SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2015
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 000-55307
FUDA GROUP (USA) CORPORATION
(Exact name of registrant as specified in its charter)
SPRUCE VALLEY ACQUISITION CORPORATION
(Former 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
100 Jin Jiang Street
Dandong City, Liaoning Province
China
+86 415 316 5852
(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 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
(do not check if a smaller reporting company)
Indicate by check mark whether the registrant is a shell company
(as defined in Rule 12b-2 of the Exchange Act).
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of stock, as of the latest practicable date.
Class Outstanding at
May 20, 2015
Common Stock, par value $0.0001 302,000,000
Documents incorporated by reference: None
______________________________________________________________
CONDENSED FINANCIAL STATEMENTS
Unauadited Condensed Financial Statements 2-4
Notes to Unaudited Condensed Financial Statements 5-7
______________________________________________________________________
FUDA GROUP (USA) CORPORATION
CONDENSED BALANCE SHEETS
March 31, December 31,
2015 2014
----------- -----------
(unaudited) (audited)
Stockholders' equity (deficit)
Preferred stock, $0.0001 par value,
20,000,000 shares authorized; none
issued and outstanding as of March 31,
2015 - -
Common stock, $0.0001 par value, 480,000,000
shares authorized; 302,000,000 shares issued
and outstanding as of March 31, 2015 30,200 2,000
Discount on Common Stock (30,200) (2,000)
Additional paid-in capital 1,331 712
Accumulated deficit (1,331) (712)
------------ _________
Total stockholders' equity (deficit) - -
------------ _________
Total liabilities and stockholders'
equity (deficit) $ - $ -
============ ==========
The accompanying notes are an integral part of these unaudited condensed
financial statements.
2
______________________________________________________________________
FUDA GROUP (USA) CORPORATION
UNAUDITED CONDENSED STATEMENT OF OPERATIONS
For the three
months ended
March 31, 2015
-----------------
Revenue $ -
Cost of revenue -
-----------------
Gross profit -
Operating expenses 619
-----------------
Operating loss (619)
Loss before income taxes (619)
==================
Income tax expense -
Net loss $ (619)
==================
Loss per share - basic and diluted $ (0.00)
==================
Weighted average shares-basic and diluted 132,800,000
------------------
The accompanying notes are an integral part of these unaudited condensed
financial statements.
3
______________________________________________________________________
FUDA GROUP (USA) CORPORATION
CONDENSED STATEMENT OF CASH FLOWS
(UNAUDITED)
For the three
months ended
March 31, 2015
--------------
OPERATING ACTIVITIES
Net loss $ (619)
-------------
Non-cash adjustments to reconcile net loss to
net cash:
Expenses paid for by stockholder and
contributed as capital 619
-------------
Changes in Operating Assets and Liabilities:
Accrued liability -
-------------
Net cash provided by
(used in) operating activities -
-------------
Proceeds from issuance of common stock -
Proceeds from stockholders contribution -
-------------
Net cash provided by financing activities -
-------------
Net increase in cash -
Cash, beginning of period -
-------------
Cash, end of period $ -
=============
The accompanying notes are an integral part of these unaudited condensed
financial statements.
4
--------------------------------------------------------------------
FUDA GROUP (USA) CORPORATION
Notes to Unaudited Condensed Financial Statements
NOTE 1 NATURE OF OPERATIONS
NATURE OF OPERATIONS
The Company Company 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. The Company
has been in the developmental stage since inception and its operations to date
have been limited to issuing shares to its original shareholders. The Company
will attempt to locate and negotiate with a business entity for the combination
of that target company with the Company. The combination will normally take
the form of a merger, stock-for-stock exchange or stock-for-assets exchange.
In most instances the target company will wish to structure the business
combination to be within the definition of a tax-free reorganization under
Section 351 or Section 368 of the Internal Revenue Code of 1986, as
amended. No assurances can be given that the Company will be successful
in locating or negotiating with any target company. The Company has been
formed to provide a method for a foreign or domestic private company to
become a reporting company with a class of securities registered under the
Securities Exchange Act of 1934.
On February 17, 2015, the Company changed its name from Spruce
Valley Acquisition Corporation to Fuda Group (USA) Corporation (the
"Company" or "Fuda Group") and filed the amendment with the State of
Delaware.
On February 17, 2015, the Company amended its certificate of
incorporation to increase its authorized capitalization to an aggregate
of 500,000,000 shares consisting of 480,000,000 shares of common stock
and 20,000,000 shares of non-designated preferred stock and filed the
amendment with the State of Delaware.
