UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549




FORM
10-KSB /A


(Amendment No.
1)




(Mark
One)


x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the fiscal year ended December 31,
2007




OR




o
            TRANSITION
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      the transition period from ___________ to
  ___________




000-23712


(Commission
File No.)




PROMOTORA
VALLE HERMOSO, INC.


(formerly
Lion Gri Corporation, Inc.)




(Name of
Small Business Issuer in Its Charter)





Colorado
            02-0755762(State
      or Other Jurisdiction of
              Incorporation
      or Organization)
            (I.R.S.
      Employer Identification No.)1809 E. Broadway St., Ste.
      346
              Oviedo,
      Fl.
              (Address
      of Principal Executive Offices)
            32765
              (Zip
      Code)







Issuer's
Telephone Number, Including Area Code:  Tel: (800)
377-2137




Securities
registered under Section 12(b) of the Securities Exchange Act of
1934:




None




Securities
registered under Section 12(g) of the Securities Exchange Act of
1934:




Common
Stock, par value $.001 per share




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




Check if
disclosure of delinquent filers in response to Item 405 of Regulation S-B is not
contained herein, and no disclosure will be contained, to the best of
registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB.  o




Issuer’s
revenues for the fiscal year ended December 31,
2007:  $416,508




As of
March 28, 2007, the last full day the registrant’s common stock was traded on
the OTC Bulletin Board, the aggregate market value of the voting and non-voting
common equity held by non-affiliates, computed by reference to the closing price
of the registrant's common stock as reported on the American Stock Exchange, was
$ 7,296,820.








As
of  March 26,   2008, there were  3,964,799 shares
of issuer's common stock outstanding.




Transitional
Small Business Disclosure Format (check one):  Yes x
 No  o
  Documents
incorporated by reference.










TABLE OF
CONTENTS






PART IITEM
      1.
              DESCRIPTION
      OF BUSINESS
              4ITEM
      2.
              DESCRIPTION
      OF PROPERTY
              7ITEM
      3.
              LEGAL
      PROCEEDINGS
              8ITEM
      4.
              SUBMISSION
      OF MATTERS TO A VOTE OF SECURITY HOLDERS
              8PART
      IIITEM
      5.
              MARKET
      FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
              8ITEM
      6.
              MANAGEMENT'S
      DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
      OPERATIONS
              9ITEM
      7.
              FINANCIAL
      STATEMENTS
              13ITEM
      8.
              CHANGES
      IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL
      DISCLOSURE
              13ITEM
      8A.(T)
              CONTROLS
      AND PROCEDURES
              13PART
      IIIITEM
      9.
              DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT
              14ITEM
      10.
              EXECUTIVE
      COMPENSATION
              16ITEM
      11.
              SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      SHAREHOLDER MATTERS
              17ITEM
      12.
              CERTAIN
      RELATIONSHIPS AND RELATED TRANSACTIONS
              17PART
      IVITEM
      13.
              EXHIBITS
      AND REPORTS ON FORM 8-K
              18ITEM
      14.
              PRINCIPAL
      ACCOUNTANT FEES AND SERVICES
              19






2


AS
A PART OF THE REVIEW BY THE SECURITIES AND EXCHANGE COMMISSION OF THE COMPANY’S
PAST FILINGS UNDER THE SECURITIES EXCHANGE ACT OF 1934, WE ARE FILING THIS
AMENDMENT NO. 1 TO OUR FORM 10-KSB FOR THE YEAR ENDED DECEMBER 31, 2007 (THE
“2007 FORM 10-KSB”).  THIS AMENDMENT NO. 1 AMENDS  ITEM
8A.(T) CONTROLS AND PROCEDURES AND THE EXHIBIT 31 CERTIFICATIONS AS PREVIOUSLY
FILED TO CORRECT THE FORM THEREOF TO CONFORM TO THAT REQUIRED UNDER THE RULES
AND REGULATIONS OF THE SECURITIES AND EXCHANGE COMMISSION.  IN ORDER
TO PRESERVE THE NATURE AND CHARACTER OF THE DISCLOSURES SET FORTH IN THE 2007
FORM 10-KSB AS OF MARCH 31, 2008, THE DATE ON WHICH THE 2007 FORM 10-KSB WAS
FILED, NO ATTEMPT HAS BEEN MADE IN THIS AMENDMENT NO. 1 TO MODIFY OR UPDATE
DISCLOSURES EXCEPT AS DESCRIBED ABOVE.




Cautionary
Note Regarding Forward-Looking Statements




This
annual report contains both historical and forward-looking
statements.  All statements other than statements of historical fact
are, or may be deemed to be, forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended.  The forward-looking
statements in this annual report are not based on historical facts, but rather
reflect the current expectations of our management concerning future results and
events.




The
forward-looking statements generally can be identified by the use of terms such
as “believe,” “expect,” “anticipate,” “intend,” “ plan,” “foresee,” “likely,” or
other similar words or phrases.  Similarly, statements that describe
our objectives, plans or goals are or may be forward-looking
statements.




Forward-looking
statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be different from
any future results, performance and achievements expressed or implied by these
statements.  You should review carefully all information, including
the financial statements and the notes to the financial statements included in
this report.  The following important factors could affect future
results, causing the results to differ materially from those expressed in the
forward-looking statements in this annual report.




·
            the
      timing, impact and other uncertainties related to pending and future
      acquisitions by us;




·
            the
      impact of new technologies;




·
            changes
      in laws or rules or regulations of governmental agencies;
    and




·
            currency
      exchange rate fluctuations.




These
factors are not necessarily all of the important factors that could cause actual
results to differ materially from those expressed in the forward-looking
statements in this annual report.  Other unknown or unpredictable
factors also could have material adverse effects on our future
results.  The forward-looking statements in this annual report are
made only as of the date of this annual report, and we do not have any
obligation to publicly update any forward-looking statements to reflect
subsequent events or circumstances.  We cannot assure you that
projected results will be achieved.




3




PART I




ITEM
1.                      DESCRIPTION
OF BUSINESS




Throughout
this annual report on Form 10-KSB, the terms “we,” “us,” “our,” “Promotora Valle
Hermoso”, “Promotora” and “our Company” refer to Promotora Valle Hermoso Inc., a
Colorado corporation, and, unless the context indicates otherwise, includes our
subsidiaries.




Overview




We were
formerly known as Lion Gri Corporation, Inc. and were incorporated under the
laws of the State of Colorado on January 6, 1999.  On June 22, 2006,
we effectuated a share exchange transaction with Promotora Valle Hermoso Inc, a
Florida company with the subsidiaries  Maria Paz Maria Paz Housing
Complex ("Maria Paz Housing Complex"), a company incorporated in the city of
Quito under the Civil Code Laws of Ecuador.   Maria Paz Housing
Complex. was formed in 2003as a Republic of Ecuador, a company incorporated in
the city of Quito under the Civil Code Laws of Ecuador,.  The sole
owners of Maria Paz Housing Complex from the time of its formation until June
24, 2006 were Maria Fernanda Rosales and Maria G Rosales.  Maria Paz
Housing Complex  has been building and developing properties in the
Quito (capital of the Republic of Ecuador) and the suburban areas of Quito since
1999.




Prior to
June 22, 2006, we engaged in the production and distribution of
wines.  In connection with the share exchange transaction with
Promotora , we sold all of our current assets and liabilities to Lion Gri
Corporation, a wholly-owned company of our former officers and directors prior
to June 22, 2006.




· We no
longer directly engage in any business operations, and any discussion of our
business includes the business of Promotora Valle Hermoso Inc and our other
Republic of Ecuador subsidiary.  All of our revenue for the fiscal
year ended December 31, 2006 was generated from the business operations of
Promotora and our other Ecuadorian subsidiary.  All such operations
are conducted in the Republic of Ecuador, which is located between Peru and
Colombia in South America.




We own
100% of the equity interest in Maria Paz Housing Complex. On October 4, 2005,
Promotora executed a share exchange with Maria Paz Housing Complex. In
connection with the share exchange, Promotora acquired the assets and assumed
the liabilities of Maria Paz Housing Complex. For accounting purposes, the share
exchange agreement has been treated as a recapitalization of Maria Paz Housing
Complex (subsidiary) as the acquirer. The financial statements prior to October
4, 2005 are those of Maria Paz Housing Complex.





As
provided for in the share exchange agreement, the stockholders of Maria Paz
Housing Complex received 1,000,000 shares of Promotora common stock,
representing 100% of the outstanding stock after the acquisition, in exchange
for the outstanding shares of Maria Paz common stock they held which was
accounted for as a reverse acquisition. The financial statements show a
retroactive restatement of Maria Paz Housing Complex's historical stockholders'
equity to reflect the equivalent number of shares of common stock issued in the
acquisition.




The
acquisition of Maria Paz Housing Complex was reported as a purchase with no
goodwill, with book values considered to be fair value. In addition, the
directors and officers of Maria Paz Housing Complex became the Board of
Directors and officers of Promotora.




All
measurements referring to size or capacity are those used in the United States
(i.e., foot, acre, gallon) and any financial information is reflected in United
States dollars, unless otherwise noted.




Our
fiscal year ends on December 31, and references to “fiscal 2007” refer to the
year ended December 31, 2007, references to “fiscal 2006” refer to the year
ended December 31, 2006,”




4





Industry
Background




Ecuadorian
economy has been in crisis since 1999 and has gone through important changes as
a generalized banking crisis which forced authorities to adopt a dollar system
and political crisis which resulted in government changes
twice.





Import
increase and lack of domestic production due to in competitiveness is evident
and this has caused unemployment increase and migration of hundred thousands of
Ecuadorians (including professionals) to other countries developed economies in
search for a labor alternative which allows savings so that they could help
their families. These money transfers constitute one of the most important
income sources registered in the country besides the country oil
revenues.





Construction
as a productive activity has grown through this crisis period as an alternative
for investment on the customers part due to lack of reliability on banks and
because of a need which grows every day.





In the
same way, offer of housing  units, in the same period, has increased
from 8,298 to 10,085 units, representing a 21.5%.  A decrease between
years 2000 and 2005 can be seen in the chart: 12.35% in 2001 and 14.79% in 2005
in relation to 2000. But there is an important recovery
starting:  6.36% in 2006 and 42.64% in 2006 in relation to 2005. It is
a development of construction as a productive activity, which is becoming
significant due to its impact in the economy operation because it is generating
employment and increasing business of constructions materials.





Housing
demand is clearly defined in three levels:  low one demands a house up
to $8,000 dollars, popular housing which is mainly in the government
hands.  A middle socio-economic level, which demands housing projects
between $8,000 to $70,000 dollars, showing a sub division of three groups: low
middle level which demands houses up to $28,000 dollars, a typical middle level
which demands housing solutions up to $40,000 dollars and a high middle level
demanding houses up to $70,000 dollars.  The chart shows a major
demand for houses between $17,501 and $40,000 dollars, population segment
corresponding to young couples, service companies employees, and government
employees, who are looking for a new life style, out of town, pure air, nature,
facilities and malls.  The demand was of  6,836 housing
units in this segment out of a total of 16,039 units in the middle class level,
representing a 42.62%.





