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 December 31, 2011

 

¨ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

 

For the transition period from ___________ to ___________

 

Commission File Number: 000-51232

 

VALLEY HIGH MINING COMPANY

(Exact name of small business issuer as specified in its charter)

 

NEVADA	68-0582275
(State of incorporation)	(I.R.S. EMPLOYER ID NO.)
946 E 1300 N, Mapleton, UT	84664
(Address of principal executive offices)	(Zip Code)

 

(801) 592-4014

(Issuer's telephone number, including area code)

 

Securities registered under Section 12(b) of the Act: None

Name of Each Exchange on Which Registered: None

 

Securities registered under Section 12(g) of the Act:

 

Common Capital Voting Stock, $0.001 par value per share

(Title of Class)

 

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 not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes x No ¨

 

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 past 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the 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. 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:

 

Large accelerated filer      ¨	Accelerated filed                      ¨
Non-accelerated filer        ¨	Smaller reporting company     x

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes x No ¨

 

As of the close of business on June 30, 2011, the last business day of the Company's most recently completed second fiscal quarter, and, as of the date of this annual report, the aggregate market value of the voting stock held by non-affiliates, an amount consisting of a total of 281,346 shares, was undeterminable due to a lack of trading in the Company’s common stock.

 

As of March 30, 2012, the Issuer had 15,281,346 common shares issued and outstanding.

 

 

PART I

 

NOTICE AND DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS

 

Certain matters discussed herein may be forward-looking statements that involve a variety of risks and uncertainties.

 

In light of the risks involved with or facing us, actual results may differ materially or considerably from those projected, implied or suggested. As a result, any forward-looking statements expressed herein are deemed to represent our best judgment as of the date of this filing. We do NOT express any intent or obligation to update any forward-looking statement because we are unable to give any assurances regarding the likelihood that, or extent to which, any event discussed in any such forward-looking statement contained herein may or may not occur, or that any effect from or outcome of any such forward-looking event may or may not bear materially upon our future business, prospects, plans, financial condition or our plan of operation.

 

 

TABLE OF CONTENTS

  

PART I	4
ITEM 1. BUSINESS.	4
ITEM 2. PROPERTY.	9
ITEM 3. LEGAL PROCEEDINGS.	9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.	9
PART II	9
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.	9
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS.	10
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTRY DATA.	F-1
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.	12
ITEM 9A AND 9A(T).  CONTROLS AND PROCEDURES.	12
ITEM 9B. OTHER INFORMATION.	13
PART III	13
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE.	13
ITEM 11. EXECUTIVE COMPENSATION.	14
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.	15
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.	15
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.	16
PART IV	16
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.	16
SIGNATURES	17

 

 

PART I

 

ITEM 1. BUSINESS.

 

Valley High Mining Company ("Valley High") was incorporated in the State of Utah on November 14, 1979, under the name "Valley High Oil, Gas & Minerals, Inc.," for the purpose of engaging in the energy, mining and natural resources business. In order to raise the money necessary to acquire, explore and develop oil and gas properties and other natural resource-related ventures or projects, Valley High, on February 19, 1980, undertook a public offering of its common stock pursuant to the Regulation A exemption from registration afforded under the General Rules and Regulations of the Securities and Exchange Commission ("Commission") in which it offered and sold a total of 25 million common capital shares at a price of two (2) cents per share. Pursuant to this offering, the Company raised $500,000 from over 1,000 persons. As stated in its offering circular, "[i]t is the present intention of management to expend the proceeds of this offering in the acquisition and exploration of natural resource properties. The types of properties which are expected to be acquired and the order of priority are as follows: (1) oil and gas, (2) uranium, (3) coal, (4) geothermal, and (5) other mineral (metallic and nonmetallic) properties."

 

Between 1980 and 1985, the Company spent nearly all of its capital on several natural resource and mining ventures. In 1985, the Company effectuated a reverse split and changed its par value from $0.001 or one mill per share to $0.01 or one cent per share, with the same number of shares authorized, namely, 50 million. By 1986, after it had engaged in several unsuccessful ventures, the Company exhausted its capital reserves.

 

In April 1989, a Mr. Joe Needle, an Ohio resident, took control of the Company. Between 1989 and 1994, Mr. Needle attempted to resurrect or revive us in some fashion; however, in 1994 he suddenly and unexpectedly passed away. At the time of Mr. Needle's passing, we had a total of 9,819,779 common capital shares issued and outstanding. Two other individuals were at that time on the board, namely, Messrs. George D. Fehr and Adrian Gerritsen, both Utah residents. Mr. Needle's daughter, Susan B. "Cookie" Needle, a Florida resident, was either already serving on the board or took a position on the Board of Directors upon her father's death. Between the time of Mr. Needle's death in 1994 and October 2003, these three individuals comprised the Board of Directors of the Company. During this same period of time, the only activity engaged in by the Company was that minimal activity necessary to keep the Company current and in good standing with the Utah Division of Corporations, the Utah Tax Commission and the Internal Revenue Service.

 

During the summer of 2003, Mr. John Michael Coombs was approached by Mr. George Fehr, a Salt Lake City resident and person Mr. Coombs has known for some-25 years. Mr. Fehr, then age 88 or 89, advised that he had been on the board of Valley High since the mid-1980's and since the death of Mr. Needle, he had maintained possession of all the corporate records of Valley High and had kept it in good standing with the requisite corporate and taxing authorities. Mr. Fehr advised that he was tired of maintaining the corporate existence of Valley High and wondered if Mr. Coombs would be interested in taking control of it, doing something productive with it, and finding replacements for each of the board members, all of whom were tired of serving on the board. After looking at the corporate records and all company records on file with its stock transfer agent, Mr. Coombs agreed to take control of us. Accordingly, effective, October 24, 2003, having done nothing with the Company in nearly 10 years and being tired of acting as board members, the directors of the Company agreed to resign and appoint in their place and stead, Mr. John Michael Coombs, his wife, Dorothy C. Coombs, and the brother of Dorothy Coombs named George J. Cayias, all residents of Salt Lake City, Utah. After new management took control of the Company, documentation with the Utah Division of Corporations was filed setting forth the new directors and further identifying Mr. Coombs as the new registered agent.

 

On February 27, 2004, we formed a wholly owned subsidiary in Nevada under the name "Valley High Mining Company" for the purpose of changing our domicile to Nevada. On March 12, 2004, Valley High O, G & M, the parent corporation, and Valley High Mining Company, the wholly owned Nevada subsidiary, entered into an Agreement and Plan of Merger ("Agreement and Plan") whereby the former would merge with and into the latter, thereby changing the Company's domicile to Nevada. The shareholders were advised of a formal shareholders' meeting to approve the transaction by means of a Notice of Meeting and Letter to the Shareholders. Among other things, the Notice advised that anyone so choosing would be entitled to exercise dissenters' rights of appraisal under applicable provisions of the Utah Revised Business Corporations Act. The Notice and Letter further invited anyone so interested to request a copy of the formal Agreement and Plan. One shareholder from Missouri sought to exercise dissenters' rights of appraisal but later abandoned that effort once we provided this individual with various corporate documents and records, at her request, including a copy of the Agreement and Plan.

 

The Agreement and Plan provided, among other things, that for every 35 shares of Valley High O, G & M, a shareholder was entitled to receive one (1) share of Valley High Mining Company, a Nevada corporation, the survivor in the merger. Another provision in the Agreement and Plan provided that Mr. John Michael Coombs, a Salt Lake City, Utah, resident (and the principal of lessor, North Beck Joint Venture, LLC, discussed elsewhere herein), was designated to be the only officer and director of the survivor in the merger. Nevada law, as opposed to Utah law, allows such.

 

On March 26, 2004, a formal shareholders' meeting was held at the law offices of Mabey & Coombs, L.C., in Salt Lake City, Utah, to approve the Plan and Agreement. At such meeting, a majority of the shareholders were in attendance either in person or by proxy. A quorum was declared and a majority of those entitled to vote approved the merger and change of domicile transaction. Having obtained approval of the Plan and Agreement by a majority of our shareholders and having filed Articles of Merger with the Nevada Secretary of State, the Secretary of State of Nevada stamped and accepted the Articles of Merger on April 13, 2004. These Articles of Merger were then filed with and stamped by the State of Utah on April 19, 2004. The merger transaction was effective by operation of law on the date that the Articles of Merger were accepted for filing by both states, namely, April 19, 2004. Among other things, this transaction changed our par value per share back to a mill or $0.001.

 

 

Because there had been 9,819,779 shares issued and outstanding as of the day prior to the effective date of the merger, this figure, as a result of the merger, and rounding fractional shares up to the next highest share, translated into a total of 281,346 shares. Furthermore, because the Agreement and Plan provided that any fractional shares resulting from the merger would be rounded up to the next nearest share, our transfer agent, Atlas Stock Transfer, advised that it also issued the necessary additional shares that resulted in a total of 281,346 post-merger shares.

 

On April 19, 2004, the day that the merger was effective, we entered into a mining lease agreement ("Mining Lease" or "Lease") with North Beck Joint Venture, LLC, a Utah limited liability company ("North Beck"). See Exhibit 10.1 attached to this document, a copy of said Mining Lease Agreement. Entering into this lease agreement was NOT an arm's length transaction because the immediate family of Mr. Coombs, our president and chairman of the board, owns and controls these mineral claims so leased to us. See Item 13 of Part III below titled "Certain Relationships and Related Transactions, and Director Independence." The terms of the lease consideration were based upon prior lease agreements that North Beck Joint Venture had entered into with other mining companies in the past.

 

Pursuant to the aforementioned mining lease agreement with North Beck Joint Venture, LLC, we acquired control of over 470 acres of patented precious metals mining claims located adjacent to, and just west of, the town of Eureka in Juab County, Utah, in the so-called "Tintic Mining District" ("the North Beck Claims"). The Tintic Mining District of Juab County, Utah, is located approximately 100 miles south of Salt Lake City. The North Beck Claims have an extensive history and contain several mines, mining shafts or "prospecting pits," two of which are over 1,000 feet deep. See Item 2 below titled " Property." Fairly extensive, though somewhat antiquated, knowledge exists regarding the North Beck Claims. This is because, among other reasons, during the late 1950's, the North Beck Claims were part of the so- called "Jenny Lind Project," a project that involved extensive exploration and development in an area known as Jenny Lind Canyon by The Bear Creek Mining Company.

 

Immediately upon consummation of the merger/change of domicile transaction, North Beck was issued, as mining lease consideration, a total of 5,000,000 "restricted" shares in the surviving Nevada corporation, a stock issuance that made North Beck Joint Venture our largest shareholder. See mining lease attached to this Annual Report as Exhibit 10.1. As repeatedly set forth elsewhere in this document, our president and sole director, John Michael Coombs, both directly and indirectly controls North Beck, the owner of the North Beck Claims. See Item 13 of Part III below titled "Certain Relationships and Related Transactions, and Director Independence."

 

As a result of a change in control in February, 2010, in which Coron Capital, LLC purchased 5,000,000 of the Company’s 5,281,346 outstanding shares of common stock, the Company's current principal business activity is to seek a suitable acquisition candidate through acquisition, merger, reverse merger or other suitable business combination method. The Company disposed of the North Beck Claims in connection with the change in control.

 

As a "reporting company," the Company may be more attractive to a private acquisition target because its common stock is eligible to be quoted on the OTC Bulletin Board although there is no assurance it will be quoted. As a result of filing this Registration Statement, the Company is obligated to file with the Securities and Exchange Commission (the "Commission") certain periodic reports, including an annual report containing audited financial statements. The Company anticipates that it will continue to file such reports as required under the Exchange Act.

 

The Company is a shell company that is defined under Rule 12b-2 of the Exchange Act as a registrant, other than an asset-backed issuer, that has 1) no or nominal operations; and 2) either (i) no or nominal assets; (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. Private companies wishing to become publicly traded may wish to merge with a shell company through a reverse merger or reverse acquisition transaction whereby the shareholders of the private company become the majority of the shareholders of the combined company. The private company may purchase for cash all or a portion of the common shares of the shell company from its major stockholders. Typically, the Board and officers of the private company become the new Board and officers of the combined Company and often the name of the private company becomes the name of the combined entity.

 

The Company has very limited capital, and it is unlikely that the Company will be able to take advantage of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term growth. At the present time, the Company has not identified any business opportunity that it plans to pursue, nor has the Company reached any agreement or definitive understanding with any person concerning an acquisition.

 

The Company's search will be directed toward small and medium-sized enterprises, which have a desire to become public corporations. In addition these enterprises may wish to satisfy, either currently or in the reasonably near future, the minimum tangible asset requirement in order to qualify shares for trading on NASDAQ or on an exchange such as the American Stock Exchange (See the subsection of this Item 1 called “Investigation and Selection of Business Opportunities”). The Company anticipates that the business opportunities presented to it will either (i) be in the process of formation, or be recently organized with limited operating history or a history of losses attributable to under-capitalization or other factors; (ii) experiencing financial or operating difficulties; (iii) be in need of funds to develop new products or services or to expand into a new market, or have plans for rapid expansion through acquisition of competing businesses; or (iv) have other similar characteristics. The Company intends to concentrate its acquisition efforts on properties or businesses that it believes to be undervalued or that it believes may realize a substantial benefit from being publicly owned. Given the above factors, investors should expect that any acquisition candidate may have little or no operating history, or a history of losses or low profitability.

 

 

The Company does not propose to restrict its search for investment opportunities to any particular geographical area or industry, and may, therefore, engage in essentially any business, to the extent of its limited resources. The Company's discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions and other factors.

 

Any entity which has an interest in being acquired by, or merging into the Company, is expected to be an entity that desires to become a public company and establish a public trading market for its securities. In connection with such a merger or acquisition, it is highly likely that an amount of stock constituting control of the Company would either be issued by the Company or be purchased from the current principal stockholder of the Company by the acquiring entity or its affiliates. If stock is purchased from the current principal stockholder, the transaction is likely to result in substantial gains to the current principal stockholder relative to its purchase price for such stock. In the Company's judgment, none of the officers and directors would thereby become an underwriter within the meaning of the Section 2(11) of the Securities Act of 1933, as amended, as long as the transaction is a private transaction rather than a public distribution of securities. The sale of a controlling interest by the principal stockholder of the Company would occur at a time when minority stockholders are unable to sell their shares because of the lack of a public market for such shares.

 

Depending upon the nature of the transaction, the current officers and directors of the Company may resign their management and board positions with the Company in connection with a change of control or acquisition of a business opportunity. In the event of such a resignation, the Company's current management would thereafter have no control over the conduct of the Company's business.

