SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-K

(Mark One)





|x | ANNUAL REPORT PURSUANT TO
    SECTION 13 OR 15(d) OF THESECURITIES
    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, 11th 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

 ̈YesxNo



Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. ̈YesxNo



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.

xYes ̈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.

xYes ̈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).

 ̈YesxNo



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











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, 59,794,307 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. Subsequently, 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.



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,        | 
|               |  | 2015                |            |  | 2014                | 
|Granite Stones |  |                     | 37,742,040 |  |                     | 
|Graphite       |  |                     | 224,936    |  |                     | 
|Fluorite       |  |                     | 249,926    |  |                     | 
|Gold           |  |                     | 187,989    |  |                     | 
|Total          |  |                     | 38,404,891 |  |                     | 



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,        | 
|                    |  | 2015                |            |  | 2014                | 
|Affiliated Entities |  |                     | 8,257,534  |  |                     | 
|Third parties       |  |                     | 30,147,357 |  |                     | 
|Total               |  |                     | 38,404,891 |  |                     | 



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,        |          
|                              |  | 2015                |          
|Insurance                     |  |                     | -        
|Employees’ wages and salaries |  |                     | 413,954  
|Bad debt expense              |  |                     | 261,847  
|Rent expense                  |  |                     | 74,838   
|Professional fees             |  |                     | 457,354  
|Stock-based compensation      |  |                     | 14,638   
|Travel expenses               |  |                     | 263,781  
|Other SG&A expenses           |  |                     | 278,845  
|Total                         |  |                     | 1,765,257













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 Xiao Bing  |  |              | (778,449   | ) |              |  
|Mr. Yang Yuan Xi  |  |              | (539,389   | ) |              |  
|Mr. Wu Zhong Chen |  |              | (539,389   | ) |              |  
|Ms. Lynn Lee      |  |              | (547,115   | ) |              |  
|Total             |  | $            | (3,631,621 | ) |              | $



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 year ended December 31, 2015 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 Treaddway 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 |        |  | 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 |  |                      | 
|                                 |  |                      |            |  |                      | 
|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.



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 Xiao Bing  |  |              | (778,449   | ) |              |  
|Mr. Yang Yuan Xi  |  |              | (539,389   | ) |              |  
|Mr. Wu Zhong Chen |  |              | (539,389   | ) |              |  
|Ms. Lynn Lee      |  |              | (547,115   | ) |              |  
|Total             |  | $            | (3,631,621 | ) |              | $



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 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



There are no financial statement schedules
nor exhibits filed herewith. The exhibits filed in earlier reports and the Company's Form 10 are incorporated herein by reference.



Exhibits



31 Certification of the Chief
Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002



32 Certification of the Chief
Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002



FINANCIAL STATEMENTS



|Report of Independent Registered Public Accounting Firm | F-1
|------------------------------------------------------- | ---
|                                                        |    
|Balance Sheet as of December 31, 2015                   | F-2
|                                                        |    
|Statement of Operations                                 | F-3
|                                                        |    
|Statement of Changes                                    | F-4
|                                                        |    
|Statement of Cash Flows                                 | F-5
|                                                        |    
|Notes to Financial Statements                           | F-6



CERTIFIED PUBLIC ACCOUNTANTS







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.



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. The Company’s
independent auditors have expressed substantial doubt as to the ability for some companies under the structure but not Liaoning
Fuda to continue as a going concern. Unless the Company is able to generate sufficient cash flow from operations and/or obtain
additional financing, there is a substantial doubt as to the ability of for some companies under the structure but not Liaoning
Fuda to continue as a going concern.



Off-Balance Sheet Arrangements



The Company has no
off-balance sheet arrangements.



Equipment Financing



The Company has no
existing equipment financing arrangements.











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.



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. Refer to
“Restrictions on currency exchange may limit the Company’s ability to utilize the Company’s capital effectively”
on page 33 of this Form S-1 for additional information.



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.



