Unr (UNRH) 10-Q/A 2010 Q2 Quarterly report (amended)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________________

Form 10-Q/A

(Amendment No. 2)

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

For the quarterly period ended September 30, 2009
 

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

 For the transition period from ______________ to _______________
 
 

UNR HOLDINGS, INC.

(Exact Name of Registrant as Specified in Its Charter)
 

Colorado	02-0755762
(State or Other Jurisdiction of	(I.R.S. Employer Identification No.)
Incorporation or Organization)

301 East Pine Street, Suite 150, Orlando, FL	32801
(Address of principal executive offices)	(Zip Code)

(407) 210-6541

(Registrant's Telephone Number, Including Area Code)
 

1809 E. Broadway St., Suite 346, Oviedo, FL 32765

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)
 

Check  whether the issuer (1) 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. o Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes o    No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a smaller reporting company.  (Check One):

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer    o	Smaller reporting company  x

(Do not check if a smaller reporting company)
 

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

The number of shares outstanding the issuer's common stock, no par value, was 24,464,799 as of November 1, 2009.

EXPLANATORY NOTE

UNR Holdings, Inc. (referred to in this report as “we” or the “Company”) is filing this Amendment No. 2 to its Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2009 to reflect the restatement of its consolidated financial statements and the notes thereto.

As initially disclosed by the Company in its Current Report on Form 8-K filed with the Securities and Exchange Commission (the “Commission”) on April 27, 2010, the Audit Committee of the Board of Directors of the Company, upon the recommendation of management and in consultation with the Company’s independent registered public accounting firm, ZAO BDO, a member firm of BDO International (“BDO”), concluded that the previously issued (i) audited consolidated financial statements for the fiscal year ended December 31, 2008 and the notes thereto (the “2008 Financial Statements”) and (ii) audited consolidated financial statements for the fiscal year ended December 31, 2009 and the notes thereto (the “2009 Financial Statements”), in each case, contained in the Company& #8217;s Annual Report on Form 10-K for the fiscal year ended December 31, 2009 (the “2009 Annual Report”), should no longer be relied upon due to errors in such financial statements, and that the Company would restate such financial statements to make the necessary accounting corrections.

The Company’s 2009 Financial Statements included in Amendment No. 1 to the 2009 Annual Report filed with the Commission on May 20, 2010 (the “Amended 2009 Annual Report”), were restated to reduce revenue by $3,301,393 and increase cost of sales by $1,402,802, in order to reflect a correction in the percentage of completion method of accounting used by the Company; also, provision for income taxes was reduced by $987,302 reflecting the adjustment of net income; and related amendments to conform the adjusted amounts as a result of the restatement were made in Part II, Item 6, Selected Financial Data and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Amended 2009 Annual Report.  Part I, Item 1A. Risk Factors and Part II, Item 9A. Controls and Procedures of the Amended 2009 Annual Report also were amended to describe the Company’s efforts to improve its internal control over financial reporting.  Corresponding changes have been made to this Quarterly Report on Form 10-Q/A for the quarter ended September 30, 2009, to reflect the foregoing restatement, as described in note 9 included herein.

This Form 10-Q/A for the quarter ended September 30, 2009, is being amended solely to reflect in Part I, Item 1, Financial Statements, the corresponding changes to the restated amounts set forth in the Company’s audited restated consolidated financial statements as of and for the year ended December 31, 2009, which are being corrected consistent with the above restatement, and related changes to note 9 and the addition of a new note detailing certain related party transactions to the financial statements included in this Form 10-Q/A.  For the sake of clarity, certain additional conforming changes have been made, including to the captions of the financial statements to describe our unaudited interim financial statements as “restated.”  The other items of the Quarterly Report on F orm 10-Q/A for the quarter ended September 30, 2009 are being reproduced as part of the amendment solely for the convenience of the reader and the content set forth in such sections is as of November 20, 2009, the original filing date of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 (except as specifically amended, modified or updated in the amendments to that Quarterly Report on Form 10-Q/A filed subsequently by the Company with the Commission).  In particular, Part I, Item 4(T), Controls and Procedures, has not been updated, and the reader is directed to the disclosure in Part II, Item 9A. Controls and Procedures included in the Amended 2009 Annual Report.  Any forward-looking statements included in this Form 10-Q/A for the quarter ended September 30, 2009, represent management’s view as of the original filing date of our Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, as explained above.

ii

UNR Holdings, Inc.
Index
		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	1
	Restated Consolidated Balance Sheets as of September 30, 2009
	and December 31, 2008 (unaudited)	3
	Restated Consolidated Statements of Operations for the Nine and
	Three Months Ended September 30, 2009 and 2008 (Unaudited)	4
	Restated Consolidated Statements of Comprehensive Income for the
	Nine Months Ended September 30, 2009 and 2008 (Unaudited)	5
	Restated Consolidated Statement of Stockholders' Equity
	(Deficiency) for the Period Ended September 30, 2009
	(Unaudited)	6
	Restated Consolidated Statement of Cash Flows for the Nine Months
	Ended September 30, 2009 and 2008 (Unaudited)	7
	Notes to Restated Unaudited Consolidated Financial Statements	9
Item 2.	Management's Discussion and Analysis of Financial
	Condition and Results of Operations.	24
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	30
Item 4T.	Controls and Procedures.	30
PART II.	OTHER INFORMATION
Item 4.	Submission of Matters to a Vote of Security Holders.	31
Item 6.	Exhibits.	32
Signatures		32

iii

PART I—FINANCIAL INFORMATION
 

Item 1.  Financial Statements.
 

Certain information and footnote disclosures required under accounting principles generally accepted in the United States of America have been condensed or omitted from the following consolidated financial statements pursuant to the rules and regulations of the Securities and Exchange Commission.  It is suggested that the following consolidated financial statements be read in conjunction with the year-end consolidated financial statements and notes thereto included in the Company's Form 10-K/A for the year ending December 31, 2008.

The results of operations for the nine months ended September 30, 2009 and 2008 are not necessarily indicative of the results for the entire fiscal year or for any other period.

1

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

RESTATED CONSOLIDATED FINANCIAL STATEMENTS

SEPTEMBER 30, 2009

(Unaudited)

2

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
RESTATED CONSOLIDATED BALANCE SHEETS
(Unaudited)
	September 30,			December 31,
	2009 (Restated)			2008 (Restated)
ASSETS
Cash and cash equivalents	$	5,510,696		$	16,430,669
Inventories		83,562,129			83,699,178
Receivables - net of allowance for doubtful accounts
of $500,000 and $500,000		48,372,235			47,005,170
Property, plant and equipment - net		987,937			678,147
Other assets		161,945			165,868
TOTAL ASSETS	$	140,594,942		$	147,979,032
LIABILITIES AND EQUITY
Notes payable	$	10,019,865		$	18,365,007
Accounts payable and other liabilities		38,754,009			38,651,801
Customer deposits		42,883,579			61,913,672
Deferred income taxes		10,552,286			6,974,741
Total Liabilities		102,209,739			125,905,221
Commitments and Contingencies		-			-
Equity:
UNR Holdings, Inc. and Subsidiary Stockholders' Equity:
Common stock, $0.001 par value; authorized 500,000,000
shares; outstanding 24,464,799 and 24,464,799 shares, respectively		24,465			24,465
Paid-in capital		99,579			99,579
Retained earnings		26,526,013			17,195,878
Accumulated other comprehensive loss		(3,430,543	)		(3,840,847	)
Total UNR Holdings, Inc. and Subsidiary Stockholders' Equity		23,219,514			13,479,075
Noncontrolling interest		13,165,689			8,594,736
Total Equity		36,385,203			22,073,811
TOTAL LIABILITIES AND EQUITY	$	140,594,942		$	147,979,032

See notes to unaudited consolidated financial statements.

3

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
RESTATED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
	For the Nine Months Ended				For the Three Months Ended
	September 30,				September 30,
	2009		2008		2009			2008
Revenues:
Home building	$	36,612,495	$	42,106,896	$	21,898,326		$	23,439,359
Road base product		2,737,874		15,429,041		1,316,894			6,833,120
		39,350,369		57,535,937		23,215,220			30,272,479
Costs and expenses:
Cost of sales		20,418,839		35,753,730		11,707,768			16,695,473
Selling, general and administrative costs		2,825,881		3,804,010		1,377,306			1,359,946
		23,244,720		39,557,740		13,085,074			18,055,419
Income from operations		16,105,649		17,978,197		10,130,146			12,217,060
Other income (expense):
Foreign currency transaction gain (loss)		720		1,529,626		(20,631	)		353,196
Other income (principally rental income)		1,305,066		1,412,216		385,831			473,023
		1,305,786		2,941,842		365,200			826,219
Income before provision for income taxes		17,411,435		20,920,039		10,495,346			13,043,279
Provision for income taxes		3,510,347		5,020,809		2,080,920			3,130,387
Net earnings		13,901,088		15,899,230		8,414,426			9,912,892
Less: Net income attributable to the
noncontrolling interest		4,570,953		5,273,775		2,760,963			3,288,106
Net earnings attributable to UNR Holdings, Inc.
and Subsidiary	$	9,330,135	$	10,625,455	$	5,653,463		$	6,624,786
Earnings per share - basic and diluted:
Earnings per common share attributable to
UNR Holdings, Inc. and Subsidiary
common shareholders	$	0.38	$	0.50	$	0.23		$	0.29
Weighted average common shares
outstanding - basic and diluted		24,464,799		21,327,815		24,464,799			22,956,452
Amounts attributable to UNR Holdings, Inc.
and Subsidiary common shareholders:
Net earnings	$	9,330,135	$	10,625,455	$	5,653,463		$	6,624,786

See notes to unaudited consolidated financial statements.

