Equibles

10-Q

Fortune Valley Treasures, Inc. (FVTI)

10-Q 2024-08-14 For: 2024-06-30
View Original
Added on April 06, 2026

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-Q

☒

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

Forthe Quarterly Period Ended ### June 30, 2024

or

☐

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

For

the transition period from _________ to _________

Commission

File Number 000-55555

FortuneValley Treasures, Inc.

(Exact name of registrant issuer as specified in its charter)

Nevada 32-0439333
(State<br> or other jurisdiction <br><br> of incorporation or organization) (I.R.S.<br> Employer<br><br> <br>Identification<br> No.)

16th

Floor, Building 2, A+Building

No.139 Liansheng Road, Humen Town

DongguanCity, Guangdong Province, China 523000

(Address of principal executive offices, including zip code)

(86)769-85729133

(Registrant’s phone number, including area code)

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

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.001 per share

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 issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ 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 ☒ 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 ☒ Smaller<br> reporting company ☒
Emerging<br> growth company ☐

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

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

Yes ☐ No ☒

As

of August 14, 2024, there were 15,655,038 shares, par value $0.001, of the registrant’s common stock outstanding.

TABLE

OF CONTENTS

Page
PART I FINANCIAL INFORMATION 3
ITEM<br> 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS: 3
Condensed Consolidated Balance Sheets as of June 30, 2024 (Unaudited) and December 31, 2023 3
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2024 and 2023 (Unaudited) 4
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three & Six Months Ended June 30, 2024 and 2023 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements for the Six Months Ended June 30, 2024 and 2023 (Unaudited) 7
ITEM<br> 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 17
ITEM<br> 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 20
ITEM<br> 4. CONTROLS AND PROCEDURES 20
PART II OTHER INFORMATION 22
ITEM<br> 1 LEGAL PROCEEDINGS 22
ITEM<br> 2 UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 22
ITEM<br> 3 DEFAULTS UPON SENIOR SECURITIES 22
ITEM<br> 4 MINE SAFETY DISCLOSURES 22
ITEM<br> 5 OTHER INFORMATION 22
ITEM<br> 6 EXHIBITS 22
SIGNATURES 23 
| 2 |

| --- |

PART

I - FINANCIAL INFORMATION

Item1. Condensed Consolidated Financial Statements.

FORTUNE

VALLEY TREASURES, INC.

CONDENSED

CONSOLIDATED BALANCE SHEETS

AS

OF JUNE 30, 2024 AND DECEMBER 31, 2023

December 31, 2023
Assets
Current assets
Cash and cash equivalents 7,410 $ 288,255
Accounts receivable, net (including 33,043 and 61,113 from related parties as of June 30, 2024 and December 31, 2023, respectively) 2,155,612 3,118,892
Inventories 34,546 32,587
Prepayments and other current assets, net (including 806,932 and 941,978 to related parties as of June 30, 2024 and December 31, 2023, respectively) 1,454,869 1,643,455
Total current assets 3,652,437 5,083,189
Non-current assets
Deposits paid, net (including 523,886 and 536,450 to related parties as of June 30, 2024 and December 31, 2023, respectively) 603,970 618,456
Property and equipment, net 65,544 83,706
Operating lease right-of-use assets 171,989 248,626
Operating lease right-of-use assets, related parties 55,133 63,553
Operating lease right-of-use assets 55,133 63,553
Intangible assets, net 46,364 151,639
Total Assets 4,595,437 $ 6,249,169
Liabilities and Stockholders’ Equity
Current liabilities
Operating lease obligations – current 90,801 $ 119,633
Operating lease obligations, related parties - current 12,730 16,986
Operating lease obligations current 12,730 16,986
Accounts payable (including 187,954 and 162,310 to related parties as of June 30, 2024 and December 31, 2023, respectively) 518,058 583,887
Accrued liabilities 756,864 627,457
Bank and other borrowings - current 420,636 458,023
Income tax payable - 1,453
Customer advances 1,338,274 1,364,260
Due to related parties 1,015,727 680,226
Total current liabilities 4,153,090 3,851,925
Non-current liabilities
Operating lease obligations – non-current 76,899 153,487
Operating lease obligations, related parties – non-current 31,423 40,877
Operating lease obligations non-current 31,423 40,877
Bank and other borrowings 218,028 212,042
Total Liabilities 4,479,440 4,258,331
Stockholders’ Equity
Common stock, 150,000,000 shares authorized, 15,655,038 shares issued and outstanding as of June 30, 2024 and December 31, 2023 15,655 15,655
Additional paid-in capital 11,061,233 11,061,233
Accumulated deficit and statutory reserves (10,280,026 ) (8,551,019 )
Accumulated other comprehensive loss (499,540 ) (406,190 )
Total Fortune Valley Treasures, Inc. stockholders’ equity 297,322 2,119,679
Noncontrolling interests (181,325 ) (128,841 )
Total Stockholders’ Equity 115,997 1,990,838
Total Liabilities and Stockholders’ Equity 4,595,437 $ 6,249,169

All values are in US Dollars.

See

accompanying notes to the unaudited condensed consolidated financial statements.

| 3 |

| --- |

FORTUNE

VALLEY TREASURES, INC.

CONDENSED

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

FOR

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

2023 2024 2023
Six months ended<br> <br>June 30
2023 2024 2023
Net revenues (including 5,907 and 42,848 from related parties for the three months ended June 30, 2024 and 2023, respectively; 9,751 and 69,598 from related parties for the six months ended June 30, 2024 and 2023, respectively) 247,061 $ 1,272,597 $ 514,883 $ 2,907,886
Cost of revenues (including 79,439 and 133,114 from related parties for the three months ended June 30, 2024 and 2023, respectively; 167,351 and 362,096 from related parties for the six months ended June 30, 2024 and 2023, respectively) 202,785 652,798 415,674 1,330,165
Gross profit 44,276 619,799 99,209 1,577,721
Operating expenses:
Selling and distribution expenses 12,198 13,016 24,795 26,258
General and administrative expenses 804,228 1,027,572 1,839,505 1,978,967
Operating loss (772,150 ) (420,789 ) (1,765,091 ) (427,504 )
Other income (expense):
Other income 2,213 6,436 5,207 8,210
Interest income 3 16 33 47
Interest expense (7,699 ) (8,964 ) (18,543 ) (18,256 )
Other expense, net (5,483 ) (2,512 ) (13,303 ) (9,999 )
Loss before income tax (777,633 ) (423,301 ) (1,778,394 ) (437,503 )
Income tax expense 90 21,528 409 96,502
Net loss (777,723 ) $ (444,829 ) $ (1,778,803 ) $ (534,005 )
Less: Net loss attributable to noncontrolling interests (48,247 ) (58,004 ) (49,796 ) (58,361 )
Net loss attributable to Fortune Valley Treasures, Inc. (729,476 ) (386,825 ) (1,729,007 ) (475,644 )
Other comprehensive loss:
Foreign currency translation loss (26,707 ) (422,433 ) (96,038 ) (376,961 )
Total comprehensive loss (804,430 ) (867,262 ) (1,874,841 ) (910,966 )
Less: comprehensive loss attributable to noncontrolling interests (50,828 ) (99,383 ) (52,484 ) (99,558 )
Comprehensive loss attributable to Fortune Valley Treasures, Inc. (753,602 ) $ (767,879 ) $ (1,822,357 ) $ (811,408 )
Loss per share
Basic and diluted loss per share of common stock (0.05 ) $ (0.02 ) $ (0.11 ) $ (0.03 )
Basic and diluted weighted average shares outstanding 15,655,038 $ 15,655,038 $ 15,655,038 $ 15,655,038

All values are in US Dollars.

