SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549
____________________

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported):  May 15, 2016

Sunvalley Solar, Inc.
(Exact name of registrant as specified in its charter)

Registrant’s telephone number, including area code:  909-598-0618

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

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SECTION 9- FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits

As previously disclosed in our Quarterly Report on Form 10-Q filed May 23, 2016, we entered into a Securities Purchase Agreement with the shareholders of Rayco Energy, Inc. (“Rayco”) effective May 15, 2016. Under the Agreement, we acquired 100% of Rayco’s issued and outstanding shares of capital stock.

Filed herewith are the audited financial statements for Rayco for the fiscal years ended December 31, 2015 and 2014, together with the unaudited financial statements for Rayco for the quarter ended March 31, 2016. In addition, pro forma consolidated financial statements for the periods ended December 31, 2015 and March 31, 2016 are filed herewith.

SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS

Item 9.01 Financial Statements and Exhibits.

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 hereunto duly authorized.

SunValley Solar, Inc.

Zhijian (James) Zhang__________________________________

Zhijian Zhang
Chief Executive Officer

Date: January 27, 2017

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RAYCO ENERGY, INC.

FINANCIAL STATEMENTS

For the Years Ended

December 31, 2015 and 2014

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

Rayco Energy, Inc.

We have audited the accompanying balance sheets of Rayco Energy, Inc. as of December 31, 2015 and 2014, and the related statements of operations, stockholders’ deficit, and cash flows for each of the years in the two year period ended December 31, 2015. Rayco Energy, Inc.’s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Rayco Energy, Inc. as of December 31, 2015 and 2014, and the results of its operations and its cash flows for each of the years in the two year period ended December 31, 2015, in conformity with accounting principles generally accepted in the United States of America.

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has suffered net losses since inception and has accumulated a significant deficit. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ Sadler, Gibb & Associates, LLC

Salt Lake City, UT

January 25, 2017  

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RAYCO ENERGY, INC.

 Notes to Financial Statements

December 31, 2015 and 2014

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Rayco Energy, Inc. (“the Company”) was incorporated on March 26, 2014 under the laws of the State of California.

The Company markets, sells, designs and installs solar panels for residential and commercial customers. The Company’s primary market is in the state of California, however the Company may sell anywhere in the United States.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

Going Concern

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from the parent company, Sunvalley Solar, to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Accounting Method

The Company's financial statements are prepared using the accrual method of accounting.  The Company has elected a December 31, year-end.

Use of Estimates

The preparation of the financial statements in conformity with generally accepted accounting principles in the United States 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 financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made in preparing the financial statements include the allowance for doubtful accounts, percentage of completion revenue recognition, accrued warranty, convertible debt derivative liabilities and discount expenses. To the extent there are material differences between estimates and the actual results, future results of operations will be affected.

Operating Segments

The Company operates in one operating segment.

Cash and Cash Equivalents

Cash equivalents are comprised of certain highly liquid investments with original maturities of three months or less when purchased.  The Company maintains its cash in bank deposit accounts which at times may exceed federally insured limits.  The Company has not experienced any losses related to this concentration of risk. As of December 31, 2015 and 2014, the Company had $156,624 and $73,866, respectively, in cash in bank deposits which did not exceed the $250,000 federally insured limits.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic and Diluted Loss per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are -0- common stock equivalents outstanding as of December 31, 2015 and 2014.

Contracts Receivable

The Company’s contracts receivable consist primarily of accounts due from wholesale customers, and contracts due from installation customers, with the most significant amounts arising from installation contracts. Receivables are due within 30 days on wholesale contracts, while receivables on installation contracts are due in installments over terms ranging from five to seven years. The Company performs periodic credit evaluations of its customers’ respective financial conditions and does not require collateral. Credit losses have consistently been within management’s expectations. An allowance for doubtful accounts is recorded when it is probable that all or a portion of a contracts receivable balance will not be collected. The Company’s allowance for doubtful accounts consisted of the following as of December 31, 2015 and 2014:

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined on an average cost basis; and the inventory is comprised of raw materials and finished goods. Raw materials consist of fittings and other components necessary to assemble the Company’s finished goods.  Finished goods consist of solar panels ready for installation and delivery to customers.   

At each balance sheet date, the Company evaluates its ending inventory for excess quantities and obsolescence. This evaluation includes an analysis of sales levels by product type.  Among other factors, the Company considers current product configurations, historical and forecasted demand, market conditions and product life cycles when determining the net realizable value of the inventory. Provisions are made to reduce excess or obsolete inventories to their estimated net realizable values. Once established, write-downs are considered permanent adjustments to the cost basis of the excess or obsolete inventory.  

