UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 10-Q

 

(Mark One)

 

x	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2012

 

OR

 

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________ to __________

 

Commission File Number 000-51232

 

VALLEY HIGH MINING COMPANY

(Exact name of registrant as specified in its charter)

 

Nevada		68-0582275
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

 

12835 East Arapahoe Road, Tower One Suite 810, Englewood, CO 80112

(Address of principal executive offices) (Zip Code)

 

(303)-647-1914

(Registrant's telephone number, including area code)

 

946 E. 1300 N, Mapleton, UT  84664

 (Former name, former address and former fiscal year,

if changed since last report)

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x    No ¨

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T 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” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	£   (Do not check if a smaller reporting company)	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 £

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date: there were 15,281,346 shares outstanding as of May 21, 2012.  

 

  

PART I - FINANCIAL INFORMATION

 

Item 1.     Financial Statements

  

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Balance Sheets

(unaudited)

 

		March 31,				December 31,
		2012				2011
ASSETS
CURRENT ASSETS
Cash		$	337			$	123
Total Current Assets			337				123
TOTAL ASSETS		$	337			$	123
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable and accrued expenses		$	2,577			$	980
Payable - related party			5,000				-
Derivative liability			43,985				43,985
Total Current Liabilities			51,562				44,965
LONG-TERM CONVERTIBLE NOTES PAYABLE- RELATED PARTY			30,000				30,000
Total Liabilities			81,562				74,965
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				847,819
Accumulated deficit			(751,374	)			(751,374	)
Deficit accumulated during the exploration stage			(192,951	)			(186,568	)
Total Stockholders' Deficit			(81,225	)			(74,842	)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT		$	337			$	123

 

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

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Operations

(unaudited)

 

										Since
										Re-entering the
										Exploration
										Stage on
										April 19, 2004
		For the Three Months Ended								Through
		March 31,								March 31,
		2012				2011				2012
REVENUE		$	-			$	-			$	-
COST OF SALES			-				-				-
GROSS PROFIT			-				-				-
OPERATING EXPENSES
General and administrative expenses			5,785				12,826				117,354
Total Operating Expenses			5,785				12,826				117,354
LOSS FROM OPERATIONS			(5,785	)			(12,826	)			(117,354	)
OTHER EXPENSES
Loss on derivative liability			-				-				(43,985	)
Interest expense			(598	)			(10,000	)			(31,612	)
Total Other Expenses			(598	)			(10,000	)			(75,597	)
LOSS BEFORE INCOME TAXES			(6,383	)			(22,826	)			(192,951	)
PROVISION FOR INCOME TAXES			-				-				-
NET LOSS		$	(6,383	)		$	(22,826	)		$	(192,951	)
BASIC AND DILUTED LOSS PER SHARE		$	(0.00	)		$	(0.00	)
WEIGHTED AVERAGE NUMBER OF COMMON  SHARES OUTSTANDING - BASIC AND DILUTED			15,281,346				15,281,346

 

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

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Changes in Stockholders' Deficit

(unaudited)

 

																		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 for the year ended December 31, 2004			-				-				-				-				(4,339	)			(4,339	)
Balance, December 31, 2004			5,281,346				5,281				746,093				(751,374	)			(4,339	)			(4,339	)
Net loss for the year ended December 31, 2005			-				-				-				-				(17,295	)			(17,295	)
Balance, December 31, 2005			5,281,346				5,281				746,093				(751,374	)			(21,634	)			(21,634	)
Net loss for the year ended December 31, 2006			-				-				-				-				(13,846	)			(13,846	)
Balance, December 31, 2006			5,281,346				5,281				746,093				(751,374	)			(35,480	)			(35,480	)
Net loss for the year ended December 31, 2007			-				-				-				-				(11,425	)			(11,425	)
Balance, December 31, 2007			5,281,346				5,281				746,093				(751,374	)			(46,905	)			(46,905	)
Net loss for the year ended December 31, 2008			-				-				-				-				(10,946	)			(10,946	)
Balance, December 31, 2008			5,281,346				5,281				746,093				(751,374	)			(57,851	)			(57,851	)
Net loss for the year ended December 31, 2009			-				-				-				-				(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 for the year ended December 31, 2010			-				-				-				-				(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 for the year ended December 31, 2011			-				-				-				-				(24,010	)			(24,010	)
Balance, December 31, 2011			15,281,346				15,281				847,819				(751,374	)			(186,568	)			(74,842	)
Net loss for the three months ended March 31, 2012			-				-				-				-				(6,383	)			(6,383	)
Balance, March 31, 2012			15,281,346			$	15,281			$	847,819			$	(751,374	)		$	(192,951	)		$	(81,225	)

