What changed in this filing

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Item 9A. Controls and Procedures

2022-04-01 compared with 2021-04-26 · 1387 added, 1196 removed, 294 unchanged (90% of the section changed)

1 unchanged sentence

of Disclosure Control and Procedures

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

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

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

The term “disclosure

controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended

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

to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported,

within the time periods specified in the Securities and Exchange Commission’s rules and forms.

Disclosure controls and procedures

also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in

the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including

its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions

regarding required disclosure.

Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of December

31, 2021, that our disclosure controls and procedures were not effective.

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

Public Company Accounting Oversight Board was lack of well-established procedures to identify, approve and review related party

transactions.

Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting.

Internal control

over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by,

or under the supervision of, the Company’s principal executive and principal financial officers and effected by the board

of directors (the “Board”), management and other personnel, to provide reasonable assurance regarding the reliability

of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles

generally accepted in the United States (“GAAP”) and includes those policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of

the assets of the company

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance

with GAAP and that receipts and expenditures of the company are being made only in accordance with authorizations of management

and directors of the company;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s

Internal control over

financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the

supervision of, the Company’s principal executive and principal financial officers and effected by the board of directors (the

“Board”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting

and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the

United States (“GAAP”) and includes those policies and procedures that:

to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets

of the company

reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with

GAAP and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors

of the company;

reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the company’s

assets that could have a material effect on the financial statements.

of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Projections of

any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes

in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

All internal control systems,

no matter how well designed, have inherent limitations.

Therefore, even those systems determined to be effective can provide only

reasonable assurance with respect to financial statement preparation and presentation.

Because of the inherent limitations of

internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control

over financial reporting.

However, these inherent limitations are known features of the financial reporting process.

it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

Projections of any evaluation

of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that

the degree of compliance with the policies or procedures may deteriorate.

All internal control systems, no matter how well designed,

have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect

to financial statement preparation and presentation.

Because of the inherent limitations of internal control, there is a risk that material

misstatements may not be prevented or detected on a timely basis by internal control over financial reporting.

However, these inherent

limitations are known features of the financial reporting process.

Therefore, it is possible to design into the process safeguards to

reduce, though not eliminate, this risk.

carried out an assessment, under the supervision and with the participation of our management, including our Chief Executive Officer

and Chief Financial Officer, of the effectiveness of our internal controls over financial reporting, as defined in Rules 13a-15(e)

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

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.

and Chief Financial Officer, of the effectiveness of our internal controls over financial reporting, as defined in Rules 13a-15(e) and

15d-15(e) of the Exchange Act, as of December 31, 2021.

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, 2021, our internal control over financial reporting is improving,

however, not effective enough to provide reasonable assurance regarding the reliability of financial reporting and the preparation

of financial statements for external purposes in accordance with U.S.

generally accepted accounting principles.

In an effort to remediate

the identified material weaknesses and other deficiencies and enhance our internal controls, we have initiated, or plan to initiate,

the following series of measures or actions:

have increased our personnel resources and technical accounting expert within the accounting function and intend to hire additional

accounting expert for the function due to continuously increasing of turnover.

have established an audit committee to oversee accounting controls consistent with control objectives.

We 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.

have tested our updated controls and remediate our deficiencies in the year 2021.

Our internal control will be continuously

updated and tested in the future.

retained a director who is qualified as an Audit Committee financial expert as defined in the

Regulation S-K

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, 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.

was no change in our internal controls over financial reporting that occurred during the three months ended December 31, 2021,

which 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

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Directors, Executive Officers and Corporate Governance

7 unchanged sentences

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

He has also been serving as chairman to FVTL since May 2011, the executive director of DILHK since June 2016, the executive

director or QHDX since November 2016, the executive director of Shenzhen Xinghuashang Industrial Group Co., Ltd., a consulting

company in China, since December 2019 and the director of Huashang Industrial Group Co., Ltd., a business consulting company in

China, since October 2019.

From April 1999 to May 2011, he was the general manager of Dongguan Saite Building Material Co., Ltd.,

a building material supplier in China.

Lin has serves as the Chairman of the Board, Chief Executive Officer, President and a director of the Company since December 2016.

Lin has over 30 years of experience in business management.

He has also been serving as chairman to FVTL since May 2011, the executive

director of DILHK since June 2016, the executive director or QHDX since November 2016, the executive director of Shenzhen Xinghuashang

Industrial Group Co., Ltd., a consulting company in China, since December 2019 and the director of Huashang Industrial Group Co., Ltd.,

a business consulting company in China, since October 2019.

From April 1999 to May 2011, he was the general manager of Dongguan Saite

Building Material Co., Ltd., a building material supplier in China.

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.

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.

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.

He served as financial director in Guangdong

Duncheng Environmental Protection Technology Co., Ltd., an environmental engineering company in China, from June 2017 to May 2018.

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.

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.

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.

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.

As an expert 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.

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.

He has also counseled clients on non-litigation

matters, such as mergers and acquisitions and due diligence investigations, among others.

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.

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.

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.

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.

Li is a director and the General Manager of Shenzhen Xiejin Education Technology

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 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.

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.

Chan was appointed as an Independent Director on October 26, 2021.

Chan is a certified public accountant registered with the

State of New York and a seasoned executive with over 30 years of professional experience in auditing, financial reporting and business

Chan is the Chief Financial Officer of Sharing Services Global Corporation (OTC:

SHRG) and President of CA Global Consulting

Inc., a company he co-founded in February 2014.

Since February 2020, he has been serving as the Director of Assurance and Advisory Services

at Wei, Wei & Co., LLP., a full-service CPA firm registered with the PCAOB.

From July 2019 to January 2020, Mr.

Chan served as the

Chief Financial Officer of SPI Energy Co.

SPI), a Nasdaq-listed green energy solutions company.

From October 2017 to March

Chan served as the Chief Financial Officer of Helo Corp.

HLOC), a technology company with shares traded on the OTC

From September 2013 to November 2015, Mr.

Chan served as an Executive Vice President, Director and Acting CFO of Sino-Global

Shipping America, Ltd.

SINO), a logistics and shipping company with operations in China, Australia and Hong Kong.

From February

2005 to August 2013, Mr.

Chan was a partner at three full-service CPA firms in New York, including UHY LLP (from September 2012 to August

2013), Friedman LLP (from September 2011 to July 2012) and Berdon LLP (from February 2005 to August 2011).

Prior to that, he had held

executive and professional positions at various U.S.-based companies including Primedia Inc, National Broadcasting Company, Arthur Anderson,

KPMG, and PwC.

Chan holds an MBA in Finance and Investments from Baruch College of the City University of New York, and a Bachelor

of Arts in Accounting and Economics from Queens College of the City University of New York.

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.

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.

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.

(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.

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).

3 unchanged sentences

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.

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.

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

1 unchanged sentence

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 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, 2021, 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.

the board of directors determined that each of Bulin Wang, Chaoping Chen, Bin Lin, Anthony S.

Chan, 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.

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.

Jianwei Lin (Chairman until October

26, 2021, remains as member of Audit Committee), Anthony Chan (Chairman since October 26, 2021) and Ramesh Ruben Louis.

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).

The Audit 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

The Compensation Committee is responsible for, among other matters:

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 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

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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:

The Corporate Governance and Nominating Committee is

responsible for, among other matters:

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

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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.

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.

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 attached as Exhibit 14.1

to this Annual Report.

in Certain Legal Proceedings

our knowledge, there are no material proceedings to which any of our directors, officers or affiliates of the Company is a party

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

our knowledge, there are no material proceedings to which any of our directors, officers or affiliates of the Company is a party adverse

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

16(a) Beneficial Ownership Reporting Compliance

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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 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 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.

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

years ended December 31, 2021 and 2020.

Name and principal position

Option awards

Nonequity incentive plan compensation

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

Kaihong Lin (1)

Chief 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

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.

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,

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.

Lin 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

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currently do not have an equity compensation plan.

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

and 2020, respectively.

Directors’ compensation $84,587

was paid for directors’ services during the years ended December 31, 2021 and $nil was paid during the year

ended December 31, 2020.

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.

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 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.

of Beneficial Owner

following table sets forth certain information, regarding the beneficial ownership of the Company’s common stock as of March 31, 2022 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.

Under these 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 15,655,038 shares of our common stock outstanding

as of March 31, 2022.

business address of each directors and officers listed below is B1601 Oriental Impression Building 2, No.

139 Liansheng Road, Humen Town,

Dongguan, Guangdong, China 523900.

Name of Beneficial Owner

Beneficially Owned

officers and directors as a group (nine persons)

Kaipeng Group Co., Ltd.

Group Co., Ltd.

Less than one percent.

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.

Beneficially Owned

Directors and Officers

Yumin Lin (1)

Kaihong Lin (2)

Minghua Cheng (3)

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.

Chaoping Chen

Ramesh Ruben Louis

All officers and directors as a group (ten persons)

5% Shareholders

China Kaipeng Group Co., Ltd.

Gaosheng Group Co., Ltd.

Less than one percent.

of (i) 900,000 shares of the Company’s common stock Mr.