Property and Equipment

Property and equipment are stated at cost.  Depreciation is computed using the straight-line method over the estimated useful lives of the depreciable assets.   Management evaluates useful lives regularly in order to determine recoverability taking into consideration current technological conditions.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Property and Equipment (Continued)

Maintenance and repairs are charged to expense as incurred; additions and betterments are capitalized. Upon retirement or sale, the cost and related accumulated depreciation of the disposed assets are removed, and any resulting gain or loss is recorded. Fully depreciated assets are not removed from the accounts until physical disposition. The estimated useful lives are as follows:

Long-Lived Assets

Long-lived assets, such as property, plant, and equipment, and purchased intangible assets subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If circumstances require a long-lived asset be tested for possible impairment, the Company first compares undiscounted cash flows expected to be generated by an asset to the carrying value of the asset. If the carrying value of the long-lived asset is not recoverable on an undiscounted cash flow basis, an impairment is recognized to the extent that the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third-party independent appraisals, as considered necessary.

Based on this analysis, the Company believes that no impairment of the carrying value on its long-lived assets existed at December 31, 2015 and 2014.

Customer Deposits

Customer deposits represent advance payments received for installation projects. Typically the Company will receive five percent of a contract total at the commencement of the installation project. These amounts are recorded as liabilities until such time that the Company has performed the majority of its contractually agreed-upon work, at which time the deposits are recognized as revenue in accordance with the Company’s revenue recognition policy.

Revenue and Costs of Revenues

The Company’s revenue consists of solar and LED installation projects, both to commercial and residential customers.  Revenues from fixed-price and cost-plus contracts are recognized on the percentage of completion method, whereby revenues on long-term contracts are recorded on the basis of the Company’s estimates of the percentage of completion of contracts based on the ratio of the actual cost incurred to total estimated costs. This cost-to-cost method is used because management considers it to be the best available measure of progress on these contracts. Revenues from cost-plus-fee contracts are recognized on the basis of costs incurred during the period plus the fee earned, measured on the cost-to-cost method.

Cost of revenues include all direct material, sub-contract, labor, and certain other direct costs, as well as those indirect costs related to contract performance, such as indirect labor and fringe benefits. Selling, general and administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changed in job performance, job conditions and estimated profitability may result in revisions to cost and income, which are recognized in the period in which the revisions are determined. Changes in estimated job profitability resulting from job performance, job conditions, contract penalty provisions, claims, change orders, and settlements, are accounted for as changes in estimates in the current period. Claims for additional contract revenue are recognized when realization of the claim in probable and the amount can be reasonably determined.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Revenue and Costs of Revenues (Continued)

The asset, “cost and estimated earnings in excess of billings on uncompleted contracts” represents revenues recognized in excess of amounts billed. The liability, “billings in excess of costs and estimated earnings on uncompleted contracts,” represents billings in excess of revenues recognized. As of December 31, 2015 and 2014, there were no uncompleted contracts or costs in excess of billings.

Cost of sales totaled $2,662,064 and $750,301 during the year ended December 31, 2015 and during the period from inception on March 26, 2014 through December 31, 2014, respectively.

Advertising Expenses

Advertising expenses are expensed as incurred. Total advertising expenses amounted to $89,158 and $5,699 for the year ended December 31, 2015 and during the period from inception on March 26, 2014 through December 31, 2014, respectively.

Income Taxes

The Company applies the asset and liability method of accounting for income taxes. The asset and liability method requires that the current or deferred tax consequences of all events recognized in the financial statements are measured by applying the provisions of enacted tax laws to determine the amount of taxes payable or refundable currently or in future years. Deferred tax assets are reviewed for recoverability and the Company records a valuation allowance to reduce its deferred tax assets when it is more likely than not that all or some portion of the deferred tax assets will not be recovered.

The Company recognizes and measures any uncertain tax positions using a “more-likely-than-not” approach. Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax bases. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will to be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1 – Quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; and

Level 3 – Unobservable inputs that are supported by little or no market activity, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of the financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 – INVENTORY

The Company’s inventory consisted of the following at December 31, 2015 and December 31, 2014:

The Company’s reserve for excess and obsolete inventory amounted to $-0- and $-0- as of December 31, 2015 and 2014.

NOTE 4 – PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at December 31, 2015 and 2014:

Depreciation expense for the year ended December 31, 2015 and during the period from inception on March 26, 2014 through December 31, 2014, was $103 and $-0-, respectively.

NOTE 5 – SHORT TERM LOANS

On April 29, 2015, the Company entered into a loan agreement for $50,000, bearing interest at 24% and with a maturity date of March 9, 2016. During the year ended December 31, 2015, the Company made principal payments of $37,200, leaving a balance due of $12,800. Interest expense incurred and paid on the loan from the period from origination through December 31, 2015 was $4,702.