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 Xiao Bing  |  |              | (778,449   | ) |              |  
|Mr. Yang Yuan Xi  |  |              | (539,389   | ) |              |  
|Mr. Wu Zhong Chen |  |              | (539,389   | ) |              |  
|Ms. Lynn Lee      |  |              | (547,115   | ) |              |  
|Total             |  | $            | (3,631,621 | ) |              | $



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,        | 
|               |  | 2015                |            |  | 2014                | 
|Granite Stones |  |                     | 37,742,040 |  |                     | 
|Graphite       |  |                     | 224,936    |  |                     | 
|Fluorite       |  |                     | 249,926    |  |                     | 
|Gold           |  |                     | 187,989    |  |                     | 
|Total          |  |                     | 38,404,891 |  |                     | 











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 entity 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,        | 
|                    |  | 2015                |            |  | 2014                | 
|Affiliated Entities |  |                     | 8,257,534  |  |                     | 
|Third parties       |  |                     | 30,147,357 |  |                     | 
|Total               |  |                     | 38,404,891 |  |                     | 



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,        |          
|                              |  | 2015                |          
|Insurance                     |  |                     | -        
|Employees’ wages and salaries |  |                     | 413,954  
|Bad debt expense              |  |                     | 261,847  
|Rent expense                  |  |                     | 74,838   
|Professional fees             |  |                     | 457,354  
|Stock-based compensation      |  |                     | 14,638   
|Travel expenses               |  |                     | 263,781  
|Other SG&A expenses           |  |                     | 278,845  
|Total                         |  |                     | 1,765,257



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.











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 |   |              | $
|Accounts receivable, net                                                                                                                                        |  |              | 475,041    |   |              |  
|Inventory                                                                                                                                                       |  |              | -          |   |              |  
|Prepaid rent                                                                                                                                                    |  |              | 28,254     |   |              |  
|Security deposits to suppliers                                                                                                                                  |  |              | 996,166    |   |              |  
|Other receivables                                                                                                                                               |  |              | 6,380      |   |              |  
|Total Current Assets                                                                                                                                            |  |              | 19,684,391 |   |              |  
|Land, property & equipment (net)                                                                                                                                |  |              | 49,478,802 |   |              |  
|Other assets                                                                                                                                                    |  |              | 46,233     |   |              |  
|Total Assets                                                                                                                                                    |  | $            | 69,209,426 |   |              | $
|                                                                                                                                                                |  |              |            |   |              |  
|LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                            |  |              |            |   |              |  
|Current Liabilities                                                                                                                                             |  |              |            |   |              |  
|Accounts payable and accrued expenses                                                                                                                           |  | $            | 29,014     |   |              | $
|Taxes payable                                                                                                                                                   |  |              | -          |   |              |  
|Due to related parties                                                                                                                                          |  |              | 3,631,621  |   |              |  
|Other payables                                                                                                                                                  |  |              | -          |   |              |  
|Trade financing loans                                                                                                                                           |  |              | -          |   |              |  
|Advances from customers                                                                                                                                         |  |              | 6,164      |   |              |  
|Total Current Liabilities                                                                                                                                       |  |              | 3,666,799  |   |              |  
|Total Liabilities                                                                                                                                               |  |              | 3,666,799  |   |              |  
|                                                                                                                                                                |  |              |            |   |              |  
|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     |   |              |  
|Additional paid-in capital                                                                                                                                      |  |              | 9,579,682  |   |              |  
|Subscriptions receivable                                                                                                                                        |  |              | -          |   |              |  
|Accumulated other comprehensive income                                                                                                                          |  |              | (3,188,494 | ) |              |  
|Statutory reserve                                                                                                                                               |  |              | 5,990,116  |   |              |  
|Accumulated earnings (unrestricted)                                                                                                                             |  |              | 53,150,728 |   |              |  
|Total stockholders' equity                                                                                                                                      |  |              | 65,542,627 |   |              |  
|TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                                                                                                      |  | $            | 69,209,426 |   |              | $



