Prepayments
   
963
     
7,781
 
Receivables
   
-
     
19,696
 
Accounts payable and accrued expenses
   
(43,486
)
   
76,493
 
Net Cash (used) in Operating Activities
   
(95,929
)
   
(252,069
)
                 
                 
CASH FLOW FROM FINANCING ACTIVITIES
               
                 
Advances payable – affiliates
   
91,311
     
242,588
 
Net Cash provided by Financing Activities
   
91,311
     
242,588
 
                 
Effect of exchange rate changes on cash
   
1,742
     
(243
)
                 
Net (decrease) in Cash
   
(2,876
)
   
(9,724
)
                 
Cash at Beginning of Year
   
3,073
     
12,797
 
Cash at End of Year
   
197
     
3,073
 
                 
                 
Non-Cash Transactions 
               
                 
Issuance of common stock to settle liability 
   
5,057,776
      -  
 


See Notes to Consolidated Financial Statements
F - 7


AURUM, INC.
Notes to Consolidated Financial Statements
October 31, 2015 and 2014

 
(1)
ORGANIZATION AND BUSINESS

 
Aurum, Inc. ("Aurum” or the “Company") was incorporated in the State of Florida in September 2008. The principal stockholder of Aurum is Golden Target Pty Ltd., an Australian corporation (“Golden”), which owned 74.93% of Aurum as of October 31, 2015.

On January 20, 2010, the Company re-incorporated in the state of Delaware (the “Reincorporation”) through a merger involving Liquid Financial Engines Inc. and Aurum, Inc., a Delaware Corporation that was a wholly owned subsidiary of Liquid. The Reincorporation was effected by merging Liquid with Aurum, with Aurum being the surviving entity. For purposes of the Company’s financial reporting status, Aurum is deemed a successor to Liquid.

In July 2009, Golden acquired a 96% interest in Aurum from certain stockholders. In connection therewith, the Company appointed a new President/Chief Executive Officer/Director and Chief Financial Officer/Secretary. The sole director and stockholder of Golden is also the President of the Company.

Commencing August 2009, the Company decided to focus on mineral exploration for gold and copper in the Lao Peoples Democratic Republic.

In December 2010, the Company executed a Management and Shareholders Agreement with Argonaut Overseas Investments Ltd (“AOI”), an indirectly wholly owned Subsidiary of Argonaut Resources N.L., in respect to Argonaut’s 70% held Century Concession in Laos. The agreement appointed Aurum as the manager of the Century Thrust Joint Venture Agreement (“Joint Venture”) and the Company had the right to earn 72.86% of AOI’s interest in the Joint Venture which was equivalent to a 51% beneficial interest in the Century Concession.

The Century Concession expired in fiscal 2014. As a result, the Company no longer has any exploration interests in Laos.

The Company has funded operations since inception through advances from affiliated entities. The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplates continuation of Aurum as a going concern. However, Aurum has limited assets, negative working capital, has not yet commenced revenue producing operations and has a retained (deficit).

The Company’s ability to continue operations through the foreseeable future is dependent upon future funding from affiliated entities, capital raisings, or its ability to commence revenue producing operations and positive cash flows, however there can be no assurance that the Company will be successful in these efforts.
F - 8


(2)
ACCOUNTING POLICIES
 
The Company is an exploration stage company and the following is a summary of the significant accounting policies followed in connection with the preparation of the consolidated consolidated financial statements.

(a)
Basis of presentation and use of estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure on contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

The functional and reporting currency of the Company is the US dollar.

(b)
Principles of Consolidation

The consolidated financial statements include the assets and liabilities of the Company and the entities it controlled at the end of the financial period and the results of the Company and the entities it controlled during the year. Where entities are not controlled throughout the entire financial year, the consolidated results include the results of those entities for that part of the period during which control exists. The effect of all transactions between entities in the group and the inter-entity balances are eliminated in full in preparing the consolidated consolidated financial statements. The Company has only one controlled entity.

(c)
Cash Equivalents

Aurum considers all highly liquid investments with an original maturity of three months or less at the time of purchase to be cash equivalents.  For the periods presented there were no cash equivalents.

(d)
Foreign Currency

The Company’s payables to affiliates are denominated in Australian dollars and converted to U.S. dollars at the end of each reporting period. Resulting gains and losses are included in the statement of operations.

