SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March~~June 3130, 2016

¨ 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) CORPORATION

(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.)

12th Floor	48 Wall Street, 11^th Floor
100 Jin Jiang Street	New York, New York 10005
Dandong City, Liaoning Province China	USA
+86 415 316 5852	+1-646-837-7950

(Registrant's telephone number, including area code)

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

Yes x

No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes ¨

No x

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

Large accelerated filer ¨	Accelerated Filer ¨
Non-accelerated filer ¨	Smaller reporting company x

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

Yes ¨

No x

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

Class	Outstanding at ~~April~~August 3015, 2016
Common Stock, par value $0.0001	105,954,309

PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Financial Statements Condensed Consolidated Balance Sheets as of June 30, 2016 (Unaudited) and December 31, 2015 Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2016 and 2015 (Unaudited) Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2016 and 2015 (Unaudited) Notes to Condensed Consolidated Financial Statements (Unaudited)

Condensed Consolidated Balance Sheets as of March 31, 2016 (Unaudited) and December 31, 2015

Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2016 and 2015 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2016 and 2015 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Balance Sheets

	March 31,			December 31,
	June 30,			December 31,
	2016			2015
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	1023,~~124~~129,~~617~~245		$	18,178,550
Accounts receivable, net		42,~~925~~059,~~067~~194			475,041
Inventory		~~30,982~~176			-
Prepaid rent		~~112~~65,~~041~~221			28,254
Security deposits to suppliers		6,~~519~~343,~~049~~194			996,166
Other receivables		6,~~404~~231			6,380
Total Current Assets		2131,~~718~~603,~~160~~261			19,684,391
Land, property & equipment (net)		4948,~~660~~318,~~083~~718			49,478,802
Other assets		4645,~~404~~153			46,233
Total Assets	$	7179,~~424~~967,~~647~~132		$	69,209,426
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses	$	~~588~~119,~~602~~323		$	29,014
Taxes payable		-			-
Due to related parties		279,680			3,631,621
Due to related parties		1,311,287			3,631,621
Advances from customers		63,963			6,164
Other payables		-			-
Total Current Liabilities		462,966			3,666,799
Trade financing loans		-			-
Total Liabilities		462,966			3,666,799
Advances from customers		6,187			6,164
Total Current Liabilities		1,906,076			3,666,799
Total Liabilities		1,906,076			3,666,799
Commitments & contingencies		-			-
Stockholders' Equity
Common stock, $0.0001 par value, 480,000,000 shares authorized;
105,954,309 shares at March 31, 2016 and December 31, 2015, respectively		10,595			10,595
Additional paid-in capital		9,579,682			9,579,682
Accumulated other comprehensive income		(24,~~909~~995,~~383~~060	)		(3,188,494	)
Statutory reserve		67,~~372~~275,~~690~~298			5,990,116
Accumulated earnings (unrestricted)		5667,~~464~~633,~~987~~651			53,150,728
Total stockholders' equity		6979,~~518~~504,~~571~~166			65,542,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	7179,~~424~~967,~~647~~132		$	69,209,426

The accompanying notes are an integral part of these financial statements

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Operations

(unaudited)

	For the Three Months Ended						For the Six Months Ended
	March 31,			March 31,
	June 30,			June 30,			June 30,			June 30,
	2016			2015			2016			2015
Sales	$	22,440,841		$	9,902,672		$	27,526,216		$	14,830,360
Affiliated Entities	$	-		$	737,261
Cost of sales		9,587,583			4,493,506			10,607,838			7,652,499
Third parties		5,085,375			6,585,304
Gross margin		12,853,258			5,409,166			16,918,378			7,177,861
Total sales		5,085,375			7,322,565
Operating expenses
Cost of sales
Selling, general & administrative expenses		784,502			173,464			1,152,792			333,515
Affiliated Entities		-			55,853
Total operating expenses		784,502			173,464			1,152,792			333,515
Third parties		1,020,255			3,284,570
Income (Loss) from operation		12,068,756			5,235,702			15,765,586			6,844,346
Total cost of sales		1,020,255			3,340,423
Other income (expenses)
Gross margin		4,065,120			3,982,142
Interest income (expenses), net		-			14			-			(1,339	)
Operating expenses
Government rebate		-			106			-			34,544
Selling, general & administrative expenses		368,290			160,051
Other income		2,516			-			2,519			-
Total operating expenses		368,290			160,051
Gain/(Loss) from barter trade		-			2,646,214			-			4,859,661
Income (Loss) from operation		3,696,830			3,822,091
Total other income (expenses)		2,516			2,646,334			2,519			4,892,866
Other income (expenses)
Income before income tax		12,071,272			7,882,036			15,768,105			11,737,212
Interest income (expenses), net		-			(1,353	)
Income tax		-			-			-			-
Government rebate		-			34,438
Net income		12,071,272			7,882,036			15,768,105			11,737,212
Other income		3			-
Foreign currency translation adjustment		(2,085,677	)		-			(1,806,566	)		435,248
Total other income (expenses)		3			33,085
Comprehensive income	$	9,985,595		$	7,882,036		$	13,961,539		$	12,172,460
Income before income tax		3,696,833			3,855,176
Common Shares Outstanding, basic and diluted		105,954,309			123,820,000			105,954,309			91,197,818
Income tax		-			-
Net income per share
Net income		3,696,833			3,855,176
Basic and diluted	$	0.11		$	0.06		$	0.15		$	0.13
Foreign currency translation adjustment		279,111			236,993
Comprehensive income	$	3,975,944		$	4,092,169
Common Shares Outstanding, basic and diluted		105,954,309			58,213,167
Net income per share
Basic and diluted	$	0.03		$	0.07

The accompanying notes are an integral part of these financial statements

Fuda Group (USA) Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(unaudited)

	For the Three Months Ended
	For the Six Months Ended
	March 31,			March 31,
	June 30,			June 30,
	2016			2015
Cash flows from operating activities
Net income	$	315,~~696~~768,~~833~~105		$	311,~~855~~737,~~176~~212
Adjustments to reconcile net income to net cash provided by or used in operating activities:
Adjustments to reconcile net income to
Bad debt expense		-			-
net cash provided by or used in operating activities:
Shares to be used and issued for compensation		-			-
Depreciation and amortization		3,559			2,120
Depreciation and amortization		1,779			1,057
Expenses paid by stockholder and contributed as capital		-			619
Gain from barter trade		-			(4,859,661	)
Changes in operating assets and liabilities:
Accounts receivable		(41,~~399~~618,~~391~~501	)		(148,~~497,088~~698	)
Inventory		(~~30,622~~179	)		(~~544~~908,~~062~~672	)
Prepaid rent		(8138,~~298~~252	)		1938,~~078~~087
Other receivables		~~319~~-			~~345~~(489,~~593~~442	)
Security deposits to suppliers		(5,~~416~~421,~~385~~694	)		21,~~176~~982,~~636~~855
Accounts payable and accrued expenses		~~551~~92,~~579~~489			51,~~979,196~~989
Accounts payable-related parties		-			(8398,~~366,913~~333	)
Taxes payable		-			-
Other payables		-			87
Other payables		-			598,897
Advances from customers		58,905			120,969
Increase/(Decrease) in security deposit Advances from customers		(309	)		-
Other assets		-			(160	)
Other assets		-			-
Net cash provided by operating activities		8,844,432			7,276,368
Net cash (used) provided by operating activities		(5,677,495	)		2,568,189
Cash flows from financing activities
Capital withdrawal from owners		-			-
Proceeds/(Repayment) to related party, net		(3,376,947	)		5
Proceeds from issuance of common stock		-			-
Proceeds/(Repayment) to related party, net		(2,447,994	)		1,894,577
Proceeds/(Repayments) from trade financing loans, net		-			(1,891,048	)
Net cash used by financing activities		(2,447,994	)		3,529
Net cash used in financing activities		(3,376,947	)		(1,891,043	)
Cash flows from investing activities
Purchase of land, property and equipment		-			-
Net cash used in investing activities		-			-
Effect of exchange rate changes		71(516,~~556~~790	)		1234,~~919~~888
NET INCREASE (DECREASE) IN CASH		(84,~~053~~950,~~933~~695	)		25,~~584~~420,~~637~~213
CASH
Beginning of period		18,178,550			466
End of period	$	1023,~~124~~129,~~617~~245		$	25,~~585~~420,~~103~~679
Less: cash and cash equivalents of discontinued operations at end of year		-			-
CASH AT END OF PERIOD	$	23,129,245		$	5,420,679
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$	-		$	1,363
Income Taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements

FUDA GROUP (USA) CORPORATION AND SUBSIDIARIES

Notes to Consolidated Financial Statements

(Unaudited)

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 a cooperative operation agreement to filter and sort gold sands or gold dust from the gold mine tailings and to sell the goods under a profit sharing ratio.

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

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.

Interim Financial Information

The accompanying consolidated balance sheet as of December 31, 2015, which has been derived from the Company's audited financial statements as of that date, and the unaudited condensed financial information of the Company as of ~~March~~June 3130, 2016 and for the three and six months ended ~~March~~June 3130, 2016, has been prepared in accordance with the instructions to Form 10-Q and Article8-03 of Regulation S-X for interim financial information.

In the opinion of management, such financial information includes all adjustments considered necessary for a fair presentation of the Company's financial position at such date and the operating results and cash flows for such periods. Operating results for the interim period ended ~~March~~June 3130, 2016 are not necessarily indicative of the results that may be expected for the entire year. Certain information and footnote disclosure normally included in financial statements in accordance with generally accepted accounting principles have been omitted pursuant to the rules of the United States Securities and Exchange Commission ("SEC").

These unaudited financial statements should be read in conjunction with our audited financial statements and accompanying notes included in the Company's Annual Report on Form 10-K/A for the year ended December 31, 2015 filed on April 22, 2016.

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.

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~~common ~~acquisition~~control with Fuda UKUSA ~~and Marvel~~ being the ~~acquirers~~acquirer and Fuda ~~USA~~UK ~~being~~and ~~the~~Marvel ~~acquiree~~being ~~as shares were issued by~~ the ~~public~~acquirees ~~entity~~because toall ~~acquire~~entities anwere ~~interest in a larger privately owned entity; thereafter the shareholders of the privately owned~~controlled ~~entity~~directly ~~became~~or ~~the~~indirectly ~~controlling~~by ~~interest of~~ the ~~public~~same ~~entity~~majority shareholder. 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. as a recapitalization. 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:

- 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”) and its local currency is Chinese Renminbi (“RMB”).

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

The functional currency of Fuda UK is Chinese Renminbi (“RMB”) and its local currency is 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:

March 31,

December 31,

June 30,

December 31,

RMB to US$

2016

2014

2015

Period end spot rate

0.~~15468~~15051

0.~~16369~~16424

0.15411

Average periodic rate

0.~~15288~~15301

0.~~16275~~16325

N/A

Cash and Cash Equivalents

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

Accounts Receivable

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

Bad debt expenses were $nil and $nil for the three and six months ended ~~March~~June 3130, 2016 and 2015, 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.

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 at gross amounts in accordance to ASC 605-45-45 as a principal when bill of lading inis received from the shipping company although the title does not transfer until the goods have reach its destination port. The ~~Agent~~Company is responsible for losses when occurred which the ~~Agent~~ Company has a blanket insurance to cover for such loss. ~~The~~and ~~Agent~~reimburse ~~would prepare~~ the ~~terms~~Company ~~and~~at ~~conditions of~~ the gross sales ~~contract and deals directly with customers~~price. The Company ~~sets~~ ~~out~~Agent ~~the~~prepares the terms and conditions of the sales contract and deals directly with customers.

The Company is the principal in the sales transactions because the Company is the primary obligator. The Company selects and deals directly with the suppliers of the products, and has the general inventory risk as well as credit risk. The Company purchases the products from the supplier and ships the product to the customer and is responsible to collect the full invoice amount plus commission charged from the agent. The Company remains the primary obligator, keeps general inventory risk when inventory is held, has the ability in setting the prices charged to the customers, has full discretion in supplier selection and has both physical loss of inventory risk and credit risk. Risk is mitigated by insurance but the Company holds the risk and would have to get reimbursed by insurance in case of any issues.

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. The Company has not made any reserves on claims for irregularity and discrepancy as the Company believe the amount will be minimal.

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 March 31, 2016, the Company has not generated any revenues from such operation.

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 ~~three~~six months ended ~~March~~June 3130, 2016 and 2015 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 $nil and $34,~~438~~544 for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, 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.

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 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 Company’s consolidated results of operations and financial condition.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842)”. The standard requires lessees to recognize lease assets and lease liabilities on the balance sheet and requires expanded disclosures about leasing arrangements. We will adopt the standard no later than July 1, 2019. The Company is currently assessing the impact that the new standard will have on the Company’s consolidated results of operations and financial condition.

In March 2016, the FASB issued ASU 2016-09, “Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”. The standard amends several aspects of the accounting for employee share-based payment transactions including the accounting for income taxes, forfeitures and statutory tax withholding requirements, as well as classification in the statement of cash flows. We will adopt the standard no later than July 1, 2017. The Company is currently assessing the impact of the new standard, and do not expect the new guidance to have a material impact on the Company’s consolidated results of operations and financial condition.

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.

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:

	March 31,		December 31,
	June 30,		December 31,
	2016		2015
Accounts receivables	$	42,~~925~~059,~~067~~194	$	736,888
Less: allowance for doubtful accounts		-		(261,847	)
Net	$	42,~~925~~059,~~067~~194	$	475,041

Bad debt expenses were $nil and $nil for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, 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,. The security deposits can be used to offset against purchases of inventory by the Company.

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

Security deposits to suppliers consist of the following:

	March 31,		December 31,
	June 30,		December 31,
	2016		2015
Liaoning Fuda - Supplier A	$	1,~~624~~580,~~155~~342	$	-
Liaoning Fuda - Supplier B		1,~~469~~429,~~474~~834		-
Liaoning Fuda - Supplier C		1,~~426~~388,~~936~~444		-
Fuda UK - Supplier D		1,~~998~~944,~~484~~574		996,166
Total	$	6,~~519~~343,~~049~~194	$	996,166

5. LAND, PROPERTY & EQUIPMENT

Land, property & equipment consist of the following:

	March 31,			December 31,
	June 30,			December 31,
	2016			2015
Depreciable assets
Office equipment	$	8,~~312~~087		$	8,281
Motor vehicle		14,~~439~~050			14,386
Machinery		2019,~~251~~705			20,154
Total		4341,~~002~~842			42,821
Less: accumulated depreciation		(1113,~~899~~328	)		(10,049	)
Net	$	3128,~~103~~514		$	32,772
Non-depricable assets
Non-depreciable assets
Land		4948,~~628~~290,~~980~~204			49,446,030
Total	$	4948,~~660~~318,~~083~~718		$	49,478,802

The depreciation expense charged to general and administrative expenses were $12,~~779~~607 and $12,~~057~~120 for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, respectively.

