10-K/A 1 v437093_10ka.htm AMENDMENT TO 10-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

AMENDMENT NO. 1 TO

FORM 10-K

(Mark One)

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

	For the fiscal year ended December 31, 2015

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

For the transition period from to

Commission file number 000-55307

FUDA GROUP (USA) COPRORATION

(Exact name of registrant as specified in its charter)

Delaware		47-2031462
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

48 Wall Street, 11^th Floor

New York, New York

(Address of principal executive offices) (zip code)

Registrant's telephone number, including area code: 646-837-7950

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.0001 par value per share

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act

¨ Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ¨ Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

x Yes ¨ No

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not 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-K or any amendment to this Form 10-K.

x Yes ¨ No

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

Large Accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x
(do not check if smaller reporting company)

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

¨ Yes x No

State the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day of the registrant's most recently completed second fiscal quarter.

$10,595

Indicate the number of shares outstanding of each of the registrant's classes of common stock as of the latest practicable date.

Class		Outstanding at April 14, 2016
Common Stock, par value $0.0001		105,954,309

Documents incorporated by reference: None

EXPLANATORY NOTE

This Amendment No. 1 to the Annual Report on Form 10-K is being filed to furnish the Interactive Data files as Exhibit 101, to amend certain typographical and numerical errors, and to remove duplicate information in the Annual Report. This Form 10-K/A does not attempt to modify or update any other disclosures set forth in the original Annual Report on Form 10-K.

PART I

Item 1. Business

Fuda Group (USA) Corporation is an emergent gold resources company seeking to develop and operate a portfolio of natural assets with reserves of gold and precious metals. The Company seeks properties with known mineralization that are in an advance stage of exploration and have previously undergone some drilling but are under-explored, which the Company believe can advance quickly to increase value. The Company further diversifies into the construction commodities, such as granite and marble, through established vendor and supplier networks. The Company is continually expanding and strengthening its upstream asset resources by acquiring and exploring properties in the region.

The Company, primarily focused on the region of Northeastern China, is concentrated on three thriving channels:

Gold & Precious Metal, Granite/Marble Trading;

Mining and Processing of Gold & Precious Metal, Granite/Marble;

Mergers and Acquisitions Projects.

Corporate History

The Company was incorporated in the State of Delaware in September 2014, and was initially known as the Spruce Valley Acquisition Corporation (“Spruce Valley”). In February 2015, Spruce Valley changed its name to Fuda Group (USA) Corporation. Thereafter, the Company effected a series of acquisitions (collectively known as the “Acquisitions”), beginning from September 2015 and on September 28, 2015, entered into stock-for-stock acquisition agreements with two companies: Fuda Gold (UK) Limited, (“Fuda UK”), a private company organized under the laws of England and Wales, and Marvel Investment Corporation Limited, (“Marvel”), a private company organized under the laws of Hong Kong. The Acquisitions have resulted in both Fuda UK and Marvel becoming wholly owned subsidiaries of the Company, the surviving entity. The Company has thereby inherited the respective operations and business plans of both Fuda UK and Marvel.

In May 2015, Fuda UK was incorporated in the United Kingdom, and at its inception, Fuda UK had conducted minimal business operations. Since the Acquisitions, which joined Fuda UK with the organization, the Company has been purchasing gold resources and operating wholesale business of gold bars.

In October 2009, Marvel was incorporated in Hong Kong. Since its inception, Marvel had conducted minimal business operations until it acquired Liaoning Fuda Mining Co. Ltd., (“Liaoning Fuda”), which was previously incorporated in China in August 2012, pursuant to an equity transfer agreement executed on February 28, 2015 and later consummated on June 30, 2015. Liaoning Fuda was a granite and marble trading company. With Marvel being a wholly owned subsidiary, the Company now has the ability to diversify its operations into the profitable granite and marble business of the construction material industry.

On February 28, 2015, Marvel entered into an Equity Interest Transfer Agreement with Liaoning Fuda Mining Co., Ltd (“Liaoning Fuda”) whereas Marvel agreed to acquire 100% equity interest in Liaoning effective June 30, 2015. Both Marvel and Liaoning Fuda are under common control of the same shareholder and no consideration was given in exchange for the equity interest in Liaoning Fuda. The acquisition was done to position Liaoning Fuda in a more favorable tax position under the laws of Hong Kong, PRC. Refer to “Principal of Consolidation” under Note 2 Summary of Significant Accounting Policies

Liaoning Fuda was established in August 2012 in Dandong City, Liaoning Province, China (“PRC”) with authorized capital of 60 million Chinese Yuan. Liaoning Fuda is a natural resource trading company that consists of raw blocks, stone carvings, slabs, pavers and wall claddings. It was established as a natural resource trading company, with operations concentrated in an area around Dandong City, Liaoning Province, situated in the Manchuria region of Northeast China. A large percentage of the its customers are industrial wholesalers, government agencies undertaking infrastructure or similar upgrading projects, corporations, renovators and construction companies, as well as stone processing factories. It also sells finished products for direct sales to civil engineering construction projects, corporations, and government agencies.

The Company is currently focusing on the acquisition and exploration of viable mines in Northeastern China, and preparing to advance to the next level by commencing the drilling or extraction of the aforementioned surveyed properties.

Operations

Since 2013, the Company is a natural resource trading company that consists of raw blocks, stone carvings, slabs, pavers, granite and wall claddings in China.

In 2015, the Company has conducted limited business operations in trading graphite, fluorite and gold.

In 2015, the Company has executed a cooperative operation agreement to filter and sort gold sands or gold dust from the gold mine tailings owned by the Chinese government with the intention to sell the goods under a profit sharing ratio. The cooperative agreement indicated the profit sharing is based on the gross sales price for the products sold and the ratios are to be 25% to mine owner, 35% to mine workers, and 40% to the Company. The Company shall collect payments from the customers for the goods sold and distribute the gross amount upon payment from the customers. The Company is responsible for managing the day to day operation activities in providing labor, tools, and equipment. At Sale, the Company is only entitled to 40% of the proceeds when the goods are sold similar to a royalty interest or net smelter interest, and the payments are only legally owed when the goods are sold while nothing is owed to the Company until completion of the sale. The Company has yet to generate revenues from such operation.

The Company’s management believes that the market demand for natural resources, such as gold, granite and marble, will continue to increase. Gold and other precious metals are commodities and will thereby experience times of high and low trading values, but the demand for it as a commodity would be ever present. The same could be said for granite and marble, which would be additionally affected by the economy in terms of the construction industry.

As for the Company’s diversification into marble and granite industry, the Company is executing plans to acquire an open-pit granite mine that employs saw-cutting methods to remove large granite blocks from the quarry. In addition, the Company is also preparing to further process the raw blocks into slabs, pavers, wall claddings, and carvings. These products can be sold to government agencies for infrastructure projects, corporations, granite processing plants, civil engineering companies as well renovation companies.

Business Strategy

The Company’s business strategy is to widen its market position in the gold mining and trading industry by directly acquiring a number of mines throughout Asia. It intends to seek properties with known mineralization that are in an advanced stage of exploration and have previously undergone some drilling but are under-explored, which we believe we can advance quickly to increase value.

Subsidiaries

The Company’s subsidiaries are: Marvel Investment Corporation Limited (and its subsidiary Liaoning Fuda Mining Co., Ltd) and Fuda Gold (UK) Limited.

Item 2. Properties

The Company currently has the following physical locations and respective lease arrangements:

The Company’s Beijing Head office is located at Room 1010, 1011, Financial Street Center South Tower, No.9A, Financial Street, Xicheng District, Beijing 100033, P.R. China

The Company’s China Regional office is located at 12th Floor, 100 Jin Jiang Street, Dandong City, Liaoning Province, China

The Company’s USA office is located at 48 Wall Street, 11th Floor, New York, NY 10005, USA

If the Company were forced to relocate, it believes it could obtain an equally satisfactory location at a comparable price.

The Company currently owns land use rights to 8 parcels of lands surrounding the mines for investment purposes, containing a total of approximately 21.56 million square feet of land.

Item 3. Legal Proceedings

There are currently no pending, threatened or actual legal proceedings of a material nature in which the Company is a party.

Item 4. Mine Safety Disclosures.

Not applicable.

PART II

Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

There is currently no public market for the Company's securities.

At such time as it qualifies, the Company may choose to apply for quotation of its securities on the OTC Bulletin Board.

The OTC Bulletin Board is a dealer-driven quotation service. Unlike the Nasdaq Stock Market, companies cannot directly apply to be quoted on the OTC Bulletin Board, only market makers can initiate quotes, and quoted companies do not have to meet any quantitative financial requirements. Any equity security of a reporting company not listed on the Nasdaq Stock Market or on a national securities exchange is eligible.

Since inception, the Company has sold securities which were not registered as follows:

The Company is authorized to issue 480,000,000 shares of common stock, par value $0.0001, of which 105,954,309 shares are outstanding as of the date of the registration statement, of which this prospectus is a part. The Company is also authorized to issue 20,000,000 shares of preferred stock, par value $0.0001, of which no shares were outstanding as of the date of the registration statement, of which this prospectus is a part.

