10-Q - FVTI - Equibles

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

Washington,D.C. 20549

FORM10-Q

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

Forthe quarterly period ended June 30, 2020

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

For the transition period from ______ to _______

COMMISSIONFILE NO. 000-55555

FORTUNEVALLEY TREASURES, INC.

(Exact name of registrant as specified in its charter)

Nevada	32-0439333
(State<br> or other jurisdiction<br><br> <br>of<br> incorporation)	(IRS<br> Employer<br><br> <br>Identification<br> No.)
13th Floor, Building B1, Wisdom Plaza<br><br> <br>Qiaoxiang Road, Nanshan District<br><br> <br>Shenzhen, Guangdong, China	518000
(Address<br> of principal executive offices)	(Zip<br> Code)

(86)755-86961405

(Registrant’s telephone number, including area code)

NotApplicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None.

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 every Interactive Data File required to be submitted 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 such files). Yes [X] No [ ]

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

Large<br> accelerated filer	[ ]	Accelerated<br> filer	[ ]
Non-accelerated<br> filer	[X]	Smaller<br> reporting company	[X]
		Emerging<br> growth company	[X]

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 Exchange Act). Yes [ ] No [X]

As of August 14, 2020, there were 307,750,100 shares of common stock, par value $0.001 per share, of the registrant issued and outstanding.

TABLEOF CONTENTS

****	PAGE
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS	3
PART I - FINANCIAL INFORMATION	F-1
ITEM<br> 1. FINANCIAL STATEMENTS	F-1
ITEM<br> 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM<br> 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	8
ITEM<br> 4. CONTROLS AND PROCEDURES	8
PART II - OTHER INFORMATION	9
ITEM<br> 1. LEGAL PROCEEDINGS	9
ITEM<br> 1A. RISK FACTORS	9
ITEM<br> 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	9
ITEM<br> 3. DEFAULTS UPON SENIOR SECURITIES	9
ITEM<br> 4. MINE SAFETY DISCLOSURES	9
ITEM<br> 5. OTHER INFORMATION	9
ITEM<br> 6. EXHIBITS	9
SIGNATURES	10

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CAUTIONARYNOTES REGARDING FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These forward-looking statements are not historical facts but rather are based on current expectations, estimates and projections. We may use words such as “anticipate,” “expect,” “intend,” “plan,” “believe,” “foresee,” “estimate” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted. These risks and uncertainties include the following:

●	the<br> availability and adequacy of working capital to meet our requirements;
●	the<br> consummation of any potential acquisitions;
●	actions<br> taken or omitted to be taken by legislative, regulatory, judicial and other governmental authorities;
●	changes<br> in our business strategy or development plans;
●	our<br> ability to continue as a going concern;
●	the<br> availability of additional capital to support capital improvements and development;
●	our<br> ability to address and as necessary adapt to changes in foreign, cultural, economic, political and financial market conditions<br> which could impair our future operations and financial performance (including, without limitation, the changes resulting from<br> the global COVID-19 outbreak in China and around the world);
●	other<br> risks identified in this report and in our other filings with the Securities and Exchange Commission (the “SEC”);<br> and
●	the<br> availability of new business opportunities.

This quarterly report should be read completely and with the understanding that actual future results may be materially different from what we expect. The forward-looking statements included in this quarterly report are made as of the date of this quarterly report and should be evaluated with consideration of any changes occurring after the date of this quarterly report. We will not update forward-looking statements even though our situation may change in the future and we assume no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise.

Except as otherwise indicated by the context hereof, references in this report to “Company,” “FVTI,” “we,” “us” and “our” are to Fortune Valley Treasures, Inc. and its subsidiaries. All references to “USD” or “U.S. Dollars (US$)” are to the legal currency of the United States of America. All references to “RMB” are to the legal currency of People’s Republic of China.

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PARTI - FINANCIAL INFORMATION

ITEM1. FINANCIAL STATEMENTS

FortuneValley Treasures, Inc.

FinancialStatements

June30, 2020

(Unaudited)

Contents	Page
Condensed<br> Consolidated Balance Sheets	F-2
Condensed<br> Consolidated Statements of Operations and Comprehensive Loss	F-3
Condensed<br> Consolidated Statements of Stockholders’ Deficit	F-4
Condensed<br> Consolidated Statements of Cash Flows	F-5
Notes<br> to Financial Statements	F-6

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FortuneValley Treasures, Inc.

CondensedConsolidated Balance Sheets

AtJune 30, 2020 and December 31, 2019

	June<br> 30,			December<br> 31,
	2020			2019
	(Unaudited)
Assets
Current<br> assets
Cash<br> and cash equivalents	$	13,976		$	38,137
Accounts<br> and other receivable, net		38,689			146
Inventories		33,948			28,502
Advances<br> and prepayment		565			-
Prepaid<br> expenses		14,000			4,094
Prepaid<br> taxes and taxes recoverable		3,375			3,091
Total<br> current assets		104,553			73,970
Non-current<br> assets
Plant<br> and equipment, net		50,960			8,611
Right<br> of use asset		101,423			110,456
Total<br> Assets	$	256,936		$	193,037
Liabilities
Current<br> liabilities
Lease<br> obligation - current		13,739			13,715
Accounts,<br> taxes, other payables, and accruals		26,010			32,860
Short<br> term borrowings		157,355			-
Due<br> to related parties		912,582			808,777
Total<br> current liabilities		1,109,686			855,352
Long<br> term liabilities
Lease<br> obligations - non-current		89,831			98,189
Total<br> liabilities	$	1,199,517		$	953,541
Stockholders’<br> Deficit
Common<br> stock (3,000,000,000 shares authorized, 307,750,100 issued and outstanding at June 30, 2020 and December 31, 2019)		307,750			307,750
Additional<br> paid in capital		-			-
Accumulated<br> deficit		(1,275,586	)		(1,085,853	)
Accumulated<br> other comprehensive income		23,179			17,599
Total<br> Stockholders’ Deficit		(944,657	)		(760,504	)
Non-controlling<br> interest		2,076			-
Total<br> Deficit		(942,581	)		(760,504	)
Total<br> Liabilities and Stockholders’ Deficit	$	256,936		$	193,037

See accompanying notes to the financial statements

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FortuneValley Treasures, Inc.

CondensedConsolidated Statements of Operations and Comprehensive Loss

Forthe Three and Six Months Ended June 30, 2020 and 2019

	Three<br> Months Ended						Six<br> Months Ended
	June<br> 30, 2020			June<br> 30, 2019			June<br> 30, 2020			June<br> 30, 2019
Revenue<br> from third parties	$	69,176		$	41,936		$	91,227		$	50,053
Revenue<br> from related parties		-			-			-			33,903
		69,176			41,936			91,227			83,956
Cost of revenues		39,917			32,767			54,343			61,675
Gross<br> profit		29,259			9,169			36,884			22,281
Selling,<br> general and administrative expenses		127,631			220,328			238,492			267,567
Operating<br> loss		(98,372	)		(211,159	)		(201,608	)		(245,286	)
Other<br> income (expenses):		1,328			1,199			2,106			2,504
Interest<br> income		72			103			80			141
Interest<br> expense		(4,862	)		(212	)		(4,980	)		(271	)
		(3,462	)		1,090			(2,794	)		2,374
Earnings<br> (loss) before tax		(101,834	)		(210,069	)		(204,402	)		(242,912	)
Income<br> tax		-			(1	)		-			84
Net<br> loss:
attributable<br> to non-controlling interest		(14,669	)		-			(14,669	)		-
attributable<br> to FVTI		(87,165	)		(210,068	)		(189,733	)		(242,996	)
	$	(101,834	)	$	(210,068	)	$	(204,402	)	$	(242,996	)
Other<br> comprehensive income:
Foreign<br> currency translation adjustment:
attributable<br> to non-controlling interest		(297	)		-			(297	)		-
attributable<br> to FVTI		(1,638	)		6,157			5,580			2,664
		(1,935	)		6,157			5,283			2,664
Comprehensive<br> loss:
attributable<br> to non-controlling interest		(14,966	)		-			(14,966	)		-
attributable<br> to FVTI		(88,803	)		(203,911	)		(184,153	)		(240,332	)
Comprehensive<br> loss	$	(103,769	)	$	(203,911	)	$	(199,119	)	$	(240,332	)
Loss<br> per share to FVTI stockholders
Basic<br> and diluted earnings per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic and diluted<br> weighted average shares outstanding		307,750,100			307,750,100			307,750,100			307,750,100

See accompanying notes to the financial statements

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FortuneValley Treasures, Inc.

CondensedConsolidated Statements of Stockholders’ Deficit

Forthe Years Ended December 31, 2019 and 2018 and the Six Months Ended June 30,


Balance<br> as of December 31 2018	307,750,100	307,750			(708,097	)	13,119			(387,228	)
Net<br> income					(242,996	)				(242,996	)
Foreign<br> currency translation adjustment							2,664			2,664
Balance<br> as of June 30, 2019	307,750,100	307,750			(951,093	)	15,783			(627,560	)
Net<br> income					(134,760	)				(134,760	)
Foreign<br> currency translation adjustment				-	-		1,816	-		1,816
Balance<br> as of December 31, 2019	307,750,100	307,750			(1,085,853	)	17,599	-		(760,504	)
Capital<br> injection by non-controlling shareholder								17,042		17,042
Net<br> income					(189,733	)		(14,669	)	(204,402	)
Foreign<br> currency translation adjustment			-	-			5,580	(297	)	5,283
Balance<br> as of June 30, 2020	307,750,100	307,750			(1,275,586	)	23,179	2,076		(942,581	)

See accompanying notes to the financial statements

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FortuneValley Treasures, Inc.

CondensedConsolidated Statements of Cash Flows

Forthe Six Months Ended June 30, 2020 and 2019

(Unaudited)

	For<br> the Six Months Ended
	June<br> 30, 2020			June<br> 30, 2019
Cash<br> flows from operating activities
Net<br> loss	$	(204,402	)	$	(242,996	)
Depreciation<br> of fixed assets		7,987			546
Decrease/(increase)<br> in accounts and other receivables		(38,754	)		3,884
Decrease<br> in inventories		(5,894	)		56,433
(Increase)/<br> decrease in advances and prepayments to suppliers		(10,805	)		(8,080	)
Increase<br> (decrease) in accounts and other payables		(931	)		(14,382	)
Net<br> cash used in operating activities		(252,799	)		(204,595	)
Cash<br> flows from investing activities
Purchases<br> of intangible assets and land use rights		(43,231	)		-
Net<br> cash used in investing activities		(43,231	)		-
Cash<br> flows from financing activities
Capital<br> injections from owners		17,042			-
Proceeds<br> from short term borrowings		144,009			-
Borrowing<br> and payments to related parties, net		111,318			261,264
Net<br> cash provided by (used in) financing activities		272,369			261,264
Net<br> (decrease)/increase of cash and cash equivalents		(23,661	)		56,669
Effect<br> of foreign currency translation on cash and cash equivalents		(500	)		749
Cash<br> and cash equivalents-beginning of period		38,137			29,999
Cash<br> and cash equivalents-end of period	$	13,976		$	87,417
Supplementary<br> cash flow information:
Interest<br> received	$	80		$	141
Interest<br> paid	$	2,982		$	271
Income<br> taxes paid	$	-		$	84
Recognition<br> of right of use asset	$	-		$	122,806

See accompanying notes to the financial statements

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NOTE1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

Fortune Valley Treasures, Inc. (formerly Crypto-Services, Inc., the “Company” or “FVTI”) was incorporated in the State of Nevada on March 21, 2014. The Company is engaged in the business of wholesale distribution and retail sales of alcoholic beverages, including wine and distilled liquors, through its subsidiaries in the People’s Republic of China (“PRC” or “China”).

On January 5, 2018, the Company changed its accounting fiscal year end from August 31 to December 31. On January 29, 2018, the Company filed a Certificate of Amendment with the State of Nevada to increase its authorized shares of common stock from 75,000,000 to 3,000,000,000.

On April 6, 2018, the Company entered into a share exchange agreement by and among DaXingHuaShang Investment Group Limited, a Republic of Seychelles limited liability company (“DIGLS”), and each of the shareholders of DIGLS, pursuant to which the Company issued 300,000,000 shares of common stock in exchange for 100% of the issued shares of DIGLS. This transaction was accounted for a reverse takeover transaction and a recapitalization of the Company whereby the Company, the legal acquirer, is the accounting acquiree, and DIGLS, the legal acquiree, is the accounting acquirer. Accordingly, the Company historical statement of stockholders’ equity has been retroactively restated to the first period presented.

DIGLS was incorporated in the Republic of Seychelles on July 4, 2016, with an authorized capital of $100,000, divided into 250,000,000 ordinary shares, par value $0.0004 per share. DIGLS wholly owns DaXingHuaShang Investment (Hong Kong) Limited (“DILHK”), a company incorporated in Hong Kong on June 22, 2016 as an investment holding company with limited liability. DILHK was previously wholly owned by Mr. Yumin Lin, the Company’s Chairman, Chief Executive Officer, Chief Financial Officer, President, Treasurer and Secretary. On November 11, 2016, Mr. Yumin Lin transferred 100% of his ownership in DILHK to DIGLS for nominal consideration. DILHK wholly owns Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. (“QHDX”), a PRC limited liability company formed on November 3, 2016 as a wholly foreign-owned enterprise. QHDX wholly owns Dongguan City France Vin Tout Ltd. (“FVTL”). FVTL was incorporated on May 31, 2011 in the PRC as a limited liability company. FVTL was previously owned and controlled by Mr. Yumin Lin. On November 20, 2016, Mr. Yumin Lin transferred his ownership in FVTL to QHDX for nominal consideration. The share transfers detailed above by and among Mr. Yumin Lin, DIGLS, DILHK, QHDX, and FVTL have been accounted for as a series of business combination of entities under common control. Accordingly, the values in these financial statements reflect the carrying values of those entities, and no goodwill was recorded as a result of these transactions.

On March 1, 2019, the Company entered into a sale and purchase agreement (the “SP Agreement”) to acquire 100% of the shares of Jiujiu Group Stock Co., Ltd. (“JJGS”), a company incorporated under the laws of the Republic of Seychelles. The transaction contemplated in the SP Agreement was closed on March 1, 2019. Pursuant to the SP Agreement, the Company issued 100 shares of its common stock to JJGS to acquire 100% of the shares of JJGS for a cost of $150. After the closing, JJGS became the Company’s wholly owned subsidiary. JJGS owns all of the equity interests of Jiujiu (HK) Industry Limited (“JJHK”) and Jiujiu (Shenzhen) Industry Co., Ltd. (“JJSZ”). None of JJGS, JJHK and JJSZ have any operations or active business, nor do they have any substantial assets.

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MakawengAcquisition

On July 13, 2019, the Company and QHDX entered into an equity interest transfer agreement, which was later amended on September 12, 2019 (“Makaweng Agreement”), with Xingwen Wang, a shareholder and legal representative of Yunnan Makaweng Wine & Spirits Co., Ltd. (“Makaweng” or “MKW”), a PRC limited liability company engaged in the business of distribution of wine and beer. Pursuant to the Makaweng Agreement, QHDX purchased 51% of Makaweng’s equity interests from Xingwen Wang in exchange for shares of our common stock (“Makaweng Issuable Shares”), the number of which is determined according to the following formula:

Number of Makaweng Issuable Shares = A x 51% x 20 x B ÷ C

For the purpose of the foregoing formula:

A = Audited net annual profit of Makaweng in fiscal year 2020.

B = The daily average middle exchange rate of U.S. Dollars to Chinese Yuan published by the State Administration of Foreign Exchange of the People’s Republic of China on December 31, 2020.

C = The closing price of FVTI’s common stock on December 31, 2020.

Mr. Wang has agreed not to transfer the Makaweng Issuable Shares for at least three years after delivery of the Makaweng Issuable Shares (the “Delivery”). He may only transfer up to 30% of his FVTI common stock during the fourth year after the Delivery and cumulatively no more than 60% of his FVTI common stock during the fifth year after the Delivery.

The 51% of equity interest of Makaweng was transferred to QHDX and the registration of such transfer with local government authorities was completed on August 28, 2019.

Makaweng acquired 95% of equity interest of Lijiang Rendetang Biotechnology Co., Ltd., a PRC limited corporation with no operations (“LJRB”), from an existing shareholder of LJRB in January 2020 for a nominal amount as consideration.

BTFAcquisition

On December 30, 2019, the Company, along with QHDX, entered into an equity interest transfer agreement (the “BTF Agreement”) with shareholders (the “BTF Original Shareholders”) of Foshan BaiTaFeng Beverage Development Co., Ltd. (“BTF”), who collectively owned 100% equity interest of BTF, a limited liability company engaged in the business of bottling and distributing of drinking water in China.

Pursuant to the BTF Agreement, QHDX agreed to purchase 80% of BTF’s equity interest (the “BTF Equity Transfer”) from Mr. Chunbin Li, the legal representative and one of the BTF Original Shareholders of BTF (the “BTF Seller”), in exchange for shares of our common stock (“BTF Issuable Shares”). The completion of the registration of the BTF Equity Transfer with local government authorities (the “BTF Closing”) is subject to satisfaction of all the closing conditions (unless waived), including but not limited to, the approval of the BTF Equity Transfer by BTF shareholders, completion of due diligence review of BTF to the satisfaction of QHDX, waiver from the BTF Original Shareholders to the right of first refusal to purchase the equity interest subject to the BTF Equity Transfer. It is agreed that the BTF Closing shall be conducted prior to the completion of an initial draft of the audited financial statements of BTF.

According to the BTF Agreement, the total number of BTF Issuable Shares will be determined according to the following formula:

Number of BTF Issuable Shares = X x 80% x 15 ÷ 3.02 ÷ Y

For the purpose of the foregoing formula:

X = Net profit of BTF during the period from October 1, 2019 to September 30, 2020.

Y = 7:1, which is the exchange rate of U.S. Dollars to Chinese Yuan mutually agreed by the parties.

Pursuant to the BTF Agreement, we will issue the BTF Issuable Shares to the BTF Seller within 30 business days after September 30, 2020 pursuant to a separate subscription agreement to be entered into by the Company and the BTF Seller or his designee.

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BTF and the BTF Original Shareholders have agreed to achieve certain operation objectives of BTF, including a net profit of RMB 9 million (approximately $1.29 million) for the period from October 1, 2019 to September 30, 2020 and a net profit of RMB 3 million (approximately $0.14 million) for the fiscal year ended December 31, 2019. Pursuant to the BTF Agreement, as long as the BTF Seller continues to serve as the general manager and legal representative of BTF, the BTF Original Shareholders and BTF shall ensure BTF achieves an increase in annual net profit of no less than 10% during each year of the five years after September 30, 2020.

Pursuant to the BTF Agreement, BTF will establish a board of directors consisting of three individuals, two of which will be designated by QHDX and one by the BTF Original Shareholders, and appoint a person designated by the BTF Original Shareholders as general manager. To ensure the continuous operations of BTF, the parties agreed that BTF will retain its existing employees and all the management members of BTF shall sign employment agreements and non-compete agreements with BTF. The parties further agreed that BTF will not make any profit distribution within three years after the execution of the BTF Agreement. Any subsequent share transfer or share pledge of QHDX’s equity interest in BTF is subject to the prior written consent of the BTF Original Shareholders. In the event of a late payment of the consideration by QHDX or any delay in the registration of the BTF Equity Transfer with local government caused by the BTF Seller, a daily penalty of 0.05% of the outstanding payment is assessed.

As of the date this report, the Company has not closed the transaction with the BTF shareholders.

ValleyHoldings Acquisition

On March 16, 2020, the Company, along with JJGS, entered into an equity interest transfer agreement (the “Valley Holdings Agreement”) with Valley Holdings Limited (“Valley Holdings”), a Hong Kong company, and Angel International Investment Holdings Limited (the “Valley Holdings Seller”), a 70% shareholder of Valley Holdings. Valley Holdings owns approximately 88.44% of the equity interest of Valley Foods Holdings (Guangzhou) Co., Ltd. (“Valley Food”), which is a limited liability company incorporated in China and engaged in the business of food wholesale and production and sale of food additives in China.

