10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the 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 or other jurisdiction of incorporation)	(IRS Employer Identification No.)
13th Floor, Building B1, Wisdom Plaza Qiaoxiang Road, Nanshan District Shenzhen, Guangdong, China	518000
(Address of principal executive offices)	(Zip Code)

(86) 755-86961405

(Registrant’s telephone number, including area code)

Not Applicable

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

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

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [  ]

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes [X] No [  ]

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

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

As of November 20, 2020, there were 307,750,100 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	3
PART I - FINANCIAL INFORMATION	F-1
ITEM 1. FINANCIAL STATEMENTS	F-1
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	4
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	7
ITEM 4. CONTROLS AND PROCEDURES	7
PART II - OTHER INFORMATION	8
ITEM 1. LEGAL PROCEEDINGS	8
ITEM 1A. RISK FACTORS	8
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	8
ITEM 3. DEFAULTS UPON SENIOR SECURITIES	8
ITEM 4. MINE SAFETY DISCLOSURES	8
ITEM 5. OTHER INFORMATION	8
ITEM 6. EXHIBITS	9
SIGNATURES	10

2

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 availability and adequacy of working capital to meet our requirements;

● the consummation of any potential acquisitions;

● actions taken or omitted to be taken by legislative, regulatory, judicial and other governmental authorities;

● changes in our business strategy or development plans;

● our ability to continue as a going concern;

● the availability of additional capital to support capital improvements and development;

● our ability to address and as necessary adapt to changes in foreign, cultural, economic, political and financial market conditions which could impair our future operations and financial performance (including, without limitation, the changes resulting from the global COVID-19 outbreak in China and around the world);

● other risks identified in this report and in our other filings with the Securities and Exchange Commission (the “SEC”); and

● the 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.

3

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Fortune Valley Treasures, Inc.

Condensed Consolidated Financial Statements

September 30, 2020

(Unaudited)

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

F-1

Fortune Valley Treasures, Inc.

Condensed Consolidated Balance Sheets

At September 30, 2020 and December 31, 2019

	September 30,			December 31,
	2020			2019
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	14,194		$	38,137
Accounts and other receivable, net		80,371			146
Inventories		50,787			28,502
Advances and prepayment		7,801			-
Prepaid expenses		11,000			4,094
Due from related parties		8,066			-
Prepaid taxes and taxes recoverable		97,827			3,091
Total current assets		270,046			73,970
Non-current assets
Plant and equipment, net		48,442			8,611
Right of use asset		101,710			110,456
Total Assets	$	420,198		$	193,037
Liabilities
Current liabilities
Accounts payable		-			-
Unearned revenues		8,629			-
Lease obligation - current		14,419			13,715
Accounts, taxes, other payables, and accruals		87,223			32,860
Short term borrowings		197,934			-
Due to related parties		878,100			808,777
Total current liabilities		1,186,305			855,352
Long term liabilities
Lease obligations - non-current		89,856			98,189
Long term borrowings		99,981			-
Total liabilities	$	1,376,142		$	953,541
Stockholders’ Deficit
Common stock (3,000,000,000 shares authorized, 307,750,100 issued and outstanding at September 30, 2020 and December 31, 2019)		307,750			307,750
Additional paid in capital		-			-
Accumulated deficit		(1,271,910	)		(1,085,853	)
Accumulated other comprehensive income		7,285			17,599
Total Stockholders’ Deficit		(956,875	)		(760,504	)
Non-controlling interest		931			-
Total Deficit		(955,944	)		(760,504	)
Total Liabilities and Stockholders’ Deficit	$	420,198		$	193,037

See accompanying notes to the 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

	Three Months Ended						Nine Months Ended
	September 30, 2020			September 30, 2019			September 30, 2020			September 30, 2019
Revenue from third parties	$	156,340		$	12,251		$	247,567		$	46,154
Revenue from related parties		-			83,327			-			133,380
		156,340			95,578			247,567			179,534
Cost of revenues		118,454			75,795			172,797			137,470
Gross profit		37,886			19,783			74,770			42,064
Selling, general and administrative expenses		102,112			98,483			340,604			366,050
Operating profit/(loss)		(64,226	)		(78,700	)		(265,834	)		(323,986	)
Other income (expenses):		71,841			(87	)		73,947			2,417
Interest income		16			44			96			-
Interest expense		(5,206	)		(100	)		(10,186	)		(371	)
		66,651			(143	)		63,857			2,231
Earnings (loss) before tax		2,425			(78,843	)		(201,977	)		(321,839	)
Income tax		-			-			-			-
Net income	$	2,425		$	(78,843	)	$	(201,977	)	$	(321,839	)
Net income/(loss):
attributable to non-controlling interest		(1,251	)		-			(15,920	)		-
attributable to FVTI		3,676			(78,843	)		(186,057	)		(321,839	)
	$	2,425		$	(78,843	)	$	(201,977	)	$	(321,839	)
Other comprehensive income/(loss):
Foreign currency translation adjustment:
attributable to non-controlling interest		106			-			(191	)		-
attributable to FVTI		(15,984	)		3,054			(10,314	)		5,718
		(15,788	)		3,054			(10,505	)
Comprehensive income/(loss):
attributable to non-controlling interest		(1,145	)		-			(16,111	)		-
attributable to FVTI		(13,363	)		(75,789	)		(196,371	)		(316,121	)
Comprehensive income/(loss)	$	(15,788	)	$	(75,789	)	$	(212,482	)	$	(316,121	)
Loss per share to FVTI stockholders
Basic and diluted earnings per share	$	(0.00	)	$	(0.00	)	$	(0.00	)	$	(0.00	)
Basic and diluted weighted average shares outstanding		307,750,000			307,750,000			307,750,000			307,750,000

See accompanying notes to the financial statements

F-3

Fortune Valley Treasures, Inc.

