What changed in this filing

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Item 9A. Controls and Procedures

2024-04-15 compared with 2023-03-31 · 608 added, 559 removed, 995 unchanged (54% of the section changed)

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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.

Apply to the maintenance

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

Provide 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;

Provide 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.

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Based on this assessment, management

has concluded that as of December 31, 2022, our internal control over financial reporting is 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.

has concluded that as of December 31, 2023, our internal control over financial reporting is not effective enough to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance

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

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.

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:

We 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.

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

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in Internal Control over Financial Reporting

was no change in our internal controls over financial reporting that occurred during the three months ended December 31, 2022, which

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

was no change in our internal controls over financial reporting that occurred during the year ended December 31, 2023, which has materially

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

Other Information

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with the Company

of the Board, Chief Executive Officer, President and Secretary

Financial Officer, Treasurer and Director

Ramesh Ruben (1)

of the Audit Committee.

of the Compensation Committee.

of the Nominating and Corporate Governance Committee.

Chairman of the Board,

Chief Executive Officer, President and Secretary

Chief Financial Officer,

Treasurer and Director

Lin (1)(2)(3)

Independent Director

Bin Li (2)(3)

Independent Director

Independent director

Chaoping Chen (3)

Independent Director

Member of the Audit Committee.

Member of the Compensation

Member of the Nominating

and Corporate Governance Committee.

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

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degree in software engineering with a concentration in financial informatics from Tianjin University.

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.

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.

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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 Operating Officer of Alset Inc.

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.

Chan is a certified public accountant registered with

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

reporting and business advisory.

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

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 February 2022 to March 2024, Mr.

Chan was the Chief Operating Officer of Alset Inc.

From July 2019 to January 2020, Mr.

Chan served as the Chief Financial Officer of SPI

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

Chan served as the Chief Financial Officer of

SPI Energy Co.

From October 2017 to March 2019, Mr.

Chan served as the

Chief Financial Officer of Helo Corp.

HLOC), a wellness technology company.

From September 2013 to November 2015, Mr.

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.

as the Chief Financial Officer of Helo Corp.

From September 2013 to November 2015,

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

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.

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,

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.

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also studied at the University of Milan on planting and brewing and at the Culinary Institute of America on wine serving.

Ruben Louis was appointed director on April 9, 2021.

Louis is a Chartered Accountant of the Malaysian Institute of Accountants

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

as well as a Certified Financial Planner.

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

from large public listed companies to multinational corporations, government agencies as well as SMEs in a spectrum of industries including

plantation, property development, manufacturing, trading, IT, shipping and retailing, among others.

He started his career at Arthur Andersen

from December 1996 to 1997, and subsequently moved to BDO from April 2000 to 2004 and from 2005 to 2006, respectively.

He also has experience

in corporate finance with Southern Investment Bank Berhad for a year from 2004 to 2005.

Louis has hands-on experience on other corporate

exercises such as due diligence, IPOs, debt issuances, corporate and debt restructuring and investigative audits.

His training and advisory

experience includes topics on Internal & Statutory Auditing, Public Sector/Government Audits, Value-for-Money Audits, ISQC 1, Risk

Management & Internal Controls, Review and Assurance Engagements such as Financial Due Diligence, Forecasts & Projections, Forensic

& Fraud Accounting/Auditing, as well as practical application of International Financial Reporting Standards (“IFRS”),

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

He has facilitated training and provided advisory for

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

Louis is a certified trainer

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

Louis serves as an independent director of Greenpro

Capital Corp.

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

of Strathclyde, UK.

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

Relationships

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Jianwei Lin (Chairman until October

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

26, 2021, remains as member of Audit Committee), Anthony S.

Chan (Chairman since October 26, 2021) and Chaoping Chen.

qualifies as the Audit Committee financial expert as defined in Item 407(d)(5) of Regulation S-K promulgated under the Securities Act.

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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.

audits of the Company’s consolidated financial statements;

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

Company’s independent registered public accounting firm the Company’s consolidated 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

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public accounting firm.

Compensation Committee was established on April 9, 2021.

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

Jianwei Lin, Anthony

Chan and Chaoping Chen.

The Compensation Committee is responsible for, among other matters:

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Governance and Nominating Committee

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

The Corporate Governance and Nominating Committee is

responsible for, among other matters:

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

Jianwei Lin, Bin Li and Chaoping Chen.

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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Name and principal position

Stock awards ($)

Option awards ($)

Nonequity incentive plan compensation

compensation ($)

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

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currently do not have an equity compensation plan.

compensation $119,682 was paid for directors’ services during the year ended December 31, 2022 and $84,587 was paid during the year

ended December 31, 2021.

The table below sets forth the compensation received by our directors in the year ended December 31, 2023 .

Fees earned or

Chaoping Chen

Bulin Wang (2)

Ramesh Ruben Louis (3)

This table does not include

Yumin Lin, our Chief Executive Officer and director and Mr.

Caihong Lin, our Chief Financial Officer and director whose compensation

is fully reflected in the Summary Compensation Table.

Bulin Wang resigned

as a director on May 18, 2023

Ramesh Ruben Louis

resigned as a director on January 23, 2024.

Committee Interlocks and Insider Participation

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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 March 31,

2023 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

following table sets forth certain information, regarding the beneficial ownership of the Company’s common stock as of April 15, 2024 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.

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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, 2023.

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.

as of April 15, 2024.

business address of each directors and officers listed below is 16th Floor, Building 2, A+Building, 139 Liansheng Road, Humen Town, Dongguan

City, Guangdong Province, China 523900.

Name of Beneficial Owner

Beneficially Owned

Directors and Officers

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Chaoping Chen

Ramesh Ruben Louis

All officers and directors as a group (eight persons)

All officers and directors as a group (six persons)

5% Shareholders

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is Second Floor, Capital City Independence Avenue Mahe Victoria, Seychelles.

Consists 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.

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) 4,185,180 shares held through China Kaipeng Group Co.,

Ltd, a company Mr.

Cheng owns 77.5% who may be deemed to have the voting and dispositive power of such shares.

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

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Certain Relationships, Related Transactions and Director Independence

As of December 31, 2022 and

2021, the Company had accounts receivable from related parties in amounts of $146,087 and $57,609, prepayments to related parties in the

amounts of $1,102,861 and $1,813,904, deposits to related parties in the amounts of $758,445 and $1,596,075, and accounts payable to related

parties in amounts of $80,426 and $17,789, respectively.

As of December 31, 2022 and

2021, the Company had outstanding receivables due from a related party in the amounts of $nil and $26,364, respectively, which mainly

consisted of funds advanced to a related party as borrowings or funds advances to pay off the Company’s expenses.

