UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
(X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2009
( ) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
For the transition period from ___________ to ___________
Commission File Number: 000-51232
VALLEY HIGH MINING COMPANY
(Exact name of small business issuer as specified in its charter)
| | |
| NEVADA | 68-0582275 |
| (State of incorporation) | (I.R.S. EMPLOYER ID NO.) |
| | |
| 946 E 1300 N, Mapleton, UT | 84664 |
| (Address of principal executive offices) | (Zip Code) |
(801) 467-2021
(Issuer's telephone number, including area code)
Securities registered under Section 12(b) of the Act: None
Name of Each Exchange on Which Registered: None
Securities registered under Section 12(g) of the Act:
Common Capital Voting Stock, $0.001 par value per share
(Title of Class)
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yeso No x
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes o Noo
Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yesx No o
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained,to the best of the registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.
x The issuer is not aware of any delinquent filers.
Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company:
| | |
Large accelerated filer o | Accelerated filed o |
Non-accelerated filer o | Smaller reporting company x |
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):
Yes x No o
State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was sold, or the average bid and asked price of such common equity, as of a specified date within the past 60 days. (See definition of affiliate in Rule 12b-2 of the Exchange Act.)
As of the close of business on December 31, 2009, the Company's fiscal year-end, and, as of the date of this annual report, the aggregate market value of the voting stock held by non-affiliates, an amount consisting of a total of 281,346 shares, was undeterminable due to a lack of trading in the Company’s common stock.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS
Not applicable
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
State the number of shares outstanding of each of the issuer's classes of common equity, as of the last practicable date:
As of the date of this document, the Issuer had 5,281,346 common capital shares issued and outstanding of which 5,000,000 are "restricted."
DOCUMENTS INCORPORATED BY REFERENCE
See Item 15 of Part IV below.
PART I
NOTICE AND DISCLAIMER REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may be forward-looking statements that involve a variety of risks and uncertainties.
In light of the risks involved with or facing us, actual results may differ materially or considerably from those projected, implied or suggested. As a result, any forward-looking statements expressed herein are deemed to represent our best judgment as of the date of this filing. We do NOT express any intent or obligation to update any forward-looking statement because we are unable to give any assurances regarding the likelihood that, or extent to which, any event discussed in any such forward-looking statement contained herein may or may not occur, or that any effect from or outcome of any such forward-looking event may or may not bear materially upon our future business, prospects, plans, financial condition or our plan of operation.
TABLE OF CONTENTS
| PART I | | |
| ITEM 1. | BUSINESS. | |
| ITEM 2. | PROPERTY. | |
| ITEM 3. | LEGAL PROCEEDINGS. | |
| ITEM 4. | SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. | |
| PART II | | |
| ITEM 5. | MARKET FOR COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. | |
| ITEM 6. | SELECTED FINANCIAL DATA | |
| ITEM 7. | MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS | |
| ITEM 7A. | QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK | |
| ITEM 8. | FINANCIAL STATEMENTS AND SUPPLEMENTRY DATA. | |
| ITEM 9. | CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. | |
| ITEM 9A. | CONTROLS AND PROCEDURES. | |
| ITEM 9A(T). | CONTROLS AND PROCEDURES. | |
| ITEM 9B. | OTHER INFORMATION. | |
| PART III | | |
| ITEM 10. | DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE | |
| ITEM 11. | EXECUTIVE COMPENSATION. | |
| ITEM 12. | SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS. | |
| ITEM 13. | CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE. | |
| ITEM 14. | PRINCIPAL ACCOUNTANT FEES AND SERVICES | |
| PART IV | | |
| ITEM 15. | EXHIBITS, FINANCIAL STATEMENT SCHEDULES | |
| | SIGNATURES | |
ITEM 1. BUSINESS.
Valley High Mining Company ("Valley High") was incorporated in the State of Utah on November 14, 1979, under the name "Valley High Oil, Gas & Minerals, Inc.," for the purpose of engaging in the energy, mining and natural resources business. In order to raise the money necessary to acquire, explore and develop oil and gas properties and other natural resource-related ventures or projects, Valley High, on February 19, 1980, undertook a public offering of its common stock pursuant to the Regulation A exemption from registration afforded under the General Rules and Regulations of the Securities and Exchange Commission ("Commission") in which it offered and sold a total of 25 million common capital shares at a price of two (2) cents per share. Pursuant to this offering, the Company raised $500,000 from over 1,000 persons. As stated in its offering circular, "[i]t is the present intention of management to expend the proceeds of this offering in the acquisition and exploration of natural resource properties. The types of properties which are expected to be acquired and the order of priority are as follows: (1) oil and gas, (2) uranium, (3) coal, (4) geothermal, and (5) other mineral (metallic and nonmetallic) properties."
Between 1980 and 1985, the Company spent nearly all of its capital on several natural resource and mining ventures. In 1985, the Company effectuated a reverse split and changed its par value from $0.001 or one mill per share to $0.01 or one cent per share, with the same number of shares authorized, namely, 50 million. By 1986, after it had engaged in several unsuccessful ventures, the Company exhausted its capital reserves.