In
relation to the average selling price of a 100 square meters  housing
solution, there has been an increment since 2000 due to the increase of steel
price worldwide; this increase drastically affected in the housing prices
between 2001 and 2007 tending to stabilization in 2006.




The
average price for construction sq. m. has experienced a 55% increase in the
2000-2006 period as a result of the steel increase worldwide.  The
registered increase is approximately 10%per year, which is opposite to the low
inflation tendency towards the tendency to lower the inflation rate in Ecuador
since the dollar adoption, registering one-digit inflation rates since, 2006 (
2.3%) and 2007 (3%) respectively.





Sales and
Marketing




In fiscal
2007, we derived approximately 100% of our total revenue from sales of the
housing units from the Developments Maria Paz I. This development is 46
townhouses ranging from 1,080 to 1,230 square feet, on lots ranging from 1,500
to 1,600 square feet plus two commercial sites.




Promotora
is starting to generate sales from the project Jardines de Gerona, a housing
development with  43 townhouses plus two commercial sites. The
marketing of the developed property is done through Ventas Pino & Asociados,
a real estate marketing company located at Av. 10 de Agosto 5070 y N.N.U.U. Edf.
10 de Agosto 1er piso, Of.16




Competition




Our competition in
the Quito construction market  is mostly from other Ecuadorian
construction companies, the main ones being Naranjo Ordonez, a company that
builds higher quality houses, Mutualista Pichinchaand Mutualista
Benalcazar. The last two are like Credit Unions who help people in receiving
loans and investing the funds in the construction developments similar to the
ones that our company invests in.


5


The
market is divided in the following segments: Low Middle Level, up to $31,000
dollars; II. Middle Level, up to $45,000 dollars; III. High Middle Level, up to
$80,000 dollars. Our housing units range in price from $45,000 to
$65,000





Construction
Practices




The
housing developments are based on the concept with iron and concrete structure,
firm and resistant, with guaranteed quality furnishings is combined with its
location in modern urban development areas full of facilities as well as the
opportunity to enjoy wide green areas for family amusement Housing inner areas
have natural lighting resulting in energy savings and all the installations are
modern technology equipment. They permit additional construction according to
family needs and have privacy and guard service as they are inside enclosed
condominiums.





Risk
Factors That May Affect Our Future Results and Market Price of Our
Stock




In
addition to the other information set forth elsewhere in this annual report, you
should carefully consider the following factors when evaluating
us.  An investment in Promotora. will be subject to risks inherent in
our business.  The trading price of our shares will be affected by the
performance of our business relative to, among other things, our competitors,
market conditions, and general economic and industry conditions.  The
value of an investment in Promotora. may decrease, resulting in a
loss.  If any of the following risks actually occurs, our business,
financial condition and results of future operations could suffer.  In
such case, the trading price of our shares could decline, and you could lose all
or part of your investment.







We
depend on the services of our chief executive officer and our chief financial
officer and implementation of our business plan could be seriously harmed if we
lost the services of either one.




We depend
heavily on the services of Ramon Rosales, our Chairman, Chief Executive Officer
and President, and Maria Fernanda Rosales, our Chief Financial Officer. We do
not have an employment agreement with either, nor do we have a “key person” life
insurance policy on either Mrs. M. Fernanda. Rosales or Mr. Ramon Rosales to
cover our losses in the event of the death of either individual. There can be no
assurance that these persons will remain in their management positions with us,
and the loss of services of either of these two people would disrupt our
business operations, which could reduce our revenues and profits.





Our revenue could decline if we are
unable to maintain or increase prices, there is a general decline in demand for
economy housing in Ecuador, or consumers decide to purchase economy housing at
more competitive prices from other developers.




At
this time there is a great demand for housing and especially economy housing
solutions in Ecuador. The deficit gap in the housing market might be narrowed in
the following years, what could significantly lower the company’s revenues. Also
the other housing development companies may lower the prices of their products
that could significantly shrink our profit margin.




We
generally do not have long term supply contracts and are subject to price
fluctuations for construction materials.




Our
business is heavily dependent upon construction materials, such as cement,
lumber, concrete, glass, and other materials, which we purchase from third-party
suppliers. We could experience shortages of raw materials due to supply,
production or shipment difficulties, which could decrease our ability to supply
housing to our customers. We are also directly affected by increases in the
costs of such raw materials. If we cannot increase prices because of competitive
pressure, increased construction materials costs could reduce our
profits.




We
may be unable to sustain further growth if we do not increase our working
capital and/or attract financing for capital expenditures.


6


The
construction development industry is a capital-intensive business, which
requires substantial capital expenditures to develop housing communities. We
estimate our need for capital expenditures at approximately $5 million over
three years to be used for buying additional land for development of new housing
complexes and upgrading and renewing our production means. If we do not attract
capital for current operations and capital expenditures, we may not be able to
increase our production and sales, and our ability to compete with our advanced
competitors, who are able to invest in development projects, will be adversely
affected.




It
may be difficult to effect service of due process in the United States against
our directors and us.




We are
organized under the laws of Colorado; therefore, our stockholders are able to
effect service of process in the U.S. upon us.. Our three other directors and
almost all of our operating assets are located outside the U.S. in the Republic
of Ecuador. As a result, it may not be possible to effect service of process
upon our directors in the Republic of Ecuador, nor may it be possible to enforce
judgments of U.S. courts against these directors or our assets. Any judgments of
U.S. courts against our directors residing in the Republic of Ecuador will have
to be domesticated in the Republic of Ecuador in accordance with the Ecuador
civil code, including the code of civil procedure and related laws and
directives approved by the Ecuadorian Parliament and the Supreme Magistrate of
the Republic of Ecuador. Original actions or actions for enforcement of
judgments of U.S. courts predicated solely upon the laws of the U.S., including
the U.S. federal securities laws, may not be enforceable in the Republic of
Ecuador. In addition, awards of punitive damages in actions brought in the U.S.
or elsewhere may not be enforceable in Ecuador.





We
do not plan to pay cash dividends.




Holders
of our common stock are entitled to cash dividends when, as and if declared by
the board of directors out of funds legally available for the payment of
dividends. We have never paid dividends and our management does not anticipate
the declaration or payments of any dividends in the foreseeable future. We
intend to retain earnings, if any, to finance the development and expansion of
our business. Our future dividend policy will be subject to the discretion of
our board of directors and will be contingent upon future earnings, if any, our
financial condition, capital requirements, general business conditions, and
other factors.





Deterioration
of the market reforms undertaken by the Ecuadorian government may undermine our
ability to operate our business and predict financial performance.




The
Republic of Ecuador has undergone significant political and economic change
since 1995 and any substantial change in current laws or regulations (or in the
interpretations of existing laws or regulations), whether caused by changes in
the government of Ecuador or otherwise, could have an impact on our results of
operations.  For example, currently there are no significant
limitations on the repatriation of profits from Ecuador, but there is no
assurance that funds transfer control restrictions or similar limitations will
not be imposed in the future with regard to repatriation of earnings and
investments from the country.  If such funds transfer control
restrictions, or similar limitations are imposed, the ability of our U.S. parent
holding company to receive payments from its subsidiaries could be reduced,
which would reduce our ability to invest in our operations in countries other
than Ecuador.  If we are unable to invest in our non-Ecuadorian
operations, our operating results could suffer which could reduce the value of
our shareholders’ investment in our common stock.





ITEM
2.                      DESCRIPTION
OF PROPERTY




Corporate
Offices




Our
corporate offices in the United States are located at 1809 E. Broadway Street,
Oviedo Florida.  Our corporate offices for our construction
development operations are located in the Republic of Ecuador  in
Quito City, Shyris N39-48 Ed. San Luis, Cuarto Piso, where we own approximately
2,000 square feet of office space.  We believe that our existing
facilities are adequate to support our existing operations and that, if needed,
we will be able to obtain suitable additional facilities on commercially
reasonable terms.




7


ITEM
3.                      LEGAL
PROCEEDINGS




Other
than as set forth below, we are not a party to any pending legal proceedings or
are aware of any pending legal proceedings against us that, individually or in
the aggregate, would have a material adverse affect on our business, results of
operations or financial condition.





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




On May
18, 2006, the Company filed its preliminary proxy solicitation materials with
the Commission (PRE 14A).





On June
2, 2006 the Company filed its definitive solicitation materials with the
Commission (DEF 14A).


On June
23, 2006, Lion-Gri International, Inc. (the “Company”) held a duly noticed
Special Meeting of Shareholders whereby the following proposals were considered
and approved:




To
consider and act upon a proposal to effect a one (1) share for twenty (20) share
reverse split of the Company’s issued and outstanding shares.


To ratify
and affirm the Exchange Agreement entered into on March 1, 2006 by and between
the Company and the Shareholders of Promotora Valle Hermoso, Inc.


To ratify
the appointment of Maria G. Rosales, Maria Fernanda Rosales and Fanny P. Narvaez
as Directors of the Company.


To effect
the name and address change of the Company from Lion-Gri International, Inc. to
Promotora Valle Hermoso, Inc. in accordance with the Exchange Agreement of March
1, 2006.


Accordingly,
the Company filed an Amendment to the articles of incorporation with the State
of Colorado to effect the proposals. The Company also applied and received a new
CUSIP number and a new trading symbol.





On
February 28, 2007 Mr. Ramon E. Rosales became Chief Executive Officer of
Promotora. He was ratified by the Board of Directors.





On August
10, 2007 the company’s  shareholders approved a one (1) share for
thirty (30)  Reverse Split.





The
company also applied and received a new CUSIP number and a new trading
symbol.







PART II




ITEM
5.                      MARKET
FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS




Market
Information




As of
July 20, 2007, our shares of common stock were traded on OTCBB under the symbol
“PVHI.”




The
following table sets forth, for the periods indicated, the high and low bid
prices of our common stock, as reported in published financial
sources.  Quotations reflect inter-dealer prices, without retail
mark-up, mark-down, commission, and may not represent actual
transactions.  All amounts have been adjusted to reflect the one for
thirty reverse stock split effected in August 10, 2007.




Fiscal
      Year Ended December 31, 2007
            High
            LowQuarter
      Ended December 31, 2007
            2.25
            2.25Quarter
      Ended September 30, 2007
            2.50
            2.48Quarter
      Ended June 30, 2007
            0.06
            0.06Quarter
      Ended March 31, 2007
            0.13
            0.13Fiscal
      Year Ended December 31, 2006
            High
            LowQuarter
      ended December 31, 2006
            0.97
            0.46Quarter
      Ended September 30, 2006
            1.16
            0.59Quarter
      Ended June 30, 2006
            1.47
            1.00Quarter
      Ended March 31, 2006
            3.00
            1.93




8




Holders




As of
December 31, 2007, there were 116  holders of record of our common
stock.




As of
December 31, 2006, there were 101 holders of record of our common
stock.




Dividends




We have
never declared or paid any cash dividends on our common stock, and we do not
anticipate paying cash dividends in the foreseeable future.  Our
current policy is to retain any earnings to finance our future development and
growth.  We may reconsider this policy from time to time in light of
conditions then existing, including our earnings performance, financial
condition and capital requirements.  Any future determination to pay
cash dividends will be at the discretion of our board of directors and will
depend upon our financial condition, operating results, capital requirements,
general business conditions and other factors that our board of directors deems
relevant.