The balance was

unsecured and non-interest bearing.

As of December 31, 2022 and

2021, the Company had outstanding payables due to its related parties in the amounts of $565,675 and $683,981, respectively, which mainly

consisted of borrowings for working capital purpose.

The balances were unsecured, non-interest bearing and due on demand.

During the years ended December

31, 2022 and 2021, the Company’s related parties paid expenses on behalf of the Company in the amounts of $135,774 and $344,218,

respectively.

During the years ended December

31, 2022 and 2021, the Company sold products to its related parties in the amounts of $238,824 and $684,862, respectively, purchased goods

from its related parties in the amounts of $1,309,553 and $729,302, and incurred cost of revenues from related parties in the amounts

of $1,302,498 and $707,322, respectively.

During the years ended December

31, 2022 and 2021, the rental expenses to related parties were $20,736 and $32,677, respectively.

Our related parties are primarily those who are significantly influenced

by the Company based on our common business relationships.

For more related party transactions, see Note 8 to the accompanying consolidated

financial statements.

of December 31, 2023 and 2022, the Company had accounts receivable from related parties in amounts of $61,113 and $146,087, prepayments

to related parties in the amounts of $941,978 and $1,102,861, deposits to related parties in the amounts of $536,450 and $758,445, and

accounts payable to related parties in amounts of $162,310 and $80,426, respectively.

of December 31, 2023 and 2022, the Company had outstanding payables due to its related parties in the amounts of $680,226 and $565,675,

respectively, which mainly consisted of borrowings for working capital purpose.

The balances were unsecured, non-interest bearing and

due on demand.

the years ended December 31, 2023 and 2022, the Company’s related parties paid expenses on behalf of the Company in the amounts

of $nil and $135,774, respectively.

the years ended December 31, 2023 and 2022, the Company sold products to its related parties in the amounts of $88,684 and $238,824,

respectively, purchased goods from its related parties in the amounts of $598,457 and $1,309,553, and incurred cost of revenues from

related parties in the amounts of $608,872 and $1,302,498, respectively.

the years ended December 31, 2023 and 2022, the rental expenses to related parties were $18,609 and $20,736, respectively.

related parties are primarily those who are significantly influenced by the Company based on our common business relationships.

related party transactions, see Note 3, 4, 5, 9, 10 and 11 to the accompanying consolidated financial statements.

Principal Accountant Fees and Services

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accounting firm for the fiscal years ended December 31, 2023 and 2022.

Fiscal Year Ended

Audit Fees (1)

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above audit services were pre-approved by the Audit Committee of the Board of Directors for the fiscal years ended December 31, 2023

and 2021, 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.

and 2022, which concluded that the provision of such services by YCM CPA Inc., our current auditor, and MaloneBailey, LLP, our

predecessor auditor, respectively, was compatible with maintenance of the firm’s independence in the conduct of its audits.

Exhibits and Financial Statement Schedules

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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)

Supplemental 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)

Code 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)

Letter from MaloneBailey, LLP dated February 8, 2024 (incorporated by reference to Exhibit 16.1 to our Current Report on Form 8-K filed on February 8, 2024)

Subsidiaries of the registrant

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002.

Fortune Valley Treasures, Inc.

Clawback Policy

XBRL Instance Document

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Report of Independent Registered Public Accounting Firm (PCAOB ID 6781 )

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

Consolidated Balance Sheets

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OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Fortune Valley Treasures, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance

sheets of Fortune Valley Treasures, Inc.

and its subsidiaries (the “Company”) as of December 31, 2022 and 2021, 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, 2022 and 2021, 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.

Basis for Opinion

These financial statements are the responsibility

of the Company’s management.

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

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

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

federal securities laws and the applicable

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

We conducted our audits in accordance with the standards

of the PCAOB.

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

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

The Company is not required to have, nor were we engaged to perform,

an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal

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

over financial reporting.

the Board of Directors and

of Fortune Valley Treasures, Inc.

on the Financial Statements

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

and its subsidiaries (collectively, the “Company”)

as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’

equity, and cash flows for the year ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”).

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

31, 2023, and the results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally

accepted in the United States of America.

Going Concern

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

As discussed in Note 1 to the financial statements, the Company has sustained net losses from its operations and has experienced negative

operating cashflows in the current year, and the Company also reports an accumulated deficit as at December 31, 2023, which 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

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

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.

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 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 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.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess

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

to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating

the overall presentation of the financial statements.

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

Critical Audit Matter

The critical audit matter communicated below is a

matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit

committee and that:

(1) relates 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 matter 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 matter below, providing a separate opinion

on the critical audit matter or on the accounts or disclosures to which it relates.

Impairment of Intangible Asset and Goodwill

Description of the Matter

As discussed in Note 2 to the consolidated financial

statements, the Company reviews its long-lived assets for impairment and performs a goodwill impairment assessment on an annual basis

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

The Company had a goodwill balance

of $1.4 million and an intangible asset balance, in the form of distribution channel, of $2.3 million as of December 31, 2021 related

to the acquisition of 90% equity interest of Dongguan Xixingdao Technology Co., Ltd.

(“Xixingdao”) in 2020.

During the year

ended December 31, 2022, the Company recognized a non-cash impairment loss of $1.0 million on distribution channel and a non-cash impairment

loss of $0.9 million on goodwill.

The evaluation of the intangible asset and goodwill

involves the comparison of the fair values of the distribution channel and the reporting unit, respectively, to their carrying values.

The fair values were calculated based upon valuation techniques under income approach with the assistance of a specialist engaged by the

Company, which required management to make significant estimates and assumptions related to forecasted revenues and cash flows, and the

discount rates.

We identified the evaluation of the intangible

asset and goodwill impairment analysis as a critical audit matter.

A high degree of subjective auditor

judgment was required in performing procedures and evaluating audit evidence relating to the valuation techniques and significant assumptions

used by management in determining the fair values .

How We Addressed the Matter in Our Audit

Our audit procedures related to the intangible asset

and goodwill impairment analysis included the following, among others:

1) We obtained an understanding of the work of the Company’s

specialist and the management’s controls over the intangible asset and goodwill impairment assessment process;

2) We compared management’s

forecasted revenues and cash flows to the actual results;

3) We tested the completeness, accuracy and relevance of the underlying data

used in the valuation models;

4) With the assistance of valuation professionals with specialized skills and knowledge, we evaluated the

appropriateness of the valuation methods, the reasonableness of significant inputs and assumptions used;

and 5) We evaluated the adequacy

of the Company’s disclosures related to the intangible asset and goodwill impairment.

audit 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.

that our audit provides a reasonable basis for our opinion.

Audit Matters

audit matters are matters arising from the current period audit of the financial statements that were communicated or are 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 especially challenging, subjective, or complex judgments.