In October 2015, the Company adopted an amendment to its certificate of incorporation effecting a reverse share split on a forty-one (41) for one hundred (100) basis, such that each one hundred (100) shares of common stock outstanding held by a stockholder were converted into only forty-one (41) shares of common stock outstanding. All outstanding shares of common stock were so converted in October when such amendment was filed in the State of Delaware. The action was duly approved by the board of directors and shareholders of the Company. As a result of the reverse share split, the total number of outstanding shares of common stock of the Company decreased from 258,339,773 shares outstanding to 105,954,309 shares outstanding at such time.

On September 25, 2014, the Company issued the following shares of its common stock:

Name	Number of Shares
James Cassidy		4,100,000
James McKillop		4,100,000

(2) On February 20, 2015, 7,995,000 shares were cancelled, pro rata, on February 20, 2015 from the holders.

(3) On February 21, 2015, the Company issued 123,615,000 shares as follows:

Name	Number of Shares
Liaoning Fuda Mining Co., LTD		25,010,000
Dandong Hao Han Mining Co., LTD		23,780,000
Xiaobin Wu		21,115,000
B. Square Pty LTD		19,680,000
JFL International Group Private Limited		14,350,000
Lina Wu		14,350,000
Lihua Sun		5,330,000

(4) Between July 1, 2015 and September 7, 2015, the Company subsequently cancelled those 123,615,000 shares that were issued on February 21, 2015.

(5) Between July 1, 2015 and September 7, 2015, 59,794,309 shares of common stock were issued by the Company to shareholders pursuant to executed subscription agreements under a Regulation D offering or other private placement of securities. Each of these transactions was issued as part of the private placement of securities by the Company in which no underwriting discounts or commissions applied to any of the transactions. The Company conducted such private placement offering in order to build a base of shareholders and establish relationships with a variety of shareholders. Tiber Creek Corporation did not assist the Company in conducting the offering.

(6) On September 30, 2015, the Company issued 45,920,002 shares of common stock in connection with the Acquisitions.

The above number of shares in (1) through (6) above is shown as post-split numbers of shares. The Company effectuated a 41-for-100 reverse stock split in October 2015.

Subsequent to the split occurring, 350 shareholders were issued 100 shares for a total of 35,000 shares in aggregate issued by the Company as compensation.

Item 6. Selected Financial Data

There is no selected financial data required to be filed for a smaller reporting company.

Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

The Company was incorporated in the State of Delaware in September 2014 and was formerly known as Spruce Valley Acquisition Corporation. In September 2015, the Company acquired each of Fuda Gold (UK) Limited, a private company organized under the laws of England and Wales (“Fuda UK”), and Marvel Investment Corporation Limited, a private company organized under the laws of Hong Kong (“Marvel”), in separate stock-for-stock acquisitions. Prior to the Acquisitions, the Company had no ongoing business or operations and was established for the purpose of completing a business combination with a target company, such as Fuda UK and Marvel. Accordingly, the business of the Company is now that of Fuda UK and Marvel (and of Liaoning Fuda by virtue of Marvel’s ownership of Liaoning Fuda), each of which was acquired by the Company in the Acquisitions.

After the Acquisition, the Company and its subsidiaries operate as a natural resource trading company that consists of raw blocks, stone carvings, slabs, pavers, granite, fluorite, graphite, gold and wall claddings in China.

References to the financial condition and performance of the Company below in this section “Management’s Discussions and Analysis of Financial Condition and Results of Operation” are to Liaoning Fuda Mining Co. Ltd, Fuda UK and Marvel respectively.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements.

Equipment Financing

The Company has no existing equipment financing arrangements.

Potential Revenue

The Company expects to earn potential revenue from existing customers and product sales and refining and trading activities. The Company prospects for new clients on an ongoing basis and also seeks additional revenue enhancement opportunities from existing clients. The company will be also expanding its portfolio of products.

Alternative Financial Planning

The Company has no alternative financial plans at the moment. If the Company is not able to successfully raise monies as needed through a private placement or other securities offering (including, but not limited to, a primary public offering of securities), the Company’s ability to expand its business plan or strategy over the next two years will be jeopardized.

Critical Accounting Policies

The financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires making estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. The estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Liquidity and Capital Resources

As of December 31, 2015, Fuda Group (USA) had cash available of $0, Liaoning Fuda had cash available of $18,116,602, Marvel had cash available of $11,549 and Fuda UK had cash available of $399, with consolidated cash available for the Company at $18,178,550.

As of December 31, 2014, Fuda Group (USA) had cash available of $0, Liaoning Fuda had cash available of $466, Marvel had cash available of $0 and Fuda UK had cash available of $0, with consolidated cash available for the Company at $466.

Overall, the Company expects to generate its liquidity and capital resources from sales revenues by its operating subsidiary-Liaoning Fuda. These capital resources are used to purchase inventory and to pay its vendors and suppliers for expenses incurred under normal operation of the Company. The Company also expect to fund the newly started operations of its subsidiary-Fuda UK and Marvel through working capital of Liaoning Fuda as well as shareholder loans.

The Company has executed short term accounts receivables factoring agreements with the banks with maturity from 1 to 3 months. The bank would advance the Company at contracted discount percentage of 70%-85% of the accounts receivable invoices factored up front and charge a contracted interest fee at average rate of 2%-4% based on the percentage advanced. The discount is recognized as financing interest expense. When the outstanding accounts receivable invoice is collected, the advanced amount plus any accrued interest are repaid. The Company has also purchased insurance for the full invoiced amount. Please refer to additional discussions below.

The Company also recognized interest expenses on the financing loans in the amount of $1,276 and $346,110, for the years ended December 31, 2015 and 2014, respectively

As at December 31, 2015, the Directors of the Company have repaid the outstanding trade financing loans on behalf of the Company which increased amounts due to related party.

The Company’s proposed expansion plans and business process improvements described above will necessitate additional capital and financing. Accordingly, the Company plans to raise outside funding in order to achieve its expanded growth and profit objectives in its business over the next two years. The monies raised will be utilized for general operations, working capital, acquisition of mines, acquisition of gold sorting and refining facilities and acquisition of granite and marble processing facilities.

There can be no assurance that the Company’s activities will generate sufficient revenues to sustain its operations without additional capital, or if additional capital is needed, that such funds, if available, will be obtainable on terms satisfactory to the Company. Accordingly, given the Company’s limited cash and cash equivalents on hand, the Company will be unable to implement its contemplated business plans and operations unless it obtains additional financing or otherwise is able to generate sufficient revenues and profits. The Company may raise additional capital through sales of debt or equity, obtain loan financing or develop and consummate other alternative financial plans.

The ability of the Company’s Chinese Subsidiary-Liaoning Fuda to pay dividends, royalties, management fees, etc may be restricted due to the foreign exchange control policies and availability of cash balance of the Chinese operating subsidiaries. A majority of our revenue being earned and currency received are denominated in RMB, which is subject to the exchange control regulation in China, and, as a result, we may unable to distribute any dividends outside of China due to PRC exchange control regulations that restrict our ability to convert RMB into US Dollars. Accordingly, Liaoning Fuda funds may not be readily available to us to satisfy obligations which have been incurred outside the PRC, which could adversely affect our business and prospects or our ability to meet our cash obligations.

Discussion of Years ended December 31, 2015 and 2014

During the years ended December 31, 2015 net cash provided by operating activities was $17,011,891, and for the years ended December 31, 2014 was $30,592,305, respectively. Net cash provided by operating activities in 2014 was much higher resulted from cash provided by accounts receivables, inventory, security deposits to suppliers, accounts payable and accrued expenses. The significant changes resulted from the Company changed its business model in 2014 focusing on the local domestic market instead of the international market which its export sales decreased significantly starting the first half of year 2014. The Company had started its trading business of graphite, fluorite, and gold which requires additional expenditures.

During the year ended December 31, 2014, the Company collected $1,055,131 from its customers for prior year’s export sales accounts receivables. The Company’s sales revenues increased and was able to generate significant cash flow by selling the inventory acquired in 2013. In addition, the Company’s deposits to suppliers were used to offset by the purchases of inventory from the suppliers.

During the year ended December 31, 2015, the Company decreased $8,381,843 of its accounts payables and accrued expenses as compared to the same period in 2014, the Company’s accounts payables and accrued expenses decreased by $5,832,650 which allows the Company to have additional cash provided by operating activities.

Net cash provided by financing activities for the year ended December 31, 2015 was $1,852,169 whereas net cash used in financing activities for the same period in 2014 was $2,144,151. Financing activities were primarily attributable to repayments to and proceeds from trade financing loans. The Company has executed various short term accounts receivables factoring agreements with the banks where the banks would advance the Company a contracted percentage of the invoices factored up front. These accounts receivables derived from export sales generated in 2013 that carryover to 2014. The shareholders of the Company have repaid the outstanding trade financing loans on behalf of the Company which increased the cash provided by financing activities.