Securities
Authorized for Issuance Under Equity Compensation Plans




We do not
currently have any type of equity compensation plan for our employees, officers
or directors.




Recent
Sales of Unregistered Securities




On June
19, 2007, the company received 150,000 US dollars in an offering of 300,000
unregistered common shares @ .50 per shares  to an accredited
investor. The company has filed an 8K disclosing the event on June 27,
2007.


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




General




On
June 22, 2006, we effectuated a share exchange transaction with Promotora Valle
Hermoso Inc., a Florida corporation with the subsidiary  Maria Paz
Housing Complex.   Maria Paz Housing Complex a Republic of
Ecuador company was incorporated in the city of Quito under the Civil Code Laws
of Ecuador.  The sole owners Maria Paz Housing Complex from the time
of its formation until June 22, 2006 were Maria Fernanda Rosales and Maria G
Rosales.  Maria Paz Housing Complex  has been building and
developing properties in the Quito (capital of the Republic of Ecuador) and the
suburban areas of Quito since 1999.Lion Gri Corporation had operations and
assets at the time of the Merger, Promotora. Inc was treated as the new entity
for accounting purposes, and the Merger was accounted for as:  (1) the
recapitalization of Promotora. Inc, whereby its previously outstanding common
stock was converted into 6,342,761shares of common stock, par value $.001 per
share; and (2) the issuance by Promotora. LTD of 2,352,000 shares of common
stock (the number of shares of common stock of Lion Gri Corporation outstanding
prior to the share exchange and before giving affect to the one-for-twenty
reverse stock split affected in July, 2006) for the net assets of Lion Gri
Corporation, which were recorded at their book value.  The
recapitalization of Promotora. LTD was accounted for by restating all share are
per share amounts.


9




Promotora
Valle Hermoso began its commercial activities in  1998 with the first
project being “Los Rosales” Condominium in 1998 - 2000 with a total of 37 houses
and is located at Calderon parish, North of Quito. This project has been
entirely delivered.




“Maria
Isabel” Condominium is built in 2001 – 2005 and has three blocks of four 98 sq.
meters each. This project is located northwest of Quito, 5 minutes away from one
of the largest malls in the capital city. This project has been entirely
delivered.




Promotora
is working in two projects at Sangolquí Valley at the present time. “Maria Paz”
is the first one in Sangolquí and has been designed in a 10,000 sq.m. piece of
land. 46 housing solutions have been built: 30 100 sq. m. houses and 16 138 sq.
m. houses. Both are two story high houses with the following distribution: three
bedrooms, living room, dinning room, kitchen and two and a half bathrooms. This
project also has two stores, guard house, social common area and vehicle and
pedestrian circulation with paving stone, and ample green areas. All the houses
have their own parking lot and green areas as well as independent inner
patio.




A second
project is “Jardines de Gerona”, next to Maria Paz, which is designed in an area
of a 8,800 sq.m .and will have 43 100 sq. m housing units and 2 138 sq.m housing
units with a distribution similar to “María Paz”, that is: first floor: living
room – dinning room, social bathroom, storage room; second floor: three
bedrooms, and two complete bathrooms: The project also has two stores, guard
house, social common area and vehicle and pedestrian circulation with paving
stone, and ample green areas. Plans and Horizontal Property statement have been
already approved by Rumiñahui Municipality and land movement has begun July,
2007. We estimate to finish this project in 2008.





In
addition to this project, in November 2006, the Company acquired a piece of land
of approximately 1,800 m2, located northeast of Quito. This land is intended for
the construction of Torres La Guardia. The Company is currently working on the
approval of the permits and blueprints. The project is designed to build 38
apartments with an estimated revenue of approx $1,900,000.  The
construction will begin at the end of the second quarter of 2008.




Critical
Accounting Policies and Estimates




Our
significant accounting policies are more fully described in Note 2 of Notes to
the Consolidated Financial Statements.  However, certain accounting
policies and estimates are particularly important to the understanding of the
our financial position and results of operations and require the application of
significant judgment by our management or can be materially affected by changes
from period to period in economic factors or conditions that are outside the
control of management.  As a result they are subject to an inherent
degree of uncertainty.  In applying these policies, our management
uses their judgment to determine the appropriate assumptions to be used in the
determination of certain estimates.  Those estimates are based on our
historical operations, our future business plans and projected financial
results, the terms of existing contracts, our observance of trends in the
industry, information provided by our customers and information available from
other outside sources, as appropriate.  The following discusses our
significant accounting policies and estimated.




Revenue
recognition.  We generally recognize product revenue at the
time of the 100% payment for the housing units, at which time persuasive
evidence of an arrangement exists, delivery has occurred (generally triggered by
the transfer of the property value to a third party buyer, or mortgage company
under contract terms), the price is fixed or determined, and collectability is
certain. Cash payments received in down payments are recorded as deferred
revenue.  We generally are not contractually obligated to accept
returns, except for defective construction
product.    Revenue is recorded net of an allowance for
estimated returns, price concessions, and other discounts.  Those
estimates are based on historical experience and future projections, and actual
future allowances may vary significantly from estimates.




Impairment
of property, plant and equipment.  Property,
plant and equipment are carried at cost and are depreciated over their useful
lives. In accordance with Statement of Financial Accounting Standards (SFAS) No.
144, “Accounting for the Impairment or Disposal of Long-Lived Assets”, we review
the carrying value of property, plant, and equipment for impairment whenever
events and circumstances indicate that the carrying value of an asset may not be
recoverable from the estimated future cash flows expected to result from its use
and eventual disposition. In cases where estimated undiscounted future cash
flows are less than the carrying value, an impairment loss is recognized equal
to an amount by which the carrying value of the assets exceeds its fair
value.  The factors considered by management in performing this
assessment include current operating results, trends, and prospects, as well as
the effects of obsolescence, demand, competition, and other economic
factors.  Estimates of future cash flows are subject to a significant
degree of uncertainty, and may change over time.  Significant changes
in such estimates may cause a write-down for the impairment of property, plant
and equipment.


10




Income Taxes. As part of the process of preparing
our financial statements, we are required to estimate our income
taxes.  This process involves estimating our actual current tax
exposure together with assessing temporary differences resulting from the
difference in the financial reporting and tax treatments of specific items, such
as depreciation, the allowance for doubtful accounts, and other
items.  These differences result in deferred tax assets and
liabilities.  We also record a deferred tax asset for the net
operating loss carry-forwards we have in the United States.  We then
assess the likelihood that our deferred tax assets will be recovered from future
taxable income, and to the extent we believe that recovery is not likely, we
must establish a valuation allowance. Our future tax expense as reported in the
financial statements will be affected by extent we establish a valuation
allowance or increase or decrease the allowance in a period.  To date,
we have recorded a valuation allowance of $8,033,000, the entire amount of our
deferred tax assets (primarily net operating loss carry-forwards) in the United
States due as currently we cannot determine that it is more likely than not that
we will generate sufficient taxable income in the U.S. to use those net
operating loss carry-forwards.  In the event that actual results
differ from these estimates or we adjust these estimates in future periods, we
may need to adjust the valuation allowance, which could materially impact our
financial position and results of operations.




Foreign currency
accounting. The financial
position and results of operations of our foreign subsidiaries in the Republic
of Ecuador are measured using the United States Dollar, the official currency of
the Republic of Ecuador.




Results
of Operations




Fiscal
Year Ended December 31, 2007 Compared to Fiscal Year Ended December 31,
2006




Revenues.Revenues decreased $ 464,254 or  53 % to $ 416,508in fiscal 2007 from $ 880,762  in fiscal 2006. This decrease in
sales was due to the delay with the payments from local banks and financial
institutions  in fiscal year 2007. This was caused by the
government changes that have been taken place; however the 2007 sales contracts
on Jardines de Gerona, was  63% of the
total  project.




Cost
of Sales and Gross Profit.  Cost of sales decreased by $ 171,971
or 31 % to $ 376,046 for fiscal 2007 from $ 548,017  for fiscal
2006.  This decrease was due to the lower amount of closing contracts
of the houses. Grossprofit decreased by $  292,283 to $ 40,462
 for fiscal 2007 from $ 332,746  for fiscal 2006.  The gross
profit percentage for fiscal 2007 was 9.70% and for fiscal 2006 was
38%. This decrease was due to an issuance of stock in the amount of
approximately $ 122,00 to the architect.




Selling and Administrative
Expenses.  Selling and administrative expenses increased by $ 93,503
or 25%  to $ 333,451 for fiscal 2007 from $ 279,968 for the fiscal
2006.  These expenses increased as the result of sales marketing, audit,
manager’s salary and expenses for our headquarters in USA.




Depreciation and
Amortization.  Depreciation and amortization
expense increased  by $2,340 to $ 16,392 in fiscal 2007 from $ 14,052
in fiscal 2006.




Stock Issuance Expense
and Consulting Fees. The Company issued 3,254,100 shares of common
stock during 2007 to employees and non-employees and recorded compensation
expense in the amount of $7,442,100.


11


Income (loss) from Operations.As a result of the foregoing, we incurred a $7,585,089 loss from
operations in fiscal 2007 compared to net income $52,777 from operations in
fiscal 2006.




Interest Expense.  Interest expenses decreased by
$ 22,768 or 63 % to $ 36,146  in fiscal 2007 from $ 58,914
 for fiscal 2006.




Income Taxes.  Income taxes decreased
to $ 3,624 for fiscal 2007 from $16,415 for fiscal 2006.




Net Income (loss). As a result of the
foregoing, we incurred a net loss of $ 7,584,775 in fiscal 2007 compared to net
loss of $ 22,552 from operations in fiscal 2006.




Off
Balance Sheet Arrangements




We
do not currently have any off balance sheet arrangements falling within the
definition of Item 303(c) of Regulation S-B.




Inflation




To
date, inflation has not had a material impact on our operations.




New
Financial Accounting Standards





In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157 “Fair Value Measurements,” (“SFAS 157”) which enhances existing guidance
for measuring assets and liabilities using fair value.  This standard
provides a single definition of fair value, together with a framework for
measuring it, and requires additional disclosure about the use of fair value to
measure assets and liabilities.  SFAS 157 is effective for financial
statements issued for fiscal years beginning after November 15, 2007, and
interim periods within those fiscal years.  The Company does not
believe that SFAS 157 will have a material impact on its financial
statements.





In
February 2007, the FASB issued SFAS No. 159  “The Fair Value Option
for Financial Assets and Financial Liabilities,” (“SFAS 159”) providing
companies with an option to report selected financial assets and liabilities at
fair value.  The standard’s objective is to reduce both complexity in
accounting for financial instruments and the volatility in earnings caused by
measuring related assets and liabilities differently.  It also
requires entities to display the fair value of those assets and liabilities for
which the Company has chosen to use fair value on the face of the balance
sheet.  SFAS 159 is effective for fiscal years beginning after
November 15, 2007.  The Company is currently evaluating the impact of
the adoption of this Statement on its financial statements.