See

accompanying notes to the unaudited condensed consolidated financial statements.

| 4 |

| --- |

FORTUNE

VALLEY TREASURES, INC.

CONDENSED

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

Number<br> <br>of shares Amount Paid-in<br> <br>Capital Comprehensive<br> <br>Loss Statutory<br> <br>Reserves controlling<br> <br>Interests Stockholders’<br> <br>Equity
Common Stock Additional Accumulated<br> <br>Other Accumulated<br> <br>Deficit and Non Total
Number<br> <br>of shares Amount Paid-in<br> <br>Capital Comprehensive<br> <br>Loss Statutory<br> <br>Reserves controlling<br> <br>Interests Stockholders’<br> <br>Equity
Balance as of December 31, 2023 15,655,038 $ 15,655 $ 11,061,233 $ (406,190 ) $ (8,551,019 ) $ (128,841 ) $ 1,990,838
Net loss - - - - (999,531 ) (1,549 ) (1,001,080 )
Foreign currency translation adjustment - - - (69,224 ) - (107 ) (69,331 )
Balance as of March 31, 2024 15,655,038 $ 15,655 $ 11,061,233 $ (475,414 ) $ (9,550,550 ) $ (130,497 ) $ 920,427
Net loss - - - - (729,476 ) (48,247 ) (777,723 )
Foreign currency translation adjustment - - - (24,126 ) - (2,581 ) (26,707 )
Balance as of June 30, 2024 15,655,038 $ 15,655 $ 11,061,233 $ (499,540 ) $ (10,280,026 ) $ (181,325 ) $ 115,997
Common Stock Additional Accumulated<br> <br>Other Accumulated<br> <br>Deficit and Non Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Number<br> <br>of shares Amount Paid-in<br> <br>Capital Comprehensive<br> <br>Income (Loss) Statutory<br> <br>Reserves controlling<br> <br>Interests Stockholders’<br> <br>Equity
Balance as of December 31, 2022 15,655,038 $ 15,655 $ 11,061,233 $ (180,826 ) $ (4,504,404 ) $ 108,251 $ 6,499,909
Net loss - - - - (88,819 ) (357 ) (89,176 )
Foreign currency translation adjustment - - - 45,290 - 182 45,472
Balance as of March 31, 2023 15,655,038 $ 15,655 $ 11,061,233 $ (135,536 ) $ (4,593,223 ) $ 108,076 $ 6,456,205
Balance 15,655,038 $ 15,655 $ 11,061,233 $ (135,536 ) $ (4,593,223 ) $ 108,076 $ 6,456,205
Net loss - - - - (386,825 ) (58,004 ) (444,829 )
Foreign currency translation adjustment - - - (381,054 ) - (41,379 ) (422,433 )
Balance as of June 30, 2023 15,655,038 $ 15,655 $ 11,061,233 $ (516,590 ) $ (4,980,048 ) $ 8,693 $ 5,588,943
Balance 15,655,038 $ 15,655 $ 11,061,233 $ (516,590 ) $ (4,980,048 ) $ 8,693 $ 5,588,943

See

accompanying notes to the unaudited condensed consolidated financial statements.

| 5 |

| --- |

FORTUNE

VALLEY TREASURES, INC.

CONDENSED

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR

THE SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

2024 2023
Six months ended June 30,
2024 2023
Cash flows from operating activities
Net loss $ (1,778,803 ) $ (534,005 )
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense 116,406 124,680
Non-cash lease expense 78,396 91,369
Allowance for credit losses 1,119,983 960,144
Loss on disposal of intangible asset - 1,855
Changes in operating assets and liabilities
Accounts receivable, net (222,303 ) (896,403 )
Inventories (2,745 ) 68,723
Prepayments and other current assets, net 151,351 232
Deposits paid, net 1 (12,080 )
Accounts payable (52,590 ) 32,763
Due to related parties 280,612 111,324
Customer advances 6,016 (17,538 )
Accrued liabilities 142,612 74,167
Income tax payable (1,431 ) (17,871 )
Operating lease obligations (112,310 ) (73,176 )
Net cash used in operating activities (274,805 ) (85,816 )
Cash flows from investing activities
Acquisition of property and equipment (4,786 )
Acquisition of intangible asset - (702 )
Net cash used in investing activities - (5,488 )
Cash flows from financing activities
Borrowings from and repayments to revolving credit lines, net - 7,224
Borrowings from bank loans 74,927 113,418
Repayments of bank loans (109,896 ) (58,299 )
Borrowings from and repayments to third party, net 34,839 (19,541 )
Net cash (used in) provided by financing activities (130 ) 42,802
Effect of exchange rate changes on cash and cash equivalents (5,910 ) (41,233 )
Net changes in cash and cash equivalents (280,845 ) (89,735 )
Cash and cash equivalents–beginning of the period 288,255 165,685
Cash and cash equivalents–end of the period $ 7,410 $ 75,950
Supplementary cash flow information:
Interest paid $ 18,543 $ 18,378
Income taxes paid $ 2,495 $ 152,140
Non-cash investing and financing activities
Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 67,520 $ 39,797
Liabilities assumed in connection with purchase of property and equipment $ - $ 28,234

See

accompanying notes to the unaudited condensed consolidated financial statements.

| 6 |

| --- |

FORTUNE

VALLEY TREASURES, INC.

NOTES

TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR

THE THREE AND SIX MONTHS ENDED JUNE 30, 2024 AND 2023

(Unaudited)

NOTE

1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

On

April 11, 2018, the Company entered into a share exchange agreement by and among DaXingHuaShang Investment Group Limited (“DIGLS”) and its shareholders: 1.) Yumin Lin, 2.) Gaosheng Group Co., Ltd. and 3.) China Kaipeng Group Co., Ltd. whereby the Company newly issued 15,000,000 shares of its common stock in exchange for all the outstanding shares in DIGLS. This transaction has been accounted for as 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’s historical statement of stockholders’ equity has been retroactively restated to the first period presented.

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 closed on March 1, 2019. Pursuant to the SP Agreement, the Company issued 5 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 interest of Jiujiu (HK) Industry Limited (“JJHK”) and Jiujiu (Shenzhen) Industry Co., Ltd. (“JJSZ”). JJGS, JJHK and JJSZ did not have any material assets or liabilities as of December 31, 2019, and they did not have any substantial operations or active business during the year ended December 31, 2019.

On

June 22, 2020, the Company entered into a sale and purchase agreement along with Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd., a company incorporated in China and a wholly-owned subsidiary of FVTI (“QHDX”), to acquire 90% of the shares of Dongguan Xixingdao Technology Co., Ltd. (“Xixingdao”), a company incorporated in the PRC, from certain shareholders of Xixingdao in exchange for 243,134 shares of the Company’s common stock. The Company obtained the control of Xixingdao on August 31, 2020, the shares were issued on December 28, 2020. Xixingdao became the Company’s subsidiary since August 31, 2020.

On June 3, 2024, Mr. Yumin Lin tendered his resignation as a member of the board of directors (the “Board”) and Chief Executive Officer of Fortune Valley Treasures, Inc. (the “Company”) due to personal reasons. The Board accepted the resignation of Mr. Lin. Mr. Lin’s resignation was not the result of any disagreement with the Company, the Company’s management or the Board. Effective June 6, 2024, the Board elected Mr. Yuwen Li to serve as a director and Chairman of the Board. Effective June 6, 2024, the Board appointed Mr. Li as the Chief Executive Officer of the Company. In connection with such appointment, Mr. Li has resigned from other executive positions he previously held with subsidiaries of the Company.