Pursuant to the Valley Holdings Agreement, JJGS agreed to purchase 70% of Valley Holdings’ equity interest (the “Valley Holdings Equity Transfer”) from the Valley Holdings Seller in consideration of shares of FVTI’s common stock (“Valley Holdings Issuable Shares”) valued at $14 million (subject to adjustments in the event of Valley Holdings failing to meet a net profit of HK$5 million (approximately US$0.6 million) for the fiscal year ended December 31, 2019). According to the Valley Holdings Agreement, the total number of Valley Holdings Issuable Shares will be determined based on the closing price of FVTI’s common stock as of the business day immediately preceding the date of the Valley Holdings Closing (as defined below).

The closing of the Valley Holdings Equity Transfer (the “Valley Holdings Closing”) is intended to occur on or before April 30, 2020 or such later date agreed upon in writing. The Valley Holdings Closing is subject to certain conditions, including, but not limited to, (a) completion of due diligence review of Valley Holdings and its subsidiaries to the satisfaction of JJGS, (b) completion of the initial draft of the audited consolidated financial statements of Valley Holdings for the fiscal year ended December 31, 2019, (c) execution of non-competition agreements and confidentiality agreements with the senior management members of Valley Holdings and its subsidiaries, and (d) assignment to Valley Holdings all of the intellectual properties related to the operations of Valley Holdings and its subsidiaries.

Pursuant to the Valley Holdings Agreement, FVTI will issue the Valley Holdings Issuable Shares to the Valley Holdings Seller within 30 business days after the later of the Valley Holdings Closing and the issuance of audit report of Valley Holdings for the fiscal year ended December 31, 2019, pursuant to a separate subscription agreement to be entered into by FVTI and the Valley Holdings Seller or its designee.

To ensure the continuous operations of Valley Holdings and its subsidiaries, the parties agreed that Valley Holdings and its subsidiaries will retain their existing employees and will enter into non-competition and employment agreements with all the management members of Valley Holdings and its subsidiaries. The parties further agreed that Valley Holdings will not make any profit distribution within three years after the execution of the Valley Holdings Agreement. JJGS or the Valley Holdings Seller may terminate Valley Holdings Agreement in writing in the event that any closing condition is not met before April 30, 2020.

As of the date of this report, the Company has not completed the transaction to acquire Valley Holdings.

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XixingdaoAcquisition

On June 22, 2020, FVTI and QHDX entered into an equity interest transfer agreement (the “Xixingdao Agreement”) with Dongguan Xixingdao Technology Co., Ltd. (“Xixingdao”), a company incorporated in China, and the two shareholders of Xixingdao, who collectively own 100% equity interest of Xixingdao (the “Xixingdao Sellers”). Xixingdao is engaged in the business of drinking water distribution and delivery in Dongguan City, Guangdong Province, China.

Pursuant to the Xixingdao Agreement, QHDX agreed to purchase 90% of Xixingdao’s equity interest (the “Xixingdao Equity Transfer”) from the Xixingdao Sellers in consideration of shares of FVTI’s common stock (“Xixingdao Issuable Shares”). The completion of the registration of the Xixingdao Equity Transfer with local government authorities (the “Xixingdao Closing”) is subject to satisfaction of all the closing conditions (unless waived), including, but not limited to, (a) completion of due diligence review of Xixingdao to the satisfaction of QHDX, (b) completion of the initial draft of the audited consolidated financial statements of Xixingdao for the fiscal year ended December 31, 2019, and (c) execution of non-competition agreements and confidentiality agreements with the senior management members of Xixingdao.

According to the Xixingdao Agreement, the total number of Xixingdao Issuable Shares will be determined according to the following formula:

Number of Issuable Shares = A x 15 ÷ B ÷ C

For the purpose of the foregoing formula:

A = Audited net profit of Xixingdao during the period from June 1, 2020 to May 31, 2021.

B = The average of the closing prices of FVTI’s common stock for the 30 business days before the date the Xixingdao Issuable Shares are issued.

C = The central parity rate of Chinese Yuan against U.S. Dollars on the date the Xixingdao Issuable Shares are issued as reported by China Foreign Exchange Trading Center.

Xixingdao and Xixingdao Sellers have agreed to achieve certain operation objectives of Xixingdao, including a net profit of RMB 4 million (approximately $565,155) for the period from January 1, 2020 to December 31, 2020. Pursuant to the Xixingdao Agreement, as long as Yuwen Li, one of the Xixingdao Sellers, continues to serve as the general manager and legal representative of Xixingdao, Xixingdao and Xixingdao Sellers shall ensure Xixingdao achieves an increase in annual net profit of no less than 10% during its fiscal years between 2022 to 2025.

To ensure the continuous operations of Xixingdao, the parties agreed that Xixingdao will retain their existing employees and will enter into non-competition and employment agreements with the management team of Xixingdao.

Pursuant to the Xixingdao Agreement, Xixingdao will establish a board of directors consisting of three individuals, two of which will be designated by QHDX and one by the Xixingdao Sellers, and appoint a person designated by the Xixingdao Sellers as general manager.

The parties further agreed that Xixingdao will not make any profit distribution within four years after the execution of the Xixingdao Agreement. In the event of a late payment of the consideration by QHDX or any delay in the registration of the Xixingdao Equity Transfer with local government caused by the Xixingdao Sellers, a daily penalty of 0.01% of the outstanding payment is assessed.

As of the date of this report, the Company has not completed the transaction to acquire Xixingdao.

NOTE2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basisof presentation

These condensed consolidated financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations of the SEC. These financial statements have been prepared using the accrual basis of accounting in accordance with the generally accepted accounting principles in the United States (“GAAP”). The Company’s fiscal year end is December 31. The Company’s financial statements are presented in U.S. Dollars.

Basisof consolidation

The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated.

Entity<br> Name	Date<br> of Incorporation	Parent<br> <br><br> Entity	Nature<br> of Operation	Place<br> of<br><br> Incorporation
DIGLS	July 4, 2016	FVTI	Investment<br> holding	Republic of<br> Seychelles
DILHK	June 22, 2016	DIGLS	Investment<br> holding	Hong<br> Kong, PRC
QHDX	November 3,<br> 2016	DILHK	Investment<br> holding	PRC
FVTL	May 31, 2011	QHDX	Trading of<br> wine	PRC
JJGS	August 17,<br> 2017	FVTI	Investment<br> holding	Republic of<br> Seychelles
JJHK	August 24,<br> 2017	JJGS	Investment<br> holding	Hong<br> Kong, PRC
JJSZ	November 16,<br> 2018	JJHK	No<br> operations	PRC
MKW	August 28,<br> 2019	QHDX	Trading<br> of alcohol	PRC
LJRB	June<br> 9, 2015	MKW	No<br> operations	PRC

| F-9 |

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Useof estimates

The preparation of financial statements is in conformity with GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, as well as the disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results may materially differ from these estimates.

Foreigncurrency translation and re-measurement

The Company translates its results of operations into the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters.”

The reporting currency for the Company and its subsidiaries is the U.S. dollar. The Company, DIGLS, JJGS, JJHK and DILHK’s functional currency is the U.S. dollar. QHDX, JJSZ, FVTL, MKW and LJRB use the Chinese Renminbi (“RMB”) as their functional currency.

The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows:

●	Monetary<br> assets and liabilities at exchange rates in effect at the end of each period,
●	Nonmonetary<br> assets and liabilities at historical rates, and
●	Revenue<br> and expense items at the average rate of exchange prevailing during the period.

Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations.

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

●	Assets<br> and liabilities at the rate of exchange in effect at the balance sheet date,
●	Equities<br> at the historical rate, and
●	Revenue<br> and expense items at the average rate of exchange prevailing during the period.

| F-10 |

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Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity.

	June<br> 30, 2020		December<br> 31, 2019
Spot<br> RMB: USD exchange rate	$	0.14125	$	0.14334
Average<br> RMB: USD exchange rate	$	0.14202	$	0.14505

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. Dollars at the rates used in translation.

Cashand cash equivalents

Cash and cash equivalents include cash on hand, deposits in banks, and any investments with maturities with less three months from inception to maturity. The Company’s primary bank deposits are located in the Hong Kong and the PRC. Under the Deposit Insurance System in China, a company’s deposits at one bank is insured for a maximum of RMB500,000 (approximately $70,000). However, management has determined that the risk of loss from insolvency by those financial institutions at which it has deposited its funds is insignificant.

Accountsreceivable

Accounts receivable are carried at the amounts invoiced to customers less allowance for doubtful accounts. The allowance is an estimate based on a review of individual customer accounts on a regular basis. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received.

The Company reviews the collectability of accounts receivable based on an assessment of historical experience, current economic conditions, and other collection indicators.

During the year ended December 31, 2019 and the six months ended June 30, 2020, the Company did not experience any delinquent or uncollectible balances; accordingly, the Company did not record any valuation allowance for bad debt during these periods.

| F-11 |

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Inventories

Inventories consisting of finished goods are stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company provides impairment that is charged directly to cost of sales when it has been determined that the product is obsolete, spoiled, and that the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are imported alcoholic beverages. The selling price of alcoholic beverages tends to increase over time. However, there are circumstances where alcoholic beverages may be subject to spoilage if stored for prolong periods of time. The Company did not experience an impairment on inventory during the six months ended June 30, 2020.

Advancesand prepayments to suppliers

In certain instances, in order to secure the supply of limited and sought-after wines and liquors, the Company will make advance payments to suppliers for the procurement of inventory. Upon physical receipt and inspection of such products from those suppliers, the applicable balances are reclassified from advances and prepayments to suppliers to inventory.

Property,plant and equipment

Equipment is carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the equipment are as follows:

Office equipment	7-20 years

The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized.

Right-of-useasset and lease liabilities

In February 2016, the FASB issued ASU 2016-02 “Leases (Topic 842).” The new standard requires lessees to recognize lease assets (right of use) and lease obligations (lease liability) for leases previously classified as operating leases under U.S. GAAP on the balance sheet for leases with terms in excess of 12 months. The standard is effective for annual periods beginning after December 15, 2018, including interim periods within those fiscal years.