The Company would review the historical cost of the land to evaluate if there is an impairment loss to be recognized. Impairment loss was $nil and $nil for the six months ended June 30, 2016 and 2015, respectively.

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

6. OTHER ASSETS

Other assets consist of the following:

	March 31,		December 31,
	June 30,		December 31,
	2016		2015
Rent Security Deposits	$	4645,~~404~~153	$	46,233
Total	$	4645,~~404~~153	$	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 (the “Discount”) and charge a contracted interest fee at average rate of 2%-4% based on the percentage advanced until the loan is repaid in full. When the outstanding accounts receivable invoice is collected, the advanced amount plus any accrued interest are to be repaid. The Company has also purchased insurance for the full invoiced amount.

The ~~outstanding amount of~~ trade financing loans ~~were~~are ~~$nil~~unrelated ~~and $nil~~to assecurity ofdeposits paid ~~March~~to ~~31,~~suppliers ~~2016~~ and ~~December 31, 2015, respectively. The shareholders of~~ the ~~Company~~related ~~have~~purchasing ~~repaid the outstanding trade financing loans on behalf~~ of ~~the Company which is included in Due to related parties~~inventory.

The ~~discounts~~outstanding ~~and~~amount ~~interest~~of ~~expenses~~trade financing loans were $nil and $~~1,363~~nil ~~for the~~as ~~three~~of ~~months~~June ~~ended March 31~~30, 2016 and December 31, 2015, 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 $nil and $1,367 for the six months ended June 30, 2016 and 2015, 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 in the amount of $6,164 as of December 31, 2015, and from a customer as deposit for goods to be delivered in the future by the Company in the amount of $63,963 as of June 30, 2016.

The ~~outstanding~~Company ~~amount~~acquired ofand ~~advances~~sold ~~from~~the ~~customers~~machinery ~~were~~equipment ~~$6,187~~to the customer and recognized $62,~~164~~295 as ofother ~~March~~income ~~31,~~for ~~2016~~the ~~and~~six ~~December~~months ~~31,~~ended ~~2015~~June 30, ~~respectively~~2016.

9. RELATED PARTY AND AFFILIATED ENTITIES TRANSACTIONS

Related parties’ receivables/(payables) consist of the following:

	March 31,			December 31,
	June 30,			December 31,
	2016			2015
Receivables/(Payables)
Mr. Tan Lin	$	-		$	(1,227,280	)
Mr. Wu Xiao Bin		(~~714~~27,~~904~~142	)		(778,449	)
Mr. Yang Yuan Xi		~~(541,385~~-	)		(539,389	)
Mr. Wu Zhong Chen		~~(541,385~~-	)		(539,389	)
Ms. Lynn Lee		~~486~~(252,~~387~~538	)		(547,114	)
Total Receivables/(Payables)	$	(1,311,287	)	$	(3,631,621	)

The relationships of the related parties above as follows:

Name		Relationship
Mr. Tan Lin		Shareholder and General Manager of Fuda UK
Mr. Wu Xiao Bing		CEO, Director, Majority Shareholder of the Company
Mr. Yang Yuan Xi		Legal Representative of Liaoning Fuda
Mr. Wu Zhong Chen		Father of Mr Wu Xiao Bin, Shareholder of the Company
Ms. Lynn Lee		Officer of the Company

The amounts payable to parties 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.

~~The~~On March 2016, the Company mistakenly paid Ms. Lynn Lee in the amount of $486,387 as expenses reimbursements which was repaid previously. This amount has been returned by the Ms. Lynn Lee to the Company ~~subsequently~~on April 2016.

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~~which ~~and~~are considered ~~Cost~~affiliated ~~of Sales for these entities is shown separately on the Income statement as Revenue and Cost of Sales from Affiliated Entities~~enities.

InSales ~~2014,~~revenues ~~the~~from ~~Company~~affiliated ~~acquired~~entities ~~land~~were ~~from~~$nil ~~Fuda~~and ~~Investment for RMB 127~~$nil,~~424,700;~~ and ~~from~~the ~~Winner~~corresponding ~~International~~cost ~~for~~of ~~RMB~~sales ~~65,965,000.~~from ~~The~~affiliated ~~purchase~~entities ~~price~~were of$nil ~~the~~and ~~land~~$nil ~~was~~for tothe besix ~~paid~~months byended ~~stones~~June in30, ~~a barter~~2016 ~~trade~~and ~~exchange~~2015, respectively.

~~The~~In 2014, the Company ~~recognized~~acquired ~~the~~lands ~~land~~from ~~purchased~~Fuda ~~(assets~~Investment ~~transferred)~~for atRMB ~~historical~~156,845,700, ~~cost~~and ~~because~~from ~~the~~Winner ~~transactions~~International ~~were~~for ~~not~~RMB ~~arm-length~~65,965,000. ~~transactions~~In asaddition, ~~they~~Fuda ~~were~~Investment ~~purchases~~and ~~from~~Winner ~~affiliated~~International ~~entities~~has soexecuted ~~therefore~~sales noagreements ~~gain~~to orpurchase ~~loss~~granite ~~were~~stones ~~recognized~~from on the ~~transfer~~Company. ~~The~~Any ~~Company~~revenues ~~would~~and ~~review~~cost ~~the~~of ~~historical~~sales ~~cost~~for ofthese ~~the~~entities ~~land~~is toshown ~~evaluate~~separately ifon ~~there~~the isStatement anof ~~impairment~~Operation ~~loss~~as toRevenue beand ~~recognized.~~Cost ~~The~~of ~~barter~~Sales ~~trade~~from ~~transactions~~Affiliated ~~were~~Entities. ~~recognized~~The aspurchase aprice ~~land~~of ~~asset~~the ~~and~~land ~~as accounts~~(corresponding ~~payable~~outstanding payables) was to ~~the~~be ~~sellers.~~paid ~~The~~off ~~revenues~~by ~~were~~fair ~~recognized~~market ~~against~~sales price of the ~~outstanding~~stones ~~amount~~(corresponding ~~owed~~accounts toreceivables) ~~the~~as ~~sellers~~a barter trade exchange. (Refer to “Barter Trade Exchange” Footnote)

Barter trade revenues ~~generated~~from ~~for~~affiliated ~~the~~entities ~~three~~were ~~months~~$nil ~~ended March~~and 31$5,254,729, ~~2016~~ and ~~2015~~the corresponding cost of sales from affiliated entities were $nil and $~~737~~398,~~261~~333 for the six months ended June 30, 2016 and 2015, respectively.

10. ~~STOCKHOLDERS'~~BARTER ~~EQUITY~~TRADE EXCHANGE

In 2013, the Company acquired lands from Beijing Huanda Renewal Resources Recycling Co. Ltd. (“Beijing Huanda”) (non-related party) for RMB 55,944,000. In addition, Beijing Huanda is also a customer of the Company who has executed sales agreements to purchase granite stones from the Company. The purchase price of the land (its corresponding outstanding payables) were partially paid off in cash as well as in a barter trade exchange which the fair market sales price of the stones (its corresponding accounts receivables) were used to offset the outstanding payables.