Condensed Consolidated Statements of Stockholders’ Deficit

For the Years Ended December 31, 2019 and 2018 and the Nine Months Ended September 30,

	No. of Shares		Common Stock		Paid in capital		Statutory reserves		Retained earnings			Accumulated other comprehensive income			Non controlling interest			Total
Balance as of December 31 2018		307,750,000		307,750						(708,097	)		13,119						(387,228	)
Net income										(321,839	)		-						(321,839	)
Foreign currency translation adjustment													5,717						5,717
Balance as of September 30, 2019		307,750,000		307,750						(1,029,936	)		18,836						(703,350	)
Net income										(55,917	)
Foreign currency translation adjustment								-		-			(1,237	)		-			(1,237	)
Balance as of December 31, 2019		307,750,000		307,750						(1,085,853	)		17,599			-			(760,504	)
Capital injection by non-controlling shareholder																17,042			17,042
Net income										(186,057	)		-			(15,920	)		(201,977	)
Foreign currency translation adjustment						-		-					(10,314)			(191	)		(10,505)
Balance as of September 30, 2020		307,750,000		307,750						(1,271,910	)		7,285			931			(955,944	)

See accompanying notes to the 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 the Nine Months Ended
	September 30, 2020			September 30, 2019
Cash flows from operating activities
Net loss	$	(201,977	)	$	(321,839	)
Depreciation of fixed assets		23,293			791
Decrease/(increase) in accounts and other receivables		(69,620	)		2,450
Decrease in inventories		(20,958	)		130,213
(Increase)/ decrease in advances and prepayments to suppliers		(106,539	)		(960	)
Increase (decrease) in accounts and other payables		40,174			(16,576	)
Net cash used in operating activities		(335,627	)		(205,921	)
Cash flows from investing activities
Building improvements		(50,543	)		-
Net cash used in investing activities		(50,543	)		-
Cash flows from financing activities
Capital injections from owners		17,157			-
Proceeds from short term borrowings		192,477			-
Proceeds from long term borrowings		97,225			-
Borrowing and payments to related parties, net		55,074			215,027
Net cash provided by (used in) financing activities		361,933			215,027
Net (decrease)/increase of cash and cash equivalents		(24,237	)		9,106
Effect of foreign currency translation on cash and cash equivalents		294			(899	)
Cash and cash equivalents-beginning of period		38,137			29,999
Cash and cash equivalents-end of period	$	14,194		$	38,206
Supplementary cash flow information:
Interest received	$	96		$	185
Interest paid	$	10,186		$	371
Income taxes paid	$	-		$	84
Recognition of right of use asset	$	-		$	128,660

See accompanying notes to the financial statements

F-5

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

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

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

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

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

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

Makaweng Acquisition

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

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

F-6

For the purpose of the foregoing formula:

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

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

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

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

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

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

BTF Acquisition

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

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

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

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

For the purpose of the foregoing formula:

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

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

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

F-7

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

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

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

Valley Holdings Acquisition

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

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

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

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

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

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

F-8

Xixingdao Acquisition

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

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

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

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

For the purpose of the foregoing formula:

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

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

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

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

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

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

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

On August 31, 2020, Xixingdao registered the Equity Transfer with local government authorities in China and QHDX became a shareholder of Xixingdao. The closing of the Equity Transfer remains subject to additional closing conditions, including the issuance of shares by FVTI to the Sellers.

F-9

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of 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.

Basis of consolidation

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

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

Use of 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.

Foreign currency 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 assets and liabilities at exchange rates in effect at the end of each period,

● Nonmonetary assets and liabilities at historical rates, and

● Revenue 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 and liabilities at the rate of exchange in effect at the balance sheet date,

● Equities at the historical rate, and

● Revenue and expense items at the average rate of exchange prevailing during the period.

F-10

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

	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.

Accounts receivable

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.

Advances and prepayments to suppliers

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

Property, plant and equipment

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

Office equipment 7-20 years

F-11

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

Right-of-use asset 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.

Accounting for 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.

Customer advances 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.

Revenue recognition

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 the contract(s) with a customer;
2.	Identify the performance obligations in the contract;
3.	Determine the transaction price;
4.	Allocate the transaction price to the performance obligations in the contract; and
5.	Recognize 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.

F-12

Shipping and handling

Outbound shipping and handling are expensed as incurred.

Retirement benefits

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.

Income taxes

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.

Statutory reserves

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.

Earnings per 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.

Financial instruments

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 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets;

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

F-13

Commitments and 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.

Comprehensive income

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.

Recent accounting 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-14

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 $201,977 and $321,839, respectively. As of September 30, 2020, the Company had working capital deficit of approximately $916,259. In addition, the Company had net cash outflows of $238,402 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:

	September 30, 2020		December 31, 2019
Gross accounts and other receivables	$	80,371	$	146
Less: Allowance for doubtful accounts		-		-
	$	80,371	$	146

NOTE 5 – INVENTORIES

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

	September 30, 2020		December 31, 2019
Finished goods	$	50,787	$	28,502

F-15

NOTE 6 - EQUIPMENT

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

	September 30, 2020			December 31, 2019
At Cost:
Equipment		61,510			61,510
Improvements		53,558			-
		115,068			61,510
Less: Accumulated depreciation		(66,626	)		(52,899	)
	$	48,442		$	8,611

NOTE 7 – LONG TERM BORROWINGS

On July 22, 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 8 - 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 tax rate is 25%;

● Hong Kong tax rate is 16.5%; and

● Seychelles 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:

	September 30, 2020			September 30, 2019
Income attributed to PRC operations	$	(20,752	)	$	(145,784	)
Loss attributed to Seychelles and Hong Kong		1,066			(208	)
Loss attributed to U.S.		(182,291	)		(175,763	)
Loss before tax		(201,977	)		(321,755	)
PRC statutory tax at 25% rate		(5,188	)		(80,439	)
Effect of Seychelles, PRC, Hong Kong, deductions and other reconciling items		5,188			80,523
Income tax	$	0		$	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:

	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		-25.0	%		-23.9	%
The Company’s effective tax rate		0.0	%		-0.3	%

F-16

NOTE 9 - RELATED PARTY TRANSACTIONS

Amounts due from 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. Naiyong Luo (1)	Director of DIGLS		3,727		-
Shenzhen Daxinghuashang Industry Group Co., Ltd.(2)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		4,339		-
		$	8,066	$	-

(1)	These sales occurred in the normal course of business. Mr. Luo is a shareholder of Gaosheng Group Co., Ltd., the prior owner of DIGLS.
(2)	The amounts to Shenzhen Daxinghuashang Industry Group Co., Ltd. are for products sold by the Company to the related party.

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 (1)	Chairman, Chief Executive Officer, President and Secretary	$	837,595	$	791,576
Ms. Qingmei Lin (2)	Mr. Yumin Lin’s wife		17,644		17,201
Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. (3)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		22,861		0
		$	878,100	$	808,777

(1)	The outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due on demand and non-interest bearing.
(2)	The amounts due to Ms. Qingmei Lin are for office rental expenses. The Company’s operating facilities are located within a building owned by Ms. Qingmei Lin.
(3)	This is a term loan from Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. to Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. in the principal amount of RMB 180,000 (approximately $27,376) with a maturity date of September 2, 2021.

NOTE 10 – LEASE COMMITMENTS

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

Minimum operating lease commitment under the lease is as follows:

2020		4,411
2021		17,644
2022		17,644
2023		17,644
2024		17,644
Thereafter:		41,169
Total future payments of right of use asset	$	116,156

NOTE 11 - RISKS

Credit risk

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.

F-17

Economic and 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.

Inflation risk

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.

Concentrations risk

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 12 - 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

Item 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Company 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 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 temporarily closed our offices for approximately one month from late January 2020, as required by relevant PRC regulatory authorities. In the first quarter of 2020, the COVID-19 outbreak caused disruptions in our operations and supply chains, which have resulted in delays in the shipment of products to certain of our customers.

● Our customers have been negatively impacted by the outbreak, which reduced the demand of our products. The demand may decrease further if the COVID-19 pandemic continues.

Our operations and supply chains have gradually recovered from the impact of COVID-19 during the three months ended 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.

4

Results of Operations

Three Months Ended September 30, 2020 and 2019

	Three Months Ended September 30,
	2020			2019			Change
Revenue	$	156,340		$	95,578		$	60,762
Cost of revenue		118,454			75,795			42,659
Gross profit		37,886			19,783			18,103
Gross profit (%)		24.23	%		20.70	%
Operating expense		102,112			98,483			3,629
Other income(expense)		71,841			(87	)		71,928
Interest income		16			44			(28	)
Interest expense		(5,206	)		(100	)		(5,106	)
Provision for income taxes		-			-			-
Foreign currency translation gain		-			3,054			(3,054	)
Comprehensive loss	$	(15,788	)	$	(75,789	)	$	78,214

Revenue

Revenue was $156,340 for three months ended September 30, 2020, reflecting an increase of $60,762 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.

Cost of revenue

Cost of revenue was $118,454 for the three months ended September 30, 2020, reflecting an increase of $42,659 from $75,795 for the three months ended September 30, 2019. The increase was due to the increase in sales volume.

Gross profit

Gross profit was $37,886 and $19,783 for the three months ended September 30, 2020 and 2019, respectively, reflecting an increase of $18,103. Gross profit margin increased to 67.28% for the three months ended September 30, 2020 from 20.7% 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 increase in gross profit margin was primarily due to the decrease in cost per unit resulting from procurement of larger quantities of supplies.

Operating expense

Operating expense was $102,112 for the three months ended September 30, 2020, reflecting an increase of $3,629 from $98,483 for the three months ended September 30, 2019. The increase was due to an increase in professional service fees.

Comprehensive loss

As a result of the foregoing, comprehensive loss to FVTI stockholders was $15,788 for the three months ended September 30, 2020 compared to comprehensive loss was $75,789 for the three months ended September 30, 2019.

Nine Months Ended September 30, 2020 and 2019

	Nine Months Ended September 30,
	2020			2019			Change
Revenue	$	247,567		$	179,534		$	68,033
Cost of revenue		172,797			137,470			35,327
Gross profit		74,770			42,064			32,706
Gross profit (%)		30.20	%		23.43	%
Operating expense		340,604			366,050			(25,446	)
Other income(expense)		(265,834	)		2,231			(268,065	)
Interest income		96			-			96
Interest expense		(10,186	)		-			(10,186	)
Provision for income taxes		-			81			(81	)
Foreign currency translation gain		(10,505	)		5,718			(16,223	)
Comprehensive loss	$	(212,482	)	$	(316,121	)	$	103,639

5

Revenue

Net revenue was $247,567 for nine months ended September 30, 2020, reflecting an increase of $68,033 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.

Cost of revenue

Cost of revenue was $172,797 for the nine months ended September 30, 2020, reflecting an increase of $35,327 from $137,470 for the nine months ended September 30, 2019. The increase was due to an increase in sales volume.

Gross profit

Gross profit was $74,770 and $42,064 for the nine months ended September 30, 2020 and 2019, respectively. Gross profit margin increased to 30.20% for the nine months ended September 30, 2020 from 23.43% for the corresponding period in 2019. The increase in gross profit was attributable to the increase in revenue and gross profit margin.

Operating expense

Operating expense was $340,604 for the nine months ended September 30, 2020, reflecting a decrease of $25,446 from $366,050 for the nine months ended September 30, 2019. The decrease was primarily due to decreases in salaries, marketing and general and administrative costs related to mergers and acquisitions as a result of the Company’s limited business activities due to the COVID-19 pandemic.

Comprehensive loss

As a result of the foregoing, comprehensive loss attributable to FVTI stockholders was $212,482 for the nine months ended September 30, 2020, reflecting a decrease in comprehensive loss by $103,639 from $316,121 for the same period in 2019.

Liquidity and Capital Resources

Working Capital

	September 30, 2020			December 31, 2019			Change
Total current assets	$	270,046		$	73,970		$	196,076
Total current liabilities		1,186,305			855,352			330,953
Working capital deficit	$	(916,259	)	$	(781,382	)	$	(134,877	)

As of September 30, 2020, we had cash and cash equivalents in an amount of $14,194. 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
Cash Flows Used in Operating Activities	$	(335,627	)	$	(205,921	)	$	(129,706	)
Cash Flows Used in Investing Activities		(50,543	)		-			(50,543	)
Cash Flows Provided by Financing Activities		361,933			215,027			146,906
Net (Decrease)/Increase in Cash During Period	$	(24,237	)	$	9,106		$	(33,343	)

6

Cash Flow from Operating Activities

For the nine months ended September 30, 2020, net cash used in operating activities was $335,627, which represents a $129,706 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 receivable of $69,620 and an increase in advances and prepayments to suppliers of $106,539.

Cash Flow from Investing Activities

Net cash used in investing activities for the nine months ended September 30, 2020 was $50,543 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.

Cash Flow from Financing Activities

Net cash provided by financing activities for the nine months ended September 30, 2020 was $361,933 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 long term borrowings.

Critical Accounting 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-Balance Sheet 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 3. 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 4. CONTROLS AND PROCEDURES.

Evaluation of 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 Board does not currently have a director who qualifies as an audit committee financial expert as defined in Item 407(d)(5)(ii) of Regulation S-K; and

● the 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.

Changes in Internal Control over Financial Reporting

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

7

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 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

8

ITEM 6. EXHIBITS

EXHIBIT INDEX

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

Exhibit 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 of Chief Executive Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
31.2*	Certification of Chief Financial Officer pursuant to Securities Exchange Act of 1934 Rule 13a-14(a) or 15d-14(a).
32.1**	Certification 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 adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
32.2**	Certification 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 adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.
101.INS*	XBRL Instance Document
101.SCH*	XBRL Taxonomy Extension Schema
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	XBRL Taxonomy Extension Definition Linkbase
101.LAB*	XBRL Taxonomy Extension Label Linkbase
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase

*	Filed herewith.
**	Furnished herewith.