Accountingfor long-lived assets

The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry or new technologies. Impairment is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated.

| F-12 |

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If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

Customeradvances and deposits

On certain occasions, the Company may receive prepayments from downstream retailers or retail customers for wines and liquors prior to their taking possession of the Company’s products. The Company records these receipts as customer advances and deposits until it has met all the criteria for recognition of revenue including the passing possession of the products to its customer, at such point Company will reduce the customer deposits balance and credit the Company’s revenues.

Revenuerecognition

The Company adopted ASC Topic 606, Revenue from Contracts with Customers, and all subsequent ASUs that modified ASC 606 on April 1, 2017 using the full retrospective method which requires the Company to present the financial statements for all periods as if Topic 606 had been applied to all prior periods. Revenue from contracts with customers is recognized using the following five steps:

1.	Identify<br> the contract(s) with a customer;
2.	Identify<br> the performance obligations in the contract;
3.	Determine<br> the transaction price;
4.	Allocate<br> the transaction price to the performance obligations in the contract; and
5.	Recognize<br> revenue when (or as) the entity satisfies a performance obligation.

In applying ASC 606, the Company recognizes revenue when the Company has negotiated the terms of the transaction, set forth the sales price, transferred of possession of product to customer, determined that the customer does not have the right to return the product, determined that the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company’s gross revenue consists of the value of goods invoiced, net of any value-added tax.

Advertising

All advertising costs are expensed as incurred. Advertising expenses for the six months ended June 30, 2020 and 2019 were $0 and $0, respectively.

Shippingand handling

Outbound shipping and handling are expensed as incurred.

Retirementbenefits

Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged as expenses as incurred or allocated to inventory as a part of overhead.

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Incometaxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred 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 realization is uncertain.

Statutoryreserves

Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital.

Earningsper share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share.” Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS.

Financialinstruments

The Company’s accounts for financial instruments in accordance to ASC Topic 820, “Fair Value Measurements and Disclosures,” which requires disclosure of the fair value of financial instruments held by the Company and ASC Topic 825, “Financial Instruments,” which defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows:

●	Level<br> 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets;
●	Level<br> 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs<br> that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial<br> instrument; and
●	Level<br> 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

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Commitmentsand contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated.

Comprehensiveincome

Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable assets acquired in a business combination. In accordance with Financial Accounting Standards Board (“FASB”) ASC Topic 350, “Goodwill and Other Intangible Assets,” goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis.

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Recentaccounting pronouncements

In February 2018, the FASB issued guidance, which eliminates the stranded tax effects in other comprehensive income resulting from the Tax Cuts and Jobs Act of 2017 (“TCJA”). Because the amendments only relate to the reclassification of the income tax effects of the TCJA, the underlying guidance that requires that the effect of a change in tax laws or rates be included in income from continuing operations is not affected. The Company adopted the guidance in the first quarter of fiscal year 2020. There was no material impact to its financial statements.

In August 2017, the FASB issued guidance, which amends the existing accounting standards for derivatives and hedging. The amendment improves the financial reporting of hedging relationships to better represent the economic results of an entity’s risk management activities in its financial statements and made certain targeted improvements to simplify the application of the hedge accounting guidance in current GAAP. The Company is required to adopt the guidance in the first quarter of fiscal year 2020. Earlier adoption is permitted. The Company adopted the new guidance. There was no material impact to its financial statements.

On March 17, 2016, the FASB issued Accounting Standards Update (“ASU”) 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net),” which amends the principal-versus-agent implementation guidance and illustrations in the Board’s new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standard’s principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is “a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer.” Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company has determined that it acts as a principal in its primary business operations.

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In August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure Requirements for Fair Value Measurement. The amendments in this standard will remove, modify and add certain disclosures under ASC Topic 820, Fair Value Measurement, with the objective of improving disclosure effectiveness. ASU 2018-13 will be effective for the Company’s year beginning January 1, 2020, with early adoption permitted. The transition requirements are dependent upon each amendment within this update and will be applied either prospectively or retrospectively. The Company does not expect ASU 2018-13 to have a material impact to the Company’s consolidated financial statements.

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes. The amendments in this Update related to separate financial statements of legal entities that are not subject to tax should be applied on a retrospective basis for all periods presented. The amendments related to changes in ownership of foreign equity method investments or foreign subsidiaries should be applied on a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. The amendments related to franchise taxes that are partially based on income should be applied on either a retrospective basis for all periods presented or a modified retrospective basis through a cumulative-effect adjustment to retained earnings as of the beginning of the fiscal year of adoption. All other amendments should be applied on a prospective basis. The Company does not expect the adoption of ASU 2019-12 to have a material impact on its condensed consolidated financial statements.

Unless otherwise stated, the Company is currently assessing the above accounting pronouncements and their potential impact from their adoption on the Company’s financial statements.

NOTE3 - GOING CONCERN

The accompanying financial statements have been prepared in conformity with GAAP which contemplate continuation of the Company as a going concern. The going concern basis assumes that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive operating cash flows. As of June 30, 2020 and 2019, the Company reported net losses of $204,402 and $242,996, respectively. As of June 30, 2020, the Company had working capital deficit of approximately $1,005,133. In addition, the Company had net cash outflows of $252,799 from operating activities during the six months ended June 30, 2020. These conditions still raise a substantial doubt as to whether the Company may continue as a going concern.

The Company relies on related parties to provide financing and management services at cost that may not be the prevailing market rate for such services.

If the Company is not able to generate positive operating cash flows, raise additional capital, and retain the services of certain related parties, it may become insolvent.

NOTE4 - ACCOUNTS AND OTHER RECEIVABLES

Accounts and other receivables consisted of the following as of June 30, 2020 and December 31, 2019:

	June<br> 30, 2020		December<br> 31, 2019
Gross<br> accounts and other receivables	$	38,689	$	146
Less:<br> Allowance for doubtful accounts		-		-
	$	38,689	$	146

NOTE5 – INVENTORIES

Inventories consisted of the following as of June 30, 2020 and December 31, 2019:

	June<br> 30, 2020		December<br> 31, 2019
Finished<br> goods	$	33,948	$	28,502

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NOTE6 - EQUIPMENT

Property, plant and equipment consisted of the following as of June 30, 2020 and December 31, 2019:

	June<br> 30, 2020			December<br> 31, 2019
At<br> Cost:
Equipment		61,510			61,510
Improvements		42,100			-
		103,610			61,510
Less:<br> Accumulated depreciation		(52,650	)		(52,899	)
	$	50,960		$	8,611

NOTE7 - INCOME TAXES

The Company’s primary operations are conducted in the PRC in accordance with the relevant tax laws and regulations. The corporate income tax rate for each country is as follows:

●	PRC<br> tax rate is 25%;
●	Hong<br> Kong tax rate is 16.5%; and
●	Seychelles<br> is on permanent tax holiday.

The following table provides the reconciliation of differences between statutory and effective tax expenses for six months ended June 30, 2020 and 2019:

	June<br> 30, 2020			June<br> 30, 2019
Income<br> attributed to PRC operations	$	(76,590	)	$	(77,579	)
Loss<br> attributed to Seychelles and Hong Kong		(37	)		-
Loss<br> attributed to U.S.		(127,775	)		(165,333	)
Loss<br> before tax		(204,402	)		(242,912	)
PRC<br> statutory tax at 25% rate		(19,148	)		(19,395	)
Effect<br> of Seychelles, PRC, Hong Kong, deductions and other reconciling items		19,148			19,479
Income<br> tax	$	-		$	84

The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows for six months ended June 30, 2020 and 2019:


U.S.<br> federal statutory income tax rate	21.0	%	21.0	%
Higher<br> rates in PRC, net	4.0	%	4.0	%
Effect<br> of reconciling items	-25.0	%	-23.9	%
The<br> Company’s effective tax rate	0.0	%	1.1	%

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NOTE8 - RELATED PARTY TRANSACTIONS

Amounts due to related parties as of June 30, 2020 and December 31, 2019 are as follow:

	Relationship<br> with the Company	June<br> 30, 2020		December<br> 31, 2019
Mr.<br> Yumin Lin (1)	Chairman,<br> Chief Executive Officer, President and Secretary	$	904,107	$	791,576
Ms.<br> Qingmei Lin (2)	Mr.<br> Yumin Lin’s wife		8,475		17,201
		$	912,582	$	808,777
(1)	The<br> outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due<br> on demand and non-interest bearing.
---	---
(2)	The<br> amounts due to Ms. Qingmei Lin are for office rental expenses. The Company’s operating facilities are located within<br> a building owned by Ms. Qingmei Lin.

NOTE9 – LEASE COMMITMENTS

The Company has a non-cancelable operating lease with Ms. Qingmei Lin, a related party, for the premises in Dongguan City, Guangdong Province, China. The lease covers the period from May 1, 2017 to April 30, 2027. The monthly rent expense is RMB 25,000 (approximately $3,811). Effective as of May 1, 2018, the monthly rent was lowered to RMB 15,000 (approximately $2,323) based on agreement between Ms. Qingmei and Company. Effective as of January 1, 2019, the monthly rent was lowered to RMB 10,000 (approximately $1,413) until April 30, 2027, based on agreement between Ms. Qingmei Lin and Company. The agreement does not require a rental deposit.

Minimum operating lease commitment under the lease is as follows:

2020		8,478
2021		16,956
2022		16,956
2023		16,956
2024		16,956
Thereafter:		39,564
Total<br> future payments of right of use asset	$	115,866

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NOTE10 - RISKS

Creditrisk

The Company is subject to risk borne from credit extended to customers.

FVTL, MKW, LJRB and QHDX bank deposits are with banks located in the PRC. JJHK’s bank account is located in Hong Kong. DIGLS and JJGS do not have any bank accounts. The bank accounts that the Company uses are located outside of the U.S. and the Company’s bank accounts in China are protected by a deposit insurance system.

Economicand political risks and national emergencies risk

The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. As imported alcoholic beverages are considered a luxury item in the PRC, they may be subject to political risks. From time to time, the PRC government limits the amount of import of foreign alcoholic beverages based on diplomatic relationships with foreign countries. The Company’s results of operations may be materially and adversely affected if it is unable to procure such products because of change of government policies.