In
December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141 (R)”)
“Business Combinations”, which replaces SFAS 141 “Business
Combinations”.  This Statement improves the relevance, completeness
and representational faithfulness of the information provided in financial
reports about the assets acquired and the liabilities assumed in a business
combination.  This Statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree at the acquisition date, measured at their fair values as of that
date, with limited exceptions specified in the Statement.  Under SFAS
141(R), acquisition-related costs, including restructuring costs, must be
recognized separately from the acquisition and will generally be expensed as
incurred.  That replaces SFAS 141’s cost-allocation process, which
required the cost of an acquisition to be allocated to the individual assets
acquired and liabilities assumed based on their estimated fair
values.  SFAS 141(R) shall be applied prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual report period beginning on or after December 15,
2008.  The Company will implement this Statement in 2009.





In
December 2007, the FASB issued SFAS No. 160 “Non-Controlling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  Specifically, this statement requires the recognition
of non-controlling interests (minority interest) as equity in the consolidated
financial statements and separate from parent’s equity.  The amount of
net income attributable to the non-controlling interest
will be included in consolidated net income on the face of the income
statement.  SFAS 160 clarifies that changes in a parent’s ownership in
a subsidiary that does not result in deconsolidation are equity transactions if
the parent retains its controlling financial interest.  In addition,
this statement requires that a parent recognize a gain or loss in net income
when a subsidiary is deconsolidated.  Such gain or loss will be
measured using the fair value of the non-controlling equity investment of the
deconsolidation date.  SFAS 160 also includes expanded disclosure
requirements regarding the interest of the parent and its non-controlling
interest.  SFAS 160 is effective for fiscal years, and interim periods
other than fiscal years, beginning on or after December 15, 2008.  The
Company is currently evaluating the impact of the adoption of this Statement on
its financial statements.


12




In January 2008, Staff Accounting
Bulletin (“SAB”) 110 “Share-Based Payment” (“SAB 110”), was
issued.  Registrants may continue, under certain circumstances, to use
the simplified method in developing estimates of the expected term of share
options as initially allowed by SAB 107, “Share-Based Payments”.  The
adoption of SAB 110 should have no effect on the financial position and results
of operations of the Company.





ITEM
7.                      FINANCIAL
STATEMENTS




Our
financial statements are set forth on pages F-3 through F-7 of this annual
report.


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




On August
14, 2006 Promotora Valle Hermoso Corporation, a Colorado corporation, formerly
Lion-Gri International, Inc., (the “Company”) dismissed “Sherb” & Co., LLP
(““Sherb””) as the Company’s independent accountant.


Also on August 14, 2006, upon the
approval of our board of directors, the Company engaged the firm of Wiener,
Goodman & Co., P.C. (“Wiener, Goodman & Co.”) as its new independent
accountants.





The
change in our independent auditors was previously reported, along with all
required disclosures, on Form 8-K filed on August 15, 2006, as amended on Form
8-K/A filed on October 23, 2006.




ITEM
8A.(T) CONTROLS
AND PROCEDURES




Evaluation of disclosure
controls and procedures.
  We maintain disclosure
controls and procedures that are designed to ensure that information required to
be disclosed in our report under the Securities Exchange Act of 1934, as
amended, 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, as appropriate, to allow timely decisions regarding
required disclosures. Any controls and procedures, no matter how well designed
and operated, can provide only reasonable assurance of achieving the desired
control objectives. Our management, with the participation of our chief
executive officer and chief financial officer, has evaluated the effectiveness
of the design and operation of our disclosure controls and procedures as of
December 31, 2007 . Based upon that evaluation and subject to the
foregoing, our chief executive officer and chief financial officer concluded
that the design and operation of our disclosure controls and procedures provided
reasonable assurance that the disclosure controls and procedures are effective
to accomplish their objectives.Changes in internal control over
financial reporting. There was no change in our internal control over financial
reporting that occurred during the fourth fiscal quarter of 2007 covered by this
Annual Report on Form 10-K SB that has materially affected, or is
reasonably likely to materially affect, our internal control over financial
reporting.Management's Report on Internal Control Over Financial
Reporting. Management of Promotora Valle Hermoso, Inc. is responsible for
establishing and maintaining adequate internal control over financial reporting.
Internal control over financial reporting is defined in Rule 13a-15(f) and
15d-15(f) under the Securities Exchange Act of 1934, as amended, as a
process designed by, or under the supervision of, our principal executive and
principal financial officers and effected by our board of directors, management
and other personnel to provide reasonable assurance regarding the reliability of
financial reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting principles and
includes those policies and procedures that:





13




• pertain to the
maintenance of records that in reasonable detail accurately and fairly reflect
the transactions and dispositions of our assets;• provide reasonable
assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with generally accepted accounting
principles, and that our receipts and  expenditures are being made only in
accordance with authorizations of management and directors; and• provide
reasonable assurance regarding prevention or timely detection of unauthorized
acquisition, use, or disposition of our assets that could have a material effect
on the consolidated financial statements.Because of its inherent
limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods
are subject to the risks that controls may become inadequate because of changes
in conditions, or that the degree of compliance with the policies or procedures
may deteriorate.Management assessed the effectiveness of our internal
control over financial reporting as of December 31, 2007 . In making this
assessment, management used the criteria set forth by the Committee of
Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control -
Integrated Framework.Based on its assessment, management believes that,
as of December 31, 2007 , our internal controls over financial reporting
are effective.
  This
annual report does not include an attestation report of our registered public
accounting firm regarding internal control over financial
reporting.  Management's report was not subject to attestation by our
registered public accounting firm, pursuant to temporary rules of the Securities
and Exchange Commission that permit us to provide only management's report in
this annual report.






PART III







ITEM
      9.
              DIRECTORS,
      EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION
      16(a) OF THE EXCHANGE ACT




The
following table sets forth the names, positions and ages of our executive
officers and directors as of December 31, 2007.  None of these
individuals have a family relationship with any other listed
individual.




Name
            Age
            TitleRamon
      E. Rosales
            64
            Chairman
      of the Board, Chief Executive Officer and PresidentMaria
      Fernanda. Rosales
            34
            Director,
      Chief Financial OfficerMaria
      G. Rosales
            29
            Director,
      Secretary and Treasurer




Set forth
below is a brief description of the background of each of our executive officers
and directors, based on the information provided to us by them.




n
            Ramon E. Rosales, CEO, has
      served as a President and Chairman of the Board
      since  February, 2007.. He has over 20 years experience as CFO
      in Halliburton Ecuador and for Halliburton Corporation subsidiaries. He
      was also 20% owner and CFO of Blader Inc., a service oil company
      specialized in hydro-pumps whose main client was Petroproduccion Ecuador,
      the largest state owned Oil
Corporation.




n
            Maria Fernanda Rosales,
      CFO, has served as a President and Chairman of the Board
      sinceFebruary 2007.She hasover 16 years experience in real estate development. From 1997 to
      April 2007, Mrs. Maria  Fernanda Rosales was one of three
      shareholders and the President of Maria Paz, the wholly owned subsidiary
      of Promotora Valle Hermoso Corporation. Mrs. Fernanda Rosales holds a
      Master’s Degree in Management, San Francisco University of
      Ecuador




n
            Maria G. Rosales, Secretary and
      Treasurer, has served as a Chief Financial Officer since February
      2007.Ms. Maria
      G. Rosales has joined the Maria Paz construction project in 2004 as a Vice
      President and MarketingDirector. From
      1998 to 2004, Mrs. Maria G. Rosales was in the management of such
      companies asTee-Off  Golf
      Club, Inc, PROGETROL  CIA. Ltda.,. . Mr. Maria G. Rosales holds
      a Bachelor’s from the San Francisco University of
  Ecuador




14




No
director is related to any other director or executive officer of the Company or
its subsidiaries, and there are no arrangements or understanding between a
director and any other person pursuant to which such person was elected
director.




No
director, director nominee, officer or affiliate of the Company, owner of record
or beneficially of more than five percent of any class of voting securities of
the Company has, to the company’s knowledge, during the last five years (i) been
convicted of any criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) been a party to a civil proceeding of or is subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, United States federal or state securities
laws or finding any violations with respect to such laws.




Board
of Directors and Committee




Directors
are elected at the annual stockholders meeting and serve for one year and until
their successors are elected and qualified.  However, when a new
director is appointed to fill a vacancy created by an increase in the number of
directors, that director holds office until the next election of one or more
directors by stockholders.  All of our current directors were elected
at our annual meeting of stockholders held on February 28,
2007.  Officers are appointed by our board of directors and their
terms of office are at the discretion of our board of directors.




The board
of directors acted by unanimous written consent 15 times in fiscal year
2007.  Each director attended all meetings of our board of directors
that were held during the portion of fiscal year 2007.




Section
16(a) Beneficial Ownership Reporting Compliance




Section
16(a) of the Exchange Act requires our directors, executive officers and persons
who beneficially own more than ten percent of our outstanding common stock to
file reports with the SEC regarding initial statement of ownership, statement of
changes of ownership and, where applicable, annual statement of ownership of our
common stock.  Such persons are required by SEC regulations to furnish
us with copies of all such statements they file




Code
of Ethics




We have
adopted a Code of Ethics within the meaning of Item 406(b) of Regulation S-B of
the Exchange Act.  This Code of Ethics applies to our directors and
executive officers, such as our principal executive officer, principal financial
officer, controller, and persons performing similar functions for
us.  We have filed a copy of our Code of Ethics as Exhibit 14.1 to
this Form 10-KSB.




15




ITEM
10.                   EXECUTIVE
COMPENSATION




Summary
Compensation Table




The
following table sets forth all compensation awarded to, earned by, or paid for
all services rendered to Promotora. during fiscal 2007, by our Chief Executive
Officer and any executive officer who received annual compensation in salary and
bonus combined in excess of $100,000 during those years.  Each person
below is referred to as a named executive officer




SUMMARY
      COMPENSATION TABLEAnnual
      Compensation(1)Period
            Salary
      ($)
            Bonus
      ($)
            All
      Other
              Compensation
      ($)Name
      and Principal PositionRamon
      E.  Rosales
              Chairman
      of the Board
              Chief
      Executive Officer
            Fiscal
      2007
            36,000
            0
            2,490,000(2)Maria
      Fernanda Rosales
              Chief
      Financial Officer
            Fiscal
      2007
            6,000
            11,173
            1,245,000(2)Maria
      G.  Rosales
              Secretary
      & Treasurer
            Fiscal
      2007
            4,200
            1,691
            1,245,000(2)Maria
      Fernanda Rosales
              Chief
      Financial Officer
            Fiscal
      2006
            6,000
            13,500
            1,837,500(2)Maria
      G.  Rosales
              Secretary
      & Treasurer
            Fiscal
      2006
            4,550
            0
            1,837,500(2)Maria
      Fernanda Rosales
              Chief
      Financial Officer
            Fiscal
      2005
            6,000
            13,500
            0(2)Maria
      G.  Rosales
              Secretary
      & Treasurer
            Fiscal
      2005
            0
            0
            0(2)





(1)
            The
      amounts reflected in the above table do not include any amounts for
      perquisites and other personal benefits extended to the named executive
      officer.  The aggregate amount of such compensation for the
      named executive officer is less than 10% of the total annual salary and
      bonus.