Going concern

The

accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and fulfillment of obligations in the normal course of business. The realization of assets and fulfillment of obligations in the normal course of business is dependent on, among other things, the Company’s ability to generate sufficient cash flows from operations, and the Company’s ability to arrange adequate financing arrangements. As of June 30, 2024, the Company had a negative working capital of $500,653, including cash and cash equivalents of $7,410, and accumulated deficit and statutory reserves of $10,280,026. For the six months ended June 30, 2024, the Company incurred net loss of $1,778,803 and had net cash outflows of $274,805 from operating activities.

The Company requires additional capital within the next six months to fund the continued operations of the Company. In order to support the Company’s operations, the Company plans to take actions to increase revenues and cash inflows by promoting product sales, expanding customer base and making additional efforts in accounts receivable collections, in addition to seeking bank borrowings and funding from shareholders. If the Company is unable to obtain additional equity or debt financing as required, the business operations and prospects of the Company may suffer.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements as of June 30, 2024 and for the six months ended June 30, 2024 and 2023, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. The condensed consolidated balance sheet information as of December 31, 2023 was derived from the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2023, filed with the SEC on April 15, 2024 (the “report”). These unaudited condensed consolidated financial statements should be read in conjunction with the report.

Basis of consolidation

The unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. The results of subsidiaries acquired during the respective periods are included in the consolidated statements of operations from the effective date of acquisition or up to the effective date of disposal, as appropriate. The portion of the income or loss applicable to noncontrolling interests in subsidiaries is reflected in the unaudited condensed consolidated statements of operations.

| 7 |

| --- |

As of June 30, 2024, details of the Company’s major subsidiaries were as follows:

SCHEDULE

OF ENTITIES AND ITS SUBSIDIARIES

Entity Name Date of<br> <br>Incorporation Parent<br> <br>Entity % Owned<br><br> <br>by FVTI Nature of<br> <br>Operation Place of<br> <br>Incorporation
DIGLS July 4, 2016 FVTI 100 % Investment holding Republic of Seychelles
DILHK June 22, 2016 DIGLS 100 % Investment holding Hong Kong, PRC
QHDX November 3, 2016 DILHK 100 % Investment holding PRC
FVTL May 31, 2011 QHDX 100 % Trading of food and platform PRC
JJGS August 17, 2017 FVTI 100 % Investment holding Republic of Seychelles
JJHK August 24, 2017 JJGS 100 % Investment holding Hong Kong, PRC
JJSZ November 16, 2018 JJHK 100 % Trading of food PRC
Xixingdao August 28, 2019 QHDX 100 % Drinking water distribution and delivery PRC
Dongguan City Fu La Tu Trade Ltd (“FLTT”) September 27, 2020 FVTL 100 % Trading of alcoholic beverages PRC
Dongguan City Fu Xin Gu Trade Ltd (“FXGT”) December 2, 2020 FVTL 100 % Trading of alcoholic beverages PRC
Dongguan City Fu Xin Technology Ltd (“FXTL”) November 12, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”) December 21, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Jing Technology Ltd (“FJTL”) November 17, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Xiang Technology Ltd (“FGTL”) November 16, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”) November 9, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Lai Food Ltd (“FLFL”) September 27, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Yi Beverage Ltd (“FYBL”) November 12, 2020 Xixingdao 90 % Drinking water distribution and delivery PRC
Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”) March 17, 2021 Xixingdao 90 % Drinking water distribution and delivery, sales of alcoholic beverages and water purifier PRC
Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”) March 29, 2021 Xixingdao 90 % Drinking water distribution and delivery, sales of water purifier PRC
Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”) March 29, 2021 Xixingdao 90 % Drinking water distribution and delivery, sales of water purifier PRC
Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”) June 7, 2021 Xixingdao 90 % Drinking water distribution and delivery, sales of water purifier PRC
Dongguan City Fu Li Trading Ltd (“FLTL”) September 10, 2021 Xixingdao 90 % Drinking water distribution and delivery, sales of water purifier PRC
Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”) September 13, 2021 QHDX 100 % Trading of alcoholic beverages PRC
Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”) September 9, 2022 FVTL 100 % Trading of alcoholic beverages PRC
Dongguan City Chang Fu Trading Ltd (“CFTL”) September 9, 2022 FVTL 100 % Trading of alcoholic beverages PRC
Dongguan City La Tong Trading Ltd (“LTTL”) August 8, 2022 FVTL 100 % Trading of alcoholic beverages PRC
Dongguan City Kai Fu Trading Ltd (“KFTL”) September 8, 2022 FVTL 100 % Trading of alcoholic beverages PRC 
| 8 |

| --- |

Use of estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant accounting estimates include certain assumptions related to going concern, allowance of credit losses, allowance of deferred tax asset and uncertain tax position, implicit interest rate of operating leases, useful lives and impairment of long-lived assets, and impairment of goodwill. Actual results may differ from these estimates.

Foreign currency translation and re-measurement

The Company translates its foreign operations to 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, DILHK, JJGS and JJHK’s functional currency is the U.S. dollar; QHDX, JJSZ and their subsidiaries which are incorporated in PRC 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
● 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
● Revenue<br> and expense items at the average rate of exchange prevailing during the period

Translation of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

SCHEDULE

OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

2023
2023
Period-end RMB:US1 exchange rate 0.13760 0.13880
Period-average RMB:US1 exchange rate 0.13875 0.14448

All values are in US Dollars.

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.

Impairment of long-lived assets other than goodwill

The Company reviews its long-lived assets for impairment 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.

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.

The Company did not recognize any impairment of long-lived assets during the six months ended June 30, 2024 and 2023.

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination. In accordance with FASB ASC Topic 350, “Intangibles-Goodwill and Others”, goodwill is subject to at least an annual assessment for impairment or more frequently if events or changes in circumstances indicate that an impairment may exist, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis. The Company would recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the amount of goodwill allocated to that reporting unit.

During the six months ended June 30, 2024 and 2023, the Company did not record any impairment of goodwill.

| 9 |

| --- |

Revenue recognition

The Company follows the guidance of ASC 606, 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.

Under Topic 606, revenues are recognized when the promised products have been confirmed of delivery or services have been transferred to the consumers in amounts that reflect the consideration the customer expects to be entitled to in exchange for those services. The Company presents value added taxes (“VAT”) as reductions of revenues. The Company recognizes revenues net of value added taxes (“VAT”) and relevant charges.

We generate revenue primarily from the sales of liquor, water, water purifier and other products directly to agents, wholesalers and end users, with majority of sales transactions were conducted offline. We recognize product revenue at a point in time when the control of the products has been transferred to customers. The transfer of control is considered complete when products have been picked up by or delivered to our customers. We account for shipping and handling fees as a fulfillment cost.

