Fortune Valley Treasures, Inc. 10-K

Item 5. Market for Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities. Market Information There is a limited public market for our common stock. Our common stock trades on the OTCQB marketplace under the symbol “FVTI”. The OTCQB marketplace is a quotation service that displays real-time quotes, last-sale prices, and volume information in over-the-counter (“OTC”) equity securities. OTCQB securities are not listed or traded on the floor of an organized national or regional stock exchange. Instead, OTCQB securities transactions are conducted through a telephone and computer network connecting dealers in stocks. OTCQB issuers are traditionally smaller companies that do not meet the financial and other listing requirements of a regional or national stock exchange. Stockholders of Record 307,750,000 shares of common stock were issued and outstanding as of March 28, 2019. They were held by approximately 381 shareholders of record. Dividends The Company has not declared any cash dividends with respect to its common stock and does not intend to declare dividends in the foreseeable future. There are no material restrictions limiting, or that are likely to limit, the Company’s ability to pay dividends on its common stock. Securities Authorized for Issuance under Equity Compensation Plans None. Recent Sales of Unregistered Securities None . Purchase of Equity Securities By the Issuer and Affiliated Purchasers. None. Item 6. Selected Financial Data Not applicable to a smaller reporting company. Item 7. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations The following discussion and analysis should be read in conjunction with our financial statements and related notes thereto. 10 Results of Operations Years Ended December 31, Change 2018 2017 Revenue $ 95,849 100.0 % $ 260,973 100.0 % $ (165,124 ) (63.3 )% Cost of revenue 46,497 48.5 % 134,728 51.6 % (88,231 ) (65.5 )% Gross profit 49,352 51.5 % 126,245 48.4 % (76,893 ) (60.9 )% 0.0 % 0 Operating expense 315,437 329.1 % 311,085 119.2 % 4,352 1.4 % Other income(expense) 847 0.9 % 177 0.1 % 670 378.5 % income taxes (2,814 ) (2.9 )% 2,833 1.1 % (5,647 ) (199.3 )% Net loss $ (262,424 ) (273.8 )% $ (187,496 ) (71.8 )% $ (74,928 ) (40.0 )% Revenue Net revenues totaled $95,849 for the year ended December 31, 2018, a decrease of $165,124 compared to that of 2017. This is a 63.3% decrease in net revenues compared to that of 2017. Such decrease was primarily due to a decrease in sales from $139,990 to $46,585 with related parties, and a decrease in sales from $165,124 to $93,405 with non-related parties. Cost of revenue Cost of revenue totaled $46,497 for the year ended December 31, 2018, which is a decrease of $88,231 compared to that of 2017. Such decrease is due to a decrease in our revenue and hence a decrease in our supplies procurement. Our cost of revenues consisted mainly of supplies procurement. Gross profit Gross profit was $49,352 and $126,245 for the year ended December 31, 2018 and 2017, respectively. The decrease in gross profit was due to a decrease in our revenue in the fiscal year 2018. Operating expenses General and administrative expenses totaled $315,437 for the year ended December 31, 2018, which is an increase of $4,352 compared to that of 2017. The increase was primarily due to an increase in expense for professional services. Net loss Net loss totaled $262,424 for the year ended December 31, 2018, which is an increase of $74,928 compared to that of 2017. Such increase was due to a decrease in our revenue. 11 Liquidity and Capital Resources Working Capital December 31, 2018 2017 Change Total current assets $ 338,305 $ 413,362 $ (75,057 ) Total current liabilities 735,342 558,668 176,674 Working capital $ (397,037 ) $ (145,306 ) $ (251,731 ) As of December 31, 2018, we had cash and cash equivalents in an amount of $29,999. To date, we have financed our operations primarily though borrowings from related parties. The change in working capital was primarily from an increase in due from our related parties. Cash Flows Years Ended December 31, 2018 2017 Change Cash Flows (used in) generated in Operating Activities $ (230,379 ) $ (279,270 ) $ 48,892 Cash Flows used in Investing Activities - - - Cash Flows provided by(used in) Financing Activities 182,417 254,712 (72,295 ) Net (decrease) increase in Cash During Period $ (47,962 ) $ (24,558 ) $ (23,404 ) Cash Flow from Operating Activities Net cash flow used in operating activities for the year ended December 31, 2018 was $230,379 as compared to that of $279,270 in 2017. The Company experienced an overall net loss of $262,424, this was partially offset by a decrease in inventory of $33,816, other working capital account balances remained stable during the period. Cash Flow from Financing Activities Net cash flow provided by financing activities was $182,417 for the year ended December 31, 2018, compared to that of $254,712 in 2017. The Company’s net cash flow provided by financing activities consisted mainly of borrowings from our CEO and Director Mr. Yumin Lin, who is a related party to our Company. Our decrease in net cash flow provided by financing activities was due to our decreased borrowings from Mr. Yumin Lin. 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 7A. Quantitative And Qualitative Disclosures About Market Risk Not applicable to a smaller reporting company. Item 8. Financial Statements And Supplementary Data The consolidated financial statements of the Company are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated herein by reference. 12 Item 9. Changes in And Disagreements With Accountants on Accounting And Financial Disclosure None.