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 a separate opinion on the critical audit matters or on the accounts

or disclosures to which it relates.

of Allowance for Accounts Receivable

of the Matter

described in Note 3 to the consolidated financial statements, as of December 31, 2023, the accounts receivable amounted to US$3,118,892

net of allowance for credit losses of US$1,718,960.

When assessing the recoverability of accounts receivable, management comprehensively

consider factors such as the aging of accounts receivable, the customer’s past repayment history and current industry situation,

among others.

We identified the valuation of allowance for accounts receivable as a critical audit matter because of its inherent complexity

and significant judgement in assessing the credit losses.

We Addressed the Matter in Our Audit

order to address the matter above, our audit procedures included, among others,

the appropriateness of the Company’s methodology for estimating expected credit losses to determine whether the methodology

and assumptions used in significant models are consistent with the requirements of U.S.

GAAP and industry standards.

the completeness and accuracy of data used in measuring the current expected credit loss and evaluating management’s accounts

receivable aging policies and examining the historical and the subsequent settlements from the customers.

the customers with significant accounts receivable balances or receivables past due, we performed research on publicly available

information to identify any inconsistencies with the information management used in the assessment of impairment of accounts receivable.

the disclosures related to expected credit loss to ensure they are complete and provide adequate information about the assumptions

used and the risks associated with the Company’s credit loss estimates.

of the Identification of Related Parties and Related Party Transactions

of the Matter

disclosed in Note 9 to the consolidated financial statements, the Company engages in transactions with related parties, which are integral

to its operations.

These transactions include but not limited to, leases, sale and procurement of goods and services, borrowings for

working capital purpose.

We identified the evaluation of the identification of related parties and relate-party transactions as a critical

audit matter due to the complexity and the inherent risk of omission or incomplete disclosure of related parties and their transactions.

The potential for these transactions to not be conducted on arm’s length terms, along with the extensive nature of transactions.

We Addressed the Matter in Our Audit

order to address the matter above, our audit procedures included, among others,

and understanding of the Company’s process for identifying related parties and related-party transactions, reviewing the Company’s

policies and procedures for identifying and disclosing such relationships and transactions, as well as the controls in place to ensure

completeness and accuracy.

inquiries with management and those charged with governance to identify all related parties and understand the nature of transactions

with these parties.

We also obtained confirmations from identified related parties to corroborate the information provided by management.

significant related-party transactions identified during the audit, we reviewed the underlying contracts and agreements to assess

whether the terms and conditions were consistent with those of arm’s length transactions.

targeted searches for potential undisclosed related-party relationship using the names of the entities, key management personnel,

significant shareholders and known related parties.

the financial statement disclosures related to related parties and related-party transactions to ensure they were complete and in

accordance with the relevant financial reporting framework.

YCM CPA, Inc .

have served as the Company’s auditor since 2024.

PCAOB ID 6781

Irvine, California

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Shareholders and Board of Directors of

Valley Treasures, Inc.

on the Financial Statements

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

and its subsidiaries (the “Company”)

as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’

equity, 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, 2022, 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.

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.

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 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 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.

Accordingly, we express no such opinion.

audit 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.

MaloneBailey, LLP

www.malonebailey.com

have served as the Company’s auditor since 2021.

Shenzhen, China

have served as the Company’s auditor from 2021 to January 25, 2024.

Valley Treasures, Inc.

3 unchanged sentences

Cash and cash equivalents

Accounts receivable (including $ 146,087 and

$ 57,609 from related parties as of December 31, 2022 and 2021, respectively)

Prepayments and other current assets, net (including

$ 1,102,861 and $ 1,813,904 to related parties as of December 31, 2022 and 2021, respectively)

Due from related party

Accounts receivable, net (including $ 61,113 and $ 146,087 from related parties as of December 31, 2023 and 2022, respectively)

Prepayments and other current assets, net (including $ 941,978 and $ 1,102,861 to related parties as of December 31, 2023 and 2022, respectively)

Total current assets

Non-current assets

Deposits paid, net (including $ 758,445 and $ 1,596,075

to related parties as of December 31, 2022 and 2021, respectively)

Deposits paid, net (including $ 536,450 and $ 758,445 to related parties as of December 31, 2023 and 2022, respectively)

Property and equipment, net

Operating lease right-of-use assets

Operating lease right-of-use assets, related

Operating lease right-of-use assets, related parties

Intangible assets, net

1 unchanged sentence

Current liabilities

Operating lease obligations

Operating lease obligations, related parties

Accounts payable (including $ 80,426 and $ 17,789

to related parties as of December 31, 2022 and 2021, respectively)

Operating lease obligations - current

Operating lease obligations, related parties - current

Accounts payable (including $ 162,310 and $ 80,426 to related parties as of December 31, 2023 and 2022, respectively)

Accrued liabilities

6 unchanged sentences

Operating lease obligations – non-current

Operating lease obligations, related parties

– non-current

Operating lease obligations, related parties – non-current

Bank and other borrowings

1 unchanged sentence

Stockholders’ Equity

Common stock ( 150,000,000 shares authorized, 15,655,038 shares issued

and outstanding as of December 31, 2022 and 2021)

Common stock, 150,000,000 shares authorized, 15,655,038 shares issued and outstanding as of December 31, 2023 and 2022

Additional paid-in capital

2 unchanged sentences

( 4,504,404 )

Accumulated other comprehensive

income (loss)

Accumulated other comprehensive income (loss)

Total Fortune Valley Treasures, Inc.

stockholders’

Noncontrolling interests

Total Stockholders’

Total Liabilities and

stockholders’ equity

Noncontrolling interests

Total Stockholders’ Equity

Total Liabilities and Stockholders’ Equity

accompanying notes to the consolidated financial statements

2 unchanged sentences

the Years ended December 31, 2023 and 2022

Net revenues (including $ 238,824

and $ 684,862 from related parties for the years ended December 31, 2022 and 2021, respectively)

Cost of revenues (including

$ 1,302,498 and $ 707,322 from related parties for the years ended December 31, 2022 and 2021, respectively)

Net revenues (including $ 88,684 and $ 238,824 from related parties for the years ended December 31, 2023 and 2022, respectively)

Cost of revenues (including $ 608,872 and $ 1,302,498 from related parties for the years ended December 31, 2023 and 2022, respectively)

Operating expenses:

3 unchanged sentences

Impairment loss on goodwill

Operating income (loss)

Operating loss

( 4,156,227 )

( 1,949,566 )

Other income (expense):

1 unchanged sentence

Interest expense

Other income (expense),

Income (loss) before income tax

Other expense, net

Loss before income tax

( 4,174,754 )

( 1,970,199 )

Income tax expense

Net income (loss)

$ ( 4,271,199 )

Net income (loss)

attributable to noncontrolling interests

Net income (loss) attributable

to Fortune Valley Treasures, Inc.

