As filed with the Securities and Exchange Commission on December 8, 2022.

Registration No. 333-261705

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

Amendment No. 7

to

FORM S-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

Fortune Valley Treasures, Inc.

(Exact name of registrant as specified in its charter)

B1601 Oriental Impression Building 2

No. 139 Liansheng Road, Humen Town

Dongguan City, Guangdong Province

People’s Republic of China 523900

+86 (769) 8572-9133

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive offices)

Nevada Agency and Transfer Company

50 West Liberty Street, Suite 880

Reno, NV 89501

(775) 322-0626

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies of all communications to:

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box: ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

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

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 7(a)(2)(B) of the Securities Act. ☐

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall hereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the SEC is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion, dated December 8, 2022

PRELIMINARY PROSPECTUS

Fortune Valley Treasures, Inc.

6,250,000 Shares of Common Stock

This prospectus relates to the offer and sale of 6,250,000 shares of common stock, par value $0.001 per share, of Fortune Valley Treasures, Inc. Our common stock is quoted on the OTC Pink Open Market under the symbol “FVTI.” We have applied to have our common stock listed on the NASDAQ Capital Market under the symbol “FVTI.” We believe that upon the completion of the offering contemplated by this prospectus, we will meet the standards for listing on the NASDAQ Capital Market. We cannot guarantee that we will be successful in listing our common stock on the NASDAQ Capital Market; however, we will not complete this offering unless we are so listed.

As of December 7, 2022, the last sale price of our common stock as reported on OTC Pink Open Market was $4.28 per share. The offering price of our common stock in this offering is assumed to be $4.00 per share. The actual public offering price per share will be determined between us and the underwriters at the time of pricing. Therefore, the assumed public offering price used throughout this prospectus may not be indicative of the final offering price.

Fortune Valley Treasures, Inc. (“FVTI” or “FVTI Nevada”) is not an operating company but a holding company incorporated in the State of Nevada. Substantially all of the business operations is conducted in the People’s Republic of China (“PRC” or “China”) by our PRC subsidiaries. Shares of common stock offered in this offering are shares of a U.S. holding company, which does not conduct operations. As used in this prospectus, “we,” “us,” “our” or “the Company” refers to FVTI Nevada, the U.S. holding company. While none of our PRC subsidiaries operates with a variable interest entity (“VIE”) structure, the Chinese regulatory authorities could disallow our current operating structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless. See “Risk Factors — If the Chinese government determines that our corporate structure does not comply with Chinese regulations, or if Chinese regulations change or are interpreted differently in the future, Chinese regulatory authorities could disallow our current operating structure, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless”; and “Risk Factors — The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of the securities we are registering for sale.”

We face various legal and operational risks and uncertainties relating to our subsidiaries’ operations in China. Because substantially all of our operations are conducted in China through our PRC subsidiaries, the Chinese government may intervene or influence the operation of our PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time, or may exert more control over securities offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in operations of our PRC subsidiaries and/or the value of our common stock. Further, any actions by the Chinese government to exert more oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

Recently, the PRC government initiated a series of regulatory actions and statements to regulate business operations in China with little advance notice, including cracking down on illegal activities in the securities market, adopting new measures to extend the scope of cybersecurity reviews, and expanding the efforts in anti-monopoly enforcement. We do not believe that we are directly subject to these regulatory actions or statements, as our PRC subsidiaries do not have a VIE structure and their operations are not subject to cybersecurity review requirements, or involve any type of restricted industry. Because these statements and regulatory actions are new, it is highly uncertain how soon legislative or administrative rule making bodies in China will respond to them, or what existing or new laws or regulations will be modified or promulgated, if any, or the potential impact such modified or new laws and regulations will have on our subsidiaries’ daily business operations or ability to accept foreign investments and list on an U.S. exchange. In July 2021, the Cyberspace Administration of China (“CAC”) opened cybersecurity probes into several U.S.-listed technology companies focusing on anti-monopoly regulation, and how companies collect, store, process and transfer data, among other things. On October 23, 2021, the Standing Committee of the National People’s Congress issued a discussion draft of the amended Anti-Monopoly Law, which proposes to increase the fines for illegal concentration of business operators to “no more than ten percent of its last year’s sales revenue if the concentration of business operator has or may have an effect of excluding or limiting competition; or a fine of up to RMB 5 million if the concentration of business operator does not have an effect of excluding or limiting competition.” On December 24, 2021, nine government agencies jointly issued the Opinions on Promoting the Healthy and Sustainable Development of Platform Economy, which provides that, among others, monopolistic agreements, abuse of dominant market position and illegal concentration of business operators in the field of platform economy will be strictly investigated and punished in accordance with the relevant laws. We do not hold a dominant market position in our product markets and we have not entered into any monopolistic agreement. We have not received any inquiry from the relevant governmental authorities. On July 10, 2021, the CAC published a revised draft revision to the Cybersecurity Review Measures for public comment, or the Draft Cybersecurity Measures, and together with 12 other Chinese regulatory authorities, released the final version of the Revised Measures for Cybersecurity Review, or the Revised Cybersecurity Measures, in December 2021, which took effect on February 15, 2022. Pursuant to the Revised Cybersecurity Measures, critical information infrastructure operators procuring network products and services and online platform operators carrying out data processing activities, which affect or may affect national security, shall conduct a cybersecurity review pursuant to the provisions therein. In addition, online platform operators possessing personal information of more than one million users seeking to be listed on foreign stock markets must apply for a cybersecurity review. We don’t believe that we are an “operator” within the meaning of the Revised Cybersecurity Measures, nor do we control more than one million users’ personal information, and therefore, we should not be required to undertake a cybersecurity review under the Revised Cybersecurity Measures. Further, an expert interpretation of the Revised Cybersecurity Measures published at the CAC’s website on February 17, 2022 indicated no application review is required for operators that have been listed abroad before the implementation of the Revised Cybersecurity Measures. The Revised Cybersecurity Measures apply to companies going abroad for secondary listing, dual primary listing and other new foreign listings and subject to the reporting requirements. On December 24, 2021, China Securities Regulatory Commission (the “CSRC”) issued the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises (the “Draft Administrative Provisions”) and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Draft Filing Measures”), collectively, the Draft Overseas Listing Rules, which are currently published for public comments only. According to the Draft Overseas Listing Rules, among other things, all China-based companies applying for overseas securities issuance, listing and post-listing capital operations shall be subject to statutory procedures, such as filing and information reporting requirement. After making initial applications with overseas stock markets for offerings or listings, all China-based companies shall file with the CSRC within three business days. In addition, overseas offerings and listings may be prohibited for such China-based companies when any of the following applies: (a) if the securities offerings and listings are prohibited by applicable PRC laws and rules; (b) if securities offerings and listings may constitute a threat to, or endanger national security as reviewed and determined by PRC authorities; (c) if there are material ownership disputes over applicants’ equity interests, major assets, core technologies or other items; (d) if a PRC company or its controlling shareholders or de facto controllers have committed certain crimes, under investigation for suspicion of major violations in the prior three years; (e) if any directors, supervisors, or senior executives of applicants have been subject to administrative punishments for severe violations, or are under investigations for crimes or major violations; or (f) other circumstances as provided. The Draft Administrative Provisions further provide that a fine between RMB 1 million and RMB 10 million may be imposed if a company fails to fulfil the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Draft Overseas Listing Rules. In the case of severe violations, an order to suspend relevant businesses or halt operations for rectification may be issued, and relevant business permits or operational license revoked. Overseas issuance and listings subject to the Draft Overseas Listing Rules include direct and indirect issuance and listings. We believe that this offering and the listing of our shares on Nasdaq Capital Market would be deemed an Indirect Overseas Issuance and Listing under the Draft Overseas Listing Rules and would be required to complete the filing procedures and submit the relevant information to CSRC if the final rules are promulgated as proposed in the current Draft Overseas Listing Rules. As of the date of this prospectus, such rules have not become effective and we are not required to complete the filing procedures if we complete this offering and begin the trading of our common stock on the Nasdaq before the rules take effect. In addition, after the rules take effect, we would only need to submit the filing materials and no CSRC approval would be required under the rules. Because we are relying on an opinion of counsel, there is uncertainty inherent in relying on an opinion of counsel in connection with whether we are required to obtain permissions from a governmental agency that is required to approve of our operations and/or listings. In the event that an government approval is required, we cannot assure you that we will be able to receive clearance in a timely manner, or at all. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer our common stock, cause significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause our shares to significantly decline in value or become worthless. See “Risk Factors — The Chinese government may intervene or influence the operations of our PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time, which could result in a material change in operations of our PRC subsidiaries and/or the value of our common stock”; “Risk Factors — Recent regulatory developments in China, including greater oversight and control by the CAC over data security, may subject us to additional regulatory review, and any actions by the Chinese government to exert more oversight and control over foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless”; and “Risk Factors — Any failure or perceived failure by our PRC subsidiaries to comply with the Anti-Monopoly Guidelines for Internet Platforms Economy Sector and other PRC anti-monopoly laws and regulations may result in governmental investigations or enforcement actions, litigation or claims against us and could have an adverse effect on our business, financial condition and results of operations.”

