Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________

Commission File Number 000-55555

Fortune Valley Treasures, Inc.

(Exact name of registrant issuer as specified in its charter)

Nevada

32-0439333

(State or other jurisdiction
of incorporation or organization)

(I.R.S. Employer

Identification No.)

B1601 Donogfang Yinxiang Building

No. 139 Liansheng Road, Humen Town

Dongguan, Guangdong, China 523000

(Address of principal executive offices, including zip code)

Registrant’s phone number, including area code (86) 769-85729133

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.001 per share

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☒

As of August 14, 2023, there were 15,655,038 shares, par value $0.001, of the registrant’s common stock outstanding.

TABLE OF CONTENTS

		Page

PART I	FINANCIAL INFORMATION	3

ITEM 1.	CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:	3

	Condensed Consolidated Balance Sheets as of June 30, 2023 (Unaudited) and December 31, 2022	3

	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2023 and 2022 (Unaudited)	4

	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Six Months Ended June 30, 2023 and 2022 (Unaudited)	5

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022 (Unaudited)	6

	Notes to Condensed Consolidated Financial Statements for the Three and Six Months Ended June 30, 2023 and 2022 (Unaudited)	7

ITEM 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	20

ITEM 4.	CONTROLS AND PROCEDURES	20

PART II	OTHER INFORMATION	22

ITEM 1	LEGAL PROCEEDINGS	22

ITEM 2	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	22

ITEM 3	DEFAULTS UPON SENIOR SECURITIES	22

ITEM 4	MINE SAFETY DISCLOSURES	22

ITEM 5	OTHER INFORMATION	22

ITEM 6	EXHIBITS	22

SIGNATURES		23

PART I - FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

FORTUNE VALLEY TREASURES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

AS OF JUNE 30, 2023 AND DECEMBER 31, 2022

	June 30, 2023			December 31, 2022
	(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	75,950		$	165,685
Accounts receivable, net (including $72,372 and $146,087 from related parties as of June 30, 2023 and December 31, 2022, respectively)		5,101,721			4,797,564
Inventories		76,795			148,925
Prepayments and other current assets, net (including $1,162,622 and $1,102,861 to related parties as of June 30, 2023 and December 31, 2022, respectively)		1,537,639			1,758,917
Total current assets		6,792,105			6,871,091

Non-current assets
Deposits paid, net (including $573,584 and $758,445 to related parties as of June 30, 2023 and December 31, 2022, respectively)		673,561			1,121,302
Property and equipment, net		112,461			97,890
Operating lease right-of-use assets		244,027			297,232
Operating lease right-of-use assets, related parties		65,242			75,300
Operating lease right-of-use assets		65,242			75,300
Intangible assets, net		252,148			370,926
Goodwill		435,562			454,201
Total Assets	$	8,575,106		$	9,287,942

Liabilities and Stockholders’ Equity
Current liabilities
Operating lease obligations – current	$	112,632		$	110,201
Operating lease obligations, related parties - current		12,625			16,629
Operating lease obligations - current		12,625			16,629
Accounts payable (including $107,454 and $80,426 to related parties as of June 30, 2023 and December 31, 2022, respectively)		692,035			688,822
Accrued liabilities		553,026			502,389
Bank and other borrowings - current		483,233			422,653
Income tax payable		20,116			38,879
Customer advances		116,769			139,334
Due to related parties		748,543			565,675
Total current liabilities		2,738,979			2,484,582

Non-current liabilities
Operating lease obligations – non-current		155,593			189,957
Operating lease obligations, related parties – non-current		45,235			55,056
Operating lease obligations – non-current		45,235			55,056
Bank and other borrowings		46,356			58,438
Total Liabilities		2,986,163			2,788,033

Stockholders’ Equity
Common stock (150,000,000 shares authorized, 15,655,038 shares issued and outstanding as of June 30, 2023 and December 31, 2022)		15,655			15,655
Additional paid-in capital		11,061,233			11,061,233
Accumulated deficit and statutory reserves		(4,980,048	)		(4,504,404	)
Accumulated other comprehensive loss		(516,590	)		(180,826	)
Total Fortune Valley Treasures, Inc. stockholders’ equity		5,580,250			6,391,658
Noncontrolling interests		8,693			108,251
Total Stockholders’ Equity		5,588,943			6,499,909

Total Liabilities and Stockholders’ Equity	$	8,575,106		$	9,287,942

See accompanying notes to the unaudited condensed consolidated financial statements.

FORTUNE VALLEY TREASURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	2023			2022			2023			2022
	Three months ended June 30						Six months ended June 30
	2023			2022			2023			2022

Net revenues (including $42,848 and $40,770 from related parties for the three months ended June 30, 2023 and 2022, respectively; $69,598 and $41,495 from related parties for the six months ended June 30, 2023 and 2022, respectively)	$	1,272,597		$	2,336,459		$	2,907,886		$	3,598,269

Cost of revenues (including $133,114 and $249,468 from related parties for the three months ended June 30, 2023 and 2022, respectively; $362,096 and $386,380 from related parties for the six months ended June 30, 2023 and 2022, respectively)		652,798			1,099,523			1,330,165			1,617,985
Gross profit		619,799			1,236,936			1,577,721			1,980,284

Operating expenses:
Selling and distribution expenses		13,016			15,929			26,258			34,084
General and administrative expenses		1,027,572			347,657			1,978,967			874,943

Operating income (loss)		(420,789	)		873,350			(427,504	)		1,071,257

Other income (expense):
Other income		6,436			1,995			8,210			8,202
Interest income		16			16			47			93
Interest expense		(8,964	)		(4,864	)		(18,256	)		(10,689	)
Other expense, net		(2,512	)		(2,853	)		(9,999	)		(2,394	)

Income (loss) before income tax		(423,301	)		870,497			(437,503	)		1,068,863

Income tax expense		21,528			81,514			96,502			103,921

Net income (loss)	$	(444,829	)	$	788,983		$	(534,005	)	$	964,942
Less: Net income (loss) attributable to noncontrolling interests		(58,004	)		41,250			(58,361	)		68,533
Net income (loss) attributable to Fortune Valley Treasures, Inc.		(386,825	)		747,733			(475,644	)		896,409

Other comprehensive income:
Foreign currency translation loss		(422,433	)		(602,321	)		(376,961	)		(591,601	)

Total comprehensive income (loss)		(867,262	)		186,662			(910,966	)		373,341
Less: comprehensive income (loss) attributable to noncontrolling interests		(99,383	)		(4,305	)		(99,558	)		24,726
Comprehensive income (loss) attributable to Fortune Valley Treasures, Inc.	$	(767,879	)	$	190,967		$	(811,408	)	$	348,615

Earnings (loss) per share
Basic and diluted earnings (loss) per share	$	(0.02	)	$	0.05		$	(0.03	)	$	0.06
Basic and diluted weighted average shares outstanding	$	15,655,038		$	15,655,038		$	15,655,038		$	15,655,038

See accompanying notes to the unaudited condensed consolidated financial statements.

FORTUNE VALLEY TREASURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	Number of shares		Amount		Paid-in Capital		Comprehensive Income (Loss)			Statutory Reserves			controlling Interests			Stockholders’ Equity
	Common Stock				Additional		Accumulated Other			Accumulated Deficit and			Non			Total
	Number of shares		Amount		Paid-in Capital		Comprehensive Loss			Statutory Reserves			controlling Interests			Stockholders’ Equity
Balance as of December 31, 2022		15,655,038	$	15,655	$	11,061,233	$	(180,826	)	$	(4,504,404	)	$	108,251		$	6,499,909
Net loss		-		-		-		-			(88,819	)		(357	)		(89,176	)
Foreign currency translation adjustment		-		-		-		45,290			-			182			45,472
Balance as of March 31, 2023		15,655,038	$	15,655	$	11,061,233	$	(135,536	)	$	(4,593,223	)	$	108,076		$	6,456,205
Net loss		-		-		-		-			(386,825	)		(58,004	)		(444,829	)
Foreign currency translation adjustment		-		-		-		(381,054	)		-			(41,379	)		(422,433	)
Balance as of June 30, 2023		15,655,038	$	15,655	$	11,061,233	$	(516,590	)	$	(4,980,048	)	$	8,693		$	5,588,943

	Common Stock				Additional		Accumulated Other			Accumulated Deficit and			Non			Total
	Number of shares		Amount		Paid-in Capital		Comprehensive Income (Loss)			Statutory Reserves			controlling Interests			Stockholders’ Equity
Balance as of December 31, 2021		15,655,038	$	15,655	$	11,061,233	$	544,305		$	(2,561,681	)	$	404,842		$	9,464,354
Net income		-		-		-		-			148,676			27,283			175,959
Foreign currency translation adjustment		-		-		-		8,972			-			1,748			10,720
Balance as of March 31, 2022		15,655,038	$	15,655	$	11,061,233	$	553,277		$	(2,413,005	)	$	433,873		$	9,651,033
Balance		15,655,038	$	15,655	$	11,061,233	$	553,277		$	(2,413,005	)	$	433,873		$	9,651,033
Net income		-		-		-		-			747,733			41250			788,983
Net income (loss)		-		-		-		-			747,733			41250			788,983
Foreign currency translation adjustment		-		-		-		(556,766	)		-			(45,555	)		(602,321	)
Balance as of June 30, 2022		15,655,038	$	15,655	$	11,061,233	$	(3,489	)	$	(1,665,272	)	$	429,568		$	9,837,695
Balance		15,655,038	$	15,655	$	11,061,233	$	(3,489	)	$	(1,665,272	)	$	429,568		$	9,837,695

See accompanying notes to the unaudited condensed consolidated financial statements.

FORTUNE VALLEY TREASURES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

	2023			2022
	Six months ended June 30,
	2023			2022
Cash flows from operating activities
Net income (loss)	$	(534,005	)	$	964,942
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense		124,680			433,417
Non-cash lease expense		91,369			85,628
Allowance for credit losses		960,144			-
Loss on disposal of intangible asset		1,855			-
Changes in operating assets and liabilities
Accounts receivable, net		(896,403	)		(185,856	)
Inventories		68,723			(64,826	)
Prepayments and other current assets, net		232			(385,553	)
Due from related parties		-			25,887
Deposits paid, net		(12,080	)		(583,325	)
Accounts payable		32,763			(37,455	)
Due to related parties		111,324			(122,702	)
Customer advances		(17,538	)		(110,633	)
Accrued liabilities		74,167			56,060
Income tax payable		(17,871	)		19,354
Operating lease obligations		(73,176	)		(77,497	)
Net cash provided by (used in) operating activities		(85,816	)		17,441

Cash flows from investing activities
Acquisition of property and equipment		(4,786	)		-
Acquisition of intangible asset		(702	)		-
Net cash used in investing activities		(5,488	)		-

Cash flows from financing activities
Borrowings from and repayments to revolving credit lines, net		7,224			148,606
Borrowings from bank loans		113,418			10,352
Borrowings from a third party		-			24,154
Repayments to related parties		-			(154,510	)
Repayments to bank loans		(58,299	)		(11,763	)
Repayments to a third party		(19,541	)		(66,379	)
Net cash provided by (used in) financing activities		42,802			(49,540	)

Effect of exchange rate changes on cash and cash equivalents		(41,233	)		(5,738	)
Net changes in cash and cash equivalents		(89,735	)		(37,837	)
Cash and cash equivalents–beginning of the period		165,685			123,163

Cash and cash equivalents–end of the period	$	75,950		$	85,326

Supplementary cash flow information:
Interest paid	$	18,378		$	10,191
Income taxes paid	$	152,140		$	86,546

Non-cash investing and financing activities
Expenses paid by related parties on behalf of the Company	$	-		$	38,627
Operating lease right-of-use assets obtained in exchange for operating lease obligations	$	39,797		$	-
Liabilities assumed in connection with purchase of property and equipment	$	28,234		$	-

See accompanying notes to the unaudited condensed consolidated financial statements.

FORTUNE VALLEY TREASURES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022

(Unaudited)

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fortune Valley Treasures, Inc. (formerly Crypto-Services, Inc.) (“FVTI” or the “Company”) was incorporated in the State of Nevada on March 21, 2014. The Company’s current primary business operations of wholesale distribution and retail sales of alcoholic beverages of wine and distilled liquors, and drinking water distribution and delivery are conducted through its subsidiaries in the People’s Republic of China (“PRC”).

On April 11, 2018, the Company entered into a share exchange agreement by and among DaXingHuaShang Investment Group Limited (“DIGLS”) and its shareholders: 1.) Yumin Lin, 2.) Gaosheng Group Co., Ltd. and 3.) China Kaipeng Group Co., Ltd. whereby the Company newly issued 15,000,000 shares of its common stock in exchange for all the outstanding shares in DIGLS. This transaction has been accounted for as a reverse takeover transaction and a recapitalization of the Company whereby the Company, the legal acquirer, is the accounting acquiree, and DIGLS, the legal acquiree, is the accounting acquirer; accordingly, the Company’s historical statement of stockholders’ equity has been retroactively restated to the first period presented.

On March 1, 2019, the Company entered into a sale and purchase agreement (the “SP Agreement”) to acquire 100% of the shares of Jiujiu Group Stock Co., Ltd. (“JJGS”), a company incorporated under the laws of the Republic of Seychelles. The transaction closed on March 1, 2019. Pursuant to the SP Agreement, the Company issued 5 shares of its common stock to JJGS to acquire 100% of the shares of JJGS for a cost of $150. After the closing, JJGS became the Company’s wholly owned subsidiary. JJGS owns all of the equity interest of Jiujiu (HK) Industry Limited (“JJHK”) and Jiujiu (Shenzhen) Industry Co., Ltd. (“JJSZ”). JJGS, JJHK and JJSZ did not have any material assets or liabilities as of December 31, 2019, and they did not have any substantial operations or active business during the year ended December 31, 2019.

On June 22, 2020, the Company entered into a sale and purchase agreement along with Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd., a company incorporated in China and a wholly-owned subsidiary of FVTI (“QHDX”), to acquire 90% of the shares of Dongguan Xixingdao Technology Co., Ltd. (“Xixingdao”), a company incorporated in the PRC, from certain shareholders of Xixingdao in exchange for 243,134 shares of the Company’s common stock. The Company obtained the control of Xixingdao on August 31, 2020, the shares were issued on December 28, 2020. Xixingdao became the Company’s subsidiary since August 31, 2020.

Basis of presentation

The accompanying unaudited condensed consolidated financial statements as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) that permit reduced disclosure for interim periods. Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. In the opinion of management, all adjustments consisting of normal recurring entries considered necessary for a fair presentation have been included. The results of operations for these periods are not necessarily comparable to, or indicative of, results of any other interim period or for the fiscal year taken as a whole. The condensed consolidated balance sheet information as of December 31, 2022 was derived from the Company’s audited consolidated financial statements included in the Company’s Annual Report on Form 10-K, for the year ended December 31, 2022, filed with the SEC on March 31, 2023 (the “report”). These unaudited condensed consolidated financial statements should be read in conjunction with the report.