$ ( 2,156,679 )

Other comprehensive income (loss):

currency translation gain (loss)

Total comprehensive income (loss)

Net loss attributable to noncontrolling interests

Net loss attributable to Fortune Valley Treasures, Inc.

( 4,046,615 )

comprehensive

income (loss) attributable to noncontrolling interests

Comprehensive income

(loss) attributable to Fortune Valley Treasures, Inc.

( 1,942,723 )

Other comprehensive loss:

Foreign currency translation loss

Total comprehensive loss

( 4,509,071 )

( 2,964,445 )

comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to Fortune Valley Treasures, Inc.

$ ( 4,271,979 )

$ ( 2,667,854 )

Earnings (loss) per share

Basic and diluted earnings

(loss) per share *

Basic and diluted weighted average shares

outstanding *

effect of the Reverse Stock Split, see Note 11

Basic and diluted loss per share

Basic and diluted weighted average shares outstanding

accompanying notes to the consolidated financial statements

2 unchanged sentences

the Years ended December 31, 2023 and 2022

Deficit and Statutory

Comprehensive

Non controlling

Stockholders’

Income (Loss)

Stockholders’

Balance as of December 31, 2021

1 unchanged sentence

Foreign currency translation adjustment

( 1,942,723 )

Balance as of December 31, 2022

$ ( 4,504,404 )

Foreign currency translation adjustment

$ ( 180,826 )

Balance, value

$ ( 4,504,404 )

Net income (loss)

$ ( 180,826 )

Foreign currency translation adjustment

( 4,046,615 )

( 4,271,199 )

Balance as of December 31, 2023

1 unchanged sentence

$ ( 406,190 )

effect of the Reverse Stock Split, see Note 11

$ ( 128,841 )

Balance, value

$ ( 8,551,019 )

$ ( 406,190 )

$ ( 128,841 )

accompanying notes to the consolidated financial statements

2 unchanged sentences

the Years ended December 31, 2023 and 2022

Cash flows from operating

Net income (loss)

Cash flows from operating activities

$ ( 4,271,199 )

Adjustments to reconcile

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

Depreciation and amortization

$ ( 2,156,679 )

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

Depreciation and amortization expense

Non-cash lease expense

2 unchanged sentences

Impairment loss on goodwill

Changes in operating assets

and liabilities

Changes in operating assets and liabilities

Accounts receivable

( 2,417,438 )

Prepayments and other current

Prepayments and other current assets, net

( 1,075,718 )

2 unchanged sentences

Deposits paid, net

( 1,591,577 )

Accounts payable

3 unchanged sentences

Income tax payable

lease obligations

provided by (used in) operating activities

Cash flows from investing

Acquisition of intangible

Repayment of advance to

related parties

of property and equipment

cash provided by (used in) investing activities

Cash flows from financing

Borrowings from related

Operating lease obligations

Cash provided by (used in) operating activities

Cash flows from investing activities

Acquisition of intangible asset

Purchase of property and equipment

Net cash used in investing activities

Cash flows from financing activities

Borrowings from a revolving credit line

Borrowings from bank loans

Borrowings from a third

Borrowings from a third party

Repayments to related parties

to bank loans

Repayments to bank loans

Repayments to a third party

cash provided by (used in) financing activities

of exchange rate changes on cash and cash equivalents

Net changes in cash and

cash equivalents

and cash equivalents–beginning of the year

and cash equivalents–end of the year

Supplementary cash flow

Non-cash investing and financing

paid by related parties on behalf of the Company

Remeasurement

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

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

Net cash provided by 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

Liabilities assumed in connection with purchase of PPE

accompanying notes to the consolidated financial statements

62 unchanged sentences

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

Liquidity and capital resources

As of December 31, 2023, the Company had

working capital of $ 1,231,264

and accumulated deficit and statutory reserves of $ 8,551,019 ,

and had incurred a net loss of $ 4,271,199 ,

negative operating cashflows of $ 179,210

during the year ended December 31, 2023.

The continuation of the Company as a going concern through December 31, 2023 is dependent

upon improving the profitability and the continuing financial support from its stockholders.

Management believes the existing

shareholders or external financing will provide the additional cash to meet the Company’s obligations as they become due.

There and other factors raise

substantial double about the Company’s ability to continue as a going concern.

These financial statements do not include any adjustments

to reflect to possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities

that may result in the Company not being able to continue as a going concern.

2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

of presentation

These consolidated financial statements, accompanying

notes, and related disclosures have been prepared pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission

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.

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

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.

The Company’s

fiscal year end is December 31.

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

of consolidation

The consolidated financial statements

include the accounts of the Company and its subsidiaries.

All intercompany accounts and transactions have been eliminated.

of subsidiaries acquired during the respective periods are included in the consolidated statements of operations from the effective date

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

The portion of the income or loss applicable to noncontrolling

interests in subsidiaries is reflected in the consolidated statements of operations.

consolidated financial statements include the accounts of the Company and its subsidiaries.

All intercompany accounts and transactions

have been eliminated.

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

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

The portion of the income

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

of December 31, 2023, details of the Company’s major subsidiaries were as follows:

SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES

OF ENTITIES AND ITS SUBSIDIARIES

Incorporation

% Owned by FVTI

Incorporation

22 unchanged sentences

City Fu Xi Drinking Water Company Ltd (“FXWL”)

Drinking water distribution and delivery, sales of alcoholic beverages

and water purifier

water distribution and delivery, sales of alcoholic beverages and water purifier

City Fu Jia Drinking Water Company Ltd (“FJWL”)

Drinking water distribution and delivery, sales of water purifier

water distribution and delivery, sales of water purifier

City Fu Sheng Drinking Water Company Ltd (“FSWL”)

Drinking water distribution and delivery, sales of water purifier

water distribution and delivery, sales of water purifier

Fu Jin Trading Technology Company Ltd (“FJSTL”)

Drinking water distribution and delivery, sales of water purifier

water distribution and delivery, sales of water purifier

City Fu Li Trading Ltd (“FLTL”)

Drinking water distribution and delivery, sales of water purifier

water distribution and delivery, sales of water purifier

City Fu Gu Supply Chain Group Ltd (“FGGC”)

Sales of alcoholic beverages

of alcoholic beverages

City Fu Zhi Gu Trading Ltd (“FZGTL”)

Trading of alcoholic beverages

of alcoholic beverages

City Chang Fu Trading Ltd (“CFTL”)

Trading of alcoholic beverages

of alcoholic beverages

City La Tong Trading Ltd (“LTTL”)

Trading of alcoholic beverages

of alcoholic beverages

City Kai Fu Trading Ltd (“KFTL”)

Trading of alcoholic beverages

of alcoholic beverages

Non-controlling interests

For the Company’s consolidated subsidiaries, non-controlling interests

are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling

Non-controlling interests are classified as a separate line item in the equity section of the Group’s consolidated

balance sheets and have been separately disclosed in the Group’s consolidated statements of operations and comprehensive loss to

distinguish the interests from that of the Company.

preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions relating to the

reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the

reported amounts of revenues and expenses during the reporting period.

