Equibles

10-Q

Fortune Valley Treasures, Inc. (FVTI)

10-Q 2023-11-13 For: 2023-09-30
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 ### September 30, 2023

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.)

B1601Donogfang Yinxiang Building

No.139 Liansheng Road, Humen Town

Dongguan,Guangdong, China 523000

(Address of principal executive offices, including zip code)

Registrant’s phone number, including area code (86) 769-85729133

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 November 13, 2023, 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 September 30, 2023 (Unaudited) and December 31, 2022 3
Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) 4
Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2023 and 2022 (Unaudited) 5
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2023 and 2022 (Unaudited) 6
Notes to Condensed Consolidated Financial Statements for the Three and Nine Months Ended September 30, 2023 and 2022 (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 SEPTEMBER 30, 2023 AND DECEMBER 31, 2022

December 31,<br> <br>2022
Assets
Current assets
Cash and cash equivalents 13,276 $ 165,685
Accounts receivable, net (including 69,746 and 146,087 from related parties as of September 30, 2023 and December 31, 2022, respectively) 4,303,366 4,797,564
Inventories 59,239 148,925
Prepayments and other current assets, net (including 966,676 and 1,102,861 to related parties as of September 30, 2023 and December 31, 2022, respectively) 1,367,548 1,758,917
Total current assets 5,743,429 6,871,091
Non-current assets
Deposits paid, net (including 523,296 and 758,445 to related parties as of September 30, 2023 and December 31, 2022, respectively) 605,609 1,121,302
Property and equipment, net 104,225 97,890
Operating lease right-of-use assets 229,526 297,232
Operating lease right-of-use assets, related parties 60,928 75,300
Operating lease right-of-use assets 60,928 75,300
Intangible assets, net 198,806 370,926
Goodwill 431,323 454,201
Total Assets 7,373,846 $ 9,287,942
Liabilities and Stockholders’ Equity
Current liabilities
Operating lease obligations – current 98,336 $ 110,201
Operating lease obligations, related parties - current 10,855 16,629
Operating lease obligations, - current 10,855 16,629
Accounts payable (including 124,987 and 80,426 to related parties as of September 30, 2023 and December 31, 2022, respectively) 683,967 688,822
Accrued liabilities 625,189 502,389
Bank and other borrowings - current 451,119 422,653
Income tax payable 7,352 38,879
Customer advances 71,315 139,334
Due to related parties 723,488 565,675
Total current liabilities 2,671,621 2,484,582
Non-current liabilities
Operating lease obligations – non-current 138,263 189,957
Operating lease obligations, related parties – non-current 41,005 55,056
Operating lease obligations, – non-current 41,005 55,056
Bank and other borrowings 188,326 58,438
Total Liabilities 3,039,215 2,788,033
Stockholders’ Equity
Common stock (150,000,000 shares authorized, 15,655,038 shares issued and outstanding as of September 30, 2023 and December 31, 2022) 15,655 15,655
Additional paid-in capital 11,061,233 11,061,233
Accumulated deficit and statutory reserves (6,088,707 ) (4,504,404 )
Accumulated other comprehensive loss (545,059 ) (180,826 )
Total Fortune Valley Treasures, Inc. stockholders’ equity 4,443,122 6,391,658
Noncontrolling interests (108,491 ) 108,251
Total Stockholders’ Equity 4,334,631 6,499,909
Total Liabilities and Stockholders’ Equity 7,373,846 $ 9,287,942

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 INCOME (LOSS)