Cash may be transferred within our organization in the following manners: (i) FVTI Nevada may transfer funds to our subsidiaries, including our PRC subsidiaries, by way of capital contributions or loans, through intermediate holding subsidiaries or otherwise; (ii) we and our intermediate holding subsidiaries may provide loans to our operating subsidiaries and vice versa; and (iii) our subsidiaries, including our PRC subsidiaries, may make dividends or other distributions to us through intermediate holding companies or otherwise. As of the date of this prospectus, we have not made any cash transfers, capital contributions or loans to any of our subsidiaries. Any loans from us or our holding subsidiaries outside of China to our PRC subsidiaries, which are treated as foreign-invested enterprises (“FIEs”) under PRC law, are subject to PRC regulations and foreign exchange loan registrations. Such loans to our FIE subsidiaries to finance their activities must be registered with the State Administration of Foreign Exchange (“SAFE”) or its local counterparts. Funds are transferred among our PRC subsidiaries for working capital purposes, primarily between Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd. (“QHDX”), our wholly foreign owned enterprise (WFOE) subsidiary, and its operating subsidiaries. As advised by our PRC counsel, PRC laws, regulations and judicial interpretations thereof do not prohibit using cash generated from one subsidiary to fund another subsidiary’s operations by way of short term interest free loans. We have not been notified of any other restriction which could limit our PRC subsidiaries’ ability to transfer cash to other PRC subsidiaries. In addition, QHDX has maintained cash management policies which dictate the corporate approvals and procedure with respect to cash transfers with other PRC subsidiaries. QHDX conducts review and management of its subsidiaries’ cash transfers and reports to its board of directors. Other than QHDX, neither us nor other subsidiaries have cash management policies dictating how funds are transfer, albeit each company must comply with applicable laws or regulations with respect to transfer of funds, dividends and distributions. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to our Hong Kong subsidiaries and PRC subsidiaries via capital contributions or shareholder loans. As of the date of this prospectus, FVTI Nevada has not made dividend or other distributions to our shareholders. FVTI Nevada may pay dividends to our shareholders subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the payment of such dividends. As a holding company, FVTI Nevada may rely on dividends and other distributions on equity paid by our subsidiaries for our cash and liquidity requirements, including payment of any debt we may incur outside of China and our expenses. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. To the extent cash or assets in the business is in the PRC or a PRC subsidiary, the cash or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on our or our subsidiaries’ ability by the PRC government to transfer cash or assets. PRC laws and regulations applicable to our PRC subsidiaries permit payments of dividends only out of their retained earnings, if any, determined in accordance with applicable accounting standards and regulations. Our PRC subsidiaries may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations. In addition, our subsidiaries are required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate amount of such funds reaches 50% of its registered capital. At its discretion, a wholly foreign-owned enterprise may allocate a portion of its after-tax profits to discretionary funds. These reserve funds and discretionary funds are not distributable as cash dividends. Furthermore, dividends paid by our WFOE subsidiaries to their parent companies will be subject to a 10% withholding tax, which can be reduced to 5% if certain requirements are met. The PRC government also imposes restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. As such, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. As of the date of this prospectus, none of our subsidiaries has made any dividends or other distributions to us. Our WFOE subsidiary, QHDX, has paid on our behalf for professional service fees and U.S. federal income tax due. Our PRC subsidiaries presently intend to retain all earnings to fund their operations and business expansions. We do not anticipate paying dividends or other distributions to our shareholders in the foreseeable future. See the relevant discussions in “Prospectus Summary — Cash Flows, Dividends and Other Asset Transfers between the U.S. Holding Company and Our Subsidiaries” beginning on page 5; “Prospectus Summary — Dividend Policy” on page 7; “Summary Risk Factors — Risks Related to Doing Business in China” on page 8; “Risk Factors — PRC regulation of loans and direct investment by offshore holding companies in PRC entities may delay or prevent us from using the proceeds of our securities offerings to make loans or additional capital contributions to our PRC operating subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 34; “Risk Factors — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 35; “Risk Factors — Governmental control of currency conversion may affect the value of your investment” on page 35; and “Risk Factors — Payment of dividends is subject to restrictions under Nevada and the PRC laws” on page 39.

Our common stock may be prohibited from trading on a national exchange or “over-the-counter” markets under the Holding Foreign Companies Accountable Act (the “HFCAA”) if the Public Company Accounting Oversight Board (“PCAOB”) determines it is unable to inspect or investigate completely our auditors for three consecutive years beginning in 2021. Further, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) and on February 4, 2022, the U.S. House of Representatives passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022 (the “COMPETES Act”). If either the AHFCAA or the COMPETES Act is enacted into law, it would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections or complete investigations for two consecutive years instead of three. Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021, which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in mainland China and Hong Kong because of positions taken by the authorities in those jurisdictions. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the PCAOB signed a Statement of Protocol Agreement with the CSRC and the Ministry of Finance (the “MOF”) of the PRC governing inspections and investigations of audit firms based in China or Hong Kong. Our auditor, MaloneBailey, LLP, is headquartered in Houston, Texas, with offices in Beijing and Shenzhen and, as a PCAOB-registered public accounting firm, is required to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. MaloneBailey, LLP has been subject to PCAOB inspections and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination of having been unable to inspect or investigate completely. Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, if there is any regulatory change or step taken by PRC regulators that does not permit MaloneBailey, LLP to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, you may be deprived of the benefits of such inspection. Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate, which could result in limitation or restriction to our access to the U.S. capital markets, and trading of our securities, including trading on the national exchange and trading on “over-the-counter” markets, may be prohibited under the HFCAA. See “Risk Factors — Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completely our auditors for three consecutive years beginning in 2021, or for two consecutive years if the Accelerating Holding Foreign Companies Accountable Act or the America COMPETES Act becomes law”; and “Risk Factors — Newly enacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and the Public Company Accounting Oversight Board, and proposed rule changes submitted by Nasdaq calling for additional and more stringent criteria to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs.”

We anticipate that following the completion of this offering, our Chief Executive Officer, Yumin Lin, and our former director and largest shareholder, Minghua Cheng, will beneficially own an aggregate 61.41% our outstanding shares of common stock. We may be deemed to be a “controlled company” under the NASDAQ Marketplace Rules 5615(c). However, we do not intend to avail ourselves of the corporate governance exemptions afforded to a “controlled company” under the NASDAQ Marketplace Rules.

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 13.

This offering is being conducted on a firm commitment basis. The underwriters are obligated to take and pay for all of the shares offered by this prospectus if any such shares are taken. The underwriters are not required to take or pay for the shares covered by the underwriters’ over-allotment option to purchase additional shares of common stock.

We have granted a 45-day option to the underwriters to purchase up to an additional shares of common stock at the public offering price to cover over-allotments, if any.

Neither the Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Shares to purchasers on or about           , 2022.

Joseph Stone Capital, LLC

The date of this prospectus is       , 2022

TABLE OF CONTENTS

Through and including           , 2022 (25 days after the commencement of this offering), all dealers effecting transaction in these securities, whether or not participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

You should rely only on the information contained in this prospectus and any free writing prospectus we may authorize to be delivered to you. We have not, and the underwriters have not, authorized anyone to provide you with information different from, or in addition to, that contained in this prospectus and any related free writing prospectus. We and the underwriters take no responsibility for, and can provide no assurances as to the reliability of, any information that others may give you. This prospectus is not an offer to sell, nor is it seeking an offer to buy, these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is only accurate as of the date of this prospectus, regardless of the time of delivery of this prospectus and any sale of our common stock. Our business, financial condition, results of operations and prospects may have changed since that date.

PROSPECTUS SUMMARY

This summary contains basic information about us and the offering contained elsewhere in this prospectus. Because it is a summary, it does not contain all the information that you should consider before investing in our securities. You should read and carefully consider the entire prospectus before making an investment decision, especially the information presented under the headings “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements,” “Management’s Discussion and Analysis of Financial Condition and Results of Operation” and all other information included in this prospectus in its entirety before you decide whether to purchase any shares offered by this prospectus.

Unless the context requires otherwise, the words “we,” “us,” “our,” “our company,” “the Company,” “FVTI” and “FVTI Nevada” refer to Fortune Valley Treasures, Inc., a holding company incorporated in the State of Nevada.

Our Company

FVTI is a holding company incorporated in the State of Nevada. We conduct our business through our PRC subsidiaries, which are a food and beverage supply chain company group based in Guangdong province, China. With the mission to improve people’s lives by offering safe and quality foods, we are committed to building a first class food supply chain business in China and in the global markets. Through quality control and sales of selected branded products, we provide a one-stop quality food purchase experience for both businesses and individual customers.

Our vision is “Safe Foods for the People.” Our products are well recognized among consumer groups in the Pearl River Delta region of China. We strive to improve the consumers’ food experience in respect of brand, quality, service and speed. Through online and offline channels, we deliver quality food products to consumers through sales targeting national and regional wholesalers, major food and beverage chains, supermarkets and other retailers.

We purchase, supply, distribute and sell alcohol and non-alcohol beverages, packaged staple foods, and household drinking water related purification devices. Since our founding in 2011, we have primarily engaged in the wholesale distribution and retail sale of wine and liquor products in Southern China. In the recent years, we have expanded into the non-alcohol beverage and food markets through strategic acquisitions.

We manage the entire process of product procurement, warehousing, distribution, logistics, and delivery through our supply chain system. We cultivate long-term cooperation relationships with many high-quality upstream suppliers to secure the supply demand and stable product procurement. Through continuous optimization and management of supply planning, logistics management and quality assurance, we have improved product procurement efficiency and product flow management capabilities.

We sell products using a hybrid marketing model through our supply chain platform, social media, primarily WeChat, distributor network, key customer channels, product displays at our stores, and community promotions. We promote direct sales to business and individual consumers on our e-commerce supply chain platform – “FVTI Online” (or “Fugu Online”). Further, we make online or offline bulk sales through our agents and independent distributors. We have over a dozen brick and mortar stores in Dongguan City and elsewhere in Guangdong Province. We have established long-term and stable cooperative relations with certain core enterprises and achieved a substantial portion of our sales through key customer channels. We utilize promotions and cross-selling opportunities to expand our customer base and build brand awareness. In addition, we are actively seeking quality target companies in the food and beverage industries for mergers and acquisition for further development of our company.

We are on path to build a closed-loop industry supply chain system for our products. Through connecting upstream suppliers and downstream purchasers and consumers, we have formed a supply chain network, broadened market penetration through the technology driven e-commerce platform and services, and aligned supplier production, supply and marketing with distribution and sale to achieve cost reduction and efficiency.

Our Strengths

Our Strategies

Corporate Structure

FVTI is a holding company incorporated in the State of Nevada that does not conduct any substantial business operations. FVTI, owns, through our wholly owned offshore non-PRC subsidiaries and WFOEs, all of the equity of FVT Supply Chain and FG Supply Chain, and 90% of the equity of Xixingdao, each of which, in turn, owns all of the equity of their subsidiaries. FVT Supply Chain, FG Supply Chain, Xixingdao and their respective subsidiaries are operating companies conducting business primarily in the PRC.

The following chart illustrates our current corporate organizational structure as of the date of this prospectus:

Permission Required from the PRC Authorities with respect to Operations and Securities Listing and Issuance

As of the date of this prospectus, as advised by our PRC legal counsel, Grandall Law Firm, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked. As an enterprise group engaged in food and beverage product sale and distribution business, our PRC subsidiaries are not operating in an industry that prohibits or limits foreign investment. We and our PRC subsidiaries are not required to obtain permissions from the CSRC, the CAC or any other PRC authorities to operate, other than the permits and approvals our PRC subsidiaries have already received. However, if we or our subsidiaries do not receive or maintain required permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change such that we are required to obtain such permissions or approvals in the future, we may be subject to governmental investigations or enforcement actions, fines, penalties, suspension of operations, or be prohibited from engaging in relevant business or conducting securities offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to offer or continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

Our PRC subsidiaries are required to obtain certain permits and licenses from the PRC government agencies to operate our business in China, including: (a) business licenses, (b) food business licenses, and (c) Electronic Data Interchange License (“EDI”). In addition, one of our PRC subsidiaries is subject to certain certification and registration requirements in connection with limited product import and export operations.

We conduct our business in China through our PRC subsidiaries. All of our PRC subsidiaries are required to obtain, and have obtained, the required business licenses from the State Administration for Market Regulation (“SAMR”). The PRC Food Safety Law mandates a licensing system for food production and trade and requires vendors engaging in food production or sale or catering services to obtain a food business license in accordance with the applicable laws. Among our PRC subsidiaries, the following thirteen companies are required to obtain food business licenses and have received such licenses pursuant to the PRC Food Safety Law: FVT Supply Chain, Xixingdao, Dongguan City Fu La Tu Trade Co., Ltd. (“FLTT”), Dongguan City Fu Xin Gu Trade Co., Ltd. (“FXGT”), Dongguan City Fu Lai Food Co., Ltd. (“FLFL”), Dongguan City Fu Xin Technology Co., Ltd. (“FXTL”), Dongguan City Fu Xiang Technology Co., Ltd (“FGTL”), Dongguan City Fu Ji Food & Beverage Co., Ltd. (“FJFL”), Dongguan City Fu Yi Beverage Co., Ltd. (“FYBL”), Dongguan City Fu Jing Technology Co., Ltd. (“FJTL”), Dongguan City Fu Sheng Drinking Water Co. Ltd. (“FSWL”), Dongguan City Fu Jia Drinking Water Co., Ltd. (“FJWL”), and Shenzhen Fu Jin Trading Technology Co., Ltd. (“FJSTL”). Therefore, these thirteen subsidiaries have the required government permits to engage in food purchase and sale activities. However, a food business license is not required for the sale of edible agricultural products and prepacked food. Companies engaged in the sale of prepacked food must report to the food safety regulatory agencies of the local government for recordation. Eight of our subsidiaries, Dongguan City Fu Zhi Gu Trade Co., Ltd. (“FZGT”), Dongguan City Chang Fu Trade Co., Ltd. (“CFT”), Dongguan City La Tong Trade Co., Ltd. (“LTT”), Dongguan City Kai Fu Trade Co., Ltd. (“KFT”), Dongguan City Fu Guan Healthy Industry Technology Co., Ltd. (“FGHL”), Dongguan City Fu Xi Drinking Water Co., Ltd. (“FXWL”), Dongguan City Fu Li Trading Co., Ltd. (“FLTL”) and Dongguan City Fu Gu Supply Chain Group Co., Ltd. (“FGGC” or “FG Supply Chain”), are subject to such reporting requirement and are in the process of completing the recordation procedure. Guangdong provincial government has not issued detailed implementation rules, and as such, changes in rules and regulations may impose additional requirements for our subsidiaries in China.

The relevant PRC Telecommunications Regulations require a telecommunication service provider in China to obtain an operating license from the Ministry of Industry and Information Technology, or MIIT, or its provincial counterparts, prior to commencement of operations. Our subsidiary, FVT Supply Chain, engages in food, beverage and related product purchases and sales via its online platform. As a provider of online data processing and transaction processing services, FVT Supply Chain is required to obtain an Electronic Data Interchange (EDI) license and has obtained the EDI license. The relevant PRC regulations, including the Classification Catalogue of Telecommunications Services, are still evolving, and there have been limited guidance and interpretation with respect to the scope of various types of telecommunication services. We may be subject to additional license requirements if we further expand our online operations and services.