Net cash used in investing activities for year ended December 31, 2015 was $20,776 whereas net cash used in investing activities for the same period in 2014 was $31,633,774. The Company acquired machinery and equipment of $20,776 for gold tailing sorting and filtering activities that started in 2015.

The resulting effect for cash at the end of the year ended December 31, 2015 was $18,178,550 compared with cash at the end of the year ended December 31, 2014 of $466.

In 2014 the Company has executed various short term accounts receivables factoring agreements with the banks where the banks would advance the Company a contracted percentage of the invoices factored up front or charge a contracted interest fee at average rate of 2%-4% based on the percentage advanced. When the outstanding accounts receivable invoice is collected, the advanced amount plus any accrued interest are repaid.

The outstanding amount of trade financing loans were $nil and $1,893,264 as of December 31, 2015 and 2014, respectively. The interest expenses were $1,276 and $346,110 for the years ended December 31, 2015 and 2014, respectively.

The Company generated revenues from sales of products of $38,404,891 and $42,518,470 during the years ended December 31, 2015 and 2014, respectively, a decrease of approximately 9.7% on a year-over-year basis. Part of the sale generated, $nil and $5,631,720 were generated through the sales of products through agents for the years ended December 31, 2015 and 2014, respectively.

Direct International Sales are sales generated by the Company directly with the customers and sets out the terms and conditions of the sales contract and deals directly with customers. Agency International Sales are sales generated by agents where they would prepare the terms and conditions of the sales contract and deal directly with customers.

Gross margin for the year ended December 31, 2015 was $26,294,081 or approximately 67% of revenues as compared to $25,843,041 or approximately 66% of revenues for the same period in 2014. The increase in gross margin from 2014 to 2015 resulted from decreased in expenses related to exporting and delivery of goods to customers, and custom duties charges for exports and different grade of stones were sold. In addition, the Company began to sell graphite, fluorite and gold in second half of 2015 which effected the gross margin.

The sales revenues and cost of sales as follows:

	Revenues				Cost of Sales
	For the Years Ended				For the Years Ended
	December 31,		December 31,		December 31,		December 31,
	2015		2014		2015		2014
Granite Stones		37,742,040		42,518,470		11,948,891		14,270,331
Graphite		224,936		-		199,957		-
Fluorite		249,926		-		174,966		-
Gold		187,989		-		238,036		-
Total		38,404,891		42,518,470		12,561,850		14,270,331

In early 2014, the Company changed its business model focusing on the local domestic market instead of the international market for its granite stone trading business. The difference in export sales and local domestic sales was that export sales required higher grade of stones which were more expensive as compared to the same period 2015, in addition, the costs to deliver the goods were more expensive. Stones sold for exports and sold to the agents are higher grade carved stones which can be used for higher end processing purposes. These customers preferred double cut which were more expensive because bigger blocks of stones needed to be cut by larger machines. As compared to stones for domestic customers are used for road making which were lower in quality and less expensive and were single cut stones. These stones are smaller slab and therefore the machines used to carve the stones are smaller.

The Company also generated higher sales from Affiliated entities through barter trade in 2014 as compared to 2015. The barter trade was trading granite stones for land acquired in 2014. The sales price of the granite stones traded was at market price. The gross margin on affiliated entities sales are higher compared to third party sales due to different grade of granite stones at lower cost.

	Sales Revenues				Cost of Sales
	For the Years Ended				For the Years Ended
	December 31,		December 31,		December 31,		December 31,
	2015		2014		2015		2014
Affiliated Entities		8,257,534		23,100,627		625,571		7,250,258
Third parties		30,147,357		19,417,843		11,936,279		7,020,073
Total		38,404,891		42,518,470		12,561,850		14,270,331

During the year ended December 31, 2015, the Company posted operating income of $24,077,784 and net income of $24,215,164 as compared to operating income of $27,017,103 and net income of $27,014,470 for year ended December 31, 2014.

Operating expenses increased 43% from $1,231,036 in the year ended December 31, 2014 to $1,765,257 in the same period of 2015. The increase in these costs was primarily attributable to professional and travel expenses related to the Company’s going public in 2015.

	For the Years Ended
	December 31,		December 31,
	2015		2014
Insurance		-		345,461
Employees’ wages and salaries		413,954		471,641
Bad debt expense		261,847		15,130
Rent expense		74,838		125,505
Professional fees		457,354		11,607
Stock-based compensation		14,638		-
Travel expenses		263,781		39,900
Other SG&A expenses		278,845		221,792
Total		1,765,257		1,231,036

The Company’s bad debt increase as a result of write of uncollectible receivable from the export sales customers which the Company has limited its export sales in early 2014. Insurance policies were purchased by the Company for the shipment of goods as required by the bank on the export sales accounts receivables factored for advance financing in 2014.

In late 2015, the Company has started operation of trading gold, graphite, and fluorite, as well as sorting and filtering gold mine tailing activities. Sorting and filtering activities of gold mine tailing required the Company to incur additional expenses such as hiring additional workers and purchasing tools and supplies for the workers. In early 2014, export sales required the Company to incur additional expenses such as hiring additional employees and renting equipment for the delivery, loading and unloading of exported goods to and from the shipping ports. As a result, wages and salaries were comparable from year to year.

Other income generated were $137,380 in the year ended December 31, 2015 as compared to other expenses of $2,633 in the same period of 2014. The Company incurred interest expenses of $1,276 and $346,110 for the years ended 2015 and 2014 for trade financing loans that were paid off in 2015. The Company received $138,427 and $343,477 in government rebates which were mainly for export and insurance incentives that occurred in 2014 for export sales by the Company.

Related Party Transactions

From time to time, the Company receive advances from related parties as working capital to fund for its operations which consist of the following. These advances are due on demand, unsecured and non-interest bearing.

	December 31,			December 31,
	2015			2014
Mr. Tan Lin	$	(1,227,280	)	$	-
Mr. Wu XiaoBin		(778,449	)		-
Mr. Yang Yuan Xi		(539,389	)		(1,548	)
Mr. Wu ZhongChen		(539,389	)		-
Ms. Lynn Lee		(547,115	)		-
Total	$	(3,631,621	)	$	(1,548	)

Mr. Xiaobin Wu, the Company’s officer and director, is the Managing Director of Dandong Fuda Investment Co., Ltd (“Fuda Investment”) and Winner International Industries Ltd., (“Winner International”), each of these entities also holds a small (under 5%) interest in the Company. Revenue and Cost of Sales for these entities is shown separately on the Income statement as Revenue and Cost of Sales from Affiliated Entities.

In 2014, the Company acquired land from Fuda Investment for RMB 127,424,700; and from Winner International for RMB 65,965,000. The purchase price of the land was to be paid by stones in a barter trade exchange.

The Company recognized the land purchased (assets transferred) at historical cost because the transactions were not arm-length transactions as they were purchases from affiliated entities so therefore no gain or loss were recognized on the transfer. The Company would review the historical cost of the land to evaluate if there is an impairment loss to be recognized. The barter trade transactions were recognized as a land asset and as accounts payable to the sellers. The revenues were recognized against the outstanding amount owed to the sellers.

Barter trade revenues generated for the years ended December 31, 2015 and 2014 were $8,257,534 and $23,100,627, respectively.

Item 8. Financial Statements and Supplementary Data

The financial statements for the years ended December 31, 2015 and 2014 are attached hereto.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

There were no disagreements with the Company's accountants on accounting or financial disclosure for the period covered by this report.

Item 9A. Controls and Procedures

Pursuant to Rules adopted by the Securities and Exchange Commission the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures pursuant to Exchange Act Rules. This evaluation was done as of the end of the fiscal year under the supervision and with the participation of the Company's principal executive officer (who is also the principal financial officer).

The Company effected a change in control in 2015 resulting in changes in internal controls. The Company’s president and chief operating office supervise all internal controls and other factors that could significantly affect internal controls subsequent to the date of the evaluation. Based upon that evaluation, the principal executive officer believes that the Company's disclosure controls and procedures are effective in gathering, analyzing and disclosing information needed to ensure that the information required to be disclosed by the Company in its periodic reports is recorded, summarized and processed timely. The principal executive officer is directly involved in the current day-to-day operations of the Company.

Management's Report of Internal Control over Financial Reporting

The Company is responsible for establishing and maintaining adequate internal control over financial reporting in accordance with the Rule 13a-15 of the Securities Exchange Act of 1934. The Company's officer, its president, conducted an evaluation of the effectiveness of the Company's internal control over financial reporting as of December 31, 2015, based on the criteria establish in Internal Control Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission . Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2015, based on those criteria. A control system can provide only reasonably, not absolute, assurance that the objectives of the control system are met and no evaluation of controls can provide absolute assurance that all control issues have been detected.

BF Borgers, CPA PC. the independent registered public accounting firm for the Company, has not issued an attestation report on the effectiveness of the Company's internal control over financial reporting.

Changes in Internal Control Over Financial Reporting

The Company has not changed control over financial reporting in the fourth quarter. However, those officers maintain internal controls such that there has been no changes in the Company's internal controls over financial reporting during its fourth fiscal quarter that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. All financial reporting is overseen and handled by the chief executive officer.

Item 9B. Other Information

Not applicable.

PART III

Item 10. Directors, Executive Officers, and Corporate Governance

Officers and Directors

The following table sets forth information regarding the members of the Company’s board of directors, officers and management.

Name	Position	Age
Xiaobin Wu	President and Chief Executive Officer and Chief Financial Officer
Weiguo Lang	Chief Operating Officer
Bin Lee	Company Secretary and Legal Adviser
Jimmy Lee	Deputy Accounting Manager
Mihir Sangani	Director, Marketing and Investor Relations
Lynn Lee	Personal Assistant and People Officer

Xiaobin Wu

Xiaobin Wu serves as Chief Executive Officer, President and Chief Financial Officer of the Company, and is the sole director of the Company. From 2012 to the present, Mr. Wu has been the Managing Director of Liaoning Fuda Mining Co. Ltd. based in Dandong, China. Mr. Wu is also the Managing Director of Marvel Investment Corporation Limited based in Hong Kong, China since 2009. Mr. Wu received a Master of Business Administration degree in 2012 from Peking University in Beijing, China. Mr. Wu has extensive commercial and entrepreneur experience and a wide network of contacts.

Weiguo Lang

Weiguo Lang was appointed Chief Operating Officer in August 2015. Lang has a PhD in Engineering. Mr Lang has published greater than 20 academic papers and reports. He has significant engineering and operational experience in the mining industry.

Bin Li

Bin Li was appointed as Company Secretary and Legal Adviser in October 2015. Mr. Li finished his Masters Degree and Doctor of Jurisprudence Degree in the United States. Mr. Li is licensed by the State Bar of California to appear before the California Superior Court and Court of Appeal, the federal District Court and Bankruptcy Court for the Central District of California.

Jimmy Lee

Jimmy Lee was appointed as Deputy Accounting Manager in June 2015. He is a qualified well versed with both the US and Asian markets and has deep knowledge about auditing, financial, reporting, consulting, taxation and financial planning. He is also a licensed CPA.

Mihir Sangari

Mihir Sangari was appointed as Director of Sales and Marketing in August 2015. has significant global marketing & business development along with investor relation exposure. Mr. Sangani has expertise includes early stage company capital restructuring, debt financing, capital introductions, and mergers and acquisitions.

Lynn Lee

Lynn Lee was appointed Personal Assistant and People Officer since March 2014. She has many years of working experience in international locations with various industries in both public and private sectors -MNCs and local companies. She has extensive people management experience and organization planning and development experience.

Director Compensation

Directors do not receive any compensation for serving on the Board of Directors. The members of the Board of Directors may receive, if the Board so decides, a fixed fee and reimbursement of expenses, for attendance at each regular or special meeting of the Board, although no such program has been adopted to date.

Committees and Terms

The Board of Directors has not established any committees. The Company will notify its shareholders for an annual shareholder meeting and that they may present proposals for inclusion in the Company’s proxy statement to be mailed in connection with any such annual meeting; such proposals must be received by the Company at least 90 days prior to the meeting. No other specific policy has been adopted in regard to the inclusion of shareholder nominations to the Board of Directors.

Indemnification of Officers, Directors, Employees and Agents

The Certificate of Incorporation and bylaws of the Company provide that the Company shall, to the fullest extent permitted by applicable law, as amended from time to time, indemnify all directors of the Company, as well as any officers or employees of the Company to whom the Company has agreed to grant indemnification.

Section 145 of the Delaware General Corporation Law empowers a corporation to indemnify its directors and officers and to purchase insurance with respect to liability arising out of their capacity or status as directors and officers provided that this provision shall not eliminate or limit the liability of a director (i) for any breach of the director's duty of loyalty to the corporation or its stockholders, (ii) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (iii) arising under Section 174 of the Delaware General Corporation Law, or (iv) for any transaction from which the director derived an improper personal benefit.

The Delaware General Corporation Law provides further that the indemnification permitted thereunder shall not be deemed exclusive of any other rights to which the directors and officers may be entitled under the corporation's by-laws, any agreement, vote of shareholders or otherwise.

The effect of the foregoing is to require the Company to indemnify the officers and directors of the Company for any claim arising against such persons in their official capacities if such person acted in good faith and in a manner that he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his conduct was unlawful.

INSOFAR AS INDEMNIFICATION FOR LIABILITIES ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, MAY BE PERMITTED TO DIRECTORS, OFFICERS OR PERSONS CONTROLLING THE COMPANY PURSUANT TO THE FOREGOING PROVISIONS, IT IS THE OPINION OF THE SECURITIES AND EXCHANGE COMMISSION THAT SUCH INDEMNIFICATION IS AGAINST PUBLIC POLICY AS EXPRESSED IN THE ACT AND IS THEREFORE UNENFORCEABLE.

Item 11. Executive Compensation

Each of the officers has received certain shares of common stock in the Company in connection with the change of control of the Company. Accordingly, the Company has not recorded any compensation expense in respect of any shares issued to the officers as such shares do not represent compensation that was paid to any officer.

There are no current plans to pay or distribute any cash or non-cash bonus compensation to officers of the Company, until such time as the Company is profitable, experiences positive cash flow or obtains additional financing. However, the Board of Directors may allocate salaries and benefits to the officers in its sole discretion. No officer is subject to a compensation plan or arrangement that results from his or her resignation, retirement, or any other termination of employment with the Company or from a change in control of the company or a change in his or her responsibilities following a change in control. The Company currently has no retirement, pension, or profit-sharing plan covering its officers and directors; however, the Company plans to implement certain such benefits after sufficient funds are realized or raised by the Company (see “Anticipated Officer and Director Remuneration” below.)

Summary of Compensation Table:

The following table sets forth the compensation paid by us for the years ended December 31, 2015 and 2014 for our officers and directors. This information includes the dollar value of base salaries, bonus awards and number of stock options granted, and certain other compensation, if any. The compensation discussed addresses all compensation awarded to, earned by, or paid to our named executive officers.

Aggregate

Accrued

Annual

Salary

Stock

All

Annual

Earned

Payments

Since

and

Compensation

Other

Compensation

Name/Position

Year

Salary

Made

Inception

Bonus

Options

Plans

Compensation

Total

Xiaobin Wu

President, Chief Executive Officer,

2014

Chief Financial Officer, Director

2015

19,271

Employment Agreements

The Company enters into various employment agreements, where necessary, in the standard course of its business operations.

Anticipated Officer and Director Remuneration

The Company intends to pay annual salaries to all of its employees and an annual stipend to its directors when, and if, it completes a primary public offering for the sale of securities (i.e. a public offering raising capital for the Company). At such time, the Company anticipates offering cash and non-cash compensation to other employees and directors. In addition, the Company may also offer additional benefits to employees in its sole and absolute discretion.

The Company does not have a compensation committee.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table sets forth each person known by the Company to be the officer or director of the Company or a beneficial owner of five percent or more of the Company's common stock. The Company does not have any compensation plans. Except as noted, the holder thereof has sole voting and investment power with respect to the shares shown.

Name and Address	Amount of Beneficial		Percent of
of Beneficial Owner	Ownership		Outstanding Stock(1)

Xiaobin Wu
President, CEO, CFO and Director		53,218,000		50	%

All Executive Officers and
Directors as a Group (1 Persons)

(1) Based on 105,954,309 shares outstanding.

Item 13. Certain Relationships and Related Transactions and Director Independence

Pursuant to Rule 4200 of The NASDAQ Stock Market one of the definitions of an independent director is a person other than an executive officer or employee of a company. The Company’s board of directors has reviewed the materiality of any relationship that each of the directors has with the Company, either directly or indirectly. Based on this review, the board has determined that there are no independent directors.

Item 14. Principal Accounting Fees and Services.

Audit Fees

The aggregate fees incurred for each of the last two years for professional services rendered by the independent registered public accounting firm for the audits of the Company's annual financial statements and review of financial statements included in the Company's Form 10-K and Form 10-Q reports and services normally provided in connection with statutory and regulatory filings or engagements were as follows:

Audit Fees $ 95,000

The Company does not currently have an audit committee serving and as a result its board of directors performs the duties of an audit committee. The board of directors will evaluate and approve in advance, the scope and cost of the engagement of an auditor before the auditor renders audit and non-audit services. The Company does not rely on pre-approval policies and procedures.

PART IV

Item 15. Exhibits, Financial Statement Schedules

Financial Statements

The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.

