Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2018 | Aug. 20, 2018 | |
Document and Entity Information: | ||
Entity Registrant Name | Fortune Valley Treasures, Inc. | |
Entity Central Index Key | 1,626,745 | |
Document Type | 10-Q | |
Document Period End Date | Jun. 30, 2018 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Entity Common Stock, Shares Outstanding | 307,750,000 | |
Trading Symbol | FVTI | |
Document Fiscal Period Focus | Q2 | |
Document Fiscal Year Focus | 2,018 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 29,312 | $ 77,782 |
Accounts and other receivable, net | 21,464 | 15,317 |
Inventories | 265,760 | 273,491 |
Prepaid expenses | 14,500 | 5,895 |
Due from related parties | 33,841 | 40,126 |
Prepaid taxes and taxes recoverable | 2,670 | 751 |
Total current assets | 367,547 | 413,362 |
Non-current assets | ||
Plant and equipment, net | 10,757 | 13,824 |
Total Assets | 378,304 | 427,186 |
Current liabilities | ||
Accounts and taxes payable | 36,352 | 44,188 |
Accrued liabilities and other payables | 303 | 2,175 |
Customers advances and deposits | 44,497 | 11,697 |
Due to related parties | 587,144 | 500,608 |
Total current liabilities | 668,296 | 558,668 |
Total Liabilities | 668,296 | 558,668 |
Stockholders' Equity | ||
Common stock (3,000,000,000 shares authorized, 307,750,000 issued and outstanding at December June 30, 2018 and 2017) | 307,750 | 307,750 |
Additional paid in capital | ||
Accumulated deficit | (607,294) | (445,673) |
Accumulated other comprehensive income | 9,552 | 6,441 |
Total Stockholders' Deficit | (289,992) | (131,482) |
Total Liabilities and Stockholders' Equity | $ 378,304 | $ 427,186 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - shares | Jun. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 |
Common stock, shares issued | 307,750,000 | 307,750,000 |
Common stock, shares outstanding | 307,750,000 | 307,750,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||||
Net revenues (related party revenue $0 and $0 for 2018 and 2017) | $ 14,226 | $ 7,109 | $ 27,973 | $ 25,376 |
Cost of revenues | 9,574 | 4,206 | 17,133 | 13,370 |
Gross profit | 4,652 | 2,903 | 10,840 | 12,006 |
Selling, general and administrative expenses | 70,771 | 49,541 | 173,881 | 96,846 |
Operating loss | (66,119) | (46,638) | (163,041) | (86,102) |
Other income (expenses): | ||||
Other income expenses | 1,475 | 1,475 | ||
Interest income | ||||
Interest expense | (201) | (201) | ||
Total Other income (expense) | 1,475 | (201) | 1,475 | (201) |
Earnings before tax | (64,644) | (46,839) | (161,566) | (86,303) |
Income tax | 376 | 376 | ||
Net loss | (64,644) | (47,215) | (161,566) | (86,679) |
Other comprehensive income: | ||||
Foreign currency translation gain | 4,942 | (2,074) | 3,414 | (2,144) |
Comprehensive loss | $ (59,702) | $ (49,289) | $ (158,152) | $ (88,825) |
Loss per share | ||||
Basic and diluted earnings per share | $ 0 | $ 0 | $ 0 | $ 0 |
Basic and diluted weighted average shares outstanding | 307,750,000 | 307,750,000 | 307,750,000 | 307,750,000 |
Consolidated Statements of Ope5
Consolidated Statements of Operations and Comprehensive Loss (Unaudited) (Parenthetical) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Statement [Abstract] | ||
Related party revenue | $ 0 | $ 0 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Cash flows from operating activities | ||
Net loss | $ (161,566) | $ (86,679) |
Depreciation of fixed assets | 3,470 | 3,240 |
Increase in accounts and other receivables | (6,438) | (10,688) |
Increase (decrease) in inventories | 13,943 | (12,808) |
Increase (decrease) in advances and prepayments to suppliers | 23,233 | (5,372) |
(Decrease) increase in accounts and other payables and accruals | (10,812) | 7,035 |
Net cash used in operating activities | (138,170) | (105,271) |
Cash flows from investing activities | ||
Purchase of plant and equipment | ||
Net cash used in investing activities | ||
Cash flows from financing activities | ||
Proceeds of owners' injection of capital | ||
Borrowing and payments to related parties, net | 86,193 | 86,277 |
Net cash provided by financing activities | 86,193 | 86,277 |
Net decrease of cash and cash equivalents | (51,977) | (18,944) |
Effect of foreign currency translation on cash and cash equivalents | 3,507 | 709 |
Cash and cash equivalents-beginning of period | 77,782 | 103,966 |
Cash and cash equivalents-end of period | 29,312 | 85,681 |
Supplementary cash flow information: | ||
Interest received | ||
Interest paid | ||
Income taxes paid |
Organization and Description of
Organization and Description of Business | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Description of Business | NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Fortune Valley Treasures, Inc. (formerly Crypto-Services, Inc.) was incorporated in the State of Nevada on March 21, 2014. The Company’s current primary business operations of wholesale distribution and retail sales of alcoholic beverages consisting of wine and distilled liquors are conducted through its subsidiaries in the People’s Republic of China (“PRC”). On January 5, 2018, the Company’s board of directors unanimously approved to modify the Company’s accounting fiscal year end from August 31 to December 31. On January 29, 2018, the Company filed a Certificate of Amendment with the State of Nevada to increase its authorized shares to 3,000,000,000. On April 11, 2018, the Company entered into share exchange agreement by and among DaXingHuaShang Investment Group Limited (“DIGLS”) and its shareholders: 1.) Yumin Lin, 2.) Gaosheng Group Co., Ltd. and 3.) China Kaipeng Group Co., Ltd whereby the Company newly issued 300,000,000 shares of its common stock in exchange for all the outstanding shares in DIGLS. This transaction has been accounted for a reverse takeover