Basis of consolidation

The unaudited condensed 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 unaudited condensed consolidated statements of operations.

As of June 30, 2023, details of the Company’s major subsidiaries were as follows:

Entity Name	Date of Incorporation	Parent Entity	Nature of Operation	Place of Incorporation
DIGLS	July 4, 2016	FVTI	Investment holding	Republic of Seychelles
DILHK	June 22, 2016	DIGLS	Investment holding	Hong Kong, PRC
QHDX	November 3, 2016	DILHK	Investment holding	PRC
FVTL	May 31, 2011	QHDX	Trading of food and platform	PRC
JJGS	August 17, 2017	FVTI	Investment holding	Republic of Seychelles
JJHK	August 24, 2017	JJGS	Investment holding	Hong Kong, PRC
JJSZ	November 16, 2018	JJHK	Trading of food	PRC
Xixingdao	August 28, 2019	QHDX	Drinking water distribution and delivery	PRC
Dongguan City Fu La Tu Trade Ltd (“FLTT”)	September 27, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Gu Trade Ltd (“FXGT”)	December 2, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Technology Ltd (“FXTL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”)	December 21, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Jing Technology Ltd (“FJTL”)	November 17, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xiang Technology Ltd (“FGTL”)	November 16, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”)	November 9, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Lai Food Ltd (“FLFL”)	September 27, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Yi Beverage Ltd (“FYBL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”)	March 17, 2021	Xixingdao	Drinking water distribution and delivery, sales of alcoholic beverages and water purifier	PRC
Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”)	June 7, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Li Trading Ltd (“FLTL”)	September 10, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”)	September 13, 2021	QHDX	Trading of alcoholic beverages	PRC
Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Chang Fu Trading Ltd (“CFTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City La Tong Trading Ltd (“LTTL”)	August 8, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Kai Fu Trading Ltd (“KFTL”)	September 8, 2022	FVTL	Trading of alcoholic beverages	PRC

Use of estimates

The 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 credit losses, 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 estimates.

Foreign currency translation and re-measurement

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

The reporting currency for the Company and its subsidiaries is the U.S. dollar. The Company, DIGLS, DILHK, JJGS and JJHK’s functional currency is the U.S. dollar; QHDX, JJSZ and their subsidiaries which are incorporated in PRC use the Chinese Renminbi (“RMB”) as their functional currency.

The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows:

	●	Monetary assets and liabilities at exchange rates in effect at the end of each period
	●	Nonmonetary assets and liabilities at historical rates
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

	●	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	●	Equities at the historical rate
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

	2023		2022
	As of and for the six months ended June 30,
	2023		2022
Period-end RMB:US$1 exchange rate		0.13880		0.14927
Period-average RMB:US$1 exchange rate		0.14448		0.15451

The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rates used in translation.

Impairment of long-lived assets other than goodwill

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry or new technologies. Impairment is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated.

If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell.

The Company did not recognize any impairment of long-lived assets during the six months ended June 30, 2023 and 2022.

Goodwill

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 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.

During the six months ended June 30, 2023 and 2022, the Company did not record any impairment of goodwill.

Revenue recognition

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

	1.	Identify the contract(s) with a customer;
	2.	Identify the performance obligations in the contract;
	3.	Determine the transaction price;
	4.	Allocate the transaction price to the performance obligations in the contract; and
	5.	Recognize revenue when (or as) the entity satisfies a performance obligation.

Under Topic 606, revenues are recognized when the promised products have been confirmed of delivery or services have been transferred to the consumers in amounts that reflect the consideration the customer expects to be entitled to in exchange for those services. The Company presents value added taxes (“VAT”) as reductions of revenues. The Company recognizes revenues net of value added taxes (“VAT”) and relevant charges.

We generate revenue primarily from the sales of 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.

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

SCHEDULE OF DISAGGREGATION REVENUE

	2023		2022		2023		2022
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sales of liquor	$	878,952	$	1,203,484	$	1,782,672	$	1,833,946
Sales of water		213,582		808,648		633,202		1,338,092
Sales of water purifier		114,714		310,807		367,837		395,548
Others		65,349		13,520		124,175		30,683
Total	$	1,272,597	$	2,336,459	$	2,907,886	$	3,598,269

Contract liabilities

Contract liabilities consist mainly of customer advances. On certain occasions, the Company may receive prepayments from downstream retailers or wholesales customers for liquors, water and other products prior to them taking possession of the Company’s products. The Company records these receipts as customer advances until the control of the products has been transferred the customers. As of June 30, 2023 and December 31, 2022, the Company had customer advances of $116,769 and $139,334, respectively. During the six months ended June 30, 2023, the Company recognized $24,707 of customer advances in the opening balance.

Related party transaction

Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.

Recently adopted accounting pronouncements

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 Instruments. ASU No. 2016-13 was further amended in November 2020 by ASU No. 2020-10, 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 unaudited condensed consolidated financial statements.

In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. This ASU clarifies that an acquirer of a business should recognize and measure contract assets and contract liabilities in a business combination in accordance with ASC Topic 606, “Revenue from Contracts with Customers”. This ASU is expected to improve comparability for both the recognition and measurement of acquired revenue contracts with customers at the date of and after a business combination. The new guidance is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. The Company adopted ASU No. 2021-08 on January 1, 2023 and the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements.

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF ACCOUNTS RECEIVABLE

	June 30, 2023			December 31, 2022
Accounts receivable (including $73,096 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	5,461,870		$	4,797,564
Less: Doubtful allowance (including $724 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)		(360,149	)		-
Accounts receivable, net	$	5,101,721		$	4,797,564

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	-		$	-
Additions to allowance		374,894			-
Foreign currency translation adjustment		(14,745	)		-
Ending balance	$	360,149		$	-

NOTE 3 – PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments and other current assets consisted of the following as of June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Prepayments (including $2,394,062 and $2,255,288 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,875,927		$	3,001,866
Other current assets		6,995			4,631
Total prepayments and other current assets		2,882,922			3,006,497
Less: Allowance for doubtful accounts (including $1,231,440 and $1,152,427 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,345,283	)		(1,247,580	)
Prepayments and other current assets, net	$	1,537,639		$	1,758,917

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

Allowance for doubtful accounts movements is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,247,580		$	-
Additions to allowance		154,985			1,284,005
Foreign currency translation adjustment		(57,282	)		(36,425	)
Ending balance	$	1,345,283		$	1,247,580

NOTE 4 – DEPOSITS PAID, NET

Deposits paid consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF DEPOSITS PAID

	June 30, 2023			December 31, 2022
Deposits paid (including $1,573,209 and $1,628,511 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,280,196		$	2,365,652
Less: Allowance for doubtful accounts (including $999,625 and $870,066 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,606,635	)		(1,244,350	)
Deposits paid, net	$	673,561		$	1,121,302

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,244,350		$	-
Additions to allowance		430,265			1,280,681
Foreign currency translation adjustment		(67,980	)		(36,331	)
Ending balance	$	1,606,635		$	1,244,350

NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30, 2023			December 31, 2022
Office equipment	$	116,520		$	116,520
Leasehold improvement		126,386			126,386
Vehicle		31,910			-
Property and equipment		274,816			242,906
Less: Accumulated depreciation		(162,355	)		(145,016	)
Property and equipment, net	$	112,461		$	97,890

Depreciation expense, which was included in general and administrative expenses, for the six months ended June 30, 2023 and 2022 was $18,046 and $15,647, respectively.

NOTE 6 – INTANGIBLE ASSETS, NET

Intangible assets and related accumulated amortization were as follows:

SCHEDULE OF INTANGIBLE ASSETS

	June 30, 2023			December 31, 2022
Distribution channel	$	2,989,709		$	3,117,635
Others		25,553			27,809
Total intangible assets		3,015,262			3,145,444
Less: Accumulated amortization		(1,850,517	)		(1,822,875	)
Less: Accumulated impairment		(912,597	)		(951,643	)
Intangible assets, net	$	252,148		$	370,926

Amortization expense for the six months ended June 30, 2023 and 2022 was $106,634 and $417,770, respectively, included in cost of revenues and general and administrative expenses.

As of June 30, 2023, the future estimated amortization costs for intangible assets are as follows:


Year ending December 31,
2023 (remaining)	$	102,773
2024		138,256
2025		5,010
2026		5,010
2027		1,099
Total	$	252,148

NOTE 7 - RELATED PARTY TRANSACTIONS

Amounts due to related parties as of June 30, 2023 and December 31, 2022 are as follows:

		June 30, 2023		December 31, 2022
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder	$	517,426	$	389,051
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		1,287		508
Mr. Huagen Li	Manager of a subsidiary		2,221		2,316
Mr. Guodong Jia	Manager of a subsidiary		4,462		2,342
Mr. Hongwei Ye	Manager of a subsidiary, Shareholder		15		16
Mr. Anping Chen	Manager of a subsidiary		5,424		1,290
Mr. Jiangwei Jia	Manager of a subsidiary		6,497		3,678
Mr. Yuwen Li	Vice President		69,925		64,924
Ms. Lihua Li	Manager of a subsidiary		3,376		-
Shenzhen DaXingHuaShang Industrial Group Ltd. (fka Shenzhen DaXingHuaShang Industry Development Ltd.)	Mr. Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industrial Group Ltd.		83,279		86,842
Ms. Chunxiang Zhang	Manager of a subsidiary		3,168		998
Mr. Meng Xue	Manager of a subsidiary		7,359		5,449
Ms. Shuqin Chen	Manager of a subsidiary		5,400		1,358
Mr. Zhipeng Zuo	Manager of a subsidiary		16,762		59
Mr. Deqin Ke	Manager of a subsidiary		-		724
Mr. Aisheng Zhang	Manager of a subsidiary		15,982		2,320
Mr. Zhihua Liao	Manager of a subsidiary		5,960		3,800
		$	748,543	$	565,675

Revenues generated from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Mr. Kaihong Lin	Chief Financial Officer and Treasurer	$	278	$	652
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder		-		438
Mr. Zihao Ye	Manager of a subsidiary		-		262
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		14		-
Dongguan Huanhai Trading Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan Huanhai Trading Co., Ltd.		10,886		13,553
Guangdong Yuexin Jiaotong Construction Co., Ltd.	Mr. Naiyong Luo, a manager of a subsidiary, is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd.		10,578		7,581
Dongguan City Hualianguan Chemical Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan City Hualianguan Chemical Co., Ltd.		14,808		19,009
Dongguan Humen Shuiyan Drinking Water Store	Ms. Shuiyan Li, a shareholder of the Company, is the controlling shareholder of Dongguan Humen Shuiyan Drinking Water Store		33,034		-
Revenues generated from related parties		$	69,598	$	41,495

Cost of revenues from related parties during the six months ended June 30, 2023 and 2022 is as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	57,509	$	15,899
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		23,614		43,759
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		23,433		33,836
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		2,934		1,475
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		52,324		34,519
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,704		64,639
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,355		64,565
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		11,473		16,312
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		111,376
Cost of revenues from related parties		$	362,096	$	386,380

Purchases from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	61,259	$	19,406
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		25,221		56,842
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		25,416		37,266
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		3,124		1,659
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		55,999		33,634
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,965		66,220
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,430		69,407
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		12,522		16,374
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		48,579
Purchase from related party		$	374,686	$	349,387

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

Mr. 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.

Also see Note 2, 3, 4, 9 and 10 for more transactions with related parties.

NOTE 8 - INCOME TAXES

United States of America

The Company is registered in the State of Nevada and is subject to United States of America tax law. The U.S. federal income tax rate is 21%.

Seychelles

Under the current laws of the Seychelles, DIGLS and JJGS are registered as an international business company governed by the International Business Companies Act of Seychelles and there is no income tax charged in Seychelles.

Hong Kong

From year of assessment of 2018/2019 onwards, Hong Kong profit tax rates are 8.25% on assessable profits up to HK$2,000,000 (approximately $255,112), and 16.5% on any part of assessable profits over HK$2,000,000. For the six months ended June 30, 2023 and 2022, the Company did not have any assessable profits arising in or derived from Hong Kong, therefore no provision for Hong Kong profits tax was made in the periods reported.

The PRC

The Company’s subsidiaries are incorporated in the PRC, and are subject to the PRC Enterprise Income Tax Laws (“EIT Laws”) with the statutory income tax rate of 25% with the following exceptions.

On April 2, 2021, the State Taxation Administration issued the notice of the Ministry of Finance and the State Administration of Taxation (“MOF and SAT”) [2021] No.12 to provide 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 $144,482, but less than RMB3,000,000, approximately $433,445, 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.

The components of the income tax provision are as follows:


	Six months ended June 30,
	2023		2022
Current:
– United States of America	$	41,444	$	45,562
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		55,058		58,359
Current income tax expense
Deferred
– United States of America		-		-
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		-		-
Deferred income tax expense
Total	$	96,502	$	103,921

The effective tax rate was -22.1% and 9.7% for the six months ended June 30, 2023 and 2022, respectively.

NOTE 9 - OPERATING LEASES

As of June 30, 2023, the Company has nineteen separate operating lease agreements for three office spaces, one warehouse and fifteen stores in PRC with remaining lease terms of from 1 month to 46 months.

Two 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 RMB10,000 (approximately $1,445). 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 RMB960 (approximately $138).

The components of lease expense and supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 are as follows:


Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations)	Six months ended June 30,
	2023		2022

Related parties	$	9,501	$	11,347
Non-related parties		63,683		74,009
Total	$	73,184	$	85,356
Operating Lease Cost	$	73,184	$	85,356

Other information for the six months ended	June 30, 2023			June 30, 2022
Cash paid for amounts included in the measurement of lease obligations	$	77,612		$	78,215
Weighted average remaining lease term (in years)		2.72			3.55
Weighted average discount rate		3.23	%		3.23	%

Maturities of the Company’s lease obligations as of June 30, 2023 are as follows:

Year ending December 31,
2023 (remaining)	$	65,998
2024		121,342
2025		103,943
2026		40,951
2027		5,552
Total lease payment		337,786
Less: Imputed interest		(11,701	)
Operating lease obligations	$	326,085

NOTE 10 – BANK AND OTHER BORROWINGS

In August 2020, the Company obtained a revolving credit line in the principal amount of RMB910,000 (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 7, 2023.

In November 2021, the Company obtained a bank loan in the principal amount of RMB500,000 (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. 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 RMB500,750 (approximately $79,000 when borrowed) reflecting the accrued interest. The loan is guaranteed by Yumin Lin and bears interest at 10.71%.

In May 2022, the Company obtained a revolving credit line in the principal amount of RMB1,000,000 (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 credit line was fully repaid on the maturity date of May 26, 2023.

In May 2022, the Company obtained a loan in the principal amount of RMB161,000 (approximately $24,000 when borrowed) from Huaneng Guicheng Trust Co., Ltd. (“Huaneng Guicheng”), which bears interest at 11.34%. The loan is guaranteed by Yumin Lin. The maturity date is on May 21, 2024.