Yumin Lin holds directly, which shares were issued to Mr.

acquisition of DIGLS on April 23, 2018, (ii) approximately 4,362,616 shares held by Gaosheng Group Co., Ltd., which is solely owned

Lin who may be deemed to have the voting and dispositive power of such shares, (iii) 1,214,820 shares held by China Kaipeng

Group Co., Ltd, a company Mr.

Lin owns 15.88% who may be deemed to have the voting and dispositive power of such shares, and (iv)

approximately 24,272 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 3,588 shares of the Company’s common stock Mr.

Kaihong Lin holds directly, of which 813 shares were issued on July 19, 2019

and 2,775 were issued on August 7, 2019 in private placements.

of (i) 515,732 shares of the Company’s common stock Mr.

Minghua Cheng holds directly, of which approximately 487,431 shares

were issued to Mr.

Cheng on June 28, 2018 in a private placement, 27,800 shares were issued on April 3, 2019 in a private placement,

and 500 shares were issued on August 10, 2016 in a private placement and (ii) 6,435,180 shares held through China Kaipeng Group Co.,

Ltd, a company Mr.

Cheng owns 84.12% who may be deemed to have the voting and dispositive power of such shares.

Cheng and Yumin Lin holds 84.12% and 15.88% 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.

The business 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.

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.

Certain Relationships, Related Transactions and Director Independence

from related parties mainly consists of funds advanced to related parties as borrowings or funds advanced to pay off the Company’s

The balances are unsecured, non-interest bearing.

During the year ended December 31, 2021, the Company advanced $nil

to its related parties, and collected $614,275 repayments.

to related parties mainly consists of borrowings for working capital purpose, the balances are unsecured, non-interest bearing and due

During the year ended December 31, 2021, the Company borrowed $464,958 from these related parties, and repaid $684,784.

addition, during the year ended December 31, 2021, these related parties paid expenses on the Company’s behalf in an amount of

Company sold its wine and liquor products to Mr.

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.

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

the amounts of $407 and $51 for the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021

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.

the outstanding receivables due from Mr.

Kaihong Lin is $nil.

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

Kaihong Lin was 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

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 in cash.

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.

in the amount of $389 for the year ended December 31, 2021.

As of December 31, 2021, the amount due to

Yumin Lin was $344,218, the amount due is unsecured and non-interest bearing.

As of the reporting date, the amount due

from the director is $0.

The Company has two operating lease agreements with

related parties:

Qingmei Lin, operating lease for the premises in Dongguan City, PRC.

The agreement covers the period from January

1, 2019 to April 30, 2027.

The monthly rent expense is RMB10,000 (approximately $1,450).

Ye Hongwei, operating lease for the

premises in Dongguan City, PRC.

The agreement covers the period from September 27, 2020 to September 30, 2023.

The monthly rent expense

is RMB960 (Approximately $148).

more related party transactions, see Note 9 of the accompanying consolidated financial statements.

Principal Accountant Fees and Services

following table shows the fees that we paid or accrued for the audit and other services provided by our independent registered

public accounting firms for the fiscal years ended December 31, 2020 and 2019.

December 31, 2020

December 31, 2019

Audit-Related

Other Fees (4)

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

the audit of our annual financial statements, review of financial statements included in our quarterly reports and services that

are normally provided by the independent registered public accounting firms in connection with statutory and regulatory filings

or engagements for those fiscal years.

following table shows the fees that we paid or accrued for the audit and other services provided by our independent registered public

accounting firm for the fiscal years ended December 31, 2021 and 2020.

Fiscal Year Ended

Audit Fees (1)

Audit-Related Fees (2)

All Other Fees (4)

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

audit of our annual financial statements, review of financial statements included in our quarterly reports and services that are normally

provided by the independent registered public accounting firms in connection with statutory and regulatory filings or engagements for

those fiscal years.

This category consists of fees for assurance and related services by our independent registered public accountant that are reasonably

related to the performance of the audit or review of our financial statements and are not reported above under “Audit Fees.”

The services for the fees disclosed under this category include consultations concerning financial accounting and reporting standards.

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tax advice, and tax planning.

This category consists of fees for services provided by our independent registered public accountants other than the services

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.

This category consists of fees for services provided by our independent registered public accountants other than the services described

above audit services were pre-approved by the Audit Committee of the Board of Directors for the fiscal years ended December 31,

2021 and 2020, which concluded that the provision of such services by MaloneBailey, LLP was compatible with maintenance of the firm’s independence in the conduct of its audits.

Foreign Companies Accountable Act (HFCAA)

common stock may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if

the PCAOB determines it is unable to inspect or investigate completely our auditors for three consecutive years beginning

Furthermore, on June 22, 2021, the U.S.

Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”),

which, if signed into law, would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S.

stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three consecutive years.

to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021 which found that the PCAOB is unable to inspect or investigate

completely registered public accounting firms headquartered in:

(1) mainland China and (2) Hong Kong.

In addition, the PCAOB’s

report identified the specific registered public accounting firms which are subject to these determinations.

auditor, MaloneBailey, LLP, is headquartered in Houston, Texas, with offices in Beijing and Shenzhen.

and has been inspected by the PCAOB

on a regular basis.

MaloneBailey, LLP is a firm registered with the PCAOB and is required by the laws of the U.S.

to undergo regular

inspections by the PCAOB to assess its compliance with the laws of the U.S.

and professional standards.

MaloneBailey, LLP has been subject

to PCAOB inspections, and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject

to PCAOB’s determination on December 16, 2021 of having been unable to inspect or investigate completely.

Notwithstanding

the foregoing, in the future, if it is determined that the PCAOB is unable to inspect or investigate our auditor completely, or if

there is any regulatory change or step taken by PRC regulators that does not permit MaloneBailey, LLP to provide audit documentations

located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination

so that we are subject to the HFCAA, as the same may be amended, you may be deprived of the benefits of such inspection.

reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work

undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures,

could result in a lack of assurance that our financial statements and disclosures are adequate and accurate.

which could result in

limitation or restriction to our access to the U.S.

capital markets and trading of our securities, including trading on the national

exchange and trading on “over-the-counter” markets, may be prohibited under the HFCAA.

See “Risk Factors — Our

shares may be delisted under the Holding Foreign Companies Accountable Act if the PCAOB is unable to inspect our auditors for three consecutive

years beginning in 2021, or for two consecutive years if the Accelerating Holding Foreign Companies Accountable Act becomes law;

the delisting of our shares, or the threat of their being delisted, may materially and adversely affect the value of your investment”

and “Risk Factors — Newly enacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the

SEC and the Public Company Accounting Oversight Board, and proposed rule changes submitted by Nasdaq calling for additional and more

stringent criteria to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance

costs” for more information.

Exhibits and Financial Statement Schedules

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All Financial Statements

consolidated financial statements as listed in the accompanying “Index to Consolidated Financial Statements”

as part of this Annual Report on Form 10-K.

consolidated financial statements as listed in the accompanying “Index to Consolidated Financial Statements” are filed as

part of this Annual Report on Form 10-K.

Financial Statement Schedules

financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts

sufficient to require submission of the schedule, or because the information required is included in the consolidated financial

statements and notes thereto included in this Form 10-K.

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)

(incorporated by reference to Exhibit 3.2 the Company’s Registration Statement on Form S-1 as amended filed with the

SEC on December 5, 2014).

financial statement schedules have been omitted, since the required information is not applicable or is not present in amounts sufficient

to require submission of the schedule, or because the information required is included in the consolidated financial statements and notes

thereto included in this Form 10-K.

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)

Bylaws (incorporated by reference to Exhibit 3.2 the Company’s Registration Statement on Form S-1 as amended filed with the SEC on December 5, 2014).

Certificate of Change (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 21, 2021)

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 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.

and Kaihong Lin (incorporated by reference

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

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

and Deng, Dong Hui , M.D.

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

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.

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

and Kaihong Lin (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 20, 2019)

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.

(incorporated by reference

to Exhibit 10.6 to the Company’s Annual Report on Form 10-K filed with the SEC on April 26, 2021)

of Ethics (incorporated by reference to Exhibit 14.1 to the Company’s Annual Report on Form 10-K filed with the SEC on

April 26, 2021)

of the registrant

5 unchanged sentences

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.

Section 1350, as

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

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.

Instance Document

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Section 1350, 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

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Filed herewith

Furnished herewith

Form 10–K Summary

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report

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

Management contract or compensatory plan

Form 10–K Summary

to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed

on its behalf by the undersigned, thereunto duly authorized.

VALLEY TREASURES, INC.

5 unchanged sentences

the Years Ended December 31, 2021 and 2020

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

Report of Independent Registered Public Accounting Firm (PCAOB ID 206 )

Consolidated Balance Sheets

Statements of Operations and Comprehensive Income (Loss)

Consolidated Statements of Changes in Equity (Deficit)

Consolidated Statements of Cash Flows

Notes to Financial Statements

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

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.

and its subsidiaries (the “Company”)

as of December 31, 2021 and 2020, and the related consolidated statements of operations and comprehensive income (loss), stockholders’

equity, and cash flows for the years 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, 2021 and 2020, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles

generally accepted in the United States of America.

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.

securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

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.

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.

Accordingly, 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 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.

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.

audit matters 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.

We determined that there are no critical audit matters.

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.

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

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

Mateo, California

have served as the Company’s auditor since 2021.

Valley Treasures, Inc.

