Equibles

10-Q/A

Fortune Valley Treasures, Inc. (FVTI)

10-Q/A 2021-11-15 For: 2020-09-30
View Original
Added on April 06, 2026

UNITED

STATES

SECURITIES

AND EXCHANGE COMMISSION

Washington,

D.C. 20549

FORM

10-Q/A

(AmendmentNo. 1)

☒

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

Forthe Quarterly Period Ended ### September 30, 2020

☐

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

For the transition period from ______ to _______

COMMISSION

FILE NO. 000-55555

FORTUNE

VALLEY TREASURES, INC.

(Exact name of registrant as specified in its charter)

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

13thFloor, Building B1, Wisdom Plaza

QiaoxiangRoad, Nanshan District

Shenzhen,Guangdong, China 518000

(Address of principal executive offices, including zip code)

Registrant’s telephone number, including area code: (86) 755-86961405

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 registrant 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 15, 2021, there were 15,655,038 shares of common stock, par value $0.001 per share, of the registrant issued and outstanding.

TABLE

OF CONTENTS

**** PAGE
CAUTIONARY NOTES REGARDING FORWARD-LOOKING STATEMENTS 4
PART I - FINANCIAL INFORMATION F-1
ITEM<br> 1. FINANCIAL STATEMENTS F-1
ITEM<br> 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 5
ITEM<br> 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 8
ITEM<br> 4. CONTROLS AND PROCEDURES 8
PART II - OTHER INFORMATION 9
ITEM<br> 1. LEGAL PROCEEDINGS 9
ITEM<br> 1A. RISK FACTORS 9
ITEM<br> 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 9
ITEM<br> 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM<br> 4. MINE SAFETY DISCLOSURES 9
ITEM<br> 5. OTHER INFORMATION 9
ITEM<br> 6. EXHIBITS 10
SIGNATURES 11 
| 2 |

| --- |

EXPLANATORY

NOTE

We are filing this Amendment No. 1 on Form 10-Q/A (“Amended Report”) to amend in its entirety our Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, originally filed with the Securities and Exchange Commission on November 23, 2020 (the “Original Report”), to restate our unaudited consolidated financial statements as of and for the period ended September 30, 2020.

Subsequent to our Original Report, the Company determined, after discussion with its independent auditors, that the Company’s previously issued unaudited condensed consolidated financial statements for the quarter ended September 30, 2020 (the “Interim Financial Statements”) should be restated to correct errors in the Interim Financial Statements related to the acquisition of Dongguan Xixingdao Technology Co., Ltd. (“Xixingdao”) completed on August 31, 2020, and therefore the Interim Financial Statements included in the Original Report should no longer be relied upon.

Because these revisions are treated as corrections of errors to our prior period financial results, the revisions are considered to be an “amendment” under U.S. generally accepted accounting principles (“US GAAP”). Accordingly, the revised financial information included in this Amended Report has been identified as “Restated.”

This Amended Report speaks as of the original filing date and reflects the acquisition of Xixingdao complete on August 31, 2020. In addition, pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, as a result of this amendment, the certifications pursuant to Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002, as exhibits to the Original Report have been re-executed and re-filed as of the date of this Amended Report and are included as exhibits hereto.

ItemsAmended in this Amended Report

The following sections in the Original Report are revised in this Amended Report, solely as a result of, and to reflect, the restatement:

● Part<br> I – Item 1. Financial Information
● Part<br> I – Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
● Part<br> II – Item 6. Exhibits and Signatures

Except as stated herein, this Amended Report does not reflect events occurring after the filing of the Original Report on November 23, 2020 and no attempt has been made in this Amended Report to modify or update other disclosures as presented in the Original Report. Accordingly, this Amended Report should be read in conjunction with the Original Report, and the Company’s other filings with the SEC subsequent to the filing of the Original Report.

| 3 |

| --- |

CAUTIONARY

NOTES REGARDING FORWARD-LOOKING STATEMENTS

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

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

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

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

| 4 |

| --- |

PART

I - FINANCIAL INFORMATION

ITEM

  1. FINANCIAL STATEMENTS

Fortune

Valley Treasures, Inc.

Condensed

Consolidated Financial Statements

September

30, 2020

(Unaudited)

Contents Page
Condensed<br> Consolidated Balance Sheets F-2
Condensed<br> Consolidated Statements of Operations and Comprehensive Loss F-3
Condensed<br> Consolidated Statements of Stockholders’ Deficit F-4
Condensed<br> Consolidated Statements of Cash Flows F-5
Notes<br> to Financial Statements F-6 
| F-1 |

| --- |

Fortune

Valley Treasures, Inc.

Condensed

Consolidated Balance Sheets

At

September 30, 2020 and December 31, 2019

(Unaudited)

September 30, December 31,
2020 2019
(Restated<br><br> <br>see Note 14)
Assets
Current assets
Cash and cash equivalents $ 23,097 $ 38,137
Accounts and other receivables, net 121,316 146
Inventories 121,306 28,502
Prepayments and other current assets 146,677 7,185
Due from related parties 11,931 -
Total current assets 424,327 73,970
Non-current assets
Property and equipment, net 50,996 8,611
Operating lease right-of-use assets 68,684 -
Operating lease right-of-use assets, related parties 169,928 110,456
Deposits paid 283,491 -
Intangible assets, net 3,101,046 -
Goodwill 6,988,560 -
Total Assets $ 11,087,032 $ 193,037
Liabilities
Current liabilities
Accounts payable $ - $ -
Unearned revenues 8,498 -
Operating lease obligation - current 31,762 -
Operating lease obligations, related parties - current 135,194 13,715
Accounts, taxes, other payables, and accruals 145,532 32,860
Due to related parties 1,174,982 808,777
Common stock payable 9,773,989 -
Total current liabilities 11,269,957 855,352
Non-current liabilities
Operating lease obligations - non-current 39,738 -
Operating lease obligations, related parties - non-current 98,099 98,189
Bank borrowing 99,981 -
Total Liabilities 11,507,775 953,541
Stockholders’ Deficit
Common stock (3,000,000,000<br> shares authorized, 307,750,100 issued<br> and outstanding at September 30, 2020 and December 31, 2019) 307,750 307,750
Additional paid in capital - -
Accumulated deficit (1,350,208 ) (1,085,853 )
Accumulated other comprehensive income 72,470 17,599
Total Fortune Valley Treasures, Inc. stockholders’ deficit (969,988 ) (760,504 )
Non-controlling interests 549,245 -
Total Stockholders’ Deficit (420,743 ) (760,504 )
Total Liabilities and Stockholders’ Deficit $ 11,087,032 $ 193,037

See

accompanying notes to the unaudited condensed financial statements

| F-2 |

| --- |

Fortune

Valley Treasures, Inc.

Condensed

Consolidated Statements of Operations and Comprehensive Loss

For

the Three and Nine Months Ended September 30, 2020 and 2019

(Unaudited)

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
Three Months Ended Nine Months Ended
September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019
(Restated<br><br> <br>see Note 14) (Restated<br><br> <br>see Note 14)
Revenue from third parties $ 281,603 $ 12,251 $ 372,830 $ 46,154
Revenue from related parties 1,957 83,327 1,957 133,380
Revenue 283,560 95,578 374,787 179,534
Cost of revenues 245,504 75,795 299,847 137,470
Gross profit 38,056 19,783 74,940 42,064
Operating expenses:
Selling and distribution expenses 1,530 - 1,530 -
General and administrative expenses 183,571 98,483 422,063 366,050
Operating loss (147,045 ) (78,700 ) (348,653 ) (323,986 )
Other income (expenses):
Other income (expenses) 78,525 (87 ) 80,631 2,417
Interest income 16 44 96 185
Interest expense (5,221 ) (100 ) (10,201 ) (371 )
Other income (expenses), net 73,320 (143 ) 70,526 2,231
Loss before income tax (73,725 ) (78,843 ) (278,127 ) (321,755 )
Income tax expense 3,415 - 3,415 84
Net loss $ (77,140 ) $ (78,843 ) $ (281,542 ) $ (321,839 )
Less: Net loss attributable to non-controlling interests (2,518 ) - (17,187 ) -
Net loss attributable to Fortune Valley Treasures,<br> Inc. (74,622 ) (78,843 ) (264,355 ) (321,839 )
Other comprehensive income
Foreign currency translation gain 49,945 3,054 55,228 5,718
Total comprehensive loss (27,195 ) (75,789 ) (226,314 ) (316,121 )
Less: comprehensive loss attributable to non-controlling interests (1,864 ) - (16,830 ) -
Comprehensive loss attributable to Fortune<br> Valley Treasures, Inc. $ (25,331 ) $ (75,789 ) $ (209,484 ) $ (316,121 )
Loss per share
Basic and diluted loss per share $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 )
Basic and diluted weighted average shares outstanding 307,750,100 307,750,100 307,750,100 307,750,100

See

accompanying notes to the unaudited condensed financial statements

| F-3 |

| --- |

Fortune

Valley Treasures, Inc.

Condensed

Consolidated Statements of Stockholders’ Deficit

For

the Nine Months Ended September 30, 2020 and 2019

(Unaudited)

For Nine Months Ended September 30, 2020

No. of<br> Shares Common Stock Accumulated Deficit Accumulated Other Comprehensive Income Non-controlling interest Total
**** (Restated see Note 14) (Restated see Note 14) (Restated see Note 14) **** (Restated see Note 14) **** (Restated see Note 14) **** (Restated see Note 14) ****
Balance as of December 31, 2019 307,750,100 $ 307,750 $ (1,085,853 ) $ 17,599 $ - $ (760,504 )
Non-controlling interest arising from acquisition of subsidiary
Acquisition of Xixingdao
Acquisition of Xixingdao, shares
1 for 20 reverve stock split
1 for 20 reverve stock split, shares
Net loss - - (102,568 ) - - (102,568 )
Foreign currency translation adjustment - - - 7,218 - 7,218
Balance as of March 31, 2020 307,750,100 $ 307,750 $ (1,188,421 ) $ 24,817 $ - $ (855,854 )
Non-controlling interest arising from acquisition of subsidiary - - - - 17,042 17,042
Net loss - - (87,165 ) - (14,669 ) (101,834 )
Foreign currency translation adjustment - - - (1,638 ) (297 ) (1,935 )
Balance as of June 30, 2020 307,750,100 $ 307,750 $ (1,275,586 ) $ 23,179 $ 2,076 $ (942,581 )
Non-controlling interest arising from acquisition of subsidiary - - - - 549,033 549,033
Net profit - - (74,622 ) - (2,518 ) (77,140 )
Foreign currency translation adjustment - - - 49,291 654 49,945
Balance as of September 30, 2020 307,750,100 $ 307,750 $ (1,350,208 ) $ 72,470 $ 549,245 $ (420,743 )

For Nine Months Ended September 30, 2019

No. of<br> Shares Common Stock Accumulated Deficit Accumulated Other Comprehensive Income Non-controlling Interest Total
Balance as of December 31 2018 307,750,100 $ 307,750 $ (708,097 ) $ 13,119 $ - $ (387,228 )
Net income - - (321,839 ) - - (321,839 )
Net profit (loss) - - (321,839 ) - - (321,839 )
Foreign currency translation adjustment - - - 5,717 - 5,717
Balance as of September 30, 2019 307,750,100 $ 307,750 $ (1,029,936 ) $ 18,836 $ - $ (703,350 )

See

accompanying notes to the unaudited condensed financial statements

| F-4 |

| --- |

Fortune

Valley Treasures, Inc.