In April 1989, a Mr. Joe Needle, an Ohio resident, took control of the Company. Between 1989 and 1994, Mr. Needle attempted to resurrect or revive us in some fashion; however, in 1994 he suddenly and unexpectedly passed away. At the time of Mr. Needle's passing, we had a total of 9,819,779 common capital shares issued and outstanding. Two other individuals were at that time on the board, namely, Messrs. George D. Fehr and Adrian Gerritsen, both Utah residents. Mr. Needle's daughter, Susan B. "Cookie" Needle, a Florida resident, was either already serving on the board or took a position on the Board of Directors upon her father's death. Between the time of Mr. Needle's death in 1994 and October 2003, these three individuals comprised the Board of Directors of the Company. During this same period of time, the only activity engaged in by the Company was that minimal activity necessary to keep the Company current and in good standing with the Utah Division of Corporations, the Utah Tax Commission and the Internal Revenue Service.
During the summer of 2003, Mr. John Michael Coombs was approached by Mr. George Fehr, a Salt Lake City resident and person Mr. Coombs has known for some-25 years. Mr. Fehr, then age 88 or 89, advised that he had been on the board of Valley High since the mid-1980's and since the death of Mr. Needle, he had maintained possession of all the corporate records of Valley High and had kept it in good standing with the requisite corporate and taxing authorities. Mr. Fehr advised that he was tired of maintaining the corporate existence of Valley High and wondered if Mr. Coombs would be interested in taking control of it, doing something productive with it, and finding replacements for each of the board members, all of whom were tired of serving on the board. After looking at the corporate records and all company records on file with its stock transfer agent, Mr. Coombs agreed to take control of us. Accordingly, effective, October 24, 2003, having done nothing with the Company in nearly 10 years and being tired of acting as board members, the directors of the Company agreed to resign and appoint in their place and stead, Mr. John Michael Coombs, his wife, Dorothy C. Coombs, and the brother of Dorothy Coombs named George J. Cayias, all residents of Salt Lake City, Utah. After new management took control of the Company, documentation with the Utah Division of Corporations was filed setting forth the new directors and further identifying Mr. Coombs as the new registered agent.
On February 27, 2004, we formed a wholly owned subsidiary in Nevada under the name "Valley High Mining Company" for the purpose of changing our domicile to Nevada. On March 12, 2004, Valley High O, G & M, the parent corporation, and Valley High Mining Company, the wholly owned Nevada subsidiary, entered into an Agreement and Plan of Merger ("Agreement and Plan") whereby the former would merge with and into the latter, thereby changing the Company's domicile to Nevada. The shareholders were advised of a formal shareholders' meeting to approve the transaction by means of a Notice of Meeting and Letter to the Shareholders. Among other things, the Notice advised that anyone so choosing would be entitled to exercise dissenters' rights of appraisal under applicable provisions of the Utah Revised Business Corporations Act. The Notice and Letter further invited anyone so interested to request a copy of the formal Agreement and Plan. One shareholder from Missouri sought to exercise dissenters' rights of appraisal but later abandoned that effort once we provided this individual with various corporate documents and records, at her request, including a copy of the Agreement and Plan.
The Agreement and Plan provided, among other things, that for every 35 shares of Valley High O, G & M, a shareholder was entitled to receive one (1) share of Valley High Mining Company, a Nevada corporation, the survivor in the merger. Another provision in the Agreement and Plan provided that Mr. John Michael Coombs, a Salt Lake City, Utah, resident (and the principal of lessor, North Beck Joint Venture, LLC, discussed elsewhere herein), was designated to be the only officer and director of the survivor in the merger. Nevada law, as opposed to Utah law, allows such.
On March 26, 2004, a formal shareholders' meeting was held at the law offices of Mabey & Coombs, L.C., in Salt Lake City, Utah, to approve the Plan and Agreement. At such meeting, a majority of the shareholders were in attendance either in person or by proxy. A quorum was declared and a majority of those entitled to vote approved the merger and change of domicile transaction. Having obtained approval of the Plan and Agreement by a majority of our shareholders and having filed Articles of Merger with the Nevada Secretary of State, the Secretary of State of Nevada stamped and accepted the Articles of Merger on April 13, 2004. These Articles of Merger were then filed with and stamped by the State of Utah on April 19, 2004. The merger transaction was effective by operation of law on the date that the Articles of Merger were accepted for filing by both states, namely, April 19, 2004. Among other things, this transaction changed our par value per share back to a mill or $0.001.
Because there had been 9,819,779 shares issued and outstanding as of the day prior to the effective date of the merger, this figure, as a result of the merger, and rounding fractional shares up to the next highest share, translated into a total of 281,346 shares. Furthermore, because the Agreement and Plan provided that any fractional shares resulting from the merger would be rounded up to the next nearest share, our transfer agent, Atlas Stock Transfer, advised that it also issued the necessary additional shares that resulted in a total of 281,346 post-merger shares.
On April 19, 2004, the day that the merger was effective, we entered into a mining lease agreement ("Mining Lease" or "Lease") with North Beck Joint Venture, LLC, a Utah limited liability company ("North Beck"). See Exhibit 10.1 attached to this document, a copy of said Mining Lease Agreement. Entering into this lease agreement was NOT an arm's length transaction because the immediate family of Mr. Coombs, our president and chairman of the board, owns and controls these mineral claims so leased to us. See Item 13 of Part III below titled "Certain Relationships and Related Transactions, and Director Independence." The terms of the lease consideration were based upon prior lease agreements that North Beck Joint Venture had entered into with other mining companies in the past.