9

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: November 23, 2020
	By:	/s/ Yumin Lin
	Name:	Yumin Lin
	Title:	Chief Executive Officer, President and Secretary
		(Principal Executive Officer)
	By:	/s/ Kaihong Lin
	Name:	Kaihong Lin
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

10

EX-31.1

EXHIBIT 31.1

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

I, Yumin Lin, certify that:

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

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

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

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

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

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

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

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

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

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

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

Date: November 23, 2020
	By:	/s/ Yumin Lin
	Name:	Yumin Lin
	Title:	Chief Executive Officer, President and Secretary
		(Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

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

I, Kaihong Lin, certify that:

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

(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: November 23, 2020
	By:	/s/ Kaihong Lin
	Name:	Kaihong Lin
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADDED BY

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the quarter ended 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 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: November 23, 2020
	By:	/s/ Yumin Lin
	Name:	Yumin Lin
	Title:	Chief Executive Officer, President and Secretary
		(Principal Executive Officer)

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADDED BY

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the quarter ended 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 Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	To my knowledge, the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company as of and for the period covered by the Report.

Date: November 23, 2020
	By:	/s/ Kaihong Lin
	Name:	Kaihong Lin
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

XML

Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2020	Nov. 20, 2020
Cover [Abstract]
Entity Registrant Name	Fortune Valley Treasures, Inc.
Entity Central Index Key	0001626745
Document Type	10-Q
Document Period End Date	Sep. 30, 2020
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business Flag	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		307,750,100
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2020

XML

Condensed Consolidated Balance Sheets - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Current assets
Cash and cash equivalents	$ 14,194	$ 38,137
Accounts and other receivable, net	80,371	146
Inventories	50,787	28,502
Advances and prepayment	7,801
Prepaid expenses	11,000	4,094
Due from related parties	8,066
Prepaid taxes and taxes recoverable	97,827	3,091
Total current assets	270,046	73,970
Non-current assets
Plant and equipment, net	48,442	8,611
Right of use asset	101,710	110,456
Total Assets	420,198	193,037
Current liabilities
Accounts payable
Unearned revenues	8,629
Lease obligation - current	14,419	13,715
Accounts, taxes, other payables, and accruals	87,223	32,860
Short term borrowings	197,934
Due to related parties	878,100	808,777
Total current liabilities	1,186,305	855,352
Long term liabilities
Lease obligations - non-current	89,856	98,189
Long term borrowings	99,981
Total liabilities	1,376,142	953,541
Stockholders' Deficit
Common stock (3,000,000,000 shares authorized, 307,750,100 issued and outstanding at September 30, 2020 and December 31, 2019)	307,750	307,750
Additional paid in capital
Accumulated deficit	(1,271,910)	(1,085,853)
Accumulated other comprehensive income	7,285	17,599
Total Stockholders' Deficit	(956,875)	(760,504)
Non-controlling interest	931
Total Deficit	(955,944)	(760,504)
Total Liabilities and Stockholders' Deficit	$ 420,198	$ 193,037

XML

Condensed Consolidated Balance Sheets (Parenthetical) - shares	Sep. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, shares issued	307,750,100	307,750,100
Common stock, shares outstanding	307,750,100	307,750,100

XML

Condensed Consolidated Statements of Operations and Comprehensive Loss - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Income Statement [Abstract]
Revenue from third parties	$ 156,340	$ 12,251	$ 247,567	$ 46,154
Revenue from related parties		83,327		133,380
Revenue	156,340	95,578	247,567	179,534
Cost of revenues	118,454	75,795	172,797	137,470
Gross profit	37,886	19,783	74,770	42,064
Selling, general and administrative expenses	102,112	98,483	340,604	366,050
Operating profit/(loss)	(64,226)	(78,700)	(265,834)	(323,986)
Other income (expenses):	71,841	(87)	73,947	2,417
Interest income	16	44	96
Interest expense	(5,206)	(100)	(10,186)	(371)
Nonoperating income expense	66,651	(143)	63,857	2,231
Earnings (loss) before tax	2,425	(78,843)	(201,977)	(321,839)
Income tax
Net income	2,425	(78,843)	(201,977)	(321,839)
Net income/(loss): attributable to non-controlling interest	(1,251)		(15,920)
Net income/(loss): attributable to FVTI	3,676	(78,843)	(186,057)	(321,839)
Net loss	2,425	(78,843)	(201,977)	(321,839)
Other comprehensive income/(loss):
Foreign currency translation adjustment: attributable to non-controlling interest	106		(191)
Foreign currency translation adjustment: attributable to FVTI	(15,984)	3,054	(10,314)	5,718
Other comprehensive income/(loss)	(15,788)	3,054	(10,505)
Comprehensive income/(loss): attributable to non-controlling interest	(1,145)		(16,111)
Comprehensive income/(loss): attributable to FVTI	(13,363)	(75,789)	(196,371)	(316,121)
Comprehensive income/(loss)	$ (15,788)	$ (75,789)	$ (212,482)	$ (316,121)
Loss per share to FVTI stockholders
Basic and diluted earnings per share	$ (0.00)	$ (0.00)	$ (0.00)	$ (0.00)
Basic and diluted weighted average shares outstanding	307,750,000	307,750,000	307,750,000	307,750,000

XML

Condensed Consolidated Statements of Stockholders' Deficit - USD ($)	Common Stock [Member]	Paid in Capital [Member]	Statutory Reserves [Member]	Retained Earnings [Member]	Accumulated Other Comprehensive Income [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2018	$ 307,750			$ (708,097)	$ 13,119		$ (387,228)
Balance, shares at Dec. 31, 2018	307,750,000
Net income				(321,839)			(321,839)
Foreign currency translation adjustment					5,717		5,717
Balance at Sep. 30, 2019	$ 307,750			(1,029,936)	18,836		(703,350)
Balance, shares at Sep. 30, 2019	307,750,000
Net income				(55,917)
Foreign currency translation adjustment					(1,237)		(1,237)
Balance at Dec. 31, 2019	$ 307,750			(1,085,853)	17,599		(760,504)
Balance, shares at Dec. 31, 2019	307,750,000
Net income				(186,057)		(15,920)	(201,977)
Foreign currency translation adjustment					(10,314)	(191)	(10,505)
Capital injection by non-controlling shareholder						17,042	17,042
Balance at Sep. 30, 2020	$ 307,750			$ (1,271,910)	$ 7,285	$ 931	$ (955,944)
Balance, shares at Sep. 30, 2020	307,750,000