1 unchanged sentence

of December 31, 2021 and 2020

and cash equivalents

and other current assets

from related parties

Current assets

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

Cash and cash equivalents

Accounts receivable (including $ 43,477 and $ 239,468 from

related parties as of December 31, 2021 and 2020, respectively)

Prepayments and other current assets (including $ 1,813,904 and $ 298,383

to related parties as of December 31, 2021 and 2020, respectively)

Due from related parties

Total current assets

Non-current assets

Deposits paid (including $ 1,596,075 and $ 526,101 to

related parties as of December 31, 2021 and 2020, respectively)

Property and equipment, net

Operating lease right-of use assets

Operating lease right-of use assets, related parties

Intangible assets, net

Liabilities and Stockholders’ Equity

Current liabilities

lease obligations –

lease obligations, related parties –

and other borrowings

Stockholders’

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)

Operating lease obligations - current

Operating lease obligations, related parties - current

Accounts payable (including $ 17,789 and $ 87,469 to related parties as of

December 31, 2021 and 2020, respectively)

Accrued liabilities

Bank and other borrowings - current

Income tax payable

Customer advances (including $ nil and $ 15,011 from related party as of

December 31, 2021 and 2020, respectively)

Due to related parties

Total current liabilities

Non-current liabilities

Operating lease obligations – non-current

Operating lease obligations, related parties – non-current

Bank and other borrowings

Total Liabilities

Stockholders’ Equity

Common stock ( 150,000,000

shares authorized, 15,655,038

shares issued and outstanding as of December 31, 2021 and 2020) *

Additional paid in capital*

Accumulated deficit and statutory reserves

( 2,561,681 )

( 4,341,417 )

Accumulated other comprehensive income

Total Fortune Valley Treasures, Inc.

stockholders’ equity

Noncontrolling interests

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

effect of the Reverse Stock Split, See Note 12

accompanying notes to the consolidated financial statements

Valley Treasures, Inc.

Statements of Operations and Comprehensive Loss

Statements of Operations and Comprehensive Income (Loss)

the Years ended December 31, 2021 and 2020

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

operating income

and distribution expenses

and administrative expenses

Net revenues (including $ 495,330 and $ 843,828

from related parties for the years ended December 31, 2021 and 2020, respectively)

Cost of revenues (including $ 663,976 and $ 308,381

from related parties for the years ended December 31, 2021 and 2020, respectively)

Other operating income

Operating expenses:

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

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

Selling and distribution expenses

General and administrative expenses

Other operating expenses

Impairment loss on goodwill

Operating income (loss)

( 3,154,709 )

Other income (expense):

Loss from conversion of related party loan

Interest income

Interest expense

Other income (expense), net

Income (loss) before income tax

( 3,340,425 )

Income tax expense

Net income (loss)

$ ( 3,647,353 )

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to Fortune Valley Treasures, Inc.

( 3,255,564 )

Other comprehensive income:

Foreign currency translation gain

Total comprehensive income (loss)

( 3,326,016 )

comprehensive income (loss)

attributable to noncontrolling interests

Comprehensive income (loss)

attributable to Fortune Valley Treasures, Inc.

$ ( 2,972,898 )

Earnings (loss) per share

Basic and diluted earnings (loss)

Basic and diluted weighted average shares outstanding*

Given effect of the Reverse Stock Split, see Note 12

accompanying notes to the consolidated financial statements

Valley Treasures, Inc.

Statements of Stockholders’

Equity (Deficit)

Statements of Stockholders’ Equity (Deficit)

the Years ended December 31, 2021 and 2020

Comprehensive

as of December 31, 2018

currency translation adjustment

Balance as of

December 31, 2019

Deficit and Statutory

Other Comprehensive

Non controlling

Stockholders’ Equity

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

$ ( 760,504 )

Shares issued for conversion of related party loan*

Shares issued for acquisition of subsidiary*

Noncontrolling interests arising from acquisition of subsidiary

( 3,255,564 )

( 3,647,353 )

Foreign currency translation adjustment

Balance as of December 31, 2020*

$ ( 4,341,417 )

Foreign currency translation adjustment

Balance as of December 31, 2021

$ ( 2,561,681 )

Given effect of the Reverse Stock Split, see Note 12

accompanying notes to the consolidated financial statements

2 unchanged sentences

the Years ended December 31, 2021 and 2020

flows from operating activities

Cash flows from operating activities

Net income (loss)

$ ( 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

Adjustments to reconcile net income (loss) to net cash

provided by (used in) operating activities:

Depreciation and amortization expense

Non-cash lease expense

Impairment loss on goodwill

Loss from conversion of related party loan

Changes in operating assets and liabilities

Accounts receivable

( 2,311,261 )

Prepayments and other current assets

( 1,755,603 )

Due from related parties

Deposits paid

( 1,591,577 )

Accounts payable

Due to related parties

Customer advances

Accrued liabilities

Income tax payable

Operating lease obligations

Cash provided by

(used in) operating activities

Cash flows from investing activities

Acquisition of intangible asset

Advance to related parties

Proceeds from acquisition of subsidiary

Repayment of advance to related parties

Purchase of property and equipment

Net cash provided by (used in) investing activities

Cash flows from financing activities

Repayments to related parties

Repayments to a third party

Borrowings from related parties

Borrowings from a third party

Proceeds from bank borrowings, net

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net changes in cash and cash equivalents

Cash and cash equivalents–beginning of the year

Cash and cash equivalents–end of the year

Supplementary cash flow information:

Interest paid

Income taxes paid

Non-cash investing and financing activities

Expenses paid by related parties on behalf of the Company

Remeasurement of

the operating lease obligation and right-of-use asset due to lease modification

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

Shares issued for acquisition of subsidiary

Related party loan settled with issuance of shares

accompanying notes to the consolidated financial statements

1 unchanged sentence

Valley Treasures, Inc.

(formerly Crypto-Services, Inc.) (“FVTI”

or the “Company”) was incorporated in

the State of Nevada on March 21, 2014.

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

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

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

(formerly Crypto-Services, Inc.) (“FVTI” or the “Company”) was incorporated in the State

of Nevada on March 21, 2014.

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

beverages of wine and distilled liquors, and drinking water distribution and delivery are conducted through its subsidiaries in the People’s

Republic of China (“PRC”).

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 a 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 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’

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.

was incorporated with limited liability in the Republic of Seychelles on July 4, 2016, with share capital of $100,000 divided

into 250,000,000 ordinary shares with $0.0004 par value.

DIGLS wholly owns DaXingHuaShang Investment (Hong Kong) Limited (“DILHK”).

DILHK was incorporated in Hong Kong on June 22, 2016 as an investment holding company with limited liability.

DILHK was previously

wholly owned by Mr.

was incorporated with limited liability in the Republic of Seychelles on July 4, 2016, with share capital of $ 100,000 divided into 250,000,000

ordinary shares with $ 0.0004 par value.

DIGLS wholly owns DaXingHuaShang Investment (Hong Kong) Limited (“DILHK”).

was incorporated in Hong Kong on June 22, 2016 as an investment holding company with limited liability.

DILHK was previously wholly owned

On November 11, 2016, Mr.

Yumin Lin, transferred 100 % of his ownership in DILHK to DIGLS.

wholly owns Qianhai DaXingHuaShang Investment (Shenzhen) Co.

(“QHDX”) which was incorporated with limited liability

on November 3, 2016 in the PRC as a wholly foreign-owned enterprise.

DILHK wholly owns Qianhai

DaXingHuaShang Investment (Shenzhen) Co.

(“QHDX”) which was incorporated with limited liability on November 3, 2016

in the PRC as a wholly foreign-owned enterprise.

QHDX wholly owns Dongguan City France Vin Tout Ltd.

(“FVTL”).

FTVL was incorporated on May 31, 2011 in the PRC with limited liability.

FTVL was incorporated

on May 31, 2011 in the PRC with limited liability.

FTVL was previously owned and controlled by Mr.

FTVL has 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 combinations 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.

March 1, 2019, the Company entered into a sale and purchase agreement (the “SP Agreement”) to acquire 100% of the

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 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

was later amended on September 12, 2019, with Xingwen Wang, a shareholder and legal representative of Yunnan Makaweng Wine

& Spirits Co., Ltd.

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

Pursuant to the Makaweng

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

FVTI’s common stock.

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

QHDX with local government authorities was completed.

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.

Yumin Lin, DIGLS, DILHK, QHDX, and FVTL have been accounted for as a series of business

combinations 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.

March 1, 2019, the Company entered into a sale and purchase agreement (the “SP Agreement”) to acquire 100% of the equity

interest of Jiujiu Group Stock Co., Ltd.

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

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.

all of the equity interest of Jiujiu (HK) Industry Limited (“JJHK”) and Jiujiu (Shenzhen) Industry Co., Ltd.

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 was later

amended on September 12, 2019, with Xingwen Wang, a shareholder and legal representative of Yunnan Makaweng Wine & Spirits Co., Ltd.

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

Pursuant to the Makaweng Agreement, QHDX agreed to purchase

51 % of Makaweng’s equity interest from Xingwen Wang in exchange for shares of FVTI’s common stock.

On August 28, 2019, the

registration of transferring the 51 % of equity interest of Makaweng to QHDX with local government authorities was completed.