 

It is anticipated that business opportunities will come to the Company's attention from various sources, including its officers and directors, its other stockholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals. The Company has no plans, understandings, agreements, or commitments with any individual for such person to act as a finder of opportunities for the Company.

 

INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES

 

To a large extent, a decision to participate in a specific business opportunity may be made upon management's analysis of the quality of the other company's management and personnel, the anticipated acceptability of new products or marketing concepts, the merit of technological changes, the perceived benefit the business opportunity will derive from becoming a publicly held entity, and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of a variety of factors, including, but not limited to, the possible need to expand substantially, shift marketing approaches, change product emphasis, change or substantially augment management, raise capital and the like.

 

It is anticipated that the Company will not be able to diversify, but will essentially be limited to the acquisition of one business opportunity because of the Company's limited financing. This lack of diversification will not permit the Company to offset potential losses from one business opportunity against profits from another, and should be considered an adverse factor affecting any decision to purchase the Company's securities.

 

Certain types of business acquisition transactions may be completed without any requirement that the Company first submit the transaction to the stockholders for their approval. In the event the proposed transaction is structured in such a fashion that stockholder approval is not required, holders of the Company's securities (other than principal stockholders holding a controlling interest) should not anticipate that they will be provided with financial statements or any other documentation prior to the completion of the transaction. Other types of transactions may require prior approval of the stockholders.

 

In the event a proposed business combination or business acquisition transaction requires stockholder approval, the Company will be required to prepare a Proxy or Information Statement describing the proposed transaction, file it with the Securities and Exchange Commission for review and approval, and mail a copy of it to all Company stockholders prior to holding a stockholders meeting for purposes of voting on the proposal or if no stockholders meeting will be held, prior to consummating the proposed transaction. Minority shareholders may have the right, in the event the transaction is approved by the required number of stockholders, to exercise statutory dissenter's rights and elect to be paid the fair value of their shares.

 

The analysis of business opportunities will be undertaken by or under the supervision of the Company's officers and directors, none of whom are professional business analysts (See the section of this Item 1 called “Management”). Although there are no current plans to do so, Company management might hire an outside consultant to assist in the investigation and selection of business opportunities, and might pay a finder's fee. Since Company management has no current plans to use any outside consultants or advisors to assist in the investigation and selection of business opportunities, no policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants or advisors, the services to be provided, the term of service, or the total amount of fees that may be paid. However, due to the limited resources of the Company, it is likely that any such fee the Company agrees to pay would be paid in stock and not in cash.

 

 

Otherwise, in analyzing potential business opportunities, Company management anticipates that it will consider, among other things, the following factors:

 

* Potential for growth and profitability indicated by new technology, anticipated market expansion, or new products;

* the Company's perception of how any particular business opportunity will be received by the investment community and by the Company's stockholders;

* whether, following the business combination, the financial condition of the business opportunity would be, or would have a significant prospect in the foreseeable future of becoming, sufficient to enable the securities of the Company to qualify for listing on an exchange or on a national automated securities quotation system, such as NASDAQ, so as to permit the trading of such securities to be exempt from the requirements of Rule 15g-9 adopted by the Securities and Exchange Commission;

* capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources;

* the extent to which the business opportunity can be advanced;

* competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole;

* strength and diversity of existing management or management prospects that are scheduled for recruitment;

* the cost of participation by the Company as compared to the perceived tangible and intangible values and potential; and

* the accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items.

 

The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.

 

Prior to making a decision to participate in a business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, such items as a description of products, services and Company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such Company and its affiliates during the relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced within a reasonable period of time not to exceed 60 days following completion of a merger or acquisition transaction; and the like.

 

As part of the Company's investigation, the Company's executive officers and directors may meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.

 

It is possible that the range of business opportunities that might be available for consideration by the Company could be limited by the impact of Securities and Exchange Commission regulations regarding purchase and sale of penny stocks. The regulations would affect, and possibly impair, any market that might develop in the Company's securities until such time as they qualify for listing on NASDAQ or on an exchange which would make them exempt from applicability of the penny stock regulations.

 

Company management believes that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current stockholders, acquisition candidates which have long-term plans for raising capital through public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates, which have a need for an immediate cash infusion, are not likely to find a potential business combination with the Company to be an attractive alternative.

 

FORM OF ACQUISITION

 

It is impossible to predict the manner in which the Company may participate in a business opportunity. Specific business opportunities will be reviewed as well as the respective needs and desires of the Company and the promoters of the opportunity and, upon the basis of the review and the relative negotiating strength of the Company and such promoters, the legal structure or method deemed by management to be suitable will be selected. Such structure may include, but is not limited to, leases, purchase and sale agreements, licenses, joint ventures and other contractual arrangements. The Company may act directly or indirectly through an interest in a partnership, corporation or other form of organization. Implementing such structure may require the merger, consolidation or reorganization of the Company with other corporations or forms of business organization. In addition, the present management and stockholders of the Company most likely will not have control of a majority of the voting stock of the Company following a merger or reorganization transaction. As part of such a transaction, the Company's existing directors may resign and new directors may be appointed without any vote by stockholders.

 

 

It is likely that the Company will acquire its participation in a business opportunity through the issuance of Common Stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called B tax free reorganization under the Internal Revenue Code of 1986 as amended, depends upon the issuance to the stockholders of the acquired Company of a controlling interest (i.e., 80% or more) of the common stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other tax free provisions provided under the Internal Revenue Code, the Company's current stockholders would retain in the aggregate 20% or less of the total issued and outstanding shares. This could result in substantial additional dilution in the equity of those who were stockholders of the Company prior to such reorganization. Any such issuance of additional shares might also be done simultaneously with a sale or transfer of shares representing a controlling interest in the Company by the current officers, directors and principal stockholders.

 

It is anticipated that any new securities issued in any reorganization would be issued in reliance upon one or more exemptions from registration under applicable federal and state securities laws to the extent that such exemptions are available. In some circumstances, however, as a negotiated element of the transaction, the Company may agree to register such securities either at the time the transaction is consummated or under certain conditions at specified times thereafter. The issuance of substantial additional securities and their potential sale into any trading market that might develop in the Company's securities may have a depressive effect upon such market.

 

The Company will participate in a business opportunity only after the negotiation and execution of a written agreement. Although the terms of such agreement cannot be predicted, generally such an agreement would require specific representations and warranties by all of the parties thereto, specify certain events of default, detail the terms of closing and the conditions which must be satisfied by each of the parties thereto prior to such closing, outline the manner of bearing costs if the transaction is not closed, set forth remedies upon default, and include miscellaneous other terms.

 

As a general matter, the Company anticipates that it, and/or its principal stockholders will enter into a letter of intent with the management, principals or owners of a prospective business opportunity prior to signing a binding agreement. Such a letter of intent will set forth the terms of the proposed acquisition but will not bind any of the parties to consummate the transaction. Execution of a letter of intent will by no means indicate that consummation of an acquisition is probable. Neither the Company nor any of the other parties to the letter of intent will be bound to consummate the acquisition unless and until a definitive agreement is executed. Even after a definitive agreement is executed, it is possible that the acquisition would not be consummated should any party elect to exercise any right provided in the agreement to terminate it on specific grounds.

 

It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs incurred in the related investigation would not be recoverable. Moreover, because many providers of goods and services require compensation at the time or soon after the goods and services are provided, the inability of the Company to pay until an indeterminate future time may make it impossible to produce goods and services.

 

COMPETITION

 

The Company expects to encounter substantial competition in its efforts to locate attractive business combination opportunities. The competition may in part come from business development companies, venture capital partnerships and corporations, small investment companies, brokerage firms, and the like. Some of these types of organizations are likely to be in a better position than the Company to obtain access to attractive business acquisition candidates either because they have greater experience, resources and managerial capabilities than the Company, because they are able to offer immediate access to limited amounts of cash, or for a variety of other reasons. The Company also will experience competition from other public companies with similar business purposes, some of which may also have funds available for use by an acquisition candidate.

 

EMPLOYEES

 

The Company currently has no employees other than John Hickey who acts as the CEO and CFO of the Company. Management of the Company expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities.

 

 

ITEM 2. PROPERTY.

 

Executive Offices/Facilities.

 

Our executive office is located at 946 E 1300 N, Mapleton, UT 84664. Our telephone number is 801-592-4014. This is also the business office address of our CEO and sole director. We pay no rent for the use of this address or facility. We do not believe that we will need to maintain any other or additional office at any time in the foreseeable future in order to carry out our plan of operations described in this document. We believe that the current facilities provided by our president are adequate to meet our needs until we become more fully operational.

 

ITEM 3. LEGAL PROCEEDINGS.

 

There are presently no pending legal proceedings to which we or any officer, director or major stockholder is a party or to which any of our mineral claims is subject and, to the best of our knowledge, information and belief, no such actions against us are contemplated or threatened.

 

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

 

We did not submit any report, proxy statement or information statement to security holders during the fiscal year ended December 31, 2011.

 

We are subject to the information reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, we file reports and other information with the Commission. Reports and other information filed by the issuer with the Commission can be inspected and copied at the Commission's Public Reference Library in the Commission's own building located at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the Commission at prescribed rates. An interested person may also obtain information about the operation of the Public Reference Room by calling the Commission at 1-800- SEC-0330.

 

Inasmuch as we are an electronic filer, and the Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission, an interested person may access this material electronically by means of the Commission's home page on the Internet at www.sec.gov. To facilitate such access for an interested person, our CIK number is 0001301838. As of the date of this filing, we have not established our own web address or web page nor do we have any plans, at present, to do so.

 

PART II

 

ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.

 

Market Information.

 

Our shares are currently quoted on OTC Markets under the symbol VHMC. There has been little or no trading activity in our common stock for the past two calendar years.

 

Currently, there are 15,281,346 shares of our common stock issued and outstanding. As of the date of this Annual Report, only 281,346 of these shares may be sold without restriction. This is because all such 281,346 shares have been issued and outstanding for over 20 years. As to the additional 15,000,000 "restricted" shares currently issued and outstanding, these shares are held by Coron capital, LLC. These 15,000,000 "restricted" shares represent approximately 98.2% of our total number of issued and outstanding shares and are held by insiders and affiliates.

 

At present, none of our officers and directors own or control any shares that are not "restricted" or which do NOT bear a restrictive legend.

 

Of the 15,281,346 shares issued and outstanding, 15,000,000 are "restricted." Those 281,346 shares that are not "restricted" have been issued and outstanding for as long as 20 years.

 

There are no plans, proposals, arrangements or understandings with any person, including any securities broker-dealer or anyone associated with a broker-dealer, concerning the development of a trading market in our common capital stock, nor have there ever been any such plans, proposals, arrangements or understandings.

 

Holders.

 

According to our stock transfer agent, Standard Registrar & Transfer in Draper, Utah. as of the date of this Annual Report, there were approximately 1139 holders of record of our common capital stock.

 

Description of Our Securities.

 

Our authorized capital stock consists of 50,000,000 shares of common capital stock, $0.001 par value, of which 15,281,346 shares are considered issued and outstanding as of our fiscal year-end, December 31, 2011.

 

 

We have no preferred shares issued or authorized.

 

Voting Rights.

 

Stockholders are entitled to one (1) vote on all matters to be voted upon for each share of common stock held. The shares do not have the right to cumulative voting for directors, meaning that holders of more than 50 percent of the shares voting for the election of directors can elect all of the directors if they choose to do so.

 

Liquidation Rights.

 

In the event of liquidation, dissolution or a winding up of us or our affairs, holders of common stock would be entitled to receive pro rata all of our remaining assets that are available and distributable to the shareholders after first satisfying claims of creditors and anyone else having rights that are superior to those of the common stockholders.

 

Preemptive Rights.

 

Stockholders do NOT have a preemptive right to acquire our unissued shares of common stock.

 

Dividends and Dividend Policy.

 

Our Board of Directors has NOT declared or paid cash dividends or made distributions in the past and we do not anticipate that we will pay cash dividends or make distributions to shareholders in the foreseeable future. We currently intend to retain and invest future earnings, if any, to finance our operations.

 

The holders of our common stock are entitled to receive such lawful dividends as may be declared by the Board of Directors. As of this date, no such dividends have been declared nor does management believe it likely that dividends will be declared in the near or distant future. The payment of any future dividends will depend upon, among other things, future earnings, capital requirements, our financial condition and general business conditions. As a result, there can be no assurance that any dividends on common stock will be paid in the future. We also have no redemption or sinking fund provisions applicable to any shares of common stock.

 

Securities Authorized for Issuance under Equity Compensation Plans.

 

We have NOT authorized any securities for issuance under any equity or other compensation plans of any type or nature, inasmuch as we have NOT adopted any such incentive or compensation plans and have no intention, at present, to do so.

 

Recent Sales of Unregistered Securities.

 

None.

 

Use of Proceeds of Registered Securities.

 

None; not applicable.

 

Purchases of Equity Securities by Us and Affiliated Purchasers.

 

None; not applicable.

 

ITEM 6. SELECTED FINANCIAL DATA.

 

Responding to this item is not required for smaller reporting companies.

 

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS.

 

The Company's current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method.

 

It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern.

 

 

The Company's need for capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.

 

The Company's current purpose is to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to it by persons or companies who or which desire to seek the perceived advantages of an Exchange Act registered corporation. As of the date of this Annual Report on Form 10-K, the Company has no particular acquisitions in mind and has not entered into any negotiations regarding such an acquisition, and neither the Company's sole officer and director nor any promoter and affiliate has engaged in any negotiations with any representatives of the owners of any business or company regarding the possibility of a merger or acquisition between the Company and such other company.

 

Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred.

 

If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.

 

ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

 

No response to this item is required for smaller reporting companies.

 

 

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

  

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

 

To the Board of Directors

Valley High Mining Company

(An Exploration Stage Company)

Mapleton, Utah

 

We have audited the accompanying balance sheets of Valley High Mining Company (the “Company”) as of December 31, 2011 and 2010, and the related statements of operations, stockholders’ deficit and cash flows for the years then ended and for the period from April 19, 2004 (date re-entered the exploration stage) through December 31, 2011. 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 audits. The financial statements for the period from April 19, 2004 (date re-entered the exploration stage) through December 31, 2009 were audited by other auditors whose report expressed an unqualified opinion on those financial statements. The financial statements for the period from April 19, 2004 (date re-entered the exploration stage) through December 31, 2009 include total revenues of $-0- and a net loss of $69,464. Our opinion on the statements of operations, stockholders’ deficit and cash flows for the period from April 19, 2004 (date re-entered the exploration stage) through December 31, 2011, insofar as it relates to amounts from April 19, 2004 (date re-entered the exploration stage) through December 31, 2009, is based solely on the report of other auditors.

 

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits 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 significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits 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 Valley High Mining Company as of December 31, 2011 and 2010 and the results of its operations and its cash flows for the years then ended and for the period from April 19, 2004 (date re-entered the exploration stage) through December 31, 2011, in conformity with accounting principles generally accepted in the United States of America.

 

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has a working capital deficit and has not yet established an ongoing source of revenues sufficient to cover its operating costs. Those conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to those matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

 

/s/ GBH CPAs, PC

 

GBH CPAs, PC

www.gbhcpas.com

Houston, Texas

March 23, 2012

 

  

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Balance Sheets

 

		December 31,				December 31,
		2011				2010
ASSETS
CURRENT ASSETS
Cash		$	123			$	2,804
Prepaid expenses			-				1,437
Total Current Assets			123				4,241
TOTAL ASSETS		$	123			$	4,241
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	980			$	27
Convertible notes payable - related party			-				10,000
Derivative liability			43,985				75,046
Total Current Liabilities			44,965				85,073
LONG-TERM CONVERTIBLE NOTES PAYABLE - RELATED PARTY			30,000				-
Total Liabilities			74,965				85,073
STOCKHOLDERS' DEFICIT
Common stock, $0.001 par value, 50,000,000 shares authorized, 15,281,346 shares issued and outstanding			15,281				15,281
Additional paid-in capital			847,819				817,819
Accumulated deficit			(751,374	)			(751,374	)
Deficit accumulated during the exploration stage			(186,568	)			(162,558	)
Total Stockholders' Deficit			(74,842	)			(80,832	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	123			$	4,241

 

The accompanying notes are an integral part of these financial statements.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Operations

 

										Since
										Re-entering  the
										Exploration
										Stage on
										April 19, 2004
		For the Year Ended								Through
		December 31,								September 30,
		2011				2010				2011
REVENUE		$	-			$	-			$	-
COST OF SALES			-				-				-
GROSS PROFIT			-				-				-
OPERATING EXPENSES
General and administrative expenses			24,091				18,014				111,569
Total Operating Expenses			24,091				18,014				111,569
LOSS FROM OPERATIONS			(24,091	)			(18,014	)			(111,569	)
OTHER INCOME (EXPENSE)
Gain (loss) on derivative liability			31,061				(75,046	)			(43,985	)
Interest expense			(30,980	)			(34	)			(31,014	)
Total Other income (Expense)			81				(75,080	)			(74,999	)
LOSS BEFORE INCOME TAXES			(24,010	)			(93,094	)			(186,568	)
PROVISION FOR INCOME TAXES			-				-				-
NET LOSS		$	(24,010	)		$	(93,094	)		$	(186,568	)
LOSS PER SHARE - BASIC AND DILUTED		$	(0.00	)		$	(0.01	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING - BASIC AND DILUTED			15,281,346				7,405,888

 

The accompanying notes are an integral part of these financial statements.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Stockholders' Deficit

 

																		Deficit
																		Accumulated
										Additional								During the
		Common Stock								Paid-in				Accumulated				Exploration
		Shares				Amount				Capital				Deficit				Stage				Total
Balance, April 19, 2004			281,313			$	281			$	751,093			$	(751,374	)		$	-			$	-
Shares issued to acquire mining claims lease valued at shareholder carryover basis of $0, April 2004			5,000,000				5,000				(5,000	)			-				-				-
Rounding shares issued			33				-				-				-				-				-
Net loss			-				-				-				-				(4,339	)			(4,339	)
Balance, December 31, 2004			5,281,346				5,281				746,093				(751,374	)			(4,339	)			(4,339	)
Net loss			-				-				-				-				(17,295	)			(17,295	)
Balance, December 31, 2005			5,281,346				5,281				746,093				(751,374	)			(21,634	)			(21,634	)
Net loss			-				-				-				-				(13,846	)			(13,846	)
Balance, December 31, 2006			5,281,346				5,281				746,093				(751,374	)			(35,480	)			(35,480	)
Net loss			-				-				-				-				(11,425	)			(11,425	)
Balance, December 31, 2007			5,281,346				5,281				746,093				(751,374	)			(46,905	)			(46,905	)
Net loss			-				-				-				-				(10,946	)			(10,946	)
Balance, December 31, 2008			5,281,346				5,281				746,093				(751,374	)			(57,851	)			(57,851	)
Net loss			-				-				-				-				(11,613	)			(11,613	)
Balance, December 31, 2009			5,281,346				5,281				746,093				(751,374	)			(69,464	)			(69,464	)
Contributed capital - forgiveness of debt payable to related party			-				-				71,726				-				-				71,726
Common stock issued for cash at $0.001 per share			10,000,000				10,000				-				-				-				10,000
Net loss			-				-				-				-				(93,094	)			(93,094	)
Balance, December 31, 2010			15,281,346				15,281				817,819				(751,374	)			(162,558	)			(80,832	)
Beneficial conversion feature			-				-				30,000				-				-				30,000
Net loss			-				-				-				-				(24,010	)			(24,010	)
Balance, December 31, 2011			15,281,346			$	15,281			$	847,819			$	(751,374	)		$	(186,568	)		$	(74,842	)

 

The accompanying notes are an integral part of these financial statements.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Cash Flows

 

										Since
										Re-entering  the
										Exploration
										Stage on
										April 19, 2004
		For the Year Ended								Through
		December 31,								December 31,
		2011				2010				2011
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(24,010	)		$	(93,094	)		$	(186,568	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount			30,000				-				30,000
(Gain) loss on derivative liability			(31,061	)			75,046				43,985
Changes in operating assets and liabilities:
Prepaid expenses			1,437				(1,437	)			-
Accounts payable and accrued expenses			953				(188	)			980
Net Cash Used in Operating Activities			(22,681	)			(19,673	)			(111,603	)
CASH FLOWS FROM INVESTING ACTIVITIES			-				-				-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock			-				10,000				10,000
Proceeds from related party advances and notes			20,000				13,434				102,726
Repayment of related party advances and notes			-				(1,000	)			(1,000	)
Net Cash Provided by Financing Activities			20,000				22,434				111,726
NET INCREASE IN CASH			(2,681	)			2,761				123
CASH AT BEGINNING OF PERIOD			2,804				43				-
CASH AT END OF PERIOD		$	123			$	2,804			$	123
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest		$	-			$	-			$	-
Income Taxes		$	-			$	-			$	-
NON-CASH FINANCING ACTIVITIES
Contributed capital - forgiveness of debt payable to related party		$	-			$	71,726			$	71,726
Beneficial conversion feature on convertible notes payable - related party		$	30,000			$	-			$	30,000

 

The accompanying notes are an integral part of these financial statements.

 

  

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

 

Organization

Valley High Mining Company (“the Company”) was organized under the laws of the State of Utah on November 14, 1979 as Valley High Oil, Gas & Minerals, Inc. The Company was suspended for failure to file annual reports. In December 2001, all required reports were filed and the Company’s charter was reinstated. In April 2004, the Company merged with Valley High Mining Company, a Nevada corporation and wholly-owned subsidiary of the Company incorporated on February 27, 2004. The Nevada Corporation became the surviving entity. The Company is considered to have re-entered into the exploration stage on April 19, 2004. The Company has not generated any revenues and is considered to be an exploration stage company according to the provisions of Industry Guide 7. Pursuant to a February 12, 2010 Stock Purchase Agreement, Coron Capital, LLC purchased from John Michael Coombs Family Living Trust and North Beck Joint Venture, LLC, 5,000,000 shares of the Company’s common stock representing 94.7% of the Company’s total outstanding shares. In connection with the stock purchase, John Michael Coombs resigned each of his positions as an officer and director of the Company and John Thomas Hickey was appointed as a Director, CEO and CFO. Coron Capital, LLC plans to use the Company to seek a reverse merger or other business combination with a private operating company.

 

Use of Estimates

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

 

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

 

Fair Value of Financial Instruments

The Company’s financial instruments consist principally of cash, amounts due to a related party, accounts payable and accrued expenses, and derivative liabilities. ASC 820, Fair Value Measurements and Disclosures, and ASC 825, Financial Instruments, establish a framework for measuring fair value, establish a fair value hierarchy based on the quality of inputs used to measure fair value, and enhance disclosure requirements for fair value measurements. 

 

The Company utilizes various types of financing to fund its business needs, including warrants not indexed to the Company’s stock. The Company is required to record its derivative instruments at their fair value. Changes in the fair value of derivatives are recognized in earnings in accordance with ASC 815.

 

The fair value of the derivative instruments are determined based on “Level 3” inputs, which consist of inputs that are both unobservable and significant to the overall fair value measurement. We believe that the recorded values of all of our other financial instruments approximate their current fair values because of their nature and respective relatively short maturity dates or durations.

 

The Company has categorized its financial instruments, based on the priority of inputs to the valuation technique, into a three-level fair value hierarchy.  The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets or liabilities (Level 1) and the lowest priority to unobservable inputs (Level 3).

 

Financial assets and liabilities recorded on the balance sheet are categorized based on the inputs to the valuation techniques as follows:

 

Level 1 Financial assets and liabilities for which values are based on unadjusted quoted prices for identical assets or liabilities in an active market that management has the ability to access.

 

Level 2 Financial assets and liabilities for which values are based on quoted prices in markets that are not active or model inputs that are observable either directly or indirectly for substantially the full term of the asset or liability (commodity derivatives and interest rate swaps).

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

 

Fair Value of Financial Instruments (continued)

 

Level 3 Financial assets and liabilities for which values are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. These inputs reflect management’s own assumptions about the assumptions a market participant would use in pricing the asset or liability.

 

When the inputs used to measure fair value fall within different levels of the hierarchy, the level within which the fair value measurement is categorized is based on the lowest level input that is significant to the fair value measurement in its entirety.  The Company conducts a review of fair value hierarchy classifications on a quarterly basis.  Changes in the observability of valuation inputs may result in a reclassification for certain financial assets or liabilities. 

 

Income Taxes 

The Company accounts for income taxes using the asset and liability approach for accounting for income taxes. The Company has no tax positions at December 31, 2011 and 2010 for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility. The Company recognizes interest accrued related to unrecognized tax liabilities in interest expense and penalties in operating expenses. During the years ended December 31, 2011 and 2010, the Company recognized no interest and penalties.

 

Loss Per Share

The computation of loss per share is based on the weighted average number of shares outstanding during the period presented. The Company had no common stock equivalents outstanding as of December 31, 2011 and 2010.

 

Subsequent Events

The Company evaluated subsequent events through the date these financial statements were available to be issued for disclosure consideration.

 

Recently Issued Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of our financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

 

NOTE 2 – GOING CONCERN

 

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has a working capital deficit and has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. These factors raise substantial doubt regarding the Company’s ability to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it consummates a business combination. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

 

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing.

 

However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans. The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 3 – RELATED PARTY TRANSACTIONS

 

Office Space

The Company has not had a need to rent office space. An officer/shareholder of the Company is allowing the Company to use his office as a mailing address, as needed, at no expense to the Company.

 

Related Party Advances

On November 16, 2010, the Company entered into a $10,000 note payable with a related party. The note is unsecured, due on demand and bears no interest. The note payable was modified on March 4, 2011, on which date the quoted market price of our common shares was $0.25 per share, by adding a feature for the note to be convertible into shares of the Company’s common stock at par value, $0.001 per share. The Company evaluated the modification and concluded that the modification was an extinguishment of the original debt since a substantive conversion feature was added. However; no gain or loss, calculated as the difference between the carrying value of the debt prior to modification and the fair value of the debt, will be recognized upon modification due to there being no change between the fair value of the new debt and the carrying value of the debt prior to modification.

 

During 2011, the Company borrowed an additional $20,000 note payable from the related party. The note was unsecured, due on demand and bore no interest. The note was convertible into shares of the Company’s common stock at a price of $0.001 per share.

 

The Company’s management evaluated the conversion terms of the above notes and concluded that there exists a beneficial conversion feature (“BCF”) associated with each note. The value of the BCF was determined based on the stock price on the day of commitment, the number of shares that the note is convertible into, and the difference between the conversion price and the fair value of the common stock. The fair value of the BCF exceeds the $30,000 of proceeds received and is thus capped at $30,000. The $30,000 value of the BCF related to these notes was recorded as a debt discount against the carrying value of the note payable and as an increase to additional paid-in capital. Because the notes were originally due on demand, the Company amortized the debt discount immediately and recorded the amortization as interest expense.

 

On August 4, 2011, the notes were converted into one 8% Convertible Shares Note. The note is due with accrued interest on December 31, 2015. However, the Company may prepay the note at any time without penalty. The note is convertible to shares of the Company’s common stock at $0.001 per share and is unsecured. The Company has recorded accrued interest of $980 as of December 31, 2011.

 

NOTE 4 – DERIVATIVE LIABILITY

 

In connection with the change in control of the Company which occurred in February 2010, the Company entered into an equity agreement with a term of three years from the date the company consummates a merger. The warrant’s expected term is 5 years from the time of issuance in February 2010 and 4.25 years from December 31, 2010. The additional two years is reflective of management’s estimate of the time to consummate a merger. The warrants are exercisable for a number of shares of Company’s common stock equal to 0.005 times the total outstanding shares of common stock of the Company immediately following a reverse merger or similar transaction and each subsequent financing in the form of a public offering or private placement which occurs within (6) months of the reverse merger.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 4 – DERIVATIVE LIABILITY (CONTINUED)

 

The following presents the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at December 31, 2011 and 2010.  These items are included in “derivative liability” on the consolidated balance sheet.

 

		Fair Value Measurements on a Recurring Basis
		Level 1				Level 2				Level 3				Total
December 31, 2011
Liabilities:
Derivative liability		$	–			$	–			$	43,985			$	43,985
Total liabilities at fair value		$	–			$	–			$	43,985			$	43,985
December 31, 2010
Liabilities:
Derivative liability		$	–			$	–			$	75,046			$	75,046
Total liabilities at fair value		$	–			$	–			$	75,046			$	75,046

 

The main factors that will affect the fair value of the derivative are the number of shares outstanding post acquisition or post offering and the resulting market capitalization. In order to estimate a range for the potential contingent liability, the Company estimated the future number of surviving shares and resulting market cap from a reverse merger based on a sample of reverse mergers completed by OTC BB companies during 2011 and 2010.

 

The following is a reconciliation of the beginning and ending balances for the derivative liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2011 and 2010:

 

		2011				2010
Beginning balance, January 1		$	75,046			$	–
Total (gains) losses included in earnings			(31,061	)			75,046
Ending balance, December 31		$	43,985			$	75,046

 

Due to the fact that the number of shares issuable under this agreement cannot be determined, it is classified as a derivative liability and is revalued to market at each reporting period. The fair value of the derivative liability at December 31, 2011 and 2010 totaling $43,985 and $75,046, respectively, was calculated using the Black-Scholes Option Pricing model under the following assumptions:

 

		2011				2010
Estimated number of underlying shares			176,336				176,336
Estimated market price per share		$	0.249			$	0.426
Exercise price per share		$	0.001			$	0.001
Expected volatility			190	%			190	%
Expected dividends			0	%			0	%
Expected term (in years)			3.25				4.25
Risk-free rate			0.36	%			1.77	%

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 4 – DERIVATIVE LIABILITY (CONTINUED)

 

The main factors that will affect the fair value of the derivative are the number of shares outstanding post acquisition or post offering and the resulting market capitalization. In order to estimate a range for the potential contingent liability, the Company estimated the future number of surviving shares and resulting market capitalization from a reverse merger based on a sample of reverse mergers completed by OTCBB companies during 2011 and 2010.

 

NOTE 5 – CAPITAL STOCK

 

The Company has authorized 50,000,000 shares of common stock with a par value of $0.001. At December 31, 2011 and 2010, the Company had 15,281,346 shares issued and outstanding.

 

On August 4, 2010 the Company issued 10,000,000 shares of common stock to the Company’s primary shareholder for $10,000 in cash.

 

In April 2004, the Company issued 5,000,000 shares of common stock. The shares were issued for mining claims valued at the historical carrying value of the contributing shareholder of $0.

 

NOTE 6 – INCOME TAXES 

 

Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. In the Company’s opinion, it is uncertain whether they will generate sufficient taxable income in the future to fully utilize the net deferred tax asset. Accordingly, a valuation allowance equal to the deferred tax asset has been recorded. The total deferred tax asset is calculated by multiplying a 34% marginal tax rate by the cumulative net operating loss of $112,583. The total valuation allowance is equal to the total deferred tax asset.

 

The tax effects of significant items comprising the Company's net deferred taxes as of December 31, 2011 and 2010 were as follows:

 

		2011				2010
Cumulative NOL		$	112,583			$	87,512
Deferred Tax assets:
Net operating loss carry forwards			38,278				29,754
Loss on derivative liability			14,955				25,516
Valuation allowance			(53,233	)			(55,270	)
		$	–			$	–

 

The income tax provision differs from the amount of income tax determined by applying the combined U.S. federal and state income tax rates of 34% to pretax income from continuing operations for the years ended December 31, 2011 and 2010 due to the following:

 

		2011				2010
Book loss from operations			(8,163	)			(31,652	)
(Gain) loss on derivative liability			(10,561	)			25,516
Debt discount			10,200				–
Change in valuation allowance			(2,037	)			6,136
		$	–			$	–

 

The Company’s net operating loss carry forwards of approximately $112,583 expire in various years through 2030. The Company has not evaluated the impact of possible limitations on the utilization of its net operating loss carry forwards in future years under Section 382, if any, as a result of any changes in control.

 

  

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

 

NOTE 7- COMMITMENTS AND CONTINGENCIES

 

Contingent Liabilities

The Company has not been active for 20 years, since it discontinued its energy related and real estate operations. Management believes that there are no valid outstanding liabilities from prior operations. If a creditor were to come forward and claim a liability, the Company has committed to contest the claim to the fullest extent of the law. Due to various statutes of limitations and because the likelihood that a 20-year old liability would not still be valid, no amount has been accrued in these financial statements for any such contingencies.

 

Derivative Liability

As described in Note 4, the Company entered into an agreement which has been accounted for as a derivative. The Company has accrued a loss contingency associated with this agreement because it is both probable that a liability had been incurred and the amount of the loss can reasonably be estimated. The fair value of this liability is closely linked to whether the Company enters a reverse merger, initiates a public offering of stock or engages in a similar transaction. The Company believes that the realization of one or more of these events in the near future is probable and when realized, it could have a material effect on the value of the derivative liability recorded.

 

The main factors that will affect the fair value of the derivative are the number of shares outstanding post acquisition or post offering and the resulting market capitalization. In order to estimate a range for the potential contingent liability, the Company estimated the future number of surviving shares and resulting market cap from a reverse merger based on a sample of reverse mergers completed by OTC BB companies during 2011 and 2010.

 

 

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.

 

None.

 

ITEM 9A AND 9A(T). CONTROLS AND PROCEDURES.

 

Management's Annual Report on Internal Control Over Financial Reporting.

 

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15)(f) under the Exchange Act). Our internal control system is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements under accounting principles generally accepted in the United States.

 

All internal controls over financial reporting, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention or overriding of controls. Therefore, even effective internal control over financial reporting can provide only reasonable, and not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal controls over financial reporting may vary over time. Because of its inherent limitations, internal control over financial reporting may also fail to prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.

 

Our management, including our chief executive officer and chief financial officer, assessed the effectiveness of our internal control over financial reporting as of March 2, 2012. In making its assessment of internal control over financial reporting, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control—Integrated Framework. Based on this evaluation, our management concluded that, as of December 31, 2011, our internal control over financial reporting was not effective due to audit adjustments from our auditors.

 

 

This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.

 

Changes in Internal Control Over Financial Reporting.

 

There have been no changes in internal control over financial reporting.

 

ITEM 9B. OTHER INFORMATION.

 

None.

 

PART III

 

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS AND CORPORATE GOVERNANCE.

 

Executive Officers and Directors

 

The current and only director and officer of Valley High is as follows:

 

Directors and Executive Officers		Position/Title		Age
John Thomas Hickey		President, Chief Executive Officer, Secretary and Treasurer, CFO and Director		48

 

There are no family relationships among our directors or executive officers; however, Mr. Hickey is the brother of one of the owners of Coron Capital, LLC which is our majority shareholder.

 

All our directors hold office until the next annual meeting of shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of our board of directors.

    

Mr. Hickey serves as the Company’s sole Director, CEO, president, CFO, Secretary and Treasurer.  In February 2010 John Hickey became an independent contractor in the financial services sector.  From 2007 to 2010, Mr. Hickey worked as a finance manager for StoresOnline, an internet consulting and hosting company.  From 1993 to 2007, as Marketing Director, Mr. Hickey led the marketing department at Q Comm International, a telecom technology company that went public in 1998 and was listed on the American Stock Exchange (AMEX).  Mr. Hickey created an in-house media buying agency that immediately cut advertising costs 15% while gaining direct negotiation access to media outlets including TV, radio and print.  He developed a pin-point tracking system that optimized more than $5 million in direct response advertising and outperformed the company’s leading competitor within 3 months on a cost-per-lead basis.  In 1997, Mr. Hickey co-founded NetQuest Consultants, an internet education company he built to profitability and sold. Mr. Hickey has a Bachelor of Science degree from Brigham Young University (1989) and an MBA from the University of Arizona (1993) with a specialization in entrepreneurship and a concentration in marketing.

 

No officer or director has been involved, directly or indirectly, in any bankruptcy or insolvency proceeding of any kind.

 

No officer or director is currently involved in any litigation nor has any been involved in any litigation that would have a bearing on any such person's fitness or other ability to act and serve as a director or officer us.

 

 

All of our directors hold office until the next annual meeting of shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of our board of directors.

 

Compliance with Section 16(a) of the Securities Exchange Act of 1934.