Significant accounting estimates include certain assumptions

related to going concern, allowance of doubtful accounts, allowance of deferred tax asset and uncertain tax position, implicit interest rate of operating

leases, useful lives and impairment of long-lived assets, and impairment of goodwill.

reporting of assets and liabilities and the disclosure of contingent liabilities at the date of the financial statements, and the reported

amounts of revenues and expenses during the reporting period.

Significant accounting estimates include certain assumptions related to

going concern, allowance of doubtful accounts, allowance of deferred tax asset and uncertain tax position, implicit interest rate of

operating leases, useful lives and impairment of long-lived assets, and impairment of goodwill.

Actual results may differ from these

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.

currency translation and re-measurement

19 unchanged sentences

of amounts from the local currencies of the Company into US$ has been made at the following exchange rates for the respective periods:

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

of and for the year ended

OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

As of and for the year ended

Period-end RMB:US$1 exchange rate

Period-average RMB:US$1

exchange rate

Period-average RMB:US$1 exchange rate

RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions.

14 unchanged sentences

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

As of December 31, 2022 and 2021, the Company has

no allowance for doubtful accounts.

There are no activities in the allowance for doubtful accounts for the year ended December 31, 2022

of December 31, 2023 and 2022, the Company has

allowance for doubtful accounts of $ 1,718,960 and $ nil .

There are amounts of $ 1,726,142 and $ nil incurred in the allowance for doubtful accounts for the years

ended December 31, 2023 and 2022, respectively.

consisting of finished goods are stated at the lower of cost or market value.

7 unchanged sentences

products are alcoholic beverages and water.

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

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

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

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

and equipment, net

34 unchanged sentences

Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

The Company did not recognize any impairment of

long-lived assets during the year ended December 31, 2021.

During the year ended December 31, 2022, the Company recognized an

impairment loss on an intangible asset, distribution channel, in the amount of $ 979,428

related to Xixingdao in view of its inability to generate sufficient operating cash flows as expected.

The Company used the

income approach with the multi-period excess earnings 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.

Goodwill represents the excess of the purchase price

over the fair value of the net identifiable assets acquired in a business combination.

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

The Company would 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.

During the year ended December 31, 2022, the Company

directly performed a quantitative assessment for goodwill impairment by comparing the fair value of Xixingdao to its carrying value, taking into account of the impairment of intangible asset as a triggering

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.

As a result, the impairment loss on goodwill of $ 863,833 was recognized during the year ended December 31, 2022.

December 31, 2022, the balance of goodwill is $ 454,201 .

Company did not recognize any impairment of long-lived assets during the year ended December 31, 2023.

During the year ended December

31, 2022, the Company recognized an impairment loss on an intangible asset, distribution channel, in the amount of $ 979,428 related to

Xixingdao in view of its inability to generate sufficient operating cash flows as expected.

The Company used the income approach with the multi-period excess earnings

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.

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.

The Company would 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.

the years ended December 31, 2023 and 2022, the Company directly performed a quantitative assessment for goodwill impairment by

comparing the fair value of Xixingdao to its carrying value, taking into account of the impairment of intangible asset as a

triggering event.

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.

As a result, the impairment loss on goodwill of $ 444,012 and

was recognized during the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023, the balance of goodwill is

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

9 unchanged sentences

and relevant charges.

generate revenue primarily from the sales of liquor, water, water purifier and other products directly to agents, wholesalers and end users, with majority of sales transactions were conducted offline.

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.

generate revenue primarily from the sales of liquor, water, water purifier and other products directly to agents, wholesalers and end

users, with majority of sales transactions were conducted offline.

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.

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

SCHEDULE OF DISAGGREGATION REVENUE

the year ended

For the year ended

Sales of liquor

4 unchanged sentences

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, 2022 and December 31, 2021, the Company had customer advances of $ 139,334

and $ 382,518 ,

respectively.

During the years ended December 31, 2022 and 2021, the Company recognized $ 332,806

and $ 580,151 , respectively, of customer advances in the opening balance.

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

As of December 31,

2023 and December 31, 2022, the Company had customer advances of $ 1,364,260 and $ 139,334 , respectively.

During the years ended December

31, 2023 and 2022, the Company recognized $ 79,685 and $ 332,806 , respectively, of customer advances in the opening balance.

and distribution expenses

7 unchanged sentences

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

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 qualified for VAT small taxpayers, entities are allowed

to enjoy preferential tax rate from 3 % to 1 % for the period from January 1, 2022 to March 31, 2022 and preferential tax rate from 3 %

to 0 % for the period from April 1, 2022 to December 31, 2022.

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.

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

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 qualified for VAT small taxpayers, entities

are allowed to enjoy preferential tax rate from 3 % to 1.5 % for the period from January 1, 2023 to December 31, 2023.

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 included in accrued liabilities.

9 unchanged sentences

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

Statutory reserves

reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover

1 unchanged sentence

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

$ 1,047,959 and $ 636,898 to statutory reserves as of December 31, 2022 and 2021, respectively, which were included in accumulated deficit

and statutory reserves in the Company’s consolidated balance sheets.

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 $ 1,204,787 and $ 1,047,959

to statutory reserves

as of December 31, 2023 and 2022, respectively, which were included in accumulated deficit and statutory reserves in the Company’s

consolidated balance sheets.

(loss) per share

15 unchanged sentences

The three levels of valuation hierarchy are defined as follows:

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

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that

are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

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

Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities

in active markets.

Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities

in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full

term of the financial instrument.

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

and contingencies

44 unchanged sentences

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 90 to 120 days.

Credit limits are established and exposure is monitored in light of changing

counterparty and market conditions.

For the years ended December 31, 2022 and 2021, no customer accounted for more than 10% of the

Company’s total revenues or accounts receivable.

For the year ended December 31, 2022, the Company had two suppliers that

accounted for more than 10 %

of the Company’s accounts payable and no supplier that accounted for more than 10% of the Company’s total purchases.

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 and other two suppliers accounted for more than 10 %

of the Company’s accounts payable.

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 90 to 120 days.