 

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

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Statements of Cash Flows

(unaudited)

 

										Since
										Re-entering the
										Exploration
										Stage on
										April 19, 2004
		For the Three Months Ended								Through
		March 31,								March 31,
		2012				2011				2012
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss		$	(6,383	)		$	(22,826	)		$	(192,951	)
Adjustments to reconcile net loss to net cash used in operating activities:
Amortization of debt discount			-				10,000				30,000
Loss on derivative liability			-				-				43,985
Changes in operating assets and liabilities:
Prepaid expenses			-				1,437				-
Accounts payable and accrued expenses			1,597				8,713				2,577
Net Cash Used in Operating Activities			(4,786	)			(2,676	)			(116,389	)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from the issuance of common stock			-				-				10,000
Proceeds from related party advances and notes			5,000				-				107,726
Repayment of related party advances and notes			-				-				(1,000	)
Net Cash Provided by Financing Activities			5,000				-				116,726
NET INCREASE (DECREASE) IN CASH			214				(2,676	)			337
CASH AT BEGINNING OF PERIOD			123				2,804				-
CASH AT END OF PERIOD		$	337			$	128			$	337
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
Beneficial conversion feature		$	-			$	10,000			$	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

March 31, 2012

(unaudited)

 

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

 

The accompanying financial statements have been prepared by Valley High Mining Company (the “Company”) without audit. In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for all periods presented herein, have been made.

 

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted. It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2011 audited financial statements. The results of operations for the period ended March 31, 2012 are not necessarily indicative of the operating results for the full year.

 

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 not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it 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 becomes profitable. 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.

 

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

 

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.

 

Subsequent Events

The Company’s management reviewed all material events through the date of the issuance of these financial statements to determine if there were any subsequent events to report.

 

Recent 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.

 

 

VALLEY HIGH MINING COMPANY

(An Exploration Stage Company)

Notes to the Financial Statements

March 31, 2012

(unaudited)

 

NOTE 4 – NOTES PAYABLE AND RELATED PARTY PAYABLES

 

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 $1,578 as of March 31, 2012. On February 27, 2012, a related party loaned the Company an additional $5,000.

 

NOTE 5 – DERIVATIVE LIABILITY

 

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 into 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 the Company’s 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 OTCBB companies during 2010 and 2011.

 

As of March 31, 2012 and December 31, 2011, the estimated fair value of this derivative was $43,985. The Company revalues the derivative each reporting period and no material change in value has occurred for the three months ended March 31, 2012.

 

NOTE 6- SUBSEQUENT EVENT

 

On April 3, 2012, a related party loaned the Company $5,000.

   

 

Item  2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

This Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements that involve known and unknown risks, significant uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed, or implied, by those forward-looking statements.  You can identify forward-looking statements by the use of the words may, will, should, could, expects, plans, anticipates, believes, estimates, predicts, intends, potential, proposed, or continue or the negative of those terms.  These statements are only predictions. In evaluating these statements, you should consider various factors which may cause our actual results to differ materially from any forward-looking statements.  Although we believe that the exceptions reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements.  Therefore, actual results may differ materially and adversely from those expressed in any forward-looking statements.  We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

 

Overview

 

Valley High Mining Company ("VHMC" or the “Company”) will search for target companies as potential candidates for a business combination.

 

VHMC has not entered into agreements with any third parties to locate potential merger candidates.

 

VHMC may seek to locate a target company through solicitation. Such solicitation may include newspaper or magazine advertisements, mailings and other distributions to law firms, accounting firms, investment bankers, financial advisors and similar persons, the use of one or more World Wide Web sites and similar methods. If VHMC engages in solicitation, no estimate can be made as to the number of persons who may be contacted or solicited. VHMC may utilize consultants in the business and financial communities for referrals of potential target companies. There is no assurance that VHMC will locate a target company or that a business combination will be successful.

 

Recent Development

 

On April 12, 2012, John Thomas Hickey, our President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and the sole director of the Board resigned from his all positions as director and officer of the Company. Mr. Hickey’s resignation as officer of the Company was effective immediately on April 12, 2012 and his resignation as a director of the Company will be effective ten days after the mailing of this Information Statement to stockholders of the Company.

 

Also effective on April 12, 2012, Michel Van Herreweghe was appointed as the President, Chief Executive Officer, Chief Financial Officer, Secretary, Treasurer and director of the Board. His appointment as a director of the Company will be effective ten days after the mailing of this Information Statement to the stockholders of the Company.

 

Results of Operation

 

Results of Operations

 

Three Months Ended March 31, 2012 and 2011

 

Revenues

 

We had revenues of $-0- during the three months ended March 31, 2012, compared to $-0- revenues during the corresponding period in 2011. We do not foresee revenues in the near term.

 

Expenses

 

We incurred operating expenses in the amount of $5,785 during the three months ended March 31, 2012, compared to $12,826 for the corresponding period in 2011. The 2012 and 2011 operating expenses consisted primarily of professional fees. We expect our operating costs to continue in the same range for the next 12 months.

 

 

Net Loss

 

We incurred a net loss of $6,383 during the three months ended March 31, 2012, compared to a net loss of $22,826 during the corresponding period in 2011. This translates to a loss per share of $0.00 and $0.00 in 2012 and 2011, respectively.

 

Liquidity and Capital Resources

 

Since its inception, the Company has financed its cash requirements from the sale of common stock. Uses of funds have included activities to establish our business, professional fees and other general and administrative expenses.

 

The Company’s principal sources of liquidity as of March 31, 2012 consisted of $337 in cash. We continue to rely on related party loans to cover our operating expenses, including $5,000 received during the most recent quarter.

 

We believe the Company will have adequate resources to implement its strategic objectives in upcoming quarters. Due to our lack of operating history and present inability to generate revenues, however, our auditors have stated their opinion that there currently exists substantial doubt about our ability to continue as a going concern.

 

Off-Balance Sheet Arrangements

 

VHMC does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to investors.  

 

Going Concern

 

The financial statements included in this filing have been prepared in conformity with generally accepted accounting principles that contemplate the continuance of us as a going concern. VHMC's cash is inadequate to pay all of the costs associated with our operations. Management intends to use borrowings and security sales to mitigate the effects of its cash position; however, no assurance can be given that debt or equity financing, if and when required, will be available. The financial statements do not include any adjustments relating to the recoverability and classification of recorded assets and classification of liabilities that might be necessary should VHMC be unable to continue its existence.

 

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

Not applicable.

 

Item 4.

Controls and Procedures

 

 

(a)	Disclosure Controls and Procedures.

 

Under the supervision and with the participation of the Company’s management, including the principal executive officer and principal financial officer, as of the end of the period covered by this report, the Company conducted an evaluation of the effectiveness of the design and operation of the Company’s disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act. The Company’s disclosure controls and procedures are designed to provide reasonable assurance that the information required to be included in the Company’s reports to Securities and Exchange Commission (“SEC”) is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and to provide reasonable assurance that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Based on this evaluation, the Company’s principal executive officer and principal financial officer concluded that, as of the period covered by this report, the Company’s disclosure controls and procedures were effective.

 

Our internal control system is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. There is no assurance that our disclosure controls or our internal controls over financial reporting can prevent all errors. An internal control system, no matter how well designed and operated, has inherent limitations, including the possibility of human error. Because of the inherent limitations in a cost-effective control system, misstatements due to error may occur and not be detected. We monitor our disclosure controls and internal controls and make modifications as necessary. Our intent in this regard is that our disclosure controls and our internal controls will improve as systems change and conditions warrant.  

 

(b)	Changes in Internal Control over Financial Reporting

 

During the three months ended March 31, 2012, there has been no change in internal control over financial reporting that has materially affected, or is reasonably likely to materially affect our internal control over financial reporting.  

 

 

 

PART II - OTHER INFORMATION

 

Item 6.

Exhibits

  

EXHIBIT
NUMBER		DESCRIPTION
31.1		Certification pursuant to Exchange Act Rules 13a-15(e) and 15d-15(e), as adopted 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
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

 

  

SIGNATURES

 

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

 

	VALLEY HIGH MINING COMPANY
	(Registrant)
Date: May 21, 2012	/s/ Michel Van Herreweghe
	By: Michel Van Herreweghe
	Chief Executive Officer and Chief Financial Officer