transaction and a recapitalization of the Company whereby the Company, the legal acquirer, is the accounting acquiree, and DIGLS, the legal acquiree, is the accounting acquirer; accordingly, the Company historical statement of stockholders’ equity has been retroactively restated to the first period presented. DIGLS was incorporated with limited liability in the Republic of Seychelles on July 4, 2016, with a share capital of $100,000 divided into 250,000,000 ordinary shares with $0.0004 par value. DIGLS wholly owns DaXingHuaShang Investment (Hong Kong) Limited (“DILHK”). DILHK was incorporated in Hong Kong on June 22, 2016 as an investment holding company with limited liability. DILHK was previously wholly owned by Mr. Yumin Lin. On November 11, 2016, Mr. Yumin Lin, transferred 100% of his ownership in DILHK to DIGLS. DILHK wholly owns Qianhai DaXingHuaShang Investment (Shenzhen)Co. Ltd. (“QHDX”) which was incorporated with limited liability on November 3, 2016 in the PRC as a wholly foreign-owned enterprise. QHDX wholly owns Dongguan City France Vin Tout Ltd. (“FVTL”). FTVL was incorporated on May 31, 2011 in the PRC with limited liability. FTVL was previously owned and controlled by Mr. Yumin Lin. FTVL has been a license to sell foods up through September 10, 2022. On November 20, 2016, Mr. Yumin Lin transferred his ownership in FTVL to QHDX for nominal consideration. The share transfers detailed above by and among Mr. Yumin Lin, DIGLS, DILHK, QHDX, and FVTL have been accounted for as a series of business combination of entities under common control; accordingly, the values in these financial statements reflect the carrying values of those entities, and no goodwill was recorded as a result of these transactions. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation These consolidated financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements have been prepared using the accrual basis of accounting in accordance with the generally accepted accounting principles (“GAAP”) in the United States. The Company’s fiscal year end is December 31. The Company’s financial statements are presented in US dollars. Basis of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Entity Name Incorporation date Entity Owned By Nature of Operation Country of Incorporation DaXingHuaShang Investment Group Limited July 4, 2016 FVTI Investment holding Seychelles DaXingHuaShang Investment (Hong Kong) Ltd (“DILHK”) June 22, 2016 DIGLS Investment holding Hong Kong, China Qianhai DaXingHuaShang Investment (Shenzhen) Co. Ltd. (“QHDX”) November 3, 2016 DILHK Investment holding China Dongguan City France Vin Tout Ltd. (“FVTL”) May 31, 2011 QHDX Trading of wine China Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results may materially differ from these estimates. Foreign currency translation and re-measurement The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “ Foreign Currency Matters The reporting currency for the Company and its subsidiaries is the US dollar. The Company’s, DIGLS’, and DILH’s functional currency is the U.S. dollar; QHDX and FVTL use the Chinese Renminbi (“RMB”) as their functional currency. The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows: ● Monetary assets and liabilities at exchange rates in effect at the end of each period ● Nonmonetary assets and liabilities at historical rates ● Revenue and expense items at the average rate of exchange prevailing during the period Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations. The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows: ● Assets and liabilities at the rate of exchange in effect at the balance sheet date ● Equities at the historical rate ● Revenue and expense items at the average rate of exchange prevailing during the period Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity. June 30, 2018 December 31, 2017 June 30, 2017 Spot RMB: USD exchange rate $ 0.1511 0.14415 $ 0.1476 Average RMB: USD exchange rate $ 0.1549 0.15031 $ 0.1461 The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits in banks, and any investments with maturities with less three months from inception to maturity. The Company’s primary bank deposits are located in the Hong Kong and the PRC; those deposits are not provided protection under FDIC insurance; however, management has determined that the risk of loss from insolvency by those financial institution at which it has deposited it funds is insignificant. Accounts receivable Accounts receivable are carried at the amounts invoiced to customers less allowance for doubtful accounts. The allowance is an estimate based on a review of individual customer accounts on a regular basis. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company reviews the collectability of accounts receivable based on an assessment of historical experience, current economic conditions, and other collection indicators. During the two years ended December 31, 2017 and the six months ended June 30, 2018, the Company did not experience any delinquent or uncollectible balances; accordingly, the Company did not record any valuation allowance for bad debt during this period. Inventories Inventories consisting of finished goods are stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company provides impairment that is charged directly to cost of sales when is has been determined the product is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are alcoholic beverages; the selling price of alcoholic beverages tend to increase over time; however, there are circumstances where alcoholic beverages may be subject to spoilage if stored for prolong periods of time. The Company did not experience an impairment on inventory during the six months ended June 30, 2018. Advances and prepayments to suppliers In certain instances, in order to secure the supply of limited and sought-after wines and liquors, the Company will make advance payments to suppliers for the procurement of inventory. Upon physical receipt and inspection of such products from those suppliers, the applicable balances are reclassified from advances and prepayments to suppliers to inventory. Property, plant and equipment Equipment is carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the equipment are as follows: Equipment 7 - 20 years The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized. Accounting for long-lived assets The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry or new technologies. Impairment is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated. If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. Customer advances and deposits On certain occasions, the Company may receive prepayments from downstream retailers or retails customer for wines and liquor prior to their taking possession of the Company’s products; the Company records these receipts as customer advances and deposits until it has met all the criteria for recognition of revenue including the passing possession of the products to its customer, at such point Company will reduce the customer and deposits balance and credit the Company’s revenues. Revenue recognition Revenues are recognized when the Company has negotiated the terms of the transaction, which includes determining and fixing the sales price, the transfer of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company’s gross revenue consists the value of goods invoiced, net of any value-added tax (VAT) or excise tax. Advertising All advertising costs are expensed as incurred. Advertising expense for the three and six months ended June 30, 2018 and June 30, 2017 were $0 and 0, respectively. Shipping and handling Outbound shipping and handling are expensed as incurred. Retirement benefits Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as a part of overhead. Income taxes The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain. Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital. Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. Financial instruments The Company’s accounts for financial instruments in accordance to ASC Topic 820, “Fair Value Measurements and Disclosures,” which requires disclosure of the fair value of financial instruments held by the Company and ASC Topic 825, “Financial Instruments,” which defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. Comprehensive income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss. Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable assets acquired in a business combination. In accordance with FASB ASC Topic 350, “Goodwill and Other Intangible Assets”, goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis. Recent accounting pronouncements On January 5, 2016, the FASB issued ASU 2016-01 “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Management has determined that the new pronouncement did not have a material impact on these financial statements. On February 25, 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASB’s new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to: Applying judgment and estimating. ● Managing the complexities of data collection, storage, and maintenance. ● Enhancing information technology systems to ensure their ability to perform the calculations necessary for compliance with reporting requirements. ● Refining internal controls and other business processes related to leases. ● Determining whether debt covenants are likely to be affected and, if so, working with lenders to avoid violations. ● Addressing any income tax implications. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein. Management is still evaluating the accounting impact of the new pronouncement. On March 15, 2016, the FASB issued ASU 2016-07 “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”, which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis of the investor’s previously held interest and the equity method would be applied subsequently from the date on which the investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method. The guidance in the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. Additional transition disclosures are not required upon adoption. Management has determined that new pronouncement did not have a material effect on these financial statements. On March 17, 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”, which amends the principal-versus-agent implementation guidance and illustrations in the Board’s new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standard’s principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is “a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer.” Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company has determined that it acts as a principal in its primary business operations. On March 30, 2016, the FASB issued ASU 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Management has determined that the new standard did not have a material impact on these financial statements. The Company is currently assessing the above the accounting pronouncements and their potential impact from their adoption on the financial statements. |
Going Concern
Going Concern | 6 Months Ended |
Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Going Concern | NOTE 3 - GOING CONCERN The accompanying financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going-concern basis assumes that assets are realized, and liabilities are settled in the ordinary course of business at amounts disclosed in the financial statements. The Company’s ability to continue as a going concern depends upon its ability to market and sell its products to generate positive operating cash flows. As of June 