(2)
            Stock
      issued to the directors pursuing to the Board Of Directors
      Resolution






Stock
Options Granted and Exercised in Fiscal 2006




No stock
option grants were made to the Board of Directors members in fiscal 2007,
and no stock options were exercised by the directors in fiscal
2007.




Director
Compensation




Currently,
our directors do not receive compensation for serving on our board of directors
or on the audit committee.  Directors are reimbursed for their
reasonable expenses incurred in attending meetings, which during fiscal 2007 was
a nominal amount.




16




Employment
Agreements




Neither
us, nor any of our subsidiaries, have entered into an employment contract with a
named executive officer.  Furthermore, we do not, nor do any of our
subsidiaries, anticipate entering into an employment contract with any named
executive officer in the near future.




Employee
Benefit Plans




We do not
currently have any type of employee compensation plan for our employees,
officers or directors.  Furthermore, we do not anticipate offering any
such plans in the near future.




ITEM
      11.
                SECURITY
      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED
      SHAREHOLDER MATTERS


The table
below sets forth information regarding the beneficial ownership of our common
stock as of December 31, 2007 by the following individuals or
groups:




·
            each
      person or entity who we know beneficially owns more than 5.0% in the
      aggregate;


·
            each
      of the executive officers named in the Summary Compensation
      Table;


·
            each
      of our directors; and


·
            all
      directors and executive officers as a
group.




Unless
otherwise indicated, the address of each of the individuals listed in the table
is c/o  1809 E Broadway St., Ste 346 Oviedo, FL. 32765.  To
our knowledge, except as otherwise indicated, and subject to community property
laws where applicable, the persons named in the table have sole voting and
investment power with respect to all shares of common stock held by
them.




The
percentage of beneficial ownership in the following table is based upon
3,964,799 shares of common stock outstanding as of December 31,
2007.  Beneficial ownership is determined in accordance with the rules
of the SEC and generally includes voting or investment power with respect to
securities.  Shares of our common stock issuable under options,
warrants or other conversion rights that are presently exercisable or
exercisable within 60 days of December 31, 2007 are deemed to be outstanding and
beneficially owned by the person holding the options, warrants or conversion
rights for the purpose of computing the percentage of ownership of that person,
but are not treated as outstanding for the purpose of computing the percentage
of any other person.




Number
      of Shares
            Approximate
      PercentageName
      of Beneficial Owner
            Beneficially
      Owned
            of
      Class OutstandingRamon
      E. Rosales
            1,016,294
            25.63%Maria
      Fernanda Rosales
            558,334
            14,08%Maria
      G. Rosales
            565,963
            14.27%All
      directors and executive officers as a group (3 persons)
            2,140,591
            53.98%






ITEM
12.                   CERTAIN
RELATIONSHIPS AND RELATED TRANSACTIONS




On January 2007, the company bought
from Servicios Blader Cia Ltda,  offices, parking lots and storage
space, located in Quito in Edificio Torre 1492 for $150,000. This amount will be
paid in three monthly installments with no interest starting December 2007. This
loan was repaid as of February 2008.




17




PART IV




ITEM
13.                   
EXHIBITS AND REPORTS ON FORM 8-K




(a)           Exhibits






Exhibit
            Description of
      Exhibit3.1
            Restated
      Articles of Incorporation.(1)3.2
            Amended
      and Restated Bylaws.(1)21.1
            List of
      Subsidiaries.(2)31.1
            Rule
      13(a)-14(a) Certification of Chief Executive Officer. (3)31.2
            Rule
      13(a)-14(a) Certification of Chief Financial Officer. (3)32.1
            Certification by
      Ramon Rosales, Chief Executive Officer, pursuant to 18 U.S.C. Section
      1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of
      2005.(4)32.2
            Certification by
      Maria Fernanda Rosales, Chief Financial Officer, pursuant to 18 U.S.C.
      Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act
      of 2005.(4)




(1)
            Incorporated
      by reference to our Quarterly Report on Form 10-QSB, filed on August 21,
      2006, file no. 000-23712.




(2)
            Incorporated
      by reference to our Form 10-KSB, filed on August21, 2006, file no.
      000-23712.




(3)
            Incorporated
      by reference to our Current Report on Form 8-K, filed on March 165, 2006
      and March 3, 2007, file no.
0-23712.




(4)
            Incorporated
      by reference to our Quarterly Report on Form 10-QSB, filed on August 19,
      2005, file no. 000-23712.




(b) Reports
on Form 8-K


We filed
a report on Form 8-K on March 6, 2007, announcing the Appointment of new
President and CEO.




We filed
a report on Form 8-K on May 30, 2007, announcing the issuance of common shares
to the President and CEO in accordance to the February 9, 2007
agreement




We filed
a report on Form 8-K on June 27, 2007, announcing the completion of a Private
Placement and issuance of 300,000 shares in accordance to the Private Placement
Agreement.




We filed
a report on Form 8-K on July19, 2007 announcing the following:




On June
22, 2007, the Promotora Valle Hermoso, Inc. (the Company”) filed its preliminary
proxy  solicitation materials with the Commission (PRE 14A). On July
2, 2007 the Company filed its definitive solicitation materials with the
Commission (DEF 14A).




On July
15, 2007, the Company held a duly noticed Special Meeting of Shareholders
whereby the following proposals were considered and approved:




18




1.  
      To consider and act upon a proposal to effect a one (1) share for thirty
      (30) share reverse split of the Company’s issued and outstanding
      shares.


The foregoing description is qualified in its entirety by reference to our press
release dated July 19, 2007.




We filed a report on Form 8-K on
October 25, 2007, announcing the definitive agreement to acquire Baulemente
Kuhn, a German Corporation.




ITEM
14.                   PRINCIPAL
ACCOUNTANT FEES AND SERVICES




The
following table presents fees for professional audit services rendered by Wiener
Goodman and Co. for the audit of our financial statements for fiscal 2007 and
for the audit of our  financial statements for fiscal 2006, and fees
billed for other services rendered by Wiener Goodman and & Co.




2007
            
            
            2006Audit
      Fees
            
            $
            38,695
            
            
            $
            29,272Audit-related
      Fees
            
            
            
            
            
            
            3,000Tax
      Fees
            
            
            --
            
            
            
            --All
      Other Fees
            
            
            --
            
            
            
            --Total
      Fees
            
            $
            38,695
            
            
            $
            32,272





Audit
Fees




Audit
fees were for professional services rendered for the audit of our annual
financial statements for fiscal 2007 and fiscal 2006, the review of the
financial statements included in our quarterly reports on Form 10-Q for fiscal
2007 and fiscal 2006 and services in connection with our statutory and
regulatory filings for fiscal 2007 and fiscal 2006.




Audit-Related
Fees




Audit
related fees were for assurance and related services rendered that are
reasonably related to the audit and reviews of our financial statements for
fiscal 2007 and fiscal 2006, exclusive of the fees disclosed as Audit Fees
above.  These fees include benefit plan audits, assistance with
registration statements and comfort letters and consents not performed directly
in connection with audits.





Tax
Fees




Tax fees were for services
related to tax compliance, consulting and planning services rendered during
fiscal 2007 and fiscal 2006 and included preparation of tax returns, review of
restrictions on net operating loss carry forwards and other general tax
services.


All
Other Fees




We did
not incur fees for any services, other than the fees disclosed above relating to
audit, audit-related and tax services, rendered during fiscal 2007 and fiscal
2006.


19




SIGNATURES





In
accordance with Section 13 or 15(d) of the Exchange Act of 1934, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.




PROMOTORA
      VALLE HERMOSO CORPORATIONDate:
      March 13, 2009
                  By:
                  /s/ Alexey A.
      KimAlexey
      A. Kim , Chief Executive Officer




Date:
      March 13, 2009
              By:
              /s/
      Iuriy Vladimirovich ShevchenkoIuriy
      Vladimirovich Shevchenko, Chief Financial Officer




In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.




Date:
      March 13, 2009
                      By:
                      /s/ Alexey A.
      KimAlexey A.
      Kim , Chief Executive Officer and
      DirectorDate:
      March 13, 2009
                      By:
                      /s/ Alexey I.
      KimAlexey
      I. Kim, President and Chairman of the Board of DirectorDate:
      March 13, 2009
                      By:
                      /s/
      Iuriy Vladimirovich ShevchenkoIuriy
      Vladimirovich Shevchenko, Chief Financial Officer and
      Director




Date:
      March 13, 2009
                                              By:
                                              /s/ Sergey
      Petrovich YushkevichSergey Petrovich
      Yushkevich,
      Chief Accounting Officer and
    DirectorDate:
      March   , 2009
                                              By:Andrey
      Andreevich Nikolaychuk, DirectorDate:
      March   , 2009
                                              By:Galina
      Nikolayevna Pyatysheva, DirectorDate:
      March   , 2009
                                              By:Victor
      Vladimirovich Milukov, DirectorDate:
      March   , 2009
                                              By:Stefan
      C. Mancas, DirectorDate:
      March 13, 2009
                                              By:
                                              /s/ Viorel
      B. SarebouneViorel
      B. Sareboune, Director




20


INDEX
TO FINANCIAL STATEMENTS




PROMOTORA
CORPORATION


TABLE
OF CONTENTS




PageIndependent
      Auditor’s Report
              F-2Audited
      Financial StatementsConsolidated
      Balance Sheets as of December 31, 2007 and 2006
              F-3Consolidated
      Statements of Operations and Comprehensive Income (Loss)for
      the years ended December 31, 2007 and 2006
              F-4Consolidated
      Statements of Changes in Shareholders’ Equity for theyears
      ended December 31, 2007 and 2006
              F-5Consolidated
      Statements Of Cash Flow for the yearsended
      December 31, 2007 and 2006
              F-6
      – F-7Notes
      to Consolidated Financial Statements
              F-8
      – F-19







F-1




REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 To
the Board of Directors of
 Promotora
Valle Hermoso, Inc.
 Oviedo,
Florida
  We
have audited the accompanying consolidated balance sheets of Promotora Valle
Hermoso, Inc. and
subsidiary (collectively, the “Company”) as of December 31, 2007 and 2006, and
the related consolidated statements of operations, stockholders’ equity
(deficiency) and cash flows for each of two years in the period ended December
31, 2007.  These financial statements are the responsibility of the
Company’s management.  Our responsibility is to express an opinion on
these financial statements based on our audits.
  We
conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States).  Those standards require
that we plan and perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.  An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement
presentation.  We believe that our audits provide a reasonable basis
for our opinion.
  In
our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of the Company as of December 31, 2007
and 2006, and the results of its operations and its cash flows for each of the
two years in the period ended December 31, 2007, in conformity with accounting
principles generally accepted in the United States of America.
     Wiener,
Goodman & Company, P.C.
 Eatontown,
New Jersey
  March
27, 2007













F-2


PROMOTORA
      VALLE HERMOSO, INC AND SUBSIDIARYCONSOLIDATED
      BALANCE SHEETSDecember
      31,2007
            
            
            2006ASSETSCurrent
      Assets:Cash
            
            $
            31,066
            
            
            $
            99,126Accounts
      receivable - net of allowance for doubtfulaccounts
      of $33,949 and $39,349, respectively
            
