High Desert Holding Corp. - Quarter Report: 2018 June (Form 10-Q)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended: June 30, 2018

or

[__] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE

ACT OF 1934

For the transition period from _____________ to _____________.

Commission file number: 333-212527

HIGH DESERT HOLDING CORP.

(Exact name of registrant as specified in its charter)

865 Tahoe Boulevard, Suite 302

Incline Village, Nevada 89451

(Address of principal executive offices)

(775) 298-2856

(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Exchange Act:

None

Securities registered pursuant to Section 12(g) of the Exchange Act:

None

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 x  No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

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

The number of shares of the issuer's common stock issued and outstanding as of August 3, 2018 was 37,990,000 shares.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

HIGH DESERT HOLDING CORP.

BALANCE SHEETS

(UNAUDITED)

The accompanying notes are an integral part of these financial statements

HIGH DESERT HOLDING CORP.

STATEMENTS OF OPERATIONS

(UNAUDITED)

The accompanying notes are an integral part of these financial statements

HIGH DESERT HOLDING CORP

STATEMENTS OF CASH FLOWS

(UNAUDITED)

The accompanying notes are an integral part of these financial statements

HIGH DESERT HOLDING CORP.

Notes to the Financial Statements

June 30, 2018

(Unaudited)

NOTE 1.                      GENERAL ORGANIZATION AND BUSINESS

High Desert Holding Corp. (“Company”) was organized in the state of Nevada in September 2013. The Company is a precious and non-precious mineral exploration company. The Company is initially focused on identifying both public and privately held land that have historically demonstrated commercially viable resources primarily located in the Western United States, particularly Nevada.

The Company has a mineral property located in Nevada has not yet determined whether these properties contain a viable resource.  Future exploration and development of this and any other properties will be dependent upon the ability of the Company to obtain necessary financing to satisfy the expenditure requirements under the property agreements to complete the development of the properties and upon the ability to raise additional capital.

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America which contemplate continuation of the Company as a going concern.

NOTE  2.                      SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions for Form 10-Q and, therefore, do not include all information and footnotes which are normally included in the Company’s Form 10-K. These financial statements reflect all adjustments (consisting of normal recurring items or items discussed herein) that management believes are necessary to fairly state results for the interim periods presented. Results of operations for interim periods are not necessarily indicative of annual results of operations.

Cash and Cash Equivalents

Cash and cash equivalents include cash in banks and financial instruments which mature within three months of the date of purchase. As of June 30, 2018 and December 31, 2017 the Company did not have any cash equivalents.

Use of Estimates

The preparation of financial statements 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Loss per Share

The Company computes net loss per share in accordance with GAAP. This requires presentation of both basic and diluted earnings per share (EPS) on the face of the income statement. Basic EPS is computed by dividing net loss by the weighted average number of shares outstanding during the period. Diluted EPS gives effect to all dilutive potential common shares outstanding during the period under the treasury stock method using the if-converted method. The Company does not currently have any instruments issued and outstanding that are potentially dilutive.

Fair Value of Financial Instruments

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  Financial assets are marked to bid prices and financial liabilities are marked to offer prices.  The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability, not on assumptions specific to the entity.  In addition, the fair value of liabilities should include consideration of non-performance risk, including the party’s own credit risk.

Fair value measurements do not include transaction costs.  A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values.  Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement.  The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Income Taxes

The Company recognizes deferred tax liabilities and assets using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statements carrying values and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.  In determining the future tax consequences of events that have been recognized in the financial statements or tax returns, judgment and interpretation of statutes is required. Judgments and interpretation of statutes are inherent in this process. Future income tax assets are recorded in the financial statements if realization is considered more likely than not.

For previously taken tax positions considered to be uncertain, the Company prescribes a recognition threshold and measurement attribute.  In the event certain tax positions do not meet the appropriate recognition threshold, de-recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, and accounting for interest and penalties associated with tax positions is required.

The Company files income tax returns in the U.S. federal jurisdiction and various states. The Company is subject to federal tax audits for all periods since inception in 2013.

Stock Based Compensation

The Company has on occasion issued equity and equity linked instruments to employees and non-employees in lieu of cash to various vendors for the receipt of goods and services and, in certain circumstances the settlement of short-term loan arrangements.   The applicable GAAP establishes that share-based payment transactions with employees and non-employees shall be measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable.

In these transactions, we issue unregistered and restricted shares of common stock.

When unregistered common shares and equity-linked instruments convertible into unregistered common shares are issued for the settlement of short-term financing arrangements (that are not initially convertible), the reacquisition price of the extinguished financing arrangement is determined by the value of the debt which is more clearly evident, and no additional inducement expense is recognized.