In 2014, the Company acquired lands from Fuda Investment (affiliated entity) for RMB 156,845,700, and from Winner International (affiliated) for RMB 65,965,000. In addition, Fuda Investment and Winner International has executed sales agreements to purchase granite stones from the Company. The purchase price of the land (its corresponding outstanding payables) was to be paid off by fair market sales price of the stones (its corresponding accounts receivables) as a barter trade exchange.

In accordance to ASC 845-10-30, the lands purchased were recorded at the purchase price of the lands (assets received) as indicated on the agreement instead of the market sales price of the granite stones to be delivered in the future (“fair value”) because the fair value of the stones to be delivered was not determinable as the earning process was not completed at the time of the exchange and therefore gain or loss cannot be computed.

The Company initially recognized land assets and its corresponding payables to the sellers at purchase price of the lands as indicated on the agreement. When stones were delivered to the sellers as ordered, the fair market sales price of the stones delivered were recognized against the outstanding amount owed to the sellers. The differences between the fair market sales price of the stones delivered and the cost of the stones purchased by the Company in inventory were recognized as gain or loss from barter trade.

For Beijing Huanda, the Company delivered stones with fair market sales price of $3,265 that cost the Company $247 to purchase the stones in inventory from the suppliers, as a result the Company recognized gain on barter trade of $3,018 . Outstanding payable to Beijing Huanda was reduced by $3,265 through barter exchange.

For Fuda Investment, the Company delivered stones with fair market sales price of $3,100,956 that cost the Company $234,921 to purchase the stones in inventory from the suppliers, as a result the Company recognized gain on barter trade of $2,866,035 for the six months ended June 30, 2015. Outstanding payable to Fuda Investment was reduced by $3,100,956 through barter exchange.

For Winner International, the Company delivered stones with fair market sales price of $2,153,773 that cost the Company $163,165 to purchase the stones in inventory from the suppliers, as a result the Company recognized gain on barter trade of $1,990,608 for the six months ended June 30, 2015. Outstanding payable to Winner International was reduced by $2,153,773 through barter exchange.

The Company reviewed ASC 845-10-30-4 and determined that the barter trade exchange transactions above are in the normal course of business and have commercial substance because the Company’s future cash flows are expected to significantly change as a result of the exchange. The Company’s future cash flows are expected to significantly change because the configuration (risk, timing, and amount) of the future cash flows of the asset(s) received differs significantly from the configuration of the future cash flows of the asset(s) transferred.

11. 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~~cash to two directors and officers of which 7,995,000 shares were cancelled on February 20, 2015 at $0.0001 per share for a total of $800. The shares issued were valued at $0.0001 per share based on the current stock price with assumed price provided by the recent transactions as no quoted price is available.

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

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

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

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.

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 $nil and $619 for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, respectively.

1112. STOCK-BASED COMPENSATION

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

1213. 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.

1314. 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.

1415. 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 $~~738~~953,~~893~~154 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 ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, Fuda UK ~~did~~ 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 ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, 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~~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 Three Months Ended
	For the Six Months Ended
	March 31,			March 31,
	June 30,			June 30,
	2016			2015
PRC Statutory income tax rate		25	%		25	%
Less: Income tax holiday		-25	%		-25	%
Total		-			-

The provision for income tax on earnings as follows:

	For the Three Months Ended
	For the Six Months Ended
	March 31,			March 31,
	June 30,			June 30,
	2016			2015
PRC income tax at statutory rate	$	~~939~~3,~~235~~212,954		$	~~963~~2,~~949~~934,458
Less: Income tax subject to tax holiday		(~~939~~3,~~235~~212,954	)		(~~963~~2,~~949~~934,458	)
Total	$	-		$	-

1516. 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 October 2018.

The Company has executed various car lease for Liaoning Fuda that expires in June 2016 and December 2016.

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

Periods	Amounts
For year ended December 31, 2016	$	~~104~~67,~~726~~325
For year ended December 31, 2017		61,~~153~~204
For year ended December 31, 2018		61,~~153~~204
For year ended December 31, 2019		-
Thereafter		-
Total	$	~~227~~189,~~032~~733

Rent expenses for office space and dormitory were $1530,~~288~~602 and $1938,~~092~~301 for the ~~three~~six months ended ~~March~~June 3130, 2016 and 2015, 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.

1617. BUSINESS SEGMENTS

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

	Revenues				Cost of Sales
	For the Three Months Ended				For the Three Months Ended
	March 31,		March 31,		March 31,		March 31,
	June 30,		June 30,		June 30,		June 30,
	2016		2015		2016		2015
Granite Stones	$	513,~~007~~328,~~441~~169	$	79,~~322~~902,~~565~~672	$	~~948~~3,~~418~~721,342	$	34,~~340~~493,~~423~~506
Graphite		-280,008		-		-276,464		-
Fluorite		-280,008		-		-277,826		-
Gold		778,~~934~~552,656		-		715,~~837~~311,951		-
Total	$	522,~~085~~440,~~375~~841	$	79,~~322~~902,~~565~~672	$	19,~~020~~587,~~255~~583	$	34,~~340~~493,~~423~~506

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

	Revenues				Cost of Sales
	For the Six Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,
	2016		2015		2016		2015
Granite Stones	$	18,335,610	$	14,830,360	$	4,669,760	$	7,652,499
Graphite		280,008		-		276,464		-
Fluorite		280,008		-		277,826		-
Gold		8,630,590		-		5,383,788		-
Total	$	27,526,216	$	14,830,360	$	10,607,838	$	7,652,499

	Sales Revenues				Cost of Sales
	For the Three Months Ended				For the Three Months Ended
	March 31,		March 31,		March 31,		March 31,
	2016		2015		2016		2015
Related parties	$	-	$	737,261	$	-	$	55,853
Third parties		5,085,375		6,585,304		1,020,255		3,284,570
Total	$	5,085,375	$	7,322,565	$	1,020,255	$	3,340,423

18. CONDENSED PARENT COMPANY FINANCIAL INFORMATION

~~17.~~Basis ~~SUBSEQUENT~~of ~~EVENTS~~Presentation

~~Management~~The ~~has~~ability ~~evaluated~~of ~~all~~the ~~events~~Company’s ~~subsequent~~Chinese Subsidiary-Liaoning Fuda to ~~year~~pay ~~end~~dividends, ~~through~~royalties, management fees, etc may be restricted due to the foreign exchange control policies and availability of cash balance of the ~~date~~Chinese operating subsidiaries. A majority of ~~this~~our ~~filing~~revenue being earned and currency received are denominated in RMB, ~~noting~~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 ~~none~~restrict ~~materially~~our ~~impacted~~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 ~~financial~~PRC, ~~statements~~which could adversely affect our business and prospects or our ability to meet our cash obligations.

Foreign exchange transactions under the capital account are subject to limitations and require registration with or approval by the relevant PRC governmental authorities. In particular, if the Company finances the Company’s PRC subsidiaries by foreign currency loans, those loans cannot exceed certain statutory limits and must be registered with the SAFE, and if the Company finance the Company’s PRC subsidiaries by capital contributions, then those capital contributions must be approved by the Ministry Of Commerce or its local agency. In addition, because of the regulatory issues related to foreign currency loans to, and foreign investment in, domestic PRC enterprises, the Company may not be able to finance its operations by loans or capital contributions.