NOTE 6 – STOCKHOLDERS’ EQUITY

At inception, the Company issued 3,000 shares of common stock as founder’s shares. No shares of common stock were issued during the year ended December 31, 2015.

NOTE 7 – INCOME TAXES

The Company determines whether it is more likely than not that a tax position will be sustained upon examination based upon the technical merits of the position. If the more-likely-than-not threshold is met, a company must measure the tax position to determine the amount to recognize in the financial statements.

Deferred taxes are provided on a liability method whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carryforwards and deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Deferred tax assets and liabilities are adjusted for the effects of changes in tax laws and rates on the date of enactment.

Net deferred tax assets consist of the following components:

The income tax provision differs from the amount of income tax determined by applying the U.S. federal and state income statutory tax rates to pretax income (loss) from continuing operations as follows:

The Company has accumulated net operating loss carryovers of approximately $910,083 as of December 31, 2015 which are available to reduce future taxable income. Due to the change in ownership provisions of the Tax Reform Act of 1986, net operating loss carry forwards for federal income tax reporting purposes may be subject to annual limitations. A change in ownership may limit the utilization of the net operating loss carry forwards in future years. The tax losses begin to expire in 2033. The fiscal years 2015 and 2014 remain open to examination by federal tax authorities and other tax jurisdictions.

NOTE 8 – RELATED PARTY TRANSACTIONS

The Company has recorded advances from related parties and expenses paid by related parties on behalf of the Company as related party payables. As of December 31, 2014 and December 31, 2015, respectively, the related party payable outstanding balance totaled $0 and $32,611, respectively. These payables are non-interest bearing, unsecured, and are due on demand.

NOTE 9 – SUBSEQUENT EVENTS

A security purchase agreement was entered into by and among the Shareholders of Rayco Energy, Inc. (“Rayco”), and Sunvalley Solar Inc., (“Sunvalley”) on May 15, 2016. Sunvalley shall purchase 100% of Rayco’s issued and outstanding shares of capital stock in exchanged for Sunvalley’s seventy five thousand and five hundred (75,500) Series B Preferred Shares which are convertible to 10 shares of Sunvalley’s common stock.  In addition, Sunvalley agrees to pay an additional $350,000 in cash to shareholders of Rayco, conditioned upon the 2016 net profit from the operation of Rayco, as a wholly-owned subsidiary of Sunvalley, being in excess of $10,000 (the “Condition”).  Sunvalley also agrees to invest no less than $350,000 working capital into Rayco after closing for its current projects and working capital. To evidence the unpaid balance of the purchase price, Sunvalley shall issue to Rayco’s shareholders 6% subordinated promissory notes in the aggregate amount $350,000, payable only upon Rayco’s 2016 net operating profit being in excess of $10,000 with interest and principal payable monthly on first day of each month commencing May 1, 2017.  Prepayments may be made at any time as the Company’s cash flow allows, as determined by the Sunvalley’s Board of Directors.  In the event that the Condition is not met, such notes shall be deemed null and void.  Both Sunvalley and Rayco agree that the acquisition shall be accounted for as if such acquisition had occurred upon the close of the business on May 15, 2016 (the “Effective Date”), regardless of when the closing in fact occurs. 

In accordance with ASC 855, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.  

RAYCO ENERGY, INC.

CONDENSED FINANCIAL STATEMENTS

For the Quarter Ended

March 31, 2016

RAYCO ENERGY, INC.

 Notes to Condensed Financial Statements

March 31, 2016 and December 31, 2015

NOTE 1 - CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows at March 31, 2016, and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company's December 31, 2015 audited consolidated financial statements.  The results of operations for the periods ended March 31, 2016 and 2015 are not necessarily indicative of the operating results for the full years.

NOTE 2 - GOING CONCERN

The Company's financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management's plan is to obtain such resources for the Company by obtaining capital from the parent company, Sunvalley Solar, to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles 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 financial statements and the reported amounts of revenues and expenses during the reporting period.  Actual results could differ from those estimates.

Recent Accounting Pronouncements

Management has considered all recent accounting pronouncements issued since the last audit of the financial statements. The Company’s management believes that these recent pronouncements will not have a material effect on the Company’s financial statements.

NOTE 3 – SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Basic and Diluted Loss per Common Share

Basic loss per share is calculated by dividing the Company’s net loss applicable to common shareholders by the weighted average number of common shares during the period. Diluted earnings per share is calculated by dividing the Company’s net income available to common shareholders by the diluted weighted average number of shares outstanding during the year. The diluted weighted average number of shares outstanding is the basic weighted number of shares adjusted for any potentially dilutive debt or equity. There are -0- common stock equivalents outstanding as of March 31, 2015.

