What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2021-04-26 compared with 2020-05-14 · 1187 added, 597 removed, 303 unchanged (85% of the section changed)

1 unchanged sentence

of Disclosure Control and Procedures

are required to maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed

in our reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified

in the SEC rules and forms, and that such information is accumulated and communicated to our management, including our chief executive

officer (also our principal executive officer) and our chief financial officer (also our principal financial and accounting officer)

to allow for timely decisions regarding required disclosure.

to Rule 13a-15(b) under the Exchange Act, the Company’s management, including the Company’s Chief Executive Officer

(“CEO”) (the Company’s principal executive officer) and Chief Financial Officer (“CFO”) (the Company’s

principal financial and accounting officer), has evaluated the effectiveness of the Company’s disclosure controls and procedures

(as defined under Rule 13a-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report.

that evaluation, the Company’s CEO and CFO concluded that the Company’s disclosure controls and procedures were not

effective as of December 31, 2019 to ensure that information required to be disclosed by the Company in the reports that the Company

files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in

the SEC rules and forms, and that such information is accumulated and communicated to the Company’s management, including

the Company’s CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

The principal basis

for this conclusion is the lack of segregation of duties within our financial function and the lack of an operating Audit Committee.

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 the SEC reporting requirements.

conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer

and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures.

“disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange

Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure

that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded,

processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules

Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that

information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated

and communicated to the company’s management, including its principal executive and principal financial officers, or persons

performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.

Based on this evaluation,

our Chief Executive Officer and Chief Financial Officer concluded as of December 31, 2020, that our disclosure controls and procedures

were not effective.

matters involving internal controls and procedures that our management considered to be material weaknesses under the standards

of the Public Company Accounting Oversight Board were:

(1) lack of well-established procedures to identify, approve and review

related party transactions;

(2) Inadequate design of controls related to business combination transactions accounting given the

accounting complexities of business combinations, including, but not limited to, lack of mindset and methods to assess the value

of the business prior to acquisition, inadequate process to determine the purchase price, lack of professional understanding to

determine when the control of the business acquired is transferred or when the transaction is completed, and inability to make

the appropriate disclosure;

and (3) the Board does not have a director who qualifies as an audit committee financial expert as

defined in Item 407(d)(5)(ii) of Regulation S-K.

Management’s

30 unchanged sentences

and 15d-15(e) of the Exchange Act, as of December 31, 2020.

Based on that assessment and on those criteria, our Chief Executive

Officer and Chief Financial Officer concluded that our internal control over financial reporting was not effective as of December

The principal basis for this conclusion is failure to engage sufficient resources in regards to our accounting and reporting

As discussed above, 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 the SEC reporting requirements.

Annual Report does not include an attestation report of our independent registered public accounting firm regarding internal

controls over financial reporting.

Our internal control over financial reporting was not subject to such attestation as we are

an emerging growth company.

Management based the assessment on criteria for effective internal

control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations

of the Treadway Commission (2013 framework).

Management’s assessment included an evaluation of the design of our internal

control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting.

Based on this assessment, management has concluded that as of December 31, 2020, our

internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial

reporting and the preparation of financial statements for external purposes in accordance with U.S.

generally accepted accounting

In an effort to remediate the identified material weaknesses and other deficiencies and enhance our internal controls,

we have initiated, or plan to initiate, the following series of measures:

have increased our personnel resources and technical accounting expertise within the accounting function and intend

to hire one or more additional personnel for the function due to turnover.

will create a position to segregate duties consistent with control objectives.

plan to prepare written policies and procedures for operating, accounting and financial reporting to establish a formal process

to close our books monthly on an accrual basis and account for all transactions, including equity and debt transactions.

plan to test our updated controls and remediate our deficiencies in the year 2021.

Annual Report does not include an attestation report of the Company’s registered public accounting firm regarding internal

control over financial reporting.

The Management’s report was not subject to attestation by the Company’s registered

public accounting firm pursuant to rules of the Securities and Exchange Commission that permit the Company to provide only management’s

report in this Annual Report.

in Internal Control over Financial Reporting

was no change in our internal controls over financial reporting that occurred during the quarter ended December 31, 2020, which

has materially affected or is reasonably likely to materially affect, our internal controls over financial reporting .

has materially affected or is reasonably likely to materially affect, our internal controls over financial reporting, except

that we have hired outside consultant to remediate our material weakness in lack of accounting and finance personnel with technical

knowledge in SEC rules and regulations.

Other Information

4 unchanged sentences

Financial Officer, Treasurer and Director

Ramesh Ruben (1)

of the Audit Committee.

of the Compensation Committee.

of the Nominating and Corporate Governance Committee.

Lin has serves as the Chairman of the Board, Chief Executive Officer, President and Secretary of the Company since December

5 unchanged sentences

a building material supplier in China.

Kaihong Lin has served as the Chief

Financial Officer, Treasurer and Director of the Company since December 2019.

In addition, he has been the head of the

finance department of QHDX since March 2019.

Prior to that, he was the head of the finance department of

Guangdong Minche New Energy Automobile Co., Ltd., a new energy automobile company, from June 2018 to March 2019.

financial director in Guangdong Duncheng Environmental Protection Technology Co., Ltd., an environmental engineering company in

China, from June 2017 to May 2018.

Lin has served as the Chief Financial Officer, Treasurer and Director of the Company since December 2019.

In addition, he

has been the head of the finance department of QHDX since March 2019.

Prior to that, he was the head of the finance department

of Guangdong Minche New Energy Automobile Co., Ltd., a new energy automobile company, from June 2018 to March 2019.

as financial director in Guangdong Duncheng Environmental Protection Technology Co., Ltd., an environmental engineering company

in China, from June 2017 to May 2018.

From October 2015 to May 2017, Mr.

Lin was the head of the finance department and a

member of the board of Guangzhou Jingcheng Inspection Technology Co., Ltd., a company specialized in testing and assessment across

various industries, including environment, construction, electronics, food safety and so on.

From January 1997 to October 2015,

he was the head of the finance department of Guangdong Provincial Expressway Development Co., Ltd.

a construction and maintenance company for highways and bridges.

Lin received a bachelor’s degree in human resources

from Peking University, a bachelor’s degree in accounting from Jinan University, and a master’s degree in software

engineering with a concentration in financial informatics from Tianjin University.

are not currently subject to listing requirements of any national securities exchange or inter-dealer quotation system which has

requirements that a majority of the Board be “independent”

and, as a result, we are not at this time required to have

our Board comprised of a majority of “independent directors.”