In addition, the Company’s sales and operations may materially adversely affected by national emergencies, such as COVID-19 pandemic.

Inflationrisk

Management monitors changes in prices. Historically inflation has not materially impacted the Company’s financial statements. However, significant increases in the price of wine and liquors that cannot be passed on to the Company’s customers could adversely impact the Company’s results of operations.

Concentrationsrisk

During the six months ended June 30, 2020 and the year ended December 31, 2019, the Company had a concentration of risk in its supply of goods, as one vendor supplied all of the Company’s purchases of finished goods.

NOTE11 - SUBSEQUENT EVENTS

Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date.

There was no event that management deemed necessary for disclosure as a material subsequent event.

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Item2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CompanyOverview

Fortune Valley Treasures, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in the State of Nevada on March 21, 2014. We were initially incorporated to offer users with up-to-date information on digital currencies. We are engaged in the retail and wholesale distribution of a wide spectrum of food and beverage products in Guangdong, China. In addition, we are actively seeking quality target companies in the food, beverage and alcohol industries for mergers and acquisition for further development of our company.

Coronavirus(COVID-19) Update

Recently, there is an ongoing outbreak of a novel strain of coronavirus (COVID-19) first identified in China and has since spread rapidly globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past few months. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and our workforce are concentrated in China, our business, results of operations and financial condition have been and will continue to be adversely affected. Potential impact to our results of operations will also depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or mitigate its impact, almost all of which are beyond our control.

The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following:

●	We<br> temporarily closed our offices for approximately one month from late January 2020, as required by relevant PRC regulatory<br> authorities. In the first quarter of 2020, the COVID-19 outbreak caused disruptions in our operations and supply chains, which<br> have resulted in delays in the shipment of products to certain of our customers.
●	Our<br> customers have been negatively impacted by the outbreak, which reduced the demand of our products. The demand may decrease<br> further if the COVID-19 pandemic continues.

Our operations and supply chains have gradually recovered from the impact of COVID-19 during the three months ended June 30, 2020 due to the effective control of the COVID-19 by the PRC government.

However, we cannot foresee whether any reoccurrence of COVID-19 will be forthcoming in the second half of 2020. If any reoccurrence of COVID-19 is not effectively and timely controlled, our business operations and financial condition may be materially and adversely affected as a result of the deteriorating market outlook, the slowdown in regional and national economic growth, weakened liquidity and financial condition of our customers or other factors that we cannot foresee. Any of these factors and other factors beyond our control could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict and materially and adversely impact our business, financial condition and results of operations.

Resultsof Operations

ThreeMonths Ended June 30, 2020 and 2019

	Three<br> Months Ended June 30,
	2020			2019			Change
Revenue	$	69,176		$	41,936		$	27,240
Cost<br> of revenue		39,917			32,767			7,150
Gross<br> profit		29,259			9,169			20,090
Gross<br> profit (%)		42.3	%		21.9	%
Operating<br> expense		127,631			220,328			(92,697	)
Other<br> income(expense)		1,328			1,199			129
Interest<br> income		72			103			(31	)
Interest<br> expense		(4,862	)		(212	)		(4,650	)
Provision<br> for income taxes		-			(1	)		1
Foreign<br> currency translation gain		(1,935	)		6,157			(8,092	)
Comprehensive<br> loss	$	(103,769	)	$	(203,911	)	$	100,142

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Revenue

Revenue was $69,176 for three months ended June 30, 2020, reflecting an increase of $27,240 from $41,936 for the three months ended June 30, 2019. The reason for the increase was the adoption of new marketing strategies by the Company which increased our sales volume.

Costof revenue

Cost of revenue was $39,917 for the three months ended June 30, 2020, reflecting an increase of $7,150 from $32,767 for the three months ended June 30, 2019. The increase was due to the increase in sales volume.

Grossprofit

Gross profit was $29,259 and $9,169 for the three months ended June 30, 2020 and 2019, respectively, reflecting an increase of $20,090. The increase in gross profit was attributable to the increase in revenue and sales activities and decrease in costs.

Operating expense

Operating expense was $127,631 for the three months ended June 30, 2020, reflecting a decrease of $92,697 from $220,328 for the three months ended June 30, 2019. The decrease was due to decreases in salaries, marketing and general and administrative costs related to mergers and acquisitions as a result of the Company’s limited business activities due the COVID-19 pandemic.

Comprehensiveloss

As a result of the foregoing, comprehensive loss to FVTI stockholders was $103,769 for the three months ended June 30, 2020, reflecting a decrease in comprehensive loss of $100,142 from $203,911 as compared to the same period of 2019.

SixMonths Ended June 30, 2020 and 2019

	Six<br> Months Ended June 30,
	2020			2019			Change
Revenue	$	91,227		$	83,956		$	7,271
Cost<br> of revenue		54,343			61,675			(7,332	)
Gross<br> profit		36,884			22,281			14,603
Gross<br> profit (%)		40.4	%		26.5	%
Operating<br> expense		238,492			267,567			(29,075	)
Other<br> income(expense)		2,106			2,504			(268	)
Interest<br> income		80			141			(61	)
Interest<br> expense		(4,980	)		(271	)		(4,709	)
Provision<br> for income taxes		-			84			(84	)
Foreign<br> currency translation gain		5,283			2,664			2,916
Comprehensive<br> loss	$	(199,119	)	$	(240,332	)	$	41,213

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Revenue

Net revenue was $91,227 for six months ended June 30, 2020, reflecting an increase of $7,271 from $83,956 for the six months ended June 30, 2019. The reason for the increase in revenue was the adoption of new marketing strategies by the Company that led to increased sales volume.

Costof revenue

Cost of revenue was $54,343 for the six months ended June 30, 2020, reflecting a decrease of $7,332 from $61,675 for the six months ended June 30, 2019. The decrease was due to the sale of older inventory with a lower cost basis.

Grossprofit

Gross profit was $36,884 and $22,281 for the six months ended June 30, 2020 and 2019, respectively. Gross profit margin increased to 40.4% for the six months ended June 30, 2020 from 26.5% for the corresponding period in 2019 due to decrease in costs. The increase in gross profit was attributable to the increase in revenue and gross profit margin.

Operatingexpense

Operating expense was $238,492 for the six months ended June 30, 2020, reflecting a decrease of $29,075 from $267,567 for the six months ended June 30, 2019. The decrease was primarily due to decreases in salaries, marketing and general and administrative costs related to mergers and acquisitions as a result of the Company’s limited business activities due to the COVID-19 pandemic.

Comprehensiveloss

As a result of the foregoing, comprehensive loss attributable to FVTI stockholders was $199,119 for the six months ended June 30, 2020, reflecting a decrease in comprehensive loss by $41,213 from $240,332 for the same period in 2019.

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Liquidityand Capital Resources

Working Capital Deficit

	June<br> 30, 2020			December<br> 31, 2019			Change
Total<br> current assets	$	104,553		$	73,970		$	30,538
Total<br> current liabilities		1,109,686			855,352			254,334
Working<br> capital deficit	$	(1,005,133	)	$	(781,382	)	$	(223,751	)

As of June 30, 2020, we had cash and cash equivalents in an amount of $13,976. We have financed our operations primarily though borrowings from related parties. The increase in working capital deficit was primarily due to continued losses from operations and net cash used in operating activities.

Cash Flows

	Six<br> Months Ended June 30,
	2020			2019			Change
Cash<br> Flows Used in Operating Activities	$	(252,799	)	$	(204,595	)	$	(48,204	)
Cash<br> Flows Used in Investing Activities		(43,231	)		-			(43,231	)
Cash<br> Flows Provided by Financing Activities		272,369			261,264			11,105
Net<br> (Decrease)/Increase in Cash During Period	$	(23,661	)	$	56,669		$	(80,330	)

CashFlow from Operating Activities

For the six months ended June 30, 2020, net cash used in operating activities was $252,799, which represents a $48,204 increase compared to $204,595 net cash used in operating activities for the six months ended June 30, 2019. The change was primarily due to an increase in accounts receivable.

CashFlow from Investing Activities

Net cash used in investing activities for the six months ended June 30, 2020 was $43,231 as compared to $0 for the six months ended June 30, 2019. The increase in net cash used in investing activities was mainly due to certain office renovation and improvements.

CashFlow from Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2020 was $272,369 as compared to $261,264 for the six months ended June 30, 2019. The increase in net cash used in investing activities was mainly due to an increase in short-term borrowings made by a related party to the Company.

CriticalAccounting Policy and Estimates

In the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and financial condition in the preparation of our financial statements in conformity with U.S. generally accepted accounting principles. We base our estimates on historical experience, when available, and on other various assumptions that are believed to be reasonable under the circumstances. Actual results could differ significantly from those estimates under different assumptions and conditions.

Off-BalanceSheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

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ITEM3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

Pursuant to Item 305(e) of Regulation S-K (§ 229.305(e)), the Company is not required to provide the information required by this Item as it is a “smaller reporting company,” as defined by Rule 229.10(f)(1).

ITEM4. CONTROLS AND PROCEDURES.

Evaluationof Disclosure Controls and Procedures

We maintain disclosure controls and procedures, as defined in Rule 13a-15(e) promulgated under the Exchange Act, that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of June 30, 2020. Based on the evaluation of these disclosure controls and procedures, our management concluded that our disclosure controls and procedures were not effective as of June 30, 2020 due to the following:

●	the<br> Board does not currently have a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii)<br> of Regulation S-K; and
●	the<br> Company lacks accounting and finance personnel with technical knowledge in SEC rules and regulations.

Our management intends to hire additional accounting staff with an appropriate understanding of U.S. GAAP and SEC reporting requirements in 2021. The Company has interviewed and is in the process of engaging a pre-audit firm to help with the closing of its books and the preparation of SEC filings.

Changesin Internal Control over Financial Reporting

During the period covered by this report, there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PartII. OTHER INFORMATION

ITEM1. LEGAL PROCEEDINGS

From time to time, we may become involved in legal proceedings or be subject to claims arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, if determined adversely to us, would individually or taken together have a material adverse effect on our business, operating results, financial condition or cash flows. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

ITEM1A. RISK FACTORS

Not applicable to a smaller reporting company.