4

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
RESTATED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
	Nine Months Ended
	September 30,
	2009		2008
Net earnings	$	13,901,088	$	15,899,230
Other comprehensive income (loss) - net of tax:
Currency translation adjustment		410,304		(1,072,235	)
Comprehensive income		14,311,392		14,826,995
Comprehensive income attributable to noncontrolling
interest		4,707,051		5,273,775
Comprehensive income attributable to UNR Holdings Inc.
and Subsidiary	$	9,604,341	$	9,553,220

See notes to unaudited consolidated financial statements.

5

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
RESTATED CONSOLIDATED STATEMENT OF EQUITY
(Unaudited)
																Accumulated
																Other
				Comprehensive			Common Stock				Paid-In		Retained			Comprehensive			Noncontrolling
	TOTAL			Income			No of shares		Amount		Capital		Earnings			Income (Loss)			Interests
Balance, January 1, 2008	$	11,380,002						20,500,000	$	20,500	$	99,579	$	7,373,321		$	169,103		$	3,717,499
Effect of recapitalization		-						3,964,799		3,965				(3,965	)
Net income		14,703,759		$	14,703,759							-		9,826,522			-			4,877,237
Currency translation adjustment		(4,009,950	)		(4,009,950	)						-					(4,009,950	)
Comprehensive income				$	10,693,809
Balance, December 31, 2008		22,073,811						24,464,799		24,465		99,579		17,195,878			(3,840,847	)		8,594,736
Net income		13,901,088		$	13,901,088							-		9,330,135			-			4,570,953
Currency translation adjustment		410,304			410,304							-					410,304
Comprehensive income				$	14,311,392
Balance, September 30, 2009	$	36,385,203						24,464,799	$	24,465	$	99,579	$	26,526,013		$	(3,430,543	)	$	13,165,689

See notes to unaudited consolidated financial statements.

6

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
	For the Nine Months Ended
	September 30,
	2009			2008
Cash flows from operating activities:
Net earnings	$	13,901,088		$	15,899,230
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation		34,667			51,931
Loss on sale of property, plant and equipment		4,832			127,007
Deferred income taxes		3,410,565			4,692,212
Change in operating assets and liabilities		(21,206,836	)		(24,892,874	)
Net cash used in operating activities		(3,855,684	)		(4,122,494	)
Cash flows from investing activities:
Proceeds from sale of property, plant and equipment		-			693,272
Purchase of property, plant and equipment		(297,572	)		(104,164	)
Net cash provided by (used in) investing activities		(297,572	)		589,108
Cash flows from financing activities:
Proceeds from borrowings		11,630,921			20,847,992
Repayment of loans		(18,264,815	)		(19,728,194	)
Net cash provided by (used in) financing activities		(6,633,894	)		1,119,798
Effect of exchange rate changes on cash		(132,823	)		(186,839	)
Net increase (decrease) in cash		(10,919,973	)		(2,600,427	)
Cash - beginning of period		16,430,669			6,736,680
Cash - end of period	$	5,510,696		$	4,136,253
Changes in operating assets
and liabilities consist of:
(Increase) decrease in accounts receivable	$	(1,587,808	)	$	(7,220,115	)
(Increase) decrease in inventories		(1,730,085	)		(17,469,259	)
Decrease in customer advances		(17,991,151	)		(9,224,705	)
Increase in accounts payable and
other liabilities		102,208			9,021,205
	$	(21,206,836	)	$	(24,892,874	)

See notes to unaudited consolidated financial statements.

7

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

RESTATED CONSOLIDATED STATEMENT OF CASH FLOWS (Continued)

(Unaudited)

	For the Nine Months Ended
	September 30,
	2009		2008
Supplementary Information:
Cash paid during the period for
Interest	$	700,024	$	2,911,634
Income taxes	$	23,507	$	39,156

See notes to unaudited consolidated financial statements.

8

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.   DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The consolidated balance sheet as of September 30, 2009 and the consolidated statements of operations, stockholders’ equity and cash flows for the periods presented herein have been prepared by UNR Holdings, Inc. and Subsidiary (the “Company” or “UNR Holdings”) and are unaudited.  In the opinion of management, all adjustments (consisting solely of normal recurring adjustments) necessary to present fairly the financial position, results of operations, changes in stockholders’ equity and cash flows for all periods presented has been made.  The information for the consolidated balance sheet as of December 31, 2008 was derived from audited financial statements.

Organization

UNR Holdings, Inc. ("UNR Holdings" or the “Company”) (Formerly Promotora Valle Hermoso, Inc. and Subsidiary) operates its business through its majority-owned subsidiary, 494 UNR Open Joint Stock, Inc. (“494 UNR”).  494 UNR, a Russian Federation corporation, is a construction contractor operating in the Russian Federation.  In addition to the general construction services, the Company develops and constructs multi-functional, multi-apartment residential complexes and produce and supply infrastructure projects with a proprietary polyethylene road base material.

494 UNR operates primarily in the Moscow regions of the Russian Federation and has completed projects in a number of other cities or urban areas.  All revenue is earned within the Russian Federation.

Basis of Presentation

Effective March 24, 2008, Promotora Valle Hermoso, Inc. entered into an Acquisition Agreement with the stockholders of 494 UNR, providing for the acquisition by the Company of 66.83% of the outstanding shares of common and preferred stock of 494 UNR.  In connection with the final agreement, as of August 5, 2008, the Company issued 20,500,000 of its common stock to Alexei Ivanovich Kim (the “Controlling Shareholder”).  Based on the number of outstanding voting securities as of August 5, 2008, the Controlling Shareholder owns beneficially approximately 84% of the Company’s issued and outstanding shares of common stock.  In connection with the share exchange, the Company acquired the assets and assumed the liabilities of 494 UNR as the acquirer.  The financial statements prior to A ugust 5, 2008, reflect the assets and liabilities of 494 UNR at historical carrying amounts.

Under the March 24, 2008 Acquisition Agreement providing for the share exchange with the controlling stockholder of 494 UNR, the former management of Promotora Valle Hermoso, Inc. had agreed to assume all debt of Promotora Valle Hermoso, Inc. in exchange for the assets of the Company’s former subsidiary, “Conjunto Habitacional Maria Paz”. The sale of this subsidiary’s assets to former management was accomplished by the transfer of the ownership interests in this subsidiary in exchange for the assumption of approximately $1.0 million of debt of Promotora Valle Hermoso, Inc. as of the August 4, 2008 closing date of the sale. The net assets sold in this transaction were approximately $400,000, representing the net assets of the Company as shown on its June 30, 2008, unaudited balance sheet included in its Quarterly Report on Form 10-Q, filed with the Securities and Exchange Commission (“SEC”) on August 11, 2008, reduced by approximately $400,000 for the costs of uncompleted contracts due to the economic conditions within the construction industry sector in Ecuador. Following the sale of the existing business to former management, the Company retained no assets or liabilities attributable to operations of the parent corporation or operations of the Ecuador subsidiary prior to the sale of subsidiary’s assets and assumption by prior management of its liabilities.

The share exchange was accounted for as a recapitalization.  The financial statements show a retroactive restatement of the Company’s historical stockholders’ equity to reflect the equivalent number of shares of common stock issued in the acquisition.

9

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Effective August 5, 2008, the Company’s officers and directors resigned and new officers and a new Board of Directors were appointed, as well as the sale of the Company’s existing business to former management.

Summary of Significant Accounting Policies

Principles of Consolidation

The financial statements include the accounts of the Company and its majority-owned subsidiary.  All intercompany transactions and balances have been eliminated.  All material intercompany balances and transactions have been eliminated.  For those consolidated subsidiaries in which the Company's ownership is less than 100 percent (100%), the outside stockholders' interests are shown as noncontrolling interest.  The noncontrolling interest of the Company's earnings or loss is classified as net income attributable to noncontrolling interest in the consolidated statement of operations.

Economic and Political Risks

The Company faces a number of risks and challenges since its operations are in the Russian Federation and its primary market is in the Russian Federation.  100% of the consolidated revenue is earned in the Russian Federation and 100% of the assets are located in the Russian Federation.  Management cannot presently predict what future impact the political risk will have on the Company, if any, or how the political climate in the Russian Federation will affect the Company’s operations.  Accordingly, events resulting from any change in the political climate could have a material effect on the Company.

Use of Estimates

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

Revenue Recognition

The Company is primarily engaged in developing several high-rise and mid-rise buildings and commercial centers that will take more than 12 months to complete as compared to sales of developments and houses that would be completed within a 12 month time frame.  This change in activity during 2008, primarily commencing with the fourth quarter of 2008, qualified the Company under the percentage of completion method of accounting.  As these buildings qualify under accounting principles, revenues and costs are recognized using the percentage of completion method of accounting in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 910, "Contractors - Construction" (" ASC 910").

Under the percentage of completion method, revenues and costs are to be recognized when construction is beyond the preliminary stage, the buyer is committed to the extent of having a sufficient initial and continuing investments that the buyer cannot require be refunded except for non-delivery of the apartment, sufficient apartments in the building have been sold to ensure that the property will not be converted to rental property, the sales prices are collectible and the aggregate sales proceeds and the total cost of the building can be reasonably estimated.