In situations in which we issue unregistered restricted common shares in exchange for goods and services, and the value of the goods and services are not the most reliably measurable, we recognize the fair value of the unregistered restricted equity instruments based on the value of similar instruments issued in private placements in exchange for cash in the most recent transactions (a Level 2 input within the GAAP hierarchy). We have determined this methodology reflects the risk adjusted fair value of our unregistered restricted equity instruments using a commercially reasonable valuation technique.

NOTE 3.                      GOING CONCERN

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. Since inception, the Company has not identified any proven or probable reserve and correspondingly has not generated any revenue during its exploration stage. This raises substantial doubt about the Company’s ability to continue as a going concern. These financials do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts and classification of liabilities that might result from this uncertainty. The Company needs to raise additional funds to continue as a going concern.

NOTE 4.                       RELATED PARTY TRANSACTIONS

In August 2013 our founder, former officer and director, and significant shareholder, Marty Weigel, loaned us $9,000 to fund the start-up of our initial operations. In May of 2018, we settled the outstanding obligation due to Mr. Weigel in full.

As of June 30, 2018, and December 31, 2017 we owed Ingenium Accounting Associates, an accounting Firm controlled by Marty Weigel, zero and $4,600, respectively, related to payments made on our behalf to maintain our regulatory filings with the State of Nevada, and pay for operating expenses. In May 2018, we settled all previously outstanding obligations due to Ingenium Accounting Associates.

As of June 30, 2018, and December 31, 2017, we owed Mr. Kersey zero and $18,168, respectively, for administrative and travel expenses paid on our behalf. In May 2018, we settled all of the previously outstanding obligations due to Mr. Kersey with the exception of his accrued director fees. The Company incurred directors fees due to Mr. Kersey totaling $5,000 and $10,000 for the three and six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, and December 31, 2017, director fees totaling $45,000 and $35,000, respectively, remained outstanding and are included in accrued director fees in the accompanying consolidated balance sheets.

The Company incurs Director fees on a quarterly basis at $5,000 per quarter. As of June 30, 2018, and December 31, 2017 the Company recognized accrued director fees due to its two non-officer Directors totaling $90,000 and $70,000, respectively.

NOTE 5.                       EQUIPMENT SALE

During the three and six month periods ended June 30, 2018, the Company sold certain mining equipment that had no remaining book value on the date of sale for total cash proceeds of $82,500. As a result of the sale, the Company recognized a gain of $82,500 in the accompanying statements of operations.

NOTE 6.                       SUBSEQUENT EVENTS

The Company did not identify any material subsequent events. The Company performed its evaluation through August 3, 2018, the date the financial statements were available for issuance.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q, Unaudited Financial Statements, and Notes to Unaudited Financial Statements contain forward-looking statements that discuss, among other things, future expectations and projections regarding future developments, operations, and financial conditions. All forward-looking statements are based on management's existing beliefs about present and future events outside of management's control and on assumptions that may prove to be incorrect. If any underlying assumptions prove incorrect, our actual results may vary materially from those anticipated, estimated, projected, or intended.  We undertake no obligation to publicly update or revise any forward-looking statements to reflect actual results, changes in expectations or events or circumstances after the date this Quarterly Report on Form 10-Q is filed.

When this report uses the words "we," "us," "our," or "HDHC" and the "Company," they refer to High Desert Holding Corp.

Overview

Since our inception in 2013, we have been engaged in the identification, potential acquisition, and on-going exploration of precious and non-precious mineral properties located in the Western United States with an initial emphasis in Nevada. Until May 2015, we did not have patented or unpatented mineral claims and our activities only consisted of initial discussions and due diligence sample testing.

We currently hold ten (10) unpatented mining claims located in Esmeralda County, Nevada, commonly known as "Kibby Flats Property". We also hold fifty (50) unpatented mining claims commonly referred to as the "QR Property" located in Humboldt County, Nevada.

Funding permitted, we expect to devote the majority of our efforts permitting and exploring the QR Property. Since the end of the fiscal year ended December 31, 2016 and through the date of this report, we were unable to commence material field activities due to heavy snowfall and our lack of financial resources.

Results of Operations

Revenues

We have not earned any revenues since our inception and we do not anticipate earning revenues in the near future.

Operating Expenses

For the three and six months ended June 30, 2018 we did not incur any exploration costs as a result of our focus on obtaining appropriate funding to begin our planned exploration program. Additionally, we received a refund associated with our QR Claim fees totaling approximately $1,500. Work was completed on the QR Claims by filing Notice of Locations for the Claims on the site in Humboldt County, NV. There is ongoing exploration and testing on the Lode Mining Claims where we will make a decision to hold or modify the claims. For the three and six months ended June 30, 2017, the Company was experiencing financial constraints and did not commence material exploration activities and received refunded claim fees totaling $9,300. As our funding permits, we expect to incur increasing exploration costs for at least the next twelve months.