ITEM2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM5. OTHER INFORMATION

None.

ITEM6. EXHIBITS

EXHIBITINDEX

The exhibits listed on the Exhibit Index are provided as part of this report.

Exhibit<br><br> <br>Number	Description
3.1	Articles<br> of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 as amended<br> filed with the SEC on December 5, 2014)
3.2	Bylaws<br> (incorporated by reference to Exhibit 3.2 the Company’s Registration Statement on Form S-1 as amended filed with the<br> SEC on December 5, 2014).
10.1*	English translation of Equity Interest Transfer Agreement, dated as of June 22, 2020, by and among Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd., Dongguan Xixingdao Technology Co., Ltd., Yuwen Li, Zhipeng Zuo and Fortune Valley Treasures, Inc.
31.1*	Certification<br> of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2*	Certification<br> of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1**	Certification<br> of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350,<br> as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2**	Certification<br> of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350,<br> as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS*	XBRL<br> Instance Document
101.SCH*	XBRL<br> Taxonomy Extension Schema
101.CAL*	XBRL<br> Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL<br> Taxonomy Extension Definition Linkbase
101.LAB*	XBRL<br> Taxonomy Extension Label Linkbase
101.PRE*	XBRL<br> Taxonomy Extension Presentation Linkbase
*	Filed<br> herewith.
---	---
**	Furnished<br> herewith.

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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.

	Fortune Valley Treasures, Inc.
Date:<br> August 14, 2020
	By:	/s/ Yumin Lin
	Name:	Yumin<br> Lin
	Title:	Chief<br> Executive Officer, President and Secretary
		(Principal<br> Executive Officer)
	By:	/s/ Kaihong Lin
	Name:	Kaihong<br> Lin
	Title:	Chief<br> Financial Officer and Treasurer
		(Principal<br> Financial and Accounting Officer)

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Exhibit10.1

EquityInterest Transfer Agreement

This Agreement was entered by and among the following parties on June 22, 2020 in Shenzhen, China:

Party A: Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. (referred to as “Transferee”)

Address: 13th Floor, Block 1, Building B, Wisdom Plaza, Nanshan District, Shenzhen

Legal Representative: Yumin Lin

Party B:

Party B 1: Yuwen Li (referred to as “Transferor”)

ID Number: *************

Address: ****************

Party B 2: Zhipeng Zuo

ID Number: *************

Address: ****************

Party B1 and Party B2 are collectively referred to as “Party B” or “Original Shareholders.”

Party C: Dongguan Xixingdao Technology Co., Ltd. (“Target Company”)

Address: Room 301, No. 88, Jiefang Road, Humen, Humen Town, Dongguan City

Legal Representative: Yuwen Li

Party D: Fortune Valley Treasures, Inc. (“FVTI”)

Address: 13th Floor, Block 1, Building B, Wisdom Plaza, Nanshan District, Shenzhen

Authorized Director: Yumin Lin

WHEREAS:

1.	Qianhai<br> DaXingHuaShang Investment (Shenzhen) Co., Ltd. is a limited company registered in Qianhai, Shenzhen and validly existing in<br> accordance with Chinese laws.
2.	Target<br> Company is a limited company registered in Dongguan, Guangdong, in accordance with Chinese law. As of the date of this Agreement,<br> Target Company’s registered capital is RMB 1 million.
3.	As<br> of the execution date of this Agreement, Party B are the original shareholders of Target Company and holds 100% equity interest<br> of Target Company, of which: Party B1 holds 90% equity interest of Target Company and Party B2 holds 10% equity interest of<br> Target Company.
4.	Party<br> B1 agrees to transfer 80% of the equity interest of Target Company he holds to Party A in accordance with the terms of this<br> Agreement, and Party A agrees to acquire such equity interest in accordance with the terms of this Agreement.

Regarding to the acquisition of 90% of the equity of Target Company held by Party B, the parties agreed to the terms of this Agreement through friendly negotiation in accordance with the principles of fairness, reasonableness, and good faith:

Article1 Definition

1.1	Unless<br> otherwise agreed in this Agreement, the following terms have the following meanings in this Agreement:
Party A	refers to	Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd.
---	---	---
Target Company	refers to	Dongguan Xixingdao Technology Co., Ltd.
Party B/ Original Shareholders	refers to	the original shareholders of the Target Company on the execution date of this Agreement, namely, Yuwen Li and Zhipeng Zuo
Transferor	refers to	Yuwen Li, one of the shareholders of Target Company.
SEC	refers to	the United States Securities and Exchange Commission.
This Transaction	refers to	Party A’s acquisition of 80% of equity interest in Target Company held by the Transferor.
Underlying Equity	refers to	the 90% equity interest of Target Company held by Party B.
Transaction price / transaction consideration	refers to	the general term for the transaction consideration paid by Party A to acquire the target equity in accordance with Article 2.5 of this Agreement.
Settlement date	refers to	the day that All Party B’s equity is transferred to Party A in the government registration department.
---	---	---
Profit commitment period	means	the period from June 1, 2020 to May 31, 2021.
Net Profit	refers to	the net profit attributable to the parent company audited by the Auditor
Burden of Rights	means	any mortgage, pledge, lien, guarantee, burden of rights, property entrustment, priority, security interest, retention of title, beneficial right, trust arrangement, or other set, recognized and/or enforceable third party rights or claims of any nature in accordance with relevant laws.
Yuan	refers to	Chinese Yuan, RMB
Working day	refers to	The normal business days of commercial banks in China, except on Saturday, Sundays and holidays.
Force majeure	refers to	any affected party cannot reasonably<br>control, do not expect or is unavoidable and cannot be overcome even if it can be expected, and it appears after the execution<br>date of this Agreement, it makes it objectively impossible or impossible for the party to perform all or part of this Agreement.<br>Such events include but not limited to, earthquakes, riots, wars, laws and regulations, and changes in the listing rules that<br>are explicitly required by the SEC and announced to the public.
Fiscal Year	refers to	the year from January 1 to December 31.

1.2 In this Agreement, unless otherwise specified:

(1) the laws, regulations or related provisions mentioned in this Agreement include future interpretations, amendments or supplements to these laws, regulations or related provisions, and also include newly issued relevant laws replacing these laws, regulations and related supporting or supplemental regulations;

(2) “articles,” “sections” and “items” shall be the “articles,” “sections” and “items” of this Agreement; and

(3) the title of the provisions of this Agreement is only for reference, and does not affect the interpretation of this Agreement.

Article2 This Transaction

2.1 All of the Original Shareholders of Target Company, Yuwen Li and Zhipeng Zuo, have agreed that Yuwen Li will transfer 81% of the equity interest of Target Company and Zhipeng Zuo will transfer 9% of the equity interest of Target Company to Party A in accordance with the terms and conditions of this Agreement, and Party A has agreed in accordance with the terms and conditions of this Agreement and Target Company’s representations and warranties to accept the transfer of equity interest. Upon the completion of the acquisition, Target Company’s equity structure is as follows:

No.	Name of Shareholders
1	Party A	900,000	90
2	Chunbin Li	90,000	9
3	Miaoqin Yao	10,000	1
Total		1,000,000	100

2.2 The parties have agreed that after the following conditions have been met on or before the Deadline (or partially or wholly waived by Party A in writing), the parties shall complete the Closing in accordance with Section 2.7 of this Agreement.

2.2.1 According to Party A’s due diligence requirements, the information disclosed by Party B and Party C to Party A before the Closing, which includes but not limited to the history of Target Company and its subsidiaries, all certificates, licenses, permits and approval documents, financial information, customer information, claims and debts, arbitration and the litigation status, Right of Burden on the equity and all information related to the equity interest of the Target Company are true, accurate and complete. There are no concealment or misleading disclosures and statements and such information has been reviewed by Party A and is to its satisfaction.

2.2.2 Each of the management members(The management list should be confirmed by Party A) of the Target Company shall enter into a non-competition agreement and a confidentiality agreement.

2.2.3 With regard to the intellectual property rights such as the trademark “Shui Yi Jia” (Type35, Graphics designs) related to the business operations of the target company and the copyright of WeChat applets such as Shui Yi Jia Fresh, Youpin, Mall, etc., the target company has been associated with Party B or its control The party signs a written transfer agreement to transfer the above intellectual property rights to the name of the target company; and Party B guarantees to complete the above-mentioned intellectual property transfer registration procedures within 180 days after the completion of the equity transfer.

2.2.4 Party B and Party C guarantee that all representations and warranties under this Agreement are true, complete, accurate and not misleading.

2.2.5 Completion of initial draft of 2019 audited consolidated annual report of Target Company.

2.2.6 Party B expressly waived the preemptive right to purchase equity.

2.3 Party A has the right to waive any of the conditions precedent listed in Section 2.2. To avoid discrepancies, apart from the above-mentioned conditions, the parties to this Agreement shall not be entitled to waive any of the conditions in Section 2.2. If the conditions listed in any of Section 2.2 are not fulfilled on or before the Deadline specified in this Agreement (or, if applicable, a written exemption), Party A or Party B may give written notice to the other party to terminate its obligations under this Agreement, and obtain immediate termination.

2.4 If at any time Party B or Party C is aware of the facts or circumstances that may prevent a certain condition from being fulfilled, it shall immediately notify Party A in writing.

2.5 Consideration

2.5.1 Consideration and Valuation Basis

All parties have agreed that the Party B shall transfer its 90% of the equity of Target Company to Party A. That is: Yuwen Li will transfer 81% of the equity interest of Target Company and Zhipeng Zuo will transfer 9% of the equity interest of Target Company to Party A. After the completion of the Transaction, Party A will hold 90% of the equity interest of the Target Company.

2.5.2 All parties confirmed that the valuation of 90% of Target Company’s equity transfer is as follows:

(1) Target Company and Party B have fully, truthfully and completely disclosed Target Company’s and its subsidiaries’ assets, liabilities, equity, external guarantees and all relevant information related to this Agreement to the Party A in writing. The assets owned by Target Company and its subsidiaries do not have significant defects.