Neither of our directors is independent under the applicable

Lin was the head of the finance department and a member

of the board of Guangzhou Jingcheng Inspection Technology Co., Ltd., a company specialized in testing and assessment across various

industries, including environment, construction, electronics, food safety and so on.

From January 1997 to October 2015, he was

the head of the finance department of Guangdong Provincial Expressway Development Co., Ltd.

000429), a construction and

maintenance company for highways and bridges.

Lin received a bachelor’s degree in human resources from Peking University,

a bachelor’s degree in accounting from Jinan University, and a master’s degree in software engineering with a concentration

in financial informatics from Tianjin University.

Cheng , was appointed director on April 9, 2021.

Cheng has over twenty years of experience in the planning and development

of commercial real estate projects, and clothing industry cluster development and clothing e-commerce platform operations.

Cheng is the founder and serves as Chairman of the board of directors of Dongguan City Daying Garment Wholesale Ltd, which owns

and operates Dongguan City Daying Garment Wholesale Centre, a well-known network clothing supply center in China.

on the integrated wholesale and e-commerce business model, Mr.

Cheng serves as a director and Vice-President of the Guangdong

Wholesale Industry Market Association and the Dongguan E-Commerce Federation.

Cheng graduated from Hong Kong Institute of

Fashion Technology with an associate’s degree in marketing management.

Wang was appointed director on April 9, 2021.

Wang is a partner of Guangzhou Kingpound Law Firm where

he has practiced law for over 18 years.

His extensive experience include representing clients in commercial disputes, labor and

employment disputes, real estate disputes, and maritime disputes, as well as serving as a defense counsel in criminal cases.

has also counseled clients on non-litigation matters, such as mergers and acquisitions and due diligence investigations, among

In addition, he also serves as a legal adviser for a number of Chinese companies.

Wang received an MBA from Jinan

University, Guangzhou, China and a Bachelor’s degree in Management from Shanghai Maritime University, China.

Liu was appointed director on April 9, 2021.

Liu is a partner of Zhongtianyun Certified Public Accountants,

Guangdong branch.

Liu has many years of practice experience in the audits of public companies listed on China’s GEM

(Growth Enterprise Market) Board and Main Board, including audits in IPOs.

Prior to joining Zhongtianyun in January 2019, she

was a project manager at Guangzhou Xinrui Zhiren Certified Public Accountants Co., Ltd.

from October 2017 to December 2018 and

a project manager at Guangzhou Zhiren Certified Public Accountants from November 2013 to October 2017.

She received a Bachelor

in Financial Management degree from Beijing Forestry University School of Economics and Management.

Lin was appointed director on April 9, 2021.

Lin is a member of the Australia Financial Complaint Authority (AFCA)

and the Financial Broker Association of Australia (FBAA).

Lin has over 10 years of experience in finance, accounting, marketing

and management.

He started his career at Investnet Australia Pty Ltd, a leading building material suppliers in Australia,

first as a Marketing Manager and was then later as Vice General Manager.

Lin established his own financial mortgage business

in 2016 that provides financing consulting services for businesses and individuals.

Lin graduated from Swinburne University

of Technology, Australia, with a Bachelor of Business and a Master of Accounting degrees.

Li was appointed director on April 9, 2021.

Li is a director and the General Manager of Shenzhen Xiejin

Education Technology Co., Ltd.

where he is responsible for all aspects of the company’s corporate strategic planning and

management and has held that position since October 2018.

Previously Dr.

Li served as the president of Shenzhen Qianhai Daoyi

Investment Management Co., Ltd from July 2015 to October 2018.

Li is a member of the China New Economic and Cultural Commission.

He received his Bachelor of Engineering from Wuhan University, EMBA from Cheung Kong Graduate School of Business, Beijing, and

Doctorate in Business Administration from the University of Nice, France.

Chen was appointed director on April 9, 2021.

Chen has served as the Secretary General of the Guangdong

Wine and Spirits Industry Association, Wine Division since February 2010 and manages all aspects of the day-to-day operations

of the association.

She is a member of the China National Wine Technical Committee and the Global Wine China Tasting System Committee.

She is an expert on food and beverage industry administration and governance.

She received her MBA from Sun Yat-Sen University

School of Management in Guangzhou, China.

She also studied at the University of Milan on planting and brewing and at the Culinary

Institute of America on wine serving.

Ruben Louis was appointed director

on April 9, 2021.

Louis is a Chartered Accountant of the Malaysian Institute of Accountants

(MIA), a fellow member of Association of Chartered Certified Accountants (FCCA), a chartered member of the Institute of Internal

Auditors, as well as a Certified Financial Planner.

Louis has over 20 years of experience in accounting, auditing and risk

management ranging from large public listed companies to multinational corporations, government agencies as well as SMEs in a

spectrum of industries including plantation, property development, manufacturing, trading, IT, shipping and retailing, among others.

He started his career at Arthur Andersen from December 1996 to 1997, and subsequently moved to BDO from April 2000 to 2004 and

from 2005 to 2006, respectively.

He also has experience in corporate finance with Southern Investment Bank Berhad for a year from

2004 to 2005.

Louis has hands-on experience on other corporate exercises such as due diligence, IPOs, debt issuances, corporate

and debt restructuring and investigative audits.

His training and advisory experience includes topics on Internal & Statutory

Auditing, Public Sector/Government Audits, Value-for-Money Audits, ISQC 1, Risk Management & Internal Controls, Review and

Assurance Engagements such as Financial Due Diligence, Forecasts & Projections, Forensic & Fraud Accounting/Auditing,

as well as practical application of International Financial Reporting Standards (“IFRS”), Reporting Standards for

SMEs (MPERS/PERS) and public sector accounting (MPSAS).

He has facilitated training and provided advisory for public accountants

across the Asia Pacific region, and multinationals and public sector institutions.

Louis is a certified trainer by the Human

Resource Development Fund (HRDF), Ministry of Human Resources Malaysia.

Louis serves as an independent director of Greenpro

Capital Corp.

Louis received his Bachelor of Accounting from National University of Malaysia and MBA from

University of Strathclyde, UK.

He is a Fellow of the Association of Chartered Certified Accountants (ACCA).

Relationships

are no family relationships, or other arrangements or understandings between or among any of the directors or executive officer.

directors hold office until the next annual meeting of shareholders and until their successors have been duly elected and qualified.

Directors are elected at the annual meetings to serve for one-year terms.