The restricted net assets of consolidated subsidiary Liaoning Fuda as of June 30, 2016 and December 31, 2015 were $77,345,031 and $66,251,944, respectively.

The condensed parent company financial information has been prepared in accordance with Rule 4-08(e) of Regulation S-X, as the net assets of the subsidiaries of Fuda Group (USA) Corp (the “Registrant”) exceed 25% of the consolidated net assets of the Registrant.

The condensed parent company financial information has been prepared using the same accounting principles and policies described in the notes to the consolidated financial statements, with the only exception being that the parent company accounts for its subsidiaries using the equity method. Refer to the consolidated financial statements and notes presented above for additional information and disclosures with respect to the financial information.

Fuda Group (USA) Corporation and Subsidiaries

Condensed Parent Company Balance Sheets

	June 30,			December 31,
	2016			2015
	(unaudited)
ASSETS
Current Assets
Cash and cash equivalents	$	-		$	-
Total Current Assets		-			-
Investment in subsidiaries, at equity in net assets		79,844,531			66,155,921
Total Assets	$	79,844,531		$	66,155,921

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued expenses		-			-
Due to related parties		276,402			613,294
Total Current Liabilities		340,365			613,294
Total Liabilities		340,365			613,294

Commitments & contingencies		-			-

Stockholders' Equity
Common stock, $0.0001 par value, 480,000,000 shares authorized;
105,954,309 shares at March 31, 2016 and December 31, 2015, respectively		10,595			10,595
Additional paid-in capital		9,579,682			9,579,682
Subscriptions receivable		-			-
Accumulated other comprehensive income		(4,995,060	)		(3,188,494	)
Statutory reserve		7,275,298			5,990,116
Accumulated earnings (unrestricted)		67,633,651			53,150,728
Total stockholders' equity		79,504,166			65,542,627
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	79,844,531		$	66,155,921

The accompanying notes are an integral part of these financial statements

Fuda Group (USA) Corporation and Subsidiaries

Condensed Parent Company Statements of Operations

(unaudited)

	For the Three Months Ended						For the Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2016			2015			2016			2015
Revenues	$	-		$	-		$	-		$	-
Cost of sales		-			-			-			-
Gross margin		-			-			-			-

Operating expenses
Selling, general & administrative expenses		214,261			(93	)		323,891			619
Total operating expenses		214,261			(93	)		323,891			619

Income (Loss) from operation		(214,261	)		93			(323,891	)		(619	)

Other income (expenses)
		-			-			-			-
Equity in undistributed income of subsidiaries		12,285,533			7,881,943			16,091,996			11,737,831
Total other income (expenses)		12,285,533			7,881,943			16,091,996			11,737,831

Income before income tax		12,071,272			7,882,036			15,768,105			11,737,212

Income tax		-			-			-			-

Net income		12,071,272			7,882,036			15,768,105			11,737,212

The accompanying notes are an integral part of these financial statements

Fuda Group (USA) Corporation and Subsidiaries

Condensed Parent Company Statements of Cash Flows

(unaudited)

	For the Six Months Ended
	June 30,			June 30,
	2016			2015

Cash flows from operating activities
Net income	$	15,768,105		$	11,737,212
Adjustments to reconcile net income to
net cash provided by or used in operating activities:
Equity in undistributed income of subsidiaries		(16,091,996	)		(11,737,831	)
Bad debt expense
Shares to be ussed and issued for services		-
Expenses paid by stockholder and contributed as capital		-			619
Changes in operating assets and liabilities:
Accounts payable and accrued expenses		-			-
Net cash used in operating activities		(323,891	)		-

Cash flows from financing activities
Proceeds from/(Repayment) to related party, net		(336,892	)		-
Proceeds from/(Repayment) to subsidiary		660,783			-
Net cash provided by financing activities		323,891			-

Cash flows from investing activities
Purchase of land, property and equipment		-			-
Net cash used in investing activities		-			-

Effect of exchange rate changes		-			-

NET INCREASE (DECREASE) IN CASH		-			-

CASH
Beginning of period		-			-
End of period	$	-		$	-


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
CASH PAID FOR:
Interest	$	-		$	-
Income Taxes	$	-		$	-

The accompanying notes are an integral part of these financial statements

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Company

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 granite and marble (raw blocks, stone carvings, slabs, pavers, wall claddings) fluorite (rocks), graphite (rocks), gold and precious metal (sand, rocks, bars) 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.

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 started conducting 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.

Besides the operations above, the Company’s subsidiary Liaoning Fuda also purchased the titles to land use right surrounding the mines for investment purposes.

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.

Reverse Stock Split

The Company effected 100-for-41 reverse stock split of all 258,339,773 of its then outstanding common stock at the record date of October 1, 2015 resulting in 105,919,309 shares outstanding. The Stockholders approved the reverse stock split at a Special Meeting of Stockholders on October 1, 2015. All references to common stock and per share amounts for all prior periods presented have been retroactively presented to reflect the reverse share split.

Registration Statement

The Company has filed a registration statement on Form S-1 for the offer and sale of ~~135~~100,~~954~~000,~~309~~000 shares of common stock, ~~as follows: (a) 30,000,000 Shares~~ offered by the Company ~~and (b) 105,954,309 shares offered by the holders (the “Selling Shareholders”) thereof~~. No public ~~market~~ market currently exists for our common stock. The ~~information~~registration ~~contained~~statement inhas ~~that~~not ~~registration~~yet ~~statement~~been isdeclared ~~incorporated~~effective ~~herein~~and bycan be viewed at ~~reference~~the SEC website.

The Company will receive no proceeds from the sale of the shares by the Selling Shareholders but will receive the proceeds from the sale of the 30,000,000 shares offered by it. The Company intends to use the proceeds from the sale of the shares, minus expenses and commissions, if any, to purchase fund capital development and for general corporate purposes.

Property

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

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

The Company’s China Head office is located at 903-904 Ling Hang International, Guang Qu Men Nei, Dong Cheng District, Beijing, China

The Company’s China Regional office is located at 12th Floor, 100 Jin Jiang Street, Dandong City, Liaoning Province, China. The Company’s China office consists of approximately 5000 square feet of office space leased on a 3 years’ basis at approximately $5,250 (RMB 33,333) per month.

The Company’s Hong Kong office is located at Room 801-2, 8/F., Easey Commercial Building, 253-261 Hennessy Road, Wanchai, Hong Kong

The Company’s UK office is located at 20-22 Wenlock Road, London N1 7G

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.

Subsidiaries

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

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. 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 ~~March~~June 3130, 2016, Fuda Group (USA) had cash available of $0, Liaoning Fuda had cash available of $1019,~~113~~269,~~741~~323, Marvel had cash available of $10557,~~149~~ 545 and Fuda UK had cash available of $~~727~~3,302,377, with consolidated cash available for the Company at $1023,~~124~~129,~~617~~245.

As of December 31, 2015, Fuda Group (USA) had cash available of $0, Liaoning Fuda had cash available of $18,~~116~~166,602, 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.