Exhibits

31.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance
101.SCH	XBRL Taxonomy Extension Schema
101.CAL	XBRL Taxonomy Extension Calculation
101.DEF	XBRL Taxonomy Extension Definition
101.LAB	XBRL Taxonomy Extension Labels
101.PRE	XBRL Taxonomy Extension Presentation

SIGNATURES

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

		FUDA GROUP (USA) CORPORATION

Dated: April 21, 2016		By: /s/ Xiaobin Wu
		Chief Executive Officer

Dated: April 21, 2016
		By: /s/ Xiaobin Wu
		Chief Financial Officer

Pursuant to the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

		FUDA GROUP (USA) CORPORATION

Dated: April 21, 2016		By: /s/ Xiaobin Wu
		Director

FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm	F-1

Consolidated Balance Sheets	F-2

Consolidated Statements of Operations	F-3

Consolidated Statements of Changes in Stockholders' Equity	F-4

Consolidated Statements of Cash Flows	F-5

Notes to Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of Fuda Group (USA) Corporation:

We have audited the accompanying consolidated balance sheets of Fuda Group (USA) Corporation (“the Company”) as of December 31, 2015 and 2014 and the related statement of operations, stockholders’ equity (deficit) and cash flows for the years then ended. 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 audit.

We conducted our audit in accordance with 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, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statement referred to above present fairly, in all material respects, the financial position of Fuda Group (USA) Corporation, as of December 31, 2015 and 2014, and the results of its operations and its cash flows for the year then ended, in conformity with generally accepted accounting principles in the United States of America.

The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the Company's internal control over financial reporting. Accordingly, we express no such opinion.

/s/ B F Borgers CPA PC

BF Borgers CPA PC
Lakewood, CO
April 14, 2016

F-1

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Balance Sheets

	December 31,			December 31,
	2015			2014
ASSETS
Current Assets
Cash and cash equivalents	$	18,178,550		$	466
Accounts receivable, net		475,041			260,624
Inventory		-			3,843
Prepaid rent		28,254			65,058
Security deposits to suppliers		996,166			1,985,178
Other receivables		6,380			387,142
Total Current Assets		19,684,391			2,702,311
Land, property & equipment (net)		49,478,802			52,286,087
Other assets		46,233			48,872
Total Assets	$	69,209,426		$	55,037,270

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	29,014		$	8,420,643
Taxes payable		-			224
Due to related parties		3,631,621			1,548
Other payables		-			11,472
Trade financing loans		-			1,893,264
Advances from customers		6,164			-
Total Current Liabilities		3,666,799			10,327,151
Total Liabilities		3,666,799			10,327,151

Commitments & contingencies		-			-

Stockholders' Equity
Common stock, $0.0001 par value, 480,000,000 shares authorized; 105,954,309 shares at December 31, 2015 and 8,200,000 shares at December 31, 2014, respectively		10,595			820
Additional paid-in capital		9,579,682			9,564,907
Subscriptions receivable		-			(2,000	)
Accumulated other comprehensive income		(3,188,494	)		220,712
Statutory reserve		5,990,116			3,493,474
Accumulated earnings (unrestricted)		53,150,728			31,432,206
Total stockholders' equity		65,542,627			44,710,119
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	69,209,426		$	55,037,270

The accompanying notes are an integral part of these financial statements

F-2

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Operations

	For the Years Ended
	December 31,			December 31,
	2015			2014
Sales
Affiliated Entities	$	8,257,534		$	23,100,627
Third parties		30,147,357			19,417,843
Total sales		38,404,891			42,518,470
Cost of sales
Affiliated Entities		625,571			7,250,258
Third parties		11,936,279			7,020,073
Total cost of sales		12,561,850			14,270,331

Gross margin		25,843,041			28,248,139

Operating expenses
Selling, general & administrative expenses		1,765,257			1,231,036
Total operating expenses		1,765,257			1,231,036

Income (Loss) from operation		24,077,784			27,017,103

Other income (expenses)
Interest income (expenses), net		(1,276	)		(346,110	)
Government rebate		138,427			343,477
Other income		229			-
Total other income (expenses)		137,380			(2,633	)

Income before income tax		24,215,164			27,014,470

Income tax		-			-

Net income		24,215,164			27,014,470

Foreign currency translation adjustment		(3,414,934	)		(73,259	)

Comprehensive income	$	20,800,230		$	26,941,211

Common Shares Outstanding, basic and diluted		87,430,953			2,201,644

Net income per share Basic and diluted	$	0.28		$	12.27

The accompanying notes are an integral part of these financial statements

F-3

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders' Equity

For the years ended December 31, 2014 and December 31, 2015

													Accumulated
	Common Stock						Additional						Other
	$0.0001 Par Value						Paid-in			Subscriptions			Comprehensive			Accumulated		Statutory
	Shares			Amount			Capital			Receivable			Income			Earnings		Reserves		Totals
Balance, September 25, 2014 (Inception)	-			$	-		$	-		$	-		$	-		$	-	$	-	$	-
Issuance of common stock		8,200,000			820			1,180			(2,000	)									-
Expenses paid by stockholder and contributed as capital								1,698													1,698
Issuance of common stock for acquisition of subsidiaries								9,602,706						293,971			7,119,353		791,857		17,807,887
Capital withdrawal from owners								(40,677	)												(40,677	)
Net loss																	24,312,853		2,701,617		27,014,470
Cumulative translation adjustment														(73,259	)						(73,259	)
Balances at December 31, 2014		8,200,000		$	820		$	9,564,907		$	(2,000	)	$	220,712		$	31,432,206	$	3,493,474	$	44,710,119
Cancellation of common stock		(7,995,000	)		(800	)		(1,150	)		1,950										-
Issuance of common stock for cash		123,615,000			12,362			17,788			(30,150	)									-
Cancellation of common stock		(123,615,000	)		(12,362	)		(17,788	)		30,150										-
Issuance of common stock for cash		59,794,309			5,979			8,605			(14,584	)									-
Issuance of common stock for acquisition		45,920,000			4,592			6,608			-										11,200
Issuance of common stock for Compensation		35,000			4			-			-										4
Expenses paid by stockholder and contributed as capital								712													712
Stock subscribed converted to stock compensation		-			-			-			14,634										14,634
Net income																	21,718,522		2,496,642		24,215,164
Cumulative translation adjustment														(3,409,206	)						(3,409,206	)
Balances at December 31, 2015		105,954,309		$	10,595		$	9,579,682		$	-		$	(3,188,494	)	$	53,150,728	$	5,990,116	$	65,542,627

The accompanying notes are an integral part of these financial statements

F-4

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Cash Flows

	For the Years Ended
	December 31,			December 31,
	2015			2014
Cash flows from operating activities
Net income	$	24,215,164		$	27,014,470
Adjustments to reconcile net income to net cash provided by or used in operating activities:
Bad debt expense		261,847			15,130
Shares to be used and issued for compensation		14,638			-
Depreciation and amortization		4,702			4,199
Expenses paid by stockholder and contributed as capital		712			1,698
Changes in operating assets and liabilities:
Accounts receivable		(474,909	)		1,055,131
Inventory		3,838			5,598,542
Prepaid rent		35,541			109,480
Other receivables		380,039			(52,513	)
Security deposits to suppliers		955,957			2,715,958
Accounts payable and accrued expenses		(8,381,843	)		(5,832,650	)
Taxes payable		1,240			224
Other payables		(11,459	)		11,451
Advances from customers		6,424			-
Other assets		-			(48,815	)
Net cash provided by operating activities		17,011,891			30,592,305

Cash flows from financing activities
Capital withdrawal from owners		-			(40,677	)
Proceeds from issuance of common stock		-			-
Proceeds/(Repayment) to related party, net		3,743,217			(21,059	)
Proceeds/(Repayments) from trade financing loans, net		(1,891,048	)		(2,082,415	)
Net cash used in financing activities		1,852,169			(2,144,151	)

Cash flows from investing activities
Purchase of land, property and equipment		(20,776	)		(31,633,774	)
Net cash used in investing activities		(20,776	)		(31,633,774	)

Effect of exchange rate changes		(665,200	)		73,558

NET INCREASE (DECREASE) IN CASH		18,178,084			(3,112,062	)

CASH
Beginning of period		466			3,112,528
End of period	$	18,178,550		$	466

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR:
Interest	$	1,345		$	346,110
Income Taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements

F-5

FUDA GROUP (USA) CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

ORGANIZATION AND DESCRIPTION OF BUSINESS

Fuda Group (USA) Corporation (“Fuda USA”) was incorporated on September 25, 2014 under the laws of the state of Delaware to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions.

On September 28, 2015, Fuda USA entered into stock-for-stock acquisition agreements with each of Fuda Gold (UK) Limited (“Fuda UK”) and Marvel Investment Corporation Limited (“Marvel”). As a result of the Acquisitions, each of Fuda UK and Marvel has been acquired by Fuda USA, and now each has become a wholly owned subsidiary of Fuda USA. Fuda USA, as the surviving entity from the Acquisitions, has taken over the respective operations and business plans of each of both Fuda UK and Marvel (and also of Liaoning Fuda by virtue of Marvel’s ownership of Liaoning Fuda). Refer to “Principal of Consolidation” under Note 2 Summary of Significant Accounting Policies

Fuda UK a private company organized under the laws of England and Wales was incorporated in May 20, 2015. Since its inception, Fuda UK has conducted minimal business operations but has started to purchase gold stones and powder and wholesale trading of gold bars. Fuda UK has executed a cooperative operation agreement to filter and sort gold sands or gold dust from the gold mine tailings and to sell the goods under a profit sharing ratio.

Marvel Investment Corporation Limited was incorporated on October 28, 2009 under the laws of Hong Kong, PRC. The Company was established to engage in any lawful corporate undertaking, including, but not limited to, selected mergers and acquisitions. Marvel has conducted limited business operations in trading graphite and fluorite.

Fuda USA and its subsidiaries Marvel, Fuda UK, and Liaoning Fuda shall be collectively known as the “Company”.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying unaudited financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“US GAAP”).

This basis of accounting involves the application of accrual accounting and consequently, revenues and gains are recognized when earned, and expenses and losses are recognized when incurred.

The Company’s financial statements are expressed in U.S. dollars.

Reclassification

Certain amounts in the prior period financial statements have been reclassified to conform to the current period presentation. These reclassifications had no effect on reported net income or losses.

F-6

Principal of Consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All significant inter-company accounts and transactions have been eliminated in consolidation.

Acquisition of Fuda UK and Marvel by Fuda USA

The acquisition was accounted under US GAAP as a business combination under reverse acquisition with Fuda UK and Marvel being the acquirers and Fuda USA being the acquiree as shares were issued by the public entity to acquire an interest in a larger privately owned entity; thereafter the shareholders of the privately owned entity became the controlling interest of the public entity. The consolidated financial statements have been presented at historical costs and on a retroactive basis to reflect the capital structure of Fuda UK and Marvel. The share exchange transaction was completed and effective on September 28, 2015 and Fuda UK and Marvel became subsidiaries of Fuda USA.

Acquisition of Liaoning Fuda by Marvel

The acquisition was accounted under US GAAP as a business combination under common control with Marvel being the acquirer as both entities were owned by the same shareholder. The consolidated financial statements have been presented at historical costs and on a retroactive basis. No purchase price or reverse merger accounting methods were used. The business combination transaction was completed and effective on June 30, 2015 and Liaoning became a subsidiary of Marvel.

Use of Estimates

The preparation of financial statements in conformity with US GAAP 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 consolidated financial statements and the amount of revenues and expenses during the reporting periods. Actual results could differ materially from those results.

Comprehensive Income (Loss)

The Company follows the provisions of the Financial Accounting Standards Board (the “FASB”) Accounting Standards Codification (“ASC”) 220 “Reporting Comprehensive Income”, and establishes standards for the reporting and display of comprehensive income, its components and accumulated balances in a full set of general purpose financial statements. The Company’s comprehensive income (loss) consist of net income (loss) and foreign currency translation adjustments.

Fair Value Measurements

The Company applies the provisions of ASC Subtopic 820-10, “Fair Value Measurements”, for fair value measurements of financial assets and financial liabilities and for fair value measurements of nonfinancial items that are recognized or disclosed at fair value in the financial statements. ASC 820 also establishes a framework for measuring fair value and expands disclosures about fair value measurements.

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.

ASC 820 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 establishes three levels of inputs that may be used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to measurements involving significant unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are as follows:

F-7

- Level 1 inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.

- Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments.

- Level 3 inputs to the valuation methodology are unobservable and significant to the fair value.

There were no assets or liabilities measured at fair value on a recurring basis subject to the disclosure requirements of ASC 820 as of the balance sheet date.

Foreign Currency Translation

The reporting currency of Fuda Group (USA) Corporation is the US Dollar (“US$”).

The functional currency of Liaoning Fuda is the Chinese Renminbi (“RMB”).

The functional currency of Marvel is the Chinese Renminbi (“RMB”) and translated to the local currency Hong Kong Dollar (“HK$”).

The functional currency of Fuda UK is Chinese Renminbi (“RMB”) and translated to the local currency British Pounds (“GBP”).

Transactions in currencies other than the entity’s functional currency are recorded at the rates of exchange prevailing on the date of the transaction. At the end of each reporting period, monetary items denominated in foreign currencies are translated at the rates prevailing at the end of the reporting periods. Exchange differences arising on the settlement of monetary items and on translation of monetary items at period-end are included in income statement of the period.

For the purpose of presenting these financial statements, the Company’s assets and liabilities are expressed in US$ at the exchange rate on the balance sheet date, stockholder’s equity accounts are translated at historical rates, and income and expense items are translated at the weighted average exchange rate during the period. The resulting translation adjustments are reported under accumulated other comprehensive income in the stockholder’s equity section of the balance sheets.

Exchange rate used for the translation as follows:

	December 31,		December 31,
RMB to US$	2015		2014
Period end spot rate		0.15411		0.16291
Average periodic rate		0.16059		0.16272

HKD to US$
Period end spot rate		0.12903		0.12891
Average periodic rate		0.12899		0.12895

GBP to US$
Period end spot rate		1.48258		N/A
Average periodic rate		1.52832		N/A

Cash and Cash Equivalents

The Company considers highly-liquid investments with maturities of three months or less, when purchased, to be cash and cash equivalents.

Accounts Receivable

Accounts receivable are stated at the amount the Company expects to collect from outstanding balances. The Company provides for probable uncollectible amounts through a charge to earnings and a credit to an allowance for doubtful accounts based on its assessment of the current status of individual accounts. Balances that are still outstanding after the Company has used reasonable collection efforts are written off through a charge to the allowance for doubtful accounts and a credit to accounts receivable.

F-8

Bad debt expenses were $261,847 and $15,130 for the years ended December 31, 2015 and 2014, respectively.

Inventories

Inventories, which are primarily comprised of goods for sale, are stated at the lower of cost or net realizable value, using the first-in first-out (FIFO) method. The Company evaluates the need for reserves associated with obsolete, slow-moving and non-salable inventory by reviewing net realizable values on a periodic basis.

Property and Equipment

Property and equipment are recorded at cost and depreciated using the straight-line method, at original cost, over the estimated useful lives of the assets as follows:

Machinery	5 years
Office equipment	5 years
Motor Vehicle	10 years

Expenditures for repairs and maintenance, which do not improve or extend the expected useful lives of the assets, are expensed as incurred while major replacements and improvements are capitalized.

Valuation of Long-Lived assets

Long-lived assets and certain identifiable intangibles are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to future net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Security deposits

Security deposits are paid by Liaoning Fuda to its suppliers in order to ensure ample, constant supply and prompt delivery of goods

Security deposits are paid by Fuda UK to its suppliers to establish a purchase commitment.

Revenue Recognition

The Company generally recognizes product sales revenue when the significant risks and rewards of ownership have been transferred pursuant to PRC law, including such factors as when persuasive evidence of an arrangement exists, delivery has occurred, the sales price is fixed or determinable, sales and value-added tax laws have been complied with, and collectability is reasonably assured.

Liaoning Fuda Direct Domestic Sales

The Company recognizes product sales revenue when customers pick up and pay for the goods at once. The customer is responsible for losses when occurred. The Company sets out the terms and conditions of the sales contract and deals directly with customers.

F-9

Liaoning Fuda Direct International Sales

The Company recognizes product sales revenue when bill of lading is received from shipping company. Although the title does not formally transfer until the goods have reach its destination port, the customer has a binding agreement for the goods; and is obligated to purchase them because a deposit has been made by the customer on the purchased goods. The Company is responsible for losses in case of a shipping issue, but in all cases the Company has purchased insurance to cover for such loss. The Company sets out the terms and conditions of the sales contract and deals directly with customers.

Liaoning Fuda Agency International Sales

The Company recognizes product sales revenue when bill of lading in received from shipping company although the title does not transfer until the goods have reach its destination port. The Agent is responsible for losses when occurred which the Agent has a blanket insurance to cover for such loss. The Agent would prepare the terms and conditions of the sales contract and deals directly with customers. The Company sets out the terms and conditions of the sales contract and deals directly with customers.

Marvel Sales

The Company derives its revenues from trading graphite and fluorite. The Company recognizes sales of graphite and fluorite revenue when the goods are delivered to destination designated by the customer. Customer is allowed to return the goods or cancel the order subject to a penalty. The Company sets out the terms and conditions of the sales contract and deals directly with customers.

Fuda UK Sales

The Company derives its revenues from trading gold stones, gold sand, or gold bars. The Company recognizes sales of gold stones, gold sand, or gold bars revenue when the goods are delivered to destination designated by the customer. Sales price of the goods are to be negotiated between Fuda UK and the customer, and accepted by the customer after a third party inspection report for quality and weight is obtained prior to arrival at the destination of the customer. In case of finding irregularity or discrepancy in weight or purity of the goods, the customer is allowed to claim from Fuda UK to deduct the corresponding amount and any cost within 7 days upon receipt of the actual goods. The Company sets out the terms and conditions of the sales contract and deals directly with customers.

Fuda UK Cooperative Operation

The Company derives its revenues from trading gold sands or gold dust filtered and sorted from the gold mine tailings owned by the Chinese government under a cooperative profit sharing agreement. The cooperative agreement indicated the profit sharing is based on the gross sales price for the products sold and the ratios are to be 25% to mine owner, 35% to mine workers, and 40% to the Company. The Company shall collect payments from the customers for the goods sold and distribute the gross amount upon payment from the customers. The Company is responsible for managing the day to day operation activities in providing labor, tools, and equipment. At Sale, the Company is only entitled to 40% of the proceeds when the goods are sold similar to a royalty interest or net smelter interest, and the payments are only legally owed when the goods are sold while nothing is owed to the Company until completion of the sale.