FVT Supply Chain is subject to certain certification and registration requirements in connection with its limited product import and export operations. FVT Supply Chain has applied and obtained the relevant certificates and government approvals, including the Record Registration Form for Foreign Trade Business Operators, Customs Declaration Entity Registration Certificate, and Filing Form for Enterprises Applying for Entry-Exit Inspection for the importing and exporting of certain categories of wines. If FVT Supply Chain is unable to obtain the requisite certificates and approvals, the PRC Customs would not perform the Customs declaration, acceptance and release procedures, and the limited product import and export operations conducted by FVT Supply Chain would be delayed, halted or otherwise materially adversely affected.

In addition, on November 14, 2021, the CAC published the Regulations of Network Data Security Management (Draft for Comments) (the “Draft Regulations on Network Data Security Management”), which further regulate the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate the obligations of internet platform operators, such as us, to establish a system for disclosure of platform rules, privacy policies and algorithmic strategies related to data. The draft regulations require data processors to (i) adopt immediate remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing of personal information, management of important data and proposed overseas transfer of data. As of the date of this prospectus, the draft regulations have not been adopted and the final provisions are subject to changes. If the above proposed regulations are adopted as proposed, based on our initial evaluation, while we have implemented some of the data security measures, we would not be in full compliance with the new draft regulations. We are also still evaluating any additional necessary actions we should take pursuant to the proposed regulations to satisfy the personal information protection and internet data security regulatory requirements. Failure to comply with the effective cybersecurity, data privacy and internet data security regulatory requirements in a timely manner may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations, among other things.

On December 28, 2021, the CAC, NDRC, and other government agencies jointly issued the final version of the Revised Measures for Cybersecurity Review, or the Revised Cybersecurity Measures, which took effect on February 15, 2022 and replaced the previously issued Revised Measures for Cybersecurity Review. Under the Revised Cybersecurity Measures, an “online platform operator” in possession of personal data of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange. The operators of critical information infrastructure purchasing network products and services, and the online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country. Pursuant to the Revised Cybersecurity Measures, we don’t believe we will be subject to the cybersecurity review by the CAC, given that (i) we possess personal information of a relatively small number of users in our business operations as of the date of this prospectus, significantly less than the one million user threshold set for a data processing operator applying for listing on a foreign exchange that is required to pass such cybersecurity review; and (ii) data processed in our business does not have a bearing on national security and thus shall not be classified as core or important data by the authorities. We don’t believe that we are an Operator within the meaning of the Revised Cybersecurity Measures, nor do we control more than one million users’ personal information, and as such, we should not be required to apply for a cybersecurity review under the Revised Cybersecurity Measures. However, in view of the fact that the Revised Cybersecurity Measures was released recently and there is a general lack of guidance and substantial uncertainties exist with respect to their interpretation and implementation. For example, there is still no clear definition of “online platform operator.” Whether the data processing activities carried out by traditional enterprises (such as food, medicine, manufacturing, and merchandise sales enterprises) are subject to such review and the scope of the review remain to be further clarified by the regulatory authorities in the subsequent implementation process.

With regard to the current effective data security management regulations, we don’t believe that we are required to conduct data security review for listing overseas. However, according to the Draft Regulations on Network Data Security Management, as an overseas listed company, we will be required to conduct an annual data security review and to comply with the relevant reporting obligations. We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities with respect to securities issuances or overseas listing, as well as regarding any annual data security review or other procedures that may be imposed on us. If any approval, review or other procedure is in fact required, we cannot assure you that we will be able to obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and offerings relating to our securities. The regulatory requirements with respect to cybersecurity and data privacy are constantly evolving and can be subject to varying interpretations, and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with the cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations, among other things. See “Risk Factors — Risks Related to Our Business and Industry — We may be unable to obtain or renew required permits, licenses or approvals necessary for our business operations, and could be imposed with fines and penalties for any violations of the license requirements”; “Risk Factors — Risks Related to Doing Business in China — The Chinese government may intervene or influence the operations of our PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time, which could result in a material change in operations of our PRC subsidiaries and/or the value of our common stock”; and “Risk Factors — Recent regulatory developments in China, including greater oversight and control by the CAC over data security, may subject us to additional regulatory review, and any actions by the Chinese government to exert more oversight and control over foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.”

We are subject to PRC rules and regulations relating to overseas listing and securities offerings, and a substantial extension of the PRC government’s oversight over our business operations or overseas listings may hinder our ability to offer or continue to offer our securities. As advised by our PRC legal counsel, neither we nor our PRC subsidiaries are required to obtain any permission from the CSRC, the CAC, or any other PRC authorities for us to issue securities to investors or to list our securities on overseas stock exchanges, such as the Nasdaq. We have not submitted any application to the CSRC, the CAC or other PRC authorities for the approval of securities issuance, including this offering, or the Nasdaq listing. As of the date of this prospectus, we and our PRC subsidiaries have not received any inquiry, notice, warning or objection in relation to our stock issuances or trading or Nasdaq listing from the CSRC, the CAC or any other PRC authorities. We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CSRC, the CAC or other PRC governmental authorities required for securities offerings and overseas listings.

On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the State Administration for Taxation, the State Administration for Industry and Commerce, CSRC and the State Administration for Foreign Exchange (“SAFE”), jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (the “M&A Rule”), effective on September 8, 2006 and amended on June 22, 2009. The M&A Rule requires that an offshore special purpose vehicle (“SPV”) formed for listing purposes and controlled directly or indirectly by Chinese companies or individuals shall obtain the approval of the CSRC prior to the listing and trading of such SPV’s securities on an overseas stock exchange. On September 21, 2006, the CSRC published procedures specifying documents and materials required to be submitted to it by an SPV seeking CSRC approval of overseas listings. However, the provisions of the M&A Rule remain ambiguous as to the scope and applicability of the CSRC approval requirement. The CSRC has not issued any definitive rule or interpretations. Based on the current PRC law, rules and regulations, our Chinese legal counsel, Grandall Law Firm, is of the opinion that the M&A Rule and related regulations do not require the Company or PRC subsidiaries to obtain prior approval from CSRC for the listing and trading of our shares on an overseas securities market, given that our wholly foreign-owned enterprise subsidiaries were established by direct investment, rather than by a merger with or an acquisition of any PRC domestic companies as defined under the M&A Rule. However, there remains uncertainty as to how the M&A Rules will be interpreted or implemented, and the opinions of our PRC counsel are subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the M&A Rules. We cannot assure you that the relevant Chinese government agencies, including the CSRC, will reach the same conclusion.

On July 6, 2021, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions on Severely Cracking Down on Illegal Securities Activities According to Law, or the Opinions. The Opinions emphasize the need to strengthen the administration over illegal securities activities and the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems, will be taken to address risks and incidents of China-based companies that are listed overseas, cybersecurity issues, data privacy protection requirements and other similar matters. As of the date of this prospectus, no official guidance or related implementation rules have been issued, and our PRC counsel is of the opinion that this offering does not constitute illegal securities activities under the Opinions. In addition, the Company has obtained all requisite licenses and operational permits and none of our permits has been denied. Notwithstanding the forgoing, there are still uncertainties as to how the Opinions will be interpreted and implemented by the relevant PRC governmental authorities.

In addition, on December 28, 2021, the CAC, the National Development and Reform Commission (“NDRC”), and several other governmental agencies jointly issued the Revised Cybersecurity Measures, which took effect on February 15, 2022. Under the Revised Cybersecurity Measures, an “online platform operator” in possession of personal data of more than one million users must apply for a cybersecurity review if it intends to list its securities on a foreign stock exchange. The operators of critical information infrastructure purchasing network products and services, and the online platform operators (together with the operators of critical information infrastructure, the “Operators”) carrying out data processing activities that affect or may affect national security, shall conduct a cybersecurity review, and any online platform operator who controls more than one million users’ personal information must go through a cybersecurity review by the cybersecurity review office if it seeks to be listed in a foreign country.

Further, the CAC released the Draft Regulations on Network Data Security Management in November 2021 for public comments, which among other things, stipulates that a data processor listed overseas must conduct an annual data security review by itself or by engaging a data security service provider and submit the annual data security review report for a given year to the municipal cybersecurity department before January 31 of the following year. If the Draft Regulations on Network Data Security Management are enacted in the current form, we, as an overseas listed company, would be required to carry out an annual data security review and comply with the relevant reporting obligations.

