UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| [X] | QUARTERLY REPORT UNDER TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED AUGUST 31, 2010 |
| OR |
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 000-53160
FLM MINERALS INC.
(Exact name of registrant as specified in its charter)
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
(Registrant’s telephone number, including area code)
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 last 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 (SS 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 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,” “non-accelerated filer,” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
| | Large Accelerated Filer | [ ] | | Accelerated Filer | [ ��] |
| | Non-accelerated Filer | [ ] | | Smaller Reporting Company | [X] |
| | (Do not check if 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicated the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: 6,906,300 as of October 15, 2010.
TABLE OF CONTENTS
| | | Page |
| | | |
| |
| | | |
| Financial Information | 3 |
| | | |
| | | F-1 |
| | | F-2 |
| | | F-3 |
| | | F-4 |
| | | |
| Management’s Discussion and Analysis of Financial Condition and Results of Operations | 7 |
| | | |
| Quantitative and Qualitative Disclosures About Market Risk | 8 |
| | | |
| Controls and Procedures | 8 |
| | | |
| | | |
| |
| | | |
| Risk Factors | 9 |
| | | |
| Exhibits | 9 |
| | | |
| | | 10 |
| | | |
| | | 11 |
-2-
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
|
| (An Exploration Stage Company) |
| Balance Sheets |
| (Expressed in US Dollars) |
| (Unaudited) |
| |
| |
| | | August 31, | | November 30, |
| | | 2010 | | 2009 |
| | | | | |
| Assets | | | | |
| Current Assets | | | | |
| | Cash | $ | 61,487 | $ | 81,795 |
| | | | | | |
| Total Assets | $ | 61,487 | $ | 81,795 |
| Liabilities and Stockholders' Equity | | | | |
| Current Liabilities | | | | |
| | Accounts payable and accrued liabilities | $ | 1,800 | $ | 7,100 |
| | | | | |
| Total Liabilities | | 1,800 | | 7,100 |
| | | | | |
| 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 shares issued and outstanding, respectively | | 69 | | 69 |
| | Additional paid in capital | | 271,881 | | 271,881 |
| | Deficit accumulated during the exploration stage | | (212,263) | | (197,255) |
| Total Stockholders' Equity | | 59,687 | | 74,695 |
| Total Liabilities and Stockholders' Equity | $ | 61,487 | $ | 81,795 |
The Accompanying Notes are an Integral Part of These Financial Statements
F-1
-3-
|
| (An Exploration Stage Company) |
| Statements of Operations |
| (Expressed in US Dollars) |
| (Unaudited) |
| |
| |
| | | | | | | | | | | Period From |
| | | Three Month | | Three Month | | Nine Month | | Nine Month | | August 31, 2006 |
| | | Ended | | Ended | | Ended | | Ended | | (Date of Inception) |
| | | August 31, | | August 31, | | August 31, | | August 31, | | to August 31, |
| | | 2010 | | 2009 | | 2010 | | 2009 | | 2010 |
| | | | | | | | | | | |
| Expenses | | | | | | | | | | |
| | General and administrative | $ | 571 | $ | 717 | $ | 1,099 | $ | 2,007 | $ | 87,416 |
| | Mineral property costs | | - | | | | - | | - | | 25,227 |
| | Professional fees | | 6,799 | | 3,692 | | 13,909 | | 11,417 | | 99,620 |
| | | | | | | | | | | | |
| Total expenses | | 7,370 | | 4,409 | | 15,008 | | 13,424 | | 212,263 |
| Net loss for the period | $ | (7,370) | $ | (4,409) | $ | (15,008) | $ | (13,424) | $ | (212,263) |
| | | | | | | | | | | |
| Net loss per share | | | | | | | | | | |
| | Basic and diluted | $ | (0.00) | $ | (0.00) | $ | (0.00) | $ | (0.00) | | |
| | | | | | | | | | | | |
| | Weighted average number of | | | | | | | | | | |
| | | shares outstanding - basic and diluted | | 6,906,300 | | 6,906,300 | | 6,906,300 | | 6,906,300 | | |
The Accompanying Notes are an Integral Part of These Financial Statements
F-2
-4-
|
| (An Exploration Stage Company) |
| Statements of Cash Flows |
| (Expressed in US Dollars) |
| (Unaudited) |
| |
| |
| | | | | | | Period From |
| | | Nine Month | | Nine Month | | August 31, 2006 |
| | | Ended | | Ended | | (Date of Inception) |
| | | August 31, | | May 31, | | to August 31, |
| | | 2010 | | 2009 | | 2010 |
| | | | | | | |
| | Cash flows used in operating activities | | | | | | |
| | | Net loss for the period | $ | (15,008) | $ | (13,424) | $ | (212,263) |
| | | Changes in operating assets and liabilities | | | | | | |
| | | | Increase (decrease) in accounts payable and accrued liabilities | | (5,300) | | (4,400) | | 1,800 |
| | | | | | | |
| | Net cash used in operating activities | | (20,308) | | (17,824) | | (210,463) |
| | | | | | | |
| | Cash flows from financing activities | | | | | | |
| | | Capital stock issued | | - | | | | 271,950 |
| | 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 | | (20,308) | | (17,824) | | 61,487 |
| | | | | | | |
| Cash beginning of the period | | 81,795 | | 103,799 | | - |
| | | | | | | |
| Cash end of the period | $ | 61,487 | | 85,975 | $ | 61,487 |
| | | | | | | |
| | | | | | | |
| Supplemental of cash flow information: | | | | | | |
| | Interest paid | $ | - | $ | - | $ | - |
| | Income taxes paid | $ | - | $ | - | $ | - |
The Accompanying Notes are an Integral Part of These Financial Statements
F-3
-5-
(An Exploration Stage Company)
Notes to Financial Statements
August 31, 2010
(Unaudited)
NOTE 1 – BASIS OF PRESENTATION AND CONTINUANCE OF BUSINESS
Basis of Presentation
The unaudited interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q of Article 10 of Regulations S-X in the United States of America and are presented in United States dollars. They do not include all information and footnotes required by United States generally accepted accounting principles for complete financial statements.
The interim unaudited consolidated financial statements should be read in conjunction with those consolidated financial statements included in Form 10-K. In the opinion of Management, all adjustments considered necessary for fair presentation, consisting solely of normal recurring adjustments, have been made. Operating results for the nine months ended August 31, 2010 are not necessarily indicative of the results that may be expected for the year ending November 30, 2010.
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. As of August 31, 2010, the Company has never generated any revenues and has an accumlated loss of $212,263 since inception. These factors raise substantial doubt regarding the Company's ability to continue as a going concern. 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, confir mation of the Company’s interests in the underlying properties, and the attainment of profitable operations. 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.
| 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.
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 an exploration 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.
-7-
Results of Operations
From Inception on August 31, 2006 to May 31, 2010
On November 30, 2006, 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. Management evaluated two potentially larger and presumably more financeable prospects in Mainland China. Based on our evaluations, neither has been acquired. We intend to continue to seek prospects in China.
Limited Operating History; Need for Additional Capital
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 August 31, 2010, our total assets were $61,487 and our total liabilities were $1,800.
As of August 31, 2010, we have never generated any revenues and have an accumulated loss of $212,263 since inception. These factors raise substantial doubt regarding our ability to continue as a going concern. We have never paid any dividends and are unlikely to pay dividends or generate earnings in the immediate or foreseeable future. Our continuation as a going concern is dependent upon the continued financial support from our shareholders, our ability to obtain necessary equity financing to continue operations, confirmation of our interests in the underlying properties, and the attainment of profitable operations.
Recent accounting pronouncements
We do not expect any recent accounting pronouncements to have an impact on its financial position, operations or cash flows.
| QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. |
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
ITEM 4. CONTROLS AND PROCEDURES.
Under the supervision and with the participation of our management, including the Principal Executive Officer and Principal Financial Officer, we have evaluated the effectiveness of our disclosure controls and procedures as required by Exchange Act Rule 13a-15(b) as of the end of the period covered by this report. Based on that evaluation, the Principal Executive Officer and Principal Financial Officer have concluded that these disclosure controls and procedures are effective.
There were no changes in our internal control over financial reporting during the quarter ended August 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.
| Exhibit Number | Document Description |
| | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive Officer and Chief Financial Officer. |
-9-
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following person on behalf of the Registrant and in the capacities on this 15th day of October, 2010.
| | FLM MINERALS INC. |
| | | |
| | BY: | XIN CHEN |
| | | Xin Chen |
| | | President, Principal Executive Officer, Principal Accounting Officer, Principal Financial Officer, Secretary, Treasurer and a member of the Board of Directors |
-10-
| Exhibit Number | Document Description |
| | |
| 31.1 | Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 for the Chief Executive Officer and Chief Financial Officer. |
-11-