Condensed

Consolidated Statements of Cash Flows

For

the Nine Months Ended September 30, 2020 and 2019

(Unaudited)

For<br> the Nine Months Ended
September<br> 30, 2020 September<br> 30, 2019
(Restated<br><br> <br>see<br> Note 14)
Cash flows from operating<br> activities
Net loss $ (281,542 ) $ (321,839 )
Adjustment to reconcile net<br> loss to net cash used in operating activities
Depreciation<br> and amortization expense 78,629 791
Non-cash<br> lease expense 87,351 -
Changes<br> in operating assets and liabilities
Accounts<br> receivables (121,170 ) 2,450
Inventories (92,804 ) 130,213
Prepayments<br> and other current assets (139,492 ) (960 )
Accounts and other payables 121,170 16,576
Operating<br> lease obligations (15,743 ) -
Net cash used in operating<br> activities (363,601 ) (205,921 )
Cash flows from investing<br> activities
Advance to related parties (12,099 ) -
Repayment of advance to<br> related parties 168 -
Proceeds from acquisition<br> of subsidiary 7,672 -
Purchase<br> of property and equipment (56,852 ) -
Net<br> cash used in investing activities (61,111 ) -
Cash flows from financing<br> activities
Borrowings<br> from related parties 561,107 215,027
Repayments<br> to related parties (194,902 ) -
Proceed<br> from bank borrowings, net 99,981 -
Net<br> cash provided by financing activities 466,186 215,027
Effect<br> of foreign currency translation on cash and cash equivalents (56,514 ) (899 )
Net (decrease)/increase of<br> cash and cash equivalents (15,040 ) 8,207
Cash<br> and cash equivalents-beginning of period 38,137 29,999
Cash<br> and cash equivalents-end of period $ 23,097 $ 38,206
Supplementary cash flow information:
Interest<br> received $ 96 $ 185
Interest<br> paid $ 10,201 $ 371
Income<br> taxes paid $ - $ 84
Non-cash<br> investing and financing activities:
Expense<br> paid by related parties $ 277,081 $ -
Shares<br> payable for acquisition of subsidiary $ 9,773,989 $ -
Operating<br> lease right-of-use assets obtained in exchange for operating lease obligations $ 172,022 $ 128,660

See

accompanying notes to the unaudited condensed financial statements

| F-5 |

| --- |

NOTE

1 - ORGANIZATION AND SUMMARY OF SIGNICANT ACCOUNTING POLICIES

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

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

On

April 11, 2018, the Company entered into a share exchange agreement by and among DaXingHuaShang Investment Group Limited, a Republic of Seychelles limited liability company (“DIGLS”), and each of the shareholders of DIGLS, pursuant to which the Company issued 300,000,000 shares of common stock in exchange for 100% of the issued shares of DIGLS. This transaction was accounted for a reverse takeover transaction and a recapitalization of the Company whereby the Company, the legal acquirer, is the accounting acquiree, and DIGLS, the legal acquiree, is the accounting acquirer. Accordingly, the Company historical statement of stockholders’ equity has been retroactively restated to the first period presented.

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

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

On

July 13, 2019, FVTI and QHDX entered into an equity interest transfer agreement (the “Makaweng Agreement”), which was later amended on September 12, 2019, with Xingwen Wang, a shareholder and legal representative of Yunnan Makaweng Wine & Spirits Co., Ltd. (“Makaweng” or MKW), a PRC limited liability company formed in 2015. Pursuant to the Makaweng Agreement, QHDX agreed to purchase 51% of Makaweng’s equity interest from Xingwen Wang in exchange for shares of FVTI’s common stock. On August 28, 2019, the registration of transferring the 51% of equity interest of Makaweng to QHDX with local government authorities was completed. The control of Makaweng has not been transferred to QHDX as of September 30, 2020.

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 4,862,681 shares of the Company’s common stock. The Company obtained the control of Xixingdao and Xixingdao became the Company’s subsidiary on August 31, 2020. As of September 30, 2020, the shares have not been issued.

| F-6 |

| --- |

NOTE 2 - SUMMARY OF SIGNIFICANT

ACCOUNTING POLICIES

Basisof presentation

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

Basisof consolidation

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

As of September 30, 2020, details of the Company’s major subsidiaries were as follows:

SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES

Entity Name Date of Incorporation Parent Entity Nature of Operation Place of 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 wine 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 No<br> operations PRC
MKW August 28, 2019 QHDX Trading of alcohol PRC
LJRB November 16, 2015 MKW No operation PRC
Xixingdao May<br> 31, 2019 QHDX Drinking<br> water distribution and delivery PRC

Useof estimates

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

Reclassification

Certain prior year amounts have been reclassified to conform to the current period presentation. These reclassifications had no impact on net earnings and financial position.

Foreigncurrency translation and re-measurement

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

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

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

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

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

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

● Assets<br> and liabilities at the rate of exchange in effect at the balance sheet date,
● Equities<br> at the historical rate, and
● Revenue<br> and expense items at the average rate of exchange prevailing during the period. 
| F-7 |

| --- |

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

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

September 30, 2020 December 31, 2019
Spot RMB: USD exchange rate $ 0.14703 $ 0.14334
Average RMB: USD exchange rate $ 0.14298 $ 0.14505

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

Cash and cash equivalents

Cash

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

Accountsreceivable

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

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

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

Inventories

Inventories consisting of finished goods are stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company provides impairment that is charged directly to cost of sales when it has been determined that the product is obsolete, spoiled, and that the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are imported alcoholic beverages. The selling price of alcoholic beverages tends to increase over time. However, there are circumstances where alcoholic beverages may be subject to spoilage if stored for prolong periods of time. The Company did not experience an impairment on inventory during the nine months ended September 30, 2020 and 2019.

Right-of-useasset and lease liabilities

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

Accountingfor long-lived assets

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

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.

| F-8 |

| --- |

Customeradvances and deposits

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

Revenuerecognition

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

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

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

Advertising

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

Shippingand handling

Outbound shipping and handling are expensed as incurred.

Retirementbenefits

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

Incometaxes

The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain.

Statutoryreserves

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

Earningsper share

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

| F-9 |

| --- |

Financialinstruments

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

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

Commitmentsand contingencies

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

Comprehensiveincome

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

Goodwill

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

Recentaccounting pronouncements

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

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

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

| F-10 |

| --- |

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

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

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

NOTE

3 - GOING CONCERN

The

accompanying financial statements have been prepared in conformity with GAAP which contemplate continuation of the Company as a going concern. The going concern basis assumes that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive operating cash flows. As of September 30, 2020 and 2019, the Company reported net losses of $281,542

and

$321,839

,

respectively. As of September 30, 2020, the Company had working capital deficit of approximately $10,845,630 .

In addition, the Company had net cash outflows of $363,601

from operating activities during the nine months ended September 30, 2020. These conditions still raise a substantial doubt as to whether the Company may continue as a going concern.