(2) The Target Company and Party B warrant that Target Company and its subsidiaries will generate a Net Profit of no less than RMB $4 million for the period from January 1, 2020 to December 31, 2020. In addition, when Part B1 remains as the general manager and executive director of the Target Company, Target Company warrants that in addition to the above-mentioned profit covenant, Target Company’s Net Profit will increase no less than 10% every fiscal year compared to the prior year for the following years from year 2022 to 2025.

On the basis of the above-mentioned committed net profit, the parties agreed to calculate the valuation of the target company’s 90% equity at a price-earnings ratio of 15 times the net profit actually completed during the target company’s profit commitment period.

2.6 Issuance of Shares

All parties agree that, upon completion of the Closing for the Transaction, and within 30 Business Days after the issuance of the May 31, 2021 audit report of Target Company, Party D shall issue the shares of common stock to Party B. The number of the shares that Party D shall issue to Party B or its designated party is calculated as follows.

The number of shares (taken as an integer) = the actual net profit of Target Company from June 1, 202020 to May 31, 2021 × 15 times ÷The average value of the sum of the closing prices of the stocks 30 working days before the stock issuance date ÷ exchange rate of RMB to USD mid-rate (The exchange rate is calculated based on the median price of the US dollar against the RMB announced on the official website of the State Administration of Foreign Exchange on the day of the issuance of the stock).

2.6.2 The parties agree that the issuance of shares shall be performed in accordance with the agreed standards above, and FVTI and the Transferor or its designated related parties shall enter into a subscription agreements. Party B is committed to cooperate with the audit work of the audit firm appointed by Party A and FVTI and provides all necessary assistance or documents required by SEC.

2.7 Closing

After all the conditions listed in Section 2.2 have been fulfilled (or, if applicable, waived in writing), the parties shall conduct the Closing within 30 Business Days to complete the government registration and equity transfer, Party A will become a 90% shareholder of the Target Company.

2.7.1 At the time of closing, Party B shall deliver or facilitate delivery to Party A, including but not limited to that Party B duly signs the transfer of shares and sales documents and/or other relevant documents with Party A as the beneficiary in order to confer on Party A Fang has legal ownership of the underlying equity and becomes a registered shareholder of the underlying equity.

2.8 Excess performance rewards

All parties agree that if the target company’s actual net profit target exceeds the commitment target stipulated in Article 2.5.2, Party A agrees that the target company will reward the target company’s operating team in cash for additional rewards. The specific calculation method of reward amount and proportion is as follows:

1) If the target company completes its performance commitment target for the year and the actual net profit completed for the year is more than 10% but less than 30% compared to the previous year’s net profit growth rate, the target company should extract the net profit achieved during the year 10% as a reward;

2) The target company completes the performance commitment target for the year, and if the annual profit growth rate is more than 30% compared with the previous year, the target company should withdraw 15% of the net profit achieved in the year as an incentive.

Article3 Corporate Governance and Non-Competition

3.1 After completion of the Transaction, Target Company will become Party A’s controlled subsidiary.

3.2 All parties agree that after the completion of the Transaction, the employment of Target Company and its subsidiaries will not change (except for the corresponding adjustments made in accordance with the relevant provisions of laws and regulations and the requirements of regulatory authorities).

3.3 In order to ensure the continuous and stable operation of Target Company and its subsidiaries, the management team members of Target Company and its subsidiaries shall enter into employment agreements, pursuant to the requirement by Party A. The term of the employment agreement shall include the rest of the current fiscal year after the Closing and three subsequent fiscal years. Non-competition agreements need to be signed with the management team members before the Closing. The aforementioned personnel, without prior written consent of Party A or Target Company, shall not use any means (including but not limited to operating, investing, cooperating with, working part-time for themselves or others) during the term of the employment agreement signed with Target Company and within 2 years from the date of termination of employment with Party A or Target Company, this includes:

(i) the aforementioned personnel shall not operate, engage in or use any means to assist the same, similar or competitive relationship business (directly or indirectly) with Party A, Party D, Target Company and its subsidiaries in China. They shall not have business interest (except for holding 10% or less equity interests) in same, similar or competitive business or conduct unfair related party transactions.

(ii) solicit or induce personnel who have business dealings with Party A or Target Company within five years before the date of signing the labor contract and/or during the term of the labor contract, instigate or work hard to make such persons to stop dealing with Party A or Target Company;

(iii) use or disclose to others the business secrets of Party A or Target Company (including but not limited to customer information and intellectual property rights), so as to affect the interests of Party A or Target Company, except the information required by law, the SEC or other regulatory agencies to disclose, and information that has become publicly known not because such persons have breached the above commitments. When such personnel are required to disclose relevant information by law, the SEC, or other regulatory agencies, they must notify Party A or Target Company before the disclosure of the information, as long as permitted by relevant laws.

(iv) Engage in any behavior that may reduce or damage the competitiveness of Party A or the target company.

If the aforementioned personnel violates the rules and regulations of Target Company, dereliction of duty or private malpractice and damages the interests of Party A or Target Company, or meets the conditions for termination of the labor contract or termination conditions of the labor contract stipulated by local laws and regulations, Target Company shall terminate the employment agreement signed by such personnel and require the aforementioned personnel to compensate all losses suffered by Party A or the companies.

3.4 After completion of the Transaction, Target Company shall establish a board of directors and supervisors. The board of directors consists of three directors, two of which will be nominated by Party A and one by Party B. Target Company shall have one supervisor, who will be appointed by Party B. The general manager of Target Company will be appointed by Party B (Party B has initially appointed Mr. Yuwen Li).

Both parties strive to ensure the stability of Target Company’s personnel and operations, and use their respective advantages to improve the performance of Target Company.

3.5 After the transfer of the Target Securities, the management of the Target Company will diligently perform its operational management responsibilities, and submit the three-year plan and annual budget plan of Target Company to Party A within 90 days after signing of this Agreement. In addition, they are to develop management performance appraisal plan according to the strategic plan and annual targets.

Article4 Closing and Profit Distribution

4.1 Within four years from the execution of this Agreement, Target Company shall not make any profit distribution. The profit will be used for the future working capital.

4.2 The parties to this Agreement have agreed to make every effort to cooperate and take all measures (including but not limited to signing or procuring a third party to sign any document, making an application and obtaining any relevant approvals, consents or permits, or completing any relevant registration and filing procedures) to ensure that the Closing is in time, legal and valid.

Article5 Party A’s Representations and Warranties

5.1 The representations and warranties made by Party A in this Article are true and accurate. Party B may rely on such representations and warranties to enter into this Agreement.

5.2 Party A is a company legally established and validly existing in accordance with laws in China. It has full legal rights to sign, perform and complete the Transaction described in this Agreement, and has obtained appropriate authorization to perform all necessary actions

5.3 To perform this Agreement and complete the Transaction, Party A will not:

(1) violate any provisions of Party A’s organizational documents;

(2) violate the terms or provisions of any binding agreement or documents, of which Party A is a party;

(3) violate any laws, regulations or regulatory documents applicable to Party A.

5.4 In order to successfully complete this Transaction, Party A shall provide active and sufficient cooperation and assistance in matters that are necessary.

Article6 Party B’s Representations and Warranties

6.1 The representations and warranties made by Party B in this Article are true and accurate. Party A may rely on such representations and warranties to enter into this Agreement.

6.2 Every party in Party B is a Chinese citizen with full capacity for civil conduct, has full legal rights to sign, perform and complete the Transactions contemplated by this Agreement, and has obtained appropriate authorization to perform all necessary actions.

6.3 Target Company (including its subsidiaries, same as below) legally owns the assets and has qualifications necessary for its production and operation, and complies with relevant laws and regulations in all aspects of production and operation.

6.4 Party B and Target Company guarantees that Target Company including its subsidiaries, do not sign, perform and complete any important assets or any other liabilities.

6.5 Party B guarantees that the equity transferred to Party A is the actual investment of Party B in Target Company, and it is the legally owned equity and has full power to dispose it. There are no other interest arrangements such as holding shares. Party B guarantees that there is no other burden of mortgage, pledge or guarantee on the transferred equity, and guarantees that it will not be subject to any third party recourse. Party B has the right to transfer it to Party A.

6.6 To perform this Agreement and complete the Transactions contemplated by this Agreement, neither party of Party B will:

(1) violate the terms or regulations of any binding agreement or document of which he is a party;

(2) violate any laws, regulations or regulatory are applicable to that party.

6.7 Prior to the closing date, Party B has legally holds the Underlying Equity, and there is no pledge, judicial freeze or other restrictions on the transfer of the Underlying Equity. Party B has the right to transfer the equity interest to Party A.

6.8 The information or materials provided by Party B to Party A in this Transaction are true, accurate and complete.

6.9 Target Company legally owns the assets and has qualifications necessary for its production and operation, and complies with relevant laws and regulations in all aspects of production and operation.

There is no violation of any relevant Chinese laws and regulations that may materially and adversely affect the transaction. There is no outstanding, unfulfilled or foreseeable major investigation, judgement, decision or penalty. Except as otherwise provided for in this Agreement, any damage, compensation, fines and compensation due to any misconduct of Target Company before the closing date (including but not limited to violations of laws in the fields of tax, industry and commerce, product quality, environmental protection, intellectual property rights, social insurance, housing fund, intellectual property rights and so on) shall be borne by Party B.

6.10 Except for the liabilities reflected in the financial statements provided by Party B to Party A, Target Company does not have any other liabilities (including existing liabilities and contingent liabilities arising from Target Company providing guarantees, mortgages, pledges or other forms of guarantees). If Target Company has other liabilities not disclosed by Party B or any fines, penalties, compensations, taxes payable and other liabilities assumed by Target Company due to facts or reasons that occurred or existed before the closing date, Party B shall be responsible. For the documents that Party B and Target Company have provided to Party A, Party A shall issue a list of documents to Party B.

6.11 Party B promises that Party B and other enterprises under its control will not engage in business that competes with Target Company. If Party B and its affiliates involve in the main business of Target Company, they should transfer the business to Target Company as required by Party A.

6.12 Party B guarantees that the Underlying Equity will be transferred to Party A within the agreed time. Party A shall provide active and full cooperation and assistance in the transfer.

6.13 Each party of Party B waives the right of first refusal to transfer the equity of Target Company to Party A.

6.14 Party B guarantees that the “Shui Yijia” trademark (35 categories, graphics) related to Target Company’s business operations, including intellectual property rights such as Shui Yijia Fresh, YouPin, Mall, and other WeChat applets will be transferred to Target Company name within 180 days after the completion of the equity transfer.

Article7 Taxes and Fees

7.1 Regardless of whether the transaction is completed or not, all costs and expenses incurred by the parties due to the transaction (including consultant fees paid to intermediaries such as financial consultants and lawyers) shall be paid by their own.

Article8 Confidentiality

8.1 The parties agree that the following information or documents shall be kept in strict confidence by the parties from the date of execution of this Agreement to the date when the transaction is disclosed in accordance with the law after the execution of legal procedures.

(1) All the information related to this Agreement, including but not limited to the transaction plan, commercial conditions (intent), negotiation process and content, and the information that the parties to the transaction have learned before and during the process to enter into this Agreement;

(2) All documents and materials in this Agreement, including but not limited to any documents, materials, data, contracts, financial reports and so on.

(3) Other information and documents that will lead to market rumors, stock price fluctuations and other abnormal conditions once leaked or disclosed.

8.2 Without the prior written consent of the other parties to this Agreement, neither party shall disclose the above information and documents to third parties. The parties to the Transaction shall take necessary actions to limit the disclosure of the above information and documents to only those involved in the Transaction, and require such persons to strictly abide by the provisions of this Article.

8.3 The following shall not be deemed as disclosure or disclosure of information and documents:

(1) the information and documents disclosed were known to the public before disclosure;

(2) disclosure pursuant to a mandatory requirement of law, regulation or normative document, or a decision, order or requirement of a competent government agency (such as the SEC), or a judgment, order or award of a court or arbitration institution;

(3) for the purpose of entering into and performing this Agreement, the disclosure to each intermediary agency before and/or after hiring each intermediary agency (including independent financial consultants, auditors, assessors and lawyers).

Article9 Force Majeure

9.1 If any party to this Agreement is unable to perform this Agreement due to any occurrence of force majeure after the signing of this Agreement, the party affected by force majeure shall notify the other party within ten working days from the date on which the force majeure occurs, and such notice shall specify the occurrence of the force majeure and declare the event as force majeure. At the same time, the party affected by the force majeure shall try its best to take measures to reduce the losses caused by the force majeure and protect the legitimate rights and interests of the other party. Force majeure refers to unforeseeable, unavoidable and insurmountable objective circumstances when the Agreement is entered into.

9.2 In the event of force majeure, the parties to the Transaction shall discuss to determine whether this Agreement will continue to be performed, postponed or terminated. After the elimination of force majeure, if this Agreement can still be performed, the parties shall still be obliged to take reasonable and feasible actions to perform this Agreement. The party affected by force majeure shall send a notice of the elimination of force majeure to the other party as soon as possible, and the other party shall confirm upon receipt of the notice.

9.3 In the event of force majeure that renders this Agreement unenforceable, this Agreement will terminate and the party suffering from force majeure shall not be liable for the foregoing termination of this Agreement. If the performance of this Agreement is partially unable or delayed due to force majeure, the party affected by the force majeure shall not be liable for any breach of this Agreement.

Article10 Breach of Contract

10.1 After this Agreement takes effect, if Party A fails to pay the consideration within the agreed period as in Article 2.6, it shall pay a liquidated damages to the Transferor at the rate of 0.01% per day of the unpaid amount.

10.2 After this Agreement takes effect, if the registration of equity transfer does not complete within the required period due to Transferor’s fault, the Transferor shall bear the liquidated damages at the rate of 0.01% per day of the transaction consideration that Party A has paid to the Transferor.

10.3 Unless otherwise provided for in the terms of this Agreement, if either party breaches its obligations under this Agreement or the representations and warranties made herein, the other party shall have the right to require it to perform the corresponding obligations or/and take necessary measures to ensure that it complies with the representations or warranties made herein. In case of any loss caused to the Transferor due to Party A’s violation of obligations hereunder or its representations and warranties, Party A shall indemnify the transferor for all losses (including reasonable expenses incurred by the transferor to avoid losses). In case of any loss caused to Party A due to any breach of obligations hereunder or any representations or warranties made by either party, the breaching party shall indemnify the other party for all losses caused to Party A (including reasonable expenses incurred by Party A to avoid losses).

10.4 For the purpose of this Agreement, the parties to this Agreement further declare that if the performance of this Agreement is delayed or impossible due to acts of approval or permission of regulatory authorities, competent authorities or relevant government departments, or changes in laws and policies, the inability to performance shall not be regarded as a breach of the contract by the party, and the parties shall negotiate and facilitate the continued performance of the transaction in a reasonable and legal manner.

10.5 Under this Agreement, Party A and Party D shall bear joint and several liability to Party B for any of their responsibilities/obligations under this Agreement while Party B and Party C shall bear joint and several liability to Party A and D for any their responsibilities/obligations under this Agreement.

Article11 Applicable Laws and Dispute Resolution

11.1 The interpretation and performance of this Agreement shall be governed by and construed in accordance with the laws of China.

11.2 Any disputes arising out of or in connection with this Agreement shall first be resolved through friendly negotiation. If it cannot be settled through negotiation, either party has the right to submit the dispute to the China ShenZhen International Arbitration Court.

11.3 Except for the terms of the dispute, the validity of other terms of this Agreement will not be affected during the settlement of the dispute.

Article12 Effectiveness

This Agreement shall come into force upon being signed and sealed by the authorized representatives of Party A, Party B, Party C and Party D.

Article13 Miscellaneous

13.1 The termination or invalidity of certain or partial provisions hereof in accordance with the law or in accordance with the provisions hereof shall not affect the validity of other provisions hereof. The breach of this Agreement by any party of Party B shall not affect the continued performance of this Agreement by the other party.

13.2 This Agreement constitutes the entire agreement of the parties to the Transaction on matters related to this Agreement and replaces any agreement, statement, memorandum, correspondence or any other document made prior to this Agreement.

13.3 Except as otherwise agreed herein, no party in this Agreement may in any way assign all or part of its rights, rights, responsibilities, or obligations under this Agreement without the prior written consent of the other parties.

13.4 Unless otherwise provided by laws and regulations or a party expressly waives its rights, if any party fails to exercise or delays the exercise of any of its rights under this Agreement, it does not constitute a waiver of those rights by that party.

13.5 All parties agree that if the parties need to sign a separate equity transfer agreement for the purpose of equity transfer registration as required by the local competent authority of Target Company, the parties shall sign the equity transfer agreement without violating the terms of this Agreement. The parties confirm that the equity transfer agreement is only for the purpose of facilitating the registration of equity transfer, and this Agreement between the parties regarding the transaction shall be subject to this Agreement and the annexes and appendices hereto.

13.6 This Agreement has six originals copies, one for each party, and the rest are kept by Party A. Each original copy shall have the same legal effect.

13.7 Each party hereby declares and confirms that before signing this Agreement, all parties have sufficient opportunity and time to hire a legal counsel and have sufficient opportunity to discuss and review the contents of this Agreement with their respective counsels. The parties further state and confirm that they had sufficient time to review the contents of this Agreement and have voluntarily entered into this Agreement.

(no text below, signature page)

(This page is the signature page of the Equity Interest Transfer Agreement.)

Party A: Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. (seal) [Corporate Seal Affixed Herein]

Signature of the legal representative or authorized representative: /s/ Yumin Lin

Party B1 (Signature): /s/ Yuwen Li

Party B2 (Signature): /s/ Zhipeng Zuo

Party C: Dongguan Xixingdao Technology Co., Ltd. (seal) [Corporate Seal Affixed Herein]

Party D: Fortune Valley Treasures, Inc. (seal) [Corporate Seal Affixed Herein]

Signature of authorized representative: /s/ Yumin Lin

EXHIBIT31.1

CERTIFICATIONOF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Yumin Lin, certify that:

(1) I have reviewed this Form 10-Q of Fortune Valley Treasures, Inc. (the “Registrant”);

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

(4) The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with the United States generally accepted accounting principles;

(c) Evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s internal control over financial reporting; and

(5) The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the Registrant’s board of directors:

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:<br> August 14, 2020
	By:	/s/ Yumin Lin
	Name:	Yumin<br> Lin
	Title:	Chief<br> Executive Officer, President and Secretary
		(Principal<br> Executive Officer)

EXHIBIT31.2

CERTIFICATIONOF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kaihong Lin, certify that:

(1) I have reviewed this Form 10-Q of Fortune Valley Treasures, Inc. (the “Registrant”);

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

Date:<br> August 14, 2020
	By:	/s/ Kaihong Lin
	Name:	Kaihong<br> Lin
	Title:	Chief<br> Financial Officer and Treasurer
		(Principal<br> Financial and Accounting Officer)

Exhibit32.1

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADDED BY

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission (the “Report”), I, Yumin Lin, Chief Executive Officer, President and Secretary of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

1.	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	To<br> my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and<br> results of operations of the Company as of and for the period covered by the Report.
Date:<br> August 14, 2020
---	---	---
	By:	/s/ Yumin Lin
	Name:	Yumin<br> Lin
	Title:	Chief<br> Executive Officer, President and Secretary
		(Principal<br> Executive Officer)

Exhibit32.2

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADDED BY

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the quarter ended June 30, 2020, as filed with the Securities and Exchange Commission (the “Report”), I, Kaihong Lin, Chief Financial Officer and Treasurer of the Company, certify, pursuant to 18 U.S.C. §1350, as added by §906 of the Sarbanes-Oxley Act of 2002, that:

1.	The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	To<br> my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and<br> results of operations of the Company as of and for the period covered by the Report.
Date:<br> August 14, 2020
---	---	---
	By:	/s/ Kaihong Lin
	Name:	Kaihong<br> Lin
	Title:	Chief<br> Financial Officer and Treasurer
		(Principal<br> Financial and Accounting Officer)