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 in Makaweng.

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

Xixingdao became the Company’s subsidiary since August 31, 2020.

On January 6, 2021,

FVTI, JJGS, Valley Holding Limited (“Valley Holdings”) and Angel International Investment Holdings Limited (the “Valley

Holdings Seller”) signed a termination agreement, pursuant to which the parties mutually agreed to terminate the original equity

interest transfer agreement signed on March 16, 2020.

On the same date, FVTI, DILHK, Valley Holdings and the Valley Holdings Seller entered

into a new equity interest transfer agreement, pursuant to which DILHK agreed to purchase 70 % of Valley Holdings’ equity interest

(the “Valley Holdings Equity Transfer”) from the Valley Holdings seller in consideration of FVTI’s common shares valued

at $ 12 million (subject to adjustments in the event Valley Holdings’ net income is more than HK$ 5 million (approximately US$ 0.6

million) or less than HK$ 3 million (approximately US$ 0.4 million) for the fiscal year ended December 31, 2020).

As of the date of this

filing, the closing of the Valley Holdings Equity Transfer has not occurred.

On February 28, 2021,

FVTI, QHDX and the original shareholders of Foshan BaiTaFeng Beverage Development Co., Ltd.

(“BTF”) signed a termination

agreement, pursuant to which the parties mutually agreed to terminate the original equity interest transfer agreement signed on December

31, 2019 (“BTF Agreement”).

The BTF Agreement was terminated effective February 28, 2021 and the parties have no further

rights or obligations under the BTF Agreement.

The parties further agreed to waive their rights to any claims that may arise under the

BTF Agreement.

As of the date of the termination agreement, no equity interest of BTF had been transferred to QHDX.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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consolidated financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations

Securities and Exchange Commission (“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 (“U.S.

GAAP”).

The Company’s fiscal year end is December 31.

The Company’s financial statements are presented in U.S.

Securities and Exchange Commission (“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 (“U.S.

The Company’s

fiscal year end is December 31.

The Company’s financial statements are presented in U.S.

The accompanying consolidated

financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization

of assets and fulfillment of obligations in the normal course of business.

The realization of assets and fulfillment of obligations in

the normal course of business is dependent on, among other things, the Company’s ability to generate sufficient cash flows from

operations, and the Company’s ability to arrange adequate financing arrangements.

Historically, the Company

had recurring net losses and negative operating cash flows that raised substantial doubt about its ability to continue as a going concern.

The Company has been improving its operations subsequent to the acquisition of Xixingdao in August 2020.

In assessing its going concern

in the next twelve months following the issuance of the financial statements for the year ended December 31, 2021, management considered

the projected revenues and expenses for the next twelve months.

Although the Company has generated a negative operating cash flow of

$ 457,142 during the year ended December 31, 2021, it has reported a net income of $ 1,963,469 .

In addition, the Company had a working

capital of $ 3,351,962 as of December 31, 2021.

Based on the Company’s efforts in improving its operations and the significant working

capital increase as of December 31, 2021, the management believes that the substantial doubt has been alleviated.

of consolidation

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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.

The portion of the income

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

As of December 31, 2021, details of the Company’s

major subsidiaries were as follows:

SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES

of Incorporation

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water distribution and delivery

City Fu La Tu Trade Ltd (“FLTT”)

of alcoholic beverages

City Fu Xin Gu Trade Ltd (“FXGT”)

of alcoholic beverages

City Fu Xin Technology Ltd (“FXTL”)

water distribution and delivery

City Fu Guan Healthy Industry Technology Ltd (“FGHL”)

water distribution and delivery

City Fu Jing Technology Ltd (“FJTL”)

water distribution and delivery

City Fu Xiang Technology Ltd (“FGTL”)

water distribution and delivery

City Fu Ji Food & Beverage Ltd (“FJFL”)

water distribution and delivery

City Fu Lai Food Ltd (“FLFL”)

water distribution and delivery

City Fu Yi Beverage Ltd (“FYDL”)

water distribution and delivery

City Fu Tai Food Trade Ltd (“FTFL”)

water distribution and delivery

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America

requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

Certain significant accounting policies that

contain subjective management estimates and assumptions include those related to going concern, allowance of doubtful accounts,

allowance of deferred tax asset, useful lives and impairment of long-lived assets, valuation of intangible assets acquired and

impairment of goodwill.

Actual results may materially differ from these estimates.

City Fu Jia Drinking Water Ltd (“FJDL”)

of agriculture products, household electric appliances and food

City Fu Sheng Drinking Water Ltd (“FSDL”)

of agriculture products, household electric appliances and food

City Fu Xi Drinking Water Ltd (“FXDL”)

of agriculture products, household electric appliances and plastic products

City Fu Jin Trading Technology Ltd (“FJSTL”)

of agriculture products, household electric appliances, plastic products and software development

City Fu Li Trading Ltd (“FLTL”)

of agriculture products, household electric appliances and plastic products

Fu Gu Supply Chain Group Ltd (“FGGC”)

chain service, sales of food and health products, machinery, plastic products, and investment holding

preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires

management to make estimates and assumptions that affect the reported amounts of assets and liabilities and 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.

Certain significant accounting policies that contain subjective management

estimates and assumptions include those related to going concern, allowance of doubtful accounts, allowance of deferred tax asset, useful

lives and impairment of long-lived assets, valuation of intangible assets acquired and impairment of goodwill.

Actual results may materially

differ from these estimates.

Reclassification

prior year amounts have been reclassified to conform to the current period presentation.

These reclassifications had no impact

on net earnings and financial position.

These reclassifications had no impact on net

earnings and financial position.

currency translation and re-measurement

Company translates its foreign operations to the U.S.

dollar in accordance with ASC 830, “

Foreign Currency Matters ”.

dollar in accordance with ASC 830, “ Foreign Currency Matters ”.

reporting currency for the Company and its subsidiaries is the U.S.

The Company, DIGLS, DILHK, JJGS and JJHK’s functional

currency is the U.S.

QHDX, JJSZ and their subsidiaries which are incorporated in PRC use the Chinese Renminbi (“RMB”)

as their functional currency.

Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records

into their functional currency as follows:

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

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

Company’s subsidiaries, whose functional currency is not the U.S.

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

Company’s subsidiaries, whose functional currency is not the U.S.

dollar, translate their records into the U.S.

dollar as follows:

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

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

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

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

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

December 31, 2021

December 31,2020

USD exchange rate

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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 US dollars at the rates used

in translation.

No representation is made that the RMB amounts could have been, or could be, converted into US dollars at the rates used in translation.

and cash equivalents

and cash equivalents consist of cash on hand, demand deposits placed with banks or other financial institutions and have original

maturities of less than three months.

The Company’s primary bank deposits are located in the Hong Kong and the PRC.

and cash equivalents consist of cash on hand, demand deposits placed with banks or other financial institutions and have original maturities

of less than three months.

The Company’s primary bank deposits are located in the Hong Kong and the PRC.

receivable and allowance for doubtful accounts

receivable are stated at the customer obligations due under normal trade terms net of allowance for doubtful accounts.

Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be

The Company determines the allowance for doubtful accounts taking into consideration various factors including but

not limited to historical collection experience and credit-worthiness of the customers as well as the age of the individual

receivables balance.

Additionally, the Company makes specific bad debt provisions based on any specific knowledge the Company

has acquired that might indicate that an account is uncollectible.

The facts and circumstances of each account may require the

Company to use substantial judgment in assessing its collectability.

Company maintains an allowance for doubtful accounts which reflects its best estimate of amounts that potentially will not be collected.

The Company determines the allowance for doubtful accounts taking into consideration various factors including but not limited to historical

collection experience and credit-worthiness of the customers as well as the age of the individual receivables balance.

Additionally,

the Company makes specific bad debt provisions based on any specific knowledge the Company has acquired that might indicate that an account

is uncollectible.

The facts and circumstances of each account may require the Company to use substantial judgment in assessing its collectability.

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 is has been determined

the product is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost.

Company’s primary products are alcoholic beverages and water.

The selling price of alcoholic beverages tend 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 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 revenues when is has been determined the product

is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost.

The Company’s primary

products are alcoholic beverages and water.

The selling price of alcoholic beverages tend to increase over time, however, there are circumstances

where alcoholic beverages may be subject to spoilage if stored for prolong periods of time.

and equipment

and equipment is

carried at cost less accumulated depreciation.

Depreciation is provided over their estimated useful lives, using the straight-line

and 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 property and equipment are as follows:

SCHEDULE OF ESTIMATED USEFUL LIVES OF EQUIPMENT

Estimated useful life

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

assets with definite lives are stated at cost less

accumulated amortization and consist mainly of distribution channel that was acquired in the acquisition of Xixingdao.

assets with definite lives are stated at cost less accumulated amortization and consist mainly of distribution channel that was acquired

in the acquisition of Xixingdao.

is calculated on the straight-line basis over the following estimated useful lives:

SCHEDULE OF ESTIMATED USEFUL LIVES OF AMORTIZATION

Company recognizes its leases in accordance with ASC 842 - Leases.

Under ASC 842, operating lease right-of-use (“ROU”)

assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

assets represent our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make

lease payments arising from the lease.

The initial lease liability is equal to the future fixed minimum lease payments discounted

using the Company’s incremental borrowing rate, on a secured basis.

The lease term includes option renewal periods and early

termination payments when it is reasonably certain that the Company will exercise those rights.

The initial measurement of the

ROU asset is equal to the initial lease liability plus any initial direct costs and prepayments, less any lease incentives.

Company elected the short-term lease exemption for contracts with lease terms of 12 months or less.

The Company accounts for the

lease and non-lease components of its leases as a single lease component.

Lease expense is recognized on a straight-line basis

over the lease term.

Under ASC 842, operating lease right-of-use (“ROU”) assets

and liabilities are recognized at commencement date based on the present value of lease payments over the lease term.

ROU assets represent

our right to use an underlying asset for the lease term and lease liabilities represent our obligation to make lease payments arising

from the lease.

The initial lease liability is equal to the future fixed minimum lease payments discounted using the Company’s

incremental borrowing rate, on a secured basis.

The lease term includes option renewal periods and early termination payments when it

is reasonably certain that the Company will exercise those rights.

The initial measurement of the ROU asset is equal to the initial lease

liability plus any initial direct costs and prepayments, less any lease incentives.

The Company elected the short-term lease exemption

for contracts with lease terms of 12 months or less.

The Company accounts for the lease and non-lease components of its leases as a single

lease component.

Lease expense is recognized on a straight-line basis over the lease term.

of long-lived assets other than goodwill

Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount

of assets may not be recoverable.

Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of

assets may not be recoverable.

Impairment may be the result of becoming obsolete from a change in the industry or new technologies.

Impairment is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated.

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.

is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated.

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.

Company did not recognize any impairment of long-lived assets during the years ended December 31, 2021 and 2020.

represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business

In accordance with FASB ASC Topic 350, “Intangibles-Goodwill and Others”, goodwill is subject to at

least an annual assessment for impairment or more frequently if events or changes in circumstances indicate that an

impairment may exist, applying a fair-value based test.

Fair value is generally determined using a discounted cash flow

represents the excess of the purchase price over the fair value of the net identifiable assets acquired in a business combination.

accordance with FASB ASC Topic 350, “Intangibles-Goodwill and Others”, goodwill is subject to at least an annual assessment

for impairment or more frequently if events or changes in circumstances indicate that an impairment may exist, applying a fair-value

Fair value is generally determined using a discounted cash flow analysis.

January 2017, the FASB issued Accounting Standards Update No.

2017-04, Intangibles - Goodwill and Other (Topic 350):

the Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test.

Under ASU 2017-04,

an entity should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair

value up to the amount of goodwill allocated to that reporting unit.

ASU 2017-04 is effective for annual and interim reporting

periods beginning after December 15, 2022 for smaller reporting companies.

Simplifying the

Test for Goodwill Impairment (ASU 2017-04), which eliminates step two from the goodwill impairment test.

Under ASU 2017-04, an entity

should recognize an impairment charge for the amount by which the carrying amount of a reporting unit exceeds its fair value up to the

amount of goodwill allocated to that reporting unit.

ASU 2017-04 is effective for annual and interim reporting periods beginning after

December 15, 2022 for smaller reporting companies.

The Company has early adopted ASU 2017-04 on January 1, 2020.

the year ended December 31, 2020, the Company has recorded impairment of goodwill in the amount of $5,594,692.

the years ended December 31, 2021 and 2020, the Company has recorded impairment of goodwill in the amount of $ nil

and $ 5,594,692 ,

respectively .

Company follows the guidance of ASC 606, revenue from contracts with customers is recognized using the following five steps:

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revenue when (or as) the entity satisfies a performance obligation.

Topic 606, revenues are recognized when the promised products have been confirmed of delivery or services have been transferred

to the consumers in amounts that reflect the consideration the customer expects to be entitled to in exchange for those services.

The Company presents value added taxes (“VAT”) as reductions of revenues.

The Company recognizes revenues net of value

added taxes (“VAT”) and relevant charges.

Topic 606, revenues are recognized when the promised products have been confirmed of delivery or services have been transferred to the

consumers in amounts that reflect the consideration the customer expects to be entitled to in exchange for those services.

presents value added taxes (“VAT”) as reductions of revenues.

The Company recognizes revenues net of value added taxes (“VAT”)

and relevant charges.

generate revenue primarily from the sales of wine, water and oil directly to agents, wholesalers and end users.

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complete when products have been picked up by or delivered to our customers.

We account for shipping and handling fees

as a fulfillment cost.

We account for shipping and handling fees as a fulfillment

following table provides information about disaggregated revenue based on revenue by product types:

the years ended

liabilities consist mainly of customer advances.

On certain occasions, the Company may receive prepayments from downstream retailers

or wholesales customers for wines, water and other products prior to them taking possession of the Company’s products.

Company records these receipts as customer advances until the control of the products has been transferred the customers.

December 31, 2020 and 2019, the Company had customer advances of $580,151 and $Nil, respectively.

SCHEDULE OF DISAGGREGATION REVENUE

For the years ended

December 31, 2021

December 31, 2020

Sales of wine

Sales of water

liabilities consist mainly of advances from customers including related party customers.

On certain occasions, the Company may receive prepayments from

downstream retailers or wholesales customers for wines, water and other products prior to them taking possession of the Company’s

The Company records these receipts as customer advances until the control of the products has been transferred the customers.

As of December 31, 2021 and 2020, the Company had customer advances of $ 382,518

and $ 580,151 ,

respectively.

During the years ended December 31, 2021 and 2020, the Company recognized $ 580,151

respectively, of customer advances in the opening balance.

and distribution expenses

and distribution expenses amounted to $23,191 and $Nil for the years ended December 31, 2020 and 2019, respectively.

Selling and distribution costs are expensed as incurred and included in selling expenses.

and distribution expenses amounted to $ 89,416 and $ 23,191 for the years ended December 31, 2021 and 2020, respectively.

Selling and distribution

costs are expensed as incurred and included in selling expenses.

and administrative expenses

and administrative expenses consist primarily of salary and welfare for general and administrative personnel, rental expenses,

entertainment expenses, general office expenses and professional service fees.

is recognized net of value-added taxes (“VAT”).

The VAT is based on gross sales price and VAT rates applicable to

the Company is 17% for the period from the beginning of 2018 till the end of April 2018, then changed to 16% from May 2018 to

the end of March 2019, and changed to 13% from April 2019.

Entities that are VAT general taxpayers are allowed to offset qualified

input VAT paid to suppliers against their output VAT liabilities.

Net VAT balance between input VAT and output VAT is recorded

as VAT payable if output VAT is larger than input VAT and is recorded as VAT recoverable if input VAT is larger than output VAT.

For entities that are VAT small taxpayers, VAT rate applicable is 3% for the period from the beginning of 2018, then during

the COVID-19, the small taxpayers are allowed to enjoy the preferred tax policy, tax rate from 3% to 1% for the period

from March 1, 2020 to December 31, 2020.

All of the VAT returns filed by the Company’s subsidiaries in the PRC, have

been and remain subject to examination by the PRC tax authorities for five years from the date of filing.

and administrative expenses consist primarily of salary and welfare for general and administrative personnel, rental expenses, entertainment

expenses, general office expenses and professional service fees.

is recognized net of value-added taxes (“VAT”).

The VAT is based on gross sales price and VAT rates applicable to the Company

for the period from the beginning of 2018 till the end of April 2018, then changed to 16 %

from May 2018 to the end of March 2019, and changed to 13 %

from April 2019.

Entities that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output

VAT liabilities.

Net VAT balance between input VAT and output VAT is recorded as VAT payable if output VAT is larger than input VAT and

is recorded as VAT recoverable if input VAT is larger than output VAT.

For entities that are VAT small taxpayers, VAT rate applicable

for the period from the beginning of 2018, then during the COVID-19, the small taxpayers are allowed to enjoy the preferred tax policy,

tax rate from 3 %

for the period from March 1, 2020 to December 31, 2021.

All of the VAT returns filed by the Company’s subsidiaries in the

PRC, have been and remain subject to examination by the PRC tax authorities for five years from the date of filing.

VAT payables are

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Company followed the liability method of accounting for income taxes in accordance with ASC 740, Income Taxes, or ASC 740.

this method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax

bases of assets and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected

The Company recorded a valuation allowance to offset deferred tax assets if based on the weight of available evidence,

it is more-likely-than-not that some portion, or all, of the deferred tax assets will not be realized.

The effect on deferred

taxes of a change in tax rate is recognized in tax expense in the period that includes the enactment date of the change in tax

method, deferred tax assets and liabilities are determined based on the difference between the financial reporting and tax bases of assets

and liabilities using enacted tax rates that will be in effect in the period in which the differences are expected to reverse.

recorded a valuation allowance to offset deferred tax assets if based on the weight of available evidence, it is more-likely-than-not

that some portion, or all, of the deferred tax assets will not be realized.

The effect on deferred taxes of a change in tax rate is recognized

in tax expense in the period that includes the enactment date of the change in tax rate.

Company accounted for uncertainties in income taxes in accordance with ASC 740.

Interest and penalties related to unrecognizable

tax benefit recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive loss as income

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

As of December 31, 2020, the Company’s WFOE and its subsidiaries did not make the provision for the

statutory reserves.

Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”.

EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding

Interest and penalties related to unrecognizable tax

benefit recognized in accordance with ASC 740 are classified in the consolidated statements of comprehensive income as income

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.

The Company had $ 636,898 and $ nil to statutory reserves as of December

31, 2021 and 2020, respectively, which were included in accumulated deficit and statutory reserves in the Company’s consolidated balance sheets.

(loss) per share

Company computes earnings (loss) 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.

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.

Company 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 financial

assets and liabilities, which primarily consist of cash and cash equivalents, accounts receivable, inventories, prepayments and

other current assets, accounts payable, accrued liabilities, income tax payable, customer advances, 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.

those that increase income per share or decrease loss

per share) are excluded from the calculation of diluted EPS.

Company 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 financial assets and liabilities,

which primarily consist of cash and cash equivalents, accounts receivable, inventories, prepayments and other current assets, accounts

payable, accrued liabilities, income tax payable, customer advances, 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

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.

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

and contingencies

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.

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

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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.

Company reports each material operating segment in accordance with ASC 280, “Segment Reporting”.

Operating segments

are defined as components of an enterprise about which separate financial information is available that is evaluated regularly

by the chief operating decision maker in deciding how to allocate resources and in assessing performance.

The Company’s

chief operating decision maker is the chief executive officer.

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.

Company reports each material operating segment in accordance with ASC 280, “Segment Reporting”.

Operating segments are defined

as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating

decision maker in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision maker

is the chief executive officer.

The Company has determined that it has only one operating segment.

majority of the Company’s expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’

assets and liabilities are denominated in RMB.

RMB is not freely convertible into foreign currencies.

In the PRC, certain foreign

exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by

the People’s Bank of China (“PBOC”).

Remittances in currencies other than RMB by the Company in the PRC

must be processed through the PBOC or other Company foreign exchange regulatory bodies which require certain supporting documentation

in order to affect the remittance.

In the PRC, certain foreign exchange

transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s

Bank of China (“PBOC”).

Remittances in currencies other than RMB by the Company in the PRC must be processed through the

PBOC or other Company foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance.

Company maintains certain bank accounts in the PRC.

On May 1, 2015, the PRC’s new Deposit Insurance Regulation came

into effect, pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to

purchase deposit insurance for deposits in RMB and in foreign currency placed with them.

Such Deposit Insurance Regulation would

not be effective in providing complete protection for the Company’s accounts, as its aggregate deposits are much higher

than the compensation limit, which is RMB500,000 for one bank.

However, the Company believes that the risk of failure of any

of these Chinese banks is remote.

Bank failure is uncommon in the PRC and the Company believes that those Chinese banks that hold

the Company’s cash and cash equivalents and short-term investments are financially sound based on public available information.

than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal

Deposit Insurance Corporation insurance or other insurance.

On May 1, 2015, the PRC’s new Deposit Insurance Regulation came into effect,

pursuant to which banking financial institutions, such as commercial banks, established in the PRC are required to purchase deposit insurance

for deposits in RMB and in foreign currency placed with them.

Such Deposit Insurance Regulation would not be effective in providing complete

protection for the Company’s accounts, as its aggregate deposits are much higher than the compensation limit, which is RMB 500,000

for one bank.

However, the Company believes that the risk of failure of any of these Chinese banks is remote.

Bank failure is uncommon

in the PRC and the Company believes that those Chinese banks that hold the Company’s cash and cash equivalents are financially sound based on public available information.

than the deposit insurance mechanism in the PRC mentioned above, the Company’s bank accounts are not insured by Federal Deposit

Insurance Corporation insurance or other insurance.

Concentration

1 unchanged sentence

instruments that potentially subject the Company to the concentration of credit risks consist of cash and short-term investments.

The maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates.

The Company deposits

its cash and cash equivalents with financial institutions located in jurisdictions where the subsidiaries are located.

The Company believes that no significant credit risk exists as these financial institutions have high credit quality.

Company’s also exposure to credit risk associated with its trading and other activities is measured on an individual counterparty

basis, as well as by group of counterparties that share similar attributes.

Concentrations of credit risk can be affected by changes

in political, industry, or economic factors.

To reduce the potential for risk concentration, the Company generally requires

payment after delivery of the goods within 60 to 90 days.

maximum exposures of such assets to credit risk are their carrying amounts as of the balance sheet dates.

The Company deposits its cash

and cash equivalents with financial institutions located in jurisdictions where the subsidiaries are located.

The Company believes that

no significant credit risk exists as these financial institutions have high credit quality.

Company also exposures to credit risk associated with its trading and other activities is measured on an individual

counterparty basis, as well as by group of counterparties that share similar attributes.

Concentrations of credit risk can be

affected by changes in political, industry, or economic factors.

To reduce the potential for risk concentration, the Company

generally requires payment after delivery of the goods within 60 to 90 days.

Credit limits are established and exposure is monitored

in light of changing counterparty and market conditions.

During the year ended December

31, 2019, the Company had a concentration of risk in its demand for goods, as a single customer, whom is also a related party

accounted for $220,203 of the Company’s sales.

There was no revenue from customers which individually represented greater

than 10% of the total revenues for the year ended December 31, 2020.

For the years ended December 31, 2021 and 2020, no customer

accounted for more than 10% of the Company’s total revenues or accounts receivable.

For the year ended December 31, 2021,

the Company had one supplier that accounted for more than 10 %

of the Company’s total purchases and accounts payable.

The Company had other two suppliers accounted for more than 10 %

of the Company’s accounts payable.

For the year ended December 31, 2020, the Company had one supplier that accounted for more

of the Company’s total purchases and accounts payable.

The Company had other three suppliers, including one related party, accounted for more than 10 %

of the Company’s accounts payable.

in market interest rates may negatively affect our financial condition and results of operations.

1 unchanged sentence

interest rate risk on cash deposit and floating rate borrowings, and the risks due to changes in interest rates is not material.

The Company has not used any derivative financial instruments to manage our interest risk exposure.

Company has not used any derivative financial instruments to manage our interest risk exposure.

party transaction

related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate

families, (ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under

common control with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction is considered to be a related party transaction when there is a transfer of resources or obligations between related

involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of

competitive, free market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply

that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions

unless such representations can be substantiated.

related party is generally defined as (i) any person that holds 10% or more of the Company’s securities and their immediate families,

(ii) the Company’s management, (iii) someone that directly or indirectly controls, is controlled by or is under common control

with the Company, or (iv) anyone who can significantly influence the financial and operating decisions of the Company.

A transaction

is considered to be a related party transaction when there is a transfer of resources or obligations between related parties.

involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,

free market dealings may not exist.

Representations about transactions with related parties, if made, shall not imply that the related

party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations

can be substantiated.

purchase price of an acquisition is measured as the aggregate of the fair value of the consideration transferred.

price is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess

recorded as goodwill.

The purchase price

is allocated to the fair values of the tangible and intangible assets acquired and liabilities assumed, with any excess recorded as goodwill.

These fair value determinations require judgment and may involve the use of significant estimates and assumptions.

The purchase price allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain

the information necessary to identify and measure the assets acquired and liabilities assumed.

Any such measurement period adjustments

are recognized in the period in which the adjustment amount is determined.

Transaction costs associated with the acquisition are

expensed as incurred.

accounting pronouncements

June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses on Financial

ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”)

model to estimate its lifetime “expected credit loss”

and record an allowance that, when deducted from the amortized

cost basis of the financial asset, presents the net amount expected to be collected on the financial asset.

The CECL model is

expected to result in more timely recognition of credit losses.

ASU 2016-13 also requires new disclosures for financial assets

measured at amortized cost, loans and available-for-sale debt securities.

ASU 2016-13 will be effective for smaller reporting

companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years.

will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first

reporting period in which the guidance is adopted.

The Company is evaluating the impact of the adoption of ASU 2016-13

on its consolidated financial statements and does not expect the adoption to have a material impact.

August 2018, the FASB issued ASU 2018-13, Disclosure Framework-Changes to the Disclosure

Requirements for Fair Value Measurement.

The amendments in this standard has removed,

modified and added certain disclosures under ASC Topic 820, Fair Value Measurement, with

the objective of improving disclosure effectiveness.

On January 1, 2020, the Company

adopted ASU 2018-13 on a prospective basis.

The adoption did not have a material impact

on the Company’s consolidated financial statements.

December 2020, the FASB issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes.

ASU removes certain exceptions to the general principles in Topic 740 and improves consistent application of and simplifies GAAP

for other areas of Topic 740 by clarifying and amending existing guidance.

ASU 2019-12 is effective for public entities for annual

reporting periods and interim periods within those years beginning after December 15, 2020, and early adoption is permitted.

Company does not expect the adoption of ASU 2019-12 to have a material impact on its consolidated financial

3 - GOING CONCERN

accompanying financial statements have been prepared in conformity with U.S.

GAAP which contemplates continuation of the Company

as a going-concern basis.

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.

Although positive operating

cash flow has been generated in the year ended December 31, 2020, the Company had recurring negative operating cash flows historically.

In addition, for the years ended December 31, 2020 and 2019, the Company reported recurring net losses of $3,647,353

and $377,756, respectively.

These conditions continue to raise substantial doubt as to whether the Company may continue as

a going concern as of the date of this report.

an effort to improve its financial position, the Company is working to obtain new working capital through improving its operation

and obtaining loans from banks or other financial institutes.

The Company also relies on relates parties to provided financing

and management services at cost that may not be the prevailing market rate for such services.

However, management cannot provide

any assurances that the Company will be successful in accomplishing any of its plans.

The accompanying financial statements do

not include any adjustments that might result from the outcome of this uncertainty.

The purchase price

allocation may be provisional during a measurement period of up to one year to provide reasonable time to obtain the information necessary

to identify and measure the assets acquired and liabilities assumed.

Any such measurement period adjustments are recognized in the period

in which the adjustment amount is determined.

Transaction costs associated with the acquisition are expensed as incurred.

accounting pronouncements adopted

In December 2020, the FASB

issued ASU 2019-12, Income Taxes (Topic 740) Simplifying the Accounting for Income Taxes.

The ASU removes certain exceptions to the general

principles in Topic 740 and improves consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending

existing guidance.

On January 1, 2021, the Company adopted ASU 2019-12 on a prospective basis.

The adoption did

not have a material impact on the Company’s consolidated financial statements.

3 - ACCOUNTS RECEIVABLE, NET

receivable consisted of the following as of December 31, 2021 and 2020:

SCHEDULE OF ACCOUNTS RECEIVABLE

Accounts receivable (including $ 43,477 and $ 239,468 from

related parties as of December 31, 2021 and 2020, respectively)

Allowance for doubtful accounts

receivable, net

Account receivable, net

4 – PREPAYMENTS AND OTHER CURRENT ASSETS

and other current assets consisted of the following as of December 31, 2021 and 2020:

OF PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments (including $ 1,813,904 and $ 298,383 to related parties

as of December 31, 2021 and 2020, respectively)

Other current assets

Prepayments and other

current assets

and other current assets consisted of the following as

of December 31, 2020 and 2019:

current assets

of December 31, 2020 and 2019, the balance of $376,746 and $7,185, respectively, represented the advanced

payments to suppliers.

of prepayments represented the advanced payments

to suppliers including related party suppliers.

5 – PROPERTY AND EQUIPMENT, NET

and equipment consisted of the following as of December 31, 2021 and 2020:

and equipment

SCHEDULE OF PROPERTY AND EQUIPMENT

Office equipment

Leasehold improvement

Property and equipment

Accumulated depreciation

and equipment, net

Property and equipment, net

expense, which was included in general and administrative expenses, for the years ended December 31, 2021 and 2020 was $ 24,500

$22,590 and $1,072, respectively.

and $ 22,590 ,

respectively.

6 – BUSINESS COMBINATION AND GOODWILL

August 31, 2020, FVTI completed the acquisition of 90 % equity interest of Xixingdao.

The Company aimed to enter the

service of drinking water distribution and delivery market in Dongguan City, Guangdong Province through this acquisition.

purchase consideration is $9,773,989, consists of 4,862,681 shares of the Company’s common stock issued to Xixingdao’s

original owner fair valued at the acquisition date.

The Company aimed to enter the service of drinking

water distribution and delivery market in Dongguan City, Guangdong Province through this acquisition.

The purchase consideration is $ 9,773,989 ,

consists of 4,862,681 shares of the Company’s common stock issued to Xixingdao’s original owner fair valued at the acquisition

These shares were issued on December 28, 2020.

The Company accounted for

the acquisition using the purchase method of accounting for business combination under ASC 805.

The total purchase price was allocated

to the tangible and identifiable intangible assets acquired and liabilities based on their estimated fair values as of the acquisition

determination of fair values involves the use of significant judgment and estimates and in the case of Xixingdao, this

is with specific reference to acquired intangible asset.

The judgments used to determine the estimated fair value assigned to

assets acquired and liabilities assumed, as well as the intangible asset life and the expected future cash flows and related discount

rate, can materially impact the Company’s consolidated financial statements.

Significant inputs and assumptions used for

the model included the amount and timing of expected future cash flows and discount rate.

The Company utilized the

assistance of a third-party valuation appraiser to determine the fair value as of the date of acquisition.

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

and other receivables

to related party

Noncontrolling

purchase price

results of operations, financial position, and cash flows of Xixingdao have been included in the Company’s consolidated

financial statements since the date of acquisition.

The Company accounted for the acquisition using the purchase method of accounting

for business combination under ASC 805.

The total purchase price was allocated to the tangible and identifiable intangible assets acquired

and liabilities based on their estimated fair values as of the acquisition date.

determination of fair values involves the use of significant judgment and estimates and in the case of Xixingdao, this is with specific

reference to acquired intangible asset.

The judgments used to determine the estimated fair value assigned to assets acquired and liabilities

assumed, as well as the intangible asset life and the expected future cash flows and related discount rate, can materially impact the

Company’s consolidated financial statements.

Significant inputs and assumptions used for the model included the amount and timing

of expected future cash flows and discount rate.

The Company utilized the assistance of a third-party valuation appraiser to determine

the fair value as of the date of acquisition.

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

OF RECOGNIZED IDENTIFIED ASSETS ACQUIRED AND LIABILITIES ASSUMED

Account and other receivables

Other net assets

Distribution channel

Due to related party

Noncontrolling interest

Total purchase price

results of operations, financial position, and cash flows of Xixingdao have been included in the Company’s consolidated financial

statements since the date of acquisition.

Goodwill arising from this business combination is not tax deductible.

following unaudited pro forma information presents the combined results of operations for the years ended December 31, 2020

and 2019 as if the acquisition of Xixingdao had occurred as of January 1, 2020 and May 31, 2019, the inception date of

These unaudited pro forma results are presented for informational purpose only and are not necessarily indicative

of what the actual results of operations of the combined company would have been if the Company consummated the acquisition

on January 1, 2020 or May 31, 2019, nor are they indicative of future results of operations:

the years ended December 31

forma net revenues

forma net loss

forma net loss attributable to Fortune Valley Treasures, Inc.

Company’s policy is to perform its annual impairment testing on goodwill for its reporting unit on December 31, of each

fiscal year or more frequently if events or changes in circumstances indicate that an impairment may exist.

The Company’s

evaluation of goodwill for impairment involves the comparison of the fair value of Xixingdao to its carrying value.

used the income approach with the discounted cash flow valuation method with the assistance of a third-party valuation appraiser

to estimate fair value, which requires management to make significant estimates and assumptions related to forecasted revenues

and cash flows and the discount rate.

The impairment loss on goodwill of $5,594,692, was recognized during the year ended December

following unaudited pro forma information presents the combined results of operations for the years ended December 31, 2020 and 2019

as if the acquisition of Xixingdao had occurred as of January 1, 2020 and May 31, 2019, the inception date of Xixingdao.

These unaudited

pro forma results are presented for informational purpose only and are not necessarily indicative of what the actual results of operations

of the combined company would have been if the Company consummated the acquisition on January 1, 2020 or May 31, 2019, nor are they indicative

of future results of operations:

OF BUSINESS ACQUISITION PRO FORMA INFORMATION

For the years ended December 31

Pro forma net revenues

Pro forma net loss

Pro forma net loss attributable to Fortune Valley Treasures, Inc.

Company’s policy is to perform its annual impairment testing on goodwill for its reporting unit on December 31, of each fiscal

year or more frequently if events or changes in circumstances indicate that an impairment may exist.

During the year ended December

31, 2020, the Company’s evaluation of goodwill for impairment involves the comparison of the fair value of Xixingdao to its

carrying value.

The Company used the income approach with the discounted cash flow valuation method with the assistance of a third-party

valuation appraiser to estimate fair value, which requires management to make significant estimates and assumptions related to forecasted

revenues and cash flows and the discount rate.

The impairment loss on goodwill of $ 5,594,692 ,

was recognized during the year ended December 31, 2020.

As of December 31, 2020, the balance of goodwill is $ 1,368,915 .

During the year ended

December 31, 2021, the Company performed a qualitative assessment by taking into consideration the industry and market conditions, overall

financial performance of the reporting unit, and other specific information related to the operations.

Based on the assessment, the Company

determined that it was not necessary to perform a quantitative goodwill impairment test and concluded that no impairment indicators on

its goodwill were noted as of December 31, 2021.

As of December 31, 2021, the balance of goodwill is $ 1,406,289 .

7 – INTANGIBLE ASSETS

assets and related accumulated amortization were as follows:

Total intangible

SCHEDULE OF INTANGIBLE ASSETS

Distributor channel

Total intangible assets

Accumulated amortization

expense for the years ended December 31, 2020 and 2019 was $260,205 and $0, respectively, included in cost of revenues.

intangible assets mainly consist of internal-used software under development, which is not yet ready for use.

( 1,129,913 )

expense for the years ended December 31, 2021 and 2020 was $ 844,907

and $ 260,205 ,

respectively, included in cost of revenues.

of December 31, 2021, the future estimated amortization costs for distribution channel are as follows:

OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS

8 - INCOME TAXES

1 unchanged sentence

Company is registered in the State of Nevada and is subject to United States of America tax law.

The U.S federal income tax

the current laws of the Seychelles, DIGLS and JJGS are registered as an international business company which governed by

the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

year of assessment of 2018/2019 onwards, Hong Kong profit

tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately $289,855), and 16.5% on any part

of assessable profits over HK$2,000,000.

For the years ended December 31, 2020 and 2019, the Company did

not have any assessable profits arising in or derived from Hong Kong, therefore no provision for Hong Kong profits tax

was made in the year.

Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”)

The U.S federal income tax rate is 21 %.

the current laws of the Seychelles, DIGLS and JJGS are registered as an international business company which governed by the International

Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25 % on assessable profits up to HK$ 2,000,000 (approximately

$ 289,855 ), and 16.5 % on any part of assessable profits over HK$ 2,000,000 .

For the years ended December 31, 2021 and 2020, the Company

did not have any assessable profits arising in or derived from Hong Kong, therefore no provision for Hong Kong profits tax was made in

Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”)

with the statutory income tax rate of 25 % with the following exceptions.

January 17, 2019, the State Taxation Administration issued the notice on the scope of small-scale and low-profit corporate

income tax preferential policies of the Ministry of Finance and the State Administration of Taxation, [2019] No.

13 for small-scale

and low-profit enterprises whose annual taxable income is less than RMB1,000,000 (including RMB1,000,000), approximately $142,209,

their income is reduced by 25% to the taxable income, and enterprise income tax is paid at 20% tax rate, which is essentially

resulting in a favorable income tax rate of 5%.

While for the portion of annual taxable income exceeding RMB1,000,000,

approximately $142,209, but not more than RMB3,000,000, approximately $426,627, the income is reduced by 50% to the taxable

income, and enterprise income tax is paid at 20% tax rate, which is essentially resulting in a favorable income tax rate of

The qualifications of small-scale and low-profit enterprises were examined annually by the Tax Bureau.

All of the Company’s

PRC subsidiaries met the criteria of small-scale and low-profit enterprises.

January 17, 2019, the State Taxation Administration issued the notice on the scope of small-scale and low-profit corporate income tax

preferential policies of the Ministry of Finance and the State Administration of Taxation, [2019] No.

13 for small-scale and low-profit

enterprises whose annual taxable income is less than RMB1,000,000 (including RMB1,000,000), approximately $ 142,209 , their income is reduced

by 25 % to the taxable income, and enterprise income tax is paid at 20 % tax rate, which is essentially resulting in a favorable income

tax rate of 5%.

While for the portion of annual taxable income exceeding RMB 1,000,000 , approximately $ 142,209 , but not more than RMB 3,000,000 ,

approximately $ 426,627 , the income is reduced by 50% to the taxable income, and enterprise income tax is paid at 20% tax rate, which

is essentially resulting in a favorable income tax rate of 10 %.

The qualifications of small-scale and low-profit enterprises were examined

annually by the Tax Bureau.

All of the Company’s PRC subsidiaries met the criteria of small-scale and low-profit enterprises .

components of the income tax provision are as follows:

OF COMPONENTS OF INCOME TAX PROVISION

– United States of America

1 unchanged sentence

summary of United States and foreign income (loss) before income taxes was composed of the following:

attributed to PRC operations

(loss) attributed to Seychelles and Hong Kong

attributed to U.S.

SCHEDULE OF UNITED STATES AND FOREIGN INCOME LOSS BEFORE INCOME TAXES

Income (loss) attributed to PRC operations

$ ( 2,861,595 )

Income (loss) attributed to Seychelles and Hong Kong

Loss attributed to U.S.

Income (loss) before tax

$ ( 3,340,425 )

difference between the U.S.

federal statutory income tax rate and the Company’s effective tax rate was as follows for the

years ended December 31, 2020 and 2019:

federal statutory income tax rate and the Company’s effective tax rate was as follows for the years

ended December 31, 2021 and 2020:

OF EFFECTIVE INCOME TAX RATE

federal statutory income tax rate

rates in PRC, net

items, net operating losses in PRC and other jurisdictions, election to not recognize tax asset

tax difference under different tax jurisdictions

tax exemption for qualified small-scale and low-profit enterprises

allowance on deferred income tax assets

of intangible asset and impairment of goodwill not deductible for tax purposes

Company’s effective tax rate

effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply

a broad range of income tax rates.

Higher rates in PRC, net

Reconciling items, net operating losses in PRC and other jurisdictions, election to not recognize tax asset

Income tax difference under different tax jurisdictions

PRC tax exemption for qualified small-scale and low-profit enterprises

Valuation allowance on deferred income tax assets

Amortization of intangible asset and impairment of goodwill not deductible for tax purposes

Impact of GILTI

The Company’s effective tax rate

effective tax rate in the years presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range

of income tax rates.

significant components of deferred taxes of the Company are as follows:

operating loss carry forwards

OF COMPONENTS OF DEFERRED TAX ASSETS

December 31, 2021

December 31, 2020

Deferred tax assets:

Net operating loss carry forwards

-United States

Gross deferred tax assets

valuation allowance

deferred tax assets, net

Total deferred tax assets, net

9- RELATED PARTY TRANSACTIONS

During the year ended

December 31, 2021, the Company identified certain of its customers and suppliers to be related parties as the Company can exercise significant

influence over those parties.

To conform to the current year presentation, the balances and transactions of those related parties in

prior year have been reclassified.

due from related parties as of December 31, 2021 and 2020 are as follows:

Chief Executive Officer, Secretary, Director

Financial Officer and Treasurer

of a subsidiary, Mr.

Yumin Lin’s wife

of a subsidiary

Subsidiary’s

OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

President, Chief Executive Officer, Secretary, Director

Chief Financial Officer and Treasurer

Manager of a subsidiary, Mr.

Yumin Lin’s wife

Manager of a subsidiary

due to related parties as of December 31, 2021 and 2020 are as follows:

Chief Executive Officer, Secretary, Director

Yumin Lin’s former wife

Yuwen Li’s wife

of a subsidiary

Aisheng Zhang

of a subsidiary

DaXingHuaShang Industry Development Ltd.

President, Chief Executive Officer, Secretary, Director

Manager of a subsidiary

Minghua Cheng

Director and majority shareholder

of the Company

Manager of a subsidiary, Shareholder

of the Company

Manager of a subsidiary

Vice President

Shenzhen DaXingHuaShang Industry Development Ltd.

Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industry Development Ltd.

Yuwen Li’s wife

Manager of a subsidiary

Aisheng Zhang

Manager of a subsidiary

generated from related parties during the years ended December 31, 2021 and 2020 are as follows:

Financial Officer and Treasurer

Chief Executive Officer, Secretary, Director

of a subsidiary

of a subsidiary, Mr.

Yumin Lin’s wife

DaXingHuaShang Industry Development Ltd

OF REVENUE GENERATED FROM RELATED PARTIES

Vice President

Chief Financial Officer and Treasurer

President, Chief Executive Officer, Secretary, Director

Manager of a subsidiary, Mr.

Yumin Lin’s wife

Manager of a subsidiary

Manager of a subsidiary, Shareholder

Shenzhen DaXingHuaShang Industry Development Ltd

Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industry Development Ltd.

DaXingHuaShang Supplychain Service Co.

of Shenzhen DaXingHuaShang Industry Development Ltd

Shuiyijia Distribution Co.

Shenzhen DaXingHuaShang Supplychain Service

Subsidiary of Shenzhen DaXingHuaShang

Industry Development Ltd.

Guangdong Shuiyijia Distribution Co.,

Lihua Li is the supervisor of this company

of a subsidiary, Shareholder

of a subsidiary

from related parties mainly consists of funds advanced to related parties as borrowings or funds advanced to pay off the Company’s

Dongguan Chashan Pingfeng Cigarate

and Wine Co., Ltd.

Taiping Deng, a manager of a subsidiary,

is the controlling shareholder of Dongguan ChaShan Pingfeng Cigarate and Wine Co.

Huanhai Trading Co., Ltd.

Weihong Ye, a manager of a subsidiary,

is the controlling shareholder of Dongguan Huanhai Trading Co., Ltd.

Dongguan Hualian Guanhua Gong Co., Ltd.

Weihong Ye, a manager of a subsidiary,

is the controlling shareholder of Dongguan Hualian Guanhua Gong Co., Ltd.

Dongguan Daying Internet Technology

Minghua Cheng, a director of the

Company, is the controlling shareholder of Dongguan Daying Internet Technology Co., Ltd.

Dongguan Zhengui Reality Co., Ltd.

Naiyong Luo, a manager of a subsidiary,

is the controlling shareholder of Dongguan Zhengui Reality Co., Ltd.

Guangdong Yuexin Jiaotong Construction

Naiyong Luo, a manager of a subsidiary,

is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd.

Dongguan Dalingshan Runxin Drinking

Significantly influenced by the Company

Dongguan Anxiang Technology Co., Ltd.

Significantly influenced by the Company

Guangdong Jiaduonuo Shengshi Trading

Significantly influenced by the Company

Dongguan Dalingshan Xinwenhua Drinking

Significantly influenced by the Company

Dongguan Tailai

Trading Co., Ltd.

Significantly

influenced by the Company

of revenues from related parties during the years ended December 31, 2021 and 2020 is as follows:

SCHEDULE OF COST

OF REVENUES FROM RELATED PARTIES

Dongguan Anxiang Technology Co., Ltd.