UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A-1
x | ANNUAL REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT |
OF 1934 FOR THE YEAR ENDED JULY 31, 2008 |
Commission file number333-146976
AURUM EXPLORATIONS, INC.
(Exact name of registrant as specified in its charter)
NEVADA
(State or other jurisdiction of incorporation or organization)
AURUM EXPLORATIONS, INC.
10431 Caithcart Road
Richmond, British Columbia
Canada V6X 1N3
(Address of principal executive offices, including zip code.)
(604) 247-0372
(Registrant's telephone number, including area code)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.Yes¨ Nox
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act:Yes¨ Nox
Indicate by check mark whether the registrant(1) has filed all reports required 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 day.YesxNo¨
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulations S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy ir 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. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 if the Exchange Act.
Large Accelerated filer | ¨ | Accelerated filer | ¨ | |
Non-accelerated filer | ¨ | Smaller reporting company | x | |
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).Yesx 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 sold, or the average bid and asked price of such common equity, as ofJuly 31, 2008: $0.00.
EXPLANATORY NOTE
This amendment is being filed to correct the liability section of the balance sheet for the period ending July31, 2008 and to revise Note 6 thereto.
ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA. | |
Report of Independent Registered Public Accounting Firm | F-1 | |
Balance Sheets | F-2 | |
Statements of Operations | F-3 | |
Statement of Stockholders’ Equity (Deficiency) | F-4 | |
Statements of Cash Flows | F-5 | |
Notes to the Financial Statements | F-6 |
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To the Board of Directors and Stockholders
Aurum Explorations, Inc.
Richmond, B.C.
Canada
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We have audited the accompanying balance sheets of Aurum Explorations, Inc. as of July 31, 2008 and 2007, and the related statements of operations, stockholders’ equity and cash flows for the years then ended and for the period from April 27, 2007 (inception) to July 31, 2008. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.
We conducted our audit 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 financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included 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 includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and sig nificant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Aurum Explorations, Inc. as of July 31, 2008 and 2007 and the results of its operations, stockholders equity and its cash flows for the years then ended and for the period from April 27, 2007 (inception) to July 31, 2008 in conformity with accounting principles generally accepted in the United States of America.
The accompanying financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2, the Company has a history of operating losses, has limited cash resources, has negative working capital and its viability is dependent upon its ability to meet its future financing requirements and the success of future operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans regarding those matters also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
WILLIAMS & WEBSTER, P.S.
Williams & Webster, P.S.
Certified Public Accountants
Spokane, Washington
October 29, 2008
F-1
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AURUM EXPLORATIONS, INC. | ||||||
(An Exploration Stage Company) | ||||||
BALANCE SHEETS | ||||||
(Stated in U.S. Dollars) | ||||||
July 31, | July 31, | |||||
2008 | 2007 | |||||
ASSETS | ||||||
Current | ||||||
Cash | $ | 3,581 | $ | 33,281 | ||
TOTAL ASSETS | $ | 3,581 | $ | 33,281 | ||
LIABILITIES | ||||||
Current | ||||||
Accounts payable and accrued liabilities | $ | 21,028 | $ | 7,000 | ||
Accounts payable – related party | 21,361 | 1,165 | ||||
Total Liabilities | 42,389 | 8,165 | ||||
STOCKHOLDERS’ EQUITY (Deficit) | ||||||
Common Stock: | ||||||
$0.001 par value, 50,000,000 shares authorized; | ||||||
8,860,000 (2007 - 8,360,000) shares issued and outstanding | 8,860 | 8,360 | ||||
Additional Paid-In Capital | 65,196 | 55,051 | ||||
Subscriptions Receivable | - | (4,200 | ) | |||
Deficit Accumulated During The Exploration Stage | 112,864 | (34,095 | ) | |||
Total Stockholders' Deficit | (38,808 | ) | 25,116 | |||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT) | $ | 3,581 | $ | 33,281 |
The accompanying notes are an integral part of these financial statements.
F-2
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AURUM EXPLORATIONS, INC. | ||||||||
(An Exploration Stage Company) | ||||||||
STATEMENTS OF OPERATIONS | ||||||||
For the period from April 27, 2007 (inception) to | ||||||||
July 31, 2008 | ||||||||
(Stated in U.S. Dollars) | ||||||||
For the period | For the period | |||||||
from April 27, | From April 27, | |||||||
For the | 2007 | 2007 (inception) | ||||||
Year ended | (inception) to | to | ||||||
July 31, | July 31, | July 31, | ||||||
2008 | 2007 | 2008 | ||||||
Revenue | $ | - | $ | - | $ | - | ||
Expenses | ||||||||
Exploration and development | 8,666 | 8,016 | 16,682 | |||||
Filing fees | 521 | 15,914 | 16,435 | |||||
Office and miscellaneous | 15,083 | 3,165 | 18,248 | |||||
Professional fees | 54,499 | 7,000 | 61,499 | |||||
Net Loss and Comprehensive Loss For The Period | $ | 78,769 | $ | 34,095 | $ | 112,864 | ||
Basic And Diluted Loss Per Common | ||||||||
Share | $ | (0.01 | ) | $ | (0.02 | ) | ||
Weighted Average Number Of Common | ||||||||
Shares Outstanding | 8,360,548 | 1,763,333 |
The accompanying notes are an integral part of these financial statements.
F-3
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AURUM EXPLORATIONS, INC. | ||||||||||||||
(An Exploration Stage Company) | ||||||||||||||
STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIENCY) | ||||||||||||||
PERIOD FROM APRIL 27, 2007 (INCEPTION) TO JULY 31, 2008 | ||||||||||||||
(Stated in U.S. Dollars) | ||||||||||||||
COMMON STOCK | DEFICIT | |||||||||||||
ACCUMULATED | ||||||||||||||
DURING | ||||||||||||||
ADDITIONAL STOCK | STOCK | THE | ||||||||||||
PAID-IN | SUBSCRIPTION | EXPLORATION | ||||||||||||
SHARES | AMOUNT | CAPITAL | RECEIVABLE | STAGE | TOTAL | |||||||||
Balance, April 27, 2007 (Date of | ||||||||||||||
inception) | - | $ | - | $ | - | $ | - $ | - | $ | - | ||||
Founding shares | ||||||||||||||
Issued for cash at par | 5,000,000 | 5,000 | - | - | - | 5,000 | ||||||||
Shares issued for cash | ||||||||||||||
Between $0.01 and $0.05 | 3,276,000 | 3,276 | 48,524 | - | - | 51,800 | ||||||||
Subscriptions receivable | 84,000 | 84 | 4,116 | (4,200 | ) | - | - | |||||||
Donated rent and services | - | - | 2,411 | - | - | 2,411 | ||||||||
Net loss for the period | - | - | - | - | (34,095 | ) | (34,095 | ) | ||||||
Balance, July 31, 2007 | 8,360,000 | 8,360 | 55,051 | (4,200 | ) | (34,095 | ) | 25,116 | ||||||
Cash received for subscription | ||||||||||||||
Receivable | - | - | - | 4,200 | - | 4,200 | ||||||||
Shares issued for services | 500,000 | 500 | - | - | - | 500 | ||||||||
Donated rent and services | - | - | 10,145 | - | - | 10,145 | ||||||||
Net loss for the year | - | - | - | - | (78,769 | ) | (78,769 | ) | ||||||
Balance, July 31, 2008 | 8,860,000 | $ | 8,860 | $ | 65,196 | $ | - $ | (112,864 | ) | $ | (38,808 | ) |
The accompanying notes are an integral part of these financial statements.