Officers are elected by, and serve at the discretion

of, the board of directors.

Our board of directors shall hold meetings on at least a quarterly basis.

board of directors has determined to comply with the NASDAQ Listing Rules with respect to certain corporate governance matters.

As a smaller reporting company, under the NASDAQ rules we are only required to maintain a board of directors composed of at least

50% independent directors, and an audit committee of at least two members, composed solely of independent directors who also meet

the requirements of Rule 10A-3 under the Securities Exchange Act of 1934.

Section 16(a) Reports

16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than ten percent of a registered

class of our equity securities, file reports of ownership and changes in ownership with the SEC.

Executive officers, directors

and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file.

Based solely on our review of the copies of the forms received by us and written representations from certain reporting persons

that they have complied with the relevant filing requirements, we believe that, during the year ended December 31, 2020, all of

our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements.

board of directors has reviewed the independence of our directors, applying the NASDAQ independence standards.

Based on this review,

the board of directors determined that each of Bulin Wang, Chaoping Chen, Bin Lin, Yumei Liu, Ramesh Ruben Louis and Jianwei

Lin are independent within the meaning of the NASDAQ rules.

In making this determination, our board of directors considered the

relationships that each of these non-employee directors has with us and all other facts and circumstances our board of directors

deemed relevant in determining their independence.

As required under applicable NASDAQ rules, we anticipate that our independent

directors will meet on a regular basis as often as necessary to fulfill their responsibilities, including at least annually in

executive session without the presence of non-independent directors and management.

board of directors has established standing committees in connection with the discharge of its responsibilities.

These committees

include an Audit Committee, a Compensation Committee and a Nominating and Corporate Governance Committee.

Our board of directors

has adopted written charters for each of these committees.

Our board of directors may establish other committees as it deems necessary

or appropriate from time to time.

Audit Committee was established on April 9, 2021 and is composed of three of our independent directors:

Jianwei Lin (Chairman),

Ramesh Ruben Louis and Yumei Liu.

Yumei Liu qualifies as the Audit Committee financial expert as defined in Item 407(d)(5) of

Regulation S-K promulgated under the Securities Act.

to its charter, the Audit Committee consists of at least three members, each of whom shall be a non-employee director who has

been determined by the Board to meet the independence requirements of NASDAQ, and also Rule 10A-3(b)(1) of the SEC, subject to

the exemptions provided in Rule 10A-3(c).

We do not have a website containing a copy of the Audit Committee Charter.

Committee Charter describes the primary functions of the Audit Committee, including the following:

the company’s accounting and the financial reporting processes;

audits of the Company’s financial statements;

and discuss with management the Company’s audited financial statements and review with management and the Company’s

independent registered public accounting firm the Company’s financial statements prior to the filing with the SEC of

any report containing such financial statements.

policies with respect to risk assessment and risk management, and discuss the Company’s major financial risk exposures

and the steps management has taken to monitor and control such exposures;

major changes to the Company’s auditing and accounting principles and practices as suggested by the Company’s

independent registered public accounting firm, internal auditors or management;

or recommend that the board take, appropriate action to oversee and ensure the independence of the Company’s independent

registered public accounting firm.

Compensation Committee was established on April 9, 2021.

The Compensation Committee will be responsible for, among other

and approving employment agreements and other similar arrangements between us and our executive officers;

and approving, or recommending to the board of directors to approve the compensation of our CEO and other executive officers

and directors reviewing key employee compensation goals, policies, plans and programs;

and overseeing any compensation consultants or advisors

Governance and Nominating Committee

Corporate Governance and Nominating Committee was established on April 9, 2021.

The Compensation Committee Corporate Governance

and Nominating Committee will be responsible for, among other matters:

and making recommendations regarding the structure and composition of our board and the board committees;

the independence of directors and director nominees;

and recommending to the board corporate governance principles and practices;

and monitoring the Company’s Code of Business Conduct and Ethics;

the evaluation of the Company’s management.

have adopted a code of ethics that applies to all of our executive officers, directors and employees.

The code of ethics codifies

the business and ethical principles that govern all aspects of our business.

A copy of the code of ethics is available on our

website at http://www.fvti.show/ and is attached as Exhibit 14.4 to this Annual Report.

in Certain Legal Proceedings

1 unchanged sentence

adverse to the Company or has a material interest adverse to the Company.

Delinquent Section 16(a) Reports

Section 16(a) of the Exchange Act requires

that our executive officers and directors, and persons who own more than ten percent of a registered class of our equity securities,

file reports of ownership and changes in ownership with the SEC.

Executive officers, directors and greater-than-ten percent stockholders

are required by SEC regulations to furnish us with all Section 16(a) forms they file.

Based solely on our review of the copies

of the forms received by us and written representations from certain reporting persons that they have complied with the relevant

filing requirements, we believe that, during the year ended December 31, 2019, all of our executive officers, directors and greater-than-ten

percent stockholders complied with all Section 16(a) filing requirements, except that, due to administrative error, Yumin Lin

failed to file a Form 3 on December 20, 2016 after becoming subject to Section 16(a) reporting requirements on March 22, 2019.

currently have not established any committees of the Board.

Our Board may designate from among its members an executive committee

and one or more other committees in the future.

We do not have a nominating committee.

Further, we do not have a policy with regard

to the consideration of any director candidates recommended by security holders.

To date, other than as described above, no security

holders have made any such recommendations.

Our Board performs all functions that would otherwise be performed by committees.

Given the present size of our board, it is not practical for us to have committees.

If we are able to grow our business and increase

our operations, we intend to expand the size of our board and allocate responsibilities accordingly.

Committee Financial Expert

have no separate audit committee at this time.

The entire Board oversees our audits and auditing procedures.

Neither of our directors

is not an “audit committee financial expert”

within the meaning of Item 407(d)(5) of SEC Regulation S-K.

have no separate compensation committee at this time.

The entire Board oversees the functions, which would be performed by a compensation

We have adopted a code of ethics that applies

to all of our executive officers, directors and employees.

The code of ethics codifies the business and ethical principles that

govern all aspects of our business.

A copy of the code of ethics is available on our website at http://en.hsfgjt.com/ and

is attached as Exhibit 14.4 to this Annual Report.

16(a) Beneficial Ownership Reporting Compliance

16(a) of the Exchange Act requires that our executive officers and directors, and persons who own more than ten percent of a registered

class of our equity securities, file reports of ownership and changes in ownership with the SEC.

Executive officers, directors

and greater-than-ten percent stockholders are required by SEC regulations to furnish us with all Section 16(a) forms they file.

Based solely on our review of the copies of the forms received by us and written representations from certain reporting persons

that they have complied with the relevant filing requirements, we believe that, during the year ended December 31, 2020, all of

our executive officers, directors and greater-than-ten percent stockholders complied with all Section 16(a) filing requirements.

Executive Compensation

following table sets forth the compensation paid or accrued by us to our Chief Executive Officer and Chief Financial Officer for

the year ended December 31, 2019 and 2018.

Name and principal position

Option awards

Nonequity incentive plan

Chairman of the Board, Chief Executive Officer, President and Secretary

Kaihong Lin (1)

Chief Financial Officer, Treasurer and Director

Kiahong Lin was appointed by the Board to serve as the Chief Financial Officer, Treasurer and a director of the Company on

December 20, 2019.

the years ended December 31, 2020 and 2019.

and principal position

incentive plan compensation

of the Board, Chief Executive Officer, President and Secretary

Financial Officer, Treasurer and Director

Kaihong Lin was appointed by the Board to serve as the Chief Financial Officer, Treasurer and a director of the Company

on December 20, 2019.

Agreements with Named Executive Officers

December 20, 2019, the Company and Mr.

Kaihong Lin entered into an employment agreement (the “Employment Agreement”)

setting forth the terms and conditions of Mr.

Lin’s employment as Chief Financial Officer and Treasurer.

Pursuant to the

Employment Agreement, Mr.

Lin will serve as the Chief Financial Officer and Treasurer for a term of one year, subject to automatic

renewal for successive one-year terms, unless either party gives 60-day prior notice of non-renewal.

Lin is entitled to an

annual base salary of $25,676 for his services and participation in all compensation and employee benefit plans.

be terminated for cause, or by reason of death or disability, or resign without good reason (as such terms are defined in the

Employment Agreement), Mr.

Lin shall be entitled to receive his base salary and benefits through the end of his employment and

such other compensation and benefits as may be provided in applicable plans and programs of the Company.

In the case of termination

by death, Mr.

Lin is entitled to receive the portion of stock option to the extent vested prior to the end of his employment.

Lin be terminated without cause (other than due to death or disability) or resign for good reason, he shall be entitled

to receive any accrued and unpaid base salary, benefits and the stock option to the extent vested through the end of his employment,

as well as continuation of his base salary for three months following of the end of his employment.

Equity Awards

2 unchanged sentences

currently do not have an equity compensation plan.

did not pay our directors any compensation for their services during the year ended December 31, 2019.

not pay our directors any compensation for their services as a director during the years ended December 31, 2019

and 2020, respectively.

Committee Interlocks and Insider Participation

of our executive officers currently serves, or has served during the last completed fiscal year, on the compensation committee

or board of directors of any other entity (other than a subsidiary or consolidated affiliate of the Company) that has one or more

executive officers serving as a member of our Board or Compensation Committee.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

following table sets forth certain information, regarding the beneficial ownership of the Company’s common stock as of May

13, 2020 by (i) each shareholder known by the Company to be the beneficial owner of 5% or more of its common stock, (ii) by each

director and executive officer of the Company and (iii) by all executive officers and directors of the Company as a group.

of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned.

following table sets forth certain information, regarding the beneficial ownership of the Company’s common stock as of April

13, 2021 by (i) each shareholder known by the Company to be the beneficial owner of 5% or more of its common stock, (ii)

by each director and executive officer of the Company and (iii) by all executive officers and directors of the Company as a group.

Each of the persons named in the table has sole voting and investment power with respect to common stock beneficially owned.

information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the

rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose.

rules, a person is deemed to be a “beneficial owner”

of a security if that person has or shares the power to vote

or direct the voting of the security or the power to dispose or direct the disposition of the security.

A person is deemed to

own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within

sixty (60) days through the conversion or exercise of any convertible security, warrant, option, or other right.

More than one

(1) person may be deemed to be a beneficial owner of the same securities.

The percentage of beneficial ownership by any person

as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number

of shares as to which such person has the right to acquire voting or investment power within sixty (60) days, by the sum of the

number of shares outstanding as of such date.

Consequently, the denominator used for calculating such percentage may be different

for each beneficial owner.

Except as otherwise indicated below and under applicable community property laws, we believe that the

beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.

column entitled “Percentage of Shares Beneficially Owned”

is based on a total of 313,098,220 shares of our common

stock outstanding as of April 26, 2021.

business address of each directors and officers listed below is 13th Floor, Building B1, Wisdom Plaza, Qiaoxiang Road, Nanshan

District, Shenzhen, Guangdong, China 518000.

5% Shareholders

China Kaipeng Group Co., Ltd.

Gaosheng Group Co., Ltd.

Directors and Officers

All officers and directors as a group (two persons)

of Beneficial Owner

Beneficially Owned

officers and directors as a group (nine persons)

Kaipeng Group Co., Ltd.

Group Co., Ltd.

Less than one percent.

Hui Jun is a 100% shareholder of China Kaipeng Group Co., Ltd.

and is deemed to hold the voting and dispositive power over

the Company’s common stock held by China Kaipeng Group Co., Ltd.

The business address of this company is Second Floor, Capital

City Independence Avenue Mahe Victoria, Seychelles.

Nai Yong is a 100% shareholder of Goasheng Group Co., Ltd.

and is deemed to hold the voting and dispositive power over

the Company’s common stock held by Gaosheng Group Co., Ltd.

The business address of this company is Second Floor, Capital

City Independence Avenue Mahe Victoria, Seychelles.

of (i) 18,000,000 shares of the Company’s common stock Mr.

Yumin Lin holds directly, which shares were issued

Lin in our acquisition of DIGLS on April 23, 2018, (ii) 87,252,311 shares held by Gaosheng Group Co.,

Ltd., which is solely owned by Mr.

Lin who may be deemed to have the voting and dispositive power of such shares, (iii) 10,985,400

shares held by China Kaipeng Group Co., Ltd, a company Mr.

Lin owns 7.18% who may be deemed to have the voting and dispositive

power of such shares, and (iv) 485,439 shares issued to him on December 16, 2020 in lieu of the full payment of the working

capital advances and loans he made to the Company.

of 71,750 shares of the Company’s common stock Mr.

Kaihong Lin holds directly,

of which 16,250 shares were issued on July 19, 2019 and 55,500 were issued on August

7, 2019 in a private placements .

of (i) 10,314,629 shares of the Company’s common stock Mr.

Minghua Cheng

holds directly, of which 9,748,629 shares were issued to Mr.

Cheng on June

28, 2018 in a private placement, 556,000 shares were issued on April 3, 2019

in a private placement, and 10,000 shares were issued on August 10, 2016 in

a private placement and (ii) 142,014,600 shares held through China Kaipeng Group

Co., Ltd, a company Mr.

Cheng owns 92.82% who may be deemed to have the voting and dispositive

power of such shares.

Cheng and Yumin Lin holds 92.82% and 7.18% of China Kaipeng Group Co., Ltd, respectively, and are deemed to

hold the voting and dispositive power over the Company’s common stock held by China Kaipeng Group Co., Ltd.

address of this company is Second Floor, Capital City Independence Avenue Mahe Victoria, Seychelles.

Lin is a 100% shareholder of Gaosheng Group Co., Ltd.

and is deemed to hold the voting and dispositive power over the Company’s

common stock held by Gaosheng Group Co., Ltd.

The business address of this company is Second Floor, Capital City Independence

Avenue Mahe Victoria, Seychelles.

Company does not know any arrangements which may result in a change in control of the Company at a subsequent date.

1 unchanged sentence

Company sold its wine and liquor products to Mr.

Naiyong Luo in the amounts of $220,203 and $41,565 for the years ended

December 31, 2019 and 2018, respectively.

The sales transactions occurred in the normal course of business.

a director of DIGLS.

the year ended December 31, 2019, Mr.

Yumin Lin, our Chairman, Chief Executive Officer, President and Secretary, made working

capital advances and loans to the Company for an aggregate amount of $791,576, of which $791,576 was outstanding as of December

Yumin Lin made additional advances after December 31, 2019.

The outstanding balance owed to him at March

31, 2020 was $848,597.

These funds are due on demand and non-interest bearing.

Company has a non-cancelable operating lease agreement with Ms.

Qingmei Lin, a related party, for the premises in Dongguan City,

Kaihong Lin, the Chief Financial Officer, Treasurer and a director of the Company,

in the amounts of $51 and $0 for the years ended December 31, 2020 and 2019, respectively.

During the year ended December

31, 2020, the Company advanced $204,395 to him.

As of December

31, 2020, t he outstanding receivables due from Mr.

Kaihong Lin is in the amounts of $215,973,

the amount due is unsecured and non-interest bearing.

As of the reporting date, the amount due from the director is $0.

December 16, 2020, Mr.

Yumin Lin, our Chairman, Chief Executive Officer, President and Secretary, made working capital advances

and loans to the Company for an aggregate amount of $796,116.

On the same day, the board

of directors of the Company approved to issue an aggregate of 485,439 shares of common stock of the Company, par value $0.001

per share (the “Conversion Shares”), to him in lieu of the full payment of the outstanding balance payable to him

And the Company sold its wine and liquor products to Mr.

Yumin Lin in the amounts of $332 and $0 for the

years ended December 31, 2020 and 2019, respectively.

of December 31, 2020, the outstanding receivables due from Mr.

Yumin Lin is in the amounts of $45,662, the amount due is unsecured

and non-interest bearing.

As of the reporting date, the amount due from the director is $0.

Company has an operating lease agreement with Ms.

Qingmei Lin, a related party, for the premises in Dongguan City, PRC.

The agreement covers the period from January 1, 2019 to April 30, 2027.

The monthly rent expense is RMB10,000 (approximately

The total rental rent expense for the year ended December 31, 2019 and 2018 was $18,870 and $33,317, respectively.

agreement does not call for a rental deposit equivalent.

The outstanding balance owed to her at December 31, 2019 was $17,201.

more related party transactions, see Note 10 of the accompanying consolidated financial statements.

Principal Accountant Fees and Services

3 unchanged sentences

December 31, 2019

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees (4)

Audit-Related

Other Fees (4)

This category consists of fees for professional services rendered by our principal independent registered public accountants for

9 unchanged sentences

described above.

above audit services were pre-approved by the Board of Directors for the fiscal years ended December 31, 2020 and 2019, which

concluded that the provision of such services by WWC P.C., subsequently, MaloneBailey, LLP was appointed on March 10, 2021

that was compatible with maintenance of the firm’s independence in the conduct of its audits.

Exhibits and Financial Statement Schedules

12 unchanged sentences

of securities registered pursuant to Section 12 of the Securities Exchange Act of 1934, as amended

translation of Equity Interest Transfer Agreement, dated as of December 30, 2019, by and among Qianhai DaXingHuaShang

Investment (Shenzhen) Co., Ltd., Chunbin Li, Miaoqin Yao and Fortune Valley Treasures, Inc.

translation of Equity Interest Transfer Agreement, dated as of March 16, 2020, by and among Jiujiu Group Stock Co., Ltd.,

Valley Holdings Limited, Angel International Investment Holdings Limited and Fortune Valley Treasures, Inc.

(incorporated

by reference to Exhibit 4.1 to the Company’s Annual Report on Form 10-K filed with the SEC on May 14, 2020)

Agreement, dated as of December 20, 2019, by and between Fortune Valley Treasures, Inc.

1 unchanged sentence

to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2019)

Interest Transfer Agreement, dated July 13, 2019, by and among Fortune Valley Treasures, Inc., Qianhai DaXingHuaShang Investment

(Shenzhen) Co., Ltd.

and Xingwen Wang (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on

Form 10-Q filed with the SEC on November 14, 2019)

to Equity Interest Transfer Agreement, dated September 12, 2019, by and among Fortune Valley Treasures, Inc., Qianhai DaXingHuaShang

Investment (Shenzhen) Co., Ltd.

and Xingwen Wang (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly

Report on Form 10-Q filed with the SEC on November 14, 2019)

and Purchase Agreement, dated March 1, 2019, by and between Fortune Valley Treasure, Inc.

1 unchanged sentence

(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on March 6,

Code of Ethics

Interest Transfer Agreement, dated June 22, 2020, by and among Fortune Valley Treasure, Inc., Qianhai DaXingHuaShang Investment

(Shenzhen) Co., Ltd., Dongguan Xixingdao Technology Co., Ltd.

and its shareholders

to Equity Interest Transfer Agreement, dated December 18, 2020, by and among Fortune Valley Treasure, Inc., Qianhai DaXingHuaShang

Investment (Shenzhen) Co., Ltd.

and Dongguan Xixingdao Technology Co., Ltd.

Agreement to Equity Interest Transfer Agreement, dated January 6, 2021, by and among DaXingHuaShang Investment (Hong Kong)

Ltd, Valley Holdings Limited, Angel International Investment Holdings Limited and Fortune Valley Treasures, Inc.

Agreement, dated January 6, 2021, by and among Jiujiu Group Stock Co., Ltd., Valley Holdings Limited, Angel International

Investment Holdings Limited and Fortune Valley Treasures, Inc.

of the registrant

11 unchanged sentences

as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

XBRL Instance Document

XBRL Taxonomy Extension Schema Document

XBRL Taxonomy Extension Calculation Linkbase Document

XBRL Taxonomy Extension Definition Document

XBRL Taxonomy Extension Label Linkbase Document

XBRL Taxonomy Extension Presentation Linkbase Document

Instance Document

Taxonomy Extension Schema Document

Taxonomy Extension Calculation Linkbase Document

Taxonomy Extension Definition Document

Taxonomy Extension Label Linkbase Document

Taxonomy Extension Presentation Linkbase Document

Filed herewith

3 unchanged sentences

to be signed on its behalf by the undersigned, thereunto duly authorized.

FORTUNE VALLEY TREASURES, INC.

VALLEY TREASURES, INC.

Executive Officer, President and Secretary (Principal Executive Officer)

4 unchanged sentences

the Years Ended December 31, 2020 and 2019

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets

Consolidated Statements of Operations and Comprehensive Loss

Consolidated Statements of Changes in Equity

Consolidated Statements of Cash Flows

Notes to Financial Statements

REPORT OF INDEPENDENT

REGISTERED PUBLIC ACCOUNTING FIRM

The Board of Directors and Stockholders

Fortune Valley Treasures, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated

balance sheets of Fortune Valley Treasures, Inc.

(the Company) as of December 31, 2019 and 2018, and the related consolidated

statements of operations, comprehensive loss, stockholders’

deficit, and cash flows for each of the years in the two-year

period ended December 31, 2019, and the related notes (collectively referred to as the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2019

and 2018, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31,

2019, in conformity with accounting principles generally accepted in the United States of America.

Emphasis of Matter

The accompanying financial statements have

been prepared assuming that the Company will continue as a going concern.

As discussed in Note 3 to the financial statements,

the Company had incurred substantial losses during the year ended December 31, 2018 and had a working capital deficit, which raised

substantial doubt about its ability to continue as a going concern.

As of and for the year ended December 31, 2019, the Company

had a working capital deficit and continued to incur substantial losses which continue to give raise to the substantial doubt

that the Company will continue as a going concern.

Management’s plans to address this substantial doubt are set forth in

These financial statements do not include any adjustments that might result from the outcome of this uncertainly.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based

on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB)

and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with

the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether

the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have,

nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits, we are required

to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the

effectiveness of the Company’s internal control over financial reporting.

of Independent Registered Public Accounting Firm

Balance Sheets

Statements of Operations and Comprehensive Loss

Statements of Changes in Equity (Deficit)

Statements of Cash Flows

to Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Valley Treasures, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheet of Fortune Valley Treasures, Inc.

and its subsidiaries (the “Company”)

as of December 31, 2020, and the related consolidated statements of operations and comprehensive loss, stockholders’

(deficit), and cash flows for the year then ended, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2020, and the results of their operations and their cash flows for the year then ended, in conformity with accounting

principles generally accepted in the United States of America.

Concern Matter

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 3 to the financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency

that raises substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters

are also described in Note 3.

The financial statements do not include any adjustments that might result from the outcome of this

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audit.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission

and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not

for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Audit Matters

critical audit matters communicated below are matters arising from the current period audit of the financial statements that were

communicated or required to be communicated to the audit committee and that:

(1) relate to accounts or disclosures that are material

to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of

critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by

communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or

disclosures to which they relate.

of Intangible Asset Acquired in Business Combination

of the Matter

described in Note 7 to the financial statements, the Company completed the acquisition of 90% equity interest of Dongguan Xixingdao

Technology Co., Ltd.

(“Xixingdao”) for consideration of approximately $9.8 million in 2020 which resulted in approximately

$3.1 million intangible asset, consists entirely of distribution channel, and approximately $6.9 million goodwill being recognized.

The fair value of intangible asset acquired was based upon valuation techniques under income approach with the assistance of a

specialist engaged by the Company.

Management applied judgment in estimating the fair value of intangible asset acquired, which

involved the use of significant estimates and assumptions with respect to the amount and timing of expected future cash flows

and discount rate.

identified the valuation of intangible asset acquired as a critical audit matter due to its materiality to the financial statements

and the significant estimates and assumptions involved by the management in determining the fair value of the intangible asset,

the audit of which required a high degree of auditor judgement.

We Addressed the Matter in Our Audit

audit procedures related to the valuation of intangible asset include the following, among others:

1) We obtained and read the

executed purchase agreements;

2) We obtained an understanding of the work of the Company’s specialist and the management’s

process and controls for estimating the fair value of intangible asset;

3) We evaluated the appropriateness of the valuation methods,

4) We tested the completeness and accuracy of data provided by management;

5) We evaluated the reasonableness of significant inputs

and assumptions used;

and 6) We evaluated the adequacy of the Company’s disclosures related to the acquisition.

of the Matter

described in Note 2 and 7 to the financial statements, the Company performs its annual impairment testing on goodwill for its

reporting units on December 31, of each fiscal year and whenever there are events or changes in circumstances indicate that an

impairment may exist.

During the year ended December 31, 2020, the Company recognized an impairment loss of approximately $5.6

million related to Xixingdao.

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value

of the reporting unit to its carrying value.

The Company used the income approach with the discounted cash flow valuation method

with the assistance of a specialist engaged by the Company to estimate fair value, which requires management to make significant

estimates and assumptions related to forecasted revenues and cash flows and the discount rate.

identified the impairment of goodwill analysis for Xixingdao as a critical audit matter due to its materiality to the financial

statements and the significant estimates and assumptions involved, the audit of which required a high degree of auditor judgement.

We Addressed the Matter in Our Audit

audit procedures related to the goodwill impairment analysis include the following, among others:

1) We obtained an understanding

of the work of the Company’s specialist and the management’s process and controls for goodwill impairment evaluation;

2) We compared management’s forecasted revenue and cash flows to the actual results of the Company;

3) We evaluated the

appropriateness of the valuation methods, 4) We tested the completeness and accuracy of data provided by management;

evaluated the reasonableness of significant inputs and assumptions used.

MaloneBailey, LLP

www.malonebailey.com

have served as the Company’s auditor since 2021.

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Stockholders of

Valley Treasures, Inc.

on the Financial Statements

have audited the accompanying consolidated balance sheets of Fortune Valley Treasures, Inc.

(the Company) as of December 31, 2019

and 2018, and the related consolidated statements of operations, comprehensive loss, stockholders’

deficit, and cash flows

for each of the years in the two-year period ended December 31, 2019, and the related notes (collectively referred to as the financial

In our opinion, the financial statements present fairly, in all material respects, the financial position of the

Company as of December 31, 2019 and 2018, and the results of its operations and its cash flows for each of the years in the two-year

period ended December 31, 2019, in conformity with accounting principles generally accepted in the United States of America.

accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

in Note 3 to the financial statements, the Company had incurred substantial losses during the year ended December 31, 2018 and

had a working capital deficit, which raised substantial doubt about its ability to continue as a going concern.

As of and for

the year ended December 31, 2019, the Company had a working capital deficit and continued to incur substantial losses which continue

to give raise to the substantial doubt that the Company will continue as a going concern.

Management’s plans to address

this substantial doubt are set forth in Note 3.

These financial statements do not include any adjustments that might result from

the outcome of this uncertainly.

financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on

the Company’s financial statements based on our audits.

We are a public accounting firm registered with the Public Company

Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the

conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit

to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial

As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but

not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures

to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures

that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures

in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made

by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide

a reasonable basis for our opinion.

audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to

error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Public Accountants

We have served as the Company’s auditor

since December 4, 2017

San Mateo, California

have served as the Company’s auditor since December 4, 2017

Mateo, California

Valley Treasures, Inc.

Balance Sheets

December 31, 2019 and 2018

of December 31, 2020 and 2019

and cash equivalents

and other current assets

from related parties

current assets

Cash and cash equivalents

Accounts and other receivable, net

Prepaid expenses

Due from related parties

Prepaid taxes and taxes recoverable

Total current assets

Non-current assets

Plant and equipment, net

Right of use asset, net

Liabilities and Stockholders’

and equipment, net

lease right-of-use assets

lease right-of-use assets, related parties

and Stockholders’

Equity (Deficit)

lease obligations –

lease obligations, related parties - current

to related parties

current liabilities

Lease obligation - current

Accounts and taxes payable

Accrued liabilities and other payables

Customers advances and deposits

Due to related parties

Total current liabilities

lease obligations –

Total Liabilities

lease obligations, related parties –

and other borrowings

Stockholders’

Common stock (3,000,000,000 shares authorized, 307,750,000 issued and outstanding at December 31, 2019 and 2018)

Additional paid in capital

Accumulated deficit

Accumulated other comprehensive income

Total Stockholders’

Total Liabilities and Stockholders’

accompanying notes to the financial statements

Equity (Deficit)

stock (3,000,000,000 shares authorized, 313,098,220 and 307,750,100 issued and outstanding as of December 31,

2020 and 2019, respectively)

paid in capital

other comprehensive income

Fortune Valley Treasures, Inc.

stockholders’

equity (deficit)

Noncontrolling

Stockholders’

Equity (Deficit)

Liabilities and Stockholders’

Equity (Deficit)

accompanying notes to the consolidated financial statements

Valley Treasures, Inc.

1 unchanged sentence

the Years ended December 31, 2020 and 2019

Net revenues (related party revenue $245,392 and $46,585 for 2019 and 2018)

Cost of revenues

revenues (including related party revenue $273,677 and $245,392 for 2020 and 2019, respectively)

operating income

and distribution expenses

and administrative expenses

operating expenses

General and administrative expenses

Operating loss

Interest income

Interest expense

Loss before tax

Other comprehensive income:

Foreign currency translation gain (loss)

loss on goodwill

from conversion of related party loan

income (expense), net

before income tax

Net loss attributable to noncontrolling interests

loss attributable to Fortune Valley Treasures, Inc.

comprehensive income:

currency translation gain

comprehensive loss

Loss per share

Basic and diluted earnings per share

Basic and diluted weighted average shares outstanding

accompanying notes to the financial statements

comprehensive loss attributable to noncontrolling interests

Comprehensive

loss attributable to Fortune Valley Treasures, Inc.

and diluted loss per share

and diluted weighted average shares outstanding

accompanying notes to the consolidated financial statements

Valley Treasures, Inc.

Statements of Stockholders’

Equity (Deficit)

the Years ended December 31, 2020 and 2019

Comprehensive

Balance as of December 31, 2017

Foreign currency translation adjustment

Balance as of December 31, 2018

Foreign currency translation adjustment

Balance as of December 31, 2019

accompanying notes to the financial statements

as of December 31, 2018

currency translation adjustment

Balance as of

December 31, 2019

$ (1,085,853 )

issued for conversion of related party loan

issued for acquisition of subsidiary

Noncontrolling

interests arising from acquisition of subsidiary

currency translation adjustment

as of December 31, 2020

$ (4,341,417 )

accompanying notes to the consolidated financial statements

Valley Treasures, Inc.

1 unchanged sentence

the Years ended December 31, 2020 and 2019

Cash flows from operating activities

Depreciation and amortization

Increase in accounts and other receivables

(Decrease)/increase in inventories

Increase (decrease) in advances and prepayments to suppliers

(Decrease) increase in accounts, other payables and lease obligations

Net cash used in operating activities

Cash flows from investing activities

Net cash used in investing activities

Cash flows from financing activities

Borrowing and payments to related parties, net

Net cash provided by financing activities

Net decrease of cash and cash equivalents

Effect of foreign currency translation on cash and cash equivalents

Cash and cash equivalents–beginning of period

Cash and cash equivalents–end of period

Supplementary cash flow information:

Interest received

Interest paid

Income taxes paid

accompanying notes to the financial statements

flows from operating activities

$ (3,647,353 )

to reconcile net loss to net cash provided by (used in) operating activities:

and amortization expense

lease expense

loss on goodwill

from conversion of related party loan

in operating assets and liabilities

and other current assets

lease obligations

cash provided by (used in) operating activities

flows from investing activities

to related parties

from acquisition of subsidiary

of advance to related parties

of property and equipment

cash used in investing activities

flows from financing activities

to related parties

from related parties

from a third party

from bank borrowings, net

cash provided by (used in) financing activities

of exchange rate changes on cash and cash equivalents

changes in cash and cash equivalents

and cash equivalents–beginning of the year

and cash equivalents–end of the year

Supplementary

cash flow information:

investing and financing activities

paid by related parties on behalf of the Company

lease right-of-use assets obtained in exchange for operating lease obligations

issued for acquisition of subsidiary

party loan settled with issuance of shares

accompanying notes to the consolidated financial statements

1 - ORGANIZATION AND DESCRIPTION OF BUSINESS

4 unchanged sentences

The Company’s current primary business operations of wholesale distribution and retail

sales of alcoholic beverages of wine and distilled liquors are conducted through its subsidiaries in the People’s Republic

of China (“PRC”).

sales of alcoholic beverages of wine and distilled liquors, and drinking water distribution and delivery are conducted

through its subsidiaries in the People’s Republic of China (“PRC”).

January 5, 2018, the Company changed its fiscal year end from August 31 to December 31.

January 29, 2018, the Company filed a Certificate of Amendment with the State of Nevada to increase its authorized shares to 3,000,000,000.

April 11, 2018, the Company entered into share exchange agreement by and among DaXingHuaShang Investment Group Limited (“DIGLS”)

and its shareholders:

April 11, 2018, the Company entered into a share exchange agreement by and among DaXingHuaShang Investment Group Limited

(“DIGLS”) and its shareholders:

1.) Yumin Lin, 2.) Gaosheng Group Co., Ltd.

and 3.) China Kaipeng Group Co., Ltd whereby the Company newly

issued 300,000,000 shares of its common stock in exchange for all the outstanding shares in DIGLS.

This transaction has been 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’

and 3.) China Kaipeng Group Co., Ltd whereby

the Company newly issued 300,000,000 shares of its common stock in exchange for all the outstanding shares in DIGLS.

This transaction

has been accounted for as a reverse takeover transaction and a recapitalization of the Company whereby the Company, the

legal acquirer, is the accounting acquiree, and DIGLS, the legal acquiree, is the accounting acquirer;

accordingly, the Company’s

historical statement of stockholders’

equity has been retroactively restated to the first period presented.

14 unchanged sentences

FTVL was previously owned and controlled by Mr.

FTVL has been a license to sell foods up through September 10, 2022.

FTVL has a license to sell foods up through September 10, 2022.

On November 20, 2016, Mr.

Yumin Lin transferred his

ownership in FTVL to QHDX for nominal consideration.

Yumin Lin transferred his ownership

in FTVL 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;

Yumin Lin, DIGLS, DILHK, QHDX,

and FVTL have been accounted for as a series of business combinations of entities under common control;

accordingly, the

2 unchanged sentences

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.

equity interest of Jiujiu Group Stock Co., Ltd.

(“JJGS”), a company incorporated under the laws of the Republic

of Seychelles.

The transaction closed on March 1, 2019.

Pursuant to the SP Agreement, the Company issued 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 interest of Jiujiu (HK) Industry Limited (“JJHK”) and Jiujiu (Shenzhen)

Industry Co., Ltd.

(“JJSZ”).

JJGS, JJHK and JJSZ did not have any material assets or liabilities

at December 31 2019, and they did not have any substantial operations or active business during the year ended December 31, 2019.

JJGS, JJHK and JJSZ did not have any material assets or liabilities as of December

31, 2019, and they did not have any substantial operations or active business during the year ended December 31, 2019.

July 13, 2019, FVTI and QHDX entered into an equity interest transfer agreement (the “Makaweng Agreement”), which

2 unchanged sentences

(“Makaweng”), a PRC limited liability company formed in 2015.

to the Makaweng Agreement, QHDX agreed to purchase 51% of Makaweng’s equity interests from Mr.

Wang in exchange for shares

of FVTI’s common stock (“Issuable Shares”).

The total number of Issuable Shares will be determined according

to the following formula:

of Issuance Shares = A x 51% x 20 x B ÷

the purpose of the foregoing formula:

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

= 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.

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

Wang has agreed not to transfer the Issuable Shares for at least three years after delivery of the 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.

to the Makaweng Agreement, Makaweng agreed to establish a board of directors consisting of seven individuals.

QHDX agreed to continue

to retain Mr.

Wang as the legal representative of Makaweng, and appoint him as the manager and Chairman of Makaweng.

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.

Pursuant to the Makaweng

Agreement, QHDX agreed to purchase 51% of Makaweng’s equity interest from Xingwen Wang in exchange for shares of

FVTI’s common stock.

On August 28, 2019, the registration of transferring the 51% of equity interest of Makaweng to

QHDX with local government authorities was completed.

December 3, 2020, QHDX and Xingwen Wang, an original shareholder of Makaweng, signed a share transfer agreement (the “Share

Transfer Agreement”) pursuant to which the parties agreed that QHDX would transfer all of the 51% of equity interest of

Makaweng it held to Xingwen Wang.

Upon the effectiveness of the Share Transfer Agreement, QHDX no longer owned an equity interest

As of the date of the Share Transfer Agreement, the Company has not issued any common shares to Xingwen Wang and

the control of Makaweng has never been transferred to QHDX.

June 22, 2020, the Company entered into a sale and purchase agreement along with Qianhai DaXingHuaShang Investment (Shenzhen)

Co., Ltd., a company incorporated in the PRC and a wholly-owned subsidiary of FVTI (“QHDX”), to acquire 90%

of the equity interest of Dongguan Xixingdao Technology Co., Ltd.

(“Xixingdao”), a company incorporated in

the PRC, in exchange for 4,862,681 shares of the Company’s common stock.

The Company obtained the control of Xixingdao

on August 31, 2020, the shares were issued on December 28, 2020.

Xixingdao became the Company’s subsidiary since

August 31, 2020.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3 unchanged sentences

These financial statements have been prepared using the accrual

basis of accounting in accordance with the generally accepted accounting principles (“GAAP”) in the United States.

basis of accounting in accordance with the generally accepted accounting principles in the United States (“U.S.

GAAP”).

The Company’s fiscal year end is December 31.

4 unchanged sentences

have been eliminated.

The results of subsidiaries acquired during the respective periods are included in the consolidated statements

of operations from the effective date of acquisition or up to the effective date of disposal, as appropriate.

The portion of the

income or loss applicable to noncontrolling interests in subsidiaries is reflected in the consolidated statements of operations.

of Incorporation

1 unchanged sentence

of Seychelles

of food and platform

of Seychelles