(e)
Federal Income Tax

The Company accounts for income taxes pursuant to ASC Topic 740, "Accounting for Income Taxes", which requires an asset and liability approach to calculating deferred income taxes.  The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities. For the period presented, there was no taxable income. There are no deferred income taxes resulting from temporary differences in reporting certain income and expense items for income tax and financial accounting purposes. Aurum at this time is not aware of any net operating losses which are expected to be realised.

(f)
Australian Tax Law

The Company is an Australian resident corporation under Australian law and accordingly is subject to Australian income tax on its non-exempt worldwide assessable income (which includes capital gains), less allowable deductions, at the rate of 30%. Foreign tax credits are allowed where tax has been paid on foreign source income provided the tax credit does not exceed 30% of the foreign source income.
 
Under the U.S. Australia tax treaty, a U.S. resident corporation such as Aurum is subject to Australian income tax on net profits attributable to the carrying on of a business in Australia through a “permanent establishment” in Australia. A “permanent establishment” is a fixed place of business through which the business of an enterprise is carried on. The treaty limits the Australian tax on interest and royalties paid by an Australian business to a U.S. resident to 10% of the gross interest or royalty income unless it relates to a permanent establishment. Although we believe that we do not have a permanent establishment in Australia, the Company may be deemed to have such an establishment due to the location of its administrative offices in Melbourne. In addition we may receive interest or dividends from time to time.
F - 9

(g)
Income/(Loss) per Share

Basic earnings (loss) per common share is based on the weighted average number of shares outstanding during each period presented. The diluted earnings per share computation includes the effect, if any, of shares that would be issuable upon the exercise of outstanding stock options, warrants and convertible debts, reduced by the number of shares which are assumed to be purchased by the Company from the resulting proceeds at the average market price during the period, when such amounts are dilutive to the earnings per share calculation.

(h)
Fair value of Financial Instruments

FASB ASC Topic 825, “Financial Instruments”, requires the Company to disclose, when reasonably attainable, the fair values of its assets and liabilities which are deemed to be financial instruments.

The Company’s financial instruments consist of cash, accounts payable and accrued expenses, and advances from affiliate. The carrying amounts of cash, accounts payable and accrued expenses approximate their respective fair values because of the short term nature of those instruments. The fair value of the advances from affiliate is not determinable as it is due to an affiliated entity, no market exists for similar instruments and settlement date is uncertain.

(i)
Comparative Figures

Where necessary, comparative figures have been restated to be consistent with current year presentation.

(j)
Mineral Property Acquisition, Exploration Costs and Amortization of Mineral Rights

Mineral property acquisition, exploration and development costs are expensed as incurred until such time as economic reserves are quantified.  To date, the Company has not established any proven or probable  reserves on its mineral properties. When it is determined that a mining deposit can be economically and legally extracted or produced based on established proven and probable reserves, further exploration costs and development costs incurred after such determination will be capitalized. The establishment of proven and probable reserves is based on results of final feasibility studies which indicate whether a property is economically feasible. Upon commencement of commercial production, capitalized costs will be transferred to the appropriate asset category and amortized over their estimated useful lives. Capitalized costs, net of salvage values, relating to a deposit which is abandoned or considered uneconomic for the foreseeable future, will be written off.
F - 10

(3)
GOING CONCERN
 
The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. The Company has not yet commenced revenue producing operations and had a retained (deficit) of $9,080,528 as of October 31 2015. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. The Company will require additional funding for operations and this additional funding may be raised through debt or equity offerings. The Company has a debt due to AXIS Consultants Pty Ltd (AXIS). AXIS provides management services to the Company and the cost of these services increases the amount of the debt. In addition, the Company has historically relied on loans and advances from corporations affiliated with the President of Aurum, Inc.  Based on discussions with these affiliate companies, the Company believes this source of funding will continue to be available. Other than the arrangements noted above, the Company has not confirmed any other arrangement for ongoing funding. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

(4)
RECENT ACCOUNTING PRONOUNCEMENTS

In June 2014, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2014-10, “Development Stage Entities (Topic 915): Elimination of Certain Financial Reporting Requirements, Including an Amendment to Variable Interest Entities Guidance in Topic 810, Consolidation”. The Company adopted the update to (Topic 915) Development Stage Entities, for the elimination of certain disclosures currently required under US GAAP in the financial statements for development stage entities. The amendment removes the definition of a development stage entity, thereby removing the financial reporting distinction between the development stage entities and reporting entities from US GAAP. The Company has adopted ASU No. 2014-10 and accordingly eliminated the inception-to-date information in the statements of income, cash flows, and shareholder equity. The financial statements are no longer labelled as an exploration or development stage entity, and no disclosure is required for a description of the development stage activities the entity is engaged or when they are no longer a development stage entity. This update also eliminates an exception provided to development stage entities in FASC Topic 810, Consolidation, for determining whether an entity is a Variable Interest Entity (VIE) based on the amount of equity at risk.
 