Pursuant to the aforementioned mining lease agreement with North Beck Joint Venture, LLC, we acquired control of over 470 acres of patented precious metals mining claims located adjacent to, and just west of, the town of Eureka in Juab County, Utah, in the so-called "Tintic Mining District" ("the North Beck Claims"). The Tintic Mining District of Juab County, Utah, is located approximately 100 miles south of Salt Lake City. The North Beck Claims have an extensive history and contain several mines, mining shafts or "prospecting pits," two of which are over 1,000 feet deep. See Item 2 below titled " Property." Fairly extensive, though somewhat antiquated, knowledge exists regarding the North Beck Claims. This is because, among other reasons, during the late 1950's, the North Beck Claims were part of the so- called "Jenny Lind Project," a project that involved extensive exploration and development in an area known as Jenny Lind Canyon by The Bear Creek Mining Company.
Immediately upon consummation of the merger/change of domicile transaction, North Beck was issued, as mining lease consideration, a total of 5,000,000 "restricted" shares in the surviving Nevada corporation, a stock issuance that made North Beck Joint Venture our largest shareholder. See mining lease attached to this Annual Report as Exhibit 10.1. As repeatedly set forth elsewhere in this document, our president and sole director, John Michael Coombs, both directly and indirectly controls North Beck, the owner of the North Beck Claims. See Item 13 of Part III below titled "Certain Relationships and Related Transactions, and Director Independence."
As a result of a change in control in February, 2010, in which Coron Capital, LLC purchased 5,000,000 of the Company’s 5,281,346 outstanding shares of common stock, the Company's current principal business activity is to seek a suitable acquisition candidate through acquisition, merger, reverse merger or other suitable business combination method. The Company disposed of the North Beck Claims in connection with the change in control.
As a "reporting company," the Company may be more attractive to a private acquisition target because its common stock is eligible to be quoted on the OTC Bulletin Board although there is no assurance it will be quoted. As a result of filing this Registration Statement, the Company is obligated to file with the Securities and Exchange Commission (the "Commission") certain periodic reports, including an annual report containing audited financial statements. The Company anticipates that it will continue to file such reports as required under the Exchange Act.
The Company is a shell company that is defined under Rule 12b-2 of the Exchange Act as a registrant, other than an asset-backed issuer, that has 1) no or nominal operations; and 2) either (i) no or nominal assets; (ii) assets consisting solely of cash and cash equivalents; or (iii) assets consisting of any amount of cash and cash equivalents and nominal other assets. Private companies wishing to become publicly traded may wish to merge with a shell company through a reverse merger or reverse acquisition transaction whereby the shareholders of the private company become the majority of the shareholders of the combined company. The private company may purchase for cash all or a portion of the common shares of the shell company from its major stockholders. Typically, the Board and officers of the private company become the new Board and officers of the combined Company and often the name of the private company becomes the name of the combined entity.
The Company has very limited capital, and it is unlikely that the Company will be able to take advantage of more than one such business opportunity. The Company intends to seek opportunities demonstrating the potential of long-term growth. At the present time, the Company has not identified any business opportunity that it plans to pursue, nor has the Company reached any agreement or definitive understanding with any person concerning an acquisition.
The Company's search will be directed toward small and medium-sized enterprises, which have a desire to become public corporations. In addition these enterprises may wish to satisfy, either currently or in the reasonably near future, the minimum tangible asset requirement in order to qualify shares for trading on NASDAQ or on an exchange such as the American Stock Exchange (See the subsection of this Item 1 called “Investigation and Selection of Business Opportunities”). The Company anticipates that the business opportunities presented to it will either (i) be in the process of formation, or be recently organized with limited operating history or a history of losses attributable to under-capitalization or other factors; (ii) experiencing financial or operating difficulties; (iii) be in need of funds to develop new products or services or to expand into a new market, or have plans for rapid expansion through acquisition of competing businesses; or (iv) have other similar characteristics. The Company intends to concentrate its acquisition efforts on properties or businesses that it believes to be undervalued or that it believes may realize a substantial benefit from being publicly owned. Given the above factors, investors should expect that any acquisition candidate may have little or no operating history, or a history of losses or low profitability.
The Company does not propose to restrict its search for investment opportunities to any particular geographical area or industry, and may, therefore, engage in essentially any business, to the extent of its limited resources. The Company's discretion in the selection of business opportunities is unrestricted, subject to the availability of such opportunities, economic conditions and other factors.
Any entity which has an interest in being acquired by, or merging into the Company, is expected to be an entity that desires to become a public company and establish a public trading market for its securities. In connection with such a merger or acquisition, it is highly likely that an amount of stock constituting control of the Company would either be issued by the Company or be purchased from the current principal stockholder of the Company by the acquiring entity or its affiliates. If stock is purchased from the current principal stockholder, the transaction is likely to result in substantial gains to the current principal stockholder relative to its purchase price for such stock. In the Company's judgment, none of the officers and directors would thereby become an underwriter within the meaning of the Section 2(11) of the Securities Act of 1933, as amended, as long as the transaction is a private transaction rather than a public distribution of securities. The sale of a controlling interest by the principal stockholder of the Company would occur at a time when minority stockholders are unable to sell their shares because of the lack of a public market for such shares.
Depending upon the nature of the transaction, the current officers and directors of the Company may resign their management and board positions with the Company in connection with a change of control or acquisition of a business opportunity
. In the event of such a resignation, the Company's current management would thereafter have no control over the conduct of the Company's business.
It is anticipated that business opportunities will come to the Company's attention from various sources, including its officers and directors, its other stockholders, professional advisors such as attorneys and accountants, securities broker-dealers, venture capitalists, members of the financial community, and others who may present unsolicited proposals. The Company has no plans, understandings, agreements, or commitments with any individual for such person to act as a finder of opportunities for the Company.
INVESTIGATION AND SELECTION OF BUSINESS OPPORTUNITIES
To a large extent, a decision to participate in a specific business opportunity may be made upon management's analysis of the quality of the other company's management and personnel, the anticipated acceptability of new products or marketing concepts, the merit of technological changes, the perceived benefit the business opportunity will derive from becoming a publicly held entity, and numerous other factors which are difficult, if not impossible, to analyze through the application of any objective criteria. In many instances, it is anticipated that the historical operations of a specific business opportunity may not necessarily be indicative of the potential for the future because of a variety of factors, including, but not limited to, the possible need to expand substantially, shift marketing approaches, change product emphasis, change or substantially augment management, raise capital and the like.
It is anticipated that the Company will not be able to diversify, but will essentially be limited to the acquisition of one business opportunity because of the Company's limited financing. This lack of diversification will not permit the Company to offset potential losses from one business opportunity against profits from another, and should be considered an adverse factor affecting any decision to purchase the Company's securities.
Certain types of business acquisition transactions may be completed without any requirement that the Company first submit the transaction to the stockholders for their approval. In the event the proposed transaction is structured in such a fashion that stockholder approval is not required, holders of the Company's securities (other than principal stockholders holding a controlling interest) should not anticipate that they will be provided with financial statements or any other documentation prior to the completion of the transaction. Other types of transactions may require prior approval of the stockholders.
In the event a proposed business combination or business acquisition transaction requires stockholder approval, the Company will be required to prepare a Proxy or Information Statement describing the proposed transaction, file it with the Securities and Exchange Commission for review and approval, and mail a copy of it to all Company stockholders prior to holding a stockholders meeting for purposes of voting on the proposal or if no stockholders meeting will be held, prior to consummating the proposed transaction. Minority shareholders may have the right, in the event the transaction is approved by the required number of stockholders, to exercise statutory dissenter's rights and elect to be paid the fair value of their shares.
The analysis of business opportunities will be undertaken by or under the supervision of the Company's officers and directors, none of whom are professional business analysts (See the section of this Item 1 called “Management”). Although there are no current plans to do so, Company management might hire an outside consultant to assist in the investigation and selection of business opportunities, and might pay a finder's fee. Since Company management has no current plans to use any outside consultants or advisors to assist in the investigation and selection of business opportunities, no policies have been adopted regarding use of such consultants or advisors, the criteria to be used in selecting such consultants or advisors, the services to be provided, the term of service, or the total amount of fees that may be paid. However, due to the limited resources of the Company, it is likely that any such fee the Company agrees to pay would be paid in stock and not in cash.
Otherwise, in analyzing potential business opportunities, Company management anticipates that it will consider, among other things, the following factors:
* Potential for growth and profitability indicated by new technology, anticipated market expansion, or new products;
* the Company's perception of how any particular business opportunity will be received by the investment community and by the Company's stockholders;
* whether, following the business combination, the financial condition of the business opportunity would be, or would have a significant prospect in the foreseeable future of becoming, sufficient to enable the securities of the Company to qualify for listing on an exchange or on a national automated securities quotation system, such as NASDAQ, so as to permit the trading of such securities to be exempt from the requirements of Rule 15g-9 adopted by the Securities and Exchange Commission;
* capital requirements and anticipated availability of required funds, to be provided by the Company or from operations, through the sale of additional securities, through joint ventures or similar arrangements, or from other sources;
* the extent to which the business opportunity can be advanced;
* competitive position as compared to other companies of similar size and experience within the industry segment as well as within the industry as a whole;
* strength and diversity of existing management or management prospects that are scheduled for recruitment;
* the cost of participation by the Company as compared to the perceived tangible and intangible values and potential; and
* the accessibility of required management expertise, personnel, raw materials, services, professional assistance, and other required items.
The Company is unable to predict when it may participate in a business opportunity. It expects, however, that the analysis of specific proposals and the selection of a business opportunity may take several months or more.
Prior to making a decision to participate in a business opportunity, the Company will generally request that it be provided with written materials regarding the business opportunity containing as much relevant information as possible, including, but not limited to, such items as a description of products, services and Company history; management resumes; financial information; available projections, with related assumptions upon which they are based; an explanation of proprietary products and services; evidence of existing patents, trademarks, or service marks, or rights thereto; present and proposed forms of compensation to management; a description of transactions between such Company and its affiliates during the relevant periods; a description of present and required facilities; an analysis of risks and competitive conditions; a financial plan of operation and estimated capital requirements; audited financial statements, or if they are not available, unaudited financial statements, together with reasonable assurance that audited financial statements would be able to be produced within a reasonable period of time not to exceed 60 days following completion of a merger or acquisition transaction; and the like.
As part of the Company's investigation, the Company's executive officers and directors may meet personally with management and key personnel, may visit and inspect material facilities, obtain independent analysis or verification of certain information provided, check references of management and key personnel, and take other reasonable investigative measures, to the extent of the Company's limited financial resources and management expertise.
It is possible that the range of business opportunities that might be available for consideration by the Company could be limited by the impact of Securities and Exchange Commission regulations regarding purchase and sale of penny stocks. The regulations would affect, and possibly impair, any market that might develop in the Company's securities until such time as they qualify for listing on NASDAQ or on an exchange which would make them exempt from applicability of the penny stock regulations.
