UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended March 31, 2017

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 ________

USA CAPITAL MANAGEMENT, INC

(Exact Name of Registrant as Specified in its Charter)

Puerto Rico

47-2128828

State or Other Jurisdiction of

Incorporation or Organization

I.R.S. Employer Identification No.

404 Ave Constitucion #208 San Juan, Puerto Rico		00901-2251
Address of Principal Executive Offices		Zip Code

		787-900-5048
		Registrant’s Telephone Number, Including Area Code

Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report

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

required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer ¨ (Do not check if a smaller reporting company)	Smaller reporting company x
Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ¨ No x

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes¨ No ¨

APPLICABLE ONLY TO CORPORATE ISSUERS

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

Class		Outstanding as of May 15, 2017
Common Stock, par value $0.001		3,000,000

TABLE OF CONTENTS

			Page
Part I.	Item 1.	Financial Statements
		Consolidated Balance Sheet (unaudited)	2
		Consolidated Statement of Operations (unaudited)	3
		Consolidated Statement of Cash Flows (unaudited)	4
		Notes to Financial Statements (unaudited)	5
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	7
	Item 3.	Quantitative and Qualitative Disclosures about Market Risk	8
	Item 4.	Control and Procedures	8

Part II.		Other Information
	Item 1.	Legal Proceedings	9
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	9
	Item 3.	Default Upon Senior Securities	9
	Item 4.	Submission of Matters to a Vote of Security Holders	9
	Item 5.	Other Information	9
	Item 6.	Exhibits	9


Signatures			9

USA Capital Management, Inc
Consolidated Balance Sheets

ASSETS		March 31, 2017 (Unaudited)			December 31, 2016
Current Assets
Cash	$	1,028,327		$	118,532
Accounts Receivable		600,000			-
Interest Receivable		55,556			-
Advances		6,300			-
Deposits		1,001,003			1,003
Total Current Assets		2,691,186			119,535

Note Receivable		12,500,000			-

Property and Equipment:
Capitalized costs		136,879			136,879
Land		1,529,455			1,529,455
Building, Improvements and Equipment		275,000			275,000
Less: Accumulated Depreciation		(20,000	)		(17,500	)
Property and Equipment, net of accumulated depreciation		1,921,334			1,923,834

Escrow costs		25,451			25,451
Less: Accumulated Amortization		(1,636	)		(1,405	)
Escrow Costs, net of accumulated amortization		23,815			24,046

TOTAL ASSETS	$	17,136,335		$	2,067,415

LIABILITIES and STOCKHOLDERS' EQUITY

LIABILITIES

Accounts Payable and Accrued Expenses	$	770,943		$	359,713
Total Current Liabilities		770,943			359,713

Note Payable		750,000			750,000

TOTAL LIABILITIES		1,520,943			1,109,713

STOCKHOLDERS' EQUITY
Stockholders' Equity:
Preferred stock, $0.0001 par value, 20,000,000 shares authorized;
none issued and outstanding as of March 31, 2017 and
December 31, 2016, respectively.		-			-

Common Stock, $0.0001 par value, 100,000,000 shares authorized;
3,000,000 shares issued and outstanding as of March 31, 2017
and December 31, 2016, respectively		300			300

Discount on Common stock		(300	)		(300	)

Additional Paid in Capital		1,331,634			1,231,634
Retained Earnings (Accumulated Deficit)		14,283,758			(273,932	)
TOTAL STOCKHOLDERS' EQUITY		15,615,392			957,702

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	17,136,335		$	2,067,415

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

USA Capital Management, Inc
Consolidated Statements of Operations


		For the Three Months Ended March 31, 2017 (Unaudited)			For the Three Months Ended March 31, 2016 (Unaudited)

Revenues	$	15,200,000		$	300,000

Operating Expenses:
Salaries and Wages	$	7,000		$	7,000
Payroll Taxes		900			668
Payroll Processing fees		-			25
Utilities		2,157			1,815
Property Taxes		3,812			3,552
Other Tax and Licenses		3,206			-
Municipal and State taxes		10			-
Legal and Professional fees		3,171			7,425
Review and Audit fees		5,775			3,675
Depreciation and Amortization		2,731			2,731
Bank Charges		361			155
Total Operating Expenses	$	29,123		$	27,046