During the three and six month periods ended June 30, 2018, our general and administrative costs decreased by approximately $1,000 and $6,500 to approximately $23,500 and $46,000, respectively, from the prior comparable period of 2017. General and administrative expenses primarily consist of director fees totaling $15,000 per quarter and professional fees associated with regulatory compliance. We expect our general and administrative expenses to remain consistent until we increase our exploration activities, if at all.

During the three and six month periods ended June 30, 2018, the Company sold mining equipment for total proceeds of $82,500. As of the sale dates, the equipment sold did not have any remaining book value resulting in the one-time recognition of a gain on sale equal to the proceeds received of $82,500. During the six months ended June 30, 2017, the Company sold equipment at a loss of approximately $32,500. While not expected to be recurring, the Company’s management periodically reviews its remaining equipment, all of which has no remaining book value, to determine whether to use it in future exploration activities (if any) or for sale.

Liquidity and Capital Resources

As of June 30, 2018, the Company had a working capital deficit of approximately $100,000. All of the Company’s obligations due as of June 30, 2018 and through the date of this report, are the accrual of quarterly director fees that informally agreed to defer payment until the Company’s financial resources improve (however, they are under no formal obligation to continue to do so).

For the period ended June 30, 2018, cash used in operations was off-set by the gain recognized on the sale of equipment with a zero net book value of $82,500. The related proceeds of $82,500 from the equipment sale was partially used to settle previously outstanding obligations due to our sole officer and director and other related entities totaling approximately $47,000. The remainder of the proceeds are expected to be used to meet our on-going working capital needs as they arise.

Our current available capital reserves are not sufficient for the Company to remain operational. We require additional equity and / or debt financing to implement our exploration and other business plans.

Our auditors have issued a "going concern" opinion on our financial statements for the year ended December 31, 2017, meaning that there is substantial doubt we can continue as an on-going business for the next twelve months unless we obtain additional capital. No substantial revenues are anticipated until we have completed one or more financings and implemented our plan of operations. Our sole Officer, and other affiliates, have provided the financial resources to continue as a going concern, however, they have no obligations to do so.

We have achieved success in using shares of our restricted and unregistered shares of common stock in making capital asset acquisitions including mining equipment and mineral properties. We expect to continue to issue shares for certain future capital acquisitions and to compensate certain officers, directors, and other consultants; however, there is no guarantee we will be able to do so at terms favorable to our operating plans or at all.

On April 3, 2018, the Company was approved by the Financial Industry Regulatory Authority (FINRA) to be listed for quotation on the Over-The-Counter securities market. The Company was listed by FINRA with the trading symbol of HGHH. The sponsoring broker to FINRA on the Company’s behalf was Alpine Securities, which is located in Salt Lake City, UT. The Company is working with Alpine Securities as its market maker to establish a market for the Company’s securities.

Critical Accounting Policies

Our Unaudited Financial Statements and Notes to Unaudited Financial Statements have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires management to make estimates, judgments, and assumptions that affect reported amounts of assets, liabilities, revenues, and expenses. We continually evaluate the accounting policies and estimates used to prepare the condensed financial statements. The estimates are based on historical experience and assumptions believed to be reasonable under current facts and circumstances. Actual amounts and results could differ from these estimates made by management. Certain accounting policies that require significant management estimates and are deemed critical to our results of operations or financial position are discussed in our Annual Report on Form 10-K for the year ended December 31, 2017.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements.

As a "smaller reporting company" (as defined by Item 10 of Regulation S-K), the Company is not required to provide the information required by this item.

Disclosure Controls and Procedures (Item 307)

The Company's management, including its Chief Executive Officer and Chief Financial Officer, carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as of June 30, 2018, the date of the Company's most recently completed fiscal quarter end. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures are not effective, as of June 30, 2018, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms due to limited segregation of duties, lack of independent directors, and no written internal control procedure manual. The Company plans to address the weaknesses in controls as soon as the Company determines that the financial situation allows the Company to expend its currently limited resources to mitigate the weaknesses in controls.

Changes in Internal Control over Financial Reporting. (Item 308)

There were no material changes in our internal control over financial reporting during the quarter ended June 30, 2018, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

None.

As a "smaller reporting company" (as defined by Item 10 of Regulation S-K), the Company is not required to provide the information required by this item.

None.

None.

There were no mining operations during the six-month period ended June 30, 2018.

None.

The following exhibits are filed with this Quarterly Report on Form 10-Q.

__________________

* This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended or the Exchange Act.

** XBRL (Extensible Business Reporting Language) information (i) is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, (ii) is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and (iii) otherwise is not subject to liability under these sections.

SIGNATURES*

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