In May 2022, the Company obtained a bank loan in the principal amount of RMB69,000 (approximately $10,000 when borrowed) from WeBank, which bears interest at 11.34%. The loan is guaranteed by Yumin Lin. The maturity date is on May 21, 2024.

In July 2022, the Company obtained two loans in the principal amount of RMB99,000 (approximately $15,000 when borrowed) and RMB231,000 (approximately $34,000 when borrowed) from WeBank and Guangdong Nanyue Bank Co., Ltd. (“Nanyue Bank”), respectively, which bear interest at 14.4%. The loans are guaranteed by Kaihong Lin. The maturity date is on July 8, 2024.

In July 2022, the Company obtained two loans in the principal amount of RMB153,000 (approximately $23,000 when borrowed) and RMB357,000 (approximately $53,000 when borrowed) from WeBank and Nanyue Bank, respectively, which bear interest at 14.4%. The loans are guaranteed by Falan Zhou, a manager of subsidiaries. The maturity date is on July 13, 2024.

In July 2022, the Company obtained a loan in the principal amount of RMB380,000 (approximately $57,000 when borrowed) from Huaneng Guicheng, which bears interest at 12.6%. The loan is guaranteed by Yumin Lin. The maturity date is on July 21, 2024.

In February 2023, the Company obtained a revolving credit line in the principal amount of RMB465,000 (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.

In April 2023, the Company obtained two bank loans in the principal amount of RMB224,000 (approximately $31,000 when borrowed) and RMB96,000 (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.

In April 2023, the Company obtained a mortgage loan in the principal amount of RMB195,415 (approximately $27,000 when borrowed) from WeBank, which bears interest at 6.54%. The loan is pledged by a vehicle of the Company. The maturity date is on April 10, 2028.

In May 2023, the Company obtained a revolving credit line in the principal amount of RMB1,050,000 (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.

The balance of the loans borrowed as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
Loans from a trust in PRC	$	38,810	$	60,049
China Construction Bank		336,585		276,447
WeBank		81,488		77,220
Guangdong Nanyue Bank		44,207		67,375
Bank of Ningbo		28,499		-
Aggregate outstanding principal balances		529,589		481,091
Less: current portion		483,233		422,653
Non-current portion	$	46,356	$	58,438

The total interest expense was $18,256 and $10,689 for the six months ended June 30, 2023 and 2022, respectively.

Future minimum loan payments as of June 30, 2023 are as follows:


Year ending December 31,
2023 (remaining)	$	210,155
2024		293,951
2025		12,826
2026		5,425
2027		5,425
Thereafter		1,807
Total	$	529,589

NOTE 11 - SUBSEQUENT EVENTS

In July 2023, the Company obtained a bank loan in the principal amount of RMB817,000 (approximately $114,000 when borrowed) from China Construction Bank, which bears interest at 3.85% with the maturity date on July 22, 2024.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The information contained in this Form 10-Q is intended to update the information contained in our Annual Report on Form 10-K for the year ended December 31, 2022 filed with the Securities and Exchange Commission on March 31, 2023 (the “Form 10-K”) and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other information contained in such Form 10-K. The following discussion and analysis also should be read together with our financial statements and the notes to the financial statements included elsewhere in this Form 10-Q.

The following discussion contains certain statements that may be deemed “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of places in this Report, including, without limitation, “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” These statements are not guaranteed of future performance and involve risks, uncertainties and requirements that are difficult to predict or are beyond our control. Forward-looking statements speak only as of the date of this quarterly report. You should not put undue reliance on any forward-looking statements. We strongly encourage investors to carefully read the factors described in our Form 10-K in the section entitled “Risk Factors” for a description of certain risks that could, among other things, cause actual results to differ from these forward-looking statements. We assume no responsibility to update the forward-looking statements contained in this quarterly report on Form 10-Q. The following should also be read in conjunction with the unaudited Financial Statements and notes thereto that appear elsewhere in this report.

Overview

Fortune Valley Treasures, Inc. (the “Company,” “we,” “our” or “us”) was incorporated in the State of Nevada on March 21, 2014. We were initially incorporated to offer users with up-to-date information on digital currencies. We engage in the food supply chain operations and management through a service platform. Through various acquisitions of high-quality upstream and downstream companies in the industry, the Company creates a complete industrial chain to reduce costs and enhance competitiveness. The company mainly focuses on online and offline sales targeting regional wholesalers, retailers, supermarkets and major food and beverage (“F&B”) chains.

During the six months ended June 30, 2023, the Company conducted its business in one revenue stream: product sales – liquor, water, water purifier and other F&B products.

Results of Operations

Three months ended June 30, 2023 and 2022

	Three months ended June 30,
	2023			2022			Change
Net revenues	$	1,272,597		$	2,336,459		$	(1,063,862	)
Cost of revenues		(652,798	)		(1,099,523	)		446,725
Gross profit		619,799			1,236,936			(617,137	)
Operating expense		(1,040,588	)		(363,586	)		(677,002	)
Other income		6,436			1,995			4,441
Interest income		16			16			-
Interest expense		(8,964	)		(4,864	)		(4,100	)
Income taxes		(21,528	)		(81,514	)		59,986
Net income (loss)		(444,829	)		788,983			(1,233,812	)
Net income (loss) attributable to noncontrolling interests		(58,004	)		41,250			(99,254	)
Net income (loss) attributable to Fortune Valley Treasures, Inc.	$	(386,825	)	$	747,733		$	(1,134,558	)

Six months ended June 30, 2023 and 2022

	Six months ended June 30,
	2023			2022			Change
Net revenues	$	2,907,886		$	3,598,269		$	(690,383	)
Cost of revenues		(1,330,165	)		(1,617,985	)		287,820
Gross profit		1,577,721			1,980,284			(402,563	)
Operating expense		(2,005,225	)		(909,027	)		(1,096,198	)
Other income		8,210			8,202			8
Interest income		47			93			(46	)
Interest expense		(18,256	)		(10,689	)		(7,567	)
Income taxes		(96,502	)		(103,921	)		7,419
Net income (loss)		(534,005	)		964,942			(1,498,947	)
Net income (loss) attributable to noncontrolling interests		(58,361	)		68,533			(126,894	)
Net income (loss) attributable to Fortune Valley Treasures, Inc.	$	(475,644	)	$	896,409		$	(1,372,053	)

Net Revenues

Net revenues were $1,272,597 for the three months ended June 30, 2023, reflecting a decrease of $1,063,862, or 46%, from $2,336,459 for the three months ended June 30, 2022. The decrease in net revenues was mainly due to the lower product sales volume than the same period of the prior year and to a lesser extent, the lower unit sales prices of wine products. The decrease in product sales was resulted from a decline in market demand resulting from the sluggish economic environment and slow recovery in China’s economy as compared to the same period of the prior year. And in order to attract new customers, the Company has lowered the unit sales prices of wine products beginning in April 2023.

Net revenues were $2,907,886 for the six months ended June 30, 2023, reflecting a decrease of $690,383, or 19%, from $3,598,269 for the six months ended June 30, 2022. The decrease in net revenues was mainly due to the lower product sales volume than the same period of the prior year and to a lesser extent, the lower unit sales prices of wine products. The decrease in product sales reflected a decline in market demand resulting from the sluggish economic environment and slow recovery in China’s economy as compared to the same period of the prior year. And in order to attract new customers, the Company has lowered the unit sales prices of wine products since April 2023.

Cost of Revenues

Cost of revenues was $652,798 for the three months ended June 30, 2023, reflecting a decrease of $446,725, or 41%, from $1,099,523 for the three months ended June 30, 2022. The decrease in cost of revenues was due to the lower product sales volume in line with our revenue decrease.

Cost of revenues was $1,330,165 for the six months ended June 30, 2023, reflecting a decrease of $287,820, or 18%, from $1,617,985 for the six months ended June 30, 2022. The decrease in cost of revenues was due to the lower product sales volume in line with our revenue decrease.

Gross Profit

Gross profit was $619,799 and $1,236,936 for the three months ended June 30, 2023 and 2022, respectively, reflecting a decrease of $617,137, or 50%. The decrease in gross profit was due to the decrease in the net revenues.

Gross profit was $1,577,721 and $1,980,284 for the six months ended June 30, 2023 and 2022, respectively, reflecting a decrease of $402,563, or 20%. The decrease in gross profit was due to the decrease in the net revenues.

Operating Expenses

Operating expenses were $1,040,588 for the three months ended June 30, 2023, reflecting an increase of $677,002, or 186%, from $363,586 for the three months ended June 30, 2022. The increase in operating expenses was mainly due to the increase in professional service fees and credit loss expenses.

Operating expenses were $2,005,225 for the six months ended June 30, 2023, reflecting an increase of $1,096,198, or 121%, from $909,027 for the six months ended June 30, 2022. The increase in operating expenses was mainly due to the increase in professional service fees and credit loss expenses.

Net Income (loss)

For the three months ended June 30, 2023, our net loss was $444,829, compared to a net income of $788,983 for the three months ended June 30, 2022. The decrease in net income was a result of the factors described above.

For the six months ended June 30, 2023, our net loss was $534,005, compared to a net income of $964,942 for the six months ended June 30, 2022. The decrease in net income was a result of the factors described above.

Net income (loss) attributable to noncontrolling interests

The Company records net income (loss) attributable to noncontrolling interests in the unaudited condensed consolidated statements of operations for any noncontrolling interests of consolidated subsidiaries.

For the three months ended June 30, 2023 and 2022, the Company recorded a net loss attributable to noncontrolling interests of $58,004 and a net income attributable to noncontrolling interests of $41,250, respectively.

For the six months ended June 30, 2023 and 2022, the Company recorded a net loss attributable to noncontrolling interests of $58,361 and a net income attributable to noncontrolling interests of $68,533, respectively.

Liquidity and Capital Resources

Working Capital

	June 30, 2023		December 31, 2022		Change
Total current assets	$	6,792,105	$	6,871,091	$	(78,986	)
Total current liabilities		2,738,979		2,484,582		254,397
Working capital	$	4,053,126	$	4,386,509	$	(333,383	)

As of June 30, 2023, we had working capital of $4,053,126, as compared to working capital of $4,386,509 as of December 31, 2022. We had total current assets of $6,792,105, consisting of cash and cash equivalents of $75,950, inventories of $76,795, prepayments and other current assets of $1,537,639, accounts receivable of $5,101,721 compared to total current assets of $6,871,091 as of December 31, 2022. The decrease in total current assets was mainly due to the decrease in prepayments and other current assets, inventories and cash and cash equivalents, and offset by the increase in accounts receivable. We had current liabilities of $2,738,979, consisting of operating lease obligations of $125,257, accounts payable of $692,035, accrued liabilities of $553,026, bank and other borrowing - current of $483,233, customer advances of $116,769, income tax payable of $20,116 and due to related parties of $748,543. The increase in total current liabilities was mainly due to the increase in the current portion of bank and other borrowings, and the amount due to related parties.

Our cash and cash equivalents balance decreased to $75,950 as of June 30, 2023, from $165,685 as of December 31, 2022. We estimate the Company currently has sufficient working capital to support its daily operations for the next twelve months, without raising additional capital. The Company is continuing to look for different financing opportunities in order to increase working capital and improve liquidity.

Despite the positive working capital of the Company, no assurance can be given that any future financing, if needed, will be available or, if available, that it will be on terms that are satisfactory to the Company. Even if the Company is able to obtain additional financing, if needed, it may contain undue restrictions on its operations, in the case of debt financing, or cause substantial dilution for its shareholders, in the case of equity financing.

Cash Flows

	Six months ended June 30,
	2023			2022			Change
Cash Flows provided by (used in) Operating Activities	$	(85,816	)	$	17,441		$	(103,257	)
Cash Flows used in Investing Activities		(5,488	)		-			(5,488	)
Cash Flows provided by (used in) Financing Activities		42,802			(49,540	)		92,342
Effect of exchange rate changes		(41,233	)		(5,738	)		(35,495	)
Net Changes in Cash and Cash Equivalents	$	(89,735	)	$	(37,837	)	$	(51,898	)

Cash Flow from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 was $85,816, as compared to the amount of $17,441 provided by operating activities for the six months ended June 30, 2022, reflecting a decrease of $103,257. The cash used in operating activities during the six months ended June 30, 2023 was mainly resulted from the net loss of $534,005, the increase in accounts receivable of $896,403, and offset by the allowance for credit losses of $960,144, depreciation and amortization expense of $124,680, non-cash lease expense of $91,369 and the increase in due to related parties of $111,324 and accrued liabilities of $74,167.

Cash Flow from Investing Activities

Net cash used in investing activities was $5,488 for the six months ended June 30, 2023, compared to net cash used in investing activities of $nil for the six months ended June 30, 2022. The cash used in investing activities during the six months ended June 30, 2023 was mainly for the purchase of a vehicle in April 2023 for daily operating use.

Cash Flow from Financing Activities

Net cash provided by financing activities was $42,802 for the six months ended June 30, 2023, compared to net cash used in financing activities of $49,540 for the six months ended June 30, 2022. The cash provided by financing activities for the six months ended June 30, 2023 was mainly resulted from the net proceeds from bank loans of $113,418, and offset by the net repayments to bank loans of $58,299.

Critical Accounting Policies and Estimates

The discussion and analysis of our financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with the accounting principles generally accepted in the United States. The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported and disclosed in our financial statements and the accompanying notes. Actual results could differ materially from these estimates under different assumptions or conditions. We identified no critical accounting estimates in the current period.

As described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022, we consider our critical accounting policies to be those related to revenue recognition, allowance of doubtful accounts and impairment of intangible assets and goodwill. There have been no material changes to our critical accounting policies as disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2022.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Related Party Transactions

As of June 30, 2023 and December 31, 2022, the Company had accounts receivable from related parties in the amounts of $72,372 and $146,087, prepayments to related parties in the amounts of $1,162,622 and $1,102,861, deposits to related parties in the amounts of $573,584 and $758,445, and accounts payable to related parties in amounts of $107,454 and $80,426, respectively.

As of June 30, 2023 and December 31, 2022, the Company had outstanding payables due to its related parties in the amounts of $748,543 and $565,675, respectively, which mainly consisted of borrowings for working capital purpose. The balances were unsecured, non-interest bearing and due on demand.

During the six months ended June 30, 2023 and 2022, the Company sold products to its related parties in the amounts of $69,598 and $41,495, respectively, purchased goods from its related parties in the amounts of $374,686 and $349,387, and incurred the costs of revenues from related parties in the amounts of $362,096 and $386,380, respectively.

During the six months ended June 30, 2023 and 2022, the rental expenses to related parties were $9,501 and $11,347, respectively.

Our related parties are primarily those who are significantly influenced by the Company based on our common business relationships. Refer to Note 7 to the unaudited condensed consolidated financial statements for additional details regarding the related party transactions.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

As a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, the Company is not required to provide the information under this item.