            
            4,220
            
            
            
            15,740Costs
      of uncompleted contracts in excess of billings
            
            
            685,474
            
            
            
            472,238Prepaid
      expenses and other current assets
            
            
            72,151
            
            
            
            18,573Total
      Current Assets
            
            
            792,912
            
            
            
            605,677Property,
      plant and equipment - net
            
            
            160,281
            
            
            
            30,284Land
      held for future development or sale
            
            
            328,652
            
            
            
            384,841TOTAL
      ASSETS
            
            $
            1,281,845
            
            
            $
            1,020,802LIABILITIES
      AND STOCKHOLDERS' EQUITY (DEFICIENCY)Current
      Liabilities:Accounts
      payable
            
            $
            79,127
            
            
            $
            129,699Accrued
      expenses
            
            
            119,749
            
            
            
            67,458Notes
      payable
            
            
            -
            
            
            
            292,138Notes
      payable - related party
            
            
            230,000
            
            
            
            535,717Customer
      advances
            
            
            345,082
            
            
            
            326,886Income
      taxes payable
            
            
            1,473
            
            
            
            16,415Total
      Current Liabilities
            
            
            775,431
            
            
            
            1,368,313Long-term
      Liabilities:Long-term
      debt
            
            
            100,000
            
            
            
            -Total
      Liabilities
            
            
            875,431
            
            
            
            1,368,313Commitments
      and ContingenciesStockholders'
      Equity (Deficiency):Common
      Stock, $ 0.001- par value - 100,000,000shares
      authorized; 3,964,799 and 6,571,618 sharesoutstanding
      at December 31, 2007 and 2006, respectively
            
            
            3,964
            
            
            
            6,572Paid-in-capital
            
            
            8,501,279
            
            
            
            159,971Deficit
            
            
            (8,098,829
            )
            
            
            (514,054
            )Total
      Stockholders' Equity (Deficiency)
            
            
            406,414
            
            
            
            (347,511
            )TOTAL
      LIABILITIES AND STOCKHOLDERS'EQUITY
      (DEFICIENCY)
            
            $
            1,281,845
            
            
            $
            1,020,802







F-3





PROMOTORA
      VALLE HERMOSO, INC AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF OPERATIONSFor
      the Years EndedDecember
      31,2007
            
            
            2006Sales
            
            $
            416,508
            
            
            $
            880,762Costs
      and expenses:Cost
      of sales
            
            
            376,046
            
            
            
            548,017Selling,
      general and administrative costs
            
            
            333,451
            
            
            
            279,968Compensatory
      element ofcommon
      stock issued for services
            
            
            7,292,100
            
            
            
            -8,001,597
            
            
            
            827,985Income
      (loss) from operations
            
            
            (7,585,089
            )
            
            
            52,777Other
      income expense:Rental
      income
            
            
            33,000
            
            
            
            -Gain
      on sale of property, plant andequipment
            
            
            7,084
            
            
            
            -Interest
      expense
            
            
            (36,146
            )
            
            
            (58,914
            )Loss
      before provision for income taxes
            
            
            (7,581,151
            )
            
            
            (6,137
            )Provision
      for income taxes
            
            
            3,624
            
            
            
            16,415Net
      loss
            
            $
            (7,584,775
            )
            
            $
            (22,552
            )Loss
      per common share - basic and diluted
            
            $
            (1.91
            )
            
            $
            (0.10
            )Weighted
      average common sharesoutstanding
      - basic and diluted
            
            
            3,964,650
            
            
            
            219,053






F-4




PROMOTORA
      VALLE HERMOSO INC, AND SUBSIDIARYCONSOLIDATED
      STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)DECEMBER
      31, 2007Common
      Stock
            
            
            
            
            
            Paid-
      In
            
            
            Deferred
      stock
            
            AccumulatedNo
      of shares
            
            
            Amount
            
            
            Capital
            
            
            Purchase
            
            Deficit
            
            
            TOTALBalance,
      January 1, 2005
            
            
            6,342,761
            
            
            $
            6,343
            
            
            $
            -
            
            
            
            
            $
            (491,502
            )
            
            $
            (485,159
            )Common
      stock issued for purchaseof
      land(valued at $.70 per share)
            228,857
            
            
            
            229
            
            
            
            159,971
            
            
            
            
            
            
            
            
            
            160,200Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (22,552
            )
            
            
            (22,552
            )Balance,
      December 31, 2006
            
            
            6,571,618
            
            
            
            6,572
            
            
            
            159,971
            
            
            
            
            
            (514,054
            )
            
            
            (347,511
            )Issuance
      of common stock forconversion
      ofdebt (valued at $ .90 per share)
            488,889
            
            
            
            489
            
            
            
            439,511
            
            
            
            
            
            
            
            
            
            440,000Effect
      of 1 for 30 reverse stock split
            
            
            (6,825,008
            )
            
            
            (6,826
            )
            
            
            6,826Common
      stock issued to repaydebt
      (valued at$1.75 per share)
            166,936
            
            
            
            166
            
            
            
            291,972
            
            
            
            
            
            -
            
            
            
            292,138Issuance
      of common stock forconversion
      of acrrued interest (valued at $1.75 per share)
            8,264
            
            
            
            9
            
            
            
            14,453
            
            
            
            
            
            
            
            
            
            14,462Common
      stock issued for services(valued
      at $1.50 - $2.49 per share)
            3,254,100
            
            
            
            3,254
            
            
            
            7,438,846
            
            
            
            
            
            -
            
            
            
            7,442,100Proceeds
      from sale of commonstock
      (valued at $0.50 per share)
            300,000
            
            
            
            300
            
            
            
            149,700
            
            
            
            
            
            -
            
            
            
            150,000Net
      loss
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            
            (7,584,775
            )
            
            
            (7,584,775
            )Balance,
      December 31 2007
            
            
            3,964,799
            
            
            $
            3,964
            
            
            $
            8,501,279
            
            $
            -
            
            $
            (8,098,829
            )
            
            $
            406,414


F-5




PROMOTORA
      VALLE HERMOSO, INC AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF CASH FLOWSFor
      the Years EndedDecember
      31,2007
              
              
              2006Cash
      flows from operating activities:Net
      loss
              
              $
              (7,584,775
              )
              
              $
              (22,552
              )Adjustments
      to reconcile net loss to net cashused
      in operating activities:Depreciation
              
              
              16,392
              
              
              
              14,052Gain
      on sale of property, plant and equipment
              
              
              (7,084
              )
              
              
              -Non-cash
      compensation
              
              
              7,442,100Change
      in operating assets and liabilities
              
              
              (79,671
              )
              
              
              62,889Net
      cash provided by (used in)operating
      activities
              
              
              (213,038
              )
              
              
              54,389Cash
      flows from investing activities:Proceeds
      from sale of property, plant and equipment
              
              
              12,065
              
              
              
              -Purchase
      of property, plant and equipment
              
              
              (151,370
              )
              
              
              -Net
      cash used in investing activities
              
              
              (139,305
              )
              
              
              -Cash
      flows from financing activities:Proceeds
      from sale of common stock
              
              
              150,000
              
              
              
              -Repayment
      of loan
              
              
              -
              
              
              
              (7,861
              )Proceeds
      from borrowings - related party
              
              
              288,000
              
              
              
              158,217Payment
      of loan - related party
              
              
              (153,717
              )
              
              
              (116,500
              )Net
      cash provided by financing activities
              
              
              284,283
              
              
              
              33,856Net
      increase (decrease) in cash
              
              
              (68,060
              )
              
              
              88,245Cash
      - beginning of year
              
              
              99,126
              
              
              
              10,881Cash
      - end of year
              
              $
              31,066
              
              
              $
              99,126Changes
      in operating assetsand
      liabilities consist of:Decrease
      in accounts receivable
              
              
              13,035
              
              
              
              31,119Decrease
      in land held for future activities
              
              
              56,189
              
              
              
              85,390Decrease
      (increase) in costs of uncompletedcontracts
      in excess of billings
              
              
              (213,236
              )
              
              
              1,115Increase
      in prepaid expenses
              
              
              (55,093
              )
              
              
              -Increase
      (decrease) in accounts payable andaccrued
      expenses
              
              
              16,180
              
              
              
              (77,937
              )Increase
      in income taxes
              
              
              (14,943
              )
              
              
              16,415Increase
      in customer advances
              
              
              118,197
              
              
              
              6,787$
              (79,671
              )
              
              $
              62,889




F-6




PROMOTORA
      VALLE HERMOSO, INC AND SUBSIDIARYCONSOLIDATED
      STATEMENT OF CASH FLOWS (Continued)For
      the Years EndedDecember
      31,2007
              
              
              2006Supplementary
      Information:Cash
      paid during the year forInterest
              
              $
              39,105
              
              
              $
              -Income
      taxes
              
              $
              16,415
              
              
              $
              -Non-cash
      financing activities:Issuance
      of common stock for purchaseof
      land
              
              $
              -
              
              
              $
              160,200Issuance
      of common stock for debt
              
              $
              732,138
              
              
              $
              -Issuance
      of common stock for services
              
              $
              7,442,100
              
              
              $
              -Issuance
      of common stock in lieu ofaccrued
      interest
              
              $
              14,462
              
              
              $
              -Conversion
      of customer advance to debt
              
              $
              100,000
              
              
              $
              -


F-7




PROMOTORA
VALLE HERMOSO, INC. AND SUBSIDIARY
 NOTES TO
CONSOLIDATED FINANCIAL STATEMENTS
 FOR THE
YEARS ENDED DECEMBER 31, 2007 AND 2006
 
 
 1.
                DESCRIPTION
      OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING
  POLICIES
 
 Organization
 
 Promotora
Valle Hermoso, Inc. and Subsidiary (“Promotora”) or the (“Company”) is engaged
in developing a real estate project in Ecuador with a surface area of
approximately 22,116 m2.  The Company operates its business through
its Ecuadorian
 wholly-owned
subsidiary, Maria Paz Housing Complex.  All of the Company’s revenue
is derived in Ecuador.
 
 The
project has a three stage plan.  The first stage, Maria Paz, is under
construction with a total area of 10,200 m2, which includes the construction of
46 houses, two commercial locations, community center, community area, watchman
location, parking area and water services.  Infrastructure investment
and town house construction costs are approximately $300,000.  This
first stage is 85% sold as of December 31, 2007 and the final closings are
scheduled during the first six months of 2008.
 
 The
second stage, Jardines de Gerona, is under construction with a total area of
8,800 m2., which includes the construction of 43 townhouses, two commercial
locations, community center, common areas, watchman location, parking area and
utilities. The stage commenced in July of 2007. Infrastructure investment and
townhouse construction costs are approximately $400,000. Sales began in
September 2007. As of December 31, 2007, the Company has contracts on 70% of the
units to be sold.
 
 In
addition to this project, in November 2006, the Company acquired a piece of land
of approximately 1,800 m2, located northeast of Quito. This land is intended for
the construction of Torres La Guardia. The Company is currently working on the
approval of the permits and blueprints. The project is designed to build 38
apartments.  The construction is expected to begin at the end of the
second quarter of 2008.
 
 
 Basis
of presentation
 
 
 On June
6, 2006, Promotora Valle Hermoso entered into a share exchange with Lion Gri
International, Inc. ("Lion Gri").  In connection with the share
exchange, Lion Gri acquired the assets and assumed the liabilities of Promotora
Valle Hermoso.
  F-8
  As
provided for in the share acquisition agreement, the stockholders of Promotora
Valle Hermoso received 4,000,000 shares of Lion Gri common stock, representing
64% of the outstanding stock after the acquisition, in exchange for the
outstanding shares of Promotora Valle Hermoso common stock they
held.  Immediately following the share acquisition, Lion Gri had a
total 6,342,761 common shares issued and outstanding.
 
 Promotora
Valle Hermoso was then liquidated and Lion Gri changed its name to Promotora
Valle Hermoso, Inc. The financial statements reflect a retroactive restatement
of Promotora Valle Hermoso's historical stockholders' equity (deficiency) to
reflect the equivalent number of common shares issued in the
acquisition.
 
 For
accounting purposes, the share exchange has been treated as a recapitalization
of Promotora Valle Hermoso, the acquirer.  The financial statements
prior to June 6, 2006 are those of Promotora Valle Hermoso.
 
 Principles
of Consolidation
 
 The
consolidated financial statements include the accounts of the Company and its
wholly-owned subsidiary.  All intercompany transactions and balances
have been eliminated.
  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 recognizes revenue in accordance with the guidance contained in SEC
Staff Bulletin No. 104, "Revenue Recognition in Financial
Statements".  Revenue from home and land sales are recorded when title
is conveyed to the buyer, adequate cash payment has been received and there is
no continuing involvement.  The Company generally is not contractually
obligated to accept returns, except for defective construction
product.
 
 
 With the
development of its planned real estate project, the Company has adopted the
revenue recognition method for completed work, over which the revenue and costs
will be recorded at the time of the completion of home construction and delivery
to the buyer.  If a loss is expected, the Company recognizes the
liability on a current basis.  The cash received on the home is
recorded as customer advances until the revenue is recognized.  Cash
advances at December 31, 2007 and 2006 against future revenue was $345,082 and
$326,886, respectively and is included in customer advances on the Company’s
consolidated balance sheet.
 
 F-9
 
 Cost
Recognition
 
 Costs
associated with future income or otherwise associated with future accounting
periods are deferred as assets.  These costs are amortized to cost of
sales as the applicable homes are sold.  The amounts are included in
costs of uncompleted contracts in excess of billing on the Company's
consolidated balance sheet.
  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 costs of sales and
included in accounts payable in the accompanying consolidated balance
sheet.
 
 Accounts
Receivable
 
 The
Company maintains allowances for doubtful accounts for estimated losses from the
inability of its customers to make required payments.  The Company
determines its reserves by specific identification of customer accounts where
appropriate.  The Company requires progressive payments as the homes
are being constructed.  If the financial condition of the Company’s
customers were to deteriorate, resulting in an impairment of their ability to
make payments, additional allowances may be required.  For the years
ending December 31, 2007 and 2006, the   Company recorded bad
debts of $ 4,648 and $ 39,349, respectively.
  Fair
Value of Financial Instruments
  For
financial instruments, including cash, accounts receivable, accounts payable,
notes payable and accrued expenses, it was assumed that the carrying amount
approximated fair value because of the short maturities of such
instruments.  Management believes that the carrying amount debt is a
reasonable estimate of its fair value.
  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.
 
  Evaluation
of Long-Lived Assets
  The
Company reviews land held for future development or sale and equipment for
impairment whenever events or changes in circumstances indicate the carrying
value may not be recoverable in accordance with guidance in SFAS No. 144,
"Accounting for the Impairment or Disposal of Long-Lived Assets".  If
the carrying value of the long-lived asset exceeds the value of the
related
 estimated
future cash flows, the asset would be adjusted to its fair value and an
impairment loss would be charged to operations in the period
identified.
  F-10
  Worker's
Participation
  In
accordance with Ecuadorian law, the Company will pay its workers a 15%
participation bonus based on the net profit before income taxes of the project
as each phase of the project is completed.  This amount is accrued and
included in cost of sales.
 
 Advertising
Costs
 
 Advertising
costs are treated as period costs and expensed as incurred.  During
the year ended December 31, 2007 and 2006, advertising costs expenses amounted
to $ 42,815 and $ 9,447, respectively.
 
 Interest
 
 Costs
related to properties under development are capitalized during the land
development and home construction period and expensed as cost of sales as the
related homes are sold.  Costs related to properties not under
development are charged to interest expense separately in the consolidated
statement of operations.  Due to the immaterial nature of the interest
expense, no interest was capitalized for the years ended December 31, 2007 and
2006.
  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 a net operating loss
carry-forward.
 
 The
Company accounts for income taxes in accordance with the Internal Income Tax Law
of Ecuador.  The Company is taxed at a rate of 25%.
 
 Stock
Based Compensation
 
 The
Company issued shares of common stock to employees and non-employees as stock
based compensation.  The Company accounts for the services using fair
market value for the consideration issued.  For the year ended
December 31, 2007 the Company issued 3,254,100 shares and recorded compensation
expense of $7,442,100.
  F-11
  Foreign
Currency
 
 The
functional currency of Ecuador is the U.S. dollar.  All transactions
are denominated in U.S. dollars.
  Earnings
(Loss) Per Share
  
 Basic
earnings (loss) per common share are computed by dividing net loss by weighted
average number of common shares outstanding during the year.  Diluted
earnings (loss) 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.  As of December 31, 2007 and 2006, there were no
potential common shares.
 
 Reclassifications
 
 Certain
reclassifications have been made to prior period amounts to conform to current
year presentation, principally in balance sheet presentation pertaining to costs
of uncompleted contracts in excess of billings and land held for future
development.
 
 New
Financial Accounting Standards
 
 In
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157 “Fair Value Measurements,” (“SFAS 157”) which enhances existing guidance
for measuring assets and liabilities using fair value.  This standard
provides a single definition of fair value, together with a framework for
measuring it, and requires additional disclosure about the use of fair value to
measure assets and liabilities.  SFAS 157, as amended by FASB Staff
Position 157-2, is effective for financial statements for fiscal years beginning
after November 15, 2008, and interim periods within those fiscal
years.  The Company does not believe that SFAS 157
will  have a material impact on its financial statements.
 
 In July
2006, FASB issued Interpretation No. 48 “Accounting for Uncertainty in Income
Taxes” (“FIN 48”).  The interpretation requires a two step approach
for recognizing and measuring tax benefits based on a recognition threshold of
“more likely than not”.  The FASB also requires explicit disclosures
about uncertainties in tax positions including a detailed rollforward of tax
benefits that do not qualify for financial statement recognition.  The
adoption of FIN 48 is effective for fiscal years beginning after December 15,
2006.  On January 1, 2007, the Company implemented FIN 48 which
resulted in no adjustment in the liability for uncertain tax
positions.  For additional information regarding the accounting
treatment and effect of FIN 48, see Note 8 of Notes to the Consolidated
Financial Statements.
 
 In
February 2007, the FASB issued SFAS No. 159  “The Fair Value Option
for Financial Assets and Financial Liabilities,” (“SFAS 159”) providing
companies with an option to report selected financial assets and liabilities at
fair value.  The standard’s objective is to reduce both complexity in
accounting for financial instruments and the volatility in earnings caused by
measuring related assets and liabilities differently.  It also
requires entities to display the fair value of those assets and liabilities for
which the Company has chosen to use fair value on the face of the balance
sheet.  SFAS 159 is effective for fiscal years beginning after
November 15, 2007.  The Company is currently evaluating the impact of
the adoption of this Statement on its financial statements.
 
 F-12
 
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007) (“SFAS 141 (R)”)
“Business Combinations”, which replaces SFAS 141 “Business
Combinations”.  This Statement improves the relevance, completeness
and representational faithfulness of the information provided in financial
reports about the assets acquired and the liabilities assumed in a business
combination.  This Statement requires an acquirer to recognize the
assets acquired, the liabilities assumed, and any non-controlling interest in
the acquiree at the acquisition date, measured at their fair values as of that
date, with limited exceptions specified in the Statement.  Under SFAS
141(R), acquisition-related costs, including restructuring costs, must be
recognized separately from the acquisition and will generally be expensed as
incurred.  That replaces SFAS 141’s cost-allocation process, which
required the cost of an acquisition to be allocated to the individual assets
acquired and liabilities assumed based on their estimated fair
values.  SFAS 141(R) shall be applied prospectively to business
combinations for which the acquisition date is on or after the beginning of the
first annual report period beginning on or after December 15,
2008.  The Company will implement this Statement in 2009.
 
 In
December 2007, the FASB issued SFAS No. 160 “Non-Controlling Interests in
Consolidated Financial Statements – An Amendment of ARB No. 51” (“SFAS
160”).  SFAS 160 establishes new accounting and reporting standards
for the non-controlling interest in a subsidiary and for the deconsolidation of
a subsidiary.  Specifically, this statement requires the recognition
of non-controlling interests (minority interest) as equity in the consolidated
financial statements and separate from parent’s equity.  The amount of
net income attributable to the non-controlling interest will be included in
consolidated net income on the face of the income statement.  SFAS 160
clarifies that changes in a parent’s ownership in a subsidiary that does not
result in deconsolidation are equity transactions if the parent retains its
controlling financial interest.  In addition, this statement requires
that a parent recognize a gain or loss in net income when a subsidiary is
deconsolidated.  Such gain or loss will be measured using the fair
value of the non-controlling equity investment of the deconsolidation
date.  SFAS 160 also includes expanded disclosure requirements
regarding the interest of the parent and its non-controlling
interest.  SFAS 160 is effective for fiscal years, and interim periods
other than fiscal years, beginning on or after December 15, 2008.  The
Company is currently evaluating the impact of the adoption of this Statement on
its financial statements.
 
 In
January 2008, Staff Accounting Bulletin (“SAB”) 110 “Share-Based Payment” (“SAB
110”), was issued.  Registrants may continue, under certain
circumstances, to use the simplified method in developing estimates of the
expected term of share options as initially allowed by SAB 107, “Share-Based
Payments”.  The adoption of SAB 110 should have no effect on the
financial position and results of operations of the Company.
 
 F-13
 
 2.
Equipment
  December
      31,2007
                
                
                2006Vehicles
      and machinery
                
                $
                42,126
                
                
                $
                55,405Land
      Office
                
                
                6,000
                
                
                
                -Office
      - Quito Torre 1492
                
                
                144,000
                
                
                
                -Computer
      equipment
                
                
                1,976
                
                
                
                607194,102
                
                
                
                56,012Less:
      accumulated depreciation
                
                
                33,821
                
                
                
                25,728$
                160,281
                
                
                $
                30,284
 3.     Costs
of uncompleted contracts in excess of billing
 
 The
component of costs of uncompleted contracts in excess of billing that have been
deferred are as follows:
 
 December
      31,2007
                  
                  
                  2006Civil
      works
                  
                  $
                  387,952
                  
                  
                  $
                  265,489Furnishings
                  
                  
                  51,981
                  
                  
                  
                  45,402Urbanization
                  
                  
                  83,442
                  
                  
                  
                  161,348Townhouse
                  
                  
                  162,099
                  
                  
                  
                  -$
                  685,474
                  
                  
                  $
                  472,239
  4.     
Notes
Payable
  
 In
connection with the initial share exchange, the Company assumed an obligation to
Lion Gri International in the amount of $300,000.  The note payable
bears interest of 5% per anum and was due 30 days after the Company filed its
Form 10-KSB for the year ended December 31, 2006.  On September 21,
2007, the Company issued 175,200 shares of common stock to Lion Gri shareholders
in lieu of the payment for the note and accrued interest of $
306,600.  As of December 31, 2007 and 2006 the Company owed Lion Gri
International $-0- and $292,138 respectively.  For the years ended
December 31, 2007 and 2006 the Company recorded interest expense of $9,397 and
$5,063, respectively on these notes.
 