Revenue from sales of developments that do not meet the percentage of completion criteria are recognized under the revenue recognition method for completed work under  ASC 910.  Revenue and costs will be recorded at the time of completion of apartment construction and delivery to the buyer.  Revenue is not recognized until the sale is consummated, the buyer’s initial and continuing investments are adequate to demonstrate a commitment to pay, the seller’s receivable is not subject to subordination and the usual risks and rewards of ownership have been transferred to the buyer.

10

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The cash received on the sale of apartments is recorded as customer advances or progress payments until the revenue is recognized.  Cash advances at September 30, 2009 and December 31, 2008 against future revenue was $42,883,579 and $61,913,672, respectively.

Revenue from the sale of materials for road base product is recognized when the work is completed and accepted by the purchaser in accordance with  ASC 910.  The contracts are usually of a short duration.  As a result, the revenue recognized would not differ under the percentage of completion or the completed-contract method.

Land, land development and the other common costs, both incurred and estimated to be incurred in the future, are amortized or allocated to the cost of projects closed based upon the total number of apartments to be constructed in each project.  Any changes resulting from a change in the estimated number of apartments to be constructed or in the estimated costs subsequent to the commencement of delivery of apartments in the project are allocated to the remaining undelivered apartments.  Construction and related costs are charged to the cost of apartments covered under the specific identifiable method.

The Company receives a significant amount of cash advances or progress payments from customers.  Advances received from government agencies are not refundable but advances received from non-government customers are refundable at the customer’s request the Company not proceed with the consummation of the construction.  A customer can receive a refund from a cancelled contract only if the Company or the customer replaces the contract and the advance with another customer.

Cash and Cash Equivalents

Cash and cash equivalents include cash deposited in checking accounts, overnight repurchase agreements and money market funds with maturities of 90 days or less when purchased.  The cash balances are held at a few institutions and may, at times, exceed insurable amounts.  The Company believes it mitigates this risk by depositing cash in major financial institutions.

Receivables

Accounts receivable are recorded when the apartments are delivered.  Accounts receivables are presented in the balance sheet net of allowance for doubtful accounts.  Receivables are due in 90 days from the date of the invoice and each customer is evaluated on their ability to demonstrate a commitment to pay.  Receivables are written off when they are determined to be uncollectible.  The allowance for doubtful accounts is estimatedbased on the Company’s historical losses, the existing economic conditions in the construction industry, and the financial ability of its customers.  The Company determined the amount to record as an allowance for doubtful accounts at December 31, 2008 based on a percentage of the current year wr ite offs to the total of accounts receivables outstanding.  The Company also analyzed the days outstanding of receivables to determine an adequate reserve.  The Company incurred historical losses for the first time during 2008 primarily due to the current economic crisis.  The collectability of receivables remains strong despite the economic crisis and the Company believes the amount reserved will be more than sufficient to cover any bad debts.  The days outstanding of receivables has decreased and the economic situation in the Russian Federation expects to be much stronger by the end of 2009.  For the nine months ended September 30, 2009 and 2008, the Company recorded bad debt expense of approximately $500,000 and $-0-, respectively.  In addition, as of September 30, 2009 and December 31, 2008, the Company established a reserve of $1,000,000 and $500,000 against future allowances for doubtful accounts.  The reserve has been established du e to the global financial crisis and the existing economic conditions in the Russian Federation.  During 2008, the Company had a write-off of approximately $711,000, which was the first time the Company experienced a problem with their outstanding receivables.  The Company expects this trend to continue during 2009 until the economic conditions in the Russian Federation improve.  The $1,000,000 reserve is based on a percentage of 2009 and 2008 bad debts to revenue during the period.  The Company will monitor the economic conditions during 2009 to determine if additional reserves are needed.

11

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Inventories

Inventories held for sale are recorded at the lower of cost or fair value less direct costs to sell.  Fair value is defined as the amount at which an asset could be bought or sold in a current transaction between willing parties, that is, other than in a forced or liquidation sale.  Construction costs are accumulated during the period of construction and charged to cost of sales under specific identification methods.  Land, land development and common facility costs are allocated based on buildable acres to product types within each project, then charged to cost of sales equally based upon the number of apartments to be constructed in each product type.  For inventories of projects under development, a loss is recorded when events and circumstances indicate impairment and the undiscounted future cash flows generated are less than the related carrying amounts and estimated cost to complete.  The impairment loss is the difference between the recorded value of the individual project, and the discounted future cash flows generated from expected revenue of the individual project, less the associated cost to complete and direct costs to sell, which approximates fair value.  The estimates used in the determination of the estimated cash flows and fair value of a project are based on factors known to us at the time such estimates are made and our expectations of future operations.  These estimates of cash flows are significantly impacted by estimates of the amounts and timing of revenues and costs and other factors which, in turn, are impacted by local market economic conditions and the actions of competitors.  Should the estimates or expectations used in determining estimated cash flows or fair value decrease or differ from current estimates in the future, we may be r equired to recognize additional impairments related to current and future projects.

Post Development Completion Costs

In instances where a development is substantially completed and sold and the Company has additional construction work to be incurred, an estimated liability is provided to cover the cost of such work and is recorded as cost of sales and included in accounts payable in the accompanying balance sheet.  Post development completion costs relate to the Company’s home building operations.  The nature of these costs would be any additional work that needs to be completed after the buyer has accepted title to the property.  Revenue from the sale of the apartment is recorded under the Company’s revenue recognition policy which is prior to the completion of additional work.  The additional work to be performed and the amount invoiced is usually not material to the amount billed to the buyer for the sale of the apartment.

Fair Value of Financial Instruments

The Company adopted FASB ASC 820, Fair Value Measurements and Disclosures (“ASC 820”) on January 1, 2008, for all financial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis or on a nonrecurring basis during the reporting period. While the Company adopted the provisions of ASC 820 for nonfinancial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis, no such assets or liabilities existed at the balance sheet date. As permitted by ASC 820, the Company delayed implementation of this standard for all nonfinancial assets and liabilities recognized or disclosed at fair value in the financial statements on a nonrecurring basis and adopted these provisions effective Janu ary 1, 2009.

The fair value is an exit price, representing the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The Company utilizes market data or assumptions that market participants would use in pricing the asset or liability.  ASC 820 establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value.  These tiers include:  Level 1, defined as observable inputs such as quoted market prices in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs about which little or no market data exists, therefore requiring an entity to develop its ow n assumptions.

As of September 30, 2009, the Company held certain financial assets that are measured at fair value on a recurring basis.  These consisted of cash and cash equivalents and investments in non-marketable securities.  The fair values of the cash and cash equivalents is determined based on quoted market prices in public markets and is categorized as Level 1.  The investment in non-marketable securities is determined by the Company to develop its own assumptions and is categorized as Level 3.  The Company does not have any financial assets measured at fair value on a recurring basis as Level 2 and there were no transfers in or out of Level 2 or Level 3 during the nine months ended September 30, 2009.

12

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The following table sets forth by level, within the fair value hierarchy, the Company’s financial assets accounted for at fair value on a recurring basis as of September 30, 2009.

			Assets at Fair Value as of September 30, 2009 Using
	Total		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Cash and cash equivalents	$	5,510,696	$	5,510,696	$	-	$	-
Non-marketable securities		161,945		-		-		161,945
Total	$	5,672,641	$	5,510,696	$	-	$	161,945

The Company had no financial assets accounted for on a non-recurring basis as of September 30, 2009.

There were no changes to the Company’s valuation techniques used to measure asset fair values on a recurring or nonrecurring basis during the nine months ended September 30, 2009 and the Company did not have any financial liabilities as of September 30, 2009.

The Company has other financial instruments, such as receivables, accounts payable and other liabilities, notes payable and customer deposits, which have been excluded from the tables above.  Due to the short-term nature of these instruments, the carrying value of receivables, accounts payable and other liabilities, notes payable and customer deposits approximate their fair values.

Concentration of Credit Risk

Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of accounts receivable.  The Company grants credit to customers that are based on an evaluation of the customer's financial condition, without requiring collateral.  Exposure to losses on receivables is principally dependent on each customer's financial condition.  The Company controls its exposure to credit risk through credit approvals and progressive payments as the work is preformed.

 The Company is also subject to the risk of currency fluctuations that may affect the prices paid for goods and the amounts received for revenue.

Advertising Costs

Advertising costs are treated as period costs and expensed as incurred.  During the nine months ended September 30, 2009 and 2008, advertising costs expenses were minimal as advertising costs are incurred by the agency hired by the Company to market its housing projects.

Interest

In accordance with FASB ASC 835-20, , ("ASC 835"), "Capitalization of Interest", interest incurred is first capitalized to the property under development during the land development and construction period and expensed along with the associated cost of sales as the related inventory is sold.   No interest was expensed for the nine months ended September 30, 2009 and 2008 as all amounts were capitalized in ongoing projects that expect to be completed in future periods.  Capitalized interest is included in Inventories – sold and unsold projects under development – in the Company’s consolidated balance sheet at September 30, 2009 and December 31, 2008.  Interest has been capitalized for the Marchall project, where the estimated cost of construction is approximately $400 million.  T he Company commenced sales of the Marchall project during the first quarter of 2009 and expects to complete the sales of the apartments in 2009.  The balance of the commercial portion of the project will not be completed until 2011.  The Marchall project is reviewed for impairment on a quarterly basis and no inventory or costs related to the project has been impaired as of September 30, 2009.  The Marchall project consists of the construction of approximately 19,000 sq, m. of residential apartments, commercial retail space and the related infrastructure costs.  As of September 30, 2009 and December 31, 2008, the total capitalized interest on the Marchall project was approximately $7.3 million and $6.5 million, respectively.  Interest will be allocated to cost of sales as revenue is recognized.