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,        |           
|                                             |  | 2015                |           
|Sales                                        |  |                     |           
|Affiliated Entities                          |  | $                   | 8,257,534 
|Third parties                                |  |                     | 30,147,357
|Total sales                                  |  |                     | 38,404,891
|Cost of sales                                |  |                     |           
|Affiliated Entities                          |  |                     | 625,571   
|Third parties                                |  |                     | 11,936,279
|Total cost of sales                          |  |                     | 12,561,850
|                                             |  |                     |           
|Gross margin                                 |  |                     | 25,843,041
|                                             |  |                     |           
|Operating expenses                           |  |                     |           
|Selling, general & administrative expenses   |  |                     | 1,765,257 
|Total operating expenses                     |  |                     | 1,765,257 
|                                             |  |                     |           
|Income (Loss) from operation                 |  |                     | 24,077,784
|                                             |  |                     |           
|Other income (expenses)                      |  |                     |           
|Interest income (expenses), net              |  |                     | (1,276    
|Government rebate                            |  |                     | 138,427   
|Other income                                 |  |                     | 229       
|Total other income (expenses)                |  |                     | 137,380   
|                                             |  |                     |           
|Income before income tax                     |  |                     | 24,215,164
|                                             |  |                     |           
|Income tax                                   |  |                     | -         
|                                             |  |                     |           
|Net income                                   |  |                     | 24,215,164
|                                             |  |                     |           
|Foreign currency translation adjustment      |  |                     | (3,414,934
|                                             |  |                     |           
|Comprehensive income                         |  | $                   | 20,800,230
|                                             |  |                     |           
|Common Shares Outstanding, basic and diluted |  |                     | 87,430,953
|                                             |  |                     |           
|Net income per share Basic and diluted       |  | $                   | 0.28      



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 |         |   | Staturory |   |            |          |  
|                                                         |  | 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         |   |   |             |         |   |           |   |            |          |   |   |            | 
|Issuance of common stock for acquisition of subsidiaries |  |                    |              |   |            |   |         |               |   |   | 9,602,706     |   |   |             |         |   |           |   | 293,971    |          |   |   | 7,119,353  | 
|Capital withdrawal from owners                           |  |                    |              |   |            |   |         |               |   |   | (40,677       | ) |   |             |         |   |           |   |            |          |   |   |            | 
|Net loss                                                 |  |                    |              |   |            |   |         |               |   |   |               |   |   |             |         |   |           |   |            |          |   |   | 24,312,853 | 
|Cummulative translation adjustment                       |  |                    |              |   |            |   |         |               |   |   |               |   |   |             |         |   |           |   | (73,259    | )        |   |   |            | 
|Balances at  December 31, 2014                           |  |                    | 8,200,000    |   |            | $ | 820     |               |   | $ | 9,564,907     |   |   | $           | (2,000  | ) |           | $ | 220,712    |          |   | $ | 31,432,206 | 
|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                        |  |                    | 59,794,307   |   |            |   | 5,979   |               |   |   | 8,605         |   |   |             | (14,584 | ) |           |   |            |          |   |   |            | 
|Issuance of common stock for acquisition                 |  |                    | 45,920,000   |   |            |   | 4,592   |               |   |   | 6,608         |   |   |             | -       |   |           |   |            |          |   |   |            | 
|Issuance of common stock for Compensation                |  |                    | 35,000       |   |            |   | 4       |               |   |   | -             |   |   |             | -       |   |           |   |            |          |   |   |            | 
|Expenses paid by stockholder and contributed as capital  |  |                    |              |   |            |   |         |               |   |   | 712           |   |   |             |         |   |           |   |            |          |   |   |            | 
|Stock subscribed converted to stock compensation         |  |                    | -            |   |            |   | -       |               |   |   | -             |   |   |             | 14,634  |   |           |   |            |          |   |   |            | 
|Net income                                               |  |                    |              |   |            |   |         |               |   |   |               |   |   |             |         |   |           |   |            |          |   |   | 21,718,522 | 
|Cummulative translation adjustment                       |  |                    |              |   |            |   |         |               |   |   |               |   |   |             |         |   |           |   | (3,409,206 | )        |   |   |            | 
|Balances at  December 31, 2015                           |  |                    | 105,954,307  |   |            | $ | 10,595  |               |   | $ | 9,579,682     |   |   | $           | -       |   |           | $ | (3,188,494 | )        |   | $ | 53,150,728 | 





