What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-04-01 · 71 added, 83 removed, 63 unchanged (71% of the section changed)

17 unchanged sentences

the year 2022, the Company conducted its business in generally one revenue stream:

product sales – wine, water and oil and other

F&B products.

product sales – wine, water, water purifier

and other F&B products, with majority of the sales transactions were conducted offline.

of Operations

1 unchanged sentence

Cost of revenues

Other operating income

Operating expense

2 unchanged sentences

$ (2,156,679 )

$ (4,120,148 )

Net income (loss) attributable to noncontrolling interests

1 unchanged sentence

$ (1,942,723 )

Net revenues totaled $8,021,823 for the year ended

December 31, 2021, an increase of $3,016,129, or 60%, as compared to the revenue for the year ended December 31, 2020.

The reason for

the increase was due to the Company expanded water and oil business department.

of revenues totaled $3,659,805 for the year ended December 31, 2021, an increase of $1,986,438, or 119%, as compared

to for the year ended December 31, 2020.

The increase in cost of revenue was due to the increase of our revenue.

$ (3,722,459 )

revenues totaled $9,234,079 for the year ended December 31, 2022, an increase of $1,212,256, or 15%, as compared to the revenue for the

year ended December 31, 2021.

The increase in net revenues was mainly due to an increase in sales of

liquor and water purifier products as a result of the business expansion of the liquor and water purifier business departments.

of revenues totaled $4,593,405 for the year ended December 31, 2022, an increase of $933,600, or 26%, as compared to for the year ended

December 31, 2021.

The increase in cost of revenue was due to the higher product sales volume in line with our revenue increase.

profit was $4,640,674 and $4,362,018 for the years ended December 31, 2022 and 2021, respectively.

2 unchanged sentences

preference from less popular brands to popular brand products.

Popular brands products will incur higher cost of revenue and result in

Popular brands products incurred higher costs of revenue and resulted in

the decrease of gross profit.

General and administrative expenses totaled $2,184,904

for the year ended December 31, 2021, a decrease of $4,337,296, or 67%, as compared to the year ended December 31, 2020.

was primarily due to there was no impairment of goodwill for the year ended December 31,2021, and partially offset by the increase of

marketing and professional service fees during 2021.

Net income totaled

$1,963,469 for the year ended December 31, 2021, an increase of $5,610,822, of 154%, as compared to the net loss of $3,647,353

General and administrative expenses

totaled $6,590,240 for the year ended December 31, 2022, an increase of $4,405,336, or 202%, as compared to the year ended December

The increase was primarily due to the increase in professional expense incurred in 2022 in connection with the Company’s proposed Nasdaq

listing and related securities offering transaction, bad debt expense incurred for allowance reserved for doubtful accounts, including prepayments and

deposits paid, and impairment loss on intangible asset and goodwill recognized in 2022.

totaled $2,156,679 for the year ended December 31, 2022, an increase of $4,120,148, of 210%, as compared to the net income of $1,963,469

for the year ended December 31, 2021.

The increase was primarily due to there was no impairment of goodwill for the year ended December

31, 2021 and the increase of gross profit in 2021.

The increase was primarily due to the allowance booked for doubtful accounts and impairment loss

on intangible asset and goodwill, while net income was generated in 2021.

and Capital Resources

Ended December 31,

Total current

Years Ended December 31,

Total current assets

Total current liabilities

Working capital

As of December 31, 2021, we had working capital

of $3,351,962 as compared to working capital of $2,234,608 as of December 31, 2020.

As of December 31, 2022, we had working capital of

$4,386,509 as compared to working capital of $3,351,962 as of December 31, 2021.

We had total current assets of $6,871,091 consisting

of cash on hand of $123,163, accounts receivables of $2,662,168, inventory – wine, water, oil and other items of $81,073, prepayments

and other current assets of $2,176,713, and amount due from related parties of $26,364, compared to total current assets of $4,231,054

of cash on hand of $165,685, accounts receivables of $4,797,564, inventory of $148,925, and prepayments and other current assets of $1,758,917,

compared to total current assets of $5,069,481 as of December 31, 2021.

The increase was mainly due to the increase in accounts receivable,

resulting from an increase in sales and the extension of payment term in 2022.

We had current liabilities of $2,484,582 consisting of

operating lease obligation from non-related parties of $110,201, operating lease obligation from related parties of $16,629, accounts

payable of $688,822, accrued liabilities of $502,389, current portion of bank and other borrowings of $422,653, income tax payable of

$38,879, customer advance of $139,334 and amount due to related parties of $565,675 compared to total current liabilities of $1,717,519

as of December 31, 2021.

The increase was due to the prepayment to the vendors to secure more competitive price and allowed customers

to have a longer payback period to remain market competitive.

We had current liabilities of $1,717,519 consisting of operating lease

obligation from non-related parties of $133,586, operating lease obligation from related parties of $22,666, accounts payable of $239,492,

accrued liabilities of $128,343, short-term bank and other borrowings of $101,207, income tax payable of $25,726, customer advance of

$382,518 and amount due to related parties of $683,981 compared to total current liabilities of $1,996,446 as of December 31, 2020.

Company’s net income was $1,963,469 and net loss $3,647,353 for the years ended December 31, 2021 and 2020, respectively.

Years Ended December 31,

Cash flows provided by (used in) operating activities

$ (1,693,407 )

Cash flows provided by (used in) investing activities

Cash flows used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net changes in cash and cash equivalents

The Company’s net loss was $2,156,679 and net

income $1,963,469 for the years ended December 31, 2022 and 2021, respectively.

Ended December 31,

flows provided by (used in) operating activities

flows provided by (used in) investing activities

flows provided by (used in) financing activities

of exchange rate changes on cash and cash equivalents

changes in cash and cash equivalents

Flow from Operating Activities

Cash flow used in operating activities for

the year ended December 31, 2021 was $457,142 as compared to the amount of $1,236,265 provided by operating activities for the

year ended December 31, 2020, reflecting a decrement of $1,693,407.

The decrease in net cash provided by operating activities was

mainly due to an increment of prepayment and other current assets, deposits paid to secure market competitive and cost effective.

Besides, during Year 2021, funds were used for repayment of account receivables, operating lease liabilities, income tax payable and

customers advances.

Cash flow provided by operating

activities for the year ended December 31, 2022 was $6,927 as compared to the amount of $457,142 used in operating activities for

the year ended December 31, 2021, reflecting a increment of $464,069.

The increase in net cash provided by operating activities was

mainly due to the fact that the bad debt expense and impairment losses on intangible asset and goodwill have no impact on cash

flows, offset by changes in accounts receivable and prepayments and other current assets, net.

Flow from Investing Activities

flow provided by investing activities was $469,190 for the year ended December 31, 2021, compared to the cash flow used in investing activities

flow used in investing activities was $10,110 for the year ended December 31, 2022, compared to the cash flow provided by investing activities

$469,190 for the year ended December 31, 2021.

The net cash flow provided by investing activities was mainly due to the borrowing collection

of due from related parties.

The increase in net cash flow used in investing activities was mainly due

to the decrease in repayment of advance to related parties.

Flow from Financing Activities

Cash flow used in financing activities was $192,034

for the year ended December 31, 2021, compared to cash flow used in financing activities of $108,368 for the year ended December 31,

The increase in net cash used in financing activities was mainly due to the repayment to related parties.

Cash flow provided by financing activities was $66,120 for the year ended

December 31, 2022, compared to cash flow used in financing activities of $192,034 for the year ended December 31, 2021.

The increase in

net cash provided by used in financing activities was mainly due to the increase in net proceeds of bank and other borrowings.

requirement for short term and long term

of December 31, 2021, the Company finance capital requirement through trust and commercial bank in PRC for further expansion, details

of December 31, 2022, the Company financed capital requirement through trust and commercial banks in PRC for further expansion, details

are as follows:

1 unchanged sentence

December 31, 2021

Bank loan from a trust in PRC

Loan from a trust in PRC

China Construction Bank

Guangdong Nanyue Bank

Aggregate outstanding principal balances

6 unchanged sentences

In addition to the items already

discussed, the following represent material expected cash requirements recorded on FVTI’s Consolidated Balance Sheets at December

discussed, the following represents material expected cash requirements recorded on FVTI’s Consolidated Balance Sheets at December

Such obligations include:

3 unchanged sentences

understanding and knowledge.

Accounting Policy

the ordinary course of business, we make a number of estimates and assumptions relating to the reporting of results of operations and

financial condition in the preparation of our financial statements in conformity with U.S.

generally accepted accounting principles.

We base our estimates on historical experience, when available, and on other various assumptions that are believed to be reasonable under

the circumstances.

Actual results could differ significantly from those estimates under different assumptions and conditions.

Revenue Recognition

The Company follows the guidance of ASC 606, revenue

from contracts with customers is recognized using the following five steps:

the contract(s) with a customer;

the performance obligations in the contract;

the transaction price;

the transaction price to the performance obligations in the contract;

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

Under 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.

We generate revenue primarily

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

We recognize product revenue at a point in time

when the control of the products has been transferred to customers.

The transfer of control is considered complete when products have

been picked up by or delivered to our customers.

We account for shipping and handling fees as a fulfillment cost.

Accounting Policies and Estimates

Our accounting policies are discussed in detail in

the footnotes to our financial statements included in this Annual Report on Form 10-K for the year ended December 31, 2022.

consider our critical accounting policies to be those related to revenue recognition, allowance of doubtful accounts and impairment of

intangible asset and goodwill.

Our critical estimates include estimates used to review the Company’s

goodwill impairments and estimations of recoverability for intangible asset.

The Company bases its estimates on historical experience

and on various other assumptions that are believed to be reasonable in the circumstances, the results of which form the basis for making

judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Quantitative and Qualitative Disclosures about Market Risk

a smaller reporting company, we are not required to provide the information required by this item.

Financial Statements and Supplementary Data

consolidated financial statements of the Company are included in this Annual Report on Form 10-K beginning on page F-1, which are incorporated

herein by reference.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis