10-K 1 flm10k113009.htm FLM MINERALS INC. FORM 10-K FOR THE YEAR ENDED NOVEMBER 30, 2009 flm10k113009.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 November 30, 2009
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 000-53160

FLM MINERALS INC.

Nevada
(State or other jurisdiction of incorporation or organization)

#14 - 8 No. 58 Haidian Road
Haidian District
Beijing, China   100086
 (Address of Principal Executive Offices, including zip code)

011 86 106261 6955
 (Issuer’s telephone number including area code)

Securities registered pursuant to Section 12(b) of the Act:
  
Securities registered pursuant to section 12(g) of the Act:
None
  
Common Stock
 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes [   ]   No [X]

Indicate by check mark if the registrant is required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ X]   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 [X]   No [   ]

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, 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 such shorter period that the registrant was required to submit and post such files). Yes [   ]   No [X]

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.  See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of 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 Exchange Act). Yes [X]   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 November 30, 2009: $770,355.
The registrant had 6,906,300 shares of common stock outstanding as of February 25, 2010.
 
 
 
 
TABLE OF CONTENTS

PART I
Page
   
     Item 1.    Business.
3
     Item 1A. Risk Factors.
3
     Item 1B. Unresolved Staff Comments.
3
     Item 2.    Properties.
3
     Item 3.    Legal Proceedings.
4
     Item 4.    Submission of Matters to a Vote of Security Holders.
4
   
PART II
  
   
     Item 5.    Market For Common Stock and Related Stockholder Matters.
4
     Item 6.    Selected Financial Data
5
     Item 7.    Management’s Discussion and Analysis of Financial Condition or Plan of
                    Operation.
5
   
PART III
  
   
    Item 7A.   Quantitative and Qualitative Disclosures about Market Risk.
9
    Item 8.      Financial Statements and Supplementary Data.
10
    Item 9.      Changes In and Disagreements With Accountants on Accounting and Financial
                     Disclosure
19
     Item 9A.  Controls and Procedures
20
     Item 9B.  Other Information
21
     Item 10.   Directors, Executive Officers, Promoters and Control Persons; Compliance with
                     Section 16(a) of the Exchange Act
22
     Item 11.   Executive Compensation
24
     Item 12.   Security Ownership of Certain Beneficial Owners and Management
26
     Item 13.   Certain Relationships and Related Transactions, and Director Independence
26
   
PART IV
  
   
     Item 14.   Principal Accountant Fees and Services.
26
     Item 15.   Exhibits, Financial Statement Schedules.
28


 
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PART I

ITEM 1.
BUSINESS
                   
General

We were incorporated on August 31, 2006.  Our administrative office is located at 14-8, No. 58 Haidian Road, Haidian District, Beijing, China, 100086 and our telephone number is 011 86 10 6261 6955 and our registered statutory office is located at 6100 Neil Road, Suite 500, Reno, Nevada 89511. Our fiscal year end is November 30th.  Our mailing address is 14-8. No. 58 HaidianRoad, HaidianDistric, Beijing, China, 100086.

We are an exploration stage mining company.  We have no ore bodies.  We acquired the right to conduct exploration activities on four claims known as the New Dawn claims on October 18, 2006 pursuant to an agreement with Altair Minerals Inc, which right we terminated.  Altair Minerals Inc. is not affiliated with us.  The Company has been and is currently seeking mineral opportunities in China.

Employees and Employment Agreements

At present, we have no full-time employees. Our officers and directors are part-time employees and each will devote about 10 hours or 25% of their time per week to our operation. Our officers and directors do not have employment agreements with us. We presently do not have pension, health, annuity, insurance, stock options, profit sharing or similar benefit plans; however, we may adopt plans in the future. There are presently no personal benefits available to our officers and directors. Our officers and directors will handle our administrative duties.  As of November 30, 2009, we have not looked for or talked to any geologists or engineers who will perform work for us in the future.

Other Activities

We are currently examining properties in China for possible exploration activities.  As of the date of this report, we have not entered into negotiations or any agreements with anyone to acquire any additional properties.

ITEM 1A.
RISK FACTORS

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

ITEM 1B.
UNRESOLVED STAFF COMMENTS

None.

ITEM 2.
PROPERTIES

We currently do not own any properties or have the right to conduct exploration activities on any property.

 
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ITEM 3.
LEGAL PROCEEDINGS
                 
      We are not presently a party to any litigation.

ITEM 4.
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

During the fourth quarter, there were no matters submitted to a vote of our shareholders.


PART II

ITEM 5.
MARKET FOR COMMON STOCK AND RELATED STOCKHOLDER MATTERS

Our stock was listed for trading on the Bulletin Board operated the Financial Industry Regulatory Authority (FINRA) on June 25, 2007 under the symbol “FLMS”.  There are no outstanding options or warrants to purchase, or securities convertible into, our common stock.

Fiscal Year
    
2009
High Bid
Low Bid
 
Fourth Quarter 9-01-09 to 11-30-09
$0.10
$0.10
 
Third Quarter 6-01-09 to 8-31-09
$0.10
$0.10
 
Second Quarter 3-01-09 to 5-31-09
$0.10
$0.10
 
First Quarter 12-01-08 to 2-28-09
$0.10
$0.10
     
Fiscal Year
    
2008
High Bid
Low Bid
 
Fourth Quarter 9-01-08 to 11-30-08
$1.10
$0.51
 
Third Quarter 6-01-08 to 8-31-08
$1.35
$0.60
 
Second Quarter 3-01-08 to 5-31-08
$1.40
$0.60
 
First Quarter 12-01-07 to 2-28-08
$2.00
$0.50

Holders

On November 30, 2009, we had 65 shareholders of record of our common stock.

Dividend Policy

As of the date of this report, we have not paid any cash dividends to stockholders. The declaration of any future cash dividend will be at the discretion of our board of directors and will depend upon our earnings, if any, our capital requirements and financial position, our general economic conditions, and other pertinent conditions. It is our present intention not to pay any cash dividends in the foreseeable future, but rather to reinvest earnings, if any, in our business operations.


 
-4-
 
Section 15(g) of the Securities Exchange Act of 1934

Our shares are covered by section 15(g) of the Securities Exchange Act of 1934, as amended that imposes additional sales practice requirements on broker/dealers who sell such securities to persons other than established customers and accredited investors (generally institutions with assets in excess of $5,000,000 or individuals with net worth in excess of $1,000,000 or annual income exceeding $200,000 or $300,000 jointly with their spouses). For transactions covered by the Rule, the broker/dealer must make a special suitability determination for the purchase and have received the purchaser's written agreement to the transaction prior to the sale. Consequently, the Rule may affect the ability of broker/dealers to sell our securities and also may affect your ability to sell your shares in the secondary market.

Section 15(g) also imposes additional sales practice requirements on broker/dealers who sell penny securities. These rules require a one page summary of certain essential items. The items include the risk of investing in penny stocks in both public offerings and secondary marketing; terms important to in understanding of the function of the penny stock market, such as  id and offer quotes, a dealers pread and broker/dealer compensation; the broker/dealer compensation, the broker/dealers duties to its customers, including the disclosures required by any other penny stock disclosure rules; the customers rights and remedies in causes of fraud in penny stock transactions; and, the FINRA’s toll free telephone number and the central number of the North American Administrators Association, for information on the disciplinary history of broker/dealers and their associated persons.

Securities Authorized for Issuance Under Equity Compensation Plans

We have no equity compensation plans and accordingly we have no shares authorized for issuance under an equity compensation plan.
 
 ITEM 6.   SELECTED FINANCIAL DATA
 
            We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.
   
 ITEM 7.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

This section of this report includes a number of forward-looking statements that reflect our current views with respect to future events and financial performance. Forward-looking statements are often identified by words like: believe, expect, estimate, anticipate, intend, project and similar expressions, or words which, by their nature, refer to future events. You should not place undue certainty on these forward-looking statements, which apply only as of the date of this report. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or our predictions.

Our auditors have issued a going concern opinion. This means that there is substantial doubt that we can continue as an on-going business for the next twelve months unless we obtain additional capital to pay our bills. This is because we have not generated any revenues and no revenues are anticipated until we begin removing and selling minerals. Accordingly we when we need capital, we must raise cash from sources other than the sale of minerals.

 
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      Our officers and directors are unwilling to make any commitment to loan us any money at this time. At the present time, we have not made any arrangements to raise additional cash. If we need additional cash and can't raise it, we will either have to suspend activities until we do raise the cash, or cease activities entirely. Other than as described in this paragraph, we have no other financing plans. Our success or failure will be determined by what we find under the ground.

We are a start-up, exploration stage corporation and have not yet generated or realized any revenues from our business operations.

We do not own an interest in any property.and have moved our principal focus to seeking opportunities in China.

If we find mineralized material and it is economically feasible to remove the mineralized material, we will attempt to raise additional money through a subsequent private placement, public offering or through loans. If we do not have enough money to complete our programs, we will have to cease activities until additional funds are raised.

If we are unable to complete any phase of exploration because we don’t have enough money, we will cease activities until we raise more money. If we cease activities, we do not have future plans for our company.

We do not intend to hire additional employees at this time. All work will be conducted by unaffiliated independent contractors that we will hire. The independent contractors will be responsible for surveying, geology, engineering, exploration, and excavation. The geologists will evaluate the information derived from the exploration and excavation and the engineers will advise us on the economic feasibility of removing the mineralized material.

Results of Operations
From Inception on August 31, 2006 to November 30, 2009

We entered into an option agreement to purchase the New Dawn property comprised of four twenty acre mining claims.

The agreement with Altair Minerals Inc. was terminated.

We raised $271,890 in a private placement pursuant to Regulation S of the Securities Act of 1933.

Since inception, we have used the proceeds from the private placement to fund our operations. No work had been done on the property as at November 30, 2009. Management has evaluated two potentially larger and presumably more financeable prospects in Mainland China. Based on our evaluations, neither has been acquired.


 
-6-
 
Limited Operating History; Need for Additional Capital

There is no historical financial information about us upon which to base an evaluation of our performance. We are an exploration stage corporation and have not generated any revenues from operations. We cannot guarantee we will be successful in our business operations. Our business is subject to risks inherent in the establishment of a new business enterprise, including limited capital resources, possible delays in the exploration of our properties, and possible cost overruns due to price and cost increases in services.

To become profitable and competitive, we must conduct research and exploration of a property before we start production of any minerals we may find .

We have no assurance that future financing will be available to us on acceptable terms. If financing is not available on satisfactory terms, we may be unable to continue, develop or expand our operations. Equity financing could result in additional dilution to existing shareholders.

Liquidity and Capital Resources

As of the date of this report, we have yet to generate any revenues from our business operations.

We issued 6,906,300 shares of common stock pursuant to the exemption from registration contained in Regulation S of the Securities Act of 1933. This was accounted for as a purchase of shares of common stock.

As of November 30, 2009, our total assets were $81,795 and our total liabilities were $7,100

Recent accounting pronouncements

On December 4, 2007, the FASB issued SFAS No. 160, Noncontrolling interest in Consolidated Financial Statements (SFAS No. 160). SFAS No. 160 requires all entities to report noncontrolling (minority) interests in subsidiaries as equity in the consolidated financial statements. The statement establishes a single method of accounting for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation and expands disclosures in the consolidated financial statements. SFAS No. 160 is effective for fiscal years beginning after December 15, 2008 and interim periods within those fiscal years. We have not yet determined the impact of the adoption of SFAS No. 160 on our financial statements and footnote disclosures.

On December 4, 2007, the FASB issued SFAS No. 141R, Business Combinations (SFAS No. 141R). SFAS No. 141R requires the acquiring entity in a business combination to recognize all the assets acquired and liabilities assumed, establishes the acquisition date fair value as the measurement objective for all assets acquired and liabilities assumed, and requires the acquirer to expand disclosures about the nature and financial effect of the business combination. SFAS No. 141R is effective for business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after December 15, 2008. We have not yet determined the impact of the adoption of SFAS No. 141R on our financial statements and footnote disclosures.

 
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       In April 2008, the FASB issued Staff Position FAS 142-3, Determination of the Useful Life of Intangible Assets (“FSP FAS 142-3”) which amends the factors an entity should consider in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under FAS No. 142, Goodwill and Other Intangible Assets (“FAS No. 142”). FSP FAS 142-3 applies to intangible assets that are acquired individually or with a group of assets and intangible assets acquired in both business combinations and asset acquisitions. It removes a provision under FAS No. 142, requiring an entity to consider whether a contractual renewal or extension clause can be accomplished without substantial cost or material modifications of the existing terms and conditions associated with the asset. Instead, FSP FAS 142-3 requires that an entity consider its own experience in renewing similar arrangements. An entity would consider market participant assumptions regarding renewal if no such relevant experience exists. FSP FAS 142-3 is effective for year ends beginning after December 15, 2008 with early adoption prohibited. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In June 2008, the Financial Accounting Standards Board (“FASB”) issued FSP No. EITF 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities (“FSP EITF 03-6-1”). FSP EITF 03-6-1 concludes that unvested share-based payment awards that contain rights to receive non-forfeitable dividends or dividend equivalents are participating securities, and thus, should be included in the two-class method of computing earnings per share (“EPS”). FSP EITF 03-6-1 is effective for fiscal years beginning after December 15, 2008, and interim periods within those years. Early application of EITF 03-6-1 is prohibited. It also requires that all prior-period EPS data be adjusted retrospectively. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In April 2009, the FASB issued FSP FAS 157-4, "Determining Fair Value When Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions That Are Not Orderly" (FSP 157-4). FSP 157-4 provides guidance on how to determine the fair value of assets and liabilities when the volume and level of activity for the asset/liability has significantly decreased. FSP 157-4 also provides guidance on identifying circumstances that indicate a transaction is not orderly. In addition, FSP 157-4 requires disclosure in interim and annual periods of the inputs and valuation techniques used to measure fair value and a discussion of changes in valuation techniques. We have not yet determined the effect, if any, of the adoption of this statement on our financial condition or results of operations.

In April 2009, the FASB issued FSP FAS 115-2 and FAS 124-2, "Recognition and Presentation of Other-Than-Temporary Impairment" (FSP 115-2/124-2). FSP 115-2/124-2 amends the requirements for the recognition and measurement of other-than-temporary impairments for debt securities by modifying the pre-existing "intent and ability" indicator. Under FSP 115-2/124-2, another-than-temporary impairment is triggered when there is intent to sell the security, it is more likely than not that the security will be required to be sold before recovery, or the security is not expected to recover the entire amortized cost basis of the security. Additionally, FSP 115-2/124-2 changes the presentation of another-than-temporary impairment in the income statement for those impairments involving credit losses. The credit loss component will be recognized in earnings and the remainder of the impairment will be recorded in other comprehensive income. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

 
-8-
 

In April 2009, the FASB issued FSP FAS 107-1 and APB 28-1, "Interim Disclosure about Fair Value of Financial Instruments" (FSP 107-1/APB 28-1). FSP 107-1/APB 28-1 requires interim disclosures regarding the fair values of financial instruments that are within the scope of FAS 107, "Disclosures about the Fair Value of Financial Instruments." Additionally, FSP 107-1/APB 28-1 requires disclosure of the methods and significant assumptions used to estimate the fair value of financial instruments on an interim basis as well as changes of the methods and significant assumptions from prior periods. FSP 107-1/APB 28-1 does not change the accounting treatment for these financial instruments. The adoption of this statement is not expected to have a material effect on the Company's financial statements.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165”), which sets forth general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 became effective in the third quarter of 2009 and did not have a material impact on our Consolidated Financial Statements.

 In June 2009, the FASB issued SFAS No. 167, “Amendments to FASB Interpretation No. 46(R)” (“SFAS 167”), which amends FASB Interpretation No. 46(revised December 2003) to address the elimination of the concept of a qualifying special purpose entity. SFAS 167 also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, SFAS 167 provides more timely and useful information about an enterprise’s involvement with a variable interest entity. SFAS 167 will become effective in the first quarter of 2010. We are currently evaluating the impact of this standard on our Consolidated Financial Statements.

In June 2009, the FASB issued SFAS No. 168, “The FASB Accounting Standards CodificationTM and the Hierarchy of Generally Accepted Accounting Principles, a replacement of FASB Statement No. 162” (“SFAS 168”), which establishes the FASB Accounting Standards Codification as the source of authoritative accounting principles recognized by the FASB to be applied in the preparation of financial statements in conformity with generally accepted accounting principles. SFAS 168 explicitly recognizes rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under federal securities laws as authoritative GAAP for SEC registrants. SFAS 168 will become effective in the fourth quarter of 2009 and will require the Company to update all existing GAAP references to the new codification references for all future filings.

ITEM 7A.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information under this item.

 
-9-
 

ITEM 8.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.


REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors
FLM Minerals, Inc.
(an exploration stage company)
Beijing, China

We have audited the accompanying balance sheet of FLM Minerals, Inc. (“FLM”) as of November 30, 2009 and the related statements of operations, stockholders’ equity, and cash flows for the year ended November 30, 2009 and for the period from August 31, 2006 (inception) through November 30, 2009. Amounts relating to the period from inception through November 30, 2008 were audited by other auditors, whose report appears herein.  These financial statements are the responsibility of FLM. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with 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 misstatements. FLM 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 FLM’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 consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provide 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 FLM as of November 30, 2009, and the results of its operations and its cash flows for the year ended and for the period from August 31, 2006 (inception) through November 30, 2009 in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that FLM will continue as a going concern. As discussed in Note 1 to the financial statements, FLM has suffered recurring losses from operations, which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding those matters are described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
MALONEBAILEY, LLP
MaloneBailey, LLP
www.malone-bailey.com
Houston, Texas
 
February 26, 2010
 
 
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KEMPISTY & COMPANY
 
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 - FAX (212) 513-1930
 
 
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 

To the Shareholders of
FLM Minerals Inc.
(An Exploration Stage Company)
 
We have audited the accompanying balance sheet of FLM Minerals Inc. (an exploration stage company) as of November 30, 2008 and the related statements of operations, changes in stockholders’ equity and cash flows for the year then ended. These financial statements are the responsibility of the company 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 at this time, 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 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 significant 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 FLM Minerals Inc. (an exploration stage company) at November 30, 2008 and the results of its operations and its cash flows for the year then ended. The accompanying financial statements referred to above have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to financial statements, the Company is in the exploration stage, and has no permanently established source of revenue and is dependent on its ability to raise capital from shareholders or other sources to sustain operations. These factors, along with other matters as set forth in Note 1, raise substantial doubt that the Company will be able to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
 
KEMPISTY & COMPANY CPAs PC
Kempisty & Company
Certified Public Accountants PC
New York, New York
February 25, 2009
 
 
 
 
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FLM MINERALS INC.
              
(An Exploration Stage Company)
              
Balance Sheets
                
(Expressed in US Dollars)  
              
                       
                       
                       
                 
November 30,
  
November 30,
                 
2009
  
2008
                       
Assets
                
Current Assets
                
 
 Cash
        
 $
            81,795
 $
     103,799
Total Assets
        
 $
          81,795
 $
       103,799
               
Liabilities and Stockholders' Equity
              
Current Liabilities
                
 
Accounts payable and accrued liabilities
      
 $
              7,100
 $
              6,200
Total Liabilities
          
              7,100
  
                6,200
                       
Stockholders' Equity
              
 
Preferred Stock, 100,000,000 shares authorized, $0.00001 par value
          
 
None issued
                
 
Common Stock, 100,000,000 shares authorized, $0.00001 par value
          
 
6,906,300 (November 30, 2007 - 6,906,300) shares issued and outstanding - par value
  
                   69
  
                  69
 
Additional paid in capital
        
          271,881
  
    271,881
 
Deficit accumulated
        
        (197,255)
  
 (174,351)
Total Stockholders' Equity
        
            74,695
  
      97,599
Total Liabilities and Stockholders' Equity
      
 $
          81,795
 $
    103,799
                       



The Accompanying Notes are an Integral Part of These Financial Statements
F-1

 
-12-
 
 
FLM MINERALS INC.
                  
(An Exploration Stage Company)
                  
Statements of Operations
                  
(Expressed in US Dollars)  
                  
                   
                   
 `
              
Period
  
               
From
  
   
Year
    
August 31, 2006
  
   
Ended
    
(Date of Inception)
  
   
November 30,
    
November 30,
    
to November 30,
  
   
2009
    
2008
    
2009
  
                   
 Expenses
                  
      General and administrative
   $ 2,763     $ 54,239     $ 86,317  
      Mineral property costs (Note 3)
     -       -       25,227  
Professional fees
     20,141       23,542       85,711  
Total expenses
     22,904       77,781       197,255  
Net loss for the period
   $ (22,904 )   $ (77,781 )   $ (197,255 )
                         
Net loss per share
                        
      Basic and diluted
   $ (0.00 )   $ (0.01 )        
                         
      Weighted average number of shares
                        
      outstanding - basic and diluted
     6,906,300       6,906,300          
                         
                         



The Accompanying Notes are an Integral Part of These Financial Statements
F-2

 
-13-
 
 
FLM MINERALS INC.
              
(An Exploration Stage Company)
              
Statements of Cash Flows
              
(Expressed in US Dollars)
              
                     
                     
                   
 Period
                   
 From
           
 Year
  
 August 31, 2006
           
  Ended
  
 (Date of Inception)
           
 November 30,
  
 November 30,
  
 to November 30,
           
2009
  
2008
  
2009
Cash flows used in operating activities
    
-
  
-
  
-
 
Net loss for the period
  
$
(22,904)
$
(77,781)
$
(197,255)
 
 Changes in operating assets and liabilities
              
   
Increase (decrease) in accounts payable and accrued liabilities
  
                 900
  
                 100
  
          7,100
Net cash used in operating activities
    
          (22,004)
  
          (77,681)
  
                  (190,155)
                     
Cash flows from financing activities
              
 
 Capital stock issued
    
                      -
  
                      -
  
              271,950
 
 Subscriptions collected
        
                      -
  
                      -
  
                         -
Net cash from financing activities
    
                      -
  
                      -
  
              271,950
Cash flows used in investing activities
              
 
 Due from related party
    
                      -
  
                      -
  
                             -
Net cash from investing activities
    
                      -
  
                      -
  
                     -
                     
Cash increase (decrease) during the period
      
(22,004)
  
          (77,681)
  
            81,795
Cash beginning of the period
    
          103,799
  
          181,480
  
                       -
Cash end of the period
    
$
          81,795
$
        103,799
$
           81,795
                     
Supplemental of cash flow information
                
 
 Interest paid
    
$
                      -
$
                      -
$
                             -
 
 Income taxes paid
  
$
                      -
$
                      -
$
                             -


The Accompanying Notes are an Integral Part of These Financial Statements
F-3

 
-14-
 
 
FLM Minerals Inc.
(An Exploration Stage Company)
Statements of Changes in Stockholders’ Equity
From period August 31, 2006 (inception) through  November 30, 2009
                       
                       
         
Additional
            
 
Common Stock
  
Paid in
  
Subscriptions
Accumulated
  
 
 Shares
  
Amount
  
Capital
  
Receivable
  
Deficit
  
Total
Balance at August 31, 2006
                      
   (inception)
-
$
-
$
-
$
-
$
-
$
 -
Capital stock issued for cash
                      
   at $0.00001 per share
6,000,000
  
60
  
-
  
-
  
-
  
60
Capital stock issued for cash
                      
    at $0.30 per share
906,300
  
9
  
271,881
  
(42,600)
  
-
  
229,290
Net loss for period
-
  
-
  
-
  
-
  
(18,200)
  
(18,200)
Balance at November 30, 2006
6,906,300
  
69
  
271,881
  
(42,600)
  
(18,200)
  
211,150
Share subscriptions received
-
  
-
  
-
  
42,600
  
-
  
42,600
Net loss for year
-
  
-
  
-
  
-
  
(78,370)
  
(78,370)
Balance at November 30, 2007
6,906,300
  
69
  
271,881
  
-
  
(96,570)
  
175,380
Net loss for year
 -
  
 -
  
-
  
-
  
(77,781)
  
(77,781)
Balance at November 30, 2008
6,906,300
  
69
  
271,881
  
-
  
(174,351)
  
97,599
Net loss for year ended November 30, 2009
-
  
-
  
-
  
-
  
(22,904)
  
(22,904)
Balance at November 30, 2009
6,906,300
$
69
$
271,881
$
-
$
(197,255)
$
74,695



The Accompanying Notes are an Integral Part of These Financial Statements
F-4

 
-15-
 

FLM Minerals Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2009

NOTE 1 – NATURE OF OPERATIONS AND GOING CONCERN

FLM Minerals Inc. (the “Company”) was incorporated in Nevada on August 31, 2006. The Company is an Exploration Stage Company.  The Company’s principal business is the acquisition and exploration of mineral properties. The Company has not presently determined whether its properties contain mineral reserves that are economically recoverable.
 
Going concern

The accompanying financial statements have been prepared on a going concern basis, which implies the Company will continue to realize its assets and discharge its liabilities in the normal course of business. The Company has never generated revenues since inception and has never paid any dividends and is unlikely to pay dividends or generate earnings in the immediate or foreseeable future. The continuation of the Company as a going concern is dependent upon the continued financial support from its shareholders, the ability of the Company to obtain necessary equity financing to continue operations, confirmation of the Company’s interests in the underlying properties, and the attainment of profitable operations. As at November 30, 2009, the Company has never generated any revenues and has an accumulated loss of $197,255 since inception. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. These interim financial statements do not include any adjustments to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
 
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with U.S. 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. The Company regularly evaluates estimates and assumptions related to donated expenses and deferred income tax asset valuation allowances. The Company bases its estimates and assumptions on current facts, historical experience and various other factors that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the accrual of costs and expenses that are not readily apparent from other sources. The actual results experienced by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences between the estimates and the actual results, future results of operations will be affected.

Earnings (Loss) Per Share

The Company computes earnings (loss) per share in accordance with Accounting Standards Codification 260, "Earnings per Share". ASC 260 requires presentation of both basic and diluted earnings per share on the face of the income statement. Basic EPS is computed by dividing earnings (loss) available to common shareholders (numerator) by the weighted average number of shares outstanding (denominator) during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period using the treasury stock method and convertible preferred stock using the if-converted method. In computing diluted EPS, the average stock price for the period is used in determining the number of shares assumed to be purchased from the exercise of stock options or warrants. Diluted EPS excludes all dilutive potential shares if their effect is anti dilutive.

Cash and Cash Equivalents

The Company considers all highly liquid instruments with maturity of three months or less at the time of issuance to be cash equivalents.

F-5
 
-16-
 

FLM Minerals Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2009


Fair Value of Financial Instruments

Financial instruments are recorded at fair value in accordance with the standard for "Fair Value Measurements codified within ASC 820", which defines fair values, establishes a three level valuation hierarchy for disclosures of fair value measurement and enhances disclosure requirements for fair value measurements: 
 Level 1--inputs to the valuation methodology are quoted prices (unadjusted) for identical asset or liabilities in active markets. 
 Level 2--inputs to the valuation methodology include closing prices for similar assets and liabilities in active markets, and inputs that are observable for the assets and liabilities, either directly, for substantially the full term of    the financial instruments. 
 Level 3--inputs to the valuation methodology are observable and significant to the fair value. 

Mineral Property Costs

The Company has been in the exploration stage since its inception on August 31, 2006 and has not yet realized any revenues from its planned operations. It is primarily engaged in the acquisition and exploration of mining properties. Mineral property exploration costs are expensed as incurred. Mineral property acquisition costs are initially capitalized when incurred using the guidance in EITF 04-02, “Whether Mineral Rights Are Tangible or Intangible Assets”. The Company assesses the carrying costs for impairment under ASC 360, “Accounting for Impairment or Disposal of Long Lived Assets” at each fiscal quarter end. When it has been determined that a mineral property can be economically developed as a result of establishing proven and probable reserves, the costs then incurred to develop such property, are capitalized. Such costs will be amortized using the units-of-production method over the estimated life of the probable reserve. If mineral properties are subsequently abandoned or impaired, any capitalized costs will be charged to operations.

Long-lived Assets

In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the carrying value of long-lived assets is reviewed on a regular basis for the existence of facts or circumstances that may suggest impairment. The Company recognizes impairment when the sum of the expected undiscounted future cash flows is less than the carrying amount of the asset. Impairment losses, if any, are measured as the excess of the carrying amount of the asset over its estimated fair value.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, “Income Taxes”. The asset and liability method provides that deferred tax assets and liabilities are recognized for the expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using the currently enacted tax rates and laws that will be in effect when the differences are expected to reverse. The Company records a valuation allowance to reduce deferred tax assets to the amount that is believed more likely than not to be realized.

Foreign Currency Translation

The Company’s functional and reporting currency is the United States dollar. Occasional transactions may occur in a foreign currency and management has adopted ASC 830, “Foreign Currency Matters”. Monetary assets and liabilities denominated in foreign currencies are translated using the exchange rate prevailing at the balance sheet date. Non-monetary assets and liabilities denominated in foreign currencies are translated at rates of exchange in effect at the date of the transaction. Average monthly rates are used to translate revenues and expenses. Gains and losses arising on translation or settlement of foreign currency denominated transactions or balances are included in the determination of income.

F-6
 
-17-
 

FLM Minerals Inc.
(An Exploration Stage Company)
Notes to Financial Statements
November 30, 2009

Recent Accounting Pronouncements

In May 2009, the FASB issued a new accounting standard regarding subsequent events. This standard incorporates into authoritative accounting literature certain guidance that already existed within generally accepted auditing standards, with the requirements concerning recognition and disclosure of subsequent events remaining essentially unchanged. This guidance addresses events which occur after the balance sheet date but before the issuance of financial statements. Under the new standard, as under previous practice, an entity must record the effects of subsequent events that provide evidence about conditions that existed at the balance sheet date and must disclose but not record the effects of subsequent events which provide evidence about conditions that did not exist at the balance sheet date. This standard added an additional required disclosure relative to the date through which subsequent events have been evaluated and whether that is the date on which the financial statements were issued. For the Company, this standard was effective beginning July 1, 2009.
 
NOTE 3 – MINERAL PROPERTIES

The cost of the mineral property was not capitalized. Cumulative to November 30, 2009, the Company has recognized property expenses of $25,227 ($5,000 for option payment; $20,227 for property evaluation), as it has not yet been determined whether there are proven or probable reserves on the property.
 
NOTE 4 – INCOME TAXES
   
November 30,
  
   
  2009
    
  2008
  
Deferred tax asset 
  
67,000
    
59,000
  
Valuation allowance 
  
( 67,000
)
  
(59,000
)
Net deferred tax asset 
$ 
- 
  
$
  -
  

 
Net operating loss carryforwards totaled approximately $197,000 and $ 174,000 at November 30, 2009 and 2008. The net operating loss carryforwards will begin to expire in the year 2029 if not utilized. After consideration of all the evidence, both positive and negative, management has recorded a valuation allowance at November 30, 2009 and 2008 due to the uncertainty of realizing the deferred tax assets.Utilization of the Company's net operating loss carryforwards are limited based on changes in ownership as defined in Internal Revenue Code Section 382.
 
NOTE 5 – SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the filing date of this Form 10-K and has determined that there were no subsequent events to recognize or disclose in these financial statements.
 
 
 
 
 
F-7
 
-18-
 
ITEM 9.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
                    
On October 6, 2008, we terminated MacKay LLP, Chartered Accountants, 1100 - 1177 West Hastings Street, Vancouver, British Columbia, Canada V6E as our independent registered public accounting firm.  The decision to dismiss MacKay LLP  as our independent registered public accounting firm was approved by our Board of Directors on October 6, 2008.   Except as noted in the paragraph immediately below, the reports of MacKay LLP’s consolidated financial statements for the years ended November 30, 2007 and 2006 and for the period January 1, 2006 through November 30, 2007 did not contain an adverse opinion or disclaimer of opinion, and such reports were not qualified or modified as to uncertainty, audit scope, or accounting principle.

The reports of MacKay LLP  on our financial statements as of and for the periods ended November 30, 2007 and 2006 and for the period December 1, 2007 through October 6, 2008 contained an explanatory paragraph which noted that there was substantial doubt as to our ability to continue as a going concern as we had suffered negative working capital, had experienced negative cash flows from continuing operating activities and also due to uncertainty with respect to our ability to meet short-term cash requirements.

During the years ended November 30, 2007 and 2006 and for the period December 1, 2007 through May 31, 2008 and through October 6, 2008 we have not had any disagreements with MacKay LLP on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements, if not resolved to MacKay LLP’s satisfaction, would have caused it to make reference to the subject matter of the disagreements in its reports on our consolidated financial statements for such years or in connection with its reports in any subsequent interim period through the date of dismissal.

During the years ended November 30, 2007 and 2006, and through October 6, 2008, there were no reportable events, as defined in Item 304(a)(1)(v) of Regulation S-K.

On October 6, 2008, we delivered a copy of this report to MacKay LLP.  MacKay LLP issued its response.  The response stated that it agreed with the foregoing disclosure.

New independent registered public accounting firm

On October 6, 2008, we engaged Kempisty & Company, Certified Public Accountants, P.C., 15 Maiden Lane, Suite 1003, New York, New York 10038, an independent registered public accounting firm, as our principal independent accountant with the approval of our board of directors. We have not consulted with Kempisty & Company, Certified Public Accountants, P.C. on any accounting issues prior to engaging them as our new auditors.

During the two most recent fiscal years and through the date of engagement, we have not consulted with Kempisty & Company, Certified Public Accountants, P.C. regarding either:



 
-19-
 

1.
The application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that Kempisty & Company, Certified Public Accountants, P.C.  concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or

2.
Any matter that was either subject of disagreement or event, as defined in Item 304(a)(1)(iv)(A) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-K.

On January 20, 2010, we was notified that the audit practice of Kempisty & Company Certified Public Accountants, P.C., the Company’s independent registered public accounting firm (“K&Co”), was taken over by MaloneBailey, LLP (“MB”) effective as of January 1, 2010.  On January 20, 2010, K&Co resigned as the independent registered public accounting firm of the Company and, with the approval of the Audit Committee of the Company’s Board of Directors, MB was engaged as the Company’s independent registered public accounting firm.

During the two most recent fiscal years and through the date of engagement, we have not consulted with MB regarding either:

1.
The application of accounting principles to any specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, and neither a written report was provided to us nor oral advice was provided that MB  concluded was an important factor considered by us in reaching a decision as to the accounting, auditing or financial reporting issue; or

2.
Any matter that was either subject of disagreement or event, as defined in Item 304(a)(1)(iv)(A) of Regulation S-K and the related instruction to Item 304 of Regulation S-K, or a reportable event, as that term is explained in Item 304(a)(1)(iv)(A) of Regulation S-K.

ITEM 9A.
CONTROLS AND PROCEDURES.
                  
Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), that are designed to ensure that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. We conducted an evaluation (the “Evaluation”), under the supervision and with the participation of our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), of the effectiveness of the design and operation of our disclosure controls and procedures (“Disclosure Controls”) as of the end of the period covered by this report pursuant to Rule 13a-15 of the Exchange Act. Based on this Evaluation, our CEO and CFO concluded that our Disclosure Controls were effective as of the end of the period covered by this report.

 
-20-
 
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 Rule 13a-15(f). The Company’s internal control over financial reporting is a process designed to provide reasonable assurance to our management and board of directors regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.

Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States of America, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements. All internal control systems, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention of overriding controls. Accordingly, even effective internal control over financial reporting can provide only reasonable assurance with respect to financial statement preparation. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Our management assessed the effectiveness of our internal control over financial reporting as of November 30, 2009. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Based on our assessment, we believe that, as of November 30, 2009, the Company’s internal control over financial reporting was effective based on those criteria.
 
This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit us to provide only management’s report in this annual report.

Changes in Internal Controls

We have also evaluated our internal controls for financial reporting, and there have been no significant changes in our internal controls or in other factors that could significantly affect those controls subsequent to the date of their last evaluation.

ITEM 9B.
OTHER INFORMATION
 
None.


 
-21-
 

PART III
 
ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.

Officers and Directors

Our directors serve until their successor is elected and qualified. Our officers are elected by the board of directors to a term of one (1) year and serves until their successor is duly elected and qualified, or until they are removed from office.  The board of directors has no nominating, auditing or compensation committees.

The name, address, age and position of our present officers and directors are set forth below:

Name and Address
Age
Position(s)
Xin Chen
48
President, Principal Executive Officer Principal
#14-8, No. 58 Haidian Road
  
Financial Officer, Treasurer, Principal Accounting
Haidian District
  
Officer, Secretary, and sole member of
Beijing, China
  
the Board of Directors.

The persons named above have held their offices/positions since inception of our company and are expected to hold their offices/positions until the next annual meeting of our stockholders.

Background of Officers and Directors

Since September 11, 2008, Mr. Chen has been our president, principal executive officer, principal financial officer, principal accounting officer, treasurer, secretary and sole member of the board of directors of FLM Minerals, Inc.  From October 29, 2006 to October 19, 2007, he was president, CEO and director of Kinglake Resources, Inc.  Since July 2004, he has been the owner of Beijing ENET Information Consulting Co. Ltd., located in Beijing, China. Beijing ENET Information Consulting Co. Ltd. is engaged in the business of Telecommunication consulting and program development. From September 1998 to April 2004, he was a project manager for AT&T China, Inc.

Involvement in Certain Legal Proceedings

Other than as described in this section, to our knowledge, during the past five years, no present or former director or executive officer of our company: (1) filed a petition under the federal bankruptcy laws or any state insolvency law, nor had a receiver, fiscal agent or similar officer appointed by a court for the business or present of such a person, or any partnership in which he was a general partner at or within two yeas before the time of such filing, or any corporation or business association of which he was an executive officer within two years before the time of such filing; (2) was convicted in a criminal proceeding or named subject of a pending criminal proceeding (excluding traffic violations and other minor offenses); (3) was the subject of any order, judgment or decree, not subsequently
 
-22-
 
reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining him from or otherwise limiting the following activities: (i) acting as a futures commission merchant, introducing broker, commodity trading advisor, commodity pool operator, floor broker, leverage transaction merchant, associated person of any of the foregoing, or as an investment advisor, underwriter, broker or dealer in securities, or as an affiliated person, director of any investment company, or engaging in or continuing any conduct or practice in connection with such activity; (ii) engaging in any type of business practice; (iii) engaging in any activity in connection with the purchase or sale of any security or commodity or in connection with any violation of federal or state securities laws or federal commodity laws; (4) was the subject of any order, judgment or decree, not subsequently reversed, suspended or vacated, of any federal or state authority barring, suspending or otherwise limiting for more than 60 days the right of such person to engage in any activity described above under this Item, or to be associated with persons engaged in any such activity; (5) was found by a court of competent jurisdiction in a civil action or by the Securities and Exchange Commission to have violated any federal or state securities law and the judgment in subsequently reversed, suspended or vacate; (6) was found by a court of competent jurisdiction in a civil action or by the Commodity Futures Trading Commission to have violated any federal commodities law, and the judgment in such civil action or finding by the Commodity Futures Trading Commission has not been subsequently reversed, suspended or vacated.

Audit Committee and Charter

We have a separately-designated audit committee of the board.  Audit committee functions are performed by our board of directors. None of our directors are deemed independent. All directors also hold positions as our officers. Our audit committee is responsible for: (1) selection and oversight of our independent accountant; (2) establishing procedures for the receipt, retention and treatment of complaints regarding accounting, internal controls and auditing matters; (3) establishing procedures for the confidential, anonymous submission by our employees of concerns regarding accounting and auditing matters; (4) engaging outside advisors; and, (5) funding for the outside auditory and any outside advisors engagement by the audit committee.

Audit Committee Financial Expert

None of our directors or officers have the qualifications or experience to be considered a financial expert. We believe the cost related to retaining a financial expert at this time is prohibitive. Further, because of our limited operations, we believe the services of a financial expert are not warranted.

Code of Ethics

We have adopted a corporate code of ethics. We believe our code of ethics is reasonably designed to deter wrongdoing and promote honest and ethical conduct; provide full, fair, accurate, timely and understandable disclosure in public reports; comply with applicable laws; ensure prompt internal reporting of code violations; and provide accountability for adherence to the code.

Disclosure Committee and Charter

We have a disclosure committee and disclosure committee charter. Our disclosure committee is comprised of all of our officers and directors. The purpose of the committee is to provide assistance to the Chief Executive Officer and the Chief Financial Officer in fulfilling their responsibilities regarding the identification and disclosure of material information about us and the accuracy, completeness and timeliness of our financial reports.

 
-23-
 
Section 16(a) Beneficial Ownership Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our executive officers and directors, and persons who beneficially own more than 10% of a registered class of our equity securities to file with the Securities and Exchange Commission initial statements of beneficial ownership, reports of changes in ownership and annual reports concerning their ownership of our common shares and other equity securities, on Forms 3, 4 and 5 respectively. Executive officers, directors and greater than 10% shareholders are required by the Securities and Exchange Commission regulations to furnish us with copies of all Section 16(a) reports they file.  Based on our review of the copies of such forms received by us, or written representations that no other reports were required, and to the best of our knowledge, we believe that all of our officers, directors, and owners of 10% or more of our common stock failed to file Form 3s, 4s and 5s.

ITEM 11.
EXECUTIVE COMPENSATION
                  
The following table sets forth the compensation paid by us for the last three fiscal years ending November  for each of our officers. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any.  The compensation discussed addresses all compensation awarded to, earned by, or paid or named executive officers.
 
Executive Officer Compensation Table
           
Non-
Nonqualified
    
           
Equity
Deferred
All
  
Name
          
Incentive
Compensa-
Other
  
and
      
Stock
Option
Plan
tion
Compen-
  
Principal
  
Salary
Bonus
Awards
Awards
Compensation
Earnings
sation
Total
Position
Year
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
Xin Chen
2009
0
0
0
0
0
0
0
0
President
2008
0
0
0
0
0
0
0
0
 
2007
0
0
0
0
0
0
0
0
                   
George Heard
2009
0
0
0
0
0
0
0
0
(former President)
2008
0
0
0
0
0
0
0
0
 
2007
0
0
0
0
0
0
0
0
                   
Jianxing Qian
2009
0
0
0
0
0
0
0
0
(former Principal
2008
0
0
0
0
0
0
0
0
 Financial Officer)
2009
0
0
0
0
0
0
0
0
                   
We do not anticipate paying any salaries in 2010.  We do not anticipate paying salaries until we have a defined ore body and begin extracting minerals from the ground.

 
-24-
 
Compensation of Directors

The members of our board of directors are not compensated for their services as directors. The board has not implemented a plan to award options to any directors. There are no contractual arrangements with any member of the board of directors. We have no director's service contracts. The following table reflects compensation paid to our directors during the fiscal year ended November 30, 2009.

Director’s Compensation Table
 
Fees
            
 
Earned
      
Nonqualified
    
 
or
    
Non-Equity
Deferred
    
 
Paid in
Stock
Option
Incentive Plan
Compensation
All Other
  
 
Cash
Awards
Awards
Compensation
Earnings
Compensation
Total
Name
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(US$)
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
Xin Chen
0
0
0
0
0
0
0
               
Option/SAR Grants

There are no stock option, retirement, pension, or profit sharing plans for the benefit of our officers and directors.

Long-Term Incentive Plan Awards

We do not have any long-term incentive plans.