On February 23, 2015, the Company filed a Form 8-K to report
a change of control by the following events: the Company redeemed an
aggregate of 19,500,000, the then officers and directors resigned,new
officers and directors were appointed, and the Company issued 301,500,000
shares of its common stock.
NOTE 2 BASIS OF PRESENTATION
The accompanying condensed balance sheet as of December 31, 2014,
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 31, 2015 and for the three months ended March 31,
2015, has been prepared in accordance with accounting principles generally
accepted in the United States of America ("U.S. GAAP") for interim financial
information and with the instructions to Form 10-Q and Article 8-03 of
Regulation S-X. 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 31, 2015 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 for the year ended
December 31, 2014 filed on April 15, 2015.
NOTE 3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
USE OF ESTIMATES
The preparation of condensed financial statements (unaudited) in conformity
with 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 condensed financial statements,
and the reported amounts of revenues and expenses during the reporting
periods. Actual results could differ from those estimates.
CASH
Cash and cash equivalents include cash on hand and on deposit at banking
institutions as well as all highly liquid short-term investments with original
maturities of 90 days or less. The Company did not have cash or cash
equivalents as of March 31, 2015 and December 31, 2014.
CONCENTRATION OF RISK
Financial instruments that potentially subject the Company to concentrations
of credit risk consist principally of cash. The Company places its cash with
high quality banking institutions. The Company did not have cash balances
in excess of the Federal Deposit Insurance Corporation limit as of March 31,
2015.
5
______________________________________________________________________
FUDA GROUP (USA) CORPORATION
Notes to Unaudited Condensed Financial Statements
INCOME TAXES
Under ASC 740, "Income Taxes," deferred tax assets and liabilities are
recognized for the future tax consequences attributable to temporary
differences between the financial statement carrying amounts of existing
assets and liabilities and their respective tax bases. Deferred tax assets and
liabilities are measured using enacted tax rates expected to apply to taxable
income in the years in which those temporary differences are expected to be
recovered or settled. Valuation allowances are established when it is more
likely than not that some or all of the deferred tax assets will not be
realized. As of March 31, 2015 there were no deferred taxes due to the
uncertainty of the realization of net operating loss or carry forward prior
to expiration.
REVENUE RECOGNITION POLICY
The Company recognizes revenue in accordance with Financial
Accounting Standards Board Accounting Standards Codification ("ASC") No.
605, Revenue Recognition. In all cases, revenue is recognized only when
the price is fixed and determinable, persuasive evidence of an arrangement
exists, the service is performed and collectability of the resulting
receivable is reasonably assured.
LOSS PER COMMON SHARE
Basic loss per common share excludes dilution and is computed by dividing
net loss by the weighted average number of common shares outstanding
during the period. Diluted loss per common share reflect the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the
issuance of common stock that then shared in the loss of the entity. As of
March 31, 2015, there are no outstanding dilutive securities.
FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company follows guidance for accounting 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 condensed financial statements (unaudited) on a
recurring basis. Additionally, the Company adopted guidance for fair
value measurement related to nonfinancial items that are recognized
and disclosed at fair value in the condensed financial statements
(unaudited) on a nonrecurring basis. The guidance establishes a fair
value hierarchy that prioritizes the inputs to valuation techniques
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 are quoted prices (unadjusted) in active markets for identical
assets or liabilities that the Company has the ability to access at the
measurement date.
Level 2 inputs are inputs other than quoted prices included within Level 1
that are observable for the asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for the asset or liability.
The carrying amounts of financial assets such as cash approximate their fair
values because of the short maturity of these instruments.
NOTE 4 - GOING CONCERN
The Company has not yet generated any revenue since inception to date and
has sustained operating losses during the period ended March 31, 2015.
The Company had working capital of $0 and an accumulated deficit of
$1,331 as of March 31, 2015. The Company's continuation as a going concern
is dependent on its ability to generate sufficient cash flows from operations
to meet its obligations and/or obtain additional financing from its members
or other sources, as may be required.
6
______________________________________________________________________
FUDA GROUP (USA) CORPORATION
Notes to Unaudited Condensed Financial Statements
The accompanying condensed financial statements (unaudited) have been prepared
assuming that the Company will continue as a going concern; however, the above
condition raises substantial doubt about the Company's ability to do so. The
condensed financial statements (unaudited) do not include any adjustments to
reflect the possible future effects on the recoverability and classification of
assets or the amounts and classifications of liabilities that may result should
the Company be unable to continue as a going concern.
In order to maintain its current level of operations, the Company will require
additional working capital from either cash flow from operations or from the
sale of its equity. However, the Company currently has no commitments
from any third parties for the purchase of its equity. If the Company is unable
to acquire additional working capital, it will be required to significantly
reduce its current level of operations.
NOTE 5 - RECENT ACCOUNTING PRONOUNCEMENTS
Adopted
In August, 2014, the Financial Accounting Standards Board ("FASB") issued
Accounting Standards Update (ASU) No. 2014-15, Presentation of Financial
Statements-Going Concern (Subtopic 205-40), which now requires management to
evaluate whether there are conditions or events, considered in the aggregate,
that raise substantial doubt about the entity's ability to continue as a going
concern within one year after the date the financial statements are issued. If
conditions or events raise substantial doubt about an entity's ability to
continue as a going concern, and substantial doubt is not alleviated after
consideration of management's plans, additional disclosures are required. The
amendments in this update are effective for the annual period ending after
December 15, 2016, and for annual periods and interim periods thereafter.
Early application is permitted. These requirements were previously included
within auditing standards and federal securities law, but are now included
within U.S. GAAP. We are currently assessing the impact of the adoption of
ASU No. 2014-15 on our financial statements and disclosures.
In June, 2014, the FASB issued ASU No. 2014-10, Development Stage Entities
(Topic 915) - Elimination of Certain Financial Reporting Requirements,
Including an Amendment to Variable Interest Entities Guidance in Topic 810,
Consolidation, which eliminates the concept of a development stage entity
(DSE) in its entirety from current accounting guidance. We have elected
early adoption of this standard, which eliminates the designation of DSEs
and the requirement to disclose results of operations and cash flows since
inception. We do not believe the adoption of ASU No. 2014-10 will have
significant impact on our financial statements and disclosures.
In May 2014, the FASB issued Accounting Standards Update ("ASU") 2014-09,
Revenue from Contracts with Customers (Topic 606). ASU 2014-09 creates a
new topic in the ASC Topic 606 and establishes a new control-based revenue
recognition model, changes the basis for deciding when revenue is recognized
over time or at a point in time, provides new and more detailed guidance on
specific topics, and expands and improves disclosures about revenue. In
addition, ASU 2014-09 adds a new Subtopic to the Codification, ASC 340-40,
Other Assets and Deferred Costs: Contracts with Customers, to provide guidance
on costs related to obtaining a contract with a customer and costs incurred in
fulfilling a contract with a customer that are not in the scope of another ASC
Topic. The guidance in ASU 2014-09 is effective for public entities for annual
reporting periods beginning after December 15, 2016, including interim periods
therein. Early application is not permitted. Management is in the process of
assessing the impact of ASU 2014-09 on the Company's financial statements.
NOTE 6 STOCKHOLDERS' EQUITY
On September 25, 2014 the Company issued 20,000,000 founders common stock
to two directors and officers of which 19,500,000 were redeemed on February
20, 2015.
On February 21, 2015, the Company issued 301,500,000 shares of its
common stock.
The Company is authorized to issue 480,000,000 shares of common stock
and 20,000,000 shares of preferred stock. As of March 31, 2015,
302,000,000 shares of common stock and no preferred stock were
issued and outstanding.
7
______________________________________________________________________
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Fuda Group (USA) Corporation (formerly Spruce Valley Acquisition
Corporation) ("Fuda Group" or the "Company") 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. The Company has been in the developmental stage since
inception.
In addition to a change in control of its management and shareholders,
the Company's operations to date have been limited to issuing shares and
filing a registration statement on Form 10 pursuant to the Securities
Exchange Act of 1934. The Company was formed to provide a method for a
foreign or domestic private company to become a reporting company with a
class of securities registered under the Securities Exchange Act of 1934.
On November 3, 2014, the Company registered its common stock on a
Form 10 registration statement filed pursuant to the Securities Exchange
Act of 1934 (the "Exchange Act") and Rule 12(g) thereof which became
automatically effective 60 days thereafter.
The Company files with the Securities and Exchange Commission periodic
and current reports under Rule 13(a) of the Exchange Act, including
quarterly reports on Form 10-Q and annual reports Form 10-K.
On February 17, 2015, the Company amended its certificate of
incorporation to increase its authorized capitalization to an aggregate
of 500,000,000 shares consisting of 480,000,000 shares of common stock
and 20,000,000 shares of non-designated preferred stock and filed the
amendment with the State of Delaware.
On February 17, 2015, the Company changed its name to Fuda Group
(USA) Corporation and filed the amendment with the State of Delaware.
On February 23, 2015, the Company filed a Form 8-K to report
the following events:
The Company redeemed an aggregate of 19,500,000 of the then
20,000,000 shares of outstanding stock at a redemption price
of par'
James Cassidy and James McKillop, both directors of the Company
and the then president and vice president, respectively, resigned
such directorships and all offices of the Company. Messrs. Cassidy
and McKillop each beneficially retain 250,000 shares of the Company's
common stock;
Xiaobin Wu was named as the sole director of the Company
and serves as its Chief Executive Officer, Secretary and
Treasurer; and
The Company issued 301,500,000 shares of its common stock at par
representing 99.8% of the then total outstanding 302,000,000 shares
of common stock.
The Company has no employees and only one director who also serves as
the Company's sole officer.
The Company has entered into an agreement with Tiber Creek
Corporation of which the former president of the Company is the president
and controlling shareholder. Tiber Creek Corporation assists companies to
become public reporting companies and for the preparation and filing of a
registration statement pursuant to the Securities Act of 1933, and the
introduction to brokers and market makers.
The Company has not entered into any definitive or binding agreements
and there are no assurances that such transactions will occur, it is
actively pursuing the following avenues of development:
To develop its business with a combination with Liaoning Fuda
Mining Co., Ltd. a Chinese company located in Dandong City, Liaoning
Province, China. The private company holds the majority shares in three
large open granite mines in the Dandong region, along the perimeter of
Zhen'an Gold Mine and Wu Long Gold Mine. The private company owns 52.16%
in each of the three mines: Heng Xu, Jun Da and Xiang An. These three mines
cover a total area of 670,000 square meters and have a total reserve of
60 million cubic meters of granite to be quarried. Presently, the business
is able to achieve an output of 200,000 cubic meters annually. Fuda Mining
processes the raw blocks into slabs, pavers, wall cladding, and carvings
which are sold to government agencies, corporations, wholesalers, civil
engineering and renovation companies. Fuda Mining anticipates future plans
to include adding additional processing plants and expanding into other
mining sectors.
No agreements have been executed and if the Company makes any
acquisitions, mergers or other business combination, it will file a
Form 8-K.
It is anticipated that such private company will bring with it to
such merger key operating business activities and a business plan. As of
the date of this Report, no agreements have been executed to effect such a
business combination and although the Company anticipates that it will effect
such a business combination there is no assurance that such combination will
be consummated.
If and when the Company chooses to enter into a business combination with
such private company or another, it will likely file a registration statement
after such business combination is effected.
A combination will normally take the form of a merger, stock-for-stock
exchange or stock-for-assets exchange. The Company may wish to structure
the business combination to be within the definition of a tax-free
reorganization under Section 351 or Section 368 of the Internal Revenue
Code of 1986, as amended.
As of March 31, 2015 the Company had not generated revenues and had
no income or cash flows from operations since inception. For the three
months ended March 31, 2015 the Company had sustained net loss of $619,
and had an accumulated deficit of $1,331.
The Company's independent auditors have issued a report for the
period from September 25, 2014 (inception) to December 31, 2014 raising
substantial doubt about the Company's ability to continue as a going concern.
At present, the Company has no operations and the continuation of the Company
as a going concern is dependent upon financial support from its stockholders,
its ability to obtain necessary equity financing to continue operations
and/or to successfully locate and negotiate with a business entity for the
combination of that target company with the Company.
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 change in control there was a change in the management
of the Company and its internal controls over financial reporting; however,
given that such control remains in the hands of a single officer and director
the process of reporting and internal control will likely not change and
therefore ther 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
20,000,000 common shares pursuant to Section 4(2) of the Securities Act
of 1933 for an aggregate purchase price of $2,000 as folllows:
On September 25, 2014, the Company issued the following shares of
its common stock:
Name Number of Shares
James Cassidy 10,000,000
James McKillop 10,000,000
Of the above 20,000,000 shares outstanding, 19,500,000 were redeemed, pro
rata, on February 20, 2015 from the holders thereof. On February 21, the
Company issued 301,500,000 shares as follows:
Liaoning Fuda Mining Co., LTD 61,000,000
Dandong Hao Han Mining Co., LTD 58,000,000
Xiaobin Wu 51,500,000
B. Square Pty LTD 48,000,000
JFL International Group
Private Limited 35,000,000
Lina Wu 35,000,000
Lihua Sun 13,000,000
As discussed above, with the issuance of the shares and the
redemption of shares of stock, the Company effected a change in control
and the shareholder(s) elected new management of the Company. The Company
may develop its business plan by future business combinations or transactions
but no agreements or contracts have been reached. If the Company makes any
acquisitions, mergers or other business combination, it will file a Form
8-K but until such time the Company remains a shell company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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
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
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 Officer
Chief Financial Officer
Dated: May 20, 2015