 5.         Notes
Payable – Related Party
 
 December
      31,2007
                    
                    
                    2006$
                    230,000
                    
                    
                    $
                    535,717
 F-14
  a) The
Company has a note payable due Ramon E. Rosales (“Rosales”), the Company’s
president and Chief Executive Officer.  The notes are due upon demand
and bear interest at 8% per annum.  In March 2007, the Company agreed
to issue Rosales 16,296 shares of its common stock,
the fair value of the common stock at the time of the agreement, in exchange for
the liquidation of $440,000 of related party debt.  During 2007, the
Company received additional loans from Rosales of $138,000 and made payments to
him of $103,717.  As of December 31, 2007 and 2006, the Company owed
Rosales $130,000 and $535,717, respectively.  For the years ending
December 31, 2007 and 2006, the Company recorded interest expense of $50,500 and
$93,692, respectively.  As of December 31, 2007 and 2006, accrued
interest of $41,000 and $58,914, respectively, is included in accrued expenses
on the Company’s balance sheet.
 
 b) In
January 2007, the Company purchased offices, parking lots and storage space
located in Quito, Ecuador from Servicios Blader Cia Ltda for $150,000, the fair
market value.  The Company’s Chief Executive Officer is a part owner
of Servicios Blader Cia Ltda.  The amount of the purchase will be paid
in three monthly instalments with no interest starting in December
2007.  The first instalment of $50,000 was paid and the balance at
December 31, 2007 was $100,000.  In February 2008, the balance was
paid in full.
 
 See Note
10 of Notes to Consolidated Financial Statements for additional related party
information.
 
 6.
Long-term Debt
 
 On
January 1, 2007, Gaby Segrest (‘Segrest”) cancelled a contract for the purchase
of homes in Jardines de Gerona.  Segrest and Promotora, agreed that
the downpayment of $100,000 would be treated as a loan for a period of three
years with interest at 5% per anum. Interest expense of $5,000 for the year
ended December 31, 2007, is included in accrued expenses on the Company’s
consolidated balance sheet.
 
 7.
Accounts Payable
 
 As of
December 31, 2007 and 2006, the Company owes Mrs. Maria Luisa Paz Aguirre
$75,000 for the purchase of land where the initial housing project is being
constructed. The Company purchased the land in 2003 for $350,000.  The
Company has agreed to either pay the balance in cash or transfer two housing
units to Mrs. Aguirre with the difference to her to be paid in
cash.  The amount due is interest free.  This amount is
included in accounts payable on the Company’s consolidated balance
sheet.
 
 8.
Income Taxes
 
 The
Company adopted the provision of Financial Accounting Standards Board
Interpretation No. 48, “Accounting for Uncertainties in Income Taxes” (“FIN
48”), on January 1, 2007.  As a result of the implementation of FIN
48, the Company recognized no adjustment in the net liabilities or equity for
unrecognized income tax benefit.
 
 
 As of
December 31, 2007 the Company has a U.S. net operating loss carry forward of
approximately $8,033,000 which expires in 2025. Deferred income taxes reflect
the impact of net operating carry forwards. In recognition of the uncertainty
regarding the ultimate amount of income tax benefits to be derived from the
Company’s net operating loss carry forwards, the Company has recorded a
valuation allowance for the entire amount of the deferred assets.
  F-15
  The
provision for income taxes consists of the following:
 
 December
      31,2007
                  
                  
                  2006Current:Federal
                  
                  $
                  -
                  
                  
                  $
                  -Foreign
                  
                  
                  3,624
                  
                  
                  
                  16,4153,624
                  
                  
                  
                  16,415Deferred:Federal
                  
                  
                  -
                  
                  
                  
                  -Foreign
                  
                  
                  -
                  
                  
                  
                  --
                  
                  
                  
                  -$
                  3,624
                  
                  
                  $
                  16,415
 
 A
reconciliation of taxes on income computed at the federal statutory rate to
amounts provided is as follows:
 
 December
      31,2007
                  
                  
                  2006Tax
      provision (benefit) computed atthe
      federal statutory rate of 34%
                  
                  $
                  (2,579,000
                  )
                  
                  $
                  (2,086
                  )Unused
      net operating losses
                  
                  
                  2,583,929
                  
                  
                  
                  24,410Decrease
      in taxes resulting from differenttax
      rates and permanent differencesapplicable
      to foreign operations
                  
                  
                  (1,305
                  )
                  
                  
                  (5,909
                  )$
                  3,624
                  
                  
                  $
                  16,415
 
 It is
management’s intention to permanently reinvest the majority of the earnings of
its foreign subsidiaries in the expansion of its foreign
operations.  No earnings were repatriated in 2007 or
2006.  Unrepatriated earnings, upon which U.S. income taxes have not
been accrued, are approximately $74,500 at December 31, 2007.  Such
unrepatriated earnings are deemed by management to be permanently
reinvested.  Estimated income taxes related to unrepatriated foreign
earnings are $25,350 under the current tax law.
 
 The
Company files income tax returns in all jurisdictions in which it has reason to
believe it is subject to tax.  The Company is subject to examination
by various taxing jurisdictions.  To date, none of these examinations
has resulted in any material additional tax.  Nonetheless, any tax
jurisdiction may contend that a filing position claimed by the Company regarding
one or more of its transactions is contrary to that jurisdictions laws or
regulations.  Significant judgement is required in determining the
worldwide provisions for income taxes.  In the ordinary course of
business of a global business, the ultimate tax outcome is uncertain for many
transactions.  It is the Company’s policy to establish provisions for
taxes that may become payable in future years as a result of an examination by
tax authorities.  The Company establishes the provisions based upon
management’s assessment of exposure associated with permanent tax differences
and tax
 credits
applied to temporary difference adjustments.  The tax provisions are
analyzed periodically (at least quarterly) and adjustments are made as events
occur that warrant adjustments to those provisions.
  F-16
 
 9.
Stockholders’ Equity
 
 In August
10, 2007, the Company’s shareholders approved a 1 for 30 reverse stock
split.  Except for the presentation of common shares authorized and
issued on the consolidated balance sheet and shares presented in the
consolidated statement of stockholders’ equity (deficiency), all shares and per
share information has been revised to give retroactive effect to the reverse
stock split.
 
 10.
Related Party Transactions
 
 In
November 2006, the Company issued 228,857 common shares of its common stock to
Maria G.Rosales, the Chief Financial Officer and daughter of the Company’s
president and Chief Executive Officer, to purchase a tract of land in Quito,
Ecuador.  The fair value of the consideration issued was
$160,200.
 
 
 11.
Segment Information
 
 The
Company operates in one industry and has two reportable segments.  The
segments are geographic and include the United States and
Ecuador.  The primary criteria by which financial performance is
evaluated and resources are allocated are revenues and operating income
(loss).
 The
following is financial information relating to the Company’s business
segments:
 
 F-17
  December
      31,2007
                  
                  
                  2006Revenue
      from external customers:United
      States
                  
                  $
                  -
                  
                  
                  $
                  -Ecuador
                  
                  
                  416,508
                  
                  
                  
                  880,762$
                  416,508
                  
                  
                  $
                  880,762Income
      (loss) from operations:United
      States
                  
                  $
                  (7,582,796
                  )
                  
                  $
                  (19,782
                  )Ecuador
                  
                  
                  (2,293
                  )
                  
                  
                  72,559$
                  (7,585,089
                  )
                  
                  $
                  52,777Long
      lived assetsUnited
      States
                  
                  $
                  -
                  
                  
                  $
                  -Ecuador
                  
                  
                  488,933
                  
                  
                  
                  415,125$
                  488,933
                  
                  
                  $
                  415,125Capital
      expenditures:United
      States
                  
                  $
                  -
                  
                  
                  $
                  -Ecuador
                  
                  
                  151,370
                  
                  
                  
                  -$
                  151,370
                  
                  
                  $
                  -Depreciation
      and amortization:United
      States
                  
                  $
                  -
                  
                  
                  $
                  -Ecuador
                  
                  
                  16,392
                  
                  
                  
                  14,052$
                  16,392
                  
                  
                  $
                  14,052
  12.
Commitments and Contingencies
 
 a) The
Company leases various facilities.  Some of these leases require the
Company to pay certain executory costs (such as maintenance and
insurance).
 
 Future
minimum lease payments for operating leases are approximately as
follows:
  Year
      Ending2008
                    
                    $
                    1,100
  Rent
expense was $ 7,058 and $ 7,056 for the years ended December 31, 2007 and 2006,
respectively.
 
 b) The
Company receives rental income from an office building they acquired during
2007.  The rental income is $2,750 per month on a month to month
lease.  Rental income was $33,000 for the year ended December 31,
2007.
  F-18
  13.
Subsequent Events
  a)
      On October 19, 2007, the Company signed an agreement in principle to
      acquire Bauelemente V. Kuhn Inc. (“Kuhn”). Under the proposed terms of the
      agreement, the Company will acquire Kuhn for $1,000,000 in Promotora Valle
      Hermoso common stock.  The value of the Promotora Valle Hermoso
      common share will be based on the October 19, 2007 closing market price of
      $3 per share. Upon successful completion of the audited financial
      statements for the years ended December 31, 2007 and 2006 of Kuhn and due
      diligence, the Company will issue Kuhn 333,333 Promotora Valle Hermoso
      common shares.  Closing of the acquisition is subject to the
      Company receiving the audited financial statements required and agreeing
      to the terms of a definitive agreement.  On March 24, 2008,
      after completing its due diligence, the Company determined not to pursue
      the acquisition.b)
      On March 24, 2008, the Company signed a share exchange agreement in
      principle to acquire OAO 494 YHP Inc. (“UNR”), a Russian Federation
      Corporation.  The Company will issue 20,500,000 shares of its
      common stock, valued at $51,250,000 (the fair market value of its common
      stock as of March 20, 2008) in exchange for 66.83/% of outstanding common
      shares and preferred shares of UNR.  Upon completion of the
      share exchange agreement the shareholders of UNR will own 83.7% of
      Promotora.For
      accounting purposes, the share exchange will be treated as a
      recapitalization of UNR, the acquirer.  The financial
      statements, once the share exchange is completed, will be those of
      UNR.UNR
      operates in Russia specializing in constructive engineering and road
      building.The
      closing of the share exchange shall take place on June 15, 2008 or on
      other such time as both partners agree.


F-19