Indemnification

Under our  Articles of Incorporation and Bylaws of the corporation, we may indemnify an officer or director who is made a party to any proceeding, including a law suit, because of his position, if he acted in good faith and in a manner he reasonably believed to be in our best interest.  We may advance expenses incurred in defending  a proceeding.  To the extent that the officer or director is successful on the merits in  a proceeding as to which  he is to be indemnified, we must indemnify him against all expenses incurred, including attorney's fees. With respect to a derivative action, indemnity may be made only for expenses actually and reasonably incurred in defending the proceeding, and if the officer or director is judged liable, only by a court order. The indemnification is intended to be to the fullest extent permitted by the laws of the State of Nevada.

Regarding indemnification for liabilities arising under the Securities Act of 1933, which may be permitted to directors or officers under Nevada law, we are informed that, in the opinion of the Securities and Exchange Commission, indemnification is against public policy, as expressed in the Act and is, therefore, unenforceable.


 
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ITEM 12.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
                 
 
Direct Amount of
  
Percent
Name of Beneficial Owner
Beneficial Owner
Position
of Class
Xin Chen
2,000,000
President, Principal Executive Officer,
28.96%
   
Principal Financial Officer, Secretary,
  
   
and sole member of the Board of
  
   
Directors.
  
       
All officers and directors as
2,000,000
  
28.96%
a group (1 person)
      
       
Chester Shynkaryk
2,000,000
  
28.96%
       
       
George Heard
2,000,000
  
28.96%
       
Changes in Control

There are no arrangements which may result in a change of control of FLM Minerals Inc. There are no known persons that may assume control of us after the offering.

Securities authorized for issuance under equity compensation plans.

We have no equity compensation plans.

ITEM 13.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
 
In August 2006, we issued a total of 6,000,000 shares of restricted common stock to our officers and directors in consideration of $60.

ITEM 14.
PRINCIPAL ACCOUNTING FEES AND SERVICES
                     
(1) Audit Fees

The aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for our audit of annual financial statements and review of financial statements included in our Form 10-Qs or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years was:

 
2009
$
13,200
Kempisty & Company, CPA PC
 
2008
$
7,800
Kempisty & Company, CPA PC
 
2008
$
14,000
MacKay LLP, Chartered Accountants


 
-26-
 
(2) Audit-Related Fees

The aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountants that are reasonably related to the performance of the audit or review of our financial statements and are not reported in the preceding paragraph:

 
2009
$
0
Kempisty & Company, CPA PC
 
2008
$
0
Kempisty & Company, CPA PC
 
2008
$
0
MacKay LLP, Chartered Accountants

(3) Tax Fees

The aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning was:

 
2009
$
0
Kempisty & Company, CPA PC
 
2008
$
0
Kempisty & Company, CPA PC
 
2008
$
0
MacKay LLP, Chartered Accountants

(4) All Other Fees

The aggregate fees billed in each of the last tow fiscal yeas for the products and services provided by the principal accountant, other than the services reported in paragraphs (1), (2), and (3) was:

 
2009
$
0
Kempisty & Company, CPA PC
 
2008
$
0
Kempisty & Company, CPA PC
 
2008
$
0
MacKay LLP, Chartered Accountants

(5) Our audit committee’s pre-approval policies and procedures described in paragraph (c)(7)(i) of Rule 2-01 of Regulation S-X were that the audit committee pre-approve all accounting related activities prior to the performance of any services by any accountant or auditor.

(6) The percentage of hours expended on the principal accountant’s engagement to audit our financial statements for the most recent fiscal year that were attributed to work performed by persons other than the principal accountant’s full time, permanent employees was 0%.


 
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ITEM 15.
EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

   
Incorporated by reference
  
Exhibit
Document Description
Form
Date
Number
Filed herewith
3.1
Articles of Incorporation.
SB-2
07-12-07
3.1
  
           
3.2
Bylaws.
SB-2
07-12-07
3.2
  
           
4.1
Specimen Stock Certificate.
SB-2
07-12-07
4.1
  
           
10.1
Option Agreement
SB-2
07-12-07
10.1
  
           
14.1
Code of Ethics.
10-K
02/28/08
14.1
  
           
31.1  Certification of Principal Executive Officer and          
 
 
 
Principal Financial Officer pursuant to 15d_15(e),
promulgated under the Securities and Exchange Act
of 1934, as amended.
      
 
X
 
 
        
32.1  Certification pursuant to 18 U.S.C. Section 1350, as          
 
 
adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (Chief Executive Officer and
Chief Financial Officer).
     
X
 
 
        
99.1
Audit Committee Charter.
10-K
02/28/08
99.1
  
           
99.2
Disclosure Committee Charter.
10-K
02/28/08
99.2
  



 
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SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing of this Form 10-K and has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on this 28th day of February, 2010.

 
FLM MINERALS INC.
 
(Registrant)
 
 
 
 
BY:
XIN CHEN
   
Xin Chen
   
President, Principal Executive Officer,
Principal Financial Officer, Secretary, and
sole member of the Board of Directors

In accordance with the Exchange Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:

Signature
Title
Date
     
XIN CHEN
President, Principal Executive Officer, Principal
February 28, 2010
Xin Chen
 
Financial Officer, Secretary, and sole
member of the Board of Directors
  
     












 
-29-
 

EXHIBIT INDEX
   
Incorporated by reference
  
Exhibit
Document Description
Form
Date
Number
Filed herewith
3.1
Articles of Incorporation.
SB-2
07-12-07
3.1
  
           
3.2
Bylaws.
SB-2
07-12-07
3.2
  
           
4.1
Specimen Stock Certificate.
SB-2
07-12-07
4.1
  
           
10.1
Option Agreement
SB-2
07-12-07
10.1
  
           
14.1
Code of Ethics.
10-K
02/28/08
14.1
  
           
31.1  Certification of Principal Executive Officer and          
 
 
 
Principal Financial Officer pursuant to 15d_15(e),
promulgated under the Securities and Exchange Act
of 1934, as amended.
      
 
X
 
 
        
32.1  Certification pursuant to 18 U.S.C. Section 1350, as          
 
 
adopted pursuant to Section 906 of the Sarbanes-
Oxley Act of 2002 (Chief Executive Officer and
Chief Financial Officer).
     
X
 
 
        
99.1
Audit Committee Charter.
10-K
02/28/08
99.1
  
           
99.2
Disclosure Committee Charter.
10-K
02/28/08
99.2
  

 

 
 

 

 
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