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Cash flows from operating activities
Net loss	$ (201,977)	$ (321,839)
Depreciation of fixed assets	23,293	791
Decrease/(increase) in accounts and other receivables	(69,620)	2,450
Decrease in inventories	(20,958)	130,213
(Increase)/ decrease in advances and prepayments to suppliers	(106,539)	(960)
Increase (decrease) in accounts and other payables	40,174	(16,576)
Net cash used in operating activities	(335,627)	(205,921)
Cash flows from investing activities
Building improvements	(50,543)
Net cash used in investing activities	(50,543)
Cash flows from financing activities
Capital injections from owners	17,157
Proceeds from short term borrowings	192,477
Proceeds from long term borrowings	97,225
Borrowing and payments to related parties, net	55,074	215,027
Net cash provided by (used in) financing activities	361,933	215,027
Net (decrease)/increase of cash and cash equivalents	(24,237)	9,106
Effect of foreign currency translation on cash and cash equivalents	294	(899)
Cash and cash equivalents-beginning of period	38,137	29,999
Cash and cash equivalents-end of period	14,194	38,206
Supplementary cash flow information:
Interest received	96	185
Interest paid	10,186	371
Income taxes paid		84
Recognition of right of use asset		$ 128,660

XML

Organization and Description of Business

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

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

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

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

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

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

Makaweng Acquisition

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

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

For the purpose of the foregoing formula:

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

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

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

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

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

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

BTF Acquisition

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

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

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

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

For the purpose of the foregoing formula:

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

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

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

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

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

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

Valley Holdings Acquisition

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

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

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

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

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

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

Xixingdao Acquisition

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

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

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

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

For the purpose of the foregoing formula:

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

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

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

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

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

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

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

On August 31, 2020, Xixingdao registered the Equity Transfer with local government authorities in China and QHDX became a shareholder of Xixingdao. The closing of the Equity Transfer remains subject to additional closing conditions, including the issuance of shares by FVTI to the Sellers. 

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of 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.

Basis of consolidation

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

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

Use of 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.

Foreign currency 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 assets and liabilities at exchange rates in effect at the end of each period,

● Nonmonetary assets and liabilities at historical rates, and

● Revenue 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 and liabilities at the rate of exchange in effect at the balance sheet date,

● Equities at the historical rate, and

● Revenue and expense items at the average rate of exchange prevailing during the period.

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

	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.

Accounts receivable

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.

Advances and prepayments to suppliers

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

Property, plant and equipment

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

Office equipment 7-20 years

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

Right-of-use asset 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.

Accounting for 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.

Customer advances 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.

Revenue recognition

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 the contract(s) with a customer;
2.	Identify the performance obligations in the contract;
3.	Determine the transaction price;
4.	Allocate the transaction price to the performance obligations in the contract; and
5.	Recognize 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.

Shipping and handling

Outbound shipping and handling are expensed as incurred.

Retirement benefits

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.

Income taxes

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.

Statutory reserves

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.

Earnings per 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.

Financial instruments

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 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets;

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

F-13

Commitments and 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.

Comprehensive income

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.

Recent accounting 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.

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.

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Going Concern

9 Months Ended

Sep. 30, 2020

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Going Concern

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 $201,977 and $321,839, respectively. As of September 30, 2020, the Company had working capital deficit of approximately $916,259. In addition, the Company had net cash outflows of $238,402 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.

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Accounts and Other Receivables

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Accounts and Other Receivables

NOTE 4 - ACCOUNTS AND OTHER RECEIVABLES

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

	September 30, 2020		December 31, 2019
Gross accounts and other receivables	$	80,371	$	146
Less: Allowance for doubtful accounts		-		-
	$	80,371	$	146

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Inventories

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Inventories

NOTE 5 – INVENTORIES

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

	September 30, 2020		December 31, 2019
Finished goods	$	50,787	$	28,502

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Equipment

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Equipment

NOTE 6 - EQUIPMENT

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

	September 30, 2020			December 31, 2019
At Cost:
Equipment		61,510			61,510
Improvements		53,558			-
		115,068			61,510
Less: Accumulated depreciation		(66,626	)		(52,899	)
	$	48,442		$	8,611

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Long Term Borrowings

9 Months Ended

Sep. 30, 2020

Debt Disclosure [Abstract]

Long Term Borrowings

NOTE 7 – LONG TERM BORROWINGS

On July 22, 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.

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Income Taxes

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

NOTE 8 - 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 tax rate is 25%;

● Hong Kong tax rate is 16.5%; and

● Seychelles 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:

	September 30, 2020			September 30, 2019
Income attributed to PRC operations	$	(20,752	)	$	(145,784	)
Loss attributed to Seychelles and Hong Kong		1,066			(208	)
Loss attributed to U.S.		(182,291	)		(175,763	)
Loss before tax		(201,977	)		(321,755	)
PRC statutory tax at 25% rate		(5,188	)		(80,439	)
Effect of Seychelles, PRC, Hong Kong, deductions and other reconciling items		5,188			80,523
Income tax	$	0		$	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:

	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		-25.0	%		-23.9	%
The Company’s effective tax rate		0.0	%		-0.3	%

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Related Party Transactions

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

Related Party Transactions

NOTE 9 - RELATED PARTY TRANSACTIONS

Amounts due from 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. Naiyong Luo (1)	Director of DIGLS		3,727		-
Shenzhen Daxinghuashang Industry Group Co., Ltd.(2)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		4,339		-
		$	8,066	$	-

(1)	These sales occurred in the normal course of business. Mr. Luo is a shareholder of Gaosheng Group Co., Ltd., the prior owner of DIGLS.
(2)	The amounts to Shenzhen Daxinghuashang Industry Group Co., Ltd. are for products sold by the Company to the related party.

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 (1)	Chairman, Chief Executive Officer, President and Secretary	$	837,595	$	791,576
Ms. Qingmei Lin (2)	Mr. Yumin Lin’s wife		17,644		17,201
Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. (3)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		22,861		0
		$	878,100	$	808,777

(1)	The outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due on demand and non-interest bearing.
(2)	The amounts due to Ms. Qingmei Lin are for office rental expenses. The Company’s operating facilities are located within a building owned by Ms. Qingmei Lin.
(3)	This is a term loan from Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. to Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. in the principal amount of RMB 180,000 (approximately $27,376) with a maturity date of September 2, 2021.

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Lease Commitments

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Lease Commitments

NOTE 10 – LEASE COMMITMENTS

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

Minimum operating lease commitment under the lease is as follows:

2020		4,411
2021		17,644
2022		17,644
2023		17,644
2024		17,644
Thereafter:		41,169
Total future payments of right of use asset	$	116,156

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Risks

9 Months Ended

Sep. 30, 2020

Risks and Uncertainties [Abstract]

Risks

NOTE 11 - RISKS

Credit risk

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.

Economic and 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.

Inflation risk

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.

Concentrations risk

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.

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Subsequent Events

9 Months Ended

Sep. 30, 2020

Subsequent Events [Abstract]

Subsequent Events

NOTE 12 - 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.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

Basis of 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.

Basis of Consolidation

Basis of consolidation

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

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

Use of Estimates

Use of 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.