13

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Interest cost incurred, expensed and capitalized were:

	Nine Months Ended
	September 30,
	2009
Interest capitalized at beginning of year	$	6,504,231
Plus interest incurred		700,024
Less cost of sales interest expense		(337,510	)
Less other interest expense		-
Less unrealized exchange loss		(454,063	)
	$	6,412,682

Depreciation

Equipment is stated at cost less accumulated depreciation and amortization.  Depreciation is calculated primarily using the straight-line method over their estimated useful lives.

Income Taxes

The Company accounts for income taxes using an asset and liability approach under which deferred income taxes are recognized by applying enacted tax rates applicable in future years to the differences noted in the financial statement carrying amounts and the tax basis of the reported assets and liabilities.

The principal item giving rise to deferred taxes is expenses deductible for tax purposes that are not deductible for book purposes.

The Company accounts for income taxes in accordance with the Internal Income Tax Law of the Russian Federation.  The Company is taxed at a rate of 20% in 2009 and 24% in 2008.

Foreign Currency Translation

The Russian ruble is the Company’s functional currency and the United States dollar is the reporting currency.

Conversion of currency from the Russian ruble into a United States dollar (“US $”) has been made at the respective applicable rates of exchange.  Monetary assets and liabilities denominated in foreign currencies are converted into US $ at the applicable rate of exchange at the balance sheet date.  Income and expense items are converted at the average rates for the years then ended.

14

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

Earnings Per Share

Basic earnings per common share are computed by dividing net earnings by weighted average number of common shares outstanding during the year.  Diluted earnings per common share are computed by dividing net earnings by the weighted average number of common share and potential common shares outstanding during the year.  There were no potential common shares outstanding for the nine months ended September 30, 2009 and 2008.

Advance payments to Contractors

Advance payments to Contractors principally include prepayments to subcontractors for goods and services and which relate to specific housing projects (home building operations) which are expensed to cost of sales as the applicable inventory are sold.  The projects typically are one to three years in length and the subcontractor costs are expensed on a specific project to project basis.    The payment to subcontractors include prepayments prior to the work commencing, advance payments for raw materials, and architectural and engineering services prior to the work being submitted to the authorities.  All projects are reviewed quarterly for impairment issues.  If any impairment exists, costs will be written down at that time.  Advance payments to contractors are included in inve ntory on the Company’s consolidated balance sheet at September 30, 2009 and December 31, 2008.

Rental Income

The Company leases, to third parties, buildings and equipment under operating lease arrangements for a period of up to one year.  The lease terms usually begin on January 1 and terminate on December 31 and are renewable on an annual basis after new negotiations.  Minimum lease revenues are recognized on a straight-line basis over the minimum lease term.  Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease term.

Reclassifications

Effective January 1, 2009, the Company completed its implementation of FASB ASC 810, "Consolidation"(ASC 810”).  As a result of adopting ASC 810 , prior years balances were reclassified to conform to current presentation.

New Financial Accounting Standards

During the second quarter of 2009, the Company implemented additional interim disclosures about fair value of financial instruments, as required by FASB ASC Paragraph 825-10-65-1.  Prior to implementation, disclosures about fair values of financial instruments were only required to be disclosed annually.  As the required modifications only related to additional disclosures of fair values of financial instruments in interim financial statements, the adoption did not affect the Company’s financial position or results of operations.

Beginning in the second quarter of 2009, the Company must disclose the date through which subsequent events have been evaluated, in accordance with the requirements in FASB ASC Paragraph 855-10-50-1.  With regards to the condensed consolidated financial statements and notes to those financial statements contained in this Form 10-Q, the Company has evaluated all subsequent events through November 20, 2009 (the date the Company’s financial statement are issued).

In September 2009, the FASB implemented certain modifications to FASB ASC Topic 860, Transfers and Servicing, as a means to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets, the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement, if any, in transferred financial assets. These modifications must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of this standard to have an impact on the Company’s results of operations, financial condition or cash flows.

15

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

During the third quarter of 2009, the Company adopted the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles in accordance with FASB ASC Topic 105, “Generally Accepted Accounting Principles” (the “Codification”).  The Codification has become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Effective with the Company’s adoption on July 1, 2009, the Codification has superseded all prior non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounti ng literature not included in the Codification has become non-authoritative. As the adoption of the Codification only affected how specific references to GAAP literature have been disclosed in the notes to the Company’s condensed consolidated financial statements, it did not result in any impact on the Company’s results of operations, financial condition or cash flows.

Updates to the FASB Codification Applicable to the Company

The FASB has published FASB Accounting Standards Update No. 2009-12, Fair Value Measurements and Disclosures (Topic 820)—Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This Update amends Subtopic 820-10, Fair Value Measurements and Disclosures—Overall, to permit a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This Update also requires new disclosures, by major category of investments, about the attributes of investments included within the scope of this amendment to the Codification. The guidance in this Update is effective for interim and annual periods ending a fter December 15, 2009. The Company does not expect the adoption of this standard to have an impact on the Company’s results of operations, financial condition or cash flows.

2. Property

Property, plant and equipment consists of buildings, building improvements, furniture and equipment used in the ordinary course of business and are recorded at cost less accumulated depreciation.  Accumulated depreciation related to these assets at September 30, 2009 and December 31, 2008 amounted to $154,939 and $173,261, respectively.

Depreciation expense for the nine months ended September 30, 2009 and 2008 amounted to $34,667 and $51,931, respectively.

Classification	Expected Useful Lives
Buildings and building improvements	7-30 years
Transportation equipment	5-15 years
Equipment	5-10 years

3.    Inventories

In accordance with FASB ASC 360-10-35, "Impairment or Disposal of Long-Lived Assets" ("ASC 360-10-35"), the Company records impairment losses on inventory related to projects under development when events and circumstances indicate that they may be impaired and the undiscounted cash flows estimated by these assets are less than their related carrying amounts.  The Company recorded no impairments for the nine months ended September 30, 2009 and 2008.

16

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

As of September 30, 2009 and December 31, 2008, inventory consists of the following:

	September 30,		December 31,
	2009 (As Restated)		2008
Unsold projects under development	$	66,155,601	$	71,330,736
Raw materials - home building		94,070		380,517
- road base product		1,998,306		1,989,155
Advance payments to contractors		15,314,692		9,998,770
	$	83,562,129	$	83,699,178

4.     Notes Payable

Notes payable balances as of September 30, 2009 and December 31, 2008 were as follows:

	September 30,		December 31,
	2009		2008
Note payable to OJSC Ros Der Bank,	$	-	$	8,103,614
interest @ 14%, due November 18, 2008
and extended to February 2009.  The note
was repaid in full in February 2009. (b)
Note payable to OJSC Sberbank of RF,		-		-
interest @ 14%, matured February 20, 2008
Note payable to OJSC Sberbank of RF,		9,969,361		10,210,889
interest @ 18.50%, due November 2010
Note payable to officer, interest free,
due on demand		50,504		50,504
	$	10,019,865	$	18,365,007

The following table shows the maturities by year of the total amount of notes payable at September 30, 2009:

The notes payable are collateralized by the Company’s accounts receivable and current projects under construction.  The loan agreements contain no debt covenants or required ratios that need to be maintained.  There are penalties or increases in the interest rates for a delay in payments, which can be as high as 21%.

Interest expense for the nine months ended September 30, 2009 and 2008 in the amount of $700,024 and $2,911,634, respectively has been capitalized and included in the cost of sold and unsold projects under development in the Company’s balance sheet at September 30, 2009 and December 31, 2008.

17

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(a) In July 2008, the notes payable to Dunchoille Holdings Limited was paid in full on the maturity date of the agreement.  The note was payable in US dollars and due to the strength of the Ruble compared to the US dollar,

a realized exchange gain in the amount of approximately $1.6 million was recorded in the Consolidated Statement of Operations during the year ended December 31, 2008 upon liquidation of the notes reflecting the difference in exchange rates when the note proceeds was received and the exchange rates at maturity.

(b) In November and December 2008, the Company made partial payments to OJSC Ros Der Bank.  The note payable was payable in US dollars and due to the strength of the US dollar compared to the Ruble a realized exchange loss in the amount of approximately $450,000 was recorded in the Consolidated Statement of Operations during the year ended December 31, 2008 upon partial liquidation of the notes reflecting the difference in exchange rates when the note proceeds were received and the exchange rates of maturity.  In February 2009, the Company paid in full the balance of the note.

5. Income Taxes

The Company adopted the provision of FASB ASC 740, "Income Taxes" ("ASC 740") January 1, 2007.  As a result of the implementation of ASC 740, the Company recognized no adjustment in the net liabilities or equity for unrecognized income tax benefit.  The Company believes there are no potential uncertain tax positions and all tax returns are correct as filed.  Should the Company recognize a liability for uncertain tax positions, the Company will separately recognize the liability for uncertain tax positions on its balance sheet.  Included in any liability for uncertain tax positions, the Company will also setup a liability for interest and penalties.  The Company’s policy is to recognize interest and penalties related to uncertain tax positions as a component of the current provisio n for income taxes.