As of December 31, 2015, the Company has not generated any revenues from such operation.

F-10

Nonmonetary Transactions

The Company recognizes nonmonetary transactions in accordance to ASC 845-10-30 which in general, that nonmonetary transactions should be based on the fair values of the assets (or services) involved, which is the same basis as that used in monetary transactions. Thus, the cost of a nonmonetary asset acquired in exchange for another nonmonetary asset is the fair value of the asset surrendered to obtain it, and a gain or loss shall be recognized on the exchange. The fair value of the asset received shall be used to measure the cost if it is more clearly evident than the fair value of the asset surrendered. Similarly, a nonmonetary asset received in a nonreciprocal transfer shall be recorded at the fair value of the asset received. A transfer of a nonmonetary asset to a stockholder or to another entity in a nonreciprocal transfer shall be recorded at the fair value of the asset transferred and a gain or loss shall be recognized on the disposition of the asset.”

Value added taxes

The Company is subject to Value Added Taxes (“VAT”) at a rate of 17% on proceeds received from customers, and are entitled to a refund for VAT already paid or borne on the goods purchased by it that have generated the gross sales proceeds. The VAT balance is recorded in other payables on the balance sheets. For the Years ended December 31, 2015 and 2014 there are no amounts recorded because the Company received a VAT tax holiday from the government that will expire in 2017.

Advertising

The Company expenses advertising costs as incurred and are included in selling expenses.

Government Subsidies

The Company recognizes government grants that are non-operating in nature and with no further conditions to be met as other income when received. The Company recognizes government grants that contain certain operating conditions as liabilities when received, and as a reduction of the related costs for which the grants are intended to compensate when the conditions are met.

The government subsidies or rebates received by the Company as other income was an incentive to the Company to support export trade were $138,427 and $343,477 for the years ended December 31, 2015 and 2014, respectively.

Stock Based Compensation

The Company recognizes stock based compensation in accordance to ASC718 which requires companies to measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements include stock options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. As such, compensation cost is measured on the date of grant at their fair value. Such compensation amounts, if any, are amortized over the respective vesting periods of the option grant.

Equity instruments (“instruments”) issued to other than employees are recorded on the basis of the fair value of the instruments, as required by ASC No. 718. FASB ASC No. 505, Equity Based Payments to Non-Employees, defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in the FASB ASC.

Refer to Footnote 11 Stock Based Compensation for additional information.

F-11

Income Taxes

The Company accounts for income taxes using an asset and liability approach which allows for the recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain.

Under ASC 740, a tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The evaluation of a tax position is a two-step process. The first step is to determine whether it is more-likely-than-not that a tax position will be sustained upon examination, including the resolution of any related appeals or litigations based on the technical merits of that position. The second step is to measure a tax position that meets the more-likely-than-not threshold to determine the amount of benefit to be recognized in the financial statements. A tax position is measured at the largest amount of benefit that is greater than 50 percent likely of being realized upon ultimate settlement. Tax positions that previously failed to meet the more-likely-than-not recognition threshold should be recognized in the first subsequent period in which the threshold is met. Previously recognized tax positions that no longer meet the more-likely-than-not criteria should be de-recognized in the first subsequent financial reporting period in which the threshold is no longer met. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the year incurred.

Segment Information

The standard, “Disclosures about Segments of an Enterprise and Related Information,” codified with ASC-280, requires certain financial and supplementary information to be disclosed on an annual and interim basis for each reportable segment of an enterprise. The Company believes that it operates in one business segment (marketing and sales) and in one geographical segment (China), as all of the Company’s current operations are carried in China.

Recent Accounting Pronouncements

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory, which modifies existing requirements regarding measuring inventory at the lower of cost or market. Under existing standards, the market amount requires consideration of replacement cost, net realizable value (NRV), and NRV less an approximately normal profit margin. The new ASU replaces market with NRV, defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. This eliminates the need to determine and consider replacement cost or NRV less an approximately normal profit margin when measuring inventory. The amendments are effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early application is permitted. The Company is currently assessing this ASU’s impacts on the Company’s consolidated results of operations and financial condition.

In February 2015, FASB issued ASU No. 2015-02, Consolidation (Topic 810): Amendments to the Consolidation Analysis. The new consolidation standard changes the way reporting enterprises evaluate whether (a) they should consolidate limited partnerships and similar entities, (b) fees paid to a decision maker or service provider are variable interests in a VIE, and (c) variable interests in a VIE held by related parties of the reporting enterprise require the reporting enterprise to consolidate the VIE. The guidance is effective for public business entities for annual and interim periods in fiscal years beginning after December 15, 2015. Early adoption is allowed, including early adoption in an interim period. A reporting entity may apply a modified retrospective approach by recording a cumulative-effect adjustment to equity as of the beginning of the fiscal year of adoption or may apply the amendments retrospectively. The Company is currently assessing the impact of the adoption of this guidance on the consolidated financial statements.

F-12

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which provides a single comprehensive model to be used in the accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. The standard’s stated core principle is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve this core principle the ASU includes provisions within a five step model that includes identifying the contract with a customer, identifying the performance obligations in the contract, determining the transaction price, allocating the transaction price to the performance obligations, and recognizing revenue when (or as) an entity satisfies a performance obligation. The standard also specifies the accounting for some costs to obtain or fulfill a contract with a customer and requires expanded disclosures about revenue recognition. The standard provides for either full retrospective adoption or a modified retrospective adoption by which it is applied only to the most current period presented. This ASU is effective January 1, 2017. The Company is currently assessing this ASU’s impact on the Company’s consolidated results of operations and financial condition.

The Company believes that there were no other accounting standards recently issued that had or are expected to have a material impact on our financial position or results of operations.

ACCOUNTS RECEIVABLES

Accounts receivables consist of the following:

	December 31,			December 31,
	2015			2014
Accounts receivables	$	736,888		$	275,754
Less: allowance for doubtful accounts		(261,847	)		(15,130	)
Net		475,041			260,624

Bad debt expenses were $261,847 and $15,130 for the years ended December 31, 2015 and 2014, respectively.

SECURITY DEPOSITS TO SUPPLIERS

Security deposits paid by Liaoning Fuda were to maintain its relationship with the suppliers in order to ensure ample, constant supply and prompt delivery of goods,

Security deposits paid by Fuda UK was a purchase commitment upon execution of the contract

Security deposits to suppliers consist of the following:

	December 31,		December 31,
	2015		2014
Liaoning Fuda - Supplier A	$	-	$	765,986
Liaoning Fuda - Supplier B		-		358,720
Liaoning Fuda - Supplier C		-		860,472
Fuda UK - Supplier D		996,166		-
Total	$	996,166	$	1,985,178

LAND, PROPERTY & EQUIPMENT

Land, property & equipment consist of the following:

	December 31,			December 31,
	2015			2014
Depreciable assets
Office equipment	$	8,281		$	8,754
Motor vehicle		14,386			15,207
Machinery		20,154			-
Total		42,821			23,961
Less: accumulated depreciation		(10,049	)		(5,841	)
Net		32,772		$	18,120
Non-depreciable assets
Land		49,446,030			52,267,967
Total	$	49,478,802		$	52,286,087

F-13

The depreciation expense charged to general and administrative expenses were $3,156 and $2,755 for the years ended December 31, 2015 and 2014, respectively.

The difference in land, motor vehicle, and office equipment value is due to currency exchange rate fluctuations.

OTHER ASSETS

Other assets consist of the following:

	December 31,		December 31,
	2015		2014
Rent Security Deposits	$	46,233	$	48,872
Total	$	46,233	$	48,872

TRADE FINANCING LOANS

The Company has executed short term accounts receivables factoring agreements with the banks with maturity from one to three months. The bank would advance the Company a contracted discount percentage of 70%-85% of the accounts receivables invoices factored up front and charge a contracted interest fee at average rate of 2%-4% based on the percentage advanced. When the outstanding accounts receivable invoice is collected, the advanced amount plus any accrued interest are repaid. The Company has also purchased insurance for the full invoiced amount.

The outstanding amount of trade financing loans were $nil and $1,893,264 as of December 31, 2015 and December 31, 2014, respectively. The shareholders of the Company have repaid the outstanding trade financing loans on behalf of the Company which is included in Due to related parties.

The discounts and interest expenses were $1,276 and $346,110 for the years ended December 31, 2015 and 2014, respectively.

ADVANCES FROM CUSTOMERS

Advances from customers consist of amounts received from a customer as a security deposit for a machinery equipment sales commitment contract.

The outstanding amount of advances from customers were $6,164 and $nil as of December 31, 2015 and 2014, respectively.

RELATED PARTY TRANSACTIONS

The Company has an outstanding payable amount of $539,389 and $1,548 to Mr. Yang Yuan Xi, the Company’s legal representative, as of December 31, 2015 and December 31, 2014, respectively.