Item 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. The term “disclosure controls and procedures”, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures also include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Based on this evaluation, our Chief Executive Officer and Chief Financial Officer concluded as of June 30, 2023, that our disclosure controls and procedures were not effective.

The matters involving internal controls and procedures that our management considered to be material weakness under the standards of the Public Company Accounting Oversight Board was lack of well-established procedures to identify, approve and review related party transactions.

Management’s Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) or 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the board of directors (the “Board”), management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States (“GAAP”) and includes those policies and procedures that:

	●	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; and

	●	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.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Because of the inherent limitations of internal control, there is a risk that material misstatements may not be prevented or detected on a timely basis by internal control over financial reporting. However, these inherent limitations are known features of the financial reporting process. Therefore, it is possible to design into the process safeguards to reduce, though not eliminate, this risk.

We carried out an assessment, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our internal controls over financial reporting, as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act, as of June 30, 2023. Management based the assessment on criteria for effective internal control over financial reporting described in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on this assessment, management has concluded that as of June 30, 2023, our internal control over financial reporting was not effective to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting 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:

	●	We have increased our personnel resources and technical accounting expertise within the accounting function and intend to hire one or more additional personnel for the function due to turnover.

	●	We plan to test our updated controls and remediate our deficiencies in the year 2023.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal controls over financial reporting that occurred during the period covered by this Report, which has materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

We know of no material, active or pending legal proceedings against us, nor are we involved as a plaintiff in any material proceedings or pending litigation. There are no proceedings in which any of our directors, officers or affiliates, or any beneficial shareholder are an adverse party or has a material interest adverse to us.

Item 1A. Risk Factors.

Not applicable to a smaller reporting company

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

None.

Item 6. Exhibits

Exhibit No.		Description
31.1		Rule 13(a)-14(a)/15(d)-14(a) Certification of principal executive officer
31.2		Rule 13(a)-14(a)/15(d)-14(a) Certification of principal financial officer
32.1		Section 1350 Certification of principal executive officer
32.2		Section 1350 Certification of principal financial officer and principal accounting officer
101.INS		Inline XBRL Instance Document
101.SCH		Inline XBRL Taxonomy Extension Schema Document
101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

	Fortune Valley Treasures, Inc.

Date: August 14, 2023	By:	/s/ Yumin Lin
		Yumin Lin
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: August 14, 2023	By:	/s/ Kaihong Lin
		Kaihong Lin
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

EXHIBIT 31.1

CERTIFICATION

I, Yumin Lin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fortune Valley Treasures, Inc. (the “Company”) for the quarter ended June 30, 2023;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting or caused such internal control to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 14, 2023
	By:	/s/ Yumin Lin
	Name:	Yumin Lin
	Title:	Chief Executive Officer, President and Secretary (Principal Executive Officer)

EXHIBIT 31.2

CERTIFICATION

I, Kaihong Lin, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Fortune Valley Treasures, Inc. (the “Company”) for the quarter ended June 30, 2023;

	a.	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	b.	Designed such internal control over financial reporting or caused such internal control to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

	c.	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	d.	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

	a.	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	b.	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting

Date: August 14, 2023
	By:	/s/ Kaihong Lin
	Name:	Kaihong Lin
	Title:	Chief Financial Officer and Treasurer (Principal Financial and Accounting Officer)

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Fortune Valley Treasures, Inc. (the “Company”) on Form 10-Q for the period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I hereby certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge and belief:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: August 14, 2023
	By:	/s/ Yumin Lin
	Name:	Yumin Lin
	Title:	Chief Executive Officer, President and Secretary (Principal Executive Officer)

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date: August 14, 2023
	By:	/s/ Kaihong Lin
	Name:	Kaihong Lin
	Title:	Chief Financial Officer and Treasurer
		(Principal Financial and Accounting Officer)

Cover - shares	6 Months Ended
Cover - shares	Jun. 30, 2023	Aug. 14, 2023
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Jun. 30, 2023
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	000-55555
Entity Registrant Name	Fortune Valley Treasures, Inc.
Entity Central Index Key	0001626745
Entity Tax Identification Number	32-0439333
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	B1601 Donogfang Yinxiang Building
Entity Address, Address Line Two	No. 139 Liansheng Road
Entity Address, Address Line Three	Humen Town
Entity Address, City or Town	Dongguan
Entity Address, Country	CN
Entity Address, Postal Zip Code	523000
City Area Code	(86)
Local Phone Number	769-85729133
Title of 12(g) Security	Common stock, par value $0.001 per share
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		15,655,038

Condensed Consolidated Balance Sheets - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Current assets
Cash and cash equivalents	$ 75,950	$ 165,685
Accounts receivable, net (including $72,372 and $146,087 from related parties as of June 30, 2023 and December 31, 2022, respectively)	5,101,721	4,797,564
Inventories	76,795	148,925
Prepayments and other current assets, net (including $1,162,622 and $1,102,861 to related parties as of June 30, 2023 and December 31, 2022, respectively)	1,537,639	1,758,917
Total current assets	6,792,105	6,871,091
Non-current assets
Deposits paid, net (including $573,584 and $758,445 to related parties as of June 30, 2023 and December 31, 2022, respectively)	673,561	1,121,302
Property and equipment, net	112,461	97,890
Intangible assets, net	252,148	370,926
Goodwill	435,562	454,201
Total Assets	8,575,106	9,287,942
Current liabilities
Accounts payable (including $107,454 and $80,426 to related parties as of June 30, 2023 and December 31, 2022, respectively)	692,035	688,822
Accrued liabilities	553,026	502,389
Bank and other borrowings - current	483,233	422,653
Income tax payable	20,116	38,879
Customer advances	116,769	139,334
Total current liabilities	2,738,979	2,484,582
Non-current liabilities
Bank and other borrowings	46,356	58,438
Total Liabilities	2,986,163	2,788,033
Stockholders’ Equity
Common stock (150,000,000 shares authorized, 15,655,038 shares issued and outstanding as of June 30, 2023 and December 31, 2022)	15,655	15,655
Additional paid-in capital	11,061,233	11,061,233
Accumulated deficit and statutory reserves	(4,980,048)	(4,504,404)
Accumulated other comprehensive loss	(516,590)	(180,826)
Total Fortune Valley Treasures, Inc. stockholders’ equity	5,580,250	6,391,658
Noncontrolling interests	8,693	108,251
Total Stockholders’ Equity	5,588,943	6,499,909
Total Liabilities and Stockholders’ Equity	8,575,106	9,287,942
Nonrelated Party [Member]
Non-current assets
Operating lease right-of-use assets	244,027	297,232
Current liabilities
Operating lease obligations - current	112,632	110,201
Non-current liabilities
Operating lease obligations – non-current	155,593	189,957
Related Party [Member]
Non-current assets
Operating lease right-of-use assets	65,242	75,300
Current liabilities
Operating lease obligations - current	12,625	16,629
Due to related parties	748,543	565,675
Non-current liabilities
Operating lease obligations – non-current	$ 45,235	$ 55,056

Condensed Consolidated Balance Sheets (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Deposit paid, related parties	$ 573,584	$ 758,445
Common stock, shares authorized	150,000,000	150,000,000
Common stock, shares issued	15,655,038	15,655,038
Common stock, shares outstanding	15,655,038	15,655,038
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Accounts receivable	$ 72,372	$ 146,087
Prepayments and other current assets, net	1,162,622	1,102,861
Accounts payable	$ 107,454	$ 80,426

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Income Statement [Abstract]
Net revenues (including $42,848 and $40,770 from related parties for the three months ended June 30, 2023 and 2022, respectively; $69,598 and $41,495 from related parties for the six months ended June 30, 2023 and 2022, respectively)	$ 1,272,597	$ 2,336,459	$ 2,907,886	$ 3,598,269
Cost of revenues (including $133,114 and $249,468 from related parties for the three months ended June 30, 2023 and 2022, respectively; $362,096 and $386,380 from related parties for the six months ended June 30, 2023 and 2022, respectively)	652,798	1,099,523	1,330,165	1,617,985
Gross profit	619,799	1,236,936	1,577,721	1,980,284
Operating expenses:
Selling and distribution expenses	13,016	15,929	26,258	34,084
General and administrative expenses	1,027,572	347,657	1,978,967	874,943
Operating income (loss)	(420,789)	873,350	(427,504)	1,071,257
Other income (expense):
Other income	6,436	1,995	8,210	8,202
Interest income	16	16	47	93
Interest expense	(8,964)	(4,864)	(18,256)	(10,689)
Other expense, net	(2,512)	(2,853)	(9,999)	(2,394)
Income (loss) before income tax	(423,301)	870,497	(437,503)	1,068,863
Income tax expense	21,528	81,514	96,502	103,921
Net income (loss)	(444,829)	788,983	(534,005)	964,942
Less: Net income (loss) attributable to noncontrolling interests	(58,004)	41,250	(58,361)	68,533
Net income (loss) attributable to Fortune Valley Treasures, Inc.	(386,825)	747,733	(475,644)	896,409
Other comprehensive income:
Foreign currency translation loss	(422,433)	(602,321)	(376,961)	(591,601)
Total comprehensive income (loss)	(867,262)	186,662	(910,966)	373,341
Less: comprehensive income (loss) attributable to noncontrolling interests	(99,383)	(4,305)	(99,558)	24,726
Comprehensive income (loss) attributable to Fortune Valley Treasures, Inc.	$ (767,879)	$ 190,967	$ (811,408)	$ 348,615
Earnings (loss) per share
Basic earnings (loss) per share	$ (0.02)	$ 0.05	$ (0.03)	$ 0.06
Diluted earnings (loss) per share	$ (0.02)	$ 0.05	$ (0.03)	$ 0.06
Basic weighted average shares outstanding	15,655,038	15,655,038	15,655,038	15,655,038
Diluted weighted average shares outstanding	15,655,038	15,655,038	15,655,038	15,655,038

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Defined Benefit Plan Disclosure [Line Items]
Revenue from related parties	$ 1,272,597	$ 2,336,459	$ 2,907,886	$ 3,598,269
Cost of revenue from related parties	133,114	249,468	362,096	386,380
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Revenue from related parties	$ 42,848	$ 40,770	$ 69,598	$ 41,495

Condensed Consolidated Statements of Changes in Stockholders' Equity (Unaudited) - USD ($)	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Noncontrolling Interest [Member]	Total
Balance at Dec. 31, 2021	$ 15,655	$ 11,061,233	$ 544,305	$ (2,561,681)	$ 404,842	$ 9,464,354
Balance, shares at Dec. 31, 2021	15,655,038
Net income (loss)				148,676	27,283	175,959
Foreign currency translation adjustment			8,972		1,748	10,720
Balance at Mar. 31, 2022	$ 15,655	11,061,233	553,277	(2,413,005)	433,873	9,651,033
Balance, shares at Mar. 31, 2022	15,655,038
Balance at Dec. 31, 2021	$ 15,655	11,061,233	544,305	(2,561,681)	404,842	9,464,354
Balance, shares at Dec. 31, 2021	15,655,038
Net income (loss)						964,942
Foreign currency translation adjustment						(591,601)
Balance at Jun. 30, 2022	$ 15,655	11,061,233	(3,489)	(1,665,272)	429,568	9,837,695
Balance, shares at Jun. 30, 2022	15,655,038
Balance at Mar. 31, 2022	$ 15,655	11,061,233	553,277	(2,413,005)	433,873	9,651,033
Balance, shares at Mar. 31, 2022	15,655,038
Net income (loss)				747,733	41,250	788,983
Foreign currency translation adjustment			(556,766)		(45,555)	(602,321)
Balance at Jun. 30, 2022	$ 15,655	11,061,233	(3,489)	(1,665,272)	429,568	9,837,695
Balance, shares at Jun. 30, 2022	15,655,038
Balance at Dec. 31, 2022	$ 15,655	11,061,233	(180,826)	(4,504,404)	108,251	6,499,909
Balance, shares at Dec. 31, 2022	15,655,038
Net income (loss)				(88,819)	(357)	(89,176)
Foreign currency translation adjustment			45,290		182	45,472
Balance at Mar. 31, 2023	$ 15,655	11,061,233	(135,536)	(4,593,223)	108,076	6,456,205
Balance, shares at Mar. 31, 2023	15,655,038
Balance at Dec. 31, 2022	$ 15,655	11,061,233	(180,826)	(4,504,404)	108,251	6,499,909
Balance, shares at Dec. 31, 2022	15,655,038
Net income (loss)						(534,005)
Foreign currency translation adjustment						(376,961)
Balance at Jun. 30, 2023	$ 15,655	11,061,233	(516,590)	(4,980,048)	8,693	5,588,943
Balance, shares at Jun. 30, 2023	15,655,038
Balance at Mar. 31, 2023	$ 15,655	11,061,233	(135,536)	(4,593,223)	108,076	6,456,205
Balance, shares at Mar. 31, 2023	15,655,038
Net income (loss)				(386,825)	(58,004)	(444,829)
Foreign currency translation adjustment			(381,054)		(41,379)	(422,433)
Balance at Jun. 30, 2023	$ 15,655	$ 11,061,233	$ (516,590)	$ (4,980,048)	$ 8,693	$ 5,588,943
Balance, shares at Jun. 30, 2023	15,655,038

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Cash flows from operating activities
Net income (loss)	$ (534,005)	$ 964,942
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization expense	124,680	433,417
Non-cash lease expense	91,369	85,628
Allowance for credit losses	960,144
Loss on disposal of intangible asset	1,855
Changes in operating assets and liabilities
Accounts receivable, net	(896,403)	(185,856)
Inventories	68,723	(64,826)
Prepayments and other current assets, net	232	(385,553)
Due from related parties		25,887
Deposits paid, net	(12,080)	(583,325)
Accounts payable	32,763	(37,455)
Due to related parties	111,324	(122,702)
Customer advances	(17,538)	(110,633)
Accrued liabilities	74,167	56,060
Income tax payable	(17,871)	19,354
Operating lease obligations	(73,176)	(77,497)
Net cash provided by (used in) operating activities	(85,816)	17,441
Cash flows from investing activities
Acquisition of property and equipment	(4,786)
Acquisition of intangible asset	(702)
Net cash used in investing activities	(5,488)
Cash flows from financing activities
Borrowings from and repayments to revolving credit lines, net	7,224	148,606
Borrowings from bank loans	113,418	10,352
Borrowings from a third party		24,154
Repayments to related parties		(154,510)
Repayments to bank loans	(58,299)	(11,763)
Repayments to a third party	(19,541)	(66,379)
Net cash provided by (used in) financing activities	42,802	(49,540)
Effect of exchange rate changes on cash and cash equivalents	(41,233)	(5,738)
Net changes in cash and cash equivalents	(89,735)	(37,837)
Cash and cash equivalents–beginning of the period	165,685	123,163
Cash and cash equivalents–end of the period	75,950	85,326
Supplementary cash flow information:
Interest paid	18,378	10,191
Income taxes paid	152,140	86,546
Non-cash investing and financing activities
Expenses paid by related parties on behalf of the Company		38,627
Operating lease right-of-use assets obtained in exchange for operating lease obligations	39,797
Liabilities assumed in connection with purchase of property and equipment	$ 28,234

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 - ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of presentation

Basis of consolidation

As of June 30, 2023, details of the Company’s major subsidiaries were as follows:

Entity Name	Date of Incorporation	Parent Entity	Nature of Operation	Place of Incorporation
DIGLS	July 4, 2016	FVTI	Investment holding	Republic of Seychelles
DILHK	June 22, 2016	DIGLS	Investment holding	Hong Kong, PRC
QHDX	November 3, 2016	DILHK	Investment holding	PRC
FVTL	May 31, 2011	QHDX	Trading of food and platform	PRC
JJGS	August 17, 2017	FVTI	Investment holding	Republic of Seychelles
JJHK	August 24, 2017	JJGS	Investment holding	Hong Kong, PRC
JJSZ	November 16, 2018	JJHK	Trading of food	PRC
Xixingdao	August 28, 2019	QHDX	Drinking water distribution and delivery	PRC
Dongguan City Fu La Tu Trade Ltd (“FLTT”)	September 27, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Gu Trade Ltd (“FXGT”)	December 2, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Technology Ltd (“FXTL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”)	December 21, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Jing Technology Ltd (“FJTL”)	November 17, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xiang Technology Ltd (“FGTL”)	November 16, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”)	November 9, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Lai Food Ltd (“FLFL”)	September 27, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Yi Beverage Ltd (“FYBL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”)	March 17, 2021	Xixingdao	Drinking water distribution and delivery, sales of alcoholic beverages and water purifier	PRC
Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”)	June 7, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Li Trading Ltd (“FLTL”)	September 10, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”)	September 13, 2021	QHDX	Trading of alcoholic beverages	PRC
Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Chang Fu Trading Ltd (“CFTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City La Tong Trading Ltd (“LTTL”)	August 8, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Kai Fu Trading Ltd (“KFTL”)	September 8, 2022	FVTL	Trading of alcoholic beverages	PRC

Use of estimates

Foreign currency translation and re-measurement

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows:

	●	Monetary assets and liabilities at exchange rates in effect at the end of each period
	●	Nonmonetary assets and liabilities at historical rates
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

	●	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	●	Equities at the historical rate
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

	2023		2022
	As of and for the six months ended June 30,
	2023		2022
Period-end RMB:US$1 exchange rate		0.13880		0.14927
Period-average RMB:US$1 exchange rate		0.14448		0.15451

Impairment of long-lived assets other than goodwill

The Company did not recognize any impairment of long-lived assets during the six months ended June 30, 2023 and 2022.

Goodwill

During the six months ended June 30, 2023 and 2022, the Company did not record any impairment of goodwill.

Revenue recognition

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

	1.	Identify the contract(s) with a customer;
	2.	Identify the performance obligations in the contract;
	3.	Determine the transaction price;
	4.	Allocate the transaction price to the performance obligations in the contract; and
	5.	Recognize revenue when (or as) the entity satisfies a performance obligation.

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

SCHEDULE OF DISAGGREGATION REVENUE

	2023		2022		2023		2022
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sales of liquor	$	878,952	$	1,203,484	$	1,782,672	$	1,833,946
Sales of water		213,582		808,648		633,202		1,338,092
Sales of water purifier		114,714		310,807		367,837		395,548
Others		65,349		13,520		124,175		30,683
Total	$	1,272,597	$	2,336,459	$	2,907,886	$	3,598,269

Contract liabilities

Related party transaction

Recently adopted accounting pronouncements

ACCOUNTS RECEIVABLE, NET

6 Months Ended

Jun. 30, 2023

Credit Loss [Abstract]

ACCOUNTS RECEIVABLE, NET

NOTE 2 – ACCOUNTS RECEIVABLE, NET

Accounts receivable consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF ACCOUNTS RECEIVABLE

	June 30, 2023			December 31, 2022
Accounts receivable (including $73,096 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	5,461,870		$	4,797,564
Less: Doubtful allowance (including $724 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)		(360,149	)		-
Accounts receivable, net	$	5,101,721		$	4,797,564

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	-		$	-
Additions to allowance		374,894			-
Foreign currency translation adjustment		(14,745	)		-
Ending balance	$	360,149		$	-

PREPAYMENTS AND OTHER CURRENT ASSETS, NET

6 Months Ended

Jun. 30, 2023

Prepayments And Other Current Assets Net

PREPAYMENTS AND OTHER CURRENT ASSETS, NET

NOTE 3 – PREPAYMENTS AND OTHER CURRENT ASSETS, NET

Prepayments and other current assets consisted of the following as of June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Prepayments (including $2,394,062 and $2,255,288 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,875,927		$	3,001,866
Other current assets		6,995			4,631
Total prepayments and other current assets		2,882,922			3,006,497
Less: Allowance for doubtful accounts (including $1,231,440 and $1,152,427 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,345,283	)		(1,247,580	)
Prepayments and other current assets, net	$	1,537,639		$	1,758,917

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

Allowance for doubtful accounts movements is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,247,580		$	-
Additions to allowance		154,985			1,284,005
Foreign currency translation adjustment		(57,282	)		(36,425	)
Ending balance	$	1,345,283		$	1,247,580

DEPOSITS PAID, NET

6 Months Ended

Jun. 30, 2023

Deposits Paid Net

DEPOSITS PAID, NET

NOTE 4 – DEPOSITS PAID, NET

Deposits paid consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF DEPOSITS PAID

	June 30, 2023			December 31, 2022
Deposits paid (including $1,573,209 and $1,628,511 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,280,196		$	2,365,652
Less: Allowance for doubtful accounts (including $999,625 and $870,066 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,606,635	)		(1,244,350	)
Deposits paid, net	$	673,561		$	1,121,302

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,244,350		$	-
Additions to allowance		430,265			1,280,681
Foreign currency translation adjustment		(67,980	)		(36,331	)
Ending balance	$	1,606,635		$	1,244,350

PROPERTY AND EQUIPMENT, NET

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT, NET

NOTE 5 – PROPERTY AND EQUIPMENT, NET

Property and equipment consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30, 2023			December 31, 2022
Office equipment	$	116,520		$	116,520
Leasehold improvement		126,386			126,386
Vehicle		31,910			-
Property and equipment		274,816			242,906
Less: Accumulated depreciation		(162,355	)		(145,016	)
Property and equipment, net	$	112,461		$	97,890

Depreciation expense, which was included in general and administrative expenses, for the six months ended June 30, 2023 and 2022 was $18,046 and $15,647, respectively.

INTANGIBLE ASSETS, NET

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

INTANGIBLE ASSETS, NET

NOTE 6 – INTANGIBLE ASSETS, NET

Intangible assets and related accumulated amortization were as follows:

SCHEDULE OF INTANGIBLE ASSETS

	June 30, 2023			December 31, 2022
Distribution channel	$	2,989,709		$	3,117,635
Others		25,553			27,809
Total intangible assets		3,015,262			3,145,444
Less: Accumulated amortization		(1,850,517	)		(1,822,875	)
Less: Accumulated impairment		(912,597	)		(951,643	)
Intangible assets, net	$	252,148		$	370,926

Amortization expense for the six months ended June 30, 2023 and 2022 was $106,634 and $417,770, respectively, included in cost of revenues and general and administrative expenses.

As of June 30, 2023, the future estimated amortization costs for intangible assets are as follows:


Year ending December 31,
2023 (remaining)	$	102,773
2024		138,256
2025		5,010
2026		5,010
2027		1,099
Total	$	252,148

RELATED PARTY TRANSACTIONS

6 Months Ended

Jun. 30, 2023

RELATED PARTY TRANSACTIONS

NOTE 7 - RELATED PARTY TRANSACTIONS

Amounts due to related parties as of June 30, 2023 and December 31, 2022 are as follows:

		June 30, 2023		December 31, 2022
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder	$	517,426	$	389,051
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		1,287		508
Mr. Huagen Li	Manager of a subsidiary		2,221		2,316
Mr. Guodong Jia	Manager of a subsidiary		4,462		2,342
Mr. Hongwei Ye	Manager of a subsidiary, Shareholder		15		16
Mr. Anping Chen	Manager of a subsidiary		5,424		1,290
Mr. Jiangwei Jia	Manager of a subsidiary		6,497		3,678
Mr. Yuwen Li	Vice President		69,925		64,924
Ms. Lihua Li	Manager of a subsidiary		3,376		-
Shenzhen DaXingHuaShang Industrial Group Ltd. (fka Shenzhen DaXingHuaShang Industry Development Ltd.)	Mr. Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industrial Group Ltd.		83,279		86,842
Ms. Chunxiang Zhang	Manager of a subsidiary		3,168		998
Mr. Meng Xue	Manager of a subsidiary		7,359		5,449
Ms. Shuqin Chen	Manager of a subsidiary		5,400		1,358
Mr. Zhipeng Zuo	Manager of a subsidiary		16,762		59
Mr. Deqin Ke	Manager of a subsidiary		-		724
Mr. Aisheng Zhang	Manager of a subsidiary		15,982		2,320
Mr. Zhihua Liao	Manager of a subsidiary		5,960		3,800
		$	748,543	$	565,675

Revenues generated from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Mr. Kaihong Lin	Chief Financial Officer and Treasurer	$	278	$	652
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder		-		438
Mr. Zihao Ye	Manager of a subsidiary		-		262
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		14		-
Dongguan Huanhai Trading Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan Huanhai Trading Co., Ltd.		10,886		13,553
Guangdong Yuexin Jiaotong Construction Co., Ltd.	Mr. Naiyong Luo, a manager of a subsidiary, is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd.		10,578		7,581
Dongguan City Hualianguan Chemical Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan City Hualianguan Chemical Co., Ltd.		14,808		19,009
Dongguan Humen Shuiyan Drinking Water Store	Ms. Shuiyan Li, a shareholder of the Company, is the controlling shareholder of Dongguan Humen Shuiyan Drinking Water Store		33,034		-
Revenues generated from related parties		$	69,598	$	41,495

Cost of revenues from related parties during the six months ended June 30, 2023 and 2022 is as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	57,509	$	15,899
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		23,614		43,759
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		23,433		33,836
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		2,934		1,475
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		52,324		34,519
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,704		64,639
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,355		64,565
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		11,473		16,312
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		111,376
Cost of revenues from related parties		$	362,096	$	386,380

Purchases from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	61,259	$	19,406
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		25,221		56,842
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		25,416		37,266
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		3,124		1,659
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		55,999		33,634
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,965		66,220
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,430		69,407
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		12,522		16,374
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		48,579
Purchase from related party		$	374,686	$	349,387

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

Mr. 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.

Also see Note 2, 3, 4, 9 and 10 for more transactions with related parties.

INCOME TAXES

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

INCOME TAXES

NOTE 8 - INCOME TAXES

United States of America

The Company is registered in the State of Nevada and is subject to United States of America tax law. The U.S. federal income tax rate is 21%.

Seychelles

Hong Kong

The PRC

The components of the income tax provision are as follows:


	Six months ended June 30,
	2023		2022
Current:
– United States of America	$	41,444	$	45,562
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		55,058		58,359
Current income tax expense
Deferred
– United States of America		-		-
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		-		-
Deferred income tax expense
Total	$	96,502	$	103,921

The effective tax rate was -22.1% and 9.7% for the six months ended June 30, 2023 and 2022, respectively.

OPERATING LEASES

6 Months Ended

Jun. 30, 2023

Operating Leases

OPERATING LEASES

NOTE 9 - OPERATING LEASES

The components of lease expense and supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 are as follows:


Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations)	Six months ended June 30,
	2023		2022

Related parties	$	9,501	$	11,347
Non-related parties		63,683		74,009
Total	$	73,184	$	85,356
Operating Lease Cost	$	73,184	$	85,356

Other information for the six months ended	June 30, 2023			June 30, 2022
Cash paid for amounts included in the measurement of lease obligations	$	77,612		$	78,215
Weighted average remaining lease term (in years)		2.72			3.55
Weighted average discount rate		3.23	%		3.23	%

Maturities of the Company’s lease obligations as of June 30, 2023 are as follows:

Year ending December 31,
2023 (remaining)	$	65,998
2024		121,342
2025		103,943
2026		40,951
2027		5,552
Total lease payment		337,786
Less: Imputed interest		(11,701	)
Operating lease obligations	$	326,085

BANK AND OTHER BORROWINGS

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

BANK AND OTHER BORROWINGS

NOTE 10 – BANK AND OTHER BORROWINGS

The balance of the loans borrowed as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
Loans from a trust in PRC	$	38,810	$	60,049
China Construction Bank		336,585		276,447
WeBank		81,488		77,220
Guangdong Nanyue Bank		44,207		67,375
Bank of Ningbo		28,499		-
Aggregate outstanding principal balances		529,589		481,091
Less: current portion		483,233		422,653
Non-current portion	$	46,356	$	58,438

The total interest expense was $18,256 and $10,689 for the six months ended June 30, 2023 and 2022, respectively.

Future minimum loan payments as of June 30, 2023 are as follows:


Year ending December 31,
2023 (remaining)	$	210,155
2024		293,951
2025		12,826
2026		5,425
2027		5,425
Thereafter		1,807
Total	$	529,589

SUBSEQUENT EVENTS

6 Months Ended

Jun. 30, 2023

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 11 - SUBSEQUENT EVENTS

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

Basis of presentation

Basis of consolidation

As of June 30, 2023, details of the Company’s major subsidiaries were as follows:

Entity Name	Date of Incorporation	Parent Entity	Nature of Operation	Place of Incorporation
DIGLS	July 4, 2016	FVTI	Investment holding	Republic of Seychelles
DILHK	June 22, 2016	DIGLS	Investment holding	Hong Kong, PRC
QHDX	November 3, 2016	DILHK	Investment holding	PRC
FVTL	May 31, 2011	QHDX	Trading of food and platform	PRC
JJGS	August 17, 2017	FVTI	Investment holding	Republic of Seychelles
JJHK	August 24, 2017	JJGS	Investment holding	Hong Kong, PRC
JJSZ	November 16, 2018	JJHK	Trading of food	PRC
Xixingdao	August 28, 2019	QHDX	Drinking water distribution and delivery	PRC
Dongguan City Fu La Tu Trade Ltd (“FLTT”)	September 27, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Gu Trade Ltd (“FXGT”)	December 2, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Technology Ltd (“FXTL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”)	December 21, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Jing Technology Ltd (“FJTL”)	November 17, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xiang Technology Ltd (“FGTL”)	November 16, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”)	November 9, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Lai Food Ltd (“FLFL”)	September 27, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Yi Beverage Ltd (“FYBL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”)	March 17, 2021	Xixingdao	Drinking water distribution and delivery, sales of alcoholic beverages and water purifier	PRC
Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”)	June 7, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Li Trading Ltd (“FLTL”)	September 10, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”)	September 13, 2021	QHDX	Trading of alcoholic beverages	PRC
Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Chang Fu Trading Ltd (“CFTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City La Tong Trading Ltd (“LTTL”)	August 8, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Kai Fu Trading Ltd (“KFTL”)	September 8, 2022	FVTL	Trading of alcoholic beverages	PRC

Use of estimates

Foreign currency translation and re-measurement

The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “Foreign Currency Matters”.

The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows:

	●	Monetary assets and liabilities at exchange rates in effect at the end of each period
	●	Nonmonetary assets and liabilities at historical rates
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows:

	●	Assets and liabilities at the rate of exchange in effect at the balance sheet date
	●	Equities at the historical rate
	●	Revenue and expense items at the average rate of exchange prevailing during the period

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

	2023		2022
	As of and for the six months ended June 30,
	2023		2022
Period-end RMB:US$1 exchange rate		0.13880		0.14927
Period-average RMB:US$1 exchange rate		0.14448		0.15451

Impairment of long-lived assets other than goodwill

The Company did not recognize any impairment of long-lived assets during the six months ended June 30, 2023 and 2022.

Goodwill

During the six months ended June 30, 2023 and 2022, the Company did not record any impairment of goodwill.

Revenue recognition

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

	1.	Identify the contract(s) with a customer;
	2.	Identify the performance obligations in the contract;
	3.	Determine the transaction price;
	4.	Allocate the transaction price to the performance obligations in the contract; and
	5.	Recognize revenue when (or as) the entity satisfies a performance obligation.

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

SCHEDULE OF DISAGGREGATION REVENUE

	2023		2022		2023		2022
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sales of liquor	$	878,952	$	1,203,484	$	1,782,672	$	1,833,946
Sales of water		213,582		808,648		633,202		1,338,092
Sales of water purifier		114,714		310,807		367,837		395,548
Others		65,349		13,520		124,175		30,683
Total	$	1,272,597	$	2,336,459	$	2,907,886	$	3,598,269

Contract liabilities

Related party transaction

Recently adopted accounting pronouncements

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

6 Months Ended

Jun. 30, 2023

Accounting Policies [Abstract]

SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES

As of June 30, 2023, details of the Company’s major subsidiaries were as follows:

Entity Name	Date of Incorporation	Parent Entity	Nature of Operation	Place of Incorporation
DIGLS	July 4, 2016	FVTI	Investment holding	Republic of Seychelles
DILHK	June 22, 2016	DIGLS	Investment holding	Hong Kong, PRC
QHDX	November 3, 2016	DILHK	Investment holding	PRC
FVTL	May 31, 2011	QHDX	Trading of food and platform	PRC
JJGS	August 17, 2017	FVTI	Investment holding	Republic of Seychelles
JJHK	August 24, 2017	JJGS	Investment holding	Hong Kong, PRC
JJSZ	November 16, 2018	JJHK	Trading of food	PRC
Xixingdao	August 28, 2019	QHDX	Drinking water distribution and delivery	PRC
Dongguan City Fu La Tu Trade Ltd (“FLTT”)	September 27, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Gu Trade Ltd (“FXGT”)	December 2, 2020	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Fu Xin Technology Ltd (“FXTL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”)	December 21, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Jing Technology Ltd (“FJTL”)	November 17, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xiang Technology Ltd (“FGTL”)	November 16, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”)	November 9, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Lai Food Ltd (“FLFL”)	September 27, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Yi Beverage Ltd (“FYBL”)	November 12, 2020	Xixingdao	Drinking water distribution and delivery	PRC
Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”)	March 17, 2021	Xixingdao	Drinking water distribution and delivery, sales of alcoholic beverages and water purifier	PRC
Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”)	March 29, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”)	June 7, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Dongguan City Fu Li Trading Ltd (“FLTL”)	September 10, 2021	Xixingdao	Drinking water distribution and delivery, sales of water purifier	PRC
Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”)	September 13, 2021	QHDX	Trading of alcoholic beverages	PRC
Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Chang Fu Trading Ltd (“CFTL”)	September 9, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City La Tong Trading Ltd (“LTTL”)	August 8, 2022	FVTL	Trading of alcoholic beverages	PRC
Dongguan City Kai Fu Trading Ltd (“KFTL”)	September 8, 2022	FVTL	Trading of alcoholic beverages	PRC

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION

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

	2023		2022
	As of and for the six months ended June 30,
	2023		2022
Period-end RMB:US$1 exchange rate		0.13880		0.14927
Period-average RMB:US$1 exchange rate		0.14448		0.15451

SCHEDULE OF DISAGGREGATION REVENUE

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

SCHEDULE OF DISAGGREGATION REVENUE

	2023		2022		2023		2022
	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022
Sales of liquor	$	878,952	$	1,203,484	$	1,782,672	$	1,833,946
Sales of water		213,582		808,648		633,202		1,338,092
Sales of water purifier		114,714		310,807		367,837		395,548
Others		65,349		13,520		124,175		30,683
Total	$	1,272,597	$	2,336,459	$	2,907,886	$	3,598,269

ACCOUNTS RECEIVABLE, NET (Tables)

6 Months Ended

Jun. 30, 2023

Credit Loss [Abstract]

SCHEDULE OF ACCOUNTS RECEIVABLE

Accounts receivable consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF ACCOUNTS RECEIVABLE

	June 30, 2023			December 31, 2022
Accounts receivable (including $73,096 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	5,461,870		$	4,797,564
Less: Doubtful allowance (including $724 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)		(360,149	)		-
Accounts receivable, net	$	5,101,721		$	4,797,564

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	-		$	-
Additions to allowance		374,894			-
Foreign currency translation adjustment		(14,745	)		-
Ending balance	$	360,149		$	-

PREPAYMENTS AND OTHER CURRENT ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2023

Prepayments And Other Current Assets Net

SCHEDULE OF PREPAYMENT AND OTHER CURRENT ASSETS

Prepayments and other current assets consisted of the following as of June 30, 2023 and December 31, 2022:

	June 30, 2023			December 31, 2022
Prepayments (including $2,394,062 and $2,255,288 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,875,927		$	3,001,866
Other current assets		6,995			4,631
Total prepayments and other current assets		2,882,922			3,006,497
Less: Allowance for doubtful accounts (including $1,231,440 and $1,152,427 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,345,283	)		(1,247,580	)
Prepayments and other current assets, net	$	1,537,639		$	1,758,917

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS

Allowance for doubtful accounts movements is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,247,580		$	-
Additions to allowance		154,985			1,284,005
Foreign currency translation adjustment		(57,282	)		(36,425	)
Ending balance	$	1,345,283		$	1,247,580

DEPOSITS PAID, NET (Tables)

6 Months Ended

Jun. 30, 2023

Deposits Paid Net

SCHEDULE OF DEPOSITS PAID

Deposits paid consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF DEPOSITS PAID

	June 30, 2023			December 31, 2022
Deposits paid (including $1,573,209 and $1,628,511 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$	2,280,196		$	2,365,652
Less: Allowance for doubtful accounts (including $999,625 and $870,066 to related parties as of June 30, 2023 and December 31, 2022, respectively)		(1,606,635	)		(1,244,350	)
Deposits paid, net	$	673,561		$	1,121,302

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF DEPOSITS PAID

Allowance for doubtful accounts movement is as follows:

	June 30, 2023			December 31, 2022
Beginning balance	$	1,244,350		$	-
Additions to allowance		430,265			1,280,681
Foreign currency translation adjustment		(67,980	)		(36,331	)
Ending balance	$	1,606,635		$	1,244,350

PROPERTY AND EQUIPMENT, NET (Tables)

6 Months Ended

Jun. 30, 2023

Property, Plant and Equipment [Abstract]

SCHEDULE OF PROPERTY AND EQUIPMENT

Property and equipment consisted of the following as of June 30, 2023 and December 31, 2022:

SCHEDULE OF PROPERTY AND EQUIPMENT

	June 30, 2023			December 31, 2022
Office equipment	$	116,520		$	116,520
Leasehold improvement		126,386			126,386
Vehicle		31,910			-
Property and equipment		274,816			242,906
Less: Accumulated depreciation		(162,355	)		(145,016	)
Property and equipment, net	$	112,461		$	97,890

INTANGIBLE ASSETS, NET (Tables)

6 Months Ended

Jun. 30, 2023

Goodwill and Intangible Assets Disclosure [Abstract]

SCHEDULE OF INTANGIBLE ASSETS

Intangible assets and related accumulated amortization were as follows:

SCHEDULE OF INTANGIBLE ASSETS

	June 30, 2023			December 31, 2022
Distribution channel	$	2,989,709		$	3,117,635
Others		25,553			27,809
Total intangible assets		3,015,262			3,145,444
Less: Accumulated amortization		(1,850,517	)		(1,822,875	)
Less: Accumulated impairment		(912,597	)		(951,643	)
Intangible assets, net	$	252,148		$	370,926

SCHEDULE OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS

As of June 30, 2023, the future estimated amortization costs for intangible assets are as follows:


Year ending December 31,
2023 (remaining)	$	102,773
2024		138,256
2025		5,010
2026		5,010
2027		1,099
Total	$	252,148

RELATED PARTY TRANSACTIONS (Tables)

6 Months Ended

Jun. 30, 2023

SCHEDULE OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES

Amounts due to related parties as of June 30, 2023 and December 31, 2022 are as follows:

		June 30, 2023		December 31, 2022
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder	$	517,426	$	389,051
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		1,287		508
Mr. Huagen Li	Manager of a subsidiary		2,221		2,316
Mr. Guodong Jia	Manager of a subsidiary		4,462		2,342
Mr. Hongwei Ye	Manager of a subsidiary, Shareholder		15		16
Mr. Anping Chen	Manager of a subsidiary		5,424		1,290
Mr. Jiangwei Jia	Manager of a subsidiary		6,497		3,678
Mr. Yuwen Li	Vice President		69,925		64,924
Ms. Lihua Li	Manager of a subsidiary		3,376		-
Shenzhen DaXingHuaShang Industrial Group Ltd. (fka Shenzhen DaXingHuaShang Industry Development Ltd.)	Mr. Yumin Lin is the supervisor of Shenzhen DaXingHuaShang Industrial Group Ltd.		83,279		86,842
Ms. Chunxiang Zhang	Manager of a subsidiary		3,168		998
Mr. Meng Xue	Manager of a subsidiary		7,359		5,449
Ms. Shuqin Chen	Manager of a subsidiary		5,400		1,358
Mr. Zhipeng Zuo	Manager of a subsidiary		16,762		59
Mr. Deqin Ke	Manager of a subsidiary		-		724
Mr. Aisheng Zhang	Manager of a subsidiary		15,982		2,320
Mr. Zhihua Liao	Manager of a subsidiary		5,960		3,800
		$	748,543	$	565,675

SCHEDULE OF REVENUE GENERATED FROM RELATED PARTIES

Revenues generated from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Mr. Kaihong Lin	Chief Financial Officer and Treasurer	$	278	$	652
Mr. Yumin Lin	President, Chief Executive Officer, Secretary, Director and majority shareholder		-		438
Mr. Zihao Ye	Manager of a subsidiary		-		262
Ms. Xiulan Zhou	Manager of a subsidiary, Mr. Yumin Lin’s wife		14		-
Dongguan Huanhai Trading Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan Huanhai Trading Co., Ltd.		10,886		13,553
Guangdong Yuexin Jiaotong Construction Co., Ltd.	Mr. Naiyong Luo, a manager of a subsidiary, is the controlling shareholder of Guangdong Yuexin Jiaotong Construction Co., Ltd.		10,578		7,581
Dongguan City Hualianguan Chemical Co., Ltd.	Mr. Hongwei Ye, a shareholder of the Company and a manager of a subsidiary, is the controlling shareholder of Dongguan City Hualianguan Chemical Co., Ltd.		14,808		19,009
Dongguan Humen Shuiyan Drinking Water Store	Ms. Shuiyan Li, a shareholder of the Company, is the controlling shareholder of Dongguan Humen Shuiyan Drinking Water Store		33,034		-
Revenues generated from related parties		$	69,598	$	41,495

SCHEDULE OF COST OF REVENUES FROM RELATED PARTIES

Cost of revenues from related parties during the six months ended June 30, 2023 and 2022 is as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	57,509	$	15,899
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		23,614		43,759
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		23,433		33,836
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		2,934		1,475
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		52,324		34,519
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,704		64,639
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,355		64,565
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		11,473		16,312
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		111,376
Cost of revenues from related parties		$	362,096	$	386,380

SCHEDULE OF PURCHASES FROM RELATED PARTIES

Purchases from related parties during the six months ended June 30, 2023 and 2022 are as follows:


		Six months ended June 30,
		2023		2022
Dongguan Baxi Food Distribution Co., Ltd.	Significantly influenced by the Company	$	61,259	$	19,406
Dongguan Dalingshan Xinwenhua Drinking Water Store	Significantly influenced by the Company		25,221		56,842
Dongguan Pengqin Drinking Water Co., Ltd.	Significantly influenced by the Company		25,416		37,266
Dongguan Dengqinghu Drinking Water Store	Significantly influenced by the Company		3,124		1,659
Dongguan Tailai Trading Co., Ltd.	Significantly influenced by the Company		55,999		33,634
Dongguan Anxiang Technology Co., Ltd.	Significantly influenced by the Company		56,965		66,220
Guangdong Jiaduonuo Shengshi Trading Co., Ltd.	Significantly influenced by the Company		90,430		69,407
Dongguan Dalingshan Runxin Drinking Water Store	Significantly influenced by the Company		12,522		16,374
Dongguan City Yijia Trading Co., Ltd.	Mr. Yongming Li, a shareholder of the Company, is the controlling shareholder of Dongguan City Yijia Trading Co., Ltd.		43,750		48,579
Purchase from related party		$	374,686	$	349,387

INCOME TAXES (Tables)

6 Months Ended

Jun. 30, 2023

Income Tax Disclosure [Abstract]

SCHEDULE OF COMPONENTS OF INCOME TAX PROVISION

The components of the income tax provision are as follows:


	Six months ended June 30,
	2023		2022
Current:
– United States of America	$	41,444	$	45,562
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		55,058		58,359
Current income tax expense
Deferred
– United States of America		-		-
– Seychelles		-		-
– Hong Kong		-		-
– The PRC		-		-
Deferred income tax expense
Total	$	96,502	$	103,921

OPERATING LEASES (Tables)

6 Months Ended

Jun. 30, 2023

Operating Leases

SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION

The components of lease expense and supplemental cash flow information related to leases for the six months ended June 30, 2023 and 2022 are as follows:


Operating lease cost (included in general and administrative expenses in the Company’s unaudited condensed consolidated statements of operations)	Six months ended June 30,
	2023		2022

Related parties	$	9,501	$	11,347
Non-related parties		63,683		74,009
Total	$	73,184	$	85,356
Operating Lease Cost	$	73,184	$	85,356

Other information for the six months ended	June 30, 2023			June 30, 2022
Cash paid for amounts included in the measurement of lease obligations	$	77,612		$	78,215
Weighted average remaining lease term (in years)		2.72			3.55
Weighted average discount rate		3.23	%		3.23	%

SCHEDULE OF MATURITIES OF LEASE OBLIGATIONS

Maturities of the Company’s lease obligations as of June 30, 2023 are as follows:

Year ending December 31,
2023 (remaining)	$	65,998
2024		121,342
2025		103,943
2026		40,951
2027		5,552
Total lease payment		337,786
Less: Imputed interest		(11,701	)
Operating lease obligations	$	326,085

BANK AND OTHER BORROWINGS (Tables)

6 Months Ended

Jun. 30, 2023

Debt Disclosure [Abstract]

SCHEDULE OF BALANCE OF LOAN BORROWED UNDER CREDIT LINES

The balance of the loans borrowed as of June 30, 2023 and December 31, 2022 were as follows:

	June 30, 2023		December 31, 2022
Loans from a trust in PRC	$	38,810	$	60,049
China Construction Bank		336,585		276,447
WeBank		81,488		77,220
Guangdong Nanyue Bank		44,207		67,375
Bank of Ningbo		28,499		-
Aggregate outstanding principal balances		529,589		481,091
Less: current portion		483,233		422,653
Non-current portion	$	46,356	$	58,438

SCHEDULE OF FUTURE MINIMUM LOAN PAYMENTS

Future minimum loan payments as of June 30, 2023 are as follows:


Year ending December 31,
2023 (remaining)	$	210,155
2024		293,951
2025		12,826
2026		5,425
2027		5,425
Thereafter		1,807
Total	$	529,589

SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES (Details)	6 Months Ended
SCHEDULE OF ENTITIES AND ITS SUBSIDIARIES (Details)	Jun. 30, 2023
DIGLS [Member]
Entity Name	DIGLS
Entity incorporation date	Jul. 04, 2016
Nature of operation	Investment holding
Country of incorporation	Republic of Seychelles
DILHK [Member]
Entity Name	DILHK
Entity incorporation date	Jun. 22, 2016
Nature of operation	Investment holding
Country of incorporation	Hong Kong, PRC
QHDX [Member]
Entity Name	QHDX
Entity incorporation date	Nov. 03, 2016
Nature of operation	Investment holding
Country of incorporation	PRC
FVTL [Member]
Entity Name	FVTL
Entity incorporation date	May 31, 2011
Nature of operation	Trading of food and platform
Country of incorporation	PRC
JJGS [Member]
Entity Name	JJGS
Entity incorporation date	Aug. 17, 2017
Nature of operation	Investment holding
Country of incorporation	Republic of Seychelles
JJHK [Member]
Entity Name	JJHK
Entity incorporation date	Aug. 24, 2017
Nature of operation	Investment holding
Country of incorporation	Hong Kong, PRC
JJSZ [Member]
Entity Name	JJSZ
Entity incorporation date	Nov. 16, 2018
Nature of operation	Trading of food
Country of incorporation	PRC
Xixingdao [Member]
Entity Name	Xixingdao
Entity incorporation date	Aug. 28, 2019
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FLTT [Member]
Entity Name	Dongguan City Fu La Tu Trade Ltd (“FLTT”)
Entity incorporation date	Sep. 27, 2020
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
FXGT [Member]
Entity Name	Dongguan City Fu Xin Gu Trade Ltd (“FXGT”)
Entity incorporation date	Dec. 02, 2020
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
FXTL [Member]
Entity Name	Dongguan City Fu Xin Technology Ltd (“FXTL”)
Entity incorporation date	Nov. 12, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FGHL [Member]
Entity Name	Dongguan City Fu Guan Healthy Industry Technology Ltd (“FGHL”)
Entity incorporation date	Dec. 21, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FJTL [Member]
Entity Name	Dongguan City Fu Jing Technology Ltd (“FJTL”)
Entity incorporation date	Nov. 17, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FGTL [Member]
Entity Name	Dongguan City Fu Xiang Technology Ltd (“FGTL”)
Entity incorporation date	Nov. 16, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FJFL [Member]
Entity Name	Dongguan City Fu Ji Food & Beverage Ltd (“FJFL”)
Entity incorporation date	Nov. 09, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FLFL [Member]
Entity Name	Dongguan City Fu Lai Food Ltd (“FLFL”)
Entity incorporation date	Sep. 27, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FYBL [Member]
Entity Name	Dongguan City Fu Yi Beverage Ltd (“FYBL”)
Entity incorporation date	Nov. 12, 2020
Nature of operation	Drinking water distribution and delivery
Country of incorporation	PRC
FXWL [Member]
Entity Name	Dongguan City Fu Xi Drinking Water Company Ltd (“FXWL”)
Entity incorporation date	Mar. 17, 2021
Nature of operation	Drinking water distribution and delivery, sales of alcoholic beverages and water purifier
Country of incorporation	PRC
FJWL [Member]
Entity Name	Dongguan City Fu Jia Drinking Water Company Ltd (“FJWL”)
Entity incorporation date	Mar. 29, 2021
Nature of operation	Drinking water distribution and delivery, sales of water purifier
Country of incorporation	PRC
FSWL [Member]
Entity Name	Dongguan City Fu Sheng Drinking Water Company Ltd (“FSWL”)
Entity incorporation date	Mar. 29, 2021
Nature of operation	Drinking water distribution and delivery, sales of water purifier
Country of incorporation	PRC
FJSTL [Member]
Entity Name	Shenzhen Fu Jin Trading Technology Company Ltd (“FJSTL”)
Entity incorporation date	Jun. 07, 2021
Nature of operation	Drinking water distribution and delivery, sales of water purifier
Country of incorporation	PRC
FLTL [Member]
Entity Name	Dongguan City Fu Li Trading Ltd (“FLTL”)
Entity incorporation date	Sep. 10, 2021
Nature of operation	Drinking water distribution and delivery, sales of water purifier
Country of incorporation	PRC
FGGC [Member]
Entity Name	Guangdong Fu Gu Supply Chain Group Ltd (“FGGC”)
Entity incorporation date	Sep. 13, 2021
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
FZGTL [Member]
Entity Name	Dongguan City Fu Zhi Gu Trading Ltd (“FZGTL”)
Entity incorporation date	Sep. 09, 2022
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
CFTL [Member]
Entity Name	Dongguan City Chang Fu Trading Ltd (“CFTL”)
Entity incorporation date	Sep. 09, 2022
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
LTTL [Member]
Entity Name	Dongguan City La Tong Trading Ltd (“LTTL”)
Entity incorporation date	Aug. 08, 2022
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC
KFTL [Member]
Entity Name	Dongguan City Kai Fu Trading Ltd (“KFTL”)
Entity incorporation date	Sep. 08, 2022
Nature of operation	Trading of alcoholic beverages
Country of incorporation	PRC

SCHEDULE OF FOREIGN CURRENCY EXCHANGE RATE TRANSLATION (Details)	Jun. 30, 2023	Jun. 30, 2022
Period-end RMB [Member]
Offsetting Assets [Line Items]
Period-average RMB:US$1 exchange rate	0.13880	0.14927
Period-average RMB [Member]
Offsetting Assets [Line Items]
Period-average RMB:US$1 exchange rate	0.14448	0.15451

SCHEDULE OF DISAGGREGATION REVENUE (Details) - USD ($)	3 Months Ended		6 Months Ended
SCHEDULE OF DISAGGREGATION REVENUE (Details) - USD ($)	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Product Information [Line Items]
Total	$ 1,272,597	$ 2,336,459	$ 2,907,886	$ 3,598,269
Sales of Liquor [Member]
Product Information [Line Items]
Total	878,952	1,203,484	1,782,672	1,833,946
Sales of Water [Member]
Product Information [Line Items]
Total	213,582	808,648	633,202	1,338,092
Sales of Water Purifier [Member]
Product Information [Line Items]
Total	114,714	310,807	367,837	395,548
Others [Member]
Product Information [Line Items]
Total	$ 65,349	$ 13,520	$ 124,175	$ 30,683

ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)				6 Months Ended
	Jun. 22, 2020	Mar. 01, 2019	Apr. 11, 2018	Jun. 30, 2023	Dec. 31, 2022
Contract with customer advance				$ 116,769	$ 139,334
Amount of customer advances in opening balance				$ 24,707
Share Exchange Agreement [Member] \| DaXingHuaShang Investment Group Limited [Member]
Number of shares exchanged			15,000,000
Sale and Purchase Agreement [Member] \| Jiujiu Group Stock Co., Ltd [Member]
Number of shares exchanged		5
Ownership percentage		100.00%
Value shares issued in exchange		$ 150
Xixingdao Agreement [Member] \| QHDX [Member]
Number of shares exchanged	243,134
Ownership percentage	90.00%

SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Accounts receivable (including $73,096 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)	$ 5,461,870	$ 4,797,564
Less: Doubtful allowance (including $724 and $nil to related parties as of June 30, 2023 and December 31, 2022, respectively)	(360,149)
Accounts receivable, net	$ 5,101,721	$ 4,797,564

SCHEDULE OF ACCOUNTS RECEIVABLE (Details) (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Accounts receivable	$ 5,461,870	$ 4,797,564
Doubtful allowance	360,149
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Accounts receivable	73,096
Doubtful allowance	$ 724

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Credit Loss [Abstract]
Beginning balance
Additions to allowance	374,894
Foreign currency translation adjustment	(14,745)
Ending balance	360,149
Beginning balance	1,247,580
Additions to allowance	154,985	1,284,005
Foreign currency translation adjustment	(57,282)	(36,425)
Ending balance	$ 1,345,283	$ 1,247,580

SCHEDULE OF PREPAYMENT AND OTHER CURRENT ASSETS (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Prepayments And Other Current Assets Net
Prepayments (including $2,394,062 and $2,255,288 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$ 2,875,927	$ 3,001,866
Other current assets	6,995	4,631
Total prepayments and other current assets	2,882,922	3,006,497
Less: Allowance for doubtful accounts (including $1,231,440 and $1,152,427 to related parties as of June 30, 2023 and December 31, 2022, respectively)	(1,345,283)	(1,247,580)
Prepayments and other current assets, net	$ 1,537,639	$ 1,758,917

SCHEDULE OF PREPAYMENTS AND OTHER CURRENT ASSETS (Details) (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Prepayments to related parties	$ 2,875,927	$ 3,001,866
Allowance for doubtful accounts	1,345,283	1,247,580
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Prepayments to related parties	2,394,062	2,255,288
Allowance for doubtful accounts	$ 1,231,440	$ 1,152,427

SCHEDULE OF DEPOSITS PAID (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Deposits Paid Net
Deposits paid (including $1,573,209 and $1,628,511 to related parties as of June 30, 2023 and December 31, 2022, respectively)	$ 2,280,196	$ 2,365,652
Less: Allowance for doubtful accounts (including $999,625 and $870,066 to related parties as of June 30, 2023 and December 31, 2022, respectively)	(1,606,635)	(1,244,350)
Deposits paid, net	$ 673,561	$ 1,121,302

SCHEDULE OF DEPOSITS PAID (Details) (Parenthetical) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Defined Benefit Plan Disclosure [Line Items]
Deposits paid	$ 2,280,196	$ 2,365,652
Deposits paid allowance for doubtful accounts	1,606,635	1,244,350
Related Party [Member]
Defined Benefit Plan Disclosure [Line Items]
Deposits paid	1,573,209	1,628,511
Deposits paid allowance for doubtful accounts	$ 999,625	$ 870,066

SCHEDULE OF ALLOWANCE FOR DOUBTFUL ACCOUNTS OF DEPOSITS PAID (Details) - USD ($)	6 Months Ended	12 Months Ended
	Jun. 30, 2023	Dec. 31, 2022
Deposits Paid Net
Beginning balance	$ 1,244,350
Additions to allowance	430,265	1,280,681
Foreign currency translation adjustment	(67,980)	(36,331)
Ending balance	$ 1,606,635	$ 1,244,350

SCHEDULE OF PROPERTY AND EQUIPMENT (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Property and equipment	$ 274,816	$ 242,906
Less: Accumulated depreciation	(162,355)	(145,016)
Property and equipment, net	112,461	97,890
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	116,520	116,520
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	126,386	126,386
Vehicle [Member]
Property, Plant and Equipment [Line Items]
Property and equipment	$ 31,910

PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 18,046	$ 15,647

SCHEDULE OF INTANGIBLE ASSETS (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 3,015,262	$ 3,145,444
Less: Accumulated amortization	(1,850,517)	(1,822,875)
Less: Accumulated impairment	(912,597)	(951,643)
Intangible assets, net	252,148	370,926
Distribution Channel [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	2,989,709	3,117,635
Other Intangible Assets [Member]
Finite-Lived Intangible Assets [Line Items]
Total intangible assets	$ 25,553	$ 27,809

SCHEDULE OF FUTURE AMORTIZATION EXPENSES FOR DISTRIBUTION CHANNELS (Details)	Jun. 30, 2023 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
2023 (remaining)	$ 102,773
2024	138,256
2025	5,010
2026	5,010
2027	1,099
Total	$ 252,148

INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	6 Months Ended
INTANGIBLE ASSETS, NET (Details Narrative) - USD ($)	Jun. 30, 2023	Jun. 30, 2022
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization expenses	$ 106,634	$ 417,770

SCHEDULE OF AMOUNT DUE FROM AND DUE TO RELATED PARTIES (Details) - Related Party [Member] - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Due to related parties	$ 748,543	$ 565,675
President, Chief Executive Officer, Secretary, Director and Majority shareholder [Member] \| Mr Yumin Lin [Member]
Related Party Transaction [Line Items]
Due to related parties	517,426	389,051
Manager of a Subsidiary, Mr. Yumin Lin’s Wife [Member] \| Ms. Xiulan Zhou [Member]
Related Party Transaction [Line Items]
Due to related parties	1,287
Manager of a Subsidiary [Member] \| Ms. Xiulan Zhou [Member]
Related Party Transaction [Line Items]
Due to related parties		508
Manager of a Subsidiary [Member] \| Mr. Huagen Li [Member]
Related Party Transaction [Line Items]
Due to related parties	2,221	2,316
Manager of a Subsidiary [Member] \| Mr. Guodong Jia [Member]
Related Party Transaction [Line Items]
Due to related parties	4,462	2,342
Manager of a Subsidiary [Member] \| Mr. Anping Chen [Member]
Related Party Transaction [Line Items]
Due to related parties	5,424	1,290
Manager of a Subsidiary [Member] \| Mr. Jiangwei Jia [Member]
Related Party Transaction [Line Items]
Due to related parties	6,497	3,678
Manager of a Subsidiary [Member] \| Ms. Lihua Li [Member]
Related Party Transaction [Line Items]
Due to related parties	3,376
Manager of a Subsidiary [Member] \| Ms. Chunxiang Zhang [Member]
Related Party Transaction [Line Items]
Due to related parties	3,168	998
Manager of a Subsidiary [Member] \| Mr. Meng Xue [Member]
Related Party Transaction [Line Items]
Due to related parties	7,359	5,449
Manager of a Subsidiary [Member] \| Ms. Shuqin Chen [Member]
Related Party Transaction [Line Items]
Due to related parties	5,400	1,358
Manager of a Subsidiary [Member] \| Mr. Zhipeng Zuo [Member]
Related Party Transaction [Line Items]
Due to related parties	16,762	59
Manager of a Subsidiary [Member] \| Mr. Deqin ke [Member]
Related Party Transaction [Line Items]
Due to related parties		724
Manager of a Subsidiary [Member] \| Mr. Aisheng Zhang [Member]
Related Party Transaction [Line Items]
Due to related parties	15,982	2,320
Manager of a Subsidiary [Member] \| Mr. Zhihua Liao [Member]
Related Party Transaction [Line Items]
Due to related parties	5,960	3,800
Manager of a Subsidiary, Shareholder [Member] \| Mr. Hongwei Ye [Member]
Related Party Transaction [Line Items]
Due to related parties	15	16
Vice President [Member] \| Mr. Yuwen Li [Member]
Related Party Transaction [Line Items]
Due to related parties	69,925	64,924
Mr. Yumin Lin is the Supervisor of Shenzhen DaXingHuaShang Industry Development Ltd [Member] \| Shenzhen Da Xing Hua Shang Industry Development Ltd [Member]
Related Party Transaction [Line Items]
Due to related parties	$ 83,279	$ 86,842

SCHEDULE OF REVENUE GENERATED FROM RELATED PARTIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Revenues generated from related parties	$ 69,598	$ 41,495
Mr. Naiyong Luo a Manager [Member] \| Related Party [Member] \| Guangdong Yuexin Jiaotong Construction Co Ltd [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	10,578	7,581
Mr. Kaihong Lin [Member] \| Chief Financial Officer and Treasurer [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	278	652
Mr Yumin Lin [Member] \| President, Chief Executive Officer, Secretary, Director and Majority shareholder [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties		438
Mr. ZihaoYe [Member] \| Manager of a Subsidiary [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties		262
XiuLan Zhou [Member] \| Manager of a Subsidiary, Mr. Yumin Lin’s Wife [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	14
Dongguan Huanhai Trading Co., Ltd. [Member] \| Mr. Hongwei Ye [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	10,886	13,553
Dongguan City Hualianguan Chemical [Member] \| Mr. Hongwei Ye [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	14,808	19,009
Dongguan Humen Shuiyan Drinking Water [Member] \| Shuiyan Li [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Revenues generated from related parties	$ 33,034

SCHEDULE OF COST OF REVENUES FROM RELATED PARTIES (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Related Party Transaction [Line Items]
Cost of revenues from related parties	$ 652,798	$ 1,099,523	$ 1,330,165	$ 1,617,985
Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			362,096	386,380
Dongguan Baxi Food Distribution Co Ltd. [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			57,509	15,899
Dongguan Dalingshan Xinwenhua Drinking Water Store [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			23,614	43,759
Dongguan Pengqin Drinking Water Co Ltd. [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			23,433	33,836
Dongguan Dengqinghu Drinking Water Store [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			2,934	1,475
Dongguan Tailai Trading Co Ltd [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			52,324	34,519
Dongguan Anxiang Technology Co Ltd. [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			56,704	64,639
Guangdong Jiaduonuo Shengshi Trading Co Ltd. [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			90,355	64,565
Dongguan Dalingshan Runxin Drinking Water Store [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			11,473	16,312
Dongguan City Yijia Trading Co Ltd [Member] \| Related Party [Member]
Related Party Transaction [Line Items]
Cost of revenues from related parties			$ 43,750	$ 111,376

SCHEDULE OF PURCHASES FROM RELATED PARTIES (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Purchase from related party	$ 374,686	$ 349,387
Dongguan Baxi Food Distribution Co Ltd. [Member]
Purchase from related party	61,259	19,406
Dongguan Dalingshan Xinwenhua Drinking Water Store [Member]
Purchase from related party	25,221	56,842
Dongguan Pengqin Drinking Water Co Ltd. [Member]
Purchase from related party	25,416	37,266
Dongguan Dengqinghu Drinking Water Store [Member]
Purchase from related party	3,124	1,659
Dongguan Tailai Trading Co Ltd [Member]
Purchase from related party	55,999	33,634
Dongguan Anxiang Technology Co Ltd. [Member]
Purchase from related party	56,965	66,220
Guangdong Jiaduonuo Shengshi Trading Co Ltd. [Member]
Purchase from related party	90,430	69,407
Dongguan Dalingshan Runxin Drinking Water Store [Member]
Purchase from related party	12,522	16,374
Dongguan City Yijia Trading Co Ltd [Member]
Purchase from related party	$ 43,750	$ 48,579

SCHEDULE OF COMPONENTS OF INCOME TAX PROVISION (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2023	Jun. 30, 2022
Operating Loss Carryforwards [Line Items]
Total	$ 21,528	$ 81,514	$ 96,502	$ 103,921
UNITED STATES
Operating Loss Carryforwards [Line Items]
Current income tax expense			41,444	45,562
Deferred income tax expense
Seychelles [Member]
Operating Loss Carryforwards [Line Items]
Current income tax expense
Deferred income tax expense
HONG KONG
Operating Loss Carryforwards [Line Items]
Current income tax expense
Deferred income tax expense
CHINA
Operating Loss Carryforwards [Line Items]
Current income tax expense			55,058	58,359
Deferred income tax expense

INCOME TAXES (Details Narrative)	6 Months Ended
INCOME TAXES (Details Narrative)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 HKD ($)	Jun. 30, 2022
Operating Loss Carryforwards [Line Items]
U.S federal income tax rate	21.00%	21.00%
Effective income tax rate reconciliation, foreign income tax rate differential, percent	(22.10%)	(22.10%)	9.70%
Effective income tax percentage	25.00%	25.00%
CHINA
Operating Loss Carryforwards [Line Items]
Income tax examination, description	On April 2, 2021, the State Taxation Administration issued the notice of the Ministry of Finance and the State Administration of Taxation (“MOF and SAT”) [2021] No.12 to provide 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 $144,482, but less than RMB3,000,000, approximately $433,445, 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	On April 2, 2021, the State Taxation Administration issued the notice of the Ministry of Finance and the State Administration of Taxation (“MOF and SAT”) [2021] No.12 to provide 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 $144,482, but less than RMB3,000,000, approximately $433,445, 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
Up To HK$2,000,000 [Member] \| Inland Revenue, Hong Kong [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, foreign income tax rate differential, percent	8.25%	8.25%
Income tax assessable profit	$ 255,112	$ 2,000,000
Over HK$2,000,000 [Member] \| Inland Revenue, Hong Kong [Member]
Operating Loss Carryforwards [Line Items]
Effective income tax rate reconciliation, foreign income tax rate differential, percent	16.50%	16.50%
Income tax assessable profit		$ 2,000,000

SCHEDULE OF COMPONENTS OF LEASE EXPENSE AND SUPPLEMENTAL CASH FLOW INFORMATION (Details) - USD ($)	6 Months Ended
	Jun. 30, 2023	Jun. 30, 2022
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating Lease Cost	$ 73,184	$ 85,356
Cash paid for amounts included in the measurement of lease obligations	$ 77,612	$ 78,215
Weighted average remaining lease term (in years)	2 years 8 months 19 days	3 years 6 months 18 days
Operating lease, weighted average discount rate, percent	3.23%	3.23%
Related Parties [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating Lease Cost	$ 9,501	$ 11,347
Non-Related Parties [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating Lease Cost	$ 63,683	$ 74,009

SCHEDULE OF MATURITIES OF LEASE OBLIGATIONS (Details)	Jun. 30, 2023 USD ($)
Operating Leases
2023 (remaining)	$ 65,998
2024	121,342
2025	103,943
2026	40,951
2027	5,552
Total lease payment	337,786
Less: Imputed interest	(11,701)
Operating lease obligations	$ 326,085

OPERATING LEASES (Details Narrative)	6 Months Ended
OPERATING LEASES (Details Narrative)	Jun. 30, 2023 USD ($)	Jun. 30, 2023 CNY (¥)
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating lease description	the Company has nineteen separate operating lease agreements for three office spaces, one warehouse and fifteen stores in PRC with remaining lease terms of from 1 month to 46 months	the Company has nineteen separate operating lease agreements for three office spaces, one warehouse and fifteen stores in PRC with remaining lease terms of from 1 month to 46 months
Qingmei Lin [Member] \| Operating Lease Agreement [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating lease description	The agreement covers the period from January 1, 2019 to April 30, 2027	The agreement covers the period from January 1, 2019 to April 30, 2027
Payments for rent	$ 1,445	¥ 10,000
Mr. Hongwei Ye [Member] \| Operating Lease Agreement [Member]
Deferred Compensation Arrangement with Individual, Excluding Share-Based Payments and Postretirement Benefits [Line Items]
Operating lease description	The agreement covers the period from September 27, 2020 to September 30, 2023	The agreement covers the period from September 27, 2020 to September 30, 2023
Payments for rent	$ 138	¥ 960

SCHEDULE OF BALANCE OF LOAN BORROWED UNDER CREDIT LINES (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	$ 529,589	$ 481,091
Less: current portion	483,233	422,653
Non-current portion	46,356	58,438
Loans from a Trust in PRC [Member]
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	38,810	60,049
China Construction Bank [Member]
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	336,585	276,447
WeBank [Member]
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	81,488	77,220
Guangdong Nanyue Bank [Member]
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	44,207	67,375
Bank of Ningbo [Member]
Line of Credit Facility [Line Items]
Aggregate outstanding principal balances	$ 28,499

SCHEDULE OF FUTURE MINIMUM LOAN PAYMENTS (Details) - USD ($)	Jun. 30, 2023	Dec. 31, 2022
Debt Disclosure [Abstract]
2023 (remaining)	$ 210,155
2024	293,951
2025	12,826
2026	5,425
2027	5,425
Thereafter	1,807
Total	$ 529,589	$ 481,091

BANK AND OTHER BORROWINGS (Details Narrative)		1 Months Ended								6 Months Ended
BANK AND OTHER BORROWINGS (Details Narrative)	Dec. 11, 2021 USD ($)	Jul. 30, 2023 USD ($)	May 31, 2023 USD ($)	Apr. 30, 2023 USD ($)	Feb. 28, 2023	Jul. 31, 2022 USD ($)	May 31, 2022 USD ($)	Nov. 30, 2021 USD ($)	Aug. 31, 2020 USD ($)	Jun. 30, 2023 USD ($)	Jun. 30, 2022 USD ($)	Jul. 30, 2023 CNY (¥)	May 31, 2023 CNY (¥)	Apr. 30, 2023 CNY (¥)	Jul. 31, 2022 CNY (¥)	May 31, 2022 CNY (¥)	Feb. 28, 2022 USD ($)	Feb. 28, 2022 CNY (¥)	Dec. 11, 2021 CNY (¥)	Nov. 30, 2021 CNY (¥)	Aug. 31, 2020 CNY (¥)
Line of Credit Facility [Line Items]
Interest expense										$ 18,256	$ 10,689
China Construction Bank [Member]
Line of Credit Facility [Line Items]
Principal amount		$ 114,000					$ 149,000		$ 139,000			¥ 817,000				¥ 1,000,000	$ 68,000	¥ 465,000			¥ 910,000
Interest rate		3.85%			4.00%		4.45%		4.10%
Maturity date					Feb. 11, 2024		May 26, 2023		Aug. 07, 2023
WeBank [Member]
Line of Credit Facility [Line Items]
Principal amount	$ 79,000			$ 13,000			$ 10,000	$ 79,000						¥ 96,000		69,000			¥ 500,750	¥ 500,000
Interest rate	10.71%						11.34%	3.60%
Maturity date							May 21, 2024	Dec. 11, 2021
Huaneng Guicheng Trust Co Ltd [Member]
Line of Credit Facility [Line Items]
Principal amount							$ 24,000									¥ 161,000
Interest rate							11.34%
Maturity date							May 21, 2024
WeBank One [Member]
Line of Credit Facility [Line Items]
Principal amount						$ 15,000									¥ 99,000
Guangdong Nanyue Bank [Member]
Line of Credit Facility [Line Items]
Principal amount						$ 34,000									231,000
WeBank and Guangdong Nanyue Bank Co Ltd. [Member]
Line of Credit Facility [Line Items]
Interest rate						14.40%
Maturity date						Jul. 08, 2024
WeBank Two [Member]
Line of Credit Facility [Line Items]
Principal amount						$ 23,000									153,000
Nanyue Bank [Member]
Line of Credit Facility [Line Items]
Principal amount						$ 53,000									357,000
WeBank and Nanyue Bank [Member]
Line of Credit Facility [Line Items]
Interest rate						14.40%
Maturity date						Jul. 13, 2024
Huaneng Guicheng [Member]
Line of Credit Facility [Line Items]
Principal amount						$ 57,000									¥ 380,000
Interest rate						12.60%
Maturity date						Jul. 21, 2024
Bank of Ningbo [Member]
Line of Credit Facility [Line Items]
Principal amount				$ 31,000										224,000
Bank of Ningbo and WeBank [Member]
Line of Credit Facility [Line Items]
Interest rate				12.24%
Maturity date				Apr. 07, 2025
Car Loan WeBank [Member]
Line of Credit Facility [Line Items]
Principal amount			$ 146,000	$ 27,000									¥ 1,050,000	¥ 195,415
Interest rate			4.20%	6.54%
Maturity date			May 26, 2024	Apr. 10, 2028

SUBSEQUENT EVENTS (Details Narrative) - China Construction Bank [Member]		1 Months Ended
	Jul. 30, 2023 USD ($)	Jul. 30, 2023 USD ($)	Feb. 28, 2023	May 31, 2022 USD ($)	Aug. 31, 2020 USD ($)	Jul. 30, 2023 CNY (¥)	May 31, 2022 CNY (¥)	Feb. 28, 2022 USD ($)	Feb. 28, 2022 CNY (¥)	Aug. 31, 2020 CNY (¥)
Line of Credit Facility [Line Items]
Long-Term Line of Credit	$ 114,000	$ 114,000		$ 149,000	$ 139,000	¥ 817,000	¥ 1,000,000	$ 68,000	¥ 465,000	¥ 910,000
Line of Credit Facility, Interest Rate During Period		3.85%	4.00%	4.45%	4.10%
Debt Instrument, Maturity Date	Jul. 22, 2024

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