6. Noncontrolling Interest

Effective January 1, 2009, the Company completed its implementation of ASC 810.

The noncontrolling interest represents the third parties of 494 UNR who did not exchange their shares with the Company in connection with the share exchange agreement.

The following table sets forth the noncontrolling interest balances and the changes in these balances attributable to the noncontrolling investors’ interests:

	September 30,		December 31,
	2009		2008
Balance at beginning of period	$	8,594,736	$	3,717,499
Non-controlling interest share of income		4,570,953		4,877,237
Balance at end of period	$	13,165,689	$	8,594,736

7. Segment Information

The Company operates in one industry with two reportable segments.  The segments are home building and road base product.  The primary criteria by which financial performance is evaluated and resources are allocated are revenues and operating income.  The following is a summary of key financial data:

18

UNR HOLDINGS, INC. AND SUBSIDIARY

(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)

NOTES TO RESTATED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

		Nine Months Ended				Three Months Ended
		September 30,				September 30,
		2009		2008		2009			2008
Net sales:
Home building		$	36,612,495	$	42,106,896	$	21,898,326		$	23,439,359
Road base product			2,737,874		15,429,041		1,316,894			6,833,120
		$	39,350,369	$	57,535,937	$	23,215,220		$	30,272,479
Income from operations:
Home building		$	15,937,266	$	12,841,695	$	10,288,732		$	8,625,416
Road base product			168,383		5,136,502		(158,586	)		3,591,644
		$	16,105,649	$	17,978,197	$	10,130,146		$	12,217,060
					September 30,		December 31,
					2009 (As restated)		2008 (As restated)
	Total Assets:
	Home buildings			$	136,596,636	$	145,989,877
	Road base products				1,998,306		1,989,155
	Total Assets			$	138,594,942	$	147,979,032

8. Accumulated Other Comprehensive Loss

The components of accumulated other comprehensive loss as of September 30, 2009 and December 31, 2008 are summarized below:

	September 30,			December 31,
	2009			2008
Foreign currency translation	$	(3,430,543	)	$	(3,840,847	)
adjustment

19

9. Restated Consolidated Financial Statements

The Company has restated its financial statements for the period ending September 30, 2009 for the correction of errors found in previously issued financial statements.  Receivables and accounts payable were increased to reflect amounts due from the Russian Ministry of Defense and the corresponding amount due to subcontractors.

Receivables and inventories have been adjusted by approximately $2.3 million for a reclassification of VAT.

The following represents the restated consolidated financial statements as of September 30, 2009 and adjustments related to the consolidated financial statements.

CONSOLIDATED BALANCE SHEETS
(Unaudited)
	September 30,						September 30,
	2009 (As reported)				Adjustments		2009 (As restated)
Cash and cash equivalents	$	5,510,696					$	5,510,696
Inventories		81,257,129		(2)		2,305,000		83,562,129
Receivables - net of allowance for doubtful accounts
of $500,000 and $-0-		12,982,690		(1)(2)		35,389,545		48,372,235
Property, plant and equipment - net		987,937						987,937
Other assets		161,945						161,945
TOTAL ASSETS	$	100,900,397					$	138,594,942
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable	$	10,019,865					$	10,019,865
Accounts payable and other liabilities		1,059,464		(1)		37,694,545		38,754,009
Customer deposits		42,883,579						42,883,579
Deferred income taxes		10,552,286						10,552,286
Total Liabilities		64,515,194						102,209,739
Commitments and Contingencies		-						-
Equity:
UNR Holdings, Inc. and Subsidiary Stockholders' Equity:
Common stock, $0.001 par value; authorized 100,000,000
shares; outstanding 24,464,799 and 24,464,799 shares, respectively		24,465						24,465
Paid-in capital		99,579						99,579
Retained earnings		26,526,013						26,526,013
Accumulated other comprehensive loss		(3,430,543	)					(3,430,543	)
Total UNR Holdings, Inc. and Subsidiary
Stockholders' Equity		23,219,514						23,219,514
Noncontrolling interest		13,165,689						13,165,689
Total Equity		36,385,203						36,385,203
TOTAL LIABILITIES AND EQUITY	$	100,900,397					$	138,594,942

(1)   Receivables and payables were increased to reflect amounts due from the Russian Ministry of Defense and the corresponding amount due to subcontractors.

(2)   VAT has been reclassified from receivables to inventories since VAT on sales to individuals is not recoverable in Russia.

See note to unaudited consolidated financial statements.

20

UNR HOLDINGS, INC. AND SUBSIDIARY
(FORMERLY PROMOTORA VALLE HERMOSO, INC. AND SUBSIDIARY)
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
	For the Nine Months Ended							For the Nine Months Ended
	September 30, 2009 (As Reported)				Adjustments			September 30, 2009 (As Restated)
Cash flows from operating activities:
Net earnings	$	13,901,088			$	-		$	13,901,088
Adjustments to reconcile net earnings to net cash
used in operating activities:
Depreciation		34,667							34,667
(Gain) on sale of property, plant and equipment		4,832							4,832
Deferred income taxes		3,410,565				-			3,410,565
Change in operating assets and liabilities		(21,206,836	)						(21,206,836	)
Net cash provided by (used in) operating activities		(3,855,684	)						(3,855,684	)
Cash flows from investing activities:
Purchase of property, plant and equipment		(297,572	)						(297,572	)
Cash flows from financing activities:
Proceeds from borrowings		11,630,921							11,630,921
Repayment of loans		(18,264,815	)						(18,264,815	)
Net cash provided by (used in) financing activities		(6,633,894	)						(6,633,894	)
Effect of exchange rate changes on cash		(132,823	)						(132,823	)
Net increase (decrease) in cash		(10,919,973	)						(10,919,973	)
Cash - beginning of period		16,430,669							16,430,669
Cash - end of period	$	5,510,696						$	5,510,696
Changes in operating assets
and liabilities consist of:
(Increase) in accounts receivable	$	(3,892,808	)	(1)	$	2,305,000		$	(1,587,808	)
(Increase) in inventories		574,915		(1)		(2,305,000	)		(1,730,085	)
Increase in accounts payable and
other liabilities		102,208							102,208
Decrease in customer deposits		(17,991,151	)			-			(17,991,151	)
	$	(21,206,836	)					$	(21,206,836	)
(1) VAT has been reclassified from receivables to inventories since VAT on sales to individuals is not recoverable in Russia.

21

CONSOLIDATED BALANCE SHEETS
	December 31,							December 31,
	2008 - As reported				Adjustments			2008 (As restated)
ASSETS
Cash and cash equivalents	$	16,430,669						$	16,430,669
Inventories		21,785,506		(1)	$	61,913,672			83,699,178
Receivables - net of allowance for doubtful accounts
of $500,000 and $-0-		9,310,625		(3)		37,694,545			47,005,170
Property, plant and equipment - net		678,147							678,147
Other assets		165,868							165,868
TOTAL ASSETS	$	48,370,815						$	147,979,032
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable	$	18,365,007						$	18,365,007
Accounts payable and other liabilities		957,256		(3)		37,694,545			38,651,801
Customer deposits		-		(1)		61,913,672			61,913,672
Deferred income taxes		6,974,741							6,974,741
Total Liabilities		26,297,004							125,905,221
Commitments and Contingencies		-							-
Equity:
Promotora Valle Hermoso, Inc. and Subsidiary Stockholders' Equity:
Common stock, $0.001 par value; authorized 100,000,000
shares; outstanding 24,464,799 and 20,500,000 shares, respectively		24,465							24,465
Paid-in capital		99,579							99,579
Retained earnings		17,860,837		(2)		(664,959	)		17,195,878
Accumulated other comprehensive income (loss)		(4,835,847	)	(2)		995,000			(3,840,847	)
Total Promotora Valle Hermoso, Inc. and Subsidiary
Stockholders' Equity		13,149,034							13,479,075
Noncontrolling interest		8,924,777		(2)		(330,041	)		8,594,736
Total Equity		22,073,811							22,073,811
TOTAL LIABILITIES AND EQUITY	$	48,370,815						$	147,979,032

(1)	Customer deposits were restated as a liability.
(2)	Foreign currency transaction was adjusted and included in current net income and not an unrealized loss adjusted through Accumulated Other Comprehensive Income (loss).
(3)	Receivables and accounts payables were increased to reflect amounts due from the Russian Ministry of Defense and the corresponding amount due to subcontractors.

See notes to unaudited consolidated financial statements.

22

10. Trade and Other Receivables, Net

	September 30,		December 31,
	2009 (As restated)		2008 (As restated)
Trade accounts and notes receivable	$	8,654,928	$	6,699,460
Accounts receivable from the Russian Ministry of Defense		37,694,545		37,694,545
Other receivables		2,022,762		2,611,165
Total trade and other receivables, net	$	48,372,235	$	47,005,170

The balances of accounts receivable from the Russian Ministry of Defense are attributable to the construction of a multi-functional residential and commercial complex on Marshal Rybalko Street (the “Project”) in Moscow.  The Company has been acting as the General Contractor of the Project for the Russian Ministry of Defense (the “Principal”).  Upon completion of the Project, the Principal will retain ownership of over half of the  residential space in the Project, with  the Company having the ownership of, and the right to sell, the remaining space in the Project.  The Company has not recognized any gross profit on the Project with the Principal through December 31, 2008.

In acting as the General Contractor of the Project, the Company organized the construction and subcontracted with other companies for the performance of certain parts of the Project.  As of September 30, 2009 and December 31, 2008, these subcontractors performed construction services for the Project totaling $37,694,545 and $37,694,545, respectively.  The amounts of subcontractor services are recorded as liabilities under “accounts payable and accrued expenses.”  The amount due from the Principal is recorded as an asset under “ accounts receivable.”

The amounts payable to the subcontractors for their services were presented to the Principal for acceptance and payment.  The Principal refused to accept and pay for these subcontractor services.  The Company initiated a lawsuit in order to recover these amounts from the Principal.  The current amount of the claims is $35,341,012.  The court of primary jurisdiction accepted the Company’s claims.  However, the Principal filed an appeal to a higher court.

At present, the Company’s management and lawyers cannot determine the ultimate outcome of this litigation. However, management believes that the Company will ultimately prevail and collect substantially all of the amounts due from the Principal.  Accordingly, no provision for the unrecoverability of these accounts receivable has been recorded.

11. Related Party Transactions

During the nine months ended September 30, 2009 and 2008, the Company had activities with related companies in connection with purchases, subcontracting construction and lease. The Company’s reported results of operations, financial position and cash flows would be different had such transactions been carried out amongst unrelated parties. Related parties may enter into transactions which unrelated parties might not, and transactions between related parties may not be affected on the same terms, conditions and amounts as transactions between unrelated parties.

The nature of the relationships with such related companies is that some of the officers of the Company's subsidiary, 494 UNR, also serve as the General Directors of such related companies. The details of the relationships for those related parties with whom the Company entered into significant transactions or had significant balances outstanding are presented below:

	Nine months ended September 30,
	2009	2008
Purchases and rental income	$3,287,367	$8,000,446
	September 30,	December 31,
	2009	2008
Accounts receivable	$1,849,716	$2,666,663
Accounts payable	$1,035,323	$   651,754

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion of our financial condition and results of operations should be read in conjunction with the financial statements and notes thereto and the other financial information included elsewhere in this report.  Certain statements contained in this report, including, without limitation, statements containing the words “believes,” “anticipates,” “expects” and words of similar import, constitute “forward looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  Such forward-looking statements involve known and unknown risks and uncertainties.  Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including our ability to create, s ustain, manage or forecast our growth; our ability to attract and retain key personnel; changes in our business strategy or development plans; competition; business disruptions; adverse publicity; and international, national and local general economic and market conditions.

Overview

Throughout this report, the terms “we,” “us,” “our,” and “our Company” refer to UNR Holdings, Inc., a Colorado corporation, and, unless the context indicates otherwise, includes our subsidiaries.

Prior to August 5, 2008, we were engaged in the housing business in the Republic of Ecuador.  Effective March 24, 2008, we entered into an Acquisition Agreement (the “Agreement”) with stockholders of OJSC “494 UNR”, a  corporation incorporated under the laws of the Russian Federation (“494 UNR”), providing for the acquisition by the Company of 66.83% of all of the outstanding shares of common and preferred stock of 494 UNR.   At the closing under the Agreement on August 5, 2008, we issued 20,500,000 shares of our common stock to the controlling stockholder of 494 UNR. The minority interest in 494 UNR is held by an agency of the government of the Russian Federation, which holds an approximate 25% interest in 494 UNR, and other individual holders. The Agreement provid ed for resignation at closing of the Company’s officers and directors and the appointment of new officers and a new Board of Directors, as well as for the sale of the Company’s existing business to former management. For accounting purposes, the Acquisition Agreement has been treated as a recapitalization of 494 UNR (now a 68.83% owned subsidiary of the Company) as the acquirer. The financial statements prior to August 5, 2008 are those of 494 UNR.

494 UNR is a construction and development company with its principal offices located in Bronnitsy (Moscow region), Russian Federation. 494 UNR operates primarily in Moscow and the Moscow area and designs/builds residential apartment complexes, and other commercial structures, and provides infrastructure construction services, in particular a road base product for road construction.

Following approval at a Special Meeting of Stockholders held on September 14, 2009, we changed the name of our Company from Promotora Valle Hermoso, Inc. to UNR Holdings, Inc.  The name change was effective for trading purposes in the OTC Bulletin Board Market under the symbol “UNRH.OB” on October 19, 2009.

Results of Operations

General

Recent constraints on the availability of credit in the worldwide banking system and in the Russian Republic impacted adversely the construction and development projects of our customers and are projected to have a consequent adverse effect on our revenues and results of operations.  In addition, the number of customers for residential units in our projects has decreased because of decrease in general purchasing power. We do not see any risks in our disposing of inventory, but the time period for turn over of inventory has increased.

Generally, we expect a slowdown in the housing market in the Russian Federation to extend from late 2008 through 2009, and do not see a recovery back toward previous levels in 2007 to 2008 until 2010.  As to our road base product, the economic downturn severely affected this segment and there is no assurance when a recovery back to 2008 levels will occur.

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The Company’s businesses are seasonal. The winter season is a period of substantially reduced residential and other construction projects and road construction activity.

Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008

REVENUES. Total revenues for the nine months ended September 30, 2009, decreased to $39.4 million, or  31.5%, as compared to $57.5 million during the comparable period of 2008. The decrease was a result of a significant decrease in road base product revenues, from $15.5 million to $2.7  million, representing lower demand in the road/infrastructure construction market of our road base product, and a decrease in home building revenues, from $42.1 million to $36.6 million, or 13.0%, representing a decrease in sales of apartments from completed construction projects.

COST OF SALES. Cost of sales decreased by $15.3 million, or 42.9%, to $20.4 million for the nine months ended September 30, 2009, from $35.7 million for the comparable period in 2008. This decrease was primarily due to substantially lower cost of sales of our road base product.  Cost of sales of road base products decreased approximately $7.7   million due to the decrease in demand during 2009.  Cost of sales decreased approximately $7.6   million for home building due primarily to a decrease in sales of apartments.  Cost of sales as a % of sales has decreased 10.2% from 2008 to 2009. The Company attributes this decrease primarily to decreases in building construction costs allocated to completed sales and higher selling prices.

SELLING, GENERAL AND ADMINISTRATIVE COSTS.  Selling, general and administrative costs decreased by approximately $1.0 million, to $2.8 million for the nine months ended September 30, 2009 from $3.8 million in 2008. The Company attributes the decrease primarily to a reduction in payroll costs, travel expenses and professional fees.

INCOME FROM OPERATIONS. Income from operations decreased by approximately $1.9 million, from $18.0 million for the nine months ended September 30, 2008, compared to $16.1  million for the nine months ended September 30, 2009, primarily due to the increases in gross profit from home building operations offset by decreases in road base product operations.  Home building operations contributed a profit of $15.9   million in 2009 as compared to an operating profit of $12.8  million in 2008.  Road base product operations contributed a profit of $0.2  million in 2009 as compared to a profit of $5.1 million in 2008.

OTHER INCOME. Other income remained approximately the same for the nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008.

FOREIGN CURRENCY TRANSACTION GAIN.  Foreign currency transaction gain decreased from

$1.5 million for the nine months ended September 30, 2008 compared to a gain of $720   for the nine months ended September 30, 2009.  This is primarily due to a realized gain on the payment of a note payable in 2008 that resulted from the strength of the Russian Ruble in 2008.

PROVISION FOR INCOME TAXES. The provision for income taxes decreased from $5.0   million for the nine months ended September 30, 2008 to $3.5 million for the nine months ending September 30, 2009. The decrease in the provision is primarily attributable to lower income tax rates in effect for 2009.

NET EARNINGS: Net earnings attributable to UNR Holdings, Inc. decreased by approximately $1.3 million for the nine months ended September 30, 2009 compared to the nine months ended September 30, 2008. The Company attributes this primarily to a decrease in the cost of sales % in the home building segment resulting in a higher gross profit from this segment’s operations despite a decrease in sales, a decrease in selling, general and administrative expenses and a foreign currency transaction gain offset, in part, by a lower demand for its road base product.

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Three Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008

REVENUES. Total revenues for the three months ended September 30, 2009, decreased to $23.2 million, or 23.2%, as compared to $30.2 million during the comparable period of 2008. The decrease was a result of a significant decrease in road base product revenues, from $6.8million to $1.3 million, representing lower demand in the road/infrastructure construction market  of our road base product,  and a decrease in home building revenues, from $23.4 million to $21.9 million, or 6.4%, representing a decrease in sales of apartments from completed construction projects.

COST OF SALES. Cost of sales decreased by $5.0 million, or 29.9 %, to $11.7   million for the three months ended September 30, 2009, from $16.7 million for the comparable period in 2008. This decrease was primarily due to substantially lower cost of sales of our road base product.  Cost of sales of road base products decreased approximately $1.8  million due to the decrease in demand during 2009.  Cost of sales decreased approximately $3.2  million for home building due primarily to a decrease in sales of apartments.  Cost of sales as a % of sales has decreased 4.9% from 2008 to 2009. The Company attributes this decrease primarily to decreases in building construction costs allocated to completed sales and higher selling prices.

SELLING, GENERAL AND ADMINISTRATIVE COSTS.  Selling, general and administrative costs remained approximately the same for the three months ended September 30, 2009.