Company management believes that various types of potential merger or acquisition candidates might find a business combination with the Company to be attractive. These include acquisition candidates desiring to create a public market for their shares in order to enhance liquidity for current stockholders, acquisition candidates which have long-term plans for raising capital through public sale of securities and believe that the possible prior existence of a public market for their securities would be beneficial, and acquisition candidates which plan to acquire additional assets through issuance of securities rather than for cash, and believe that the possibility of development of a public market for their securities will be of assistance in that process. Acquisition candidates, which have a need for an immediate cash infusion, are not likely to find a potential business combination with the Company to be an attractive alternative.
FORM OF ACQUISITION
It is impossible to predict the manner in which the Company may participate in a business opportunity. Specific business opportunities will be reviewed as well as the respective needs and desires of the Company and the promoters of the opportunity and, upon the basis of the review and the relative negotiating strength of the Company and such promoters, the legal structure or method deemed by management to be suitable will be selected. Such structure may include, but is not limited to, leases, purchase and sale agreements, licenses, joint ventures and other contractual arrangements. The Company may act directly or indirectly through an interest in a partnership, corporation or other form of organization. Implementing such structure may require the merger, consolidation or reorganization of the Company with other corporations or forms of business organization. In addition, the present management and stockholders of the Company most likely will not have control of a majority of the voting stock of the Company following a merger or reorganization transaction. As part of such a transaction, the Company's existing directors may resign and new directors may be appointed without any vote by stockholders.
It is likely that the Company will acquire its participation in a business opportunity through the issuance of Common Stock or other securities of the Company. Although the terms of any such transaction cannot be predicted, it should be noted that in certain circumstances the criteria for determining whether or not an acquisition is a so-called B tax free reorganization under the Internal Revenue Code of 1986 as amended, depends upon the issuance to the stockholders of the acquired Company of a controlling interest (i.e., 80% or more) of the common stock of the combined entities immediately following the reorganization. If a transaction were structured to take advantage of these provisions rather than other tax free provisions provided under the Internal Revenue Code, the Company's current stockholders would retain in the aggregate 20% or less of the total issued and outstanding shares. This could result in substantial additional dilution in the equity of those who were stockholders of the Company prior to such reorganization. Any such issuance of additional shares might also be done simultaneously with a sale or transfer of shares representing a controlling interest in the Company by the current officers, directors and principal stockholders.
It is anticipated that any new securities issued in any reorganization would be issued in reliance upon one or more exemptions from registration under applicable federal and state securities laws to the extent that such exemptions are available. In some circumstances, however, as a negotiated element of the transaction, the Company may agree to register such securities either at the time the transaction is consummated or under certain conditions at specified times thereafter. The issuance of substantial additional securities and their potential sale into any trading market that might develop in the Company's securities may have a depressive effect upon such market.
The Company will participate in a business opportunity only after the negotiation and execution of a written agreement. Although the terms of such agreement cannot be predicted, generally such an agreement would require specific representations and warranties by all of the parties thereto, specify certain events of default, detail the terms of closing and the conditions which must be satisfied by each of the parties thereto prior to such closing, outline the manner of bearing costs if the transaction is not closed, set forth remedies upon default, and include miscellaneous other terms.
As a general matter, the Company anticipates that it, and/or its principal stockholders will enter into a letter of intent with the management, principals or owners of a prospective business opportunity prior to signing a binding agreement. Such a letter of intent will set forth the terms of the proposed acquisition but will not bind any of the parties to consummate the transaction. Execution of a letter of intent will by no means indicate that consummation of an acquisition is probable. Neither the Company nor any of the other parties to the letter of intent will be bound to consummate the acquisition unless and until a definitive agreement is executed. Even after a definitive agreement is executed, it is possible that the acquisition would not be consummated should any party elect to exercise any right provided in the agreement to terminate it on specific grounds.
It is anticipated that the investigation of specific business opportunities and the negotiation, drafting and execution of relevant agreements, disclosure documents and other instruments will require substantial management time and attention and substantial costs for accountants, attorneys and others. If a decision is made not to participate in a specific business opportunity, the costs incurred in the related investigation would not be recoverable. Moreover, because many providers of goods and services require compensation at the time or soon after the goods and services are provided, the inability of the Company to pay until an indeterminate future time may make it impossible to produce goods and services.
COMPETITION
The Company expects to encounter substantial competition in its efforts to locate attractive business combination opportunities. The competition may in part come from business development companies, venture capital partnerships and corporations, small investment companies, brokerage firms, and the like. Some of these types of organizations are likely to be in a better position than the Company to obtain access to attractive business acquisition candidates either because they have greater experience, resources and managerial capabilities than the Company, because they are able to offer immediate access to limited amounts of cash, or for a variety of other reasons. The Company also will experience competition from other public companies with similar business purposes, some of which may also have funds available for use by an acquisition candidate.
EMPLOYEES
The Company currently has no employees other than John Hickey who acts as the CEO and CFO of the Company. Management of the Company expects to use consultants, attorneys and accountants as necessary, and does not anticipate a need to engage any full-time employees so long as it is seeking and evaluating business opportunities. The need for employees and their availability will be addressed in connection with the decision whether or not to acquire or participate in specific business opportunities. ITEM 2. PROPERTY.
Executive Offices/Facilities.
Our executive office was located at 3098 South Highland Drive, Suite 323, Salt Lake City, Utah, 84106-6001 during the fiscal year ended December 31, 2009. Our executive office is now located at 946 E 1300 N, Mapleton, UT 84664. Our telephone number is 801-592-4014. This is also the business office address of our CEO and sole director. We pay no rent for the use of this address or facility. We do not believe that we will need to maintain any other or additional office at any time in the foreseeable future in order to carry out our plan of operations described in this document. We believe that the current facilities provided by our president are adequate to meet our needs until we become more fully operational.
ITEM 3. LEGAL PROCEEDINGS.
There are presently no pending legal proceedings to which we or any officer, director or major stockholder is a party or to which any of our mineral claims is subject and, to the best of our knowledge, information and belief, no such actions against us are contemplated or threatened.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
We did not submit any report, proxy statement or information statement to security holders during the fiscal year ended December 31, 2008.
We are subject to the information reporting requirements of the Securities Exchange Act of 1934 (the "Exchange Act"), and, in accordance therewith, we file reports and other information with the Commission. Reports and other information filed by the issuer with the Commission can be inspected and copied at the Commission's Public Reference Library in the Commission's own building located at 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the Commission at prescribed rates. An interested person may also obtain information about the operation of the Public Reference Room by calling the Commission at 1-800- SEC-0330.
Inasmuch as we are an electronic filer, and the Commission maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Commission, an interested person may access this material electronically by means of the Commission's home page on the Internet at www.sec.gov.com. To facilitate such access for an interested person, our CIK number is 0001301838. As of the date of this filing, we have not established our own web address or web page nor do we have any plans, at present, to do so.
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES.
Market Information.
Since 2006, our common shares have been quoted on the Over-the-Counter Bulletin Board (OTCBB) administered by the Financial Regulatory Authority (FINRA) under the symbol VHMC.OB. The following table sets forth the the trading activity in our stock over the last two fiscal years as reported by the OTC Bulletin Board, and represents prices between dealers that do not include retail markups, markdowns or commissions, and may not necessarily represent actual transactions at the indicated prices:
| VHMC - VALLEY HIGH MINING | Years Ending December 2008 and 2009 |
| | | BID | | | ASK | | | PRICE | | | | |
| END DATE | | HIGH | | | LOW | | | CLOSE | | | HIGH | | | LOW | | | CLOSE | | | HIGH | | | LOW | | | CLOSE | | | VOLUME | |
| 12/31/2008 | | | 0.22 | | | | 0.22 | | | | 0 | | | | 0.51 | | | | 0.51 | | | | 0 | | | | 0.22 | | | | 0.22 | | | | 0.22 | | | | 4,000 | |
| 09/30/2008 | | | 0.22 | | | | 0.22 | | | | 0 | | | | 0.51 | | | | 0.51 | | | | 0 | | | | - | | | | - | | | | - | | | | 0 | |
| 06/30/2008 | | | 0.22 | | | | 0.2 | | | | 0 | | | | 0.51 | | | | 0.51 | | | | 0 | | | | - | | | | - | | | | - | | | | 0 | |
| 03/31/2008 | | | 0.21 | | | | 0.2 | | | | 0 | | | | 0.51 | | | | 0.51 | | | | 0 | | | | 0.21 | | | | 0.2 | | | | 0.21 | | | | 1,123 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 12/31/2009 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| 09/30/2009 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| 06/30/2009 | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | | | | 0 | |
| 03/31/2009 | | | 0.22 | | | | 0 | | | | 0 | | | | 0.51 | | | | 0 | | | | 0 | | | | 0.22 | | | | 0 | | | | 0 | | | | 11,000 | |
Currently, there are 5,281,346 shares of our common stock issued and outstanding. As of the date of this Annual Report, only 281,346 of these shares may be sold without restriction. This is because all such 281,346 shares have been issued and outstanding for over 20 years. As to the additional 5,000,000 "restricted" shares currently issued and outstanding, these shares are held by Coron capital, LLC. These 5,000,000 "restricted" shares represent approximately 94.7% of our total number of issued and outstanding shares and are held by insiders and affiliates.
At present, none of our officers and directors own or control any shares that are not "restricted" or which do NOT bear a restrictive legend.
Of the 5,281,346 shares issued and outstanding, 5,000,000 are "restricted." Those 281,346 shares that are not "restricted" have been issued and outstanding for as long as 20 years.
We currently have no outstanding warrants, options, incentive stock option or employee compensation plans of any kind or nature. At the same time, and though there are currently no plans to do so, no assurance can be given that such derivative securities will not be issued in the future.
There are no plans, proposals, arrangements or understandings with any person, including any securities broker-dealer or anyone associated with a broker-dealer, concerning the development of a trading market in our common capital stock, nor have there ever been any such plans, proposals, arrangements or understandings.
Holders.
According to our stock transfer agent, Standard Registrar & Transfer in Draper, Utah., as of the date of this Annual Report, there were approximately 1139 holders of record of our common capital stock.
Description of Our Securities.
Our authorized capital stock consists of 50,000,000 shares of common capital stock, $0.001 par value, of which 5,281,346 shares are considered issued and outstanding as of our fiscal year-end, December 31, 2008. No new shares were issued by the Company in 2009.
We have no preferred shares issued or authorized.
Voting Rights.
Stockholders are entitled to one (1) vote on all matters to be voted upon for each share of common stock held. The shares do not have the right to cumulative voting for directors, meaning that holders of more than 50 percent of the shares voting for the election of directors can elect all of the directors if they choose to do so.
Liquidation Rights.
In the event of liquidation, dissolution or a winding up of us or our affairs, holders of common stock would be entitled to receive pro rata all of our remaining assets that are available and distributable to the shareholders after first satisfying claims of creditors and anyone else having rights that are superior to those of the common stockholders.
Preemptive Rights.
Stockholders do NOT have a preemptive right to acquire our unissued shares of common stock.
Dividends and Dividend Policy.
Our Board of Directors has NOT declared or paid cash dividends or made distributions in the past and we do not anticipate that we will pay cash dividends or make distributions to shareholders in the foreseeable future. We currently intend to retain and invest future earnings, if any, to finance our operations.
The holders of our common stock are entitled to receive such lawful dividends as may be declared by the Board of Directors. As of this date, no such dividends have been declared nor does management believe it likely that dividends will be declared in the near or distant future. The payment of any future dividends will depend upon, among other things, future earnings, capital requirements, our financial condition and general business conditions. As a result, there can be no assurance that any dividends on common stock will be paid in the future. We also have no redemption or sinking fund provisions applicable to any shares of common stock.
Securities Authorized for Issuance under Equity Compensation Plans.
We have NOT authorized any securities for issuance under any equity or other compensation plans of any type or nature, inasmuch as we have NOT adopted any such incentive or compensation plans and have no intention, at present, to do so.
Recent Sales of Unregistered Securities.
None.
Use of Proceeds of Registered Securities.
None; not applicable.
Purchases of Equity Securities by Us and Affiliated Purchasers.
ITEM 6. SELECTED FINANCIAL DATA.
Responding to this item is not required for smaller reporting companies.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION AND RESULTS OF OPERATIONS.
The Company's current principal business activity is to seek a suitable reverse acquisition candidate through acquisition, merger or other suitable business combination method.
It is the intent of management and significant stockholders to provide sufficient working capital necessary to support and preserve the integrity of the corporate entity. However, there is no legal obligation for either management or significant stockholders to provide additional future funding. Should this pledge fail to provide financing, the Company has not identified any alternative sources. Consequently, there is substantial doubt about the Company's ability to continue as a going concern.
The Company's need for capital may change dramatically as a result of any business acquisition or combination transaction. There can be no assurance that the Company will identify any such business, product, technology or company suitable for acquisition in the future. Further, there can be no assurance that the Company would be successful in consummating any acquisition on favorable terms or that it will be able to profitably manage the business, product, technology or company it acquires.
The Company's current purpose is to seek, investigate and, if such investigation warrants, merge or acquire an interest in business opportunities presented to it by persons or companies who or which desire to seek the perceived advantages of an Exchange Act registered corporation. As of the date of this Annual Report on Form 10-K, the Company has no particular acquisitions in mind and has not entered into any negotiations regarding such an acquisition, and neither the Company's sole officer and director nor any promoter and affiliate has engaged in any negotiations with any representatives of the owners of any business or company regarding the possibility of a merger or acquisition between the Company and such other company.
Pending negotiation and consummation of a combination, the Company anticipates that it will have, aside from carrying on its search for a combination partner, no business activities, and, thus, will have no source of revenue. Should the Company incur any significant liabilities prior to a combination with a private company, it may not be able to satisfy such liabilities as are incurred.
If the Company's management pursues one or more combination opportunities beyond the preliminary negotiations stage and those negotiations are subsequently terminated, it is foreseeable that such efforts will exhaust the Company's ability to continue to seek such combination opportunities before any successful combination can be consummated. In that event, the Company's common stock will become worthless and holders of the Company's common stock will receive a nominal distribution, if any, upon the Company's liquidation and dissolution.ITEM 7A. QUANTATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
No response to this item is required for smaller reporting companies.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTRY DATA.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
ITEM 9A AND 9A(T). CONTROLS AND PROCEDURES.
Our management evaluated the effectiveness of our disclosure controls and procedures as of the end of the period covered by this Annual Report. Based on that evaluation, management concluded that our disclosure controls and procedures as of the end of the period covered by the Annual Report were effective such that the information required to be disclosed by us in our reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management as appropriate to allow timely decisions regarding disclosure. A controls system cannot provide absolute assurance, however, that the objectives of the controls system are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within a company have been detected.
Management's Annual Report on Internal Control Over Financial Reporting.
Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15)(f) under the Exchange Act). Our internal control system is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements under accounting principles generally accepted in the United States.
All internal controls over financial reporting, no matter how well designed, have inherent limitations, including the possibility of human error and the circumvention or overriding of controls. Therefore, even effective internal control over financial reporting can provide only reasonable, and not absolute, assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal controls over financial reporting may vary over time. Because of its inherent limitations, internal control over financial reporting may also fail to prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance of achieving their control objectives.
This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management’s report in this annual report.
Changes in Internal Control Over Financial Reporting.
There have been no changes in internal control over financial reporting.
ITEM 9B. OTHER INFORMATION.
There are no family relationships among our directors or executive officers; however, Mr. Hickey is the brother of one of the owners of Coron Capital, LLC which will become our majority shareholder.
All our directors hold office until the next annual meeting of shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of our board of directors.
None is currently involved in any litigation nor has any been involved in any litigation that would have a bearing on any such person's fitness or other ability to act and serve as a director or officer us.
All of our directors hold office until the next annual meeting of shareholders of the Company, and until their successors have been qualified after being elected or appointed. Officers serve at the discretion of our board of directors.
Board Meetings and Committees.
After October 24, 2003, the then-existing Board of Directors of what was then known as "Valley High Oil, Gas & Mining, Inc.," a Utah corporation, met and also conversed on the phone. These members of the Board of Directors, which consisted, at that time, of three individuals, attended or were present at all meetings held; in particular, all were present at the shareholders' meeting held on March 26, 2004. Action taken by the Board since October 24, 2003, was generally implemented by written consent. On April 19, 2004, the effective date of our domicile change to Nevada, we became known as "Valley High Mining Company." As per the terms and conditions of the change of domicile transaction, we reduced our board members to one (1), for the time being, namely, Mr. Coombs. The purpose of this is for ease of operation during the registration statement process and this transition period. The current Board of Directors (currently consisting of Mr. Coombs only) has established no committees. After the effective date of the change of domicile transaction, Mr. Coombs, as our only board member, appointed himself as our president, CEO, secretary/treasurer and Chief Financial Officer (CFO) for the ensuing year. In February, 2010. Mr. Coombs appointed Mr. Hickey as the Company’s sole director and resigned.
As set forth in our Nevada Articles of Incorporation and Bylaws, copies of which are attached to our original 10-SB registration statement as exhibits, all directors hold office until the next annual meeting of stockholders or until their successors have been duly elected and qualified. There are no agreements with respect to the election of directors. Though we have not compensated any director for his or her service on the board of directors or any committee, directors are entitled to be reimbursed for expenses incurred for attendance at meetings of the board of directors and any committee of the board of directors. Due to our current lack of capital resources, our current director and any future directors will likely defer his, her or their expenses and any compensation due and owing them, if any. We currently have no standing committees.
Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Director and Officer Liability Limitation.
Our Articles of Incorporation and Bylaws, both of which were exhibits to our original registration statement on Form 10-SB, limit the personal liability of directors, officers and our shareholders to the full extent allowed by Nevada law. This is a risk factor that an investor or potential investor should consider because it means that a disgruntled or injured investor's remedies may not be as significant or meaningful as might otherwise be the case in the absence of these statutory and common law protections. Reference is made to Risk Factor No. 10 in the beginning of this document above titled "Indemnification of Officers and Directors."
Corporate Governance.
ITEM 11. EXECUTIVE COMPENSATION.
Because there is no compensation to disclose under this Item, we have not prepared a Summary Compensation Table or any other compensation table as would otherwise be required under Release Nos. 33-8765, the recent Commission release that requires more detailed executive and director compensation disclosure.
We have NOT adopted a bonus, stock option, profit sharing, equity award at fiscal year-end, share-based, grants of plan-based program or deferred compensation plan of any sort for the benefit of our employees, officers or directors. This, however, does not mean that we will not do so in the future. Further, we have not entered into an employment agreement of any kind with any of our directors or officers or any other persons and no such agreements are anticipated in the immediate or near future.
Absence of Management Employment Agreements and Compensation.
Mr. Coombs, our former sole officer and director, received no compensation for service as an officer for the year ended December 31, 2009.
Other Key Advisors and Consultants.
We have access to several outside professional firms that can counsel us and provide important advice during our exploration stage. The terms of engagement of these firms will be determined from time to time as their services may be required. So far, no such persons’ services have been sought.
Remuneration and Compensation of Directors.
Mr. Hickey currently does not receive any compensation, but may receive compensation for his services as determined in the future. This is also true of any officers or directors that join Mr. Hickey and also end up serving on our board. As stated above, all directors are entitled to be reimbursed for any out-of-pocket expenses incurred by them in behalf of the Company.
There are no standard arrangements pursuant to which our directors are compensated for any services provided as director, including services for committee participation or for special assignments. Our directors received no compensation for service as directors for the year ended December 31, 2009.
Outstanding Equity Awards at Fiscal Year-End.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.
(1) Mr. Hickey is the brother of one of the owners of Coron Capital, LLC.
(2) This figure represents the 5,000,000 "restricted" shares acquired from John Michael Coombs in February, 2010.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE.
Transactions with Related Persons.
No Parents or Subsidiaries of the Issuer.
We have no parent or subsidiary corporation.
Transactions with Promoters and Control Persons.
ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES.
Aggregate fees for professional services rendered us by Pritchett, Siler & Hardy, Certified Public Accountants, for the years ended December 31, 2009 and 2008 are set forth below. The aggregate fees included in the Audit category are fees billed for the year-end audit of our annual financial statements and review of financial statements and statutory and regulatory filings or engagements. The aggregate fees included in each of the other categories are fees billed in the calendar years indicated.
Audit fees for the years ended December 31, 2009 and 2008 were for professional services rendered for the audits of our financial statements, quarterly review of the financial statements included in the Quarterly Reports on Form 10-Q, consents and other assistance required to complete the year- end audit of our financial statements.
Audit-Related Fees as of the years ended December 31, 2009 and 2008 were for the assurance and related services reasonably related to the performance of the audit or review of financial statements and not reported under the caption Audit Fees.
Tax Fees as of the years ended December 31, 2009 and 2008 were for professional services related to tax compliance, tax authority audit support and tax planning.
There were no fees that were classified as All Other Fees as of the years ended December 31, 2009 and 2008.
As we do not have a formal audit committee, the services described above were not approved by the audit committee under the de minimus exception provided by Rule 2-01(c) (7)(i)(C) under Regulation S-X. Further, as we do not have a formal audit committee, we do not have, at this time, audit committee pre- approval policies and procedures.
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES.
In accordance with the provisions of the Securities and Exchange Act of 1934 and the rules and regulations promulgated thereunder, VALLEY HIGH MINING COMPANY has duly caused this Annual Report on Form 10-K for its fiscal year ended December 31, 2009, to be signed on its behalf by the undersigned, thereunto duly authorized.