 

Section 16(a) of the Securities and Exchange Act of 1934 requires officers, directors, and persons who own more than ten percent (10%) of the issuer's common stock to file initial reports of beneficial ownership and to report changes in such ownership with the Commission and the NASD. These persons are also required to furnish the Company with copies of all Section 16(a) forms they file. These requirements commenced upon the effective date of the Company's Form 10-SB/A registration statement. We are not aware of any late or missed filings due under Section 16(a) for the fiscal year ended December 31, 2011.

 

Director and Officer Liability Limitation.

 

Our Articles of Incorporation and Bylaws, both of which were exhibits to our original registration statement on Form 10-SB, limit the personal liability of directors, officers and our shareholders to the full extent allowed by Nevada law. This is a risk factor that an investor or potential investor should consider because it means that a disgruntled or injured investor's remedies may not be as significant or meaningful as might otherwise be the case in the absence of these statutory and common law protections.

 

Corporate Governance.

 

We have no change in any state law or other procedures by which security holders may recommend nominees to our board of directors. In addition to having no nominating committee for this purpose, we currently have no specific audit committee and no audit committee financial expert. Based on the fact that our current business affairs are simple and we do not issue a lot of checks during any quarter and have no income from mining or other operations, any such committees are excessive and beyond the scope of our business and needs.

 

ITEM 11. EXECUTIVE COMPENSATION.

 

Because there is no compensation to disclose under this Item, we have not prepared a Summary Compensation Table or any other compensation table as would otherwise be required under Release Nos. 33-8765, the recent Commission release that requires more detailed executive and director compensation disclosure.

 

We have NOT adopted a bonus, stock option, profit sharing, equity award at fiscal year-end, share-based, grants of plan-based program or deferred compensation plan of any sort for the benefit of our employees, officers or directors. This, however, does not mean that we will not do so in the future. Further, we have not entered into an employment agreement of any kind with any of our directors or officers or any other persons and no such agreements are anticipated in the immediate or near future.

 

Absence of Management Employment Agreements and Compensation.

 

We do not pay any of our officers any salary. We do not provide any other benefits to our officers. We do not have any written agreements with any of our officers and directors. Our officers and directors may engage in other businesses, either individually or through partnerships, limited liability companies, or corporations in which they have an interest, hold an office or serve on boards of directors of other companies or entities. All officers and directors have other business interests to which they devote their time.

Mr. Hickey, our sole officer and director, received no compensation for service as an officer for the year ended December 31, 2011.

 

Other Key Advisors and Consultants.

 

We have access to several outside professional firms that can counsel us and provide important advice during our exploration stage. The terms of engagement of these firms will be determined from time to time as their services may be required. So far, no such persons’ services have been sought.

 

Remuneration and Compensation of Directors.

 

Mr. Hickey currently does not receive any compensation, but may receive compensation for his services as determined in the future. This is also true of any officers or directors that join Mr. Hickey and also end up serving on our board. As stated above, all directors are entitled to be reimbursed for any out-of-pocket expenses incurred by them in behalf of the Company.

 

There are no standard arrangements pursuant to which our directors are compensated for any services provided as director, including services for committee participation or for special assignments. Our director received no compensation for service as a director for the year ended December 31, 2011.

 

 

Outstanding Equity Awards at Fiscal Year-End.

 

None; not applicable.

 

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.

 

The following table sets forth information, to the best of our knowledge, as of the date of this document, with respect to each person known to be the owner of more than 5% of common capital stock of us, each director and officer, and all executive officers and directors of us as a group. As of the date of this document there are 15,281,346 common capital shares issued and outstanding.

 

Name of Beneficial Owner		Number of Shares of Common Stock Beneficially* owned				Percent of Ownership of Common Stock Outstanding
Coron Capital, LLC (1) 2435 Scenic Drive Salt Lake City, Utah 84109			15,000,000 (2)				98.2	%
John Hickey			0				0	%

 

* Beneficial ownership is determined in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (SEC) and generally includes voting or investment power with respect to securities. Shares of common stock issuable upon the exercise of options or warrants currently exercisable, or exercisable or convertible within 60 days, are also deemed outstanding for computing the percentage ownership of the person holding such options or warrants but are not deemed outstanding for computing the percentage ownership of any other person. Having said this, the Company has no outstanding stock options, warrants or compensation plans of any kind.

 

(1) Mr. Hickey is the brother of one of the owners of Coron Capital, LLC.

 

(2) This figure represents the 5,000,000 "restricted" shares acquired from John Michael Coombs in February, 2010.

 

We are not aware of any other stockholder-related matters to disclose in this Item in addition to what is already disclosed elsewhere in this document.

 

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.

 

Transactions with Related Persons.

 

Except for the lease acquisition of the North Beck Claims owned and controlled by our former president and his immediate family, there have been no other transactions between us and the directors or officers or any member of any such person's immediate family.

 

No Parents or Subsidiaries of the Issuer.

 

We have no parent or subsidiary corporation.

 

Transactions with Promoters and Control Persons.

 

During our last five fiscal years and other than we have already disclosed in this Report or in our Form 10-SB/A, there have been no material transactions or series of similar transactions, nor are there any currently proposed transactions, in which we were or will be a party and in which the amount involved exceeded $60,000 and further, in which any promoter or founder of ours, such as Mr. Coombs or any member of his immediate family, had an interest.

 

 

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.

 

Aggregate fees for professional services rendered us by Pritchett, Siler & Hardy, Certified Public Accountants, for the years ended December 31, 2011 and 2010 are set forth below. The aggregate fees included in the Audit category are fees billed for the year-end audit of our annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the calendar years indicated.

 

Fee Category		2011				2010
Audit Fees		$	14,000			$	11,114
Audit-related Fees			0				0
Tax Fees			0				0
All Other Fees			0				0
Total Fees		$	14,000			$	11,114

 

Audit fees for the years ended December 31, 2011 and 2010 were for professional services rendered for the audits of our financial statements, quarterly review of the financial statements included in the Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year- end audit of our financial statements.

 

Audit-Related Fees as of the years ended December 31, 2011 and 2010 were for the assurance and related services reasonably related to the performance of the audit or review of financial statements and not reported under the caption Audit Fees.

 

Tax Fees as of the years ended December 31, 2011 and 2010 were for professional services related to tax compliance, tax authority audit support and tax planning.

 

There were no fees that were classified as All Other Fees as of the years ended December 31, 2011 and 2010.

 

As we do not have a formal audit committee, the services described above were not approved by the audit committee under the de minimus exception provided by Rule 2-01(c) (7)(i)(C) under Regulation S-X. Further, as we do not have a formal audit committee, we do not have, at this time, audit committee pre- approval policies and procedures.

 

PART IV

 

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.

 

The following Exhibits are filed as a part of this Annual Report on Form 10-K:

 

Exhibit Number		Description*
31		Sarbanes-Oxley Section 302 Certification
32		Sarbanes-Oxley Section 906 Certification

 

 

SIGNATURES

 

In accordance with the provisions of the Securities and Exchange Act of 1934 and the rules and regulations promulgated thereunder, VALLEY HIGH MINING COMPANY has duly caused this Annual Report on Form 10-K for its fiscal year ended December 31, 2011, to be signed on its behalf by the undersigned, thereunto duly authorized.

 

VALLEY HIGH MINING COMPANY, Issuer

 

Date:      March 30, 2012		By:	/s/John Thomas Hickey
			John Thomas Hickey
			Chairman of the Board, President, Chief Executive Officer (CEO) and Chief or Principal Officer (CFO), and Principal Accounting Officer, Secretary and Treasurer