The Company has an outstanding payable amount of $539,389 and $nil to Mr. Zhong Chen Wu, father of Mr. Xiao Bin Wu and a shareholder of the Company, as of December 31, 2015 and December 31, 2014, respectively.

The Company has an outstanding payable amount of $778,449 and $nil to Mr. Xiao Bin Wu, the Company’s officer, director, and majority shareholder, as of December 31, 2015 and December 31, 2014, respectively.

The Company has an outstanding payable amount of $547,115 and $nil to Ms. Lynn Lee, the Company’s officer, as of December 31, 2015 and December 31, 2014, respectively.

F-14

The Company has an outstanding payable amount of $1,227,280 and $nil to Mr. Tan Lin, the Fuda UK’s officer and shareholder of the Company, as of December 31, 2015 and December 31, 2014, respectively.

The amounts above are advances received from related parties from time to time as working capital to fund for its operations. These advances are due on demand, unsecured and non-interest bearing.

Barter trade revenues generated for the years ended December 31, 2015 and 2014 were $8,257,534 and $23,100,627, respectively.

10.

STOCKHOLDERS' EQUITY

The Company is authorized to issue 480,000,000 shares of common stock and 20,000,000 shares of preferred stock.

On September 25, 2014 the Company issued 8,200,000 founders common stock at $0.0001 per share for a total of $820 for cashto two directors and officers of which 7,995,000 shares were cancelled on February 20, 2015 at $0.0001 per share for a total of $800. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

On February 21, 2015, the Company issued 123,615,000 shares of its common stock at $0.0001 per share for cash which all 123,615,000 shares were cancelled between July 1, 2015 and September 7, 2015. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

Between July 1, 2015 and September 7, 2015, the Company issued 59,794,309 shares of its common stock at $0.0001 per share for a total of $5,979 for cash. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

On September 28, 2015, pursuant to the Acquisition Agreements, the Company acquires each of Fuda UK and Marvel through the exchange of (i) all of the outstanding shares of Fuda UK for 20,500,000 shares of common stock of the Company, and (ii) all of the outstanding shares of Marvel for 25,420,000 shares of common stock of the Company. Accordingly, a total of 45,920,002 shares were issued at $0.0001 per share for a total of $4,592 for the acquisitions. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

F-15

On October 1, 2015, the Company issued 35,000 shares of its common stock at $0.0001 as compensation to various employees for a total of $4. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

From time to time, the Company’s majority shareholder has paid expenses on behalf of the Company that are recorded as contribution to paid-in capital. The amounts contributed to paid-in capital were $712 and $1,698 for the years ended December 31, 2015 and 2014, respectively.

11.

STOCK-BASED COMPENSATION

On December 31, 2015, the Company converted 59,999,037 shares of its previously unpaid common stock subscriptions to compensation expense as it has become unlikely that this subscription receivable will be paid back to the company and needed to be written off for a total of $14,634. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

12.

GOVERNMENT CONTRIBUTION PLAN

Pursuant to the laws applicable to PRC law, the Company is required to participate in a government-mandated multi-employer defined contribution plan pursuant to which certain retirement, medical and other welfare benefits are provided to employees. Chinese labor regulations require the Company to pay to the local labor bureau a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The relevant local labor bureau is responsible for meeting all retirement benefit obligations; the Company has no further commitments beyond its monthly contribution.

13.

STATUTORY RESERVE

Pursuant to the laws applicable to the PRC, the Company must make appropriations from after-tax profit to the non-distributable “statutory surplus reserve fund”. Subject to certain cumulative limits, the “statutory surplus reserve fund” requires annual appropriations of 10% of after-tax profit until the aggregated appropriations reach 50% of the registered capital (as determined under accounting principles generally accepted in the PRC ("PRC GAAP") at each year-end). For foreign invested enterprises and joint ventures in the PRC, annual appropriations should be made to the “reserve fund”. For foreign invested enterprises, the annual appropriation for the “reserve fund” cannot be less than 10% of after-tax profits until the aggregated appropriations reach 50% of the registered capital (as determined under PRC GAAP at each year-end). If the Company has accumulated loss from prior periods, the Company is able to use the current period net income after tax to offset against the accumulate loss.

The PRC regulations also restrict the ability of the Company to make dividend and other payments to offshore entities or individuals. The PRC legal restrictions permit payments of dividend by the Company only out of its accumulated after-tax profits, if any, determined in accordance with PRC GAAP and regulations. Any limitations on the ability of the Company to transfer funds could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to the Company’s business, pay dividends and otherwise fund and conduct the Company’s business.

F-16

14.

INCOME TAXES

United States

Fuda USA is established in the State of Delaware in United States and is subject to Delaware State and US Federal tax laws. Fuda USA has approximately $614,625 of unused net operating losses (“NOLs”) available for carry forward to future years for U.S. federal income tax reporting purposes. The benefit from the carry forward of such NOLs will begin expiring during the year ended December 31, 2034. Because United States tax laws limit the time during which NOL carry forwards may be applied against future taxable income, the Company may be unable to take full advantage of its NOLs for federal income tax purposes should the Company generate taxable income. Further, the benefit from utilization of NOL carry forwards could be subject to limitations due to material ownership changes that could occur in the Company as it continues to raise additional capital. Based on such limitations, the Company has significant NOLs for which realization of tax benefits is uncertain.

United Kingdom

Fuda UK is established in United Kingdom and its income is subject to a 20% profit tax rate for income sourced within the country. During the years ended December 31, 2015 and 2014, Fuda UK did not earn any income derived in United Kingdom, and therefore was not subject to United Kingdom Profits Tax.

Hong Kong

Marvel is established in Hong Kong and its income is subject to a 16% profit tax rate for income sourced within the country. During the years ended December 31, 2015 and 2014, Marvel did not earn any income derived in Hong Kong, and therefore was not subject to Hong Kong Profits Tax.

China, PRC

Liaoning Fuda established in China and its income is subject to income tax rate of 25%. But has received an income tax holiday from the government for three years that will expire in 2017.

The reconciliation of effective income tax rate as follows:

	For the Years ended
	December 31,			December 31,
	2015			2014
PRC Statutory income tax rate		25	%		25	%
Less: Income tax holiday		-25	%		-25	%
Total		-			-

The provision for income tax on earnings as follows:

	For the Years ended
	December 31,			December 31,
	2015			2014
PRC income tax at statutory rate		6,241,606			6,754,042
Less: Income tax subject to tax holiday		(6,241,606	)		(6,754,042	)
Total		-			-

15.

COMMITMENTS, CONTINGENCIES, RISKS AND UNCERTAINTIES

The Company has executed lease agreements for office space and dormitory for Liaoning Fuda in Dandong, China which expires in December 2022.

The Company has executed a car lease for Liaoning Fuda that expires in June 2016.

The total future minimum lease payments under the operating leases as follows:

F-17

Periods	Amounts
For year ended December 31, 2016	$	72,264
For year ended December 31, 2017		64,235
For year ended December 31, 2019		64,235
For year ended December 31, 2019		64,235
Thereafter		385,413
Total	$	650,382

Rent expenses for office space and dormitory were $74,838 and $125,505 for the years ended December 31, 2015 and 2014, respectively.

Concentration and Credit risk

Cash deposits with banks are held in financial institutions in China, which are not federally insured deposit protection. Accordingly, the Company has a concentration of credit risk related to these uninsured bank deposits. The Company has not experienced any losses in such accounts and believes it is not exposed to significant credit risk in this area.

The Company depends on a limited number of suppliers for its products. Accordingly, the Company has a concentration risk related to these suppliers. Failure to maintain existing relationships with our suppliers or to establish new relationships in the future could also negatively affect our ability to obtain products sold to customers in a timely manner. If the Company is unable to obtain ample supply of products from existing suppliers or alternative sources of supply, the Company may be unable to satisfy our customers’ orders, which could materially and adversely affect revenues.

16.

BUSINESS SEGMENTS

The revenues and cost of goods sold from operation consist of the following:

	Revenues				Cost of Sales
	For the Years Ended				For the Years Ended
	December 31,		December 31,		December 31,		December 31,
	2015		2014		2015		2014
Granite stones		37,742,040		42,518,470		11,948,891		14,270,331
Graphite		224,936		-		199,957		-
Fluorite		249,926		-		174,966		-
Gold		187,989		-		238,036		-
Total		38,404,891		42,518,470		12,561,850		14,270,331

The revenues and costs of goods sold for Affiliated Entities (See note 9) and third parties consist of the following:

	Sales Revenues				Cost of Sales
	For the Years Ended				For the Years Ended
	December 31,		December 31,		December 31,		December 31,
	2015		2014		2015		2014
Affiliated Entities		8,257,534		23,100,627		625,571		7,250,258
Third parties		30,147,357		19,417,843		11,936,279		7,020,073
Total		38,404,891		42,518,470		12,561,850		14,270,331

17.

SUBSEQUENT EVENTS

Management has evaluated all events subsequent to year end through the date of this filing, noting that none materially impacted the financial statements.

F-18