FORTUNE VALLEY TREASURES, INC. Item 1.01 Entry into a Material Definitive Agreement.
The information contained in Item 2.01 below relating to the Original Agreement and Amendment described therein is incorporated herein by reference.
Item 2.01 Completion of Acquisition or Disposition of Assets.
EQUITY INTEREST TRANSFER AGREEMENT
As previously disclosed on the Current Report on Form 8-K, on
Pursuant to the Original Agreement, QHDX agreed to purchase 90% of Xixingdao's
equity interest (the "Equity Transfer") from the Sellers in consideration of
shares of FVTI's common stock ("Issuable Shares"). The completion of the
registration of the Equity Transfer with local government authorities (the
"Closing") is subject to satisfaction of all the closing conditions (unless
waived), including, but not limited to, (a) completion of due diligence review
of Xixingdao to the satisfaction of QHDX, (b) completion of the initial draft of
the audited financial statements of Xixingdao for the fiscal year ended
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our financial statements and related notes thereto. Unless otherwise indicated or the context otherwise requires, references in this report to "we," "our" "us" and other similar terms refer to Xixingdao.
Results of Operations of Period from
2019
Net revenues $ 585,454
Cost of revenues 291,784
Gross profit 293,670
Operating expenses:
Selling and marketing expenses 12,812
General and administrative expenses 49,639
62,451
Operating income 231,219
Interest expense 31
Earnings before tax 231,188
Income tax 16,655
Net income $ 214,531
Other comprehensive income:
Foreign currency translation income (2,516 )
Comprehensive income $ 212,017
Revenue
Net revenues totaled
Cost of revenue
Cost of revenue totaled
Gross profit
Gross profit was
Operating expenses
General and administrative expenses totaled
Net income
Net income totaled
Liquidity and Capital Resources as of
Working capital
As of December 31,
2019 2018 Change
Total current assets $ 32,634 $ - $ 32,634
Total current liabilities 128,955 - 128,955
Working capital deficit (96,321 ) - (96,321 )
As of
Cash Flows for the period from
Period ended December 31,
2019 2018 Change
Cash flows generated in operating activities
(282,911 ) - (282,911 )
Cash flows provided by financing activities 49,169 - 49,169
Net increase in cash during period $ 2 $ - $ 2 Cash Flow from Operating Activities
Cash flow generated in operating activities for the period from
Cash Flow in Investing Activities
Cash flow used in investing activities was
Cash Flow from Financing Activities
Cash flow provided by financing activities was
Results of Operations for the Six Months ended
2020 2019
(Unaudited) (Unaudited) Change
Net revenues $ 450,412 $ 22,001 $ 428,411
Cost of revenues 265,485 20,830 244,655
Gross profit 184,927 1,171 110,094
Selling, general and administrative expenses 126,541 16,504 110,037
Other Income (Expenses) 9,299 - 9299
Profit /Loss before tax 67,685 (15,316 ) 83,001
Income tax 3,415 - 3,415
Net Income/loss $ 64,270 $ (15,316 ) $ 79,586
Other comprehensive income:
Foreign currency translation income 7,820 0 7,820
Comprehensive Income/loss $ 72,090 $ (15,316 ) $ 87,406
Revenue
Net revenues totaled
Cost of revenue
Cost of revenue totaled
Gross profit
Gross profit was
Operating expenses
Selling, general and administrative expenses totaled
Net Income/Loss
Net Income totaled
Liquidity and Capital Resources
Working capital as
September 30,
2020 September 30, 2019 Change
Total current assets $ 158,620 $ 10,048 $ 148,572
Total current liabilities 190,851 28,504 162,347
Working capital deficit (32,231 ) (18,456 ) 13,775
As of
Cash Flows for the nine months ended
2020 2019 Change
Cash flows generated in operating activities
- (3,249 ) 3,249
Cash flows provided by financing activities 43,993 - 43,993
Net increase in cash during period $ 8,652 $ 4,226 $ 4,426 Cash Flow from Operating Activities
Cash flow used in operating activities for the nine months ended
Cash Flow from Financing Activities
Cash flow provided by financing activities was
Critical Accounting Policy and Estimates
In the ordinary course of business, we make a number of estimates and
assumptions relating to the reporting of results of operations and financial
condition in the preparation of our financial statements in conformity with
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired.
The audited financial statements, including Balance Sheet as of
(b) Pro Forma Financial Information.
The unaudited Pro Forma Combined Financial Statements, including Balance Sheet and Statement of Operations and Comprehensive Loss, are filed as Exhibit 99.2 to this amendment.
The unaudited pro forma financial information is provided for informational purposes only and is not necessarily indicative of what the actual results of operations would have been had the transactions taken place on the assumed date; nor is it indicative of the future consolidated results of operations or financial position of the combined companies.
(d) Exhibits
The following exhibits are furnished herewith:
Exhibit Number Description
Audited Financial Statements of Xixingdao as of December 31 ,
99.1 2019
Reviewed Financial Statements of Xixingdao as of September 30 ,
99.2 2020
99.3 Unaudited Pro Forma Combined Financial Statements© Edgar Online, source