FOR

THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

2022 2023 2022
Nine months ended<br><br> <br>September 30,
2022 2023 2022
Net revenues (including 17,570 and 79,137 from related parties for the three months ended September 30, 2023 and 2022, respectively; 87,168 and 120,632 from related parties for the nine months ended September 30, 2023 and 2022, respectively) 909,719 $ 2,915,303 $ 3,817,605 $ 6,513,572
Cost of revenues (including 131,000 and 377,283 from related parties for the three months ended September 30, 2023 and 2022, respectively; 493,096 and 763,663 from related parties for the nine months ended September 30, 2023 and 2022, respectively) 593,294 1,400,522 1,923,459 3,018,507
Gross profit 316,425 1,514,781 1,894,146 3,495,065
Operating expenses:
Selling and distribution expenses 14,667 15,509 40,925 49,593
General and administrative expenses 1,523,598 472,131 3,502,565 1,347,074
Operating income (loss) (1,221,840 ) 1,027,141 (1,649,344 ) 2,098,398
Other income (expense):
Other income 7,466 2,221 15,676 10,423
Interest income 14 114 61 207
Interest expense (10,290 ) (10,388 ) (28,546 ) (21,077 )
Other expense, net (2,810 ) (8,053 ) (12,809 ) (10,447 )
Income (loss) before income tax (1,224,650 ) 1,019,088 (1,662,153 ) 2,087,951
Income tax expense (benefit) (1,906 ) 108,353 94,596 212,274
Net income (loss) (1,222,744 ) $ 910,735 $ (1,756,749 ) $ 1,875,677
Less: Net income (loss) attributable to noncontrolling interests (114,085 ) 54,931 (172,446 ) 123,464
Net income (loss) attributable to Fortune Valley Treasures, Inc. (1,108,659 ) 855,804 (1,584,303 ) 1,752,213
Other comprehensive income:
Foreign currency translation loss (31,568 ) (719,949 ) (408,529 ) (1,311,550 )
Total comprehensive income (loss) (1,254,312 ) 190,786 (2,165,278 ) 564,127
Less: Comprehensive income (loss) attributable to noncontrolling interests (117,184 ) 10,749 (216,742 ) 35,475
Comprehensive income (loss) attributable to Fortune Valley Treasures, Inc. (1,137,128 ) $ 180,037 $ (1,948,536 ) $ 528,652
Earnings (loss) per share
Basic and diluted earnings (loss) per share (0.07 ) $ 0.05 $ (0.10 ) $ 0.11
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 NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

Number<br><br> <br>of shares Amount Paid-in<br> Capital Comprehensive<br> Loss Statutory<br> Reserves controlling<br> Interests Stockholders’ <br> Equity
Common Stock Additional Accumulated<br> Other Accumulated<br> Deficit and Non Total
Number<br><br> <br>of shares Amount Paid-in<br> Capital Comprehensive<br> Loss Statutory<br> Reserves controlling<br> Interests Stockholders’ <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
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
Net loss - - - - (1,108,659 ) (114,085 ) (1,222,744 )
Foreign currency translation adjustment - - - (28,469 ) - (3,099 ) (31,568 )
Balance as of September 30, 2023 15,655,038 $ 15,655 $ 11,061,233 $ (545,059 ) $ (6,088,707 ) $ (108,491 ) $ 4,334,631
Common Stock Additional Accumulated<br> Other Accumulated<br> Deficit and Non Total
--- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- --- ---
Number of shares Amount Paid-in<br> Capital Comprehensive<br> Income (Loss) Statutory<br> Reserves controlling<br> Interests Stockholders’<br> Equity
Balance as of December 31, 2021 15,655,038 $ 15,655 $ 11,061,233 $ 544,305 $ (2,561,681 ) $ 404,842 $ 9,464,354
Net income - - - - 148,676 27,283 175,959
Foreign currency translation adjustment - - - 8,972 - 1,748 10,720
Balance as of March 31, 2022 15,655,038 $ 15,655 $ 11,061,233 $ 553,277 $ (2,413,005 ) $ 433,873 $ 9,651,033
Net income - - - - 747,733 41,250 788,983
Foreign currency translation adjustment - - - (556,766 ) - (45,555 ) (602,321 )
Balance as of June 30, 2022 15,655,038 $ 15,655 $ 11,061,233 $ (3,489 ) $ (1,665,272 ) $ 429,568 $ 9,837,695
Balance 15,655,038 $ 15,655 $ 11,061,233 $ (3,489 ) $ (1,665,272 ) $ 429,568 $ 9,837,695
Net income - - - - 855,804 54,931 910,735
Net income (loss) - - - - 855,804 54,931 910,735
Foreign currency translation adjustment - - - (675,767 ) - (44,182 ) (719,949 )
Balance as of September 30, 2022 15,655,038 $ 15,655 $ 11,061,233 $ (679,256 ) $ (809,468 ) $ 440,317 $ 10,028,481
Balance 15,655,038 $ 15,655 $ 11,061,233 $ (679,256 ) $ (809,468 ) $ 440,317 $ 10,028,481

See

accompanying notes to the unaudited condensed consolidated financial statements.

| 5 |

| --- |

FORTUNE

VALLEY TREASURES, INC.