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

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

NOTE

4 - ACCOUNTS AND OTHER RECEIVABLES

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

SCHEDULE OF ACCOUNTS RECEIVABLE

September<br> 30,<br><br> <br>2020 December<br> 31,<br><br> <br>2019
Gross accounts and other receivables $ 121,316 $ 146
Less: Allowance for doubtful accounts - -
Accounts and other receivables<br> net $ 121,316 $ 146

NOTE

5 – INVENTORIES

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

SCHEDULE OF INVENTORIES

September<br> 30,<br><br> <br>2020 December<br> 31,<br><br> <br>2019
Finished goods $ 121,306 $ 28,502 
| F-11 |

| --- |

NOTE

6 - PROPERTY AND EQUIPMENT, NET

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

SCHEDULE OF PROPERTY AND EQUIPMENT, NET

September<br> 30,<br><br> <br>2020 December<br> 31,<br><br> <br>2019
At Cost:
Equipment $ 64,804 $ 61,510
Improvements 53,558 -
Property, plant and equipment, gross 118,362 61,510
Less: Accumulated depreciation (67,366 ) (52,899 )
Property, plant and equipment,<br> net $ 50,996 $ 8,611

NOTE

7 – INTANGIBLE ASSETS

Intangible assets and related accumulated amortization were as follows:

SCHEDULE OF INTANGIBLE ASSETS

September<br> 30,<br><br> <br>2020 December<br> 31,<br><br> <br>2019
At Cost:
Distributor channel $ 3,165,208 $ -
Less: Accumulated depreciation (64,162 ) -
Total $ 3,101,046 $ -

Amortization

expense for the nine months ended September 30, 2020 and 2019 was $64,162 and $0, respectively, included in cost of revenues.

As of September 30, 2020, the future estimated amortization costs for distribution channel are as follows:

SCHEDULE OF FUTURE AMORTIZATION EXPENSE FOR DISTRIBUTION CHANNELS

2020 (remaining of the year) $ 197,939
2021 791,756
2022 791,756
2023 791,756
2024 527,839
Total $ 3,101,046

NOTE

8 – BUSINESS COMBINATION AND GOODWILL

On

August 31, 2020, FVTI completed the acquisition of 90%

equity interest of Xixingdao. The Company aimed

to enter the service of drinking water distribution and delivery market in Dongguan City, Guangdong Province through this acquisition. The purchase consideration is $9,773,989

,

consists of 4,862,681 shares of the Company’s common stock, which have not been issued. The Company accounted for the acquisition using the purchase method of accounting for business combination under ASC 805. The total purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities based on their estimated fair values as of the acquisition date.

The determination of fair values involves the use of significant judgment and estimates and in the case of Xixingdao, this is with specific reference to acquired intangible asset. The judgments used to determine the estimated fair value assigned to assets acquired and liabilities assumed, as well as the intangible asset life and the expected future cash flows and related discount rate, can materially impact the Company’s consolidated financial statements. Significant inputs and assumptions used for the model included the amount and timing of expected future cash flows and discount rate. The Company utilized the assistance of a third-party valuation appraiser to determine the fair value as of the date of acquisition.

The purchase price was allocated on the acquisition date of Xixingdao as follows:

SCHEDULE

OF ASSETS ACQUIRED AND LIABILITIES ASSUMED

Account<br> and other receivables $ 305,866
Inventories 79,332
Other<br> net assets (12,884 )
Distribution<br> channel 3,145,260
Due<br> to related parties (135,080 )
Noncontrolling<br> interest (549,033 )
Goodwill 6,940,530
Total $ 9,773,991

The results of operations, financial position, and cash flows of Xixingdao have been included in the Company’s consolidated financial statements since the date of acquisition. Goodwill arising from this business combination is not tax deductible.

The following unaudited pro forma information presents the combined results of operations for the nine months ended September 30, 2020 and 2019 as if the acquisition of Xixingdao had occurred as of January 1, 2020 and May 31, 2019, the inception date of Xixingdao. These unaudited pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations of the combined company would have been if the Company consummated the acquisition on January 1, 2020 or May 31, 2019, nor are they indicative of future results of operations:

SCHEDULE

OF PRO FORMA INFORMATION

For nine months ended September 30, 2020 For nine months ended September30, 2019
Pro forma net revenues $ 889,983 $ 201,535
Pro forma net loss 109,971 337,155
Pro forma net loss attributable to Fortune Valley Treasures, Inc. 110,036 335,623

The Company’s policy is to perform its annual impairment testing on goodwill for its reporting unit on December 31, of each fiscal year or more frequently if events or changes in circumstances indicate that an impairment may exist.

| F-12 |

| --- |

NOTE

9 – LONG TERM BORROWINGS

In August 2020, the Company entered in long term line of credit with China Construction Bank-Dongguan City Branch for an aggregate of RMB910,000 (approximately $138,656) for working capital purposes. The line of credit comes due on July 21, 2023. It carries a variable interest rate of the Chinese Loan Prime Rate plus 40 basis points. The loan is unsecured. As of September 30, 2020, the Company had drawn $99,981 (RMB 680,000) against the line.

NOTE

10 - INCOME TAXES

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

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

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

SCHEDULE

OF RECONCILIATION OF TAX EXPENSES

September 30, 2020 September 30, 2019
Loss attributed to PRC operations $ (96,902 ) $ (145,784 )
Loss attributed to Seychelles and Hong Kong 1,066 (208 )
Loss attributed to U.S. (182,291 ) (175,763 )
Loss before tax (278,127 ) (321,755 )
PRC statutory tax at 25% rate (69,532 ) (80,439 )
Effect of Seychelles, PRC, Hong Kong, deductions and other reconciling items 66,117 80,523
Income tax $ 3,415 $ 84

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

Schedule of Effective Income Tax Rate

September 30, 2020 September 30, 2019
U.S. federal statutory income tax rate 21.0 % 21.0 %
Higher rates in PRC, net 4.0 % 4.0 %
Effect of reconciling items (26.2 %) (25.0 %)
The Company’s effective tax rate (1.2 %) 0.0 % 
| F-13 |

| --- |

NOTE

11 - RELATED PARTY TRANSACTIONS

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

SCHEDULE OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

Relationship with the Company September 30, 2020 December 31, 2019
Mr. Naiyong Luo Director of DIGLS $ 3,727 $ -
Ms. Lihua Li Mr. Yumin Lin’s wife 8,204 -
$ 11,931 $ -