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AURUM EXPLORATIONS, INC. | |||||||||
(An Exploration Stage Company) | |||||||||
STATEMENTS OF CASH FLOWS | |||||||||
(Stated in U.S. Dollars) | |||||||||
For the period | For the period | ||||||||
from April 27, | From April 27, | ||||||||
For the | 2007 | 2007 | |||||||
Year ended | (inception) to | (inception) to | |||||||
July 31, | July 31, | July 31, | |||||||
2008 | 2007 | 2008 | |||||||
Cash provided by (used in): | |||||||||
Cash Flows From Operating Activities | |||||||||
Net loss for the period | $ | (78,769 | ) | $ | (34,095 | ) | $ | (112,864 | ) |
Adjust for non-cash items | |||||||||
Shares issued for services | 500 | - | 500 | ||||||
Donated rent and services | 10,145 | 2,411 | 12,556 | ||||||
Changes in non-cash working capital | |||||||||
Items | |||||||||
Accounts payable and accrued liabilities | 14,028 | 7,000 | 21,028 | ||||||
(54,096 | ) | (24,684 | ) | (78,780 | ) | ||||
Cash Flows From Financing Activities | |||||||||
Due to director | 20,196 | 1,165 | 21,361 | ||||||
Shares issued for cash | - | 56,800 | 56,800 | ||||||
Cash received on subscriptions | 4,200 | - | 4,200 | ||||||
28,068 | 57,965 | 86,033 | |||||||
Increase (Decrease) In Cash | (29,700 | ) | 33,281 | 3,581 | |||||
Cash, Beginning Of Period | 33,281 | - | - | ||||||
Cash, End Of Period | $ | 3,581 | $ | 33,281 | $ | 3,581 | |||
Supplemental Disclosure Of Cash Flow | |||||||||
Information | |||||||||
Interest paid | $ | $ | $ | ||||||
Income taxes paid | - | - | - | ||||||
Non cash investing and financing activities | |||||||||
Shares issued for subscription | 0 | $ | 4,200 | $ | 4,200 |
The accompanying notes are an integral part of these financial statements.
F-5
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS
AURUM EXPLORATIONS, INC. (“the Company”) was incorporated in the State of Nevada on April 27, 2007. The Company is an Exploration Stage Company. The Company has acquired an option on a mineral property located in the Greenwood Mining Division, British Columbia, Canada, and has not yet determined whether this property contains reserves that are economically recoverable. The recoverability of property expenditures will be dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying property, the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreement and upon future profitable production or proceeds for the sale thereof.
The Company has been in the exploration stage since its formation and has not yet realized any revenues from its planned operations. The Company was formed for the purpose of acquiring exploration and development stage natural resources properties. The Company has not commenced business operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The financial statements of the Company have been prepared in accordance with U.S. generally accepted accounting principles. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates which have been made using careful judgment. Actual results may vary from these estimates.
The financial statements have, in management’s opinion, been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:
Acquisition, Exploration and Evaluation Expenditures
The Company is an exploration stage mining company and has not yet realized any revenue from its operations. It is primarily engaged in the acquisition, exploration and development of mining properties. Mineral property acquisition and exploration costs are expensed as incurred. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs incurred to develop such property, are capitalized. For the purpose of preparing financial information, all costs associated with a property that has the potential to add to the Company’s proven and probable reserves are expensed until a final feasibility study demonstrating the existence of proven and probable reserves is completed. No costs have been capitalized in the periods covered by these financial statements.
Basic and Diluted Net Loss per Share
The Company reports basic loss per share in accordance with SFAS No. 128 – “Earnings Per Share”. Basic loss per share is computed using the weighted average number of common stock outstanding during the period. Diluted loss per share is computed using the weighted average number of common and potentially dilutive common stock outstanding during the period. At July 31, 2007 and 2008, the Company has no common stock equivalents that were anti-dilutive and excluded from the earnings per share computation.
F-6
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Cash and Cash Equivalents
Cash and cash equivalents consists of cash on deposit and term deposit with a term to maturity of less than three months from the date of purchase.
Exploration Stage Company
The Company is considered to be in the exploration stage.
The Company follows a policy of expensing exploration expenditures until a production decision in respect of the project is made and the Company is reasonably assured that it will receive regulatory approval to permit mining operations, which may include the receipt of a legally binding project approval certificate.
Management periodically reviews the carrying value of its investments in mineral leases and claims with internal and external mining related professionals. A decision to abandon, reduce or expand a specific project is based upon many factors including general and specific assessments of mineral deposits, anticipated future mineral prices, anticipated future costs of exploring, developing and operating a production mine, the expiration term and ongoing expenses of maintaining mineral properties and the general likelihood that the Company will continue exploration on such project. The Company does not set a pre-determined holding period for properties with unproven deposits, however, properties which have not demonstrated suitable metal concentrations at the conclusion of each phase of an exploration program are re-evaluated to determine if future exploration is warranted, whether there has been any impairment in value and that their carrying values are appropriate.
If an area of interest is abandoned or it is determined that its carrying value cannot be supported by future production or sale, the related costs are charged against operations in the year of abandonment or determination of value.
The Company’s exploration activities and proposed mine development are subject to various laws and regulations governing the protection of the environment. These laws are continually changing, generally becoming more restrictive. The Company has made, and expects to make in the future, expenditures to comply with such laws and regulations.
Financial Instruments
The carrying value of cash, and accounts payable and accrued liabilities approximates their fair value because of the short maturity of these instruments. The Company’s operations are in Canada and virtually all of its assets and liabilities are giving rise to significant exposure to market risks from changes in foreign currency rates. The Company’s financial risk is the risk that arises from fluctuations in foreign exchange rates and the degree of volatility of these rates. Currently, the Company does not use derivative instruments to reduce its exposure to foreign currency risk.
F-7
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
Foreign Currency Translation and Other Comprehensive Income
The Company has adopted SFAS No. 52, “Foreign Currency Translation”. Monetary assets and liabilities denominated in foreign currencies are translated into United States dollars at rates of exchange in effect at the balance sheet date. Gains or losses are included in income for the year. Non-monetary assets, liabilities and items recorded in income arising from transactions denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. As the Company's functional currency is the U.S. dollar, and all translation gains and losses are transactional, and the Company has no assets with value recorded in Canadian dollars, there is no recognition of other comprehensive income in the financial statements.
Going Concern
These financial statements have been prepared on a going concern basis. The Company has incurred losses since inception resulting in an accumulated deficit of $112,864 since inception and further losses are anticipated in the development of its business raising substantial doubt about the Company’s ability to continue as a going concern. Its ability to continue as a going concern is dependent upon the ability of the Company to generate profitable operations in the future and/or to obtain the necessary financing to meet its obligations and repay its liabilities arising from normal business operations when they come due. Management has plans to seek additional capital through a private placement and public offering of its common stock. These plans, if successful, will mitigate the factors which raise substantial doubt about the Company’s ability to continue as a going concern. The Company anticipates that it will need $50,000 to continue in existence for the following twelve months. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets, or the amounts of and classification of liabilities that might be necessary in the event the Company cannot continue in existence.
Provision for Taxes
In June 2006, the Financial Accounting Standards Board issued FASB Interpretation No. 48, “Accounting for Uncertainty in Income Taxes – an interpretation of FASB Statement No. 109” (“FIN 48”), which prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 became effective for fiscal years beginning after December 15, 2006 and was adopted in 2007 with no impact.
Income taxes are provided for based upon the liability method of accounting pursuant to Statement of Financial Accounting Standards No. 109 “Accounting for Income Taxes” (“SFAS No. 109”). Under this approach, deferred income taxes are recorded to reflect the tax consequences on future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by SFAS No. 109 to allow recognition of such an asset. See Note 5
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
Impairment of Long-Lived Assets
In accordance with Statement of Financial Accounting Standards No. 144 (“SFAS 144”), “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company records impairment losses on long-lived assets used in operations when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the assets’ carrying amount. In such cases, the amount of the impairment is determined based on the relative fair values of the impaired assets.
Organization and Start-up Costs
Costs of start up activities, including organizational costs, are expensed as incurred.
Recent Accounting Pronouncement
In December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51” (“SFAS 160”). SFAS 160 requires companies with noncontrolling interests to disclose such interests clearly as a portion of equity but separate from the parent’s equity. The noncontrolling interest’s portion of net income must also be clearly presented on the Income Statement. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008 and the Company does not expect this pronouncement to have a significant impact on the financial position, results of operations or cash flows.
In December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R broadens the guidance of SFAS 141, extending its applicability to all transactions and other events in which one entity obtains control over one or more other businesses. It broadens the fair value measurement and recognition of assets acquired, liabilities assumed, and interests transferred as a result of business combinations. SFAS 141R expands on required disclosures to improve the statement users’ abilities to evaluate the nature and financial effects of business combinations. SFAS 141R is effective for fiscal year beginning on or after December 15, 2008 and the Company does not expect this pronouncement to have a significant impact on the financial position, results of operations or cash flows.
In April 2007, the FASB issued FASB Staff Position FIN 39-1, “Amendment of FASB Interpretation No. 39” (“FSP FIN 39-1”), which amended FIN 39, to indicate that the following fair value amounts could be offset against each other if certain conditions of FIN 39 are otherwise met: (a) those recognized for derivative instruments executed with the same counterparty under a master netting arrangement and (b) those recognized for the right to reclaim cash collateral (a receivable) or the obligation to return cash collateral (a payable) arising from the same master netting arrangement as the derivative instruments. In addition, a reporting entity is not precluded from offsetting the derivative instruments if it determines that the amount recognized upon payment or receipt of cash collateral is not a fair value amount. FSP FIN 39-1 is effective at the beginning of the first fiscal year after November 15, 2007. The C ompany does not expect this pronouncement to have a significant impact on the financial position, results of operations or cash flows.
F-9
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES(Continued)
In February, 2007, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities – including an amendment of FASB Statement No. 115” (hereinafter “SFAS No. 159”). This statement permits entities to choose to measure many financial instruments and certain other items at fair value. The objective is to improve financial reporting by providing entities with the opportunity to mitigate volatility in reporting earnings caused by measuring related assts and liabilities differently without having to apply complex hedge accounting provisions. This statement is expected to expand the use of fair measurement, which is consistent with the Board’s long-term measurement objectives for accounting for financial instruments. This statement is effective as of the beginning of an entity’s first fiscal y ear that begins after November 15, 2007, although earlier adoption is permitted. Management has not determined the effect that adopting this statement would have on the Company’s financial condition or results of operation.
Regulatory Matters
The Company and its mineral property interest are subject to a variety of federal and provincial regulations governing land use, health, safety and environmental matters. The Company’s management believes it has been in substantial compliance with all such regulations, and is unaware of any pending action or proceeding relating to regulatory matters that would affect the financial position of the Company.
Revenue Recognition
The Company's revenue recognition policy is in accordance with the criteria outlined in Securities Exchange Commission Staff Accounting Bulletin No. 104 (“SAP 104”), “Revenue Recognition”. Revenues will be recognized once they are earned; specifically when: (a) services are provided or products are delivered to customers, (b) clear proof that an arrangement exists, (c) amounts are fixed or can be determined, and (d) the Company’s ability to collect is reasonably assured.
Use of Estimates and Assumptions
The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 3 - MINERAL PROPERTY
In 2007, the Company, through its President, obtained a 100% undivided right, title and interest in a mineral claim in the Luxor Gold Silver Copper Prospect, near Grand Forks, British Columbia, Canada for 5,000Cdn and a 1% net smelter royalty. The company has the right to purchase 50% of the net smelter return royalty anytime up to July 4, 2017 for $2,000,000Cdn.
The Company has engaged a geologist to prepare a technical report on the property to be completed subsequent to year-end at an estimated cost of $15,000.
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 4 - SHARE CAPITAL
Common Stock
The Company is authorized to issue 50,000,000 shares of $0.001 par value common stock. All shares have equal voting rights, are non-assessable and have one vote per share. Voting rights are not cumulative and, therefore, the holders of more than 50% of the common stock could, if they choose to do so, elect all of the directors of the Company.
In May, 2007, the Company issued 5,000,000 common shares at $0.001 for total cash proceeds of $5,000 to the president and director of the Company.
In June, 2007, the Company issued 2,800,000 common shares at $0.01 for total cash proceeds of $28,000.
In July, 2007, the Company issued 476,000 common shares at $0.05 for total cash proceeds of $23,800.
In July, 2007, the Company issued 84,000 common shares at $0.05 for a subscription receivable of $4,200 which was received during the year.
In July, 2008, the Company issued 500,000 common shares at $0.001 ($500) to the president and director of the Company for services rendered.
NOTE 5 - INCOME TAXES
Income tax provision (U.S.)
Potential benefits of income tax losses are not recognized in the accounts until realization is more likely than not. Pursuant to SFAS No. 109, the Company is required to compute tax asset benefits for net operating losses carried forward. Potential benefit of net operating losses have not been recognized in these financial statements because the Company cannot be assured that it is more likely than not it will utilize the net operating losses carried forward in future years.
The provision for income taxes differs from the result which would be obtained by applying the statutory income tax rate of 34% to income before income taxes. The difference results from the following items:
July 31, | July 31, | ||||||
2008 | 2007 | ||||||
Computed expected (benefit of) income taxes | $ | 26,781 | $ | 11,592 | |||
Increase in valuation allowance | (26,781 | ) | (11,592 | ) | |||
Income tax provision | $ | - | $ | - |
F-11
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AURUM EXPLORATION, INC.
(An Exploration Stage Company)
NOTES TO THE FINANCIAL STATEMENTS
JULY 31, 2008
(Stated in U.S. Dollars)
NOTE 5 - INCOME TAXES
Significant components of the Company’s deferred income tax assets are as follows:
July 31, | July 31, | ||||||
2008 | 2007 | ||||||
Net operating loss carry forward | $ | 112,800 | $ | 34,000 | |||
Deferred income tax asset | 38,000 | 11,500 | |||||
Valuation allowance | (38,000 | ) | (11,500 | ) | |||
Net deferred tax assets | $ | - | $ | - |
At July 31, 2008, the Company has net operating loss carryforwards of approximately $112,800 which expires as follows:
2027 | $ | 34,000 | |
2028 | 78,800 | ||
$ | 112,800 |
The change in the valuation allowance from 2007 to 2008 was $26,500.
NOTE 6 - RELATED PARTY TRANSACTIONS
During the period ended July 31, 2007 the President purchased 5,000,000 common shares at par for total consideration of $5,000.
During the period ended July 31, 2008 the President received 500,000 common shares at par in exchange for services rendered.
The sole director also provided rent and administrative services for the period with a value of $10,145 (2007 - $2,411) for which the director will receive no compensation. This amount has been expensed and shown as an increase in additional paid in capital.
Accounts payable – Patrick Mohammed, the Company’s sole officer and director, a related party is owed $21,361. The amount due Mr. Mohammed is non-interest bearing and has no specific terms of repayment. The amount due Mr. Mohammed is for expenses paid on behalf of the Company.
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PART IV. OTHER INFORMATION | ||||||
ITEM 15. | EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. | |||||
The following documents are included herein: | ||||||
Incorporated by reference | ||||||
Exhibit | Filed | |||||
Number | Document Description | Form | Date Number | herewith | ||
3.1 | Articles of Incorporation. | SB-2 | 10/29/07 | 3.1 | ||
3.2 | Bylaws. | SB-2 | 10/29/07 | 3.2 | ||
4.1 | Specimen Stock Certificate. | SB-2 | 10/29/07 | 4.1 | ||
10.1 | Bill of Sale from David Zamida | SB-2 | 10/29/07 | 10.1 | ||
10.2 | Trust Agreement | SB-2 | 10/29/07 | 10.2 | ||
14.1 | Code of Ethics. | 10-K | 10/29/08 | 14.1 | ||
31.1 | Certification of Principal Executive Officer | X | ||||
and Principal Accounting Officer pursuant | ||||||
to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer | X | ||||
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||
99.1 | Subscription Agreement | SB-2 | 10/29/07 | 99.1 | ||
99.2 | Audit Committee Charter. | 10-K | 10/29/08 | 99.2 | ||
99.3 | Disclosure Committee Charter. | 10-K | 10/29/08 | 99.3 |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, this amended report has been signed below by the following person on behalf of the Registrant and in the capacities on this 12th day of November, 2008.
AURUM EXPLORATIONS, INC. | |
BY: PATRICK MOHAMMED | |
Patrick Mohammed, President, Principal Executive | |
Officer, Treasurer, Principal Financial Officer, | |
Principal Accounting Officer and sole member of | |
the Board of Directors. |
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Incorporated by reference | ||||||
Exhibit | Filed | |||||
Number | Document Description | Form | Date Number | herewith | ||
3.1 | Articles of Incorporation. | SB-2 | 10/29/07 | 3.1 | ||
3.2 | Bylaws. | SB-2 | 10/29/07 | 3.2 | ||
4.1 | Specimen Stock Certificate. | SB-2 | 10/29/07 | 4.1 | ||
10.1 | Bill of Sale from David Zamida | SB-2 | 10/29/07 | 10.1 | ||
10.2 | Trust Agreement | SB-2 | 10/29/07 | 10.2 | ||
14.1 | Code of Ethics. | 10-K | 10/29/08 | 14.1 | ||
31.1 | Certification of Principal Executive Officer | X | ||||
and Principal Accounting Officer pursuant | ||||||
to Section 302 of the Sarbanes-Oxley Act of 2002. | ||||||
32.1 | Certification of Chief Executive Officer and Chief Financial Officer | X | ||||
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||||
99.1 | Subscription Agreement | SB-2 | 10/29/07 | 99.1 | ||
99.2 | Audit Committee Charter. | 10-K | 10/29/08 | 99.2 | ||
99.3 | Disclosure Committee Charter. | 10-K | 10/29/08 | 99.3 |
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