The accompanying notes are an integral
part of these financial statements



F-4







Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)



|                                                                                             |  | For the Years Ended |           
|-------------------------------------------------------------------------------------------- |  | ------------------- | ----------
|                                                                                             |  | December 31,        |           
|                                                                                             |  | 2015                |           
|Cash flows from operating activities                                                         |  |                     |           
|Net income                                                                                   |  | $                   | 24,215,164
|Adjustments to reconcile net income to net cash provided by or used in operating activities: |  |                     |           
|Bad debt expense                                                                             |  |                     | 261,847   
|                                                                                             |  |                     |           
|Shares to be used and issued for compensation                                                |  |                     | 14,638    
|Depreciation and amortization                                                                |  |                     | 4,702     
|Expenses paid by stockholder and contributed as capital                                      |  |                     | 712       
|Changes in operating assets and liabilities:                                                 |  |                     |           
|Accounts receivable                                                                          |  |                     | (474,909  
|Inventory                                                                                    |  |                     | 3,838     
|Prepaid rent                                                                                 |  |                     | 35,541    
|Other receivables                                                                            |  |                     | 380,039   
|Security deposits to suppliers                                                               |  |                     | 955,957   
|Accounts payable and accrued expenses                                                        |  |                     | (8,381,843
|Taxes payable                                                                                |  |                     | 1,240     
|Other payables                                                                               |  |                     | (11,459   
|Advances from customers                                                                      |  |                     | 6,424     
|Other assets                                                                                 |  |                     | -         
|Net cash provided by operating activities                                                    |  |                     | 17,011,891
|                                                                                             |  |                     |           
|Cash flows from financing activities                                                         |  |                     |           
|Capital withdrawal from owners                                                               |  |                     | -         
|Proceeds from issuance of common stock                                                       |  |                     | -         
|Proceeds/(Repayment) to related party, net                                                   |  |                     | 3,743,217 
|Proceeds/(Repayments) from trade financing loans, net                                        |  |                     | (1,891,048
|Net cash used in financing activities                                                        |  |                     | 1,852,169 
|                                                                                             |  |                     |           
|Cash flows from investing activities                                                         |  |                     |           
|Purchase of land, property and equipment                                                     |  |                     | (20,776   
|Net cash used in investing activities                                                        |  |                     | (20,776   
|                                                                                             |  |                     |           
|Effect of exchange rate changes                                                              |  |                     | (665,200  
|                                                                                             |  |                     |           
|NET INCREASE (DECREASE) IN CASH                                                              |  |                     | 18,178,084
|                                                                                             |  |                     |           
|CASH                                                                                         |  |                     |           
|Beginning of period                                                                          |  |                     | 466       
|End of period                                                                                |  | $                   | 18,178,550
|                                                                                             |  |                     |           
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION CASH PAID FOR:                             |  |                     |           
|Interest                                                                                     |  | $                   | 1,345     
|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



| | 1. | 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 an 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.



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.



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



| | 2. | 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 |  |              | 
|Average periodic rate |  |              | 0.16059 |  |              | 
|                      |  |              |         |  |              | 
|HKD  to US$           |  |              |         |  |              | 
|Period end spot rate  |  |              | 0.12903 |  |              | 
|Average periodic rate |  |              | 0.12899 |  |              | 
|                      |  |              |         |  |              | 
|GBP to US$            |  |              |         |  |              | 
|Period end spot rate  |  |              | 1.48258 |  |              | 
|Average periodic rate |  |              | 1.52832 |  |              | 



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.



| | 3. | ACCOUNTS RECEIVABLES
| | -- | --------------------



Accounts receivables consist of the following:



|                                      |  | December 31, |          |   | December 31, |  
|------------------------------------- |  | ------------ | -------- | - | ------------ | -
|                                      |  | 2015         |          |   | 2014         |  
|Accounts receivables                  |  | $            | 736,888  |   |              | $
|Less: allowance for doubtful accounts |  |              | (261,847 | ) |              |  
|Net                                   |  |              | 475,041  |   |              |  