Under the data security regulations currently in effect, we don’t believe that we are required to conduct data security review for listing overseas. However, according to the Draft Regulations on Network Data Security Management, as an overseas listed company, we would be required to conduct an annual data security review and to comply with the relevant reporting obligations. We have been closely monitoring the development in the regulatory landscape in China, particularly regarding the requirement of approvals, including on a retrospective basis, from the CSRC, the CAC or other PRC authorities in relation to this offering, as well as regarding any annual data security review or other procedures that may be imposed on us. If any approval, review or other procedure is in fact required, we cannot assure you that we will be able to obtain such approval or complete such review or other procedure timely or at all. For any approval that we may be able to obtain, it could nevertheless be revoked and the terms of its issuance may impose restrictions on our operations and/or securities offerings. The PRC regulatory requirements with respect to cybersecurity and data security are constantly evolving and can be subject to varying interpretations and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. Failure to comply with these cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations, among other things.

On December 24, 2021, the CSRC issued the Administrative Provisions of the State Council Regarding the Overseas Issuance and Listing of Securities by Domestic Enterprises (the “Draft Administrative Provisions”) and the Measures for the Overseas Issuance of Securities and Listing Record-Filings by Domestic Enterprises (Draft for Comments) (the “Draft Filing Measures”), collectively, the Draft Overseas Listing Rules, which are currently published for public comments only. The Draft Overseas Listing Rules require that companies applying for overseas securities issuance, listing, and post-listing capital operations, including IPO, multi-listing, spin-off listing, SPAC, refinancing, issuance for asset acquisitions, equity incentives, changes of control and certain other transactions, shall be subject to statutory procedures, such as filing and information reporting requirement. According to the Draft Overseas Listing Rules, among other things, after making initial applications with overseas stock markets for offerings or listings, all China-based companies shall file with the CSRC within three business days. In addition, overseas offerings and listings may be prohibited for such China-based companies when any of the following applies: (a) if the securities offerings and listings are prohibited by applicable PRC laws and rules; (b) if securities offerings and listings may constitute a threat to, or endanger national security as reviewed and determined by PRC authorities; (c) if there are material ownership disputes over applicants’ equity interests, major assets, core technologies or other items; (d) if a PRC company or its controlling shareholders or de facto controllers have committed certain crimes, under investigation for suspicion of major violations in the prior three years; (e) if any directors, supervisors, or senior executives of applicants have been subject to administrative punishments for severe violations, or are under investigations for crimes or major violations; or (f) other circumstances as provided. The Draft Administrative Provisions further stipulate that a fine between RMB 1 million and RMB 10 million may be imposed if a company fails to fulfill the filing requirements with the CSRC or conducts an overseas offering or listing in violation of the Draft Overseas Listing Rules. In the case of severe violations, an order to suspend relevant businesses or halt operations for rectification may be issued, and relevant business permits or operational license revoked.

Overseas issuance and listings subject to the Draft Overseas Listing Rules include direct and indirect issuance and listings. Where an enterprise whose principal business activities are conducted in PRC seeks to issue and list its shares in the name of an overseas enterprise based on equity ownership, assets, income or other similar rights and interests of an PRC domestic enterprise, such activities are deemed an indirect overseas issuance and listing (the “Indirect Overseas Issuance and Listing”) under the Draft Overseas Listing Rules. Our PRC counsel has advised us that this offering and the proposed listing of our shares on the Nasdaq would be deemed an Indirect Overseas Issuance and Listing under the Draft Overseas Listing Rules and will be required to complete the filing procedures and submit the relevant information to CSRC after the Draft Overseas Listing Rules become effective. As of the date hereof, the rules have not become effective and we are not required to complete the filing procedures if we complete the offering and transferring the trading of our securities on the Nasdaq before the rules take effect. In addition, our PRC counsel advised us that, even if the filing procedures are implemented, we would only submit the filing materials as provided by the rules and no CSRC approve is required under the rules. Because we are relying on an opinion of counsel, there is uncertainty inherent in relying on an opinion of counsel in connection with whether we are required to obtain permissions from a governmental agency that is required to approve of our operations and/or listings.

If the CSRC, CAC or any other governmental agency requires that we obtain their respective approval(s) for our securities issuances or overseas listing, the offering would be delayed until we have obtained such approval. There is also the possibility that we may not be able to obtain or maintain such approval or that we inadvertently concluded that such approval was not required. If we do not receive or maintain required permissions or approvals, inadvertently conclude that such permissions or approvals are not required, or applicable laws, regulations, or interpretations change and we are required to obtain such permissions or approvals in the future, we may face regulatory actions, investigations, disruption of our subsidiaries’ operations, or other sanctions from the CSRC, CAC or other Chinese regulatory authorities. These authorities may impose fines and penalties upon our subsidiaries’ operations in China, limit our operating privileges in China, delay or restrict the repatriation of the proceeds from this offering into China, or take other actions that could have a material adverse effect upon our business, financial condition, results of operations, reputation and prospects, as well as the trading price of our common stock. The CSRC, CAC or other Chinese regulatory agencies may also take actions requiring us, or making it advisable for us, to terminate this offering prior to closing. Any failure of us to fully comply with new or changed regulatory requirements may significantly limit or completely hinder our ability to offer or continue to offer the common stock, causing significant disruption to our business operations, severely damage our reputation, materially and adversely affect our financial condition and results of operations and cause the common stock to significantly decline in value or become worthless. See “Risk Factor — “The Chinese government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations and/or the value of the securities we are registering for sale”; “Risk Factor — The Chinese government may intervene or influence the operations of our PRC subsidiaries and exercise significant oversight and discretion over the conduct of their business and may intervene in or influence their operations at any time, which could result in a material change in operations of our PRC subsidiaries and/or the value of our common stock”; and “Risk Factor — Recent regulatory developments in China, including greater oversight and control by the CAC over data security, may subject us to additional regulatory review, and any actions by the Chinese government to exert more oversight and control over foreign investment in China-based issuers could significantly limit or completely hinder our ability to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.”

Cash Flows, Dividends and Other Asset Transfers between the U.S. Holding Company and Our Subsidiaries

Cash may be transferred within our organization in the following manners: (i) we may transfer funds to our PRC subsidiaries by way of capital contributions or loans, through intermediate holding companies, such as our Hong Kong subsidiaries; (ii) we or our intermediate holding companies may provide loans to our PRC operating subsidiaries directly and vice versa ; and (iii) our PRC subsidiaries may make dividends or other distributions to us through our intermediate holding subsidiaries.

We are a holding company with no material operations of our own and do not generate any revenue. We currently conduct substantially all of our operations through our PRC operating subsidiaries, QHDX and Xixingdao, and their subsidiaries. We are permitted under PRC laws and regulations to provide funding to PRC subsidiaries through loans or capital contributions, only if we satisfy the applicable PRC government registration and approval requirements. Any loans from us or our holding subsidiaries outside of China to our PRC subsidiaries, which are treated as FIEs under PRC law, are subject to PRC regulations and foreign exchange loan registration requirements. See “Risk Factors —PRC regulation of loans and direct investment by offshore holding companies to PRC entities may delay or prevent us from using the proceeds of our securities offerings to make loans or additional capital contributions to our PRC operating subsidiary, which could materially and adversely affect our liquidity and our ability to fund and expand our business” on page 34 of this prospectus.

Under Nevada law, we may pay dividends to our shareholders subject to our ability to service our debts as they become due and provided that our assets will exceed our liabilities after the payment of such dividends. As a holding company, we may rely on dividends and other distributions on equity paid by our subsidiaries for our cash and liquidity requirements, including funds necessary to pay dividends and other cash distributions to our shareholders or investors, or service any debt we may incur outside of China and pay our expenses. If any of our subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict their ability to pay dividends to us. To the extent cash or assets in the business is in the PRC or a PRC subsidiary, the cash or assets may not be available to fund operations or for other use outside of the PRC due to interventions in or the imposition of restrictions and limitations on our or our subsidiaries’ ability by the PRC government to transfer cash or assets. Under the PRC laws and regulations, our PRC subsidiaries may pay dividends only out of their respective accumulated after-tax profits as determined in accordance with PRC accounting standards and regulations. In addition, each of our PRC subsidiaries is required to set aside at least 10% of its accumulated after-tax profits each year, after making up for previous year’s accumulated losses, to fund certain statutory reserve funds, until the aggregate amount of such funds reaches 50% of its registered capital. At its discretion, a subsidiary may allocate a portion of its after-tax profits based on PRC accounting standards to discretional funds. These reserve funds and discretional funds are prohibited from being distributed to their shareholders as dividends. See “Risk Factors — We may rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability to conduct our business” on page 35 and “Risk Factors — Payment of dividends is subject to restrictions under Nevada and the PRC laws” on page 39 of this prospectus.