Overall, the Company expects to generate its liquidity and capital resources from sales revenues by its operating ~~subsidiary~~subsidiaries-Liaoning Fuda and Fuda UK. 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 expects to fund the recently started operations of its subsidiary-Fuda UK and Marvel through working capital of Liaoning Fuda as well as shareholder loans.~~

In 2013 and 2014, 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 $1,363 and $nil, for the three months ended March 31, 2015 and 2016, 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 outstanding amount of trade financing loans were $nil and $nil as of June 30, 2016 and December 31, 2015 respectively. The interest expenses were $nil and $1,367 for the six months ended June 30, 2016 and 2015, respectively. The trade financing loans were repaid in Jan 2015 when the goods were returned by the customers.

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~~During ofthe ~~Three~~six months ended ~~March~~June 3130, 2016, net cash provided by operating activities was $8,844,432, and net cash provided by operating activities for the six months ended June 30, 2015 was $7,276,368, respectively. Net cash provided by operating activities in 2015 was lower resulted from gain from barter trade of $4,859,661 adjustment to reconcile net income to net cash provided by operating activities. The significant changes resulted from net income increase with gain from barter trade reduction. The Company generated net income of $15,768,105 for the six months ended June 30, 2016 compared to net income of $11,737,212 for the same period in 2015. In 2015, the net income of $11,737,212 where generated from $4,859,661 of gain from barter trade as compared to 2016 no net income was generated from barter trade, as a result cash provided by operating activities was higher for the six months ended June 30, 2016. However, in 2016 the Company paid $5,421,694 to its suppliers as part of the purchase agreements while in 2015 the Company received security deposits returned from its suppliers which reduce the cash provided by operating activities in 2016. During the six months ended June 30, 2016, the Company had outstanding receivable from its customers of $2,059,194 as compared to $475,041 for the same period in 2015. The increase in receivable resulted from sales generated at the end of the quarter with payments collected subsequently.

~~During~~Net ~~the~~cash ~~three~~used ~~months~~by ~~ended~~financing ~~March~~activities ~~31,~~for ~~2016~~the ~~net~~six ~~cash~~months ~~used~~ended byJune ~~operating~~30, ~~activities~~2016 was $53,~~677~~376,~~495,~~947 ~~and~~whereas net cash ~~provided~~used byin ~~operating~~financing activities for the ~~three~~same ~~months~~period ~~ended March~~in ~~31,~~2014 ~~2015~~ was $21,~~568~~891,~~189, respectively~~043. ~~Net~~The ~~cash~~Company’s ~~provided~~received by$5 ~~operating~~from ~~activities~~its shareholders in 2015 ~~was~~and ~~much~~repaid ~~higher~~$3,376,947 ~~resulted~~to ~~from~~the ~~cash provided~~shareholders byin ~~security~~2016. ~~deposits~~In 2013 toand ~~suppliers~~2014, ~~accounts~~the ~~payable~~Company ~~and~~has ~~accrued~~executed ~~expenses.~~various ~~The~~short ~~significant~~term ~~changes~~accounts ~~resulted~~receivables ~~from~~factoring ~~the~~agreements ~~Company received~~with ~~security~~the ~~deposits~~banks ~~returned~~where ~~from~~the ~~its~~banks would ~~suppliers~~advance inthe ~~2015~~Company ~~while~~a incontracted ~~2016~~percentage of the ~~Company~~invoices ~~paid~~factored ~~$5,416,385~~up tofront. ~~its~~These ~~suppliers~~trade asfinancing ~~part of~~loans ~~the~~derived ~~purchase~~from ~~agreements.~~export sales ~~During~~generated ~~the~~in ~~three~~2013 ~~months~~and ~~ended~~2014 ~~March~~that ~~31,~~carryover ~~2016,~~to ~~the~~2015. ~~Company~~Financing ~~has~~activities anattributable ~~outstanding~~to ~~receivable~~repayments ~~from~~of ~~its~~trade ~~customers~~financing loans ofwas $41,~~925~~891,~~067~~048 in 2015. The ~~increase~~trade infinancing ~~receivable~~loans ~~resulted~~had ~~from~~to ~~sales~~be ~~generated~~repaid atby the ~~end~~shareholders ofas the ~~quarter~~goods ~~with~~were ~~payments~~returned ~~collected~~by ~~subsequently~~the customers.

~~Net~~The ~~cash~~resulting ~~used~~effect ~~by financing activities~~ for ~~the~~cash ~~three~~as ~~months~~at ~~ended March 31~~June 30, 2016 was $223,~~447~~129,~~994~~245 ~~whereas~~compared ~~net~~with cash ~~provided~~at byJune ~~financing activities for the same period in 2014 was $3~~30,~~529.~~ ~~The Company’s received $1,894,577 from its shareholders in~~ 2015 and repaid $2,447,994 to the shareholders in 2016. In 2013 and 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. These trade financing loans derived from export sales generated in 2013 and 2014 that carryover to 2015. Financing activities attributable to repayments of trade financing loans was $15,~~891~~420,~~048 in 2015~~679. ~~The trade financing loans had to be repaid by the shareholders as the goods were returned by the customers.~~

~~The~~Discussion ~~resulting~~of ~~effect for~~Three ~~cash~~months atended ~~March~~June 3130, 2016 ~~was~~and ~~$10,113,714 compared with cash at March 31,~~ 2015 ~~was $2,585,103.~~

InThe ~~2013~~Company generated revenues from sales of products of $22,440,841 and ~~2014~~$9,902,672 during the ~~Company~~three ~~has~~months ~~executed various~~ended ~~short~~June ~~term~~30, ~~accounts~~2016 ~~receivables~~and ~~factoring~~2015, ~~agreements~~respectively, ~~with~~an ~~the~~increase ~~banks~~of ~~where~~approximately 126.6% ~~the~~on ~~banks~~a ~~would~~year-over-year ~~advance~~basis. As the Company agranite ~~contracted percentage~~stones ofbusiness ~~the~~steadies, ~~invoices~~there ~~factored~~was upan ~~front~~increase orof ~~charge~~customers aand ~~contracted~~therefore sales ~~interest~~orders ~~fee~~have atincreased. ~~average~~According ~~rate~~to ofthe ~~2%-4%~~increase ~~based~~in onmarket and customer demand, the ~~percentage~~Company’s revenues generated from ~~advanced~~granite stones increased. The ~~When~~Company also started generating sales revenues from the ~~outstanding~~cooperative ~~accounts~~operation ~~receivable~~agreement ~~invoice~~to isfilter and ~~collected,~~sort gold sands or gold dust from the ~~advanced~~gold ~~amount~~mine ~~plus~~tailings ~~any~~for ~~accrued~~the ~~interest~~three ~~are~~months ~~repaid~~ended June 30, 2016.

~~The~~Gross ~~outstanding~~margin ~~amount~~for ofthe ~~trade~~three ~~financing~~months ended ~~loans~~June ~~were~~30, ~~$nil~~2016 ~~and~~was $~~nil~~12,853,258 asor approximately 57.3% of ~~March~~revenues 31as compared to $5,409,166 ~~2016~~or ~~and~~approximately ~~December~~54.6% ~~31,~~of revenues for the same period in 2015, ~~respectively~~representing an increase in gross margin. The ~~interest~~gross ~~expenses~~margin ~~were~~was ~~$nil~~effected ~~and~~by ~~$1,363 for~~ the ~~three~~quality ~~months~~of ~~ended~~the ~~March~~granite stones ~~31,~~received ~~2016~~by ~~and~~the ~~2015,~~Company ~~respectively~~from the supplier. The ~~trade~~Company ~~financing~~receive ~~loans~~delivery of granite stones in batches from the supplier and the granite stones were ~~repaid~~in better-quality in ~~Jan~~2016 than in 2015. ~~when~~The ~~the~~imperfect ~~goods~~ granites stones were ~~returned~~included byas part of the ~~customers~~cost of the inventory which resulted in a lower profit margin in 2015.