Credit limits are established and exposure is monitored in light of changing counterparty and market

For the years ended December 31, 2023 and 2022, no customer accounted for more than 10 % of the Company’s total revenues

or accounts receivable.

For the year ended December 31, 2023 and 2022, the Company had three and two suppliers that accounted for more

than 10 % of the Company’s accounts payable and two suppliers that accounted for more than 10 % of the Company’s total purchases,

respectively.

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

14 unchanged sentences

Accounting Pronouncement

In June 2016, the FASB issued Accounting Standards

Update (“ASU”) No.

2016-13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial

2016-13 was further amended in November 2020 by ASU No.

June 2016, the FASB issued Accounting Standards Update (“ASU”) No.

2016-13, Financial Instruments – Credit Losses (Topic

326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).

As a result, ASC Topic 326, Financial Instruments – Credit Losses

is effective for smaller reporting companies for fiscal years beginning after December 15, 2022, including interim periods within those

fiscal years.

326), Measurement of Credit Losses on Financial Instruments.

2016-13 was further amended in November 2020 by ASU No.

Financial Instruments – Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842).

As a result, ASC

Topic 326, Financial Instruments – Credit Losses is effective for smaller reporting companies for fiscal years beginning after

December 15, 2022, including interim periods within those fiscal years.

The Company adopted ASU No.

2016-13 on January 1, 2023 and the adoption did not have a material impact on the Company’s

consolidated financial statements.

2016-13 on January 1, 2023 and 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, 2023 and 2022:

OF ACCOUNTS RECEIVABLE

December 31, 2023

December 31, 2022

Accounts receivable (including $ 70,710 and $ 146,087 from related parties as of December 31, 2023 and December 31, 2022, respectively)

Doubtful allowance (including $ 2,602 and $ nil from related parties as of December 31, 2023 and December 31, 2022, respectively)

( 1,718,960 )

Accounts receivable, net

for doubtful accounts movement is as follows:

FOR DOUBTFUL ACCOUNTS RECEIVABLE

Beginning balance

Additions to allowance

Foreign currency translation adjustment

Ending balance

4 – PREPAYMENTS AND OTHER CURRENT ASSETS, NET

and other current assets consisted of the following as of December 31, 2023 and 2022:

SCHEDULE OF PREPAYMENTS AND OTHER CURRENT ASSETS

Prepayments (including $ 2,255,288

and $ 1,813,904 to related parties as of December 31, 2022 and 2021, respectively)

OF PREPAYMENT AND OTHER CURRENT ASSETS

Prepayments (including $ 2,769,741 and $ 2,255,288 to related parties as of December 31, 2023 and 2022, respectively)

Other current assets

Total prepayments and other current assets

Allowance for doubtful accounts (including $ 1,152,427 and $ nil to related parties as of December 31, 2022 and 2021, respectively)

Prepayments and other

current assets, net

Allowance for doubtful accounts (including $ 1,827,763 and $ 1,152,427 to related parties as of December 31, 2023 and 2022, respectively)

( 2,354,625 )

( 1,247,580 )

Prepayments and other current assets, net

of prepayments represented the advanced payments to suppliers including related party suppliers.

for doubtful accounts movement is as follows:

FOR DOUBTFUL ACCOUNTS

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

Beginning balance

3 unchanged sentences

5 – DEPOSITS PAID, NET

Deposits paid consisted of the following as of December 31, 2022 and 2021:

paid consisted of the following as of December 31, 2023 and 2022:

OF DEPOSITS PAID

Deposits paid (including $ 1,597,060 and $ 1,628,511 to related parties as of December 31, 2023 and 2022, respectively)

Allowance for doubtful accounts (including $ 870,066 and $ nil to related

parties as of December 31, 2022 and 2021, respectively)

Allowance for doubtful accounts (including $ 1,060,610 and $ 870,066 to related parties as of December 31, 2023 and 2022, respectively)

( 1,694,166 )

( 1,244,350 )

Deposits paid, net

for doubtful accounts movement is as follows:

FOR DOUBTFUL ACCOUNTS

OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF DEPOSITS PAID

Beginning balance

4 unchanged sentences

and equipment consisted of the following as of December 31, 2023 and 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

OF PROPERTY AND EQUIPMENT

Office equipment

Leasehold improvement

Motor Vehicle

Property and equipment

Accumulated depreciation

Property and equipment,

expense, which was included in general and administrative expenses, for the years ended December 31, 2022 and 2021 was

Property and equipment, net

expense, which was included in general and administrative expenses, for the years ended December 31, 2023 and 2022 was $ 34,332 and $ 46,344 ,

respectively.

8 unchanged sentences

Impairment loss

expense for the years ended December 31, 2022 and 2021 was $ 806,539

and $ 844,907 ,

respectively, included in cost of revenues and general and administrative expenses.

During the years ended December 31, 2022 and 2021, the Company recognized impairment

loss of $ 979,428

expense for the years ended December 31, 2023 and 2022 was $ 209,533 and $ 806,539 , respectively, included in cost of revenues and general

and administrative expenses.

During the years ended December 31, 2023 and 2022, the Company recognized impairment loss of $ nil and $ 979,428 ,

respectively.

1 unchanged sentence

OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS

Year ending December 31,

8 - INCOME TAXES

12 unchanged sentences

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 10%.

[2021] No.12 provides an enterprise income tax rate of 2.5% on small-scale and low-profit enterprises whose annual taxable

income is less than RMB1,000,000, approximately $142,209, from January 1, 2021 to December 31, 2022.

MOF and SAT [2022] No.13 also provides

an enterprise income tax rate of 5% on small-scale and low-profit enterprises whose annual taxable income is more than RMB1,000,000,

approximately $142,209, but less than RMB3,000,000, approximately $426,627, from January 1, 2022 to December 31, 2024.

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, except for Xixingdao, FVT Supply Chain and FLTT.

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 10%.

MOF and SAT [2021] No.12 provides an enterprise income tax rate of 2.5%

on small-scale and low-profit enterprises whose annual taxable income is less than RMB1,000,000, approximately $142,209, from January

1, 2021 to December 31, 2022.

MOF and SAT [2022] No.13 also provides an enterprise income tax rate of 5% on small-scale and low-profit

enterprises whose annual taxable income is more than RMB1,000,000, approximately $142,209, but less than RMB3,000,000, approximately

$426,627, from January 1, 2022 to December 31, 2024.

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, except for

Xixingdao, FVT Supply Chain and FLTT.

components of the income tax provision are as follows:

OF COMPONENTS OF INCOME TAX PROVISION

SCHEDULE OF COMPONENTS OF INCOME TAX PROVISION

– United States of America

4 unchanged sentences

SCHEDULE OF UNITED STATES AND FOREIGN INCOME LOSS BEFORE INCOME TAXES

Income (loss) attributed to PRC

Income (loss) attributed to PRC operations

$ ( 3,501,303 )

Loss attributed to Seychelles and

$ ( 766,083 )

Loss attributed to Seychelles and Hong Kong

Loss attributed to U.S.

( 1,204,097 )

Income (loss) before

Income (loss) before tax

$ ( 4,271,199 )

The difference between the U.S.

$ ( 1,970,199 )

difference between the U.S.

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

5 unchanged sentences

Valuation allowance on deferred income tax assets

Amortization and impairment loss not deductible for tax

Amortization and impairment loss not deductible for tax purposes

Expenses not deductible for tax purpose

1 unchanged sentence

The Company’s effective tax rate

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

of income tax rates.

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

a broad range of income tax rates.

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

OF COMPONENTS OF DEFERRED TAX ASSETS

December 31, 2023

December 31, 2022

December 31, 2023

December 31, 2022

Deferred tax assets:

3 unchanged sentences

valuation allowance

Total deferred tax assets,

Total deferred tax assets, net

9 - RELATED PARTY TRANSACTIONS

Amounts due from related parties as of December 31,

2022 and 2021 are as follows:

OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

Manager of a subsidiary

due to related parties as of December 31, 2023 and 2022 are as follows:

OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

President, Chief Executive Officer, Secretary, Director and majority shareholder

2 unchanged sentences

Manager of a subsidiary

Minghua Cheng

Former director and majority shareholder

Manager of a subsidiary, Shareholder

1 unchanged sentence

Manager of a subsidiary

Vice President

Manager of a subsidiary

Shenzhen DaXingHuaShang Industry Development Ltd.

10 unchanged sentences

generated from related parties during the years ended December 31, 2023 and 2022 are as follows:

OF REVENUE GENERATED FROM RELATED PARTIES

SCHEDULE OF REVENUE GENERATED FROM RELATED PARTIES

Chief Financial Officer and Treasurer

3 unchanged sentences

Manager of a subsidiary

Manager of a subsidiary, Shareholder

2 unchanged sentences

Dongguan Humen Shuiyan Drinking Water Store

Shuiyan Li, a shareholder of the Company, is the controlling shareholder

of Dongguan Humen Shuiyan Drinking Water Store

Guangdong Shuiyijia Distribution Co., Ltd.

Lihua Li, Mr.

Yuwen Li’s wife, is the supervisor of Guangdong Shuiyijia Distribution Co.,

Dongguan Chashan Pingfeng Cigarette and Wine Co., Ltd.

Taiping Deng, a manager of a subsidiary, is the controlling shareholder of Dongguan ChaShan Pingfeng Cigarette and Wine Co.

Shuiyan Li, a shareholder of the Company, is the controlling shareholder of Dongguan Humen Shuiyan Drinking Water Store

Dongguan Huanhai Trading Co., Ltd.

2 unchanged sentences

Weihong Ye, a manager of a subsidiary, is the controlling shareholder of Dongguan Hualian Guanhua Gong Co., Ltd.

Dongguan Daying Internet Technology Co., Ltd.

Minghua Cheng, a former 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 Co., Ltd.

Naiyong Luo, a manager of a subsidiary, is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd.

Dongguan Tailai Trading Co., Ltd.

Significantly influenced by the Company

Vice President

Revenues generated from

1 unchanged sentence

of revenues from related parties during the years ended December 31, 2023 and 2022 is as follows:

SCHEDULE OF COST

OF REVENUES FROM RELATED PARTIES

SCHEDULE OF COST OF REVENUES FROM RELATED PARTIES

Dongguan Anxiang Technology Co., Ltd.

15 unchanged sentences

Dongguan City Yijia Trading Co., Ltd.

Yongming Li, a shareholder

of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.

Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.

Cost of revenues from

19 unchanged sentences

Dongguan City Yijia Trading Limited

Yongming Li, a shareholder

of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.

Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.

Purchase from related

from related party 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.

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

addition, during the years ended December 31, 2023 and 2022, these related parties paid expenses on the Company’s behalf in an

amount of $ 135,774 and $ 344,218 , respectively.

Yuwen Li, the Vice President of the Company, authorized

the Company to use trademarks that were owned by him for ten years from October 5, 2019 to October 4, 2029 at no cost.

amount of $ nil and $ 135,774 , respectively.

Yuwen Li, the Vice President of the Company, authorized the Company to use trademarks that were owned by him for ten years from October

5, 2019 to October 4, 2029 at no cost.

see Note 3, 4, 5, 10 and 11 for more transactions with related parties.

10 – OPERATING LEASES

of December 31, 2022, the Company has twenty separate operating lease agreements for three office spaces, one warehouse and sixteen

of December 31, 2023, the Company has twenty-one separate operating lease agreements for three office spaces, one warehouse and seventeen

stores in PRC with remaining lease terms of from 6 months to 40 months .

Two of the leases described above were entered with related parties.

operating lease entered with Ms.

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

The agreement covers the period

from January 1, 2019 to April 30, 2027 with the monthly rent expense of RMB 10,000 (approximately $ 1,490 ).

The operating lease agreement

entered with Mr.

Hongwei Ye, another related party, is for the premises in Dongguan City, PRC.

The agreement covers the period from September

27, 2020 to September 30, 2023 with the monthly rent expense of RMB 960 (approximately $ 143 ).

of the leases described above were entered with related parties.

The operating lease entered with Ms.

Qingmei Lin, a related party, is

for the premises in Dongguan City, PRC.

The agreement covers the period from January 1, 2019 to April 30, 2027 with the monthly rent

expense of RMB 10,000 (approximately $ 1,490 ).

The operating lease agreement entered with Mr.

Hongwei Ye, another related party, is for

the premises in Dongguan City, PRC.

The agreement covers the period from October 1, 2023 to September 30, 2026 with the monthly rent

expense of RMB 960 (approximately $ 143 ).

components of lease expense and supplemental cash flow information related to leases for the years ended December 31, 2023 and 2022 are

SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

Operating lease cost (included

in general and administrative expenses in the Company’s consolidated statements of operations) for the years ended

Operating lease cost (included in general and administrative expenses in the Company’s consolidated statements of operations) for the years ended

December 31, 2023

December 31, 2022

Related parties

Non-related parties

Other information for the years

Cash paid for amounts included

in the measurement of lease obligations

Other information for the years ended

December 31, 2023

December 31, 2022

Cash paid for amounts included in the measurement of lease obligations

Weighted average remaining lease term (in years)

8 unchanged sentences

11 – BANK AND OTHER BORROWINGS

August 2020, the Company obtained a revolving credit line in the principal amount of RMB 910,000 (approximately $ 139,000 when borrowed)

from China Construction Bank, which bears interest at 4.10% .

The credit line is guaranteed by Xiulan

Zhou, a related party, and pledged by her property.

August 2020, the Company obtained a revolving credit line in the principal amount of RMB 910,000

(approximately $ 139,000

when borrowed) from China Construction Bank, which bears interest at 4.10 %.

The credit line is guaranteed by Xiulan Zhou, a related party, and pledged by her property.

The maturity date is on August

December 2020, the Company obtained a loan in the principal amount of RMB 750,000 (approximately $ 115,000 when borrowed) from Huaneng

Guicheng Trust Co., Ltd.

(“Huaneng Guicheng”), a financial institution in PRC, which bears interest at the base Loan Prime

Rate of 3.85% plus 8.75% .

The loan is guaranteed by Yumin Lin.

The maturity date is on December 21, 2022 .

The loan was fully repaid in

November 2021, the Company obtained a bank loan in the principal amount of RMB 500,000 (approximately $ 79,000 when borrowed) from Shenzhen

Qianhai Webank Co., Ltd.

As of December 31, 2023, the Company had repaid this bank loan in full to the China Construction Bank.

November 2021, the Company obtained a bank loan in the principal amount of RMB 500,000

(approximately $ 79,000

when borrowed) from Shenzhen Qianhai Webank Co., Ltd.

(“WeBank”), which bears interest at 3.6 %.

The maturity date is on December

11, 2021, the Company and WeBank agreed to extend the maturity date of the loan to December 21, 2023 and increase the principal amount

to RMB 500,750 (approximately $ 79,000 when borrowed) reflecting the accrued interest.

The loan is guaranteed by Yumin Lin and bears interest

May 2022, the Company obtained a revolving credit line in the principal amount of RMB 1,000,000 (approximately $ 149,000 when borrowed)

from China Construction Bank, which bears interest at 4.45% .

On December 11, 2021, the Company and WeBank agreed to extend the maturity date of the loan to December

21, 2023 and increase the principal amount to RMB 500,750

(approximately $ 79,000

when borrowed) reflecting the accrued interest.

The loan is guaranteed by Yumin Lin and bears interest at 10.71 %.

As of December 31, 2023, the Company had repaid this bank loan in full to the WeBank.

May 2022, the Company obtained a revolving credit line in the principal amount of RMB 1,000,000

(approximately $ 149,000

when borrowed) from China Construction Bank, which bears interest at 4.45 %.

The credit line is guaranteed by Xiulan Zhou, a related party.

The maturity date is on May

As of December 31, 2023, the Company had repaid this bank loan in full to the China Construction Bank.

May 2022, the Company obtained a loan in the principal amount of RMB 161,000 (approximately $ 24,000 when borrowed) from Huaneng Guicheng,

20 unchanged sentences

The maturity date is on July 21, 2024 .

February 2023, the Company obtained a revolving credit line in the principal amount of RMB 465,000 (approximately $ 68,000 when borrowed)

from China Construction Bank, which bears interest at 4.00 %.

The loan is guaranteed by Shuqin Chen, a related party.

The maturity date

is on February 11, 2024 .

April 2023, the Company obtained two bank loans in the principal amount of RMB 224,000 (approximately $ 31,000 when borrowed) and RMB 96,000

(approximately $ 13,000 when borrowed) from Bank of Ningbo and WeBank, respectively, which bear interest at 12.24 %.

The loans are guaranteed

by Falan Zhou, a manager of subsidiaries.

The maturity date is on April 7, 2025 .

April 2023, the Company obtained a mortgage loan in the principal amount of RMB 195,415 (approximately $ 27,000 when borrowed) from WeBank,

which bears interest at 6.54 %.

The loan is pledged with a vehicle of the Company.

The maturity date is on April 10, 2028 .

May 2023, the Company obtained a revolving credit line in the principal amount of RMB 1,050,000 (approximately $ 146,000 when borrowed),

with Yumin Lin as a co-borrower, from China Construction Bank, which bears interest at 4.20 %.

The maturity date is on May 26, 2024 .

July 2023, the Company obtained two bank loans in the principal amount of RMB 57,000 (approximately $ 8,000 when borrowed) and RMB 133,000

(approximately $ 18,000 when borrowed) from WeBank and Nanyue Bank, respectively, which bear interest at 10.44 %.

The loans are guaranteed

by Falan Zhou, a manager of subsidiaries.

The maturity date is on July 13, 2025 .

July 2023, the Company obtained a revolving credit line in the principal amount of RMB 1,040,000 (approximately $ 143,000 when borrowed)

from China Construction Bank, which bears interest at 3.70 %.

The credit line is guaranteed by Xiulan Zhou, a related party, and pledged

with her property.

The maturity date is on July 17, 2026 .

July 2023, the Company obtained a revolving credit line in the principal amount of RMB 817,000 (approximately $ 114,000 when borrowed),

with Yumin Lin as a co-borrower from China Construction Bank, which bears interest at 3.85 %.

The maturity date is on July 22, 2024 .

November 2023, the Company obtained a bank loan in the principal amount of RMB 440,000 (approximately $ 62,000 when borrowed) from WeBank,

which bears interest at 7.92 %.

The loan is guaranteed by Jianglong Xiong.

The maturity date is on November 16, 2025 .

balance of the loans borrowed as of December 31, 2023 and 2022 was as follows:

5 unchanged sentences

Guangdong NanYue Bank

Bank of Ningbo

Aggregate outstanding principal balances

1 unchanged sentence

Non-current portion

total interest expense was $ 31,444

for the years ended December 31, 2022 and 2021,

respectively.

Future minimum loan payments as of December 31, 2022 are as follows:

total interest expense was $ 38,389 and $ 31,444 for the years ended December 31, 2023 and 2022, respectively.

minimum loan payments as of December 31, 2023 are as follows:

SCHEDULE OF FUTURE MINIMUM LOAN PAYMENTS

13 unchanged sentences

share amount in the accompanying financial statement for the prior period have been retroactively adjusted to reflect the Reverse Stock

NOTE 12 - SUBSEQUENT EVENTS

In February 2023, the Company obtained a revolving credit line in the principal

amount of RMB 465,000 (approximately $ 67,000 when borrowed) from China Construction Bank, which bears interest at 4.00 %.

The maturity date

is on February 11, 2024 .

13 - SUBSEQUENT EVENTS

In February 2024, the Company obtained two bank loans,

both in the principal amount of RMB 270,000 (approximately $ 38,000 when borrowed) from WeBank, which bears interest at 7.92 %.

are both guaranteed by Jianglong Xiong.

The maturity dates are both on February 22, 2026 .

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 9A. Controls and Procedures