Other Income (Expenses):
Interest Income		55,556			-
Interest Expense		(9,375	)		(9,479	)
Total Other Income (Expenses)		46,181			(9,479	)

Net Income before income taxes	$	15,217,058		$	263,475

Provision for Income taxes		609,368			10,539

Net Income	$	14,607,690		$	252,936

Earnings Per Share - basic and diluted	$	4.87		$	0.08

Weighted average shares-basic and diluted		3,000,000			3,000,000

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

USA Capital Management, Inc.
Consolidated Statement of Cash Flows


	For the Three Months Ended March 31, 2017			For the Three Months Ended March 31, 2016
OPERATING ACTIVITIES
Net Income	$	14,607,690		$	252,936
Non-cash adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization		2,731			2,731
Changes in Operating Assets and Liabilities:
Increase in accounts receivable		(600,000	)		(300,000	)
Increase in interest receivable		(55,556	)		-
Increase in advances		(6,300	)		-
Increase in deposits		(1,000,000	)		-
Increase (Decrease) in accounts payable and accrued expenses		411,230			(535,869	)
Total adjustments to reconcile net income to net cash		(1,247,895	)		(833,138	)

Net cash provided by (used in) operating activities	$	13,359,795		$	(580,202	)

INVESTING ACTIVITIES
Increase in capitalized costs		-			(16,944	)
Increase in note receivable		(12,500,000	)		-
Net cash used in investing activities	$	(12,500,000	)	$	(16,944	)


FINANCING ACTIVITIES
Proceeds from stockholders contribution		100,000			18,388
Dividends paid		(50,000	)		-
Net cash provided by financing activities	$	50,000		$	18,388

Net increase (decrease) in cash		909,795			(578,758	)

Cash, beginning of year		118,532			593,611

Cash, end of year	$	1,028,327		$	14,853

The accompanying condensed notes are an integral part of these unaudited consolidated financial statements.

NOTE 1 – NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NATURE OF OPERATIONS

USA Capital Management, Inc. ("USA Capital" or "the Company") was incorporated on September 25, 2014 and is a Puerto Rican corporation with its principal place of business in San Juan, Puerto Rico. The Company’s operations include management consulting services and the acquisition of various properties for development. The Company has been granted tax benefits in Puerto Rico under ACT 20-2012. This allows the Company to benefit from significant income tax advantages, including a 4% tax on taxable income. The Company will pursue other fee generating management and consulting contracts which may include carried interest, outside of Puerto Rico. USA Capital Management, Inc. intends to provide management and consulting services to Limited Liability Companies that are formed to promote, invest and operate business opportunities globally.

BASIS OF PRESENTATION

The summary of significant accounting policies presented below is designed to assist in understanding the Company's unaudited condensed financial statements. Such unaudited condensed financial statements and accompanying notes are the representations of the Company's management, who are responsible for their integrity and objectivity. These accounting policies conform to accounting principles generally accepted in the United States of America ("GAAP") in all material respects, and have been consistently applied in preparing the accompanying unaudited condensed financial statements.

Certain information and footnote disclosures normally present in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP") were omitted pursuant to such rules and regulations. These financial statements should be read in conjunction with the audited financial statements and footnotes included in the Company's Annual Report on Form 10-K filed with the SEC on March 27, 2017. The results for the three months ended March 31, 2017, are not necessarily indicative of the results to be expected for the year ending December 31, 2017.

USE OF ESTIMATES

The preparation of unaudited consolidated financial statements 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 consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. Actual results could differ from those estimates.

REVENUE RECOGNITION

Revenue recognition is based on accrual accounting in accordance with GAAP and is recognized when earned. Consulting fees are based on a percentage of the value of the managed project.

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 had cash of $1,028,327 as of March 31, 2017 and $118,532 as of December 31, 2016. The Company has no cash equivalents.

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 have cash balances in excess of the Federal Deposit Insurance Corporation limit as of March 31, 2017 of $778,327. During the year 2016, cash balances did, from time to time, exceed such limits.

Accounts receivable potentially exposes the Company to a concentration of credit risk. Management reviews its accounts receivable periodically to determine its collectability. The company expects to collect on its receivable and does not believe an allowance is necessary at March 31, 2017. The accounts receivable balance at March 31, 2017 is as follows:

	Menada Inc.	$450,000
	Residences at 107 Ave, Inc	150,000
		$600,000

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, 2017 there were no deferred taxes due to the uncertainty of the realization of net operating loss or carry forward prior to expiration.

EARNINGS PER COMMON SHARE

Basic earnings per common share excludes dilution and is computed by dividing net income by the weighted average number of common shares outstanding during the period. Diluted earnings 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 earnings of the entity. As of March 31, 2017, there were 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 1that 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 and accounts receivable approximate their fair values because of the short maturity of these instruments. In addition, the notes receivable and notes payable carrying amounts also approximate their fair values.

NOTE 2 – STOCKHOLDERS' EQUITY

The Company is authorized to issue 100,000,000 shares of common stock and 20,000,000 shares of the preferred stock, 3,000,000 shares of common stock and no preferred stock were issued and outstanding as of March 31, 2017 and December 31, 2016, respectively. The total outstanding 3,000,000 shares of common stock are issued to a sole shareholder as follows:

Richard Meruelo

3,000,000 (or 100% of shares outstanding)

NOTE 3 – PROPERTY

The Company has purchased the following through March 31, 2017:

Description	Purchase Date	Purchase Amount
Building	04/01/15	275,000
Land	07/09/15	1,267,115
Land	08/31/16	262,340
Accumulated Depreciation		(20,000)
Total Property & Equipment, net		$1,784,455

These purchases were funded by paid in capital by its sole shareholder and were purchased under Rebuild San Juan-Puerta de Tierra, LLC and Rebuild San Juan-Puerta De Tierra II, LLC. These are single member LLC’s with USA Capital Management, Inc. as its only member.

Additionally, the Company has capitalized legal costs of future purchases in the amount of $136,879.

In August 2016, USA Capital Management, Inc. purchased the parcel of land it had on deposit. The total cost including closing and legal expenses was $262,340. This property is part of the Company’s comprehensive development plan. The $252,675 of the cost was originally contributed from the Company’s President, Richard Meruelo, as additional paid-in capital.

The Company had $2,500 and $2,500 depreciation expense for March 31, 2017 and March 31, 2016.

NOTE 4 – NOTE RECEIVABLE

In March, 2017 the Company, as manager to a related entity that will be developing a parcel of land, provided an unsecured note of five years for $12,500,000 at a rate of 10%. Interest is due and payable at the end of each calendar year. The note and any remaining accrued interest is due in March, 2022. The Company has accrued interest at March 31, 2017 of $55,556.

NOTE 5 – NOTE PAYABLE

In the negotiation for the closing of the $1,000,000 land purchase, the seller, as an inducement to close escrow quickly, accepted a note for $750,000 at 5% per annum, with interest accruing yearly. The note, which commenced on July 8, 2015, is for 36 months (due and payable on July 8, 2018). It is collaterized by the real estate purchased.

NOTE 6 – RELATED PARTY TRANSACTIONS

The land acquisitions were purchased under Rebuild San Juan-Puerta De Tierra, LLC and Rebuild San Juan-Puerta De Tierra II, LLC, single member LLC’s incorporated in Puerto Rico (with the Company as its only member). USA Capital acquired the LLC’s by its capital contributions of $250,000 and $260,000 respectively.

The cost of land purchased under each entity were as follows:

Rebuild San Juan-Puerta De Tierra, LLC		$	1,007,115
Rebuild San Juan-Puerta De Tierra II, LLC		$	522,340

The consulting fees generated by the Company of $15,200,000 as of March 31, 2017 are with entities affiliated/related to the sole shareholder of USA Capital Management, Inc.

NOTE 7 – SUBSEQUENT EVENTS

On May 9, 2017 the Company cancelled its contract to purchase the parcel of land and requested for a refund of the $1,000,000 deposit.

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

USA Capital Management, Inc. (formally known as Oak Valley Acquisition Corp.) 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. USA Capital Management, Inc. ("USA Capital" or the "Company") is a blank check company and qualifies as an "emerging growth company" as defined in the Jumpstart Our Business Startups Act which became law in April, 2012.

On May 6, 2015, the Company changed its name from Oak Valley Acquisition Corporation to USA Capital Management, Inc. and effected a change in control.

On May 5, 2015, the following events occurred:

1. The Company redeemed and cancelled an aggregate of 20,000,000 of the then 20,000,000 shares of outstanding stock at a redemption price of $.0001 per share and cancelled such shares. The then current officers and directors resigned.

2. Richard Meruelo was named President, Secretary and Chief Financial Officer of the Company.

Richard Meruelo was named Director of the Company.

Richard Meruelo serves as the Chief Executive Officer, Secretary, Chief Financial Officer and Director of the Company. From 2011 to the present, Mr. Meruelo has served as the manager of Rebuild Miami, LLC. From 2000 to 2011, Mr. Meruelo was chairman and CEO of Meruelo Maddux Properties, Inc. Mr. Meruelo received his Bachelor of Arts Degree from the University of Southern California in 1986.

3. On May 6, 2015, the Company issued 3,000,000 shares of its common stock at par representing 100% of the total outstanding 3,000,000 shares of common stock to Richard Meruelo, the sole officer and director of the Company.

The Company is now generating consulting revenues as its principal source of income and continues its business objective to provide management services to stateside businesses.

The anticipated structure also involves the Company managing Limited Liability Company’s (LLC’s) that are formed to promote, invest and operate business opportunities globally.

On June 23, 2016 the Company was granted tax benefits provided by Act 20 in Puerto Rico which allows a reduced 4% income tax rate and 60% municipal license tax exemption for a 20 year period together with the total income tax exemption on dividends. Advisory services on matters relating to any trade or business; investment banking and other financial services; advertising and public relations; economic, environmental, technological scientific, management, marketing, human resources, information and audit consulting, professional services; development of computer programs and research are among the services that qualify for Act 20 tax benefits.

The Company converted from a Delaware to a Puerto Rico corporation and moved its principal place of business to San Juan, Puerto Rico. The Company amended its certificate of incorporation to reflect the change in its situs and filed a Form 8-K reporting the change.

Results of Operations for the three months ended March 31, 2017 and March 31, 2016.

The Company had net income of $14,607,690 and $252,936 for the three months ended March 31, 2017 and March 31, 2016, respectively. The current quarter reflects consulting revenues of $15,200,000 and $300,000 for the prior year quarter. The increase in revenues for the current quarter is mainly comprised of $12,600,000 generated from the sale of one of its managed properties. The quarterly expenses for March 31, 2017 and March 31, 2016 are $38,498 and $36,525(before taxes). This decrease in current quarter legal fees was offset by increase in licenses and review fees. All other costs were comparable to the prior year quarter.

Liquidity and Capital Resources

The Company’s operating activities provided $13,359,795 for the three months ended March 31, 2017 and used $580,202 for the three months ended March 31, 2016. The cash provided in the current quarter was mostly a result of the fee generation of $15,200,000. The cash provided was reduced, in part, by a deposit made on a parcel of land of $1,000,000. The company continues to fund its operations from fees generated and receivable collections. Any deficiencies or additional capital expenditures will be provided through capital contributions by its sole stockholder.

The Company used $12,500,000 from investing activities to provide a note receivable to one of the properties it manages in the three months ended March 31, 2017. It used $16,944 for such investing activities at March 31, 2016.

For the three month period ended March 31, 2017, USA Capital provided $50,000 from financing activities. This was primarily a result of a $100,000 contribution from its sole shareholder and reduced by a dividend payment of $50,000. The Company had proceeds of $18,388 from financing activities for the three months ended March 31, 2016.

The Company had working capital of $1,920,243 and a working capital deficiency of $240,178 at March 31, 2017 and March 31, 2016, 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 was also the principal financial officer).

Based upon that evaluation, he believes that the Company's disclosure controls and procedures are not 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 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

There was no change in the Company's internal control over financial reporting that was identified in connection with such evaluation 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 follows:

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

On May 5, 2015, the Company redeemed and cancelled the 20,000,000 shares of outstanding common stock.

On May 6, 2015, the Company issued 3,000,000 shares of common stock to its sole officer and director, Richard Meruelo.

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.

	USA CAPITAL MANAGEMENT, INC.


	By:	/s/ Richard Meruelo
			President, Chief Financial Officer
Dated: May 15, 2017

USA Capital Management Inc. 10-Q