Foreign Currency Translation and Re-measurement

Foreign currency 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 assets and liabilities at exchange rates in effect at the end of each period,

● Nonmonetary assets and liabilities at historical rates, and

● Revenue 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 and liabilities at the rate of exchange in effect at the balance sheet date,

● Equities at the historical rate, and

● Revenue and expense items at the average rate of exchange prevailing during the period.

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

	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

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.

Accounts Receivable

Accounts receivable

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

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.

Advances and Prepayments to Suppliers

Advances and prepayments to suppliers

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

Property, Plant and Equipment

Property, plant and equipment

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

Office equipment 7-20 years

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

Right-of-Use Asset and Lease Liabilities

Right-of-use asset 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.

Accounting for Long-lived Assets

Accounting for 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.

Customer Advances and Deposits

Customer advances 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.

Revenue Recognition

Revenue recognition

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 the contract(s) with a customer;
2.	Identify the performance obligations in the contract;
3.	Determine the transaction price;
4.	Allocate the transaction price to the performance obligations in the contract; and
5.	Recognize 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

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.

Shipping and Handling

Shipping and handling

Outbound shipping and handling are expensed as incurred.

Retirement Benefits

Retirement benefits

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.

Income Taxes

Income taxes

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.

Statutory Reserves

Statutory reserves

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.

Earnings Per Share

Earnings per 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.

Financial Instruments

Financial instruments

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 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets;

● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument; and

● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement.

Commitments and Contingencies

Commitments and 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.

Comprehensive Income

Comprehensive income

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

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.

Recent Accounting Pronouncements

Recent accounting 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.

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.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2020

Accounting Policies [Abstract]

Schedule of Entities and its Subsidiaries

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

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

Schedule of Foreign Currency Exchange Rate Translation

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

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

Schedule of Estimated Useful Lives of Equipment

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

Office equipment 7-20 years

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Accounts and Other Receivables (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of Accounts and Other Receivables

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

	September 30, 2020		December 31, 2019
Gross accounts and other receivables	$	80,371	$	146
Less: Allowance for doubtful accounts		-		-
	$	80,371	$	146

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Inventories (Tables)

9 Months Ended

Sep. 30, 2020

Inventory Disclosure [Abstract]

Schedule of Inventories

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

	September 30, 2020		December 31, 2019
Finished goods	$	50,787	$	28,502

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Equipment (Tables)

9 Months Ended

Sep. 30, 2020

Property, Plant and Equipment [Abstract]

Schedule of Property, Plant and Equipment

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

	September 30, 2020			December 31, 2019
At Cost:
Equipment		61,510			61,510
Improvements		53,558			-
		115,068			61,510
Less: Accumulated depreciation		(66,626	)		(52,899	)
	$	48,442		$	8,611

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Income Taxes (Tables)

9 Months Ended

Sep. 30, 2020

Income Tax Disclosure [Abstract]

Schedule of Reconciliation of Tax Expenses

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

	September 30, 2020			September 30, 2019
Income attributed to PRC operations	$	(20,752	)	$	(145,784	)
Loss attributed to Seychelles and Hong Kong		1,066			(208	)
Loss attributed to U.S.		(182,291	)		(175,763	)
Loss before tax		(201,977	)		(321,755	)
PRC statutory tax at 25% rate		(5,188	)		(80,439	)
Effect of Seychelles, PRC, Hong Kong, deductions and other reconciling items		5,188			80,523
Income tax	$	0		$	84

Schedule of Effective Income Tax Rate

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:

	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		-25.0	%		-23.9	%
The Company’s effective tax rate		0.0	%		-0.3	%

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Related Party Transactions (Tables)

9 Months Ended

Sep. 30, 2020

Related Party Transactions [Abstract]

Schedule of Amount Due to Related Parties

Amounts due from 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. Naiyong Luo (1)	Director of DIGLS		3,727		-
Shenzhen Daxinghuashang Industry Group Co., Ltd.(2)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		4,339		-
		$	8,066	$	-

(1)	These sales occurred in the normal course of business. Mr. Luo is a shareholder of Gaosheng Group Co., Ltd., the prior owner of DIGLS.
(2)	The amounts to Shenzhen Daxinghuashang Industry Group Co., Ltd. are for products sold by the Company to the related party.

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 (1)	Chairman, Chief Executive Officer, President and Secretary	$	837,595	$	791,576
Ms. Qingmei Lin (2)	Mr. Yumin Lin’s wife		17,644		17,201
Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. (3)	An entity that the Company’s CEO, Mr. Yumin Lin, owns a 25% interest of		22,861		0
		$	878,100	$	808,777

(1)	The outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due on demand and non-interest bearing.
(2)	The amounts due to Ms. Qingmei Lin are for office rental expenses. The Company’s operating facilities are located within a building owned by Ms. Qingmei Lin.
(3)	This is a term loan from Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. to Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. in the principal amount of RMB 180,000 (approximately $27,376) with a maturity date of September 2, 2021.

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Lease Commitments (Tables)

9 Months Ended

Sep. 30, 2020

Leases [Abstract]

Schedule of Minimum Operating Lease Commitment

Minimum operating lease commitment under the lease is as follows:

2020		4,411
2021		17,644
2022		17,644
2023		17,644
2024		17,644
Thereafter:		41,169
Total future payments of right of use asset	$	116,156

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Organization and Description of Business (Details Narrative)						3 Months Ended		9 Months Ended		12 Months Ended
	Jun. 22, 2020 USD ($)	Jun. 22, 2020 CNY (¥)	Mar. 16, 2020 USD ($)	Mar. 01, 2019 USD ($) shares	Apr. 06, 2018 shares	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($) shares	Sep. 30, 2020 CNY (¥) shares	Dec. 31, 2019 USD ($) shares	Dec. 31, 2019 CNY (¥) shares	Dec. 31, 2019 HKD ($) shares	Dec. 30, 2019	Aug. 28, 2019	Jul. 13, 2019	Jun. 22, 2019	Jan. 29, 2018 shares	Nov. 11, 2016	Jul. 04, 2016 USD ($) $ / shares shares
Common stock shares authorized | shares						3,000,000,000		3,000,000,000		3,000,000,000	3,000,000,000	3,000,000,000	3,000,000,000	3,000,000,000					75,000,000
Net profit						$ 2,425	$ (78,843)	$ (201,977)	$ (321,839)
Annual net profit percentage								10.00%
Daily penalty percent								0.05%
Maximum [Member]
Annual net profit percentage								50.00%
Mr. Yumin Lin [Member]
Ownership percentage																				100.00%
Xixingdao Sellers [Member]
Ownership percentage	100.00%	100.00%
DaXingHuaShang Investment Group Limited [Member]
Common stock shares authorized | shares																					250,000,000
Share capital																					$ 100,000
Common stock par value | $ / shares																					$ 0.0004
Lijiang Rendetang Biotechnology Co., Ltd [Member]
Ownership percentage						95.00%		95.00%		95.00%	95.00%
Valley Holdings Limited [Member]
Ownership percentage			70.00%
Value of shares issued for acquisition			$ 14,000,000
Net profit												$ 600,000
Valley Holdings Limited [Member] | Hong Kong [Member]
Net profit														$ 5,000,000
Valley Foods Holdings [Member]
Ownership percentage			88.44%
Xixingdao Technology Co Ltd [Member]
Ownership percentage	100.00%	100.00%
Daily penalty percent	0.01%	0.01%
Xixingdao Technology Co Ltd [Member] | January 1 2020 to December 31 2020
Net profit	$ 565,155
Xixingdao Technology Co Ltd [Member] | Between 2022 to 2025 [Member]
Annual net profit percentage	10.00%	10.00%
Xixingdao Technology Co Ltd [Member] | RMB Currency [Member] | January 1 2020 to December 31 2020
Net profit | ¥		¥ 4,000,000
Share Exchange Agreement [Member] | DaXingHuaShang Investment Group Limited [Member]
Number of common stock shares issued | shares					300,000,000
Common stock share exchange percentage					100.00%
Sale and Purchase Agreement [Member] | Jiujiu Group Stock Co., Ltd [Member]
Acquisition percentage				100.00%
Number of shares issued for acquisition | shares				100
Value of shares issued for acquisition				$ 150
Makaweng Agreement [Member]
Ownership percentage																51.00%	51.00%
Fourth Year After Delivery [Member]
Percentage of shares issuable						30.00%		30.00%		30.00%	30.00%
Fifth Year After Delivery [Member] | Maximum [Member]
Percentage of shares issuable						60.00%		60.00%		60.00%	60.00%
BTF Agreement [Member]
Net profit										$ 1,290,000		$ 140,000
BTF Agreement [Member] | RMB Currency [Member]
Net profit | ¥											¥ 9,000,000		¥ 3,000,000
BTF Agreement [Member] | BTF [Member]
Ownership percentage															100.00%
BTF Agreement [Member] | Mr. Chunbin Li [Member]
Ownership percentage															80.00%
Xixingdao Agreement [Member] | QHDX [Member]
Ownership percentage																		90.00%

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Summary of Significant Accounting Policies (Details Narrative)	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 CNY (¥)
Advertising expense	$ 0	$ 0
Percentage of statutory reserves	10.00%
Maximum [Member]
Percentage of statutory reserves	50.00%
China Deposit Insurance System [Member] | Maximum [Member]
Cash insured amount	$ 70,000
China Deposit Insurance System [Member] | Maximum [Member] | RMB Currency [Member]
Cash insured amount | ¥			¥ 500,000

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Summary of Significant Accounting Policies - Schedule of Entities and its Subsidiaries (Details)	9 Months Ended
	Sep. 30, 2020
DIGLS [Member]
Entity Name	DaXingHuaShang Investment Group Limited ("DIGLS")
Entity Incorporation date	Jul. 04, 2016
Nature of Operation	Investment holding
Country of Incorporation	Republic of Seychelles
DILHK [Member]
Entity Name	DaXingHuaShang Investment (Hong Kong) Ltd ("DILHK")
Entity Incorporation date	Jun. 22, 2016
Nature of Operation	Investment holding
Country of Incorporation	Hong Kong, PRC
QHDX [Member]
Entity Name	Qianhai DaXingHuaShang Investment (Shenzhen) Co. Ltd. ("QHDX")
Entity Incorporation date	Nov. 03, 2016
Nature of Operation	Investment holding
Country of Incorporation	PRC
FVTL [Member]
Entity Name	Dongguan City France Vin Tout Ltd. ("FVTL")
Entity Incorporation date	May 31, 2011
Nature of Operation	Trading of wine
Country of Incorporation	PRC
JJGS [Member]
Entity Name	Jiujiu Group Stock Co., Ltd. ("JJGS")
Entity Incorporation date	Aug. 17, 2017
Nature of Operation	Investment holding
Country of Incorporation	Republic of Seychelles
JJHK [Member]
Entity Name	Jiujiu (HK) Industry Ltd ("JJHK")
Entity Incorporation date	Aug. 24, 2017
Nature of Operation	Investment holding
Country of Incorporation	Hong Kong, PRC
JJSZ [Member]
Entity Name	Jiujiu (Shenzhen) Industry Ltd ("JJSZ")
Entity Incorporation date	Nov. 16, 2018
Nature of Operation	No operations
Country of Incorporation	PRC
MKW [Member]
Entity Name	Yunnan Makaweng Wine & Spirits Co., Ltd. ("Makaweng")
Entity Incorporation date	Aug. 28, 2019
Nature of Operation	Trading of alcohol
Country of Incorporation	PRC
LJRB [Member]
Entity Name	LJRB
Entity Incorporation date	Jun. 09, 2015
Nature of Operation	No operations
Country of Incorporation	PRC
Xixingdao [Member]
Entity Name	Xixingdao
Entity Incorporation date	May 31, 2019
Nature of Operation	Drinking water distribution and delivery
Country of Incorporation	PRC

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Summary of Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate Translation (Details)	Sep. 30, 2020	Dec. 31, 2019
Spot RMB [Member]
Foreign Currency Exchange Rate Translation	0.14703	0.14334
Average RMB [Member]
Foreign Currency Exchange Rate Translation	0.14298	0.14505

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Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Equipment (Details) - Office Equipment [Member]	9 Months Ended
	Sep. 30, 2020
Minimum [Member]
Estimated useful lives of equipment	7 years
Maximum [Member]
Estimated useful lives of equipment	20 years

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Going Concern (Details Narrative) - USD ($)	3 Months Ended			9 Months Ended
	Sep. 30, 2020	Dec. 31, 2019	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Net loss	$ 2,425		$ (78,843)	$ (201,977)	$ (321,839)
Working capital deficit	$ 916,259			916,259
Net cash used in operating activities				$ (335,627)	$ (205,921)

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Accounts and Other Receivables - Schedule of Accounts and Other Receivables (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Receivables [Abstract]
Gross accounts and other receivables	$ 80,371	$ 146
Less: Allowance for doubtful accounts
Accounts and other receivables net	$ 80,371	$ 146

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Inventories - Schedule of Inventories (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Inventory Disclosure [Abstract]
Finished goods	$ 50,787	$ 28,502