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



| | 4. | 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 |  | $            | -       |  |              | $
|Liaoning Fuda - Supplier B |  |              | -       |  |              |  
|Liaoning Fuda - Supplier C |  |              | -       |  |              |  
|Fuda UK - Supplier D       |  |              | 996,166 |  |              |  
|Total                      |  | $            | 996,166 |  |              | $



| | 5. | LAND, PROPERTY & EQUIPMENT
| | -- | --------------------------



Land, property & equipment consist of the following:



|                               |  | December 31, |            |   | December 31, |  
|------------------------------ |  | ------------ | ---------- | - | ------------ | -
|                               |  | 2015         |            |   | 2014         |  
|Depreciable assets             |  |              |            |   |              |  
|Office equipment               |  | $            | 8,281      |   |              | $
|Motor vehicle                  |  |              | 14,386     |   |              |  
|Machinery                      |  |              | 20,154     |   |              |  
|Total                          |  |              | 42,821     |   |              |  
|Less: accumulated depreciation |  |              | (10,049    | ) |              |  
|Net                            |  |              | 32,772     |   |              | $
|Non-depreciable assets         |  |              |            |   |              |  
|Land                           |  |              | 49,446,030 |   |              |  
|Total                          |  | $            | 49,478,802 |   |              | $





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.



| | 6. | OTHER ASSETS
| | -- | ------------



Other assets consist of the following:



|                       |  | December 31, |        |  | December 31, |  
|---------------------- |  | ------------ | ------ |  | ------------ | -
|                       |  | 2015         |        |  | 2014         |  
|Rent Security Deposits |  | $            | 46,233 |  |              | $
|Total                  |  | $            | 46,233 |  |              | $



| | 7. | 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.



| | 8. | 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.



| | 9. | 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.



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.



| | 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
59,794,307 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.



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. All references to common stock and per share amounts for all prior periods presented have been
retroactively presented to reflect the reverse share split.





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 $619 and $1,698 for the years ended December 31, 2015 and 2014, respectively.



| | 11. | STOCK-BASED COMPENSATION
| | --- | ------------------------



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.



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,        |    
|                              |  | 2015                |    
|PRC Statutory income tax rate |  |                     | 25 
|Less: Income tax holiday      |  |                     | -25
|Total                         |  |                     | -  



The provision for income tax on earnings as follows:



|                                        |  | For the Years ended |           
|--------------------------------------- |  | ------------------- | ----------
|                                        |  | December 31,        |           
|                                        |  | 2015                |           
|PRC income tax at statutory rate        |  |                     | 6,241,606 
|Less: Income tax subject to tax holiday |  |                     | (6,241,606
|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,        | 
|               |  | 2015                |            |  | 2014                | 
|Granite stones |  |                     | 37,742,040 |  |                     | 
|Graphite       |  |                     | 224,936    |  |                     | 
|Fluorite       |  |                     | 249,926    |  |                     | 
|Gold           |  |                     | 187,989    |  |                     | 
|Total          |  |                     | 38,404,891 |  |                     | 



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,        | 
|                    |  | 2015                |            |  | 2014                | 
|Affiliated Entities |  |                     | 8,257,534  |  |                     | 
|Third parties       |  |                     | 30,147,357 |  |                     | 
|Total               |  |                     | 38,404,891 |  |                     | 



| | 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







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 14, 2016 |  | By: /s/
    Xiaobin Wu      
|                      |  | Chief Executive Officer     
|                      |  |                             
|Dated: April 14, 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.



|NAME           | OFFICE   | DATE              
|-------------- | -------- | ------------------
|               |          |                   
|/s/ Xiaobin Wu | Director | April 14,
    2016















Exhibits:



| | 31 | Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
| | -- | ----------------------------------------------------------------------------------------------------------------------------------



| | 32 | Certification of the Chief Executive Officer and Chief
Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
| | -- | ----------------------------------------------------------------------------------------------------------------------------------