In August 2014, the Financial Accounting Standards Board (“FASB”)  issued Accounting Standards Update No. 2014-15, Presentation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entities Ability to Continue as a Going Concern (ASU 2014-15). The guidance in ASU 2014-15 sets forth management's responsibility to evaluate whether there is substantial doubt about an entity's ability to continue as a going concern as well as required disclosures. ASU 2014-15 indicates that, when preparing financial statements for interim and annual financial statements, management should evaluate whether conditions or events, in the aggregate, raise substantial doubt about the entity's ability to continue as a going concern for one year from the date the financial statements are issued or are available to be issued. This evaluation should include consideration of conditions and events that are either known or are reasonably knowable at the date the financial statements are issued or are available to be issued, as well as whether it is probable that management's plans to address the substantial doubt will be implemented and, if so, whether it is probable that the plans will alleviate the substantial doubt. ASU 2014-15 is effective for annual periods ending after December 15, 2016, and interim periods and annual periods thereafter. Early application is permitted.  The Company will evaluate the going concern considerations in this ASU however management does not believe the financial statements require additional disclosure.

Other Recently Issued, but not Yet Effective Accounting Pronouncements
 
Management does not believe that any recently issued, but not yet effective accounting pronouncements, if adopted, would have a material effect on the accompanying consolidated financial statements.
F - 11

(5)
AFFILIATE TRANSACTIONS

In August 2009, the Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide geological, management and administration services to the Company, (the “Service Agreement”). AXIS has some common management and is incorporated in Australia. Mr. Peter Lee is Chief Financial Officer and Company Secretary of AXIS and owes fiduciary duties to both parties. AXIS’s principal business is to provide geological, management and administration services to companies. We are one of seven companies that AXIS provides services to, namely, Merlin Diamonds Limited, Top End Minerals Limited, Northern Capital Resources Corp, Golden River Resources Corporation, Great Central Resources Corp, Aurum Inc., and Consolidated Gems Inc.

Each of the companies has some common Directors, officers and shareholders. In addition, each of the companies is substantially dependent upon AXIS for its senior management and certain mining and exploration staff.  A number of arrangements and transactions have been entered into from time to time between such companies.  It has been the intention of the companies and respective Boards of Directors that each of such arrangements or transactions should accommodate the respective interest of the relevant companies in a manner which is fair to all parties and equitable to the shareholders of each. Currently, there are no material arrangements or planned transactions between the Company and any of the other companies other than AXIS.

AXIS is paid by each company for the costs incurred by it in carrying out the administration function for each such company. Pursuant to the Service Agreement, AXIS performs such functions as payroll, maintaining employee records required by law and by usual accounting procedures, providing insurance, human resources, company secretarial, land management, certain exploration and mining support including provision of exploration managers and geologists, financial, accounting advice and services.  AXIS also provides for the Company’s various services, including but not limited to the making available of office supplies, office facilities and any other services as may be required from time to time by the Company as and when requested by the Company.

We are required to reimburse AXIS for any direct costs incurred by AXIS for the Company. In addition, we are required to pay a proportion of AXIS’s overhead cost based on AXIS’s management estimate of our utilisation of the facilities and activities of AXIS plus a service fee of not more than 15% of the direct and overhead costs. Amounts invoiced by AXIS are required to be paid by us. We are also not permitted to obtain services from sources other than AXIS, and we are not permitted to perform or provide ourselves, the services contemplated by the Service Agreement, unless we first request AXIS to provide the service and AXIS fails to provide the service within one month.

The Service Agreement may be terminated by AXIS or ourselves upon 60 days prior notice. If the Service Agreement is terminated by AXIS, we would be required to independently provide, or to seek an alternative source of providing, the services currently provided by AXIS.  There can be no assurance that we could independently provide or find a third party to provide these services on a cost-effective basis or that any transition from receiving services under the Service Agreement will not have a material adverse effect on us.  Our inability to provide such services or to find a third party to provide such services may have a material adverse effect on our operations.

In accordance with the Service Agreement, AXIS provides the Company with the services of our Chief Executive Officer, Chief Financial Officer and clerical employees, as well as office facilities, equipment, administrative and clerical services. We pay AXIS for the actual costs of such facilities plus a maximum service fee of 15%.  AXIS billed Aurum, Inc. as per the services agreement for 2015 of $56,226 (2014: $71,597).

During the year ended October 31, 2015, AXIS provided services in accordance with the services agreement and incurred direct costs on behalf of the Company of $56,226 (2014: $71,597), and advanced  the Company $23,180 (2013: $170,091). For the year ended October 31, 2015, the foreign currency translation effect of the amount owed to AXIS was a gain of $1,224,634 (2014: $542,982). During fiscal 2015, the Company issued 30,000,000 shares of common stock to AXIS as repayment of a debt of $5,057,776. At October 31, 2015, the Company owed AXIS $834,327 (2014: $7,025,426). At October 31, 2015, the Company owed the Managing Director of its former Laos operations (“Manager”)  $232,500 (2014: $232,500). The Company intends to repay these amounts with funds raised either via additional debt or equity offerings. AXIS and the Manager have advised they do not currently intend to require repayment of these advances prior to October 31, 2016, accordingly, the Company has decided to classify the amounts payable as non-current in the accompanying balance sheets.
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(6)
PROPERTY AND EQUIPMENT

Property and equipment is stated at cost. The Company records depreciation and amortization, when appropriate, using the straight-line method over the estimated useful lives of the assets. Expenditures for maintenance and repairs are charged to expense as incurred.

At October 31, 2015 the Company no longer holds any property and equipment in Laos. The depreciation expense for fiscal 2015 amounted to $nil and for fiscal 2014 amounted to $423.

 
(7)
INCOME TAXES
 
The Company recognises deferred tax assets or liabilities for the expected future consequences attributable to differences between the financial statement carrying amount of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using the enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled.
 
The Company is subject to taxation in the USA.
 
At October 31, 2015 and 2014, deferred taxes consisted of the following:

   
USA
2015
$
   
Total
2015
$
 
Deferred tax assets
           
             
Net operating loss carry-forward
   
827,643
     
827,643
 
Less valuation allowance
   
(827,643
)
   
(827,643
)
Net deferred taxes
   
-
     
-
 

 
   
USA
2014
$
   
Total
2014
$s
 
Deferred tax assets
           
             
Net operating loss carry-forward
   
827,643
     
827,643
 
Less valuation allowance
   
(827,643
)
   
(827,643
)
Net deferred taxes
   
-
     
-
 
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Under ASC 740, tax benefits are recognised only for tax positions that are more likely than not to be sustained upon examination by tax authorities, based on the technical merits of the position. The valuation allowance offsets the net deferred tax asset for which there is no assurance of recovery. The valuation allowance will be evaluated at the end of each year, considering positive and negative evidence about whether the deferred tax asset will be realized.
 
At that time, the allowance will either be increased or reduced; reduction could result in the complete elimination of the allowance if positive evidence indicates that the value of the deferred tax assets is no longer impaired and the allowance is no longer required.
 
The Company has available net operating loss carry forwards as of October 31, 2015, which are subject to limitations, aggregating approximately $2,285,000 which would expire in years 2028 through 2034.

The Company’s tax returns for all years since fiscal 2012 remain open to examination by the respective tax authorities.  There are currently no tax examinations in progress.
 
(8)
CASH

 
The Company maintains cash deposits with financial institutions in Australia and in Laos. Cash deposits maintained in Australian dollars are translated into US dollars at the period end exchange rate with the related adjustment recognised in operations.

 
(9)
STOCKHOLDERS’ EQUITY

In September 2008, 96,000,000 shares of common stock were issued to the Company’s founder raising $9,000.

In March 2009, the Company raised $12,000 in a registered public offering of 9,600,000 shares of common stock share pursuant to a prospectus dated January 30, 2009.

On July 31, 2015, the Company issued 30,000,000 shares of common stock as repayment of a debt of $5,057,776.
 
(10)
ISSUE OF OPTIONS UNDER EQUITY INCENTIVE PLAN
 
(i)
Effective December 13, 2010, the Company issued 2,500,000 options over shares of Common Stock to employees under the 2010 Equity Incentive Plan that has been adopted by the Directors of the Company. The options vested 1/3 on December 13, 2010, 1/3 vested on November 17, 2011 and the balance vested on November 17, 2012. The exercise price of the options is US$1.00 and the latest exercise date for the options is November 17, 2020.

The Company has accounted for all options issued based upon their fair market value using the Binomial pricing model.
 
As a result of the termination of the employee holding the options, the employee had a period of 90 days from the date of termination to exercise the options. The holder did not exercise the options therefore the options have expired in May 2015.

(ii)
In May 2011, the Company issued 750,000 options over shares of Common Stock to employees under the 2010 Equity Incentive Plan that has been adopted by the Directors of the Company. The options vested 1/3 upon grant date, 1/3 vested on February 1, 2012 and the balance vested on February 1, 2013. The exercise price of the options is US$1.00 and the latest exercise date for the options is February 1, 2018.

The Company has accounted for all options issued based upon their fair market value using the Binomial pricing model.

 
As a result of the termination of the employees holding the options, the employees had a period of 90 days from the date of termination to exercise the options. The holder did not exercise the options therefore the options have expired in April 2014.
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 (11)            SUBSEQUENT EVENTS

The Company has evaluated the existence of significant events subsequent to the balance sheet date through the date the consolidated financial statements were issued and has determined that there were no subsequent events or transactions which would require recognition or disclosure in the consolidated financial statements, other than noted herein.
 
On April 1, 2016 the Company announced that it had entered into an agreement with an Israeli company, PayItSimple Ltd and its subsidiaries (PayItSimple) whereby the Company would invest $15 million directly into PayItSimple by September 5, 2016 to acquire a 30% interest in PayItSimple, and a further $7.5 million into PayItSimple over 18 months to acquire a further 10% interest in PayItSimple, taking its holding to 40% of interest in PayItSimple.  PayItSimple owns a business known as Splitit. On April 6, 2016 the Company terminated the proposed acquisition of PayItsimple.
 
On June 27, 2016 the Company announced that it had entered into a binding term sheet with the shareholders of an Israeli company, Humavox Ltd (Humavox), a company that creates wireless charging solutions. In accordance with the proposed acquisition of Humavox, Aurum would acquire 100% of the shares of Humavox and 100% of the warrants and options to acquire shares of Humavox in exchange for the issue of shares of common stock of Aurum representing 50% of the shares of common stock of Aurum post issue on a fully-diluted basis, including the investment of an amount of US$16 million in Humavox.  The investment would take place in unconditional instalments over a period of 24 months following the closing. The closing of the merger was subject to certain closing conditions, including the investment in Humavox of the first instalment of the investment in the amount of $5.5 million. On July 29, 2016 the Company terminated the proposed acquisition of Humavox.
 
In April 2016, the Company raised $38,329 through the private placement of 250,000 shares of common stock.
 
On July 19, 2017, the Company entered into a Term Sheet with Lior Wayn, Erez Glazer and Dr Guy Shalom, (collectively, the ‘’Sellers”)  for the acquisition of all of the issued shares of a medical technology business. The Company has a 120 day period to conduct due diligence and negotiate a formal share sale agreement.
 
The purchase price is up to USD$7,500,000 which is to be satisfied as follows:

f)
The sum of USD$100,000 payable to the Sellers for due diligence expenses, 30 business days from the execution of the Term Sheet;

g)
A further USD$100,000 each month after the date in a) above for due diligence expenses, for 3 months,  payable to the Sellers for working capital purposes;

h)
An issue of fully paid ordinary shares of common stock of the Company to the value of USD$2,500,000 (less any payments made to the Sellers under (a) and (b) above) to the Sellers at an issue price of USD$0.22 per share of common stock (Consideration Shares);

i)
The issue to the Sellers of shares of common stock to the equivalent to USD$2,500,000 at the issue price of USD$0.22, subject to the Sellers achieving sales revenue of USD$100,000 within twelve months after the first anniversary of Completion; and

j)
The issue to the Sellers of shares of common stock to the equivalent to USD$2,500,000 at the issue price of USD$0.22, subject to the Sellers achieving sales revenue of USD$1,000,000 within twelve months after the first anniversary of Completion.
 
F - 15

If the Transaction is terminated or is in the reasonable opinion of the Company unable to proceed at any point, the Vendors and the Sellers have agreed to convert any monies paid to the Sellers under (a) and (b) above into convertible securities in the Sellers.

As part of the agreement and as a condition to completion, the Company will raise USD$2,500,000.

Pending completion, the Sellers are required to carry on business in the ordinary course.

In July 2017, the Company raised $38,329 through the private placement of 250,000 shares of common stock.
 

 
F - 16