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Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($)	Sep. 30, 2020	Dec. 31, 2019
Property, plant and equipment, gross	$ 115,068	$ 61,510
Less: Accumulated depreciation	(66,626)	(52,899)
Property, plant and equipment, net	48,442	8,611
Equipment [Member]
Property, plant and equipment, gross	61,510	61,510
Improvements [Member]
Property, plant and equipment, gross	$ 53,558

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Long Term Borrowings (Details Narrative)	Jul. 22, 2020 USD ($)	Sep. 30, 2020 USD ($)	Jul. 22, 2020 CNY (¥)	Dec. 31, 2019 USD ($)
Long term borrowings		$ 99,981
RMB [Member]
Long term borrowings		$ 680,000
Loan Agreement [Member] | China Construction Bank [Member]
Working capital	$ 138,656
Loan due date	Jul. 21, 2023
Loan Agreement [Member] | China Construction Bank [Member] | RMB [Member]
Working capital | ¥			¥ 910,000

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Income Taxes (Details Narrative)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Corporate income tax rate	0.00%	(0.30%)
People's Republic of China [Member]
Corporate income tax rate	25.00%
Hong Kong [Member]
Corporate income tax rate	16.50%

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Income Taxes - Schedule of Reconciliation of Tax Expenses (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019	Sep. 30, 2020	Sep. 30, 2019
Loss before tax	$ 2,425	$ (78,843)	$ (201,977)	$ (321,839)
PRC statutory tax at 25% rate			(5,188)	(80,439)
Effect of Seychelles, PRC, Hong Kong, deductions and other reconciling items			5,188	80,523
Income tax
People's Republic of China [Member]
Income (Loss) attributed			(20,752)	(145,784)
Seychelles and Hong Kong [Member]
Income (Loss) attributed			1,066	(208)
United States [Member]
Income (Loss) attributed			$ (182,291)	$ (175,763)

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Income Taxes - Schedule of Reconciliation of Tax Expenses (Details) (Parenthetical)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Statutory income tax rate	21.00%	21.00%
People's Republic of China [Member]
Statutory income tax rate	25.00%	25.00%

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Income Taxes - Schedule of Effective Income Tax Rate (Details)	9 Months Ended
	Sep. 30, 2020	Sep. 30, 2019
Income Tax Disclosure [Abstract]
U.S. federal statutory income tax rate	21.00%	21.00%
Higher rates in PRC, net	4.00%	4.00%
Effect of reconciling items	(25.00%)	(23.90%)
The Company's effective tax rate	0.00%	(0.30%)

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Related Party Transactions - Schedule of Amount Due to Related Parties (Details) - USD ($)		Sep. 30, 2020	Dec. 31, 2019
Due from related parties		$ 8,066
Amounts due to related parties		878,100	808,777
Mr Naiyon Luo [Member] | Director of DIGLS [Member]
Due from related parties	[1]	3,727
Shenzhen Daxinghuashang Industry Group Co., Ltd.[Member] | CEO [Member]
Due from related parties	[2]	4,339
Amounts Due From Related Parties [Member]
Due from related parties		8,066
Mr. Yumin Lin [Member] | Chairman, Chief Executive Officer, President and Secretary [Member]
Amounts due to related parties	[3]	837,595	791,576
Ms. Qingmei Lin [Member] | Mr. Yumin Lin's Wife [Member]
Amounts due to related parties	[4]	17,644	17,201
Shenzhen Daxinghuashang Supply chain Service Co.., Ltd [Member] | CEO [Member]
Amounts due to related parties	[5]	$ 22,861	$ 0

[1] These sales occurred in the normal course of business. Mr. Luo is a shareholder of Gaosheng Group Co., Ltd., the prior owner of DIGLS.

[2] The amounts to Shenzhen Daxinghuashang Industry Group Co., Ltd. are for products sold by the Company to the related party.

[3] The outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due on demand and non-interest bearing.

[4] The amounts due to Ms. Qingmei Lin are for office rental expenses. The Company's operating facilities are located within a building owned by Ms. Qingmei Lin.

[5] This is a term loan from Shenzhen Daxinghuashang Supply Chain Service Co., Ltd. to Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. in the principal amount of RMB 180,000 (approximately $27,376) with a maturity date of September 2, 2021.

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Related Party Transactions - Schedule of Amount Due to Related Parties (Details) (Parenthetical)	9 Months Ended
	Sep. 30, 2020 USD ($)	Sep. 30, 2020 CNY (¥)	Dec. 31, 2019
Shenzhen Daxinghuashang Industry Group Co., Ltd.[Member]
Principal amount | $	$ 27,376
Maturity date	Sep. 02, 2021
Shenzhen Daxinghuashang Industry Group Co., Ltd.[Member] | RMB [Member]
Principal amount | ¥		¥ 180,000
Shenzhen Daxinghuashang Industry Group Co., Ltd.[Member] | CEO - Yumin Lin [Member]
Equity share ownership percentage	25.00%	25.00%	25.00%
Shenzhen Daxinghuashang Supply chain Service Co.., Ltd [Member] | CEO - Yumin Lin [Member]
Equity share ownership percentage	25.00%	25.00%	25.00%

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Lease Commitments (Details Narrative)					9 Months Ended
	Jan. 02, 2019 USD ($)	Jan. 02, 2019 CNY (¥)	May 01, 2018 USD ($)	May 01, 2018 CNY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2020 CNY (¥)
Lease description					The Company has a non-cancelable operating lease with Ms. Qingmei Lin, a related party, for the premises in Dongguan City, Guangdong Province, China. The lease covers the period from May 1, 2017 to April 30, 2027.	The Company has a non-cancelable operating lease with Ms. Qingmei Lin, a related party, for the premises in Dongguan City, Guangdong Province, China. The lease covers the period from May 1, 2017 to April 30, 2027.
Monthly rent expense | $	$ 1,413		$ 2,323		$ 3,811
RMB Currency [Member]
Monthly rent expense | ¥		¥ 10,000		¥ 15,000		¥ 25,000

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Lease Commitments - Schedule of Minimum Operating Lease Commitment (Details)	Sep. 30, 2020 USD ($)
Leases [Abstract]
2020	$ 4,411
2021	17,644
2022	17,644
2023	17,644
2024	17,644
Thereafter:	41,169
Total future payments of right of use asset	$ 116,156

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Subsequent Events (Details Narrative)	1 Months Ended		3 Months Ended		9 Months Ended
	Oct. 31, 2020 USD ($)	Oct. 31, 2020 CNY (¥)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)	Sep. 30, 2020 USD ($)	Sep. 30, 2019 USD ($)
Revenue			$ 156,340	$ 95,578	$ 247,567	$ 179,534
Subsequent Event [Member]
Revenue	$ 147,031
Subsequent Event [Member] | RMB Currency [Member]
Revenue | ¥		¥ 1,000,000