The Company generated revenues from sales of products of $5,085,375 and $7,322,565 during the three months ended March 31, 2016 and 2015, respectively, a decrease of approximately 31% on a year-over-year basis. The sales above are generated from direct sales to local domestic customers.

Gross margin for the three months ended March 31, 2016 was $4,065,120 or approximately 80% of revenues as compared to $3,982,142 or approximately 54% of revenues for the same period in 2015. The increase in gross margin from 2015 to 2016 resulted from higher quality of the granites stones. The Company purchased the same grade of granite stones in batch from the suppliers, and yet the Company received a higher quality from the batch, as a result the Company was able to sell these granite stones at a higher price resulting in a higher gross margin.

The sales revenues and cost of sales as follows:

	Revenues				Cost of Sales				Margin %
	For the Three Months Ended				For the Three Months Ended				For the Three Months Ended
	March 31,		March 31,		March 31,		March 31,
	June 30,		June 30,		June 30,		June 30,		June 30,			June 30,
	2016		2015		2016		2015		2016			2015
Granite Stones		513,~~007~~328,~~441~~169		79,~~322~~902,~~565~~672		~~948~~3,~~418~~721,342		34,~~340~~493,~~423~~506		72.1	%		54.6	%
Graphite		-280,008		-		-276,464		-		1.3	%
Fluorite		-280,008		-		-277,826		-		0.8	%
Gold		778,~~934~~552,656		-		715,~~837~~311,951		-		37.9	%
Total		522,~~085~~440,~~375~~841		79,~~322~~902,~~565~~672		19,~~020~~587,~~255~~583		34,~~340~~493,~~423~~506		57.3	%		54.6	%

~~The~~Operating ~~Company~~expenses ~~generated higher~~increased ~~sales~~352% from ~~Affiliated entities through barter trade~~ $173,464 in ~~2015~~the asthree ~~compared~~months toended ~~2016~~June as30, ~~outstanding~~2015 ~~balance owed~~ to ~~Affiliated entities~~$784,502 ~~were paid off~~ in ~~2015. The barter trade was trading granite stones for land acquired in 2014. The sales price of~~ the ~~granite stones~~same ~~traded~~period ~~was at market price. The gross margin on affiliated entities sales are higher under normal circumstances as compared to third party sales due to different grade~~ of ~~granite stones at lower cost~~2016.

	Sales Revenues				Cost of Sales
	For the Three Months Ended
	For the Three Months Ended				For the Three Months Ended
	June 30,		June 30,
	March 31,		March 31,		March 31,		March 31,
	2016		2015
	2016		2015		2016		2015
Selling, general and administrative expenses
Affiliated entities		-		737,261		-		55,853
Employees’ wages and salaries		408,841		105,127
Third parties		5,085,375		6,585,304		1,020,255		3,284,570
Rent expense		15,314		19,209
Total		5,085,375		7,322,565		1,020,255		3,340,423
Professional fees		134,674		2,459
Motor vehicle expenses		26,800		218
Travel expenses		107,950		13,014
Other SG&A expenses		90,923		33,437
Total		784,502		173,464

~~During~~The ~~the~~Company’s ~~three~~motor ~~months~~vehicle expenses ~~ended~~increased ~~March~~as ~~31,~~a ~~2016,~~result ~~the~~of ~~Company~~new ~~posted~~car ~~operating~~leases ~~income~~obtained ofby ~~$3,628,032~~the ~~and~~Company ~~net~~for ~~income~~its ofofficers ~~$3,628,035~~in as2016. ~~compared~~The toCompany ~~operating~~also ~~income~~incurred additional oftravel ~~$3,822,091~~expenses and ~~net~~professional ~~income~~fees ofbeing ~~$3,855,176~~a ~~for~~public ~~the~~reporting ~~three~~company. ~~months~~The ~~ended~~Company ~~March~~also ~~31,~~incurred ~~2015~~additional travel expenses to visit suppliers and customers for graphite and fluorite.

Operating expenses increased 130% from $368,290 in the three months ended March 31, 2016 to $160,051 in the same period of 2015. The increase in these costs was primarily attributable to professional fees, motor vehicle expenses and travel expenses

	For the Three Months Ended
	March 31,		March 31,
	2016		2015
Selling, general and administrative expenses
Employees’ wages and salaries		103,699		89,422
Rent expense		15,288		19,092
Professional fees		39,085		3,255
Stock-based compensation		-		4,993
Motor vehicle expenses		28,573		1,403
Travel expenses		68,798		-
Other SG&A expenses		112,847		41,886
Total		368,290		160,051

In late 2015, the Company has started operation of trading gold, graphite, and fluorite, as well as sorting and filtering gold mine tailing activities which continued into 2016. 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. As a result, wages and salaries were higher in 2016.

Total Other income generated were $3 2,516 in the three months ended ~~March~~June 3130, 2016 as compared to other income of $332,~~085~~646,334 in the same period of 2015. The Company ~~incurred~~ received interest ~~expenses~~income of $nil and $~~1,353~~14 for the three months ended 2016 and 2015, respectively~~, for trade financing loans that were paid off in Jan 2015~~. The Company received $nil and $~~34,438~~106 in the three months ended ~~March~~June 3130, 2016 and 2015, respectively in government rebates which were mainly for export and insurance incentives that occurred in 2014 for export sales by the Company. The Company generated other income of $2,516 from the sale of an equipment for the three months ended June 30, 2016. The Company generated gain from barter trade of $nil and $2,646,214 for the three months ended June 30, 2016 and 2015, respectively. The barter trade was trading granite stones for land acquired in 2014.

The Company generated higher sales from through barter trade in 2015 as compared to 2016 as outstanding balance owed were paid off in 2015. The barter trade was trading granite stones for land acquired in 2014. The granite stones traded was at market sales price. The gross margin on affiliated entities sales are higher under normal circumstances as compared to third party sales due to different grade of granite stones at lower cost.

	Barter Trade Revenues				Barter Trade Cost of Sales
	For the Three Months Ended				For the Three Months Ended
	June 30,		June 30,		June 30,		June 30,
	2016		2015		2016		2015
Affiliated entities		-		2,863,107		-		216,903
Third parties		-		10		-		-
Total		-		2,863,117		-		216,903

As a result, during the three months ended June 30, 2016, the Company posted operating income of $12,068,756 and net income of $12,071,272 as compared to operating income of $5,235,702 and net income of $7,882,036 for the three months ended June 30, 2015.

Discussion of Six Months ended June 30, 2016 and 2015

The Company generated revenues from sales of products of $27,526,216 and $14,830,360 during the six months ended June 30, 2016 and 2015, respectively, an increase of approximately 85.6% on a year-over-year basis. As the Company granite stones business steadies, there was an increase of customers and therefore sales orders have increased. According to the increase in market and customer demand, the Company’s revenues generated from granite stones increased. The Company also started generating sales revenues from the cooperative operation agreement to filter and sort gold sands or gold dust from the gold mine tailings for the three months ended June 30, 2016.

Gross margin for the six months ended June 30, 2016 was $16,918,378 or approximately 61.5% of revenues as compared to $7,177,861 or approximately 48.4% of revenues for the same period in 2015, representing an increase in gross margin. The gross margin was effected by the quality of the granite stones received by the Company from the supplier. The Company receive delivery of granite stones in batches from the supplier and the granite stones were in better-quality in 2016 than in 2015. The imperfect granites stones were included as part of the cost of the inventory which resulted in a lower profit margin in 2015.

The sales revenues and cost of sales as follows:

	Revenues				Cost of Sales				Margin %
	For the Six Months Ended				For the Six Months Ended				For the Six Months Ended
	June 30,		June 30,		June 30,		June 30,		June 30,			June 30,
	2016		2015		2016		2015		2016			2015
Granite Stones		18,335,610		14,830,360		4,669,760		7,652,499		74.5	%		48.4	%
Graphite		280,008		-		276,464		-		1.3	%		0.0	%
Fluorite		280,008		-		277,826		-		0.8	%		0.0	%
Gold		8,630,590		-		5,383,788		-		37.6	%		0.0	%
Total		27,526,216		14,830,360		10,607,838		7,652,499		61.5	%		48.4	%

Operating expenses increased 130% from $333,315 in the six months ended June 30, 2015 to $1,152,792 in the same period of 2015. The increase in these costs was primarily attributable to professional fees, motor vehicle expenses and travel expenses

	For the Six Months Ended
	June 30,		June 30,
	2016		2015
Selling, general and administrative expenses
Employees’ wages and salaries		512,540		194,549
Rent expense		30,602		38,301
Professional fees		173,759		5,714
Motor vehicle expenses		55,373		1,621
Travel expenses		176,748		18,007
Other SG&A expenses		203,770		75,323
Total		1,152,792		333,315

The Company’s motor vehicle expenses increased as a result of new car leases obtained by the Company for its officers in 2016. The Company also incurred additional travel expenses and professional fees being a public reporting company. The Company also incurred additional travel expenses to visit suppliers and customers for graphite and fluorite.

Total Other income generated were $2,519 in the six months ended June 30, 2016 as compared to other income of $4,892,866 in the same period of 2015. The Company incurred interest expenses of $nil and $1,339 for the six months ended 2016 and 2015, respectively, for trade financing loans that were paid off in Jan 2015. The Company received $nil and $34,544 in the six months ended June 30, 2016 and 2015, respectively in government rebates which were mainly for export and insurance incentives that occurred in 2014 for export sales by the Company. The Company generated gain from barter trade of $nil and $4,859,661 for the six months ended June 30, 2016 and 2015, respectively. The barter trade was trading granite stones for land acquired in 2014.

Barter Trade Revenues

Barter Trade Cost of Sales

For the Six Months Ended

June 30,

2016

2015

2016

2015

Affiliated entities

5,254,729

398,333

Third parties

3,265

Total

5,257,994

398,333

During the six months ended June 30, 2016, the Company posted operating income of $15,765,586 and net income of $15,768,105 as compared to operating income of $6,844,346 and net income of $11,737,212 for the six months ended June 30, 2015.

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.

	March 31,			December 31,
	June 30,			December 31,
	2016			2015
Receivables/(Payables)
Mr. Tan Lin	$	-		$	(1,227,280	)
Mr. Wu Xiao Bin		(~~714~~27,~~904~~142	)		(778,449	)
Mr. Yang Yuan Xi		~~(541,385~~-	)		(539,389	)
Mr. Wu Zhong Chen		~~(541,385~~-	)		(539,389	)
Ms. Lynn Lee		~~486~~(252,~~387~~538	)		(547,114	)
Total	$	(1,311,287	)	$	(3,631,621	)
Total Receivables/(Payables)	$	(1,311,287	)	$	(3,631,621	)

~~In addition,~~ Mr. Xiaobin Wu, the Company’s officer ~~and~~ 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~~which ~~and~~are ~~Cost~~considered ofaffiliated ~~Sales for these entities is shown separately on the Income statement as Revenue and Cost of Sales from Affiliated Entities~~enities.

In 2014, the Company acquired ~~land~~lands from Fuda Investment for RMB ~~127~~156,~~424~~845,700;, and from Winner International for RMB 65,965,000. ~~The~~In addition, Fuda Investment and Winner International has executed sales agreements to purchase granite stones from the Company. Any revenues and cost of sales for these entities is shown separately on the Statement of Operation as Revenue and Cost of Sales from Affiliated Entities. The purchase price of the land (corresponding outstanding payables) was to be paid off by fair market sales price of the stones in(corresponding accounts receivables) as a barter trade exchange. (Refer to “Barter Trade Exchange” Footnote)

~~The~~Sales ~~Company~~revenues ~~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~~$nil onand ~~the~~$nil, ~~transfer.~~and ~~The Company would review~~ the ~~historical~~corresponding cost of ~~the~~sales ~~land~~from toaffiliated ~~evaluate if~~entities ~~there is an impairment loss to be recognized. The barter trade transactions~~ were ~~recognized~~$nil ~~as a land asset~~ and as$nil ~~accounts payable~~for to the ~~sellers.~~six ~~The~~months ~~revenues~~ended ~~were~~June 30, ~~recognized~~2016 ~~against~~and ~~the~~2015, ~~outstanding amount owed to the sellers~~respectively.

Barter trade revenues generated for the three months ended March 31, 2016 and 2015 were $nil and $737,261, respectively.

ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.

Information not required to be filed by Smaller reporting companies.

ITEM 4. Controls and Procedures.

Disclosures 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 period covered by this report under the supervision and with the participation of the Company's principal executive officer (who is also the principal financial officer).

Based upon that evaluation, he 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, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Act is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

This Quarterly Report does not include an attestation report of the Company's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's registered public accounting firm pursuant to temporary rules of the Securities and Exchange Commission that permit the Company to provide only management's report in this Quarterly Report.

Changes in Internal Controls

With the acquisitions of the Company’s subsidiaries, the Company has grown in size and revenues and management of the Company believes that currently its internal controls over financial reporting are efficient and effective; however, given the time constraints and growth of the Company, management believes that it will likely examine and change the process of reporting financial matters and internal control will likely change. There was no change that occurred during the period covered by this report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There are no legal proceedings against the Company and the Company is unaware of such proceedings contemplated against it.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

From inception (September 25, 2014), the Company has issued common shares pursuant to Section 4(2) of the Securities Act of 1933 as follows:

(1)

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.

(7)

On October 1, 2015, the Company issued 100 shares each to 350 shares for a total of 35,000 shares of common stock as compensation.

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

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

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

On September 30, 2015, the Board of Directors approved the 41-for-100 reverse stock split and resolved to present the matter to a vote of shareholders at a special meeting of the stockholders held October 1, 2015. The 41-for-100 reverse stock split was approved with a record date of October 1, 2015.

ITEM 5. OTHER INFORMATION

(a)

Not applicable.

(b)

Item 407(c)(3) of Regulation S-K:

During the quarter covered by this Report, there have not been any material changes to the procedures by which security holders may recommend nominees to the Board of Directors.

ITEM 6. EXHIBITS

(a)

Exhibits

Number		Item
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
101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

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

FUDA GROUP (USA) CORPORATION

By:	/s/ Xiaobin Wu
	President, Chief Executive Office and Chief Financial Officer

Dated: ~~May~~August 1015, 2016

Filing Compare · Fuda Group (USA) Corp