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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

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FORM 10-Q

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AURUM, INC.

(Exact name of registrant as specified in its charter)

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Table Of Contents

 

 

 

PART I – FINANCIAL INFORMATION

Item 1.

FINANCIAL STATEMENTS

Introduction to Interim Consolidated Financial Statements.

The interim consolidated financial statements included herein have been prepared by Aurum, Inc. (“Aurum” or the “Company”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (The “Commission”). Certain information and footnote disclosure normally included in consolidated financial statements prepared in accordance with accounting principles generally accepted in United States of America (“US GAAP”) have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

The interim consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended October 31, 2015.

In the opinion of management, all adjustments, consisting of normal recurring adjustments necessary to present fairly the financial position of the Company as of April 30, 2016, the results of its operations for the three and six month periods ended April 30, 2016 and April 30, 2015, and the changes in its cash flows for the six month periods ended April 30, 2016 and April 30, 2015 have been included. The results of operations for the interim periods are not necessarily indicative of the results for the full year.

The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.

 

AURUM, INC.

Consolidated Balance Sheet

 

 

 

AURUM, INC.

Consolidated Statements of Operations

(Unaudited)

 

 

AURUM, INC.

Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)

 

See Notes to Consolidated Financial Statements

 

AURUM, INC.

Consolidated Statements of Cash Flows

(Unaudited)

 

See Notes to Consolidated Financial Statements

 

AURUM, INC.

(An Exploration Stage Company)

Notes to Consolidated Financial Statements

April 30, 2016

(unaudited)

 

(1)	ORGANIZATION AND BUSINESS

 

Aurum, Inc. ("Aurum” or the “Company") is a Delaware corporation originally incorporated in Florida as Liquid Financial Engines, Inc. The principal stockholder of Aurum is Golden Target Pty Ltd., an Australian corporation (“Golden”), which owned 74.78% of Aurum as of April 30, 2016.

 

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 financial reporting purposes 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 and Chief Financial Officer/Secretary and a new sole Director. 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 (Lao P.D.R or Laos).

 

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 is equivalent to a 51% beneficial interest in the Century Concession.

 

The Century Concession expired in fiscal 2014 and was not renewed. 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 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.

 

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.

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.

 

(2)	RECENT ACCOUNTING PRONOUNCEMENTS

 

The Company has implemented all new accounting pronouncements that are in effect and applicable to the Company. These pronouncements did not have any material impact on the consolidated financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

 

(3)	GOING CONCERN

 

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America, which contemplate continuation of Aurum as a going concern. Aurum has incurred net losses since inception and may continue to incur substantial and increasing losses for the next several years, all of which raises substantial doubt as to its ability to continue as a going concern.

 

In addition, Aurum is reliant on loans and advances from corporations affiliated with the President of Aurum. Based on discussions with these affiliate companies, Aurum believes this source of funding will continue to be available. Other than the arrangements noted above, Aurum has not confirmed any other arrangements for ongoing funding. As a result Aurum may be required to raise funds by additional debt or equity offerings in order to meet its cash flow requirements during the forthcoming year.

 

The retained deficit of the Company at April 30, 2016 amounted to approximately $9,163,616.

(4)	AFFILIATE TRANSACTIONS

 

The Company entered into an agreement with AXIS Consultants Pty Ltd (“AXIS”) to provide management and administration services to the Company. AXIS is affiliated through common management. The Company is one of nine affiliated companies to which AXIS provides services. Each of the companies has some common Directors, officers and shareholders. Currently, there are no material arrangements or planned transactions between the Company and any of the affiliated companies other than AXIS.

 

 

During the six months ended April 30, 2016, AXIS provided services in accordance with the services agreement, incurred direct costs on behalf of the Company and were repaid $72,935. During the six months ended April 30, 2016, the foreign exchange effect on the amounts owed to affiliates was a loss of $55,603. The amounts owed to AXIS as of April 30, 2016 and October 31, 2015 is $816,994 and $834,327 respectively. At April 30, 2016, the Company owed the former Managing Director of its Laos operation $232,500 (2015: $232,500). Both amounts are reflected in non-current liabilities - advance from affiliates and are reflected in non-current liabilities - advance from affiliates. During the six months ended April 30, 2016 and 2015, the affiliates have agreed not to charge interest.

 

The Company intends to repay these amounts with funds raised either via additional debt or equity offerings. Both affiliates have agreed not to call the advance within the next twelve months and accordingly the Company has classified the amounts payable as non-current in the accompanying balance sheet.

 

(5)	INCOME TAXES

 

Aurum files its income tax returns on an accrual basis.

 

The Company follows the accounting requirements associated with uncertainty in income taxes using the provisions of FASB ASC 740, Income Taxes. Using that guidance, tax positions initially need to be recognized in the consolidated financial statements when it is more-likely-than-not the positions will be sustained upon examination by the tax authorities. It also provides guidance for de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. As of April 30, 2015, the Company has no uncertain tax positions that qualify for either recognition or disclosure in the consolidated financial statements.

 

The Company is required to file tax returns in the United States and a summary of the deferred tax asset at April 30, 2016 is as follows:

 

 

The Company has available net operating loss carry forwards as of April 30, 2016, 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.

 

(6)	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 in satisfaction of a debt of $5,057,776.

 

 

On April 7, 2016, the Company raised $38,329 in a private placement through the offer of 250,000 shares of common stock.

 

(7)	FAIR VALUE OF FINANCIAL INSTRUMENTS

 

The Company’s financial instruments consist of cash, receivables, accounts payable, accrued expenses and advances from affiliates. The carrying amounts of cash, receivables, accounts payables and accrued expenses approximates their fair values because of the short term maturities of those instruments. The fair value of advances from affiliates is not readily determinable as no similar market exists for these instruments and it doesn’t have a specified date of repayment.

 

(8)	NET INCOME (LOSS) PER SHARE

 

Basic income (loss) per share is computed by dividing net profit (loss) available to common stockholders by the weighted average number of common shares outstanding during the period.

 

 

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

 

(10)	SUBSEQUENT EVENTS

 

The Company has evaluated 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.

 

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.

 

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.

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.

 

 

Item 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

 

General

 

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the 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 and other projections and estimates could differ materially from those projected in the forward-looking statements.

 

Overview

 

Aurum, Inc. is an exploration stage company and was incorporated in Florida on September 29, 2008, to develop and market financial software. In July 2009, Golden Target Pty Ltd, an Australian corporation ("Golden") acquired a 96% interest in Aurum from Daniel McKelvey and certain other stockholders. Commencing August 2009, the Company decided to focus on mineral exploration for gold and copper in the Lao Peoples Democratic Republic. The Company is considered to be in the exploration stage. On January 20, 2010, the Company re-incorporated in the State of Delaware through a merger involving Liquid Financial Engines, Inc. (“Liquid”) and Aurum, Inc., with Aurum being the surviving entity. For the purpose of the Company’s financial reporting status, Aurum is deemed a successor to Liquid.

 

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.

 

The Century Concession expired in fiscal 2014 and was not renewed. 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 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.

 

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.

We have incurred net losses since our inception and may continue to incur substantial and increasing losses for the next several years. We have incurred accumulated losses of approximately $9.2 million which was funded primarily by the sale of equity securities and advances from affiliates.

 

RESULTS OF OPERATIONS

 

Three Months Ended April 30, 2016 vs. Three Months Ended April 30, 2015.

 

Costs and expenses decreased from $21,091 in the three months ended April 30, 2015 to $15,380 in the three months ended April 30, 2016. The decrease in costs and expenses is a net result of:

 

a)	A decrease in legal, accounting and professional expense from $16,425 for the three months ended April 30, 2015 to $13,275 for the three months ended April 30, 2016, primarily due to a decrease in share registry expenses, accounting and legal fees.

b)	a decrease in administrative expenses from $4,662 in the three months ended April 30, 2015 to $2,105 in the three months ended April 30, 2016, is primarily as a result of a decrease in employment costs and insurance expense.

 

As a result of the foregoing, the loss from operations increased from $21,091 for the three months ended April 30, 2015 to $15,380 for the three months ended April 30, 2016.

 

The Company recorded a foreign currency exchange loss of $61,711 for the three months ended April 30, 2016 compared to a foreign currency exchange loss of $190,789 for the three months ended April 30, 2015, primarily due to revaluation of the advance from affiliate which is denominated in Australian dollars.

 

The net loss was $77,091 for the three months ended April 30, 2016 compared to a net loss of $203,043 for the three months ended April 30, 2015.

 

Six Months Ended April 30, 2016 vs. Six Months Ended April 30, 2015.

 

Costs and expenses decreased from a loss of $47,559 in the six months ended April 30, 2015 to a loss of $27,950 in the six months ended April 30, 2016. The decrease in costs and expenses is a net result of:

 

a)	a decrease in legal, accounting and professional expense from $26,422 for the six months ended April 30, 2015 to $22,875 for the six months ended April 30, 2016, primarily as a result of a decrease in accounting and legal fees.

b)	a decrease in administrative expenses from $21,127 in the six months ended April 30, 2015 to $4,827 in the six months ended April 30, 2016, primarily due to a decrease in employment costs, IT support costs and insurance expense.

 

As a result of the foregoing, the loss from operations decreased from $47,559 for the six months ended April 30, 2015 to $27,950 for the six months ended April 30, 2016.

 

The Company recorded a foreign currency exchange gain of $628,148 for the six months ended April 30, 2015 compared to a foreign currency exchange loss of $55,138 for the six months ended April 30, 2016, primarily due to revaluation of the advance from affiliate which is denominated in Australian dollars.

 

The net income was $589,426 for the six months ended April 30, 2015 compared to a net loss of $83,088 for the six months ended April 30, 2016.

 

Liquidity and Capital Resources

 

For the six months ended April 30, 2016, net cash provided by operating activities was $34,383 primarily consisting of the net loss of $83,088, adjusted for non-cash items being foreign currency loss of $55,138, and an increase in accounts payable and accrued expenses of $62,333.

 

Net cash used in investing activities was $nil; and net cash used in financing activities was $34,607 being repayments to affiliates and proceeds from the issuance of stock.

 

As of April 30, 2016 the Company has short term obligations of $267,688 comprising accounts payable and accruals.

 

The Company has $438 in cash at April 30, 2016.

 

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, of which there can be no assurance.

 

The Company continues to search for additional sources of capital, as and when needed; however, 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.

 

Information Concerning 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 risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015,

·	The risks and hazards inherent in the mineral exploration business (including environmental hazards, industrial accidents, weather or geologically related conditions),

·	The uncertainties inherent in our exploratory activities, including risks relating to permitting and regulatory delays,

·	The political, governmental and regulatory risks affecting mineral exploration activities in foreign countries,

·	The effects of environmental and other governmental regulations, and

·	Uncertainty as to whether financing will be available to enable further exploration and development.

·	Movements in foreign exchange rates,

·	Performance of information systems,

·	Ability of the Company to hire, train and retain qualified employees,

·	Our ability to enter into key exploration 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 Quarterly Report on Form 10-Q and in the Company’s Annual Report on Form 10-K for the fiscal year ended October 31, 2015, including under the heading “Risk Factors” and elsewhere herein and therein 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 3.

Quantitative and Qualitative Disclosures About Market Risk.

 

At April 30, 2016, the Company had no outstanding loan facilities.

 

The Company reports in US$ and holds cash in Australian dollars. At April 30, 2016, this amounted to A$438. A change in the exchange rate between the A$ and the US$ will have an effect on the amounts reported in the Company’s consolidated financial statements, and create a foreign exchange gain or loss. A movement of 1% in the A$ versus the US$ exchange rate will have a US$4 effect on the balance sheet and income statement.

 

Item 4.

Controls and Procedures.

 

a)	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)	Change in Internal Control over Financial Reporting

 

There were no changes in our internal control over financial reporting during the second quarter of fiscal 2016 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

 

 

c)

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 April 30, 2016, that our disclosure controls and procedures were effective in achieving that level of reasonable assurance.

 

 

PART II – OTHER INFORMATION

 

Item 1.

Legal Proceedings.

 

Not Applicable

 

Item 1A.

Risk Factors.

 

Not Applicable for smaller reporting company.

 

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds.

 

Not Applicable

 

Item 3.

Defaults Upon Senior Securities.

 

Not Applicable

 

Item 4.

Mine Safety Disclosure.

 

Not Applicable

 

Item 5.

Other Information.

 

Not Applicable

 

Item 6.

Exhibits.

 

 

31.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Joseph Isaac Gutnick

 

31.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Peter James Lee

 

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Joseph Isaac Gutnick

 

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Peter James Lee

 

101

The following materials from the Aurum, Inc. Quarterly Report on Form 10-Q for the quarter ended April 30, 2016 formatted in Extensible Business Reporting Language (XBRL):  (i) the Balance Sheets, (ii) the Statements of Operations, (iii) Statement of Stockholders’ (Deficit), (iv) the Statements of Cash Flows and (v) related notes.

#101.INS

XBRL Instance Document.

#101.SCH

XBRL Taxonomy Extension Schema Document.

#101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

#101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

#101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

#101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

_________________

#

Filed herewith.  In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.

 

 

 

(FORM 10-Q)

 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 

 

 

 

EXHIBIT INDEX

 

 

31.1

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Joseph Isaac Gutnick

 

31.2

Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by Peter James Lee

 

32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Joseph Isaac Gutnick

 

32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of Sarbanes-Oxley act of 2002 by Peter James Lee

101

The following materials from the Aurum, Inc. Quarterly Report on Form 10-Q for the quarter ended April 30, 2016 formatted in Extensible Business Reporting Language (XBRL): (i) the Balance Sheets, (ii) the Statements of Operations, (iii) Statement of Stockholders’ (Deficit), (iv) the Statements of Cash Flows and (v) related notes.

#101.INS

XBRL Instance Document.

#101.SCH

XBRL Taxonomy Extension Schema Document.

#101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document.

#101.LAB

XBRL Taxonomy Extension Label Linkbase Document.

#101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document.

#101.DEF

XBRL Taxonomy Extension Definition Linkbase Document.

_________________

#

Filed herewith.  In accordance with Rule 406T of Regulation S-T, these interactive data files are deemed “not filed” for purposes of section 18 of the Exchange Act, and otherwise are not subject to liability under that section.