Remittance of funds by our subsidiaries out of China is subject to examination by the banks designated by SAFE and declaration and payment of withholding tax. Cash dividends, if any, on our common stock will be paid in U.S. dollars. The PRC government also imposes restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities. As such, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any. In addition, there can be no assurance that the PRC government will not intervene or impose additional restrictions on our ability to transfer cash or assets within our organization or to foreign investors, which could result in an inability or prohibition on making transfers or distributions outside of PRC, which may adversely affect our business, financial condition and results of operations. See “Risk Factors — Payment of dividends is subject to restrictions under Nevada and the PRC laws” on page 39; and “Risk Factors — Governmental control of currency conversion may affect the value of your investment” on page 35 of this prospectus.

If we are deemed by the PRC tax authorities as a PRC tax resident enterprise for tax purposes, any dividends we pay to our non-PRC resident shareholders and gains received by our non-PRC stockholders from sale of our shares may be regarded as China-sourced income and as a result, may be subject to PRC withholding tax at a rate of up to 10.0%. Pursuant to the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income, or the Double Tax Avoidance Arrangement, the 10% withholding tax rate may be reduced to 5% if a Hong Kong resident enterprise owns no less than 25% of a PRC entity. However, the 5% withholding tax rate does not automatically apply and certain requirements must be satisfied, including, without limitation, that (a) the Hong Kong entity must be the beneficial owner of the relevant dividends; and (b) the Hong Kong entity must directly hold no less than 25% share ownership in the PRC entity during the 12 consecutive months preceding its receipt of the dividends. In practice, a Hong Kong entity must obtain a tax resident certificate from the Hong Kong tax authority to apply for the 5% lower PRC withholding tax rate. As the Hong Kong tax authority will issue such a tax resident certificate on a case-by-case basis, we cannot be certain that we will be able to obtain the tax resident certificate from the relevant Hong Kong tax authority and enjoy the preferential withholding tax rate of 5% under the Double Taxation Arrangement with respect to any dividends to be paid by our WFOE, QHDX, to our Hong Kong subsidiary. Our WFOE currently does not have any plan to declare and pay dividends, and we have not applied for the tax resident certificate from the relevant Hong Kong tax authority. Our Hong Kong subsidiary will apply for the tax resident certificate when our WFOE plans to declare and pay dividends.

The following discussions illustrate taxes we would hypothetically be required to pay in China, assuming that: (i) our PRC subsidiaries have taxable earnings, and (ii) they determine to pay dividends in the future:

Notes:

As of the date of this prospectus, we have not made any cash transfers, capital contributions or loans to any of our subsidiaries. Any loans from us or our holding subsidiaries outside of China to our PRC subsidiaries, which are treated as FIEs under PRC law, are subject to PRC regulations and foreign exchange loan registrations. Such loans to our FIE subsidiaries to finance their activities must be registered with the SAFE, or its local counterparts, or filed with SAFE in its information system. Funds are transferred among our PRC subsidiaries for working capital purposes, primarily between our WFOE subsidiary, QHDX, and our operating subsidiaries. As advised by our PRC counsel, PRC laws and regulations, as well as judicial interpretations thereof, do not prohibit using cash generated from one subsidiary to fund another subsidiary’s operations by way of short term interest free loans. The transfer of funds among our subsidiaries are subject to the Provisions of the Supreme People’s Court on Several Issues Concerning the Application of Law in the Trial of Private Lending Cases (2020 Revision, the “Provisions on Private Lending Cases”) issued on August 20, 2020, which are applicable to financing activities among individuals, legal entities and unincorporated organizations. We have not been notified of any other restriction which could limit our PRC subsidiaries’ ability to transfer cash to other PRC subsidiaries. In addition, QHDX has maintained cash management policies which dictate the corporate approvals and procedure with respect to cash transfers with other PRC subsidiaries. QHDX conducts review and management of its subsidiaries’ cash transfers and reports to its board of directors. The funds are transferred among our PRC subsidiaries mainly for two purposes, including capital injections for working capital and intercompany advances. For capital injections, funds are transferred based on shareholders’ resolutions and related corporate approval documents. Intercompany advances are mainly for short term borrowings between our subsidiaries. Once the borrowing subsidiary has a surplus, it will repay the funds to its WFOE shareholder or other PRC subsidiaries. All cash transfer requests must be (a) first reported to and reviewed by the head of the Finance/Accounting Department at QHDX and the relevant PRC subsidiary’s chief executive officer, and (b) then be approved by the Chief Financial Officer and Chairman of QHDX. If the transfer amount is material, the transfer must be approved by all directors of QHDX. Other than QHDX, neither us nor other subsidiaries have cash management policies dictating how funds are transfer, provided each entity must comply with applicable law or regulations with respect to transfer of funds, dividends and distributions. In the future, cash proceeds raised from overseas financing activities, including this offering, may be transferred by us to our Hong Kong subsidiaries and PRC subsidiaries via capital contributions or shareholder loans.

The following table describes transfers among us and our subsidiaries made during the periods presented:

As of the date of this prospectus, none of our subsidiaries have made any dividends or other distributions to us or their respective shareholders, nor have we ever made a dividend or distribution to our shareholders. Our PRC subsidiaries presently intend to retain all earnings to fund their operations and business expansions.

For more information, see our consolidated financial statements and the related notes included elsewhere in the registration statement to which this prospectus forms a part.

Dividend Policy

We anticipate that we will retain any earnings to support operations and to finance the growth and development of our business. Therefore, we do not expect to pay cash dividends in the foreseeable future. Any future determination relating to our dividend policy will be made at the discretion of our board of directors and will depend on a number of factors, including future earnings, capital requirements, financial conditions and future prospects and other factors the board of directors may deem relevant. As of the date of this prospectus, we have not paid any dividends or distributions to our shareholders.

As a holding company, we may rely on dividends from our subsidiaries in China for our cash requirements, including any payment of dividends to our shareholders. PRC regulations restrict the ability of our PRC subsidiaries to pay dividends to us. Our subsidiaries in China are required to set aside at least 10% of after-tax profits each year, if any, to fund statutory reserve funds until the accumulative amount of such statutory reserve funds reaches 50% of its registered capital. At its discretion, our PRC subsidiaries may allocate a portion of its after-tax profits based on PRC accounting standards to discretionary funds. These reserve funds and discretionary funds are not distributable as cash dividends. The PRC government also imposes restrictions on the conversion of RMB into foreign currencies and the remittance of currencies out of the PRC. As such, we may experience difficulties in completing the administrative procedures necessary to obtain and remit foreign currency for the payment of dividends from our profits, if any.

Holding Foreign Companies Accountable Act (the “HFCAA”)

Our common stock may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the PCAOB is unable to inspect our auditors for three consecutive years beginning in 2021. Further, on June 22, 2021, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act (“AHFCAA”) and on February 4, 2022, the U.S. House of Representatives passed the America Creating Opportunities for Manufacturing Pre-Eminence in Technology and Economic Strength (COMPETES) Act of 2022 (the “COMPETES Act”). If either the AHFCAA or the COMPETES Act is enacted into law, it would amend the HFCAA and require the SEC to prohibit an issuer’s securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections or complete investigations for two consecutive years instead of three.

Pursuant to the HFCAA, the PCAOB issued a Determination Report on December 16, 2021, which found that the PCAOB is unable to inspect or investigate completely registered public accounting firms headquartered in: (1) mainland China and (2) Hong Kong. In addition, the PCAOB’s report identified the specific registered public accounting firms which are subject to these determinations. On August 26, 2022, the PCAOB signed a Statement of Protocol (SOP) Agreement with the CSRC and the MOF of the PRC regarding cooperation in the oversight of PCAOB-registered public accounting firms in the PRC and Hong Kong. The SOP remains unpublished and is subject to further interpretation and implementation. Pursuant to the fact sheet with respect to the SOP disclosed by the SEC, the SOP seeks to establish a method for the PCAOB to conduct inspections of PCAOB-registered public accounting firms in the PRC and Hong Kong, as contemplated by the Sarbanes-Oxley Act. Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions. The PCAOB is required to reassess its determinations as to whether it is able to carry out inspections and investigations completely and without obstruction by the end of 2022. There is a possibility that, following the PCAOB’s reassessment, it could determine that it is still unable to inspect or investigate completely registered public accounting firms in mainland China and Hong Kong.