The following table provides information about disaggregated revenue based on revenue by product types:

SCHEDULE

OF DISAGGREGATION REVENUE

2024 2023 2024 2023
Three months ended <br> June 30, Six months ended <br> June 30,
2024 2023 2024 2023
Sales of liquor $ 81,809 $ 878,952 $ 152,053 $ 1,782,672
Sales of water 80,455 213,582 172,834 633,202
Sales of water purifier 54,362 114,714 113,250 367,837
Others 30,435 65,349 76,746 124,175
Total $ 247,061 $ 1,272,597 $ 514,883 $ 2,907,886

Contract liabilities

Contract

liabilities consist mainly of customer advances. On certain occasions, the Company may receive prepayments from downstream retailers or wholesales customers for liquors, water and other products prior to them taking possession of the Company’s products. The Company records these receipts as customer advances until the control of the products has been transferred the customers. As of June 30, 2024 and December 31, 2023, the Company had customer advances of $1,338,274 and $1,364,260, respectively. During the six months ended June 30, 2024, the Company recognized $78,300 of customer advances in the opening balance.

Related party transaction

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Recently adopted accounting pronouncements

In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments. ASU No. 2016-13 was further amended in November 2020 by ASU No. 2020-10, Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842). As a result, ASC Topic 326, Financial Instruments – Credit Losses is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU No. 2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC Topic 606, “Revenue from Contracts with Customers”. This ASU is expected to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU No. 2021-08 on January 1, 2023 and the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

| 10 |

| --- |

NOTE

2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following as of June 30, 2024 and December 31, 2023:

SCHEDULE

OF ACCOUNTS RECEIVABLE

December 31, 2023
Accounts receivable (including 77,373 and 70,710 from related parties as of June 30, 2024 and December 31, 2023, respectively) 4,945,006 $ 4,837,852
Less: Doubtful allowance (including 44,330 and 9,597 from related parties as of June 30, 2024 and December 31, 2023, respectively) (2,789,394 ) (1,718,960 )
Accounts receivable, net 2,155,612 $ 3,118,892

All values are in US Dollars.

Allowance for doubtful accounts movement is as follows:

SCHEDULE

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

June 30, 2024 December 31, 2023
Beginning balance $ 1,718,960 $ -
Additions to allowance 1,119,983 1,726,142
Foreign currency translation adjustment (49,549 ) (7,182 )
Ending balance $ 2,789,394 $ 1,718,960

NOTE

3 – PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments and other current assets consisted of the following as of June 30, 2024 and December 31, 2023:

SCHEDULE

OF PREPAYMENT AND OTHER CURRENT ASSETS

December 31, 2023
Prepayments (including 2,591,888 and 2,769,741 to related parties as of June 30, 2024 and December 31, 2023, respectively) 3,750,197 $ 3,995,750
Other current assets 4,152 2,330
Total prepayments and other current assets 3,754,349 3,998,080
Less: Allowance for doubtful accounts (including 1,784,956 and 1,827,763 to related parties as of June 30, 2024 and December 31, 2023, respectively) (2,299,480 ) (2,354,625 )
Prepayments and other current assets, net 1,454,869 $ 1,643,455

All values are in US Dollars.

Balance of prepayments represented the advanced payments to suppliers including related party suppliers.

Allowance for doubtful accounts movement is as follows:

SCHEDULE

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

June 30, 2024 December 31, 2023
Beginning balance $ 2,354,625 $ 1,247,580
Additions to allowance - 1,169,058
Foreign currency translation adjustment (55,145 ) (62,013 )
Ending balance $ 2,299,480 $ 2,354,625

NOTE

4 – DEPOSITS PAID, NET

Deposits paid consisted of the following as of June 30, 2024 and December 31, 2023:

SCHEDULE

OF DEPOSITS PAID

December 31, 2023
Deposits paid (including 1,559,656 and 1,597,060 to related parties as of June 30, 2024 and December 31, 2023, respectively) 2,258,458 $ 2,312,622
Less: Allowance for doubtful accounts (including 1,035,770 and 1,060,610 to related parties as of June 30, 2024 and December 31, 2023, respectively) (1,654,488 ) (1,694,166 )
Deposits paid, net 603,970 $ 618,456

All values are in US Dollars.

Allowance for doubtful accounts movement is as follows:

SCHEDULE

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF DEPOSITS PAID

June 30, 2024 December 31, 2023
Beginning balance $ 1,694,166 $ 1,244,350
Additions to allowance - 484,800
Foreign currency translation adjustment (39,678 ) (34,984 )
Ending balance $ 1,654,488 $ 1,694,166 
| 11 |

| --- |

NOTE

5 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of June 30, 2024 and December 31, 2023:

SCHEDULE

OF PROPERTY AND EQUIPMENT

December 31, 2023
Office equipment (including 9,026 and nil to the disposal of office equipment as of June 30, 2024 and December 31, 2023, respectively) 94,784 $ 106,225
Leasehold improvement 111,814 114,495
Vehicle 31,635 32,393
Property and equipment 238,233 253,113
Less: Accumulated depreciation (including 9,026 and nil to the written back disposal of office equipment as of June 30, 2024 and December 31, 2023, respectively) (172,689 ) (169,407 )
Property and equipment, net 65,544 $ 83,706

All values are in US Dollars.

Depreciation

expense, which was included in general and administrative expenses, for the six months ended June 30, 2024 and 2023 was $16,337 and $18,046, respectively.

Written back depreciation expense, which was included in general and administrative expenses, for the six months ended June 30, 2024 and 2023 was $8,952 and $nil, respectively.

No gain or loss was recorded for the disposal as the property and equipment was fully depreciated with zero residual value upon disposal and no proceeds were received.

NOTE

6 – INTANGIBLE ASSETS, NET

Intangible assets and related accumulated amortization were as follows:

SCHEDULE

OF INTANGIBLE ASSETS

June 30, 2024 December 31, 2023
Distribution channel $ 2,963,947 $ 3,035,029
Others 24,836 25,601
Total intangible assets 2,988,783 3,060,630
Less: Accumulated amortization (2,026,190 ) (1,982,560 )
Less: Accumulated impairment (916,229 ) (926,431 )
Intangible assets, net $ 46,364 $ 151,639

Amortization

expense for the six months ended June 30, 2024 and 2023 was $100,069 and $106,634, respectively, included in cost of revenues and general and administrative expenses.

As of June 30, 2024, the future estimated amortization costs for intangible assets are as follows:

SCHEDULE

OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS

Year ending December 31,
2024 (remaining) $ 35,508
2025 4,967
2026 4,967
2027 922
2028 -
Total $ 46,364

NOTE

7 - RELATED PARTY TRANSACTIONS

Amounts due to related parties as of June 30, 2024 and December 31, 2023 are as follows:

SCHEDULE

OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

June 30, 2024 December 31, 2023
Mr. Yumin Lin Former President, former Chief Executive Officer, Director and majority shareholder $ 356,119 $ 341,831
Ms. Xiulan Zhou Manager of a subsidiary, Mr. Yumin Lin’s wife 4,609 2,118
Mr. Huagen Li Manager of a subsidiary 2,202 2,254
Mr. Guodong Jia Manager of a subsidiary 3,995 7,479
Mr. Hongwei Ye Manager of a subsidiary, Shareholder 15 15
Mr. Anping Chen Manager of a subsidiary 26,347 12,798
Mr. Jiangwei Jia Manager of a subsidiary 23,757 10,449
Mr. Yuwen Li President, Chief Executive Officer and Director 153,875 122,327
Ms. Lihua Li Manager of a subsidiary 38,766 14,907
Shenzhen DaXingHuaShang Industrial Group Ltd. (fka Shenzhen DaXingHuaShang Industry Development Ltd.) Mr. Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industrial Group Ltd. 82,561 84,541
Ms. Chunxiang Zhang Manager of a subsidiary 22,858 6,810
Mr. Meng Xue Manager of a subsidiary 2,527 8,204
Ms. Shuqin Chen Manager of a subsidiary 35,341 18,171
Mr. Zhipeng Zuo Manager of a subsidiary 45,227 10,103
Mr. Aisheng Zhang Manager of a subsidiary 41,093 28,751
Mr. Zhihua Liao Manager of a subsidiary 14,592 9,468
Ms. Xiuyun Wang Manager of a subsidiary 83 -
Mr. Kaihong Lin Chief Financial Officer 563 -
Mr. Minghua Cheng Majority shareholder 161,197 -
$ 1,015,727 $ 680,226 
| 12 |

| --- |

Revenues generated from related parties during the six months ended June 30, 2024 and 2023 are as follows:

SCHEDULE

OF REVENUE GENERATED FROM RELATED PARTIES

2024 2023
Six months ended June 30,
2024 2023
Mr. Kaihong Lin Chief Financial Officer and Treasurer $ - $ 278
Ms. Xiulan Zhou Manager of a subsidiary, Mr. Yumin Lin’s wife - 14
Mr. Hongwei Ye Manager of a subsidiary, Shareholder 68 -
Dongguan Huanhai Trading Co., Ltd. Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan<br>Huanhai Trading Co., Ltd. - 10,886
Guangdong Yuexin Jiaotong Construction Co., Ltd. Mr. Naiyong Luo, a manager of a subsidiary, is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd. 899 10,578
Dongguan City Hualianguan Chemical Co., Ltd. Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan<br>City Hualianguan Chemical Co., Ltd. - 14,808
Dongguan Humen Shuiyan Drinking Water Store Ms. Shuiyan Li, a shareholder of the Company, is the controlling shareholder of Dongguan Humen Shuiyan Drinking Water Store 8,305 33,034
Dongguan Zhengui Industry Ltd. Significantly influenced by the Company 479 -
Revenues generated from<br> related parties $ 9,751 $ 69,598

Cost of revenues from related parties during the six months ended June 30, 2024 and 2023 is as follows:

SCHEDULE

OF COST OF REVENUES FROM RELATED PARTIES

2024 2023
Six months ended June 30,
2024 2023
Dongguan Baxi Food Distribution Co., Ltd. Significantly influenced by the Company $ 51,539 $ 57,509
Dongguan Dalingshan Xinwenhua Drinking Water Store Significantly influenced by the Company 7,255 23,614
Dongguan Pengqin Drinking Water Co., Ltd. Significantly influenced by the Company 3,348 23,433
Dongguan Dengqinghu Drinking Water Store Significantly influenced by the Company - 2,934
Dongguan Tailai Trading Co., Ltd. Significantly influenced by the Company 27,779 52,324
Dongguan Anxiang Technology Co., Ltd. Significantly influenced by the Company 20,659 56,704
Guangdong Jiaduonuo Shengshi Trading Co., Ltd. Significantly influenced by the Company 13,068 90,355
Dongguan Dalingshan Runxin Drinking Water Store Significantly influenced by the Company 1,842 11,473
Dongguan City Yijia Trading Co., Ltd. Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd. 41,861 43,750
Cost of revenues from<br> related parties $ 167,351 $ 362,096

Purchases from related parties during the six months ended June 30, 2024 and 2023 are as follows:

SCHEDULE

OF PURCHASES FROM RELATED PARTIES

2024 2023
Six months ended June 30,
2024 2023
Dongguan Baxi Food Distribution Co., Ltd. Significantly influenced by the Company $ 51,539 $ 61,259
Dongguan Dalingshan Xinwenhua Drinking Water Store Significantly influenced by the Company 7,255 25,221
Dongguan Pengqin Drinking Water Co., Ltd. Significantly influenced by the Company 3,348 25,416
Dongguan Dengqinghu Drinking Water Store Significantly influenced by the Company - 3,124
Dongguan Tailai Trading Co., Ltd. Significantly influenced by the Company 27,779 55,999
Dongguan Anxiang Technology Co., Ltd. Significantly influenced by the Company 20,659 56,965
Guangdong Jiaduonuo Shengshi Trading Co., Ltd. Significantly influenced by the Company 13,068 90,430
Dongguan Dalingshan Runxin Drinking Water Store Significantly influenced by the Company 1,842 12,522
Dongguan City Yijia Trading Co., Ltd. Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd. 41,861 43,750
Purchase from related<br> party $ 167,351 $ 374,686

Due to related parties mainly consists of borrowings for working capital purpose, the balances are unsecured, non-interest bearing and due on demand.

Mr. Yuwen Li, the Vice President of the Company, authorized the Company to use trademarks that were owned by him for ten years from October 5, 2019 to October 4, 2029 at no cost.

Also see Note 2, 3, 4, 9 and 10 for more transactions with related parties.

| 13 |

| --- |

NOTE

8 - INCOME TAXES

UnitedStates of America

The Company is registered in the State of Nevada and is subject to United States of America tax law. The U.S. federal income tax rate is 21%.

Seychelles

Under the current laws of the Seychelles, DIGLS and JJGS are registered as an international business company governed by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

HongKong

From

year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately $277,506), and 16.5% on any part of assessable profits over HK$2,000,000. For the six months ended June 30, 2024 and 2023, the Company did not have any assessable profits arising in or derived from Hong Kong, therefore no provision for Hong Kong profits tax was made in the periods reported.

ThePRC

The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions.

On April 2, 2021, the State Taxation Administration issued the notice of the Ministry of Finance and the State Administration of Taxation (“MOF and SAT”) [2021] No.12 to provide an enterprise income tax rate of 2.5% on small-scale and low-profit enterprises whose annual taxable income is less than RMB1,000,000, approximately $142,209, from January 1, 2021 to December 31, 2022. MOF and SAT [2022] No.13 also provides an enterprise income tax rate of 5% on small-scale and low-profit enterprises whose annual taxable income is more than RMB1,000,000, approximately $139,404, but less than RMB3,000,000, approximately $418,212, from January 1, 2022 to December 31, 2024. The qualifications of small-scale and low-profit enterprises were examined annually by the Tax Bureau. All of the Company’s PRC subsidiaries met the criteria of small-scale and low-profit enterprises, except for Xixingdao, FVT Supply Chain and FLTT.

Thecomponents of the income tax provision are as follows:

SCHEDULE

OF COMPONENTS OF INCOME TAX PROVISION

2024 2023
Six months ended June 30,
2024 2023
Current:
– United States of America $ - $ 41,444
– Seychelles - -
– Hong Kong - -
– The PRC 409 55,058
Current income tax expense
Deferred
– United States of America - -
– Seychelles - -
– Hong Kong - -
– The PRC - -
Deferred income tax expense
Total $ 409 $ 96,502

The

effective tax rate was 17.7% and -22.1% for the six months ended June 30, 2024 and 2023, respectively.

| 14 |

| --- |

NOTE

9 - OPERATING LEASES

As of June 30, 2024, the Company has twenty-one separate operating lease agreements for three office spaces, one warehouse and seventeen stores in PRC with remaining lease terms of from 3 month to 39 months.

Two of the leases described above were entered with related parties. The operating lease entered with Ms. Qingmei Lin, a related party, is for the premises in Dongguan City, PRC. The agreement covers the period from January 1, 2019 to April 30, 2027 with the monthly rent expense of RMB10,000 (approximately $1,387). The operating lease agreement entered with Mr. Hongwei Ye, another related party, is for the premises in Dongguan City, PRC. The agreement covers the period from October 1, 2023 to September 30, 2026 with the monthly rent expense of RMB960 (approximately $133).

The components of lease expense and supplemental cash flow information related to leases for the six months ended June 30, 2024 and 2023 are as follows:

SCHEDULE

OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

2024 2023
Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations) Six months ended June 30,
2024 2023
Related parties $ 8,918 $ 9,501
Non-related parties 81,478 63,683
Total $ 90,396 $ 73,184
Other information for the three months ended June 30, 2024 June 30, 2023
--- --- --- --- --- --- ---
Cash paid for amounts included in the measurement of lease obligations $ 97,077 $ 77,612
Weighted average remaining lease term (in years) 1.84 2.72
Weighted average discount rate 3.23 % 3.23 %

Maturities of the Company’s lease obligations as of June 30, 2024 are as follows:

SCHEDULE

OF MATURITIES OF LEASE OBLIGATIONS

Year ending December 31,
2024 (remaining) $ 54,759
2025 105,926
2026 53,041
2027 5,504
2028 -
Total lease payment 219,230
Less: Imputed interest (7,377 )
Operating lease obligations $ 211,853

NOTE

10 – BANK AND OTHER BORROWINGS

In May 2022, the Company obtained a loan in the principal amount of RMB161,000 (approximately $24,000 when borrowed) from Huaneng Guicheng Trust Co., Ltd. (“Huaneng Guicheng”), which bears interest at 11.34%. The loan is guaranteed by Yumin Lin. The maturity date is on May 21, 2024.

In May 2022, the Company obtained a bank loan in the principal amount of RMB69,000 (approximately $10,000 when borrowed) from WeBank, which bears interest at 11.34%. The loan is guaranteed by Yumin Lin. The maturity date is on May 21, 2024.

In July 2022, the Company obtained two loans in the principal amount of RMB99,000 (approximately $15,000 when borrowed) and RMB231,000 (approximately $34,000 when borrowed) from WeBank and Guangdong Nanyue Bank Co., Ltd. (“Nanyue Bank”), respectively, which bear interest at 14.4%. The loans are guaranteed by Kaihong Lin. The maturity date is on July 8, 2024.

In July 2022, the Company obtained two loans in the principal amount of RMB153,000 (approximately $23,000 when borrowed) and RMB357,000 (approximately $53,000 when borrowed) from WeBank and Nanyue Bank, respectively, which bear interest at 14.4%. The loans are guaranteed by Falan Zhou, a manager of subsidiaries. The maturity date is on July 13, 2024.

In July 2022, the Company obtained a loan in the principal amount of RMB380,000 (approximately $57,000 when borrowed) from Huaneng Guicheng, which bears interest at 12.6%. The loan is guaranteed by Yumin Lin. The maturity date is on July 21, 2024.

| 15 |

| --- |

In February 2023, the Company obtained a revolving credit line in the principal amount of RMB465,000 (approximately $68,000 when borrowed) from China Construction Bank, which bears interest at 4.00%. The loan is guaranteed by Shuqin Chen, a related party. The maturity date is on February 11, 2024. As of June 30, 2024, the Company had repaid this bank loan in full to China Construction Bank.

In April 2023, the Company obtained two bank loans in the principal amount of RMB224,000 (approximately $31,000 when borrowed) and RMB96,000 (approximately $13,000 when borrowed) from Bank of Ningbo and WeBank, respectively, which bear interest at 12.24%. The loans are guaranteed by Falan Zhou, a manager of subsidiaries. The maturity date is on April 7, 2025.

In April 2023, the Company obtained a mortgage loan in the principal amount of RMB195,415 (approximately $27,000 when borrowed) from WeBank, which bears interest at 6.54%. The loan is pledged with a vehicle of the Company. The maturity date is on April 10, 2028.

In May 2023, the Company obtained a revolving credit line in the principal amount of RMB1,050,000 (approximately $146,000 when borrowed), with Yumin Lin as a co-borrower, from China Construction Bank, which bears interest at 4.20%. The maturity date is on May 26, 2024.

In July 2023, the Company obtained two bank loans in the principal amount of RMB57,000 (approximately $8,000 when borrowed) and RMB133,000 (approximately $18,000 when borrowed) from WeBank and Nanyue Bank, respectively, which bear interest at 10.44%. The loans are guaranteed by Falan Zhou, a manager of subsidiaries. The maturity date is on July 13, 2025.

In July 2023, the Company obtained a revolving credit line in the principal amount of RMB1,040,000 (approximately $143,000 when borrowed) from China Construction Bank, which bears interest at 3.70%. The credit line is guaranteed by Xiulan Zhou, a related party, and pledged with her property. The maturity date is on July 17, 2026.

In July 2023, the Company obtained a revolving credit line in the principal amount of RMB817,000 (approximately $114,000 when borrowed), with Yumin Lin as a co-borrower from China Construction Bank, which bears interest at 3.85%. The maturity date is on July 22, 2024.

In November 2023, the Company obtained a bank loan in the principal amount of RMB440,000 (approximately $62,000 when borrowed) from WeBank, which bears interest at 7.92%. The loan is guaranteed by Jianglong Xiong. The maturity date is on November 16, 2025.

In January 2024, the Company obtained a bank loan, in the principal amount of RMB390,000 (approximately $544,000 when borrowed) from from Huaneng Guicheng Trust Co., Ltd. (“Huaneng Guicheng”), which bears interest at 17.64%. The loan is guaranteed by Yumin Lin. The maturity date is on January 21, 2026.

In February 2024, the Company obtained two bank loans, both in the principal amount of RMB270,000 (approximately $38,000 when borrowed) from WeBank, which bears interest at 7.92%. The loans are both guaranteed by Jianglong Xiong. The maturity dates are both on February 22, 2026.

The balance of the loans borrowed as of June 30, 2024 and December 31, 2023 were as follows:

SCHEDULE

OF BALANCE OF LOAN BORROWED UNDER CREDIT LINES

June 30, 2024 December 31, 2023
Loans from a trust in PRC $ 54,416 $ 20,343
China Construction Bank 400,009 475,121
Guangdong Nanyue Bank 7,464 24,164
WeBank 162,648 129,396
Bank of Ningbo 14,127 21,041
Aggregate outstanding principal balances 638,664 670,065
Less: current portion 420,636 458,023
Non-current portion $ 218,028 $ 212,042

The

total interest expense was $10,844 and $9,292 for the six months ended June 30, 2024 and 2023, respectively.

Future minimum loan payments as of June 30, 2024 are as follows:

SCHEDULE

OF FUTURE MINIMUM LOAN PAYMENTS

Year ending December 31,
2024 (remaining) $ 362,876
2025 113,033
2026 157,127
2027 4,948
Thereafter 680
Total $ 638,664

NOTE 11 – SUBSEQUENT EVENT

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred up to August 14, 2024, the date the consolidated financial statements were available to issue. Based upon this evaluation, the Company did not identify any subsequent events that would have required adjustment or disclosure in the consolidated financial statements.

| 16 |

| --- |

Item2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Theinformation contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the yearended December 31, 2023 filed with the Securities and Exchange Commission on April 15, 2024 (the “Form 10-K”) and presumesthat readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read togetherwith our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

Thefollowing discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of thePrivate Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation,“Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guaranteedof future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-lookingstatements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. Westrongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled “Risk Factors”for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements.We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following shouldalso be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

Overview

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 engage in the food supply chain operations and management through a service platform. Through various acquisitions of high-quality upstream and downstream companies in the industry, the Company creates a complete industrial chain to reduce costs and enhance competitiveness. The company mainly focuses on online and offline sales targeting regional wholesalers, retailers, supermarkets and major food and beverage (“F&B”) chains.

During the six months ended June 30, 2024 and 2023, the Company conducted its business in one revenue stream: product sales – liquor, water, water purifier and other F&B products.

Resultsof Operations

Threemonths ended June 30, 2024 and 2023

Three months ended June 30,
2024 2023 Change
Net revenues $ 247,061 $ 1,272,597 $ (1,025,536 )
Cost of revenues (202,785 ) (652,798 ) 450,013
Gross profit 44,276 619,799 (575,523 )
Operating expense (816,426 ) (1,040,588 ) 224,162
Other income 2,213 6,436 (4,223 )
Interest income 3 16 (13 )
Interest expense (7,699 ) (8,964 ) 1,265
Income taxes expense (90 ) (21,528 ) 21,438
Net loss (777,723 ) (444,829 ) (332,894 )
Net loss attributable to noncontrolling interests (48,247 ) (58,004 ) 9,757
Net loss attributable to Fortune Valley Treasures, Inc. $ (729,476 ) $ (386,825 ) $ (342,651 )

Sixmonths ended June 30, 2024 and 2023

Six months ended June 30,
2024 2023 Change
Net revenues $ 514,883 $ 2,907,886 $ (2,393,003 )
Cost of revenues (415,674 ) (1,330,165 ) 914,491
Gross profit 99,209 1,577,721 (1,478,512 )
Operating expense (1,864,300 ) (2,005,225 ) 140,925
Other income 5,207 8,210 (3,003 )
Interest income 33 47 (14 )
Interest expense (18,543 ) (18,256 ) (287 )
Income taxes expense (409 ) (96,502 ) 96,093
Net loss (1,778,803 ) (534,005 ) (1,244,798 )
Net loss attributable to noncontrolling interests (49,796 ) (58,361 ) 8,565
Net loss attributable to Fortune Valley Treasures, Inc. $ (1,729,007 ) $ (475,644 ) $ (1,253,363 ) 
| 17 |

| --- |

NetRevenues

Net revenues were $247,061 for the three months ended June 30, 2024, reflecting a decrease of $1,025,536, or 81%, from $1,272,597 for the three months ended June 30, 2023. The decrease in net revenues was mainly due to the lower product sales volume than the same period of the prior year and to a lesser extent, the lower unit sales prices of wine products. The decrease in product sales was resulted from a decline in market demand resulting from the sluggish economic environment and slow recovery in China’s economy as compared to the same period of the prior year. And in order to attract new customers, the Company has lowered the unit sales prices of wine products beginning in April 2023.

Net revenues were $514,883 for the six months ended June 30, 2024, reflecting a decrease of $2,393,003, or 82%, from $2,907,886 for the six months ended June 30, 2023. The decrease in net revenues was mainly due to the lower product sales volume than the same period of the prior year and to a lesser extent, the lower unit sales prices of wine products. The decrease in product sales was resulted from a decline in market demand resulting from the sluggish economic environment and slow recovery in China’s economy as compared to the same period of the prior year. And in order to attract new customers, the Company has lowered the unit sales prices of wine products beginning in April 2023.

Costof Revenues

Cost of revenues was $202,785 for the three months ended June 30, 2024, reflecting a decrease of $450,13, or 69%, from $652,798 for the three months ended June 30, 2023. The decrease in cost of revenues was mainly due to the lower product sales volume in line with our net revenues decrease and to a lesser extent, the lower unit sales prices of wine products, which led to a lesser decrease in cost of revenues comparing to net revenues.

Cost of revenues was $415,674 for the six months ended June 30, 2024, reflecting a decrease of $914,491, or 69%, from $1,330,165 for the six months ended June 30, 2023. The decrease in cost of revenues was mainly due to the lower product sales volume in line with our net revenues decrease and to a lesser extent, the lower unit sales prices of wine products, which led to a lesser decrease in cost of revenues comparing to net revenues.

GrossProfit

Gross profit was $44,276 and $619,799 for the three months ended June 30, 2024 and 2023, respectively, reflecting a decrease of $575,523, or 93%. The decrease in gross profit was mainly due to the decrease in the net revenues.

Gross profit was $99,209 and $1,577,721 for the six months ended June 30, 2024 and 2023, respectively, reflecting a decrease of $1,478,512, or 94%. The decrease in gross profit was mainly due to the decrease in the net revenues.

OperatingExpenses

Operating expenses were $816,426 for the three months ended June 30, 2024, reflecting a decrease of $224,162, or 22%, from $1,040,588 for the three months ended June 30, 2023. The decrease in operating expenses was mainly due to the allowance of credit loss for accounts receivable.

Operating expenses were $1,864,300 for the six months ended June 30, 2024, reflecting a decrease of $140,925, or 7%, from $2,005,225 for the six months ended June 30, 2023. The decrease in operating expenses was mainly due to the allowance of credit loss for accounts receivable.

NetLoss

For the three months ended June 30, 2024, our net loss was $777,723, compared to the net loss of $444,829 for the three months ended June 30, 2023. The increase in net loss was a result of the factors described above.

For the six months ended June 30, 2024, our net loss was $1,778,803, compared to the net loss of $534,005 for the six months ended June 30, 2023. The increase in net loss was a result of the factors described above.

NetLoss Attributable to Noncontrolling Interests

The Company records net loss attributable to noncontrolling interests in the unaudited condensed consolidated statements of operations for any noncontrolling interests of consolidated subsidiaries.

For the three months ended June 30, 2024 and 2023, the Company recorded the net loss attributable to noncontrolling interests of $48,247 and $58,004, respectively.

For the six months ended June 30, 2024 and 2023, the Company recorded the net loss attributable to noncontrolling interests of $49,796 and $58,361, respectively.

Liquidity and Capital Resources

WorkingCapital

June 30, 2024 December 31, 2023 Change
Total current assets $ 3,652,437 $ 5,083,189 $ (1,430,752 )
Total current liabilities 4,153,090 3,851,925 301,165
Working capital $ (500,653 ) $ 1,231,264 $ (1,731,917 )

As of June 30, 2024, we had a negative working capital of $500,653, as compared to working capital of $1,231,264 as of December 31, 2023. We had total current assets of $3,652,437, consisting of cash and cash equivalents of $7,410, inventories of $34,546, prepayments and other current assets of $1,454,869, accounts receivable of $2,155,612 compared to total current assets of $5,083,189 as of December 31, 2023. The decrease in total current assets was mainly due to the decrease in accounts receivable, prepayments and other current assets, and cash and cash equivalents. We had current liabilities of $4,153,090, consisting of operating lease obligations - current of $103,531, accounts payable of $518,058, accrued liabilities of $756,864, bank and other borrowing - current of $420,636, customer advances of $1,338,274 and due to related parties of $1,015,727. The decrease in total current liabilities was mainly due to the decrease in the accounts payable and customer advances.

| 18 |

| --- |

Our cash and cash equivalents balance decreased to $7,410 as of June 30, 2024, from $288,255 as of December 31, 2023. We estimate the Company currently has insufficient working capital to support its daily operations for the next twelve months, without raising additional capital. The Company is continuing to look for different financing opportunities in order to increase working capital and improve liquidity, including bank borrowings and additional funding from major shareholders. We intend to commence new promotion plans to increase product sales and expand customer base and make additional efforts in accounts receivable collections. If we are unable to generate sufficient profits from operations or obtain additional equity or debt financing as required, there could be substantial uncertainty regarding our ability to continue as a going concern.

No assurance can be given that any future financing will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its shareholders, in the case of equity financing.

CashFlows

Six months ended June 30,
2024 2023 Change
Cash Flows used in Operating Activities $ (274,805 ) $ (85,816 ) $ (188,989 )
Cash Flows used in Investing Activities - (5,488 ) 5,488
Cash Flows (used in) provided by Financing Activities (130 ) 42,802 (42,932 )
Effect of exchange rate changes (5,910 ) (41,233 ) 35,323
Net Changes in Cash and Cash Equivalents $ (280,845 ) $ (89,735 ) $ (191,110 )

CashFlow from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2024 was $274,805, as compared to the amount of $85,816 provided by operating activities for the six months ended June 30, 2023, reflecting an increase of $188,989 in cash outflows. Such increase was mainly resulted from the net loss for the period and the allowance of credit loss for accounts receivables.

CashFlow from Investing Activities

Net cash used in investing activities was $nil for the six months ended June 30, 2024, compared to net cash used in investing activities of $5,488 for the t six months ended June 30, 2023. Such decrease was mainly resulted from no purchase of property and equipment in 2024.

CashFlow from Financing Activities

Net cash used in financing activities was $130 for the six months ended June 30, 2024, compared to net cash provided by financing activities of $42,802 for the six months ended June 30, 2023. Such decrease was mainly resulted from the higher repayment to bank loan during the periods ended June 30, 2024 than 2023.

CriticalAccounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported and disclosed in our financial statements and the accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions. We identified no critical accounting estimates in the current period.

As described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023, we consider our critical accounting policies to be those related to revenue recognition, allowance of doubtful accounts and impairment of intangible assets and goodwill. There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

| 19 |

| --- |

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.

RelatedParty Transactions

As of June 30, 2024 and December 31, 2023, the Company had accounts receivable from related parties in the amounts of $33,043 and $61,113, prepayments to related parties in the amounts of $806,932 and $941,978, deposits to related parties in the amounts of $523,886 and $536,450, and accounts payable to related parties in amounts of $187,954 and $162,310, respectively.

As of June 30, 2024 and December 31, 2023, the Company had outstanding payables due to its related parties in the amounts of $1,015,727 and $680,226, respectively, which mainly consisted of borrowings for working capital purpose. The balances were unsecured, non-interest bearing and due on demand.

During the six months ended June 30, 2024 and 2023, the Company sold products to its related parties in the amounts of $9,751 and $69,598, respectively, purchased goods from its related parties in the amounts of $167,351 and $374,686, and incurred the costs of revenues from related parties in the amounts of $167,351 and $362,096, respectively.

During the six months ended June 30, 2024 and 2023, the rental expenses to related parties were $8,918 and $9,501, respectively.

Our related parties are primarily those who are significantly influenced by the Company based on our common business relationships. Refer to Note 7 to the unaudited condensed consolidated financial statements for additional details regarding the related party transactions.

Item3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

Item4. Controls and Procedures.

Evaluationof Disclosure Controls and Procedures

We conducted 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 the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of June 30, 2024, that our disclosure controls and procedures were not effective.

The matters involving internal controls and procedures that our management considered to be material weakness under the standards of the Public Company Accounting Oversight Board was lack of well-established procedures to identify, approve and review related party transactions.

| 20 |

| --- |

Management’sReport on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the board of directors (the “Board”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States (“GAAP”) and includes those policies and procedures that:

● Apply<br> to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets<br> of the company;
● Provide<br> reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with<br> GAAP and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors<br> of the company; and
● Provide<br> reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s<br> assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

We carried out an assessment, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal controls over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of June 30, 2024. Management based the assessment on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on this assessment, management has concluded that as of June 30, 2024, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate, the following series of measures:

● We<br> have increased our personnel resources and technical accounting expertise within the accounting function and intend to hire one or<br> more additional personnel for the function due to turnover.
● We<br> plan to test our updated controls and remediate our deficiencies at the end of 2024.

Changesin Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

| 21 |

| --- |

PART

II — OTHER INFORMATION

Item1. Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

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

Exhibit No. Description
31.1 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
31.2 Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer
32.1 Section 1350 Certification of principal executive officer
32.2 Section 1350 Certification of principal financial officer and principal accounting officer
101.INS Inline<br> XBRL Instance Document
101.SCH Inline<br> XBRL Taxonomy Extension Schema Document
101.CAL Inline<br> XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF Inline<br> XBRL Taxonomy Extension Definition Linkbase Document
101.LAB Inline<br> XBRL Taxonomy Extension Label Linkbase Document
101.PRE Inline<br> XBRL Taxonomy Extension Presentation Linkbase Document
104 Cover<br> Page Interactive Data File (embedded within the Inline XBRL document) 
| 22 |

| --- |

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, 2024 By: /s/ Yuwen Li
Yuwen<br> Li
President<br> and Chief Executive Officer
(Principal<br> Executive Officer)
Date:<br> August 14, 2024 By: /s/ Kaihong Lin
Kaihong<br> Lin
Chief<br> Financial Officer and Treasurer
(Principal<br> Financial and Accounting Officer) 
| 23 |

| --- |

EXHIBIT31.1

CERTIFICATION

I, Yuwen Li, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fortune Valley Treasures, Inc. (the “Company”) for the quarter ended June 30, 2024;

2. Based on my knowledge, this quarterly 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<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared;
b. Designed<br> such internal control over financial reporting or caused such internal control to be designed under our supervision, to provide reasonable<br> assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance<br> with generally accepted accounting principles.
c. Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
d. Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

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 audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
b. Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting.
Date:<br> August 14, 2024
--- --- ---
By*:* /s/ Yuwen Li
Name: Yuwen<br> Li
Title: Chief<br> Executive Officer and President<br><br> (Principal Executive Officer)

EXHIBIT31.2

CERTIFICATION

I, Kaihong Lin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fortune Valley Treasures, Inc. (the “Company”) for the quarter ended June 30, 2024;

2. Based on my knowledge, this quarterly 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<br> such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,<br> to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others<br> within those entities, particularly during the period in which this report is being prepared;
b. Designed<br> such internal control over financial reporting or caused such internal control to be designed under our supervision, to provide reasonable<br> assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance<br> with generally accepted accounting principles.
c. Evaluated<br> the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about<br> the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;<br> and
d. Disclosed<br> in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s<br> most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected,<br> or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

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 audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All<br> significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are<br> reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information;<br> and
b. Any<br> fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s<br> internal control over financial reporting
Date:<br> August 14, 2024
--- --- ---
By*:* /s/ Kaihong Lin
Name: Kaihong<br> Lin
Title: Chief<br> Financial Officer and Treasurer<br><br> <br>(Principal<br> Financial and Accounting Officer)

EXHIBIT32.1

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

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 period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:<br> August 14, 2024
By*:* /s/ Yuwen Li
Name: Yuwen<br> Li
Title: Chief<br> Executive Officer and President<br><br> <br>(Principal<br> Executive Officer)

EXHIBIT32.2

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADOPTED PURSUANT TO

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 period ended June 30, 2024 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:<br> August 14, 2024
By*:* /s/ Kaihong Lin
Name: Kaihong<br> Lin
Title: Chief<br> Financial Officer and Treasurer
(Principal<br> Financial and Accounting Officer)

Report a Problem

Category
Description
Email (optional, for follow-up)