CONDENSED

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR

THE NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(Unaudited)

2023 2022
Nine months ended September 30,
2023 2022
Cash flows from operating activities
Net income (loss) $ (1,756,749 ) $ 1,875,677
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense 183,809 648,740
Non-cash lease expense 103,902 122,069
Allowance for credit losses 2,175,928 -
Loss on disposal of intangible asset 1,999 -
Changes in operating assets and liabilities
Accounts receivable, net (274,184 ) (1,374,495 )
Inventories 85,143 (80,648 )
Prepayments and other current assets, net (838,488 ) (608,448 )
Due from related parties - 25,423
Deposits paid, net (12,147 ) (277,134 )
Accounts payable 30,908 (63,540 )
Due to related parties 72,627 (177,253 )
Customer advances (63,197 ) (178,597 )
Accrued liabilities 153,430 153,158
Income tax payable (30,633 ) 95,197
Operating lease obligations (105,292 ) (111,705 )
Net cash provided by (used in) operating activities (272,944 ) 48,444
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 141,967 148,606
Borrowings from bank loans 138,834 135,499
Borrowings from a third party - 80,338
Repayments to related parties - (154,510 )
Repayments of bank loans (90,578 ) (28,053 )
Repayments to a third party (28,888 ) (73,878 )
Net cash provided by financing activities 161,335 108,002
Effect of exchange rate changes on cash and cash equivalents (35,312 ) (40,166 )
Net changes in cash and cash equivalents (152,409 ) 116,280
Cash and cash equivalents–beginning of the period 165,685 123,163
Cash and cash equivalents–end of the period $ 13,276 $ 239,443
Supplementary cash flow information:
Interest paid $ 28,546 $ 21,077
Income taxes paid $ 171,532 $ 126,858
Non-cash investing and financing activities
Expenses paid by related parties on behalf of the Company $ - $ 135,081
Operating lease right-of-use assets obtained in exchange for operating lease obligations $ 58,249 $ 74,588
Remeasurement of operating lease liabilities and right-of-use assets due to lease modifications $ 22,035 $ -
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 NINE MONTHS ENDED SEPTEMBER 30, 2023 AND 2022

(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.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022, 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, 2022 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, 2022, filed with the SEC on March 31, 2023 (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 September 30, 2023, details of the Company’s major subsidiaries were as follows:

SCHEDULE

OF ENTITIES AND ITS SUBSIDIARIES

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

| --- |

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 September 30, 2023, the Company had a working capital of $3,071,808, including cash and cash equivalents of $13,276, and accumulated deficit and statutory reserves of $6,088,707. For the nine months ended September 30, 2023, the Company incurred net loss of $1,756,749 and had net cash outflows of $272,944 from operating activities.

The Company may need additional capital in the future to fund the continued operations of the Company. If the Company is unable to obtain additional equity or debt financing as required, the business operations and prospects of the Company may suffer.

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

2022
2022
Period-end RMB:US1 exchange rate 0.13745 0.14053
Period-average RMB:US1 exchange rate 0.14239 0.15174

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 nine months ended September 30, 2023 and 2022.

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 nine months ended September 30, 2023 and 2022, 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

2023 2022 2023 2022
Three months ended <br> September 30, Nine months ended <br> September 30,
2023 2022 2023 2022
Sales of liquor $ 664,492 $ 1,582,829 $ 2,447,164 $ 3,416,775
Sales of water 160,260 1,005,738 793,462 2,343,830
Sales of water purifier 62,016 245,581 429,853 641,129
Others 22,951 81,155 147,126 111,838
Total $ 909,719 $ 2,915,303 $ 3,817,605 $ 6,513,572

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 September 30, 2023 and December 31, 2022, the Company had customer advances of $71,315 and $139,334, respectively. During the nine months ended September 30, 2023, the Company recognized $68,717 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 September 30, 2023 and December 31, 2022:

SCHEDULE

OF ACCOUNTS RECEIVABLE

December 31, <br> 2022
Accounts receivable (including 70,777 and 146,087 from related parties as of September 30, 2023 and December 31, 2022, respectively) 4,820,610 $ 4,797,564
Less: Doubtful allowance (including 1,031 and nil from related parties as of September 30, 2023 and December 31, 2022, respectively) (517,244 ) -
Accounts receivable, net 4,303,366 $ 4,797,564

All values are in US Dollars.

Allowance for doubtful accounts movement is as follows:

SCHEDULE

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS RECEIVABLE

September 30, <br> 2023 December 31, <br> 2022
Beginning balance $ - $ -
Additions to allowance 535,862 -
Foreign currency translation adjustment (18,618 ) -
Ending balance $ 517,244 $ -

NOTE

3 – PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments and other current assets consisted of the following as of September 30, 2023 and December 31, 2022:

SCHEDULE

OF PREPAYMENT AND OTHER CURRENT ASSETS

December 31, <br>2022
Prepayments (including 2,749,621 and 2,255,288 to related parties as of September 30, 2023 and December 31, 2022, respectively) 3,657,518 $ 3,001,866
Other current assets 6,919 4,631
Total prepayments and other current assets 3,664,437 3,006,497
Less: Allowance for doubtful accounts (including 1,782,945 and 1,152,427 to related parties as of September 30, 2023 and December 31, 2022, respectively) (2,296,889 ) (1,247,580 )
Prepayments and other current assets, net 1,367,548 $ 1,758,917

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

September 30, <br>2023 December 31, <br>2022
Beginning balance $ 1,247,580 $ -
Additions to allowance 1,152,172 1,284,005
Foreign currency translation adjustment (102,863 ) (36,425 )
Ending balance $ 2,296,889 $ 1,247,580

NOTE

4 – DEPOSITS PAID, NET

Deposits paid consisted of the following as of September 30, 2023 and December 31, 2022:

SCHEDULE

OF DEPOSITS PAID

December 31, <br>2022
Deposits paid (including 1,557,900 and 1,628,511 to related parties as of September 30, 2023 and December 31, 2022, respectively) 2,258,234 $ 2,365,652
Less: Allowance for doubtful accounts (including 1,034,604 and 870,066 to related parties as of September 30, 2023 and December 31, 2022, respectively) (1,652,625 ) (1,244,350 )
Deposits paid, net 605,609 $ 1,121,302

All values are in US Dollars.

Allowance for doubtful accounts movement is as follows:

SCHEDULE

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF DEPOSITS PAID

September 30, <br>2023 December 31, <br>2022
Beginning balance $ 1,244,350 $ -
Additions to allowance 487,894 1,280,681
Foreign currency translation adjustment (79,619 ) (36,331 )
Ending balance $ 1,652,625 $ 1,244,350 
| 11 |

| --- |

NOTE

5 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of September 30, 2023 and December 31, 2022:

SCHEDULE

OF PROPERTY AND EQUIPMENT

September 30, <br>2023 December 31, <br>2022
Office equipment $ 116,520 $ 116,520
Leasehold improvement 126,386 126,386
Vehicle 31,599 -
Property and equipment 274,505 242,906
Less: Accumulated depreciation (170,280 ) (145,016 )
Property and equipment, net $ 104,225 $ 97,890

Depreciation

expense, which was included in general and administrative expenses, for the nine months ended September 30, 2023 and 2022 was $26,168 and $32,829, respectively.

NOTE

6 – INTANGIBLE ASSETS, NET

Intangible assets and related accumulated amortization were as follows:

SCHEDULE OF INTANGIBLE ASSETS

September 30, <br>2023 December 31, <br>2022
Distribution channel $ 2,960,608 $ 3,117,635
Others 25,138 27,809
Total intangible assets 2,985,746 3,145,444
Less: Accumulated amortization (1,883,226 ) (1,822,875 )
Less: Accumulated impairment (903,714 ) (951,643 )
Intangible assets, net $ 198,806 $ 370,926

Amortization

expense for the nine months ended September 30, 2023 and 2022 was $157,641 and $615,911, respectively, included in cost of revenues and general and administrative expenses.

As of September 30, 2023, the future estimated amortization costs for intangible assets are as follows:

SCHEDULE

OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS

Year ending December 31,
2023 (remaining) $ 50,886
2024 136,911
2025 4,962
2026 4,962
2027 1,085
Total $ 198,806

NOTE

7 - RELATED PARTY TRANSACTIONS

Amounts due to related parties as of September 30, 2023 and December 31, 2022 are as follows:

SCHEDULE

OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

September 30, <br>2023 December 31, <br>2022
Mr. Yumin Lin President, Chief Executive Officer, Secretary, Director and majority shareholder $ 454,645 $ 389,051
Ms. Xiulan Zhou Manager of a subsidiary, Mr. Yumin Lin’s wife 1,670 508
Mr. Huagen Li Manager of a subsidiary 2,199 2,316
Mr. Guodong Jia Manager of a subsidiary 5,900 2,342
Mr. Hongwei Ye Manager of a subsidiary, Shareholder 15 16
Mr. Anping Chen Manager of a subsidiary 9,442 1,290
Mr. Jiangwei Jia Manager of a subsidiary 7,977 3,678
Mr. Yuwen Li Vice President 100,416 64,924
Ms. Lihua Li Manager of a subsidiary 7,082 -
Shenzhen DaXingHuaShang Industrial Group Ltd. (fka Shenzhen DaXingHuaShang Industry Development Ltd.) Mr. Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industrial Group Ltd. 82,468 86,842
Ms. Chunxiang Zhang Manager of a subsidiary 4,294 998
Mr. Meng Xue Manager of a subsidiary 7,398 5,449
Ms. Shuqin Chen Manager of a subsidiary 8,949 1,358
Mr. Zhipeng Zuo Manager of a subsidiary 459 59
Mr. Deqin Ke Manager of a subsidiary - 724
Mr. Aisheng Zhang Manager of a subsidiary 23,633 2,320
Mr. Zhihua Liao Manager of a subsidiary 6,941 3,800
$ 723,488 $ 565,675 
| 12 |

| --- |

Revenues generated from related parties during the nine months ended September 30, 2023 and 2022 are as follows:

SCHEDULE OF REVENUE GENERATED FROM RELATED PARTIES

2023 2022
Nine months ended September 30,
2023 2022
Mr. Kaihong Lin Chief Financial Officer and Treasurer $ 342 $ 697
Mr. Yumin Lin President, Chief Executive Officer, Secretary, Director and majority shareholder - 438
Mr. Zihao Ye Manager of a subsidiary - 262
Ms. Xiulan Zhou Manager of a subsidiary, Mr. Yumin Lin’s wife 14 -
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 Huanhai Trading Co., Ltd. 21,644 49,676
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. 14,420 12,639
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 City Hualianguan Chemical Co., Ltd. 14,808 56,920
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 35,619 -
Mr. Yuwen Li Vice President 321 -
Revenues generated from<br> related parties $ 87,168 $ 120,632

Cost of revenues from related parties during the nine months ended September 30, 2023 and 2022 is as follows:

SCHEDULE OF COST OF REVENUES FROM RELATED PARTIES

2023 2022
Nine months ended September 30,
2023 2022
Dongguan Baxi Food Distribution Co., Ltd. Significantly influenced by the Company $ 83,891 $ 27,916
Dongguan Dalingshan Xinwenhua Drinking Water Store Significantly influenced by the Company 27,658 78,474
Dongguan Pengqin Drinking Water Co., Ltd. Significantly influenced by the Company 24,481 63,429
Dongguan Dengqinghu Drinking Water Store Significantly influenced by the Company 2,934 2,043
Dongguan Tailai Trading Co., Ltd. Significantly influenced by the Company 76,224 60,614
Dongguan Anxiang Technology Co., Ltd. Significantly influenced by the Company 63,754 95,045
Guangdong Jiaduonuo Shengshi Trading Co., Ltd. Significantly influenced by the Company 112,233 112,598
Dongguan Dalingshan Runxin Drinking Water Store Significantly influenced by the Company 12,386 26,174
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. 89,535 297,370
Cost of revenues from<br> related parties $ 493,096 $ 763,663

Purchases from related parties during the nine months ended September 30, 2023 and 2022 are as follows:

SCHEDULE OF PURCHASES FROM RELATED PARTIES

2023 2022
Nine months ended September 30,
2023 2022
Dongguan Baxi Food Distribution Co., Ltd. Significantly influenced by the Company $ 85,268 $ 31,360
Dongguan Dalingshan Xinwenhua Drinking Water Store Significantly influenced by the Company 28,869 90,930
Dongguan Pengqin Drinking Water Co., Ltd. Significantly influenced by the Company 26,317 66,659
Dongguan Dengqinghu Drinking Water Store Significantly influenced by the Company 3,124 2,217
Dongguan Tailai Trading Co., Ltd. Significantly influenced by the Company 77,746 59,449
Dongguan Anxiang Technology Co., Ltd. Significantly influenced by the Company 63,654 96,341
Guangdong Jiaduonuo Shengshi Trading Co., Ltd. Significantly influenced by the Company 112,306 117,062
Dongguan Dalingshan Runxin Drinking Water Store Significantly influenced by the Company 13,329 26,122
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. 87,351 279,247
Purchase from related<br> party $ 497,964 $ 769,387

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 $255,112), and 16.5% on any part of assessable profits over HK$2,000,000. For the nine months ended September 30, 2023 and 2022, 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 $144,482, but less than RMB3,000,000, approximately $433,445, 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

Nine months ended September 30,
2023 2022
Current:
– United States of America $ 31,761 $ 105,074
– Seychelles - -
– Hong Kong - -
– The PRC 62,835 107,200
Current income tax expense
Deferred
– United States of America - -
– Seychelles - -
– Hong Kong - -
– The PRC - -
Deferred income tax expense
Total $ 94,596 $ 212,274

The

effective tax rate was -5.7% and 10.2% for the nine months ended September 30, 2023 and 2022, respectively.

| 14 |

| --- |

NOTE

9 - OPERATING LEASES

As of September 30, 2023, 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 1 month to 43 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 $1,424). 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 September 27, 2020 to September 30, 2023 with the monthly rent expense of RMB960 (approximately $138). The lease term has been extended to September 30, 2026 with all other terms unchanged.

The components of lease expense and supplemental cash flow information related to leases for the nine months ended September 30, 2023 and 2022 are as follows:

SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations) Nine months ended <br> September 30,
2023 2022
Related parties $ 14,046 $ 16,132
Non-related parties 97,288 109,050
Total $ 111,334 $ 125,182
Other information for the nine months ended September 30, <br> 2023 September 30, <br> 2022
--- --- --- --- --- --- ---
Cash paid for amounts included in the measurement of lease obligations $ 116,743 $ 110,768
Weighted average remaining lease term (in years) 2.61 3.31
Weighted average discount rate 3.23 % 3.23 %

Maturities of the Company’s lease obligations as of September 30, 2023 are as follows:

SCHEDULE OF MATURITIES OF LEASE OBLIGATIONS

Year ending December 31,
2023 (remaining) $ 27,008
2024 118,512
2025 105,405
2026 47,012
2027 5,498
Total lease payment 303,435
Less: Imputed interest (14,976 )
Operating lease obligations $ 288,459

NOTE

10 – BANK AND OTHER BORROWINGS

In

August 2020, the Company obtained a revolving credit line in the principal amount of RMB910,000 (approximately $139,000 when borrowed) from China Construction Bank, which bears interest at 4.10%. The credit line is guaranteed by Xiulan Zhou, a related party, and pledged with her property. The credit line was fully repaid on the maturity date of August 7, 2023.

In

November 2021, the Company obtained a bank loan in the principal amount of RMB500,000 (approximately $79,000 when borrowed) from Shenzhen Qianhai Webank Co., Ltd. (“WeBank”), which bears interest at 3.6%. The maturity date is on December 11, 2021. On December 11, 2021, the Company and WeBank agreed to extend the maturity date of the loan to December 21, 2023 and increase the principal amount to RMB500,750 (approximately $79,000 when borrowed) reflecting the accrued interest. The loan is guaranteed by Yumin Lin and bears interest at 10.71%.

In

May 2022, the Company obtained a revolving credit line in the principal amount of RMB1,000,000 (approximately $149,000 when borrowed) from China Construction Bank, which bears interest at 4.45%. The credit line is guaranteed by Xiulan Zhou, a related party. The credit line was fully repaid on the maturity date of May 26, 2023.

| 15 |

| --- |

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.

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.

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.

The balance of the loans borrowed as of September 30, 2023 and December 31, 2022 were as follows:

SCHEDULE OF BALANCE OF LOAN BORROWED UNDER CREDIT LINES

September 30, <br> 2023 December 31, <br> 2022
Loans from a trust in PRC $ 29,139 $ 60,049
China Construction Bank 463,471 276,447
WeBank 70,508 77,220
Guangdong Nanyue Bank 51,954 67,375
Bank of Ningbo 24,373 -
Aggregate outstanding principal balances 639,445 481,091
Less: current portion 451,119 422,653
Non-current portion $ 188,326 $ 58,438

The

total interest expense was $28,546 and $21,077 for the nine months ended September 30, 2023 and 2022, respectively.

Future minimum loan payments as of September 30, 2023 are as follows:

SCHEDULE OF FUTURE MINIMUM LOAN PAYMENTS

Year ending December 31,
2023 (remaining) $ 44,254
2024 418,306
2025 21,406
2026 148,317
2027 5,372
Thereafter 1,790
Total $ 639,445 
| 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, 2022 filed with the Securities and Exchange Commission on March 31, 2023 (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 nine months ended September 30, 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 September 30, 2023 and 2022

Three months ended September 30,
2023 2022 Change
Net revenues $ 909,719 $ 2,915,303 $ (2,005,584 )
Cost of revenues (593,294 ) (1,400,522 ) 807,228
Gross profit 316,425 1,514,781 (1,198,356 )
Operating expense (1,538,265 ) (487,640 ) (1,050,625 )
Other income 7,466 2,221 5,245
Interest income 14 114 (100 )
Interest expense (10,290 ) (10,388 ) 98
Income taxes benefit (expense) 1,906 (108,353 ) 110,259
Net income (loss) (1,222,744 ) 910,735 (2,133,479 )
Net income (loss) attributable to noncontrolling interests (114,085 ) 54,931 (169,016 )
Net income (loss) attributable to Fortune Valley Treasures, Inc. $ (1,108,659 ) $ 855,804 $ (1,964,463 )

Ninemonths ended September 30, 2023 and 2022

Nine months ended September 30,
2023 2022 Change
Net revenues $ 3,817,605 $ 6,513,572 $ (2,695,967 )
Cost of revenues (1,923,459 ) (3,018,507 ) 1,095,048
Gross profit 1,894,146 3,495,065 (1,600,919 )
Operating expense (3,543,490 ) (1,396,667 ) (2,146,823 )
Other income 15,676 10,423 5,253
Interest income 61 207 (146 )
Interest expense (28,546 ) (21,077 ) (7,469 )
Income taxes expense (94,596 ) (212,274 ) 117,678
Net income (loss) (1,756,749 ) 1,875,677 (3,632,426 )
Net income (loss) attributable to noncontrolling interests (172,446 ) 123,464 (295,910 )
Net income (loss) attributable to Fortune Valley Treasures, Inc. $ (1,584,303 ) $ 1,752,213 $ (3,336,516 ) 
| 17 |

| --- |

NetRevenues

Net revenues were $909,719 for the three months ended September 30, 2023, reflecting a decrease of $2,005,584, or 69%, from $2,915,303 for the three months ended September 30, 2022. 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 $3,817,605 for the nine months ended September 30, 2023, reflecting a decrease of $2,695,967, or 41%, from $6,513,572 for the nine months ended September 30, 2022. 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 reflected 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 since April 2023.

Costof Revenues

Cost of revenues was $593,294 for the three months ended September 30, 2023, reflecting a decrease of $807,228, or 58%, from $1,400,522 for the three months ended September 30, 2022. 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 $1,923,459 for the nine months ended September 30, 2023, reflecting a decrease of $1,095,048, or 36%, from $3,018,507 for the nine months ended September 30, 2022. The decrease in cost of revenues was due to the lower product sales volume in line with our net revenues decrease.

GrossProfit

Gross profit was $316,425 and $1,514,781 for the three months ended September 30, 2023 and 2022, respectively, reflecting a decrease of $1,198,356, or 79%. The decrease in gross profit was mainly due to the decrease in the net revenues.

Gross profit was $1,894,146 and $3,495,065 for the nine months ended September 30, 2023 and 2022, respectively, reflecting a decrease of $1,600,919, or 46%. The decrease in gross profit was mainly due to the decrease in the net revenues.

OperatingExpenses

Operating expenses were $1,538,265 for the three months ended September 30, 2023, reflecting an increase of $1,050,625, or 215%, from $487,640 for the three months ended September 30, 2022. The increase in operating expenses was mainly due to the increase in professional service fees and credit loss expenses.

Operating expenses were $3,543,490 for the nine months ended September 30, 2023, reflecting an increase of $2,146,823, or 154%, from $1,396,667 for the nine months ended September 30, 2022. The increase in operating expenses was mainly due to the increase in professional service fees and credit loss expenses.

NetIncome (Loss)

For the three months ended September 30, 2023, our net loss was $1,222,744, compared to a net income of $910,735 for the three months ended September 30, 2022. The decrease in net income was a result of the factors described above.

For the nine months ended September 30, 2023, our net loss was $1,756,749, compared to a net income of $1,875,677 for the nine months ended September 30, 2022. The decrease in net income was a result of the factors described above.

NetIncome (Loss) Attributable to Noncontrolling Interests

The Company records net income (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 September 30, 2023 and 2022, the Company recorded a net loss attributable to noncontrolling interests of $114,085 and a net income attributable to noncontrolling interests of $54,931, respectively.

For the nine months ended September 30, 2023 and 2022, the Company recorded a net loss attributable to noncontrolling interests of $172,446 and a net income attributable to noncontrolling interests of $123,464, respectively.

| 18 |

| --- |

Liquidity and Capital Resources

WorkingCapital

September 30, <br> 2023 December 31,<br> 2022 Change
Total current assets $ 5,743,429 $ 6,871,091 $ (1,127,662 )
Total current liabilities 2,671,621 2,484,582 187,039
Working capital $ 3,071,808 $ 4,386,509 $ (1,314,701 )

As of September 30, 2023, we had working capital of $3,071,808, as compared to working capital of $4,386,509 as of December 31, 2022. We had total current assets of $5,743,429, consisting of cash and cash equivalents of $13,276, inventories of $59,239, prepayments and other current assets of $1,367,548, accounts receivable of $4,303,366 compared to total current assets of $6,871,091 as of December 31, 2022. 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 $2,671,621, consisting of operating lease obligations - current of $109,191, accounts payable of $683,967, accrued liabilities of $625,189, bank and other borrowing - current of $451,119, customer advances of $71,315, income tax payable of $7,352 and due to related parties of $723,488. The increase in total current liabilities was mainly due to the increase in the accrued liabilities and the amount due to related parties, and offset by the decrease in customer advances and income tax payable.

Our cash and cash equivalents balance decreased to $13,276 as of September 30, 2023, from $165,685 as of December 31, 2022. We estimate the Company currently has sufficient 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.

Despite the positive working capital of the Company, no assurance can be given that any future financing, if needed, 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, if needed, 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

Nine months ended September 30,
2023 2022 Change
Cash Flows provided by (used in) Operating Activities $ (272,944 ) $ 48,444 $ (321,388 )
Cash Flows used in Investing Activities (5,488 ) - (5,488 )
Cash Flows provided by Financing Activities 161,355 108,002 53,353
Effect of exchange rate changes (35,312 ) (40,166 ) 4,854
Net Changes in Cash and Cash Equivalents $ (152,409 ) $ 116,280 $ (268,689 )

CashFlow from Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2023 was $272,944, as compared to the amount of $48,444 provided by operating activities for the nine months ended September 30, 2022, reflecting a decrease of $321,388. The cash used in operating activities during the nine months ended September 30, 2023 was mainly resulted from the net loss of $1,756,749 and the increase in prepayments and other current assets of $838,488, offset by the allowance for credit losses of $2,175,928.

CashFlow from Investing Activities

Net cash used in investing activities was $5,488 for the nine months ended September 30, 2023, compared to net cash used in investing activities of $nil for the nine months ended September 30, 2022. The cash used in investing activities during the nine months ended September 30, 2023 was mainly for the purchase of a vehicle in April 2023 for daily operating use.

CashFlow from Financing Activities

Net cash provided by financing activities was $161,335 for the nine months ended September 30, 2023, compared to net cash provided by financing activities of $108,002 for the nine months ended September 30, 2022. The cash provided by financing activities for the nine months ended September 30, 2023 was mainly resulted from the net proceeds from revolving credit lines of $141,967.

| 19 |

| --- |

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, 2022, 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, 2022.

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 September 30, 2023 and December 31, 2022, the Company had accounts receivable from related parties in the amounts of $69,746 and $146,087, prepayments to related parties in the amounts of $966,676 and $1,102,861, deposits to related parties in the amounts of $523,296 and $758,445, and accounts payable to related parties in amounts of $124,987 and $80,426, respectively.

As of September 30, 2023 and December 31, 2022, the Company had outstanding payables due to its related parties in the amounts of $723,488 and $565,675, respectively, which mainly consisted of borrowings for working capital purpose. The balances were unsecured, non-interest bearing and due on demand.

During the nine months ended September 30, 2023 and 2022, the Company sold products to its related parties in the amounts of $87,168 and $120,632, respectively, purchased goods from its related parties in the amounts of $497,964 and $769,387, and incurred the costs of revenues from related parties in the amounts of $493,096 and $763,663, respectively.

During the nine months ended September 30, 2023 and 2022, the rental expenses to related parties were $14,046 and $16,132, 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 September 30, 2023, 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 September 30, 2023. 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 September 30, 2023, 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 2023.

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> November 13, 2023 By: /s/ Yumin Lin
Yumin<br> Lin
President<br> and Chief Executive Officer
(Principal<br> Executive Officer)
Date:<br> November 13, 2023 By: /s/ Kaihong Lin
Kaihong<br> Lin
Chief<br> Financial Officer and Treasurer
(Principal<br> Financial and Accounting Officer) 
| 23 |

| --- |

EXHIBIT 31.1

CERTIFICATION

I, Yumin 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 September 30, 2023;

  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 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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
  1. 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 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: November 13, 2023
--- --- ---
By*:* /s/ Yumin Lin
Name: Yumin Lin
Title: Chief Executive Officer and President<br><br>(Principal Executive Officer)

EXHIBIT 31.2

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 September 30, 2023;

  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 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 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 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 (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
  1. 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 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: November 13, 2023
--- --- ---
By*:* /s/ Kaihong Lin
Name: Kaihong Lin
Title: Chief Financial Officer and Treasurer<br><br> <br>(Principal Financial and Accounting Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANTTO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 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: November 13, 2023
By*:* /s/ Yumin Lin
Name: Yumin Lin
Title: Chief Executive Officer and President<br><br><br><br>(Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANTTO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEYACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the period ended September 30, 2023 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: November 13, 2023
By*:* /s/ Kaihong Lin
Name: Kaihong Lin
Title: Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

Report a Problem

Category
Description
Email (optional, for follow-up)