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

Relationship with the Company September 30, 2020 December 31, 2019
Mr. Yumin Lin Chairman, Chief Executive Officer, President and Secretary $ 840,942 $ 791,576
Ms. Qingmei Lin Mr. Yumin Lin’s wife 9,263 17,201
Mr. Yuwen Li Vice President 103,287 -
Hua Hui (Shenzhen) Education Management<br> Ltd. Mr. Hongwei Ye, manager of a subsidiary, is the<br> supervisor of Hua Hui (Shenzhen) Education Management Ltd. 197,934 -
Mr. Xingwen Wang Manager of a subsidiary 1,429 -
Shenzhen Daxinghuashang<br> Industry Group Co., Ltd. Mr. Yumin Lin is the supervisor<br> of Shenzhen Daxinghuashang Industry Group Co., Ltd. 22,127 -
$ 1,174,982 $ 808,777

Due from related parties mainly consists of funds advanced to related parties as to pay off the Company’s expenses. The balance is unsecured, non-interest bearing.

Due

to related parties mainly consists of borrowings for working capital purpose, the balance is unsecured, non-interest bearing. The balance with Hua Hui (Shenzhen) Education Management Ltd. bears interest at the rate of 0.7% per month.

In addition, during the nine months ended September

30, 2020, these related parties paid expenses on the Company’s behalf in an amount of $277,081.

NOTE

12 – LEASE COMMITMENTS

The Company has six operating leases for five office spaces, and one warehouse in PRC with remaining lease terms of 13 months to 79 months.

Three of these leases were entered with related parties. The Company has an operating lease agreement with Qingmei Lin, a related party, for the premises in Dongguan City, PRC. The agreement covers the period from January 1, 2019 to April 30, 2027. The monthly rent expense is RMB10,000 (approximately $1,450). The Company has an operating lease agreement with subsidiary of Shenzhen DaXingHuaShang Industry Development Ltd., a related party, for the premises in Shenzhen City, PRC. The agreement covers the period from October 28, 2016 to October 28, 2021. The monthly rent expense is RMB30,000 (approximately $4,349). The Company has an operating lease agreement with Hongwei Ye, a related party, for the premises in Dongguan City, PRC. The agreement covers the period from September 27, 2020 to September 30, 2023. The monthly rent expense is RMB960 (approximately $139).

The components of lease expense and supplemental cash flow information related to leases for the nine months ended September 30, 2020 and 2019 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<br> consolidated statements of operations) For the nine<br> months ended <br>September 30, 2020
Related parties $ 85,212
Non-related parties 2,139
Total $ 87,351
Other information for the nine months ended September 30,<br><br> <br>2020
--- --- --- ---
Cash paid for amounts included in the measurement of lease obligations $ 11,152
Weighted average remaining lease term (in years) 3.91
Weighted average discount rate 3.23 %

Maturities of the Company’s lease obligations as of September 30, 2020 are as follows:

SCHEDULE OF MATURITIES OF LEASE OBLIGATIONS

2020 $ 93,641
2021 96,970
2022 46,244
2023 24,207
2024 17,644
Thereafter: 41,169
Total lease payment 319,875
Less: Imputed interest (15,082 )
Operating lease obligations $ 304,793 
| F-14 |

| --- |

NOTE

13 - RISKS

Creditrisk

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

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

Economicand political risks and national emergencies risk

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

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

Inflationrisk

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

Concentrationsrisk

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

NOTE

14 – RESTATEMENT

Our interim financial statements for the nine months ended September 30, 2020, as previously filed with the SEC on November 23, 2020, have been restated. The previously filed financial statements did not reflect the acquisition of Xixingdao, completed on August 31, 2020 and the results of Xixingdao from the effective date of acquisition. The impact of this restatement on the Company’s Condensed Consolidated Balance Sheet, Statements of Operations and Comprehensive Loss, and Statement of Cash Flows is reflected in the tables below:

SCHEDULE

OF RESTATEMENT TO BALANCE SHEET

CONDENSED CONSOLIDATED

BALANCE SHEET

(Unaudited）

Previously filed<br> <br>September 30, Restated<br> <br>September 30,
2020 Adjustment 2020
Assets
Current assets
Cash and cash equivalents $ 14,194 $ 8,903 $ 23,097
Accounts and other receivables, net 80,371 40,945 121,316
Inventories 50,787 70,519 121,306
Prepayments and other current assets 116,628 30,049 146,677
Due from related parties 8,066 3,865 11,931
Total current assets 270,046 154,281 424,327
Non-current assets
Property and equipment, net 48,442 2,554 50,996
Operating lease right of use asset - 68,684 68,684
Operating lease right of use asset, related parties 101,710 68,218 169,928
Deposits paid - 283,491 283,491
Intangible assets, net - 3,101,046 3,101,046
Goodwill - 6,988,560 6,988,560
Total Assets $ 420,198 $ 10,666,834 $ 11,087,032
Liabilities
Current liabilities
Accounts payable $ - $ - $ -
Unearned revenues 8,629 (131 ) 8,498
Operating lease obligation - current - 31,762 31,762
Operating lease obligation, related parties - current 14,419 120,775 135,194
Accounts, taxes, other payables, and accruals 87,223 58,309 145,532
Short<br> term borrowings 197,934 (197,934 ) -
Due to related parties 878,100 296,882 1,174,982
Common stock payable - 9,773,989 9,773,989
Total current liabilities 1,186,305 10,083,652 11,269,957
Non-current liabilities
Operating lease obligation - non-current - 39,738 39,738
Operating lease obligation, related parties - non-current 89,856 8,243 98,099
Long term borrowings 99,981 - 99,981
Total liabilities 1,376,142 10,131,633 11,507,775
Stockholders’ Deficit
Common stock (3,000,000,000 shares authorized, 307,750,100 issued and outstanding at<br> September 30, 2020 and December 31, 2019) 307,750 - 307,750
Additional paid in capital - - -
Accumulated deficit (1,271,910 ) (78,298 ) (1,350,208 )
Accumulated other comprehensive income 7,285 65,185 72,470
Total Stockholders’ Deficit (956,875 ) (13,113 ) (969,988 )
Non-controlling interest 931 548,314 549,245
Total Deficit (955,944 ) 535,201 (420,743 )
Total Liabilities and Stockholders’ Deficit $ 420,198 $ 10,666,834 $ 11,087,032 
| F-15 |

| --- |

SCHEDULE

OF RESTATEMENT TO OPERATIONS AND COMPREHENSIVE INCOME

CONDENSED

CONSOLDIATED STATEMENT OF OPERATIONS AND COMPREHENSIVE LOSS

(Unaudited）

For Three Months Ended September 30, 2020

Previously filed<br> <br>Three months ended<br><br> <br>September 30, Restated<br> <br>Three months ended<br><br>September 30,
**** 2020 **** Adjustment **** 2020 ****
Revenue from third parties $ 156,340 $ 125,263 $ 281,603
Revenue from related<br> parties - 1,957 1,957
Revenue 156,340 127,220 283,560
Cost of revenues 118,454 127,050 245,504
Gross profit 37,886 170 38,056
Operating<br> expenses
Selling and distribution expenses - 1,530 1,530
General and administrative expenses 102,112 81,459 183,571
Operating loss (64,226 ) (82,819 ) (147,045 )
Other income (expenses):
Other income (expenses) 71,841 6,684 78,525
Interest income 16 - 16
Interest expense (5,206 ) (15 ) (5,221 )
Other<br> income (expenses), net 66,651 6,669 73,320
Income<br> (loss) before income tax 2,425 (76,150 ) (73,725 )
Income tax - 3,415 3,415
Net<br> income (loss) $ 2,425 $ (79,565 ) $ (77,140 )
Less:<br> Net income (loss) attributable to non-controlling interest (1,251 ) (1,267 ) (2,518 )
Net<br> income (loss) attributable to Fortune Valley Treasures, Inc. 3,676 (78,298 ) (74,622 )
Other comprehensive income (loss):
Foreign<br> currency translation gain (loss) (15,788 ) 65,733 49,945
Comprehensive loss (15,788 ) (11,407 ) (27,195 )
Less:<br> Comprehensive loss attributable to non-controlling interest (1,145 ) (719 ) (1,864 )
Comprehensive<br> loss attributable to Fortune Valley Treasures, Inc. $ (13,363 ) $ (11,968 ) $ (25,331 )
Loss per share
Basic<br> and diluted loss per share $ (0.00 ) $ - $ (0.00 )
Basic and diluted weighted average shares<br> outstanding 307,750,000 100 307,750,100 
| F-16 |

| --- |

For Nine Months Ended September 30, 2020

Previously filed<br> <br>Nine months Restated<br> <br>Ninemonths
**** ended **** **** **** ended ****
**** September 30, **** **** **** September 30, ****
**** 2020 **** Adjustment **** **** 2020 ****
Revenue from third parties $ 247,567 $ 125,263 $ 372,830
Revenue from related parties - 1,957 1,957
Revenue 247,567 127,220 374,787
Cost of revenues 172,797 127,050 299,847
Gross profit 74,770 170 74,940
Operating expenses
Selling and distribution expenses - 1,530 1,530
General and administrative expenses 340,604 81,459 422,063
Operating loss (265,834 ) (82,819 ) (348,653 )
Other income (expenses):
Other income (expenses) 73,947 6,684 80,631
Interest income 96 - 96
Interest expense (10,186 ) (15 ) (10,201 )
Other<br> income (expenses), net 63,857 6,669 70,526
Loss before income tax (201,977 ) (76,150 ) (278,127 )
Income tax expense - 3,415 3,415
Net loss $ (201,977 ) $ (79,565 ) $ (281,542 )
Less: Net loss attributable to<br> non-controlling interest (15,920 ) (1,237 ) (17,187 )
Net loss<br> attributable to Fortune Valley Treasures, Inc. (186,057 ) (78,328 ) (264,355 )
Other comprehensive gain (loss):
Foreign currency translation gain (loss) (10,505 ) 65,733 55,228
Comprehensive loss: (212,482 ) (13,832 ) (226,314 )
Less: Comprehensive loss attributable<br> to non-controlling interest (16,111 ) (719 ) (16,830 )
Comprehensive<br> loss attributable to Fortune Valley Treasures, Inc. $ (196,371 ) $ (13,113 ) $ (209,484 )
Loss per share
Basic and diluted loss<br> per share $ (0.00 ) - $ (0.00 )
Basic and diluted weighted average shares outstanding 307,750,000 100 307,750,100 
| F-17 |

| --- |

SCHEDULE

OF RESTATEMENT TO STOCKHOLDERS’ EQUITY

SCHEDULE

OF RESTATEMENT TO CASH FLOWS

CONDENSED

CONSOLDIATED STATEMENTS OF CASH FLOWS

(Unaudited)

Previously filed Nine months<br><br> <br>ended Restated <br>Ninemonths<br> ended
September 30, September<br> 30,
2020 Adjustment 2020
Cash flows from operating activities
Net loss $ (201,977 ) $ (79,565 ) $ (281,542 )
Adjustments to reconcile net income to net cash provided by (used for) operating activities
Depreciation of fixed assets 23,293 55,336 78,629
Non-cash lease expense - 87,351 87,351
Changes in operating assets and liabilities
Accounts and other receivables (69,620 ) (51,550 ) (121,170 )
Inventories (20,958 ) (71,846 ) (92,804 )
Prepayments and other current<br> assets (106,539 ) (32,953 ) (139,492 )
Accounts and other payables 40,174 80,996 121,170
Lease liabilities - (15,743 ) (15,743 )
Net cash used in operating activities (335,627 ) (27,974 ) (363,601 )
Cash flows from investing activities
Advance to related parties - (12,099 ) (12,099 )
Repayment from related parties - 168 168
Proceeds from acquisition of subsidiary - 7,672 7,672
Purchase of property and equipment (50,543 ) (6,309 ) (56,852 )
Net cash used in investing activities (50,543 ) (10,568 ) (61,111 )
Cash flows from financing activities
Capital injections from owners 17,157 (17,157 ) -
Proceeds from short term borrowings 192,477 (192,477 ) -
Borrowings from related parties 55,074 506,033 561,107
Repayment to related parties - (194,902 ) (194,902 )
Proceeds from long term bank borrowings, net 97,225 2,756 99,981
Net cash provided by financing activities 361,933 104,253 466,186
Effect of foreign currency translation on cash and cash equivalents 294 (56,808 ) (56,514 )
Net (decrease)/increase of cash and cash equivalents (23,943 ) 8,903 (15,040 )
Cash and cash equivalents-beginning of period 38,137 - 38,137
Cash and cash equivalents-end of period $ 14,194 $ 8,903 $ 23,097
Supplementary cash flow information:
Interest received $ 96 $ - $ 96
Interest paid $ 10,186 $ 15 $ 10,201
Income tax paid $ - $ - $ -
Non-cash investing and financing activities:
Expense paid by related parties $ - $ 277,081 $ 277,081
Shares payable for acquisition of subsidiary $ - $ 9,773,989 $ 9,773,989
Operating lease right-of-use assets obtained in exchange for operating lease obligations $ - $ 172,022 $ 172,022

NOTE

15 - SUBSEQUENT EVENTS

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

There was RMB 1,000,000 (approximately $147,031)

received as revenue in October 2020.

| F-18 |

| --- |

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

CompanyOverview

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

Coronavirus(COVID-19) Update

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

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

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

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

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

| 5 |

| --- |

Resultsof Operations

ThreeMonths Ended September 30, 2020 and 2019

Three Months Ended September 30,
2020 2019 Change
(Restated)
Revenue $ 283,560 $ 95,578 $ 187,982
Cost of revenue (245,504 ) (75,795 ) (169,709 )
Gross profit 38,056 19,783 18,273
Gross profit (%) 13 % 21 % 92 %
Operating expense (185,101 ) (98,483 ) (86,618 )
Other income (expense) 78,525 (87 ) 78,612
Interest income (loss) 16 44 (28 )
Interest expense (5,221 ) (100 ) (5,121 )
Provision for income taxes (3,415 ) - (3,415 )
Net loss (77,140 ) (78,843 ) 1,703
Net loss attributable to non-controlling<br> interest (2,518 ) - (2,518 )
Net loss attributable to Fortune Valley<br> Treasures, Inc $ (74,622 ) $ (78,843 ) $ 4,221

Revenue

Revenue was $283,560 for three months ended September 30, 2020, reflecting an increase of $187,982 from $95,578 for the three months ended September 30, 2019. The reason for the increase was that the Company made sales to a handful of new customers which increased our sales volume and the acquisition of Xixingdao.

Costof revenue

Cost of revenue was $245,504 for the three months ended September 30, 2020, reflecting an increase of $169,709 from $75,795 for the three months ended September 30, 2019. The increase was due to the increase in sales volume and the acquisition of Xixingdao.

Grossprofit

Gross profit was $38,056 and $19,783 for the three months ended September 30, 2020 and 2019, respectively, reflecting an increase of $18,273. Gross profit margin decreased to 13% for the three months ended September 30, 2020 from 21% for the corresponding period in 2019. The increase in gross profit was primarily attributable to the increase in revenue as a result of sales to new customers and existing customers’ revenge spending since the business reopening after the COVID-19 lockdown and the significant increase in gross profit margin. The decrease in gross profit margin was primarily due to the decrease in cost per unit resulting from procurement of larger quantities of supplies.

Operatingexpense

Operating expense was $185,101 for the three months ended September 30, 2020, reflecting an increase of $86,618 from $98,483 for the three months ended September 30, 2019. The increase was due to an increase in professional service fees and the amortization of intangible asset.

Netloss

For the three months ended September 30, 2020, net loss was $77,140 compared to net loss of $78,843 for the three months ended September 30, 2019.

Netloss attributable to noncontrolling interest

For the three months ended September 30, 2020, the Company recorded net loss attributable to noncontrolling interest of $2,518 compared to net loss attributable to noncontrolling interest of $0 for the three months ended September 30, 2019.

NineMonths Ended September 30, 2020 and 2019

Nine Months Ended September 30,
2020 2019 Change
(Restated)
Revenue $ 374,787 $ 179,534 $ 195,253
Cost of revenue (299,847 ) (137,470 ) (162,377 )
Gross profit 74,940 42,064 32,876
Gross profit (%) 20 % 23 % 78 %
Operating expense (423,593 ) (366,050 ) (57,543 )
Other income(expense) 80,631 2,417 78,214
Interest income 96 185 (89 )
Interest expense (10,201 ) (371 ) (9,830 )
Provision for income taxes (3,415 ) (84 ) (3,331 )
Net loss (281,542 ) (321,839 ) 40,297
Net loss attributable to noncontrolling<br> interest (17,187 ) - (17,187 )
Net loss attributable to Fortune Valley<br> Treasures, Inc $ (264,355 ) $ (321,839 ) $ 57,484 
| 6 |

| --- |

Revenue

Net revenue was $374,787 for nine months ended September 30, 2020, reflecting an increase of $195,253 from $179,534 for the nine months ended September 30, 2019. The reason for the increase in revenue was that the Company made sales of a handful of new customers that led to increased sales volume and the acquisition of Xixingdao.

Costof revenue

Cost of revenue was $299,847 for the nine months ended September 30, 2020, reflecting an increase of $162,377 from $137,470 for the nine months ended September 30, 2019. The increase was due to an increase in sales volume and the acquisition of Xixingdao.

Grossprofit

Gross profit was $74,940 and $42,064 for the nine months ended September 30, 2020 and 2019, respectively. Gross profit margin decreased to 20% for the nine months ended September 30, 2020 from 23% for the corresponding period in 2019. The decrease in gross profit was attributable to the increase in cost of revenue and gross profit margin.

Operatingexpense

Operating expense was $423,593 for the nine months ended September 30, 2020, reflecting an increase of $57,543 from $366,050 for the nine months ended September 30, 2019. The increase was primarily due to increases in salaries, marketing and general and administrative costs related to mergers and the amortization of intangible asset, as a result of the Company’s limited business activities due to the COVID-19 pandemic.