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined on an average cost basis; and the inventory is comprised of raw materials and finished goods. Raw materials consist of fittings and other components necessary to assemble the Company’s finished goods.  Finished goods consist of solar panels ready for installation and delivery to customers.

The Company’s inventory consisted of the following at March 31, 2016 and December 31, 2015:

 NOTE 4 – PROPERTY AND EQUIPMENT

The following is a summary of property and equipment at March 31, 2016 and December 31, 2015:

Depreciation expense for the quarter ended March 31, 2016 and the year ended December 31, 2015 was $1,817 and $103, respectively.

NOTE 5 – SHORT TERM LOANS

On April 29, 2015, the Company entered into a loan agreement for $50,000, bearing interest at 24.9% and with a maturity date of March 9, 2016. As of December 31, 2015, the principal balance on the note was $12,800. On January 4, 2016, the Company entered into a loan agreement for $120,000, bearing interest at 24.9% and with a maturity date of March 9, 2016 to pay off the remaining principal and interest balance and provide further working capital. After paying off the previous loan and associated fees, the net cash proceeds from the second loan were $102,564. During the three months ended March 31, 2016, the Company made principal payments of $16,631, leaving a balance due of $85,933. Interest expense incurred and paid on the loan the three months ended March 31, 2016 was $16,897.

NOTE 6 – RELATED PARTY TRANSACTIONS

The Company has recorded advances from related parties and expenses paid by related parties on behalf of the Company as related party payables. As of March 31, 2016 and December 31, 2015, respectively, the related party payable outstanding balance totaled $32,611 and $32,611, respectively. These payables are non-interest bearing, unsecured, and are due on demand.

NOTE 7 – SUBSEQUENT EVENTS

A security purchase agreement was entered into by and among the Shareholders of Rayco Energy, Inc. (“Rayco”), and Sunvalley Solar Inc., (“Sunvalley”) on May 15, 2016. Sunvalley shall purchase 100% of Rayco’s issued and outstanding shares of capital stock in exchanged for Sunvalley’s seventy five thousand and five hundred (75,500) Series B Preferred Shares which are convertible to 10 shares of Sunvalley’s common stock.  In addition, Sunvalley agrees to pay an additional $350,000 in cash to shareholders of Rayco, conditioned upon the 2016 net profit from the operation of Rayco, as a wholly-owned subsidiary of Sunvalley, being in excess of $10,000 (the “Condition”).  Sunvalley also agrees to invest no less than $350,000 working capital into Rayco after closing for its current projects and working capital. To evidence the unpaid balance of the purchase price, Sunvalley shall issue to Rayco’s shareholders 6% subordinated promissory notes in the aggregate amount $350,000, payable only upon Rayco’s 2016 net operating profit being in excess of $10,000 with interest and principal payable monthly on first day of each month commencing May 1, 2017.  Prepayments may be made at any time as the Company’s cash flow allows, as determined by the Sunvalley’s Board of Directors.  In the event that the Condition is not met, such notes shall be deemed null and void.  Both Sunvalley and Rayco agree that the acquisition shall be accounted for as if such acquisition had occurred upon the close of the business on May 15, 2016 (the “Effective Date”), regardless of when the closing in fact occurs. 

In accordance with ASC 855, Company management reviewed all material events through the date of this report and there are no material subsequent events to report.  

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Unaudited Pro forma Combined Balance Sheet as at May 31, 2014

Unaudited Pro forma Combined Statement of Operations for the year ended May 31, 2014

Notes to the Unaudited Pro forma Combined Financial Statements

UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

On May 15, 2016, Sunvalley Solar, Inc. “Sunvalley”, entered into a purchase agreement with Rayco Energy, Inc., “Rayco” wherein Sunvalley sold all of the issued and outstanding shares of its common stock.

The following Unaudited Pro Forma Combined Financial Statements give effect to the aforementioned acquisition based on the assumptions and adjustments set forth in the accompanying notes to the Unaudited Pro Forma Combined Financial Statements, which management believes are reasonable.  The Unaudited Pro Forma Combined Balance Sheet and Combined Statement of Operations, represents the combined financial position and operations of Sunvalley and Rayco as of March 31, 2016  as if the merger occurred on January 1, 2016. These unaudited Pro Forma Combined Financial Statements and accompanying notes should be read in conjunction with the audited historical financial statements and related notes of NGRC.

The Unaudited Pro Forma Combined financial information is presented for illustrative purposes only and is not necessarily indicative of the operating results that would have been achieved if the merger of Sunvalley and RAyco had been consummated as of the beginning of the period indicated, nor is it necessarily indicative of the results of future operations.