INCOME FROM OPERATIONS. Income from operations decreased by approximately $2.1   million, from $12.2 million for the three months ended September 30, 2008, compared to $10.1  million for the three months ended September 30, 2009, primarily due to the decreases in gross profit from home building operations and road base product operations.  Home building operations contributed an operating profit of $10.3 million in 2009 as compared to an operating profit of $8.6  million in 2008.  Road base product operations contributed an operating loss of $(0.2) million in 2009 as compared to an operating profit of $3.6 million in 2008.

OTHER INCOME. Other income decreased from $0.5 million for the three months ended September 30, 2008 to $0.4  million for the three months ended September 30, 2009, primarily due to the decrease in net rental income during 2009 from rental agreements entered into during 2009 in connection with the rental of various buildings and equipment.

FOREIGN CURRENCY TRANSACTION LOSS.  Foreign currency transaction loss increased from a gain of $ 1.5 million  for the three months ended September 30, 2008 compared to a loss of $20,631 for the three months ended September 30, 2009.  This is primarily due to a greater fluctuation of exchange rates during 2008.

PROVISION FOR INCOME TAXES. The provision for income taxes decreased from $3.1 million for the three months ended September 30, 2008 to $2.0 million for the three months ending September 30, 2009. The decrease in the provision is primarily attributable to lower income tax rates in effect for 2009.

NET EARNINGS: Net earnings attributable to UNR Holdings, Inc. decreased by approximately $970,000 for the three months ended September 30, 2009 compared to the three months ended September 30, 2008. The Company attributes this primarily to a decrease in the cost of sales % in the home building segment resulting in a higher gross profit from this segment’s operations despite a decrease in sales, a decrease in selling, general and administrative expenses offset, in part, by a lower demand for its road base product and a foreign currency transaction loss.

Liquidity and Financial Resources

The Company believes the sources of cash are sufficient to meet the overhead needs of the Company in 2009 including the liquidation of its short term debt.  In January and February 2009, the Company liquidated $6.8 million of matured debt.  The Company eliminated debt of approximately $11.5 million in June 2009 through cash flow from operations and refinancing the debt with another financial institution. The Company expects to continue its sales of properties during 2009 but at a slower pace due to economic conditions. The global economic slowdown should not have a material effect on outstanding accounts receivable collections based on collections through the second quarter of 2009. However, to build out and complete scheduled projects, the Company will require significant additional financing.

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The Company had a working capital surplus of approximately $35.2 million and stockholders’ equity attributable UNR Holdings, Inc. of approximately $23.2        million as of September 30, 2009.  During the nine months ended September 30, 2009, the Company had repaid $18.3 million in loans.  Cash and cash equivalents decreased approximately $10.9 million for the nine months ended September 30, 2009.  The decrease is primarily attributable to the net repayment of debt of approximately $6.6 million and a decrease in operating activities of approximately $3.9 million (primarily due to a decrease in customer deposits of $19.5  million offset by net earnings of $13.9  million.)

Accounts receivable, net of allowances, were $48.4 million at September 30, 2009, as compared to $47.0 million at December 31, 2008.  The increase in accounts receivable is primarily due to unrealized translation gains in 2009 and slower payments on outstanding receivables.  Inventories were $83.6 million at September 30, 2009, as compared to $83.6  million at December 31, 2008.

The sources of liquidity are a broad range of financial institutions in the Russian Federation, Japan, the United States and Europe, including banks, private equity funds and investment banks. The Company is also in negotiations with the government in the Russian Federation for either possible financing or the construction of additional apartment units for the government. The financial markets financing the Company’s construction projects have become much more difficult to obtain with the global liquidity crisis still in effect.  The Company does not have any firm commitments as of this date and there is no assurance that the Company will be able to arrange required financing for its residential and other construction projects.  The Company may be forced to delay such projects until financing is obtained.  ; The Company has arranged financing in the past with these institutions and believes financing will be obtainable in the near future.

Critical Accounting Policies

The Securities and Exchange Commission recently issued "Financial Reporting Release No.  60 Cautionary Advice Regarding Disclosure About Critical Accounting Policies" ("FRR 60"), suggesting companies provide additional disclosures, discussion and commentary on those accounting policies considered most critical to its business and financial reporting requirements.  FRR 60 considers an accounting policy to be critical if it is important to the Company's financial condition and results of operations, and requires significant judgment and estimates on the part of management in the application of the policy.  For a summary of the Company's significant accounting policies, including the critical accounting policies discussed below, please refer to the accompanying notes to the financial statements.

The Company assesses potential impairment of its long-lived assets, which include its property and equipment and its identifiable intangibles such as deferred charges under the guidance of SFAS 144 "Accounting for the Impairment or Disposal of Long-Lived Assets" (“SFAS 144”). The Company must continually determine if a permanent impairment of its long-lived assets has occurred and write down the assets to their fair values and charge current operations for the measured impairment.

Inventories - Inventories consist of land, land development,  construction costs, capitalized interest and construction overhead and are stated at cost, net of impairment losses, if any. Construction costs are accumulated during the period of construction and charged to cost of sales under specific identification methods. Land, land development and common facility costs are allocated based on buildable acres to product types within each construction project, then charged to cost of sales equally based upon the number of projects to be constructed in each product type.

The recoverability of inventories and other long-lived assets are assessed in accordance with the provisions of SFAS 144, which requires long-lived assets, including inventories, held for development to be evaluated for impairment based on undiscounted future cash flows of the assets at the lowest level for which  there are identifiable cash flows. As such, we evaluate inventories for impairment at the individual level, the lowest level of discrete cash flows that we measure.

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We evaluate inventories under development for impairment when indicators of potential impairment are present. Indicators of impairment include, but are not limited to, decreases in local market values, decreases in gross margins or sales absorption rates, decreases in net sales prices (base sales price net of sales incentives), or actual or projected operating or cash flow losses. The assessment of construction projects for indication of impairment is performed quarterly, primarily by completing detailed budgets for all of our projects and identifying those construction projects with a projected operating loss for any projected fiscal year or for the entire projected life. For those construction projects with projected losses, we estimate remaining undiscounted future cash flows and compare those to the carrying value of the project, to determine if the carrying value of the asset is recoverable. The projected operating profits, losses or cash flows of each construction project can be significantly impacted by our estimates of the following:

• future base selling prices;

• future projects sales incentives;

• future  construction projects and land development costs; and

• future sales absorption pace and cancellation rates.

These estimates are dependent upon specific market conditions for each construction project. While we consider available information to determine what we believe to be our best estimates as of the end of a quarterly reporting period, these estimates are subject to change in future reporting periods as facts and circumstances change. Local market-specific conditions that may impact our estimates for a project include:

• the intensity of competition within a market, including publicly available sales prices and sales incentives offered by our competitors;

• the current sales absorption pace for both our construction project and competitor construction project;

• construction project specific attributes, such as location, availability of lots in the market, desirability and uniqueness of our construction project, and the size and style of project currently being offered;

• potential for alternative product offerings to respond to local market conditions;

• changes by management in the sales strategy of the project; and

• current local market economic and demographic conditions and related trends and forecasts.

These and other local market-specific conditions that may be present are considered by management in preparing projection assumptions for each construction project. The sales objectives can differ between our projects, even within a given market. For example, facts and circumstances in a given project may lead us to price our projects with the objective of yielding a higher sales absorption pace, while facts and circumstances in another project may lead us to price our projects to minimize deterioration in our gross margins, although it may result in a slower sales absorption pace. In addition, the key assumptions included in our estimate of future undiscounted cash flows may be interrelated. For example, a decrease in estimated base sales price or an increase in project sales incentives may result in a corresponding increase in sales absorption pace. Additionally, a decrease in the average sales price of projects to be sold and closed in future reporting periods for one project that has not been generating what management believes to be an adequate sales absorption pace may impact the estimated cash flow assumptions of a nearby project. Changes in our key assumptions, including estimated construction and development costs, absorption pace and selling strategies, could materially impact future cash flow and fair value estimates. Due to the number of possible scenarios that would result from various changes in these factors, we do not believe it is possible to develop a sensitivity analysis with a level of precision that would be meaningful to an investor.

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If the undiscounted cash flows are more than the carrying value of the project, then the carrying amount is recoverable, and no impairment adjustment is required. However, if the undiscounted cash flows are less than the carrying amount, then the project is deemed impaired and is written-down to its fair value. We determine the estimated fair value of each project by determining the present value of the estimated future cash flows at a discount rate commensurate with the risk of the respective project. Our discount rates used for the impairments recorded to date range from 13.5% to 17.0%. The estimated future cash flow assumptions are the same for both our recoverability and fair value assessments. Should the estimates or expectations used in determining estimated cash flows or fair value decrease or differ from current estimates in t he future, we may be required to recognize additional impairments related to current and future projects. The impairment of a project is allocated to each project on a specific identification basis and written down to each project’s fair value.  Any impairment is allocated to specific lots on a square foot basis. Should the fair value of any lot need to be written down further based on the future selling value of that lot, an additional impairment charge will be specifically allocated to such lot.  As of December 31, 2008 and 2007, the Company has evaluated the inventory for possible impairment and determined no adjustments for impairment existed.  There were no contract cancellations and although the economic climate may cause a delay in completing construction projects, there is no current impairment issues that will affect current operations.

Inventories held for sale, which are land parcels where we have decided not to build a project, are a very small portion of our total inventories, and are reported at the lower of carrying amount or fair value less costs to sell. In determining whether land held for sale is impaired, management considers, among other things, prices for land in recent comparable sale transactions, market analysis studies, which include the estimated price a willing buyer would pay for the land (other than in a forced liquidation sale) and recent bona fide offers received from outside third parties.

From time to time, we write-off deposits and approval, engineering and capitalized interest costs when we decide not to exercise options to buy land in various locations or when we redesign projects and/or abandon certain engineering costs. In deciding not to exercise a land option, we take into consideration changes in market conditions, the timing of required land takedowns, the willingness of land sellers to modify terms of the land option contract (including timing of land takedowns), and the availability and best use of our capital, among other factors. The write-off is recorded in the period it is deemed probable that the optioned property will not be acquired. In certain instances, we have been able to recover deposits and other preacquisition costs which were previously written off. These recoveries are generally not significa nt in comparison to the total costs written off.

NEW FINANCIAL ACCOUNTING STANDARDS

During the second quarter of 2009, the Company implemented additional interim disclosures about fair value of financial instruments, as required by FASB ASC Paragraph 825-10-65-1.  Prior to implementation, disclosures about fair values of financial instruments were only required to be disclosed annually.  As the required modifications only related to additional disclosures of fair values of financial instruments in interim financial statements, the adoption did not affect the Company’s financial position or results of operations.

Beginning in the second quarter of 2009, the Company must disclose the date through which subsequent events have been evaluated, in accordance with the requirements in FASB ASC Paragraph 855-10-50-1.  With regards to the condensed consolidated financial statements and notes to those financial statements contained in this Form 10-Q, the Company has evaluated all subsequent events through November 20, 2009 (the date the Company’s financial statement are issued).

In September 2009, the FASB implemented certain modifications to FASB ASC Topic 860, Transfers and Servicing, as a means to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets, the effects of a transfer on its financial position, financial performance, and cash flows, and a transferor’s continuing involvement, if any, in transferred financial assets. These modifications must be applied as of the beginning of each reporting entity’s first annual reporting period that begins after November 15, 2009. The Company does not expect the adoption of this standard to have an impact on the Company’s results of operations, financial condition or cash flows.

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During the third quarter of 2009, the Company adopted the FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles in accordance with FASB ASC Topic 105, “Generally Accepted Accounting Principles” (the “Codification”).  The Codification has become the source of authoritative U.S. generally accepted accounting principles (GAAP) recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (SEC) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. Effective with the Company’s adoption on July 1, 2009, the Codification has superseded all prior non-SEC accounting and reporting standards. All other non-grandfathered non-SEC accounti ng literature not included in the Codification has become non-authoritative. As the adoption of the Codification only affected how specific references to GAAP literature have been disclosed in the notes to the Company’s condensed consolidated financial statements, it did not result in any impact on the Company’s results of operations, financial condition or cash flows.

Updates to the FASB Codification Applicable to the Company

The FASB has published FASB Accounting Standards Update No. 2009-12, Fair Value Measurements and Disclosures (Topic 820)—Investments in Certain Entities That Calculate Net Asset Value per Share (or Its Equivalent). This Update amends Subtopic 820-10, Fair Value Measurements and Disclosures—Overall, to permit a reporting entity to measure the fair value of certain investments on the basis of the net asset value per share of the investment (or its equivalent). This Update also requires new disclosures, by major category of investments, about the attributes of investments included within the scope of this amendment to the Codification. The guidance in this Update is effective for interim and annual periods ending a fter December 15, 2009. The Company does not expect the adoption of this standard to have an impact on the Company’s results of operations, financial condition or cash flows.

ITEM 3.       QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are primarily exposed to foreign currency risk, interest rate risk and credit risk.

Foreign Currency Risk - Because our revenues are currently denominated in U.S. dollars, a strengthening of the dollar could reduce our reported revenues. We do not engage in financial transactions for trading or speculative purposes.

Interest Rate Risk - Interest rate risk refers to fluctuations in the value of a security resulting from changes in the general level of interest rates. Investments that are classified as cash and cash equivalents have original maturities of three months or less.  We believe that there is not a material risk exposure to our short term investments.

Credit Risk - Our accounts receivables are subject, in the normal course of business, to collection risks. We regularly assess these risks and have established policies and business practices to protect against the adverse effects of collection risks. As a result we do not anticipate any material losses in this area.

Item 4(T). Controls and Procedures.

Management’s Report on Internal Control Over Financial Reporting          

We have restated our prior financial statements, including the audited financial statements for the years ended December 31, 2008 and 2007, as well as the unaudited financial statements for the three month period ended March 31, 2009, since the Company’s chief executive officer and chief financial officer had concluded that material weaknesses existed with regard to recording of a financial transaction, the financial reporting of transaction gains and losses as of the balance sheet dates, the presentation of customer deposits as of the balance sheet dates that should have been reported as a liability and not to be netted against inventory, and the presentation of transaction gains and losses as a separate line item in the statement of operations and not as a component of selling, general and administrative costs.

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The Company’s chief executive officer and chief financial officer in discussion with the Company’s audit committee authorized the restatement of the previously issued financial statements and had concluded, as a result of the restatement, that material weaknesses in internal control over financial reporting existed as of December 31, 2008 and 2007. The Company has restated its financial statements for the years ended December 31, 2008 and 2007, and for the periods ended March 31, 2009 and 2008 to correct the errors. Based on the restatement of the previously issued financial statements, the chief executive officer and chief financial officer believe the financial statements have been properly reflected as of December 31, 2008 and 2007, and as of September 30, 2009 and 2008.  Management has made significant changes subsequent to the March 31, 2009 balance sheet date in is engaged in an ongoing effort to correct the material weaknesses in internal control over financial reporting.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, to allow timely decisions regarding required disclosure. The restatement of our financial statements involved previously issued financial statements for the periods ended March 31, 2009 and 2008, and, in their evaluation of the effectiveness of our disclosure controls and procedures as of the end of the quarterly period covered by this report, our chief executive officer and chief financial officer concluded, as a result of the res tatement, that material weaknesses in our disclosure controls and procedures continued to exist as at September 30, 2009, and that our disclosure controls and procedures were not effective as of September 30, 2009. Given these reportable conditions and material weaknesses, management has devoted additional resources to resolving questions that arose during the period covered by this report. As a result we are confident our financial statements as of September 30, 2009 and for the nine months ended September 30, 2009 and 2008, fairly present in all material respects our financial condition and results of operations.

Changes in Internal Control Over Financial Reporting          

We have taken actions and implemented new policies to mitigate certain weaknesses in our disclosure controls and procedures that resulted in errors we identified with regard to our financial statements at December 31, 2008, and for the two years then ended, and for the interim periods ended March 31, 2009 and 2008, which required restatement of such financial statements, as discussed above. Procedures have been implemented since the beginning of 2009 to properly reflect the underlying transactions within the system and communicate any weaknesses in the internal control process to the audit committee.  All disclosures and new financial accounting pronouncements are reviewed internally and discussed with the audit committee and the Company’s independent registered accounting firm.  Disclosure conferences before the release of the financial statements between the audit committee and the Company’s independent registered accounting firm are done on a quarterly basis. We are dedicated to maintaining the high standards of financial accounting and reporting that we have now established, and are committed to providing financial information that is transparent, timely, complete and accurate.

PART II—OTHER INFORMATION

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

On October 17, 2008, our board of directors approved an amendment to our Articles of Incorporation to change our name from Promotora Valle Hermoso, Inc. to UNR Holdings, Inc. Stockholder approval for this amendment to our Articles of Incorporation was obtained from our stockholders at a Special Meeting of Stockholders, held on September 14, 2009, from stockholders holding a majority of the issued and outstanding shares.

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Stockholders holding 20,508,887 shares of our common stock, or 83.83%, of the 24,464,799 then issued and outstanding shares of our common stock approved the proposal to amend the Certificate of Incorporation to change our name:

Proposal	Shares in Favor	Shares Against	Abstentions/                           Broker Nonvotes
Change of Company’s  name to UNR Holdings, Inc.	20,508,887	--	--

ITEM 6.  EXHIBITS.

3.1a	Amendment to Articles of Incorporation, filed September 14, 2009.
31.1	Certification of Chief Executive Officer Pursuant to Section 302 of The Sarbanes Oxley Act of 2002.
31.2	Certification of Chief Financial Officer Pursuant to Section 302 of The Sarbanes Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18  U.S.C.  Section  1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18  U.S.C.  Section  1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Oxley Act of 2002.

SIGNATURES

         Pursuant to the requirements of Section 13 or 15(d) 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.

		UNR HOLDINGS, INC.
Dated:  May 20, 2010	By:	/s/ Alexey A. Kim
		Alexey A. Kim
		Chief Executive Officer

Dated:  May 20, 2010	By:	/s/ Iuriy Vladimirovich Shevchenko
		Iuriy Vladimirovich Shevchenko
		Chief Financial Officer

32

EXHIBIT INDEX

Exhibit Number	Description
3.1a	Amendment to Articles of Incorporation, filed September 14, 2009.
31.1	Certification  of Chief Executive Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
31.2	Certification  of Chief Financial Officer Pursuant to Section 302 of the Sarbanes Oxley Act of 2002.
32.1	Certification of Chief Executive Officer Pursuant to 18  U.S.C.  Section  1350 as adopted pursuant to Section  906 of the Sarbanes-Oxley Oxley Act of 2002.
32.2	Certification of Chief Financial Officer Pursuant to 18  U.S.C.  Section  1350 as adopted pursuant to Section  906 of the Sarbanes-Oxley Oxley Act of 2002.