Netloss

For the nine months ended September 30, 2020, net loss was $281,542 compared to net loss of $321,839 for the nine months ended September 30, 2019.

Netloss attributable to noncontrolling interest

For the nine months ended September 30, 2020, the Company recorded net loss attributable to noncontrolling interest of $17,187 compared to net loss attributable to noncontrolling interest of $0 for the nine months ended September 30, 2019.

Liquidityand Capital Resources

Working Capital

September 30,<br><br> <br>2020 December 31,<br><br> <br>2019 Change
(Restated)
Total current assets $ 424,327 $ 73,970 $ 350,357
Total current liabilities 11,269,957 855,352 10,414,605
Working capital deficit $ (10,845,630 ) $ (781,382 ) $ (10,064,248 )

As of September 30, 2020, we had cash and cash equivalents in an amount of $23,097. We have financed our operations primarily though borrowings from related parties. The decrease in working capital deficit was primarily due to a decrease in losses from operations and net cash used in operating activities.

Cash Flows

Nine Months Ended September 30, ****
2020 **** 2019 **** Change ****
(Restated)
Cash<br> Flows Used in Operating Activities $ (363,601 ) $ (205,921 ) $ (157,680 )
Cash<br> Flows Used in Investing Activities (61,111 ) - (61,111 )
Cash<br> Flows Provided by Financing Activities 466,186 215,027 251,159
Effect<br> of change rate changes in cash and cash equivalent (56,514 ) (899 ) (55,615 )
Net<br> (Decrease)/Increase in Cash During Period $ (15,040 ) $ 8,207 $ (23,247 ) 
| 7 |

| --- |

CashFlow from Operating Activities

For the nine months ended September 30, 2020, net cash used in operating activities was $363,601, which represents a $157,680 increase compared to $205,921 net cash used in operating activities for the nine months ended September 30, 2019. The change was primarily due to an increase in accounts payables of $87,045 and amortization of intangible assets of $64,162.

CashFlow from Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2020 was $61,111 as compared to $0 for the nine months ended September 30, 2019. The increase in net cash used in investing activities was mainly due to certain office renovation and improvements, advanced to related parties.

CashFlow from Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2020 was $466,186 as compared to $215,027 for the nine months ended September 30, 2019. The increase in net cash provided by financing activities was mainly due to an increase in advanced from related parties and long term bank borrowings.

CriticalAccounting Policy and Estimates

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

Off-BalanceSheet Arrangements

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

ITEM

  1. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK.

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

ITEM

  1. CONTROLS AND PROCEDURES.

Evaluationof Disclosure Controls and Procedures

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

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

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

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

Changesin Internal Control over Financial Reporting

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.

| 8 |

| --- |

PART

II. OTHER INFORMATION

ITEM

  1. LEGAL PROCEEDINGS

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

ITEM

1A. RISK FACTORS

Not applicable to a smaller reporting company.

ITEM

  1. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM

  1. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM

  1. MINE SAFETY DISCLOSURES

Not applicable.

ITEM

  1. OTHER INFORMATION

None.

| 9 |

| --- |

ITEM

  1. EXHIBITS

EXHIBIT

INDEX

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

Exhibit<br><br> <br>Number Description
3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 as amended filed with the SEC on December 5, 2014)
3.2 Bylaws (incorporated by reference to Exhibit 3.2 the Company’s Registration Statement on Form S-1 filed with the SEC on December 5, 2014).
31.1* Certification<br> of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2* Certification<br> of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1** Certification<br> of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as<br> adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2** Certification<br> of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(b) or 15d-14(b) and 18 U.S.C. Section 1350, as<br> adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS* Inline XBRL<br> Instance Document
101.SCH* Inline XBRL<br> Taxonomy Extension Schema
101.CAL* Inline XBRL<br> Taxonomy Extension Calculation Linkbase
101.DEF* Inline XBRL<br> Taxonomy Extension Definition Linkbase
101.LAB* Inline XBRL<br> Taxonomy Extension Label Linkbase
101.PRE* Inline XBRL<br> Taxonomy Extension Presentation Linkbase
104 Cover Page Interactive Data File (embedded within the Inline XBRL document)
* Filed<br> herewith.
--- ---
** Furnished<br> herewith. 
| 10 |

| --- |

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Fortune Valley Treasures, Inc.
Date:<br> November 15, 2021
By*:* /s/ Yumin Lin
Name: Yumin<br> Lin
Title: Chief<br> Executive Officer, President and Secretary
(Principal<br> Executive Officer)
By*:* /s/ Kaihong Lin
Name: Kaihong<br> Lin
Title: Chief<br> Financial Officer and Treasurer
(Principal<br> Financial and Accounting Officer) 
| 11 |

| --- |

EXHIBIT31.1

CERTIFICATIONOF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Yumin Lin, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:<br> November 15, 2021
By*:* /s/ Yumin Lin
Name: Yumin<br> Lin
Title: Chief<br> Executive Officer, President and Secretary
(Principal<br> Executive Officer)

EXHIBIT31.2

CERTIFICATIONOF THE CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302 OF THE

SARBANES-OXLEY ACT OF 2002

I, Kaihong Lin, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date:<br> November 15, 2021
By*:* /s/ Kaihong Lin
Name: Kaihong<br> Lin
Title: Chief<br> Financial Officer and Treasurer
(Principal<br> Financial and Accounting Officer)

Exhibit32.1

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADDED BY

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

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

1. The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. To<br> my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results<br> of operations of the Company as of and for the period covered by the Report.
Date:<br> November 15, 2021
--- --- ---
By*:* /s/ Yumin Lin
Name: Yumin<br> Lin
Title: Chief<br> Executive Officer, President and Secretary
(Principal<br> Executive Officer)

Exhibit32.2

CERTIFICATIONPURSUANT TO

18U.S.C. SECTION 1350,

ASADDED BY

SECTION906 OF THE SARBANES-OXLEY ACT OF 2002

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

1. The<br> Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. To<br> my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results<br> of operations of the Company as of and for the period covered by the Report.
Date:<br> November 15, 2021
--- --- ---
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)