Our auditor, MaloneBailey, LLP, is headquartered in Houston, Texas, with offices in Beijing and Shenzhen and, as a PCAOB-registered public accounting firm, is required by the laws of the U.S. to undergo regular inspections by the PCAOB to assess its compliance with the laws of the U.S. and professional standards. MaloneBailey, LLP has been subject to PCAOB inspections on a regular basis with the last inspection conducted in 2021, and is not among the PCAOB-registered public accounting firms headquartered in the PRC or Hong Kong that are subject to PCAOB’s determination of having been unable to inspect or investigate completely.

Notwithstanding the foregoing, if it is later determined that the PCAOB is unable to inspect or investigate our auditor completely, or if there is any regulatory change or step taken by PRC regulators that does not permit our auditor to provide audit documentations located in China or Hong Kong to the PCAOB for inspection or investigation, or the PCAOB expands the scope of the Determination so that we are subject to the HFCAA, as the same may be amended, you may be deprived of the benefits of such inspection or investigation. Any audit reports not issued by auditors that are completely inspected or investigated by the PCAOB, or a lack of PCAOB inspections of audit work undertaken in China that prevents the PCAOB from regularly evaluating our auditors’ audits and their quality control procedures, could result in a lack of assurance that our financial statements and disclosures are adequate and accurate. which could result in limitation or restriction to our access to the U.S. capital markets, and trading of our securities, including trading on a national exchange or on “over-the-counter” markets, may be prohibited under the HFCAA. See “Risk Factors — Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completely our auditors for three consecutive years beginning in 2021, or for two consecutive years if the Accelerating Holding Foreign Companies Accountable Act or the America COMPETES Act becomes law” and “Risk Factors — Newly enacted Holding Foreign Companies Accountable Act, recent regulatory actions taken by the SEC and the Public Company Accounting Oversight Board, and proposed rule changes submitted by Nasdaq calling for additional and more stringent criteria to be applied to China-based public companies could add uncertainties to our capital raising activities and compliance costs” for more information.

Summary Risk Factors

Our business and prospects may be limited by a number of risks and uncertainties that we currently face, including without limitation, the following:

Risks Related to Our Business and Industry -- See “Risk Factors — Risks Related to Our Business and Industry” from page 13 to page 25 of this prospectus.

Risks Related to Doing Business in China — See “Risk Factors — Risks Related to Doing Business in China” from page 25 to page 40 of this prospectus.

Risks Related to Our Securities and this Offering — See “Risk Factors — Risks Related to our Common Stock” and “Risk Factors — Risks Related to this Offering” from page 40 to page 42 of this prospectus.

In addition, we face other risks and uncertainties that may materially affect our business prospects, financial condition and results of operations. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investing in our common stock.

Corporate Information

The Company was incorporated in the State of Nevada on March 21, 2014 as CRYPTO-SERVICES, INC. Effective as of September 21, 2016, the Company changed its name from “Crypto-Services, Inc.” to “Fortune Valley Treasures, Inc.” In connection with our name change, our trading symbol on the OTC Pink Open Market was changed from “CRYT” to “FVTI.”

Our principal executive offices are located at B1601 Oriental Impression Building 2, No. 139 Liansheng Road, Humen Town, Dongguan, Guangdong, China 523900. Our telephone number is (86) (769) 8572-9133. We maintain a corporate website at http://www.fvti.show/. Information on our website, and any downloadable files found there, are not part of this prospectus and should not be relied upon with respect to this offering.

Prospectus Conventions

Except where the context otherwise requires and for purposes of this prospectus only, references to the “Company,” “FVTI,” “FVTI Nevada,” “the U.S. holding company,” “we,” “us,” and “our” are to Fortune Valley Treasures, Inc., a Nevada corporation, which is the parent holding company issuing securities hereby.

References to our “offshore subsidiaries” are to all of our subsidiaries except our PRC subsidiaries, including:

● DaXingHuaShang Investment Group Limited, a company incorporated under the laws of the Republic of Seychelles (“DIGLS”), which is a wholly owned subsidiary of FVTI;

● Jiujiu Group Stock Co., Ltd., a company incorporated under the laws of the Republic of Seychelles (“JJGS”), which is a wholly owned subsidiary of FVTI;

● DaXingHuaShang Investment (Hong Kong) Limited, a company organized under the laws of Hong Kong Special Administrative Region (SAR) of the PRC (“DILHK”), which is a wholly owned subsidiary of DIGLS;

● Jiujiu (HK) Industry Limited, a company organized under the laws of Hong Kong SAR (“JJHK”), which is a wholly owned subsidiary of JJGS;

References to our “PRC subsidiaries” are to our subsidiaries incorporated in mainland China, including:

● Qianhai DaXingHuaShang Investment (Shenzhen) Co., Ltd., a company incorporated in China (“QHDX” or a “WFOE”) and a wholly-owned subsidiary of DILHK;

● Jiujiu (Shenzhen) Industry Co., Ltd., a company incorporated in China (“JJSZ” or a “WFOE”) and a wholly-owned subsidiary of JJHK;

● Dongguan Xixingdao Technology Co., Ltd. (“Xixingdao”), a company incorporated in the PRC and a 90%-owned subsidiary of QHDX;

● Dongguan City FVT Supply Chain Technology Co., Ltd. (“FVTL or FVT Supply Chain”), a company incorporated in the PRC and a wholly-owned subsidiary of QHDX;

● Dongguan City Fu Gu Supply Chain Group Co., Ltd. (“FGGC” or “FG Supply Chain”), a company incorporated in the PRC and a wholly-owned subsidiary of QHDX;

● Dongguan City Fu La Tu Trade Co., Ltd. (“FLTT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City Fu Xin Gu Trade Co., Ltd. (“FXGT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City Fu Zhi Gu Trade Co., Ltd. (“FZGT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City Chang Fu Trade Co., Ltd. (“CFT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City La Tong Trade Co., Ltd. (“LTT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City Kai Fu Trade Co., Ltd. (“KFT”), a company incorporated in the PRC and a wholly-owned subsidiary of FVTL;

● Dongguan City Fu Lai Food Co., Ltd. (“FLFL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Xin Technology Co., Ltd. (“FXTL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Xiang Technology Co., Ltd (“FGTL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Ji Food & Beverage Co., Ltd. (“FJFL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Yi Beverage Co., Ltd. (“FYBL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Guan Healthy Industry Technology Co., Ltd. (“FGHL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Jing Technology Co., Ltd. (“FJTL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Sheng Drinking Water Co. Ltd. (“FSWL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Jia Drinking Water Co., Ltd. (“FJWL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Xi Drinking Water Co., Ltd. (“FXWL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao;

● Dongguan City Fu Li Trading Co., Ltd. (“FLTL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao; and

● Shenzhen Fu Jin Trading Technology Co., Ltd. (“FJSTL”), a company incorporated in the PRC and a wholly-owned subsidiary of Xixingdao.

THE OFFERING

(1) The number of shares of common stock to be outstanding immediately after this offering is based upon 15,655,038 shares outstanding as of the date of this prospectus.

(2) Except as otherwise indicated, the number of shares of common stock presented in this prospectus excludes shares of our common stock issuable if the underwriters exercise their over-allotment option and shares of our common stock underlying warrants to be issued to the representative of the underwriters in connection with this offering.

SUMMARY CONSOLIDATED FINANCIAL DATA

The following selected historical statements of operations for the fiscal years ended December 31, 2021 and 2020, and balance sheet data as of December 31, 2021 and 2020 have been derived from our audited consolidated financial statements for those periods included elsewhere in this prospectus. The statements of operations data for the nine months ended September 30, 2022 and the balance sheet data as of September 30, 2022 have been derived from our unaudited financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of the results that may be expected in the future. You should read this data together with our consolidated financial statements and related notes appearing elsewhere in this prospectus as well as “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” appearing elsewhere in the prospectus.

Selected Consolidated Statements of Operations and Comprehensive Income (Loss)

Selected Consolidated Balance Sheet Data

RISK FACTORS

Investing in our securities involves a high degree of risk. Before making any investment decision, you should consider carefully the following risks and other information in this prospectus, including our consolidated financial statements and related notes. The risks and uncertainties we describe are not the only ones facing us. Additional risks and uncertainties that we are unaware of or that we believe are not material at the time could also materially adversely affect our business, financial condition or results of operations. In any case, the value of our common stock could decline, and you could lose all or part of your investment. Please also see the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

Risks Related to Our Business and Industry

We have a limited operating history that you can use to evaluate us, and the likelihood of our success must be considered in light of the problems, expenses, difficulties, complications and delays frequently encountered by a small developing company.

We were incorporated in Nevada in March 2014. For the nine months ended September 30, 2022 and 2021, we generated $6,513,572 and $5,474,894, respectively, in net revenues, and had net income of $1,875,677 and $1,242,318, respectively. For the years ended December 31, 2021 and 2020, we generated $8,021,823 and $5,005,694, respectively, in net revenues, and had net income of $1,963,469 and net loss of $3,647,353, respectively. The likelihood of our success must be considered in the light of the problems, expenses, difficulties, complications and delays frequently encountered by a small company starting a new business enterprise and the highly competitive environment in which we are operating. We have a limited operating history upon which an evaluation of our future success or failure can be made. Our ability to achieve and maintain profitability and positive cash flow is dependent upon:

Failure to successfully execute our online and offline-channel strategy and the cost of our investments in our online platform and technology may materially adversely affect our gross profit, net sales and financial performance

Our food and beverage supply chain business continues to rapidly evolve and consumers increasingly embrace digital shopping. As a result, the portion of total consumer expenditures with retailers and wholesale stores occurring through digital platforms is increasing and the pace of this increase could continue to accelerate. Our strategy, which includes investments in our online platform, technology, acquisitions and store remodels, may not adequately or effectively allow us to continue to grow our online platform transaction volume, increase comparable store sales, maintain or grow our overall market position or otherwise offset the impact on the growth of our business of a moderated pace of new store openings.

Failure to successfully execute this strategy may adversely affect our market position, gross profit, net sales and financial performance which could also result in impairment charges to intangible assets or other long-lived assets. In addition, a greater concentration of online platform sales, including increasing online food sales, could result in a reduction in the amount of traffic in our stores, which would, in turn, reduce the opportunities for cross-store sales of food merchandise that such traffic creates and could reduce our sales within our stores and materially adversely affect our financial performance.

COVID-19 pandemic has had, and may continue to have, an adverse effect on our business and our financial results.

In December 2019, a novel strain of coronavirus first emerged in China, which has and is continuing to spread throughout the world. On January 30, 2020, the World Health Organization declared the outbreak of the COVID-19 disease a “Public Health Emergency of International Concern.” On March 11, 2020, the World Health Organization characterized the outbreak as a “pandemic.” The COVID-19 outbreak has resulted in, and a significant outbreak of other infectious diseases could result in, a widespread health crisis that could materially and adversely affect the economies and financial markets worldwide, and the operations and financial position of any potential target business with which we consummate a business combination could be materially and adversely affected. Furthermore, we may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors, if the target company’s personnel, vendors and service providers are unavailable to negotiate and consummate a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. The extent to which COVID-19 impacts our search for business combinations will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

In addition, our ability to consummate a business combination may be dependent on the ability to raise equity and debt financing which may be impacted by COVID-19 and other events, including as a result of increased market volatility, decreased market liquidity and third-party financing being unavailable on terms acceptable to us or at all.

COVID-19 could negatively affect our internal controls over financial reporting as a portion of our workforce is required to work from home and therefore new processes, procedures, and controls could be required to respond to changes in our business environment. Further, should any key employees become ill from COVID-19 and unable to work, the attention of the management team and resources could be diverted.

The potential effects of COVID-19 could also heighten the risks we face related to each of the risk factors disclosed below. As COVID-19 and its impacts are unprecedented and continuously evolving, there remain uncertainties surrounding the COVID-19 pandemic, including the existing and new variants of COVID-19. As a result, COVID-19 may also materially adversely affect our operating and financial results in a manner that is not currently known to us or that we do not currently consider may present significant risks to our operations.

We have a history of operating losses, and continued future operating losses would have a material adverse effect on our ability to continue as a going concern.

We have a history of operating losses and had net losses of approximately $3.6 million and $0.4 million for the years ended December 31, 2020 and 2019, respectively. We generated a net income of $1,963,469 for the year ended December 31, 2021 as a result of the increased product sale. However, there can be no assurance that we will have net income in future periods. Our history of operating losses and our projections of the level of capital that will be required for our future expanded operations may impair our ability to grow our business at the level we desire. If in the future we incur operating losses or are unable to obtain the requisite amount of capital needed to fund our planned operations, it could have a material adverse effect on our business and ability to continue as a going concern.

We operate in a highly competitive industry, and our failure to compete effectively could adversely affect our market share, revenues and growth prospects.

The food and beverage industry in China is highly fragmented and intensely competitive. Industry participants include large scale and well-funded manufacturers and distributors, as well as smaller counterparts. We believe that the market is also highly sensitive to the introduction of new products, including the ever-growing list of new alcohol and non-alcohol beverages, water and edible oil products, which may rapidly capture a significant share of the market. Presently most of our business operations and product distribution are concentrated in Guangdong province, China, and we expect to expand our product sales into broader markets and more geographic areas in China. We compete for sales with heavily advertised national and international brands sponsored by large food companies or distribution networks. Our competitors include China home-grown manufacturers and distributors, foreign companies with China operations, as well as product importers and distributors that carry the same categories of products as ours. We may not be able to compete effectively and our attempt to do so may require us to reduce our prices and result in lower margins. Failure to effectively compete could adversely affect our market share, revenues, and growth prospects.

Our failure to appropriately respond to changing consumer preferences and demand for new products could significantly harm our customer relationships and product sales.

Our business is particularly subject to changing consumer trends and preferences. Our continued success depends in part on our ability to anticipate and respond to these changes, and we may not be able to respond in a timely or commercially appropriate manner to these changes. If we are unable to do so, our customer relationships and product sales could be harmed significantly.

Furthermore, the food and beverage industry in particular is characterized by rapid and frequent changes in demand for products and new product introductions. Our failure to accurately predict these trends could negatively impact consumer opinion with respect to the products we distribute. This could harm our customer relationships and cause losses to our market share. The success of our new product offerings depends upon a number of factors, including our ability to accurately anticipate customer needs, identify the right suppliers, successfully commercialize new products in a timely manner, price our products competitively, deliver our products in sufficient volumes and in a timely manner, and differentiate our product offerings from those of our competitors.

If we do not introduce new products or make sufficient adjustments to meet the changing needs of our customers in a timely manner, some of our products could become obsolete in the view of consumers, which could have a material adverse effect on our revenues and operating results.

Competitors may enter our business sector with superior products which could affect our business adversely.

We believe that barriers to entry are low because of economies of scale, cost advantage and brand identity. Potential competitors may enter this sector with superior products. This would have an adverse effect upon our business and our results of operations. In addition, a high level of support is critical for the successful marketing and recurring sales of our products. Despite having accumulated customers from the past seven years, we may still need to continue to improve our marketing strategic, products and platform in order to assist potential customers in using our platform, and we also need to provide effective support to future clients. If we are unable to increase customer support and improve our platform in the face of increasing competition, with the increase in competition, our ability to sell our products to potential customers could adversely affect our brand, which would harm our reputation.

Supply chain issues that increase our costs or cause a delay in our ability to fulfill orders, could have an adverse impact on our business and operating results, and our failure to estimate customer demand properly may result in excess or obsolete product supply, which could adversely affect our gross margins.

With the exception of some of the bottled water products, we do not own or operate production facilities but instead rely on third party vendors to manufacture our products, and we expect that we will continue to rely on existing and new suppliers and manufacturers for the foreseeable future. The following reliance issues could have an adverse impact on the supply of our products and on our business and operating results:

In addition, the following supply chain-related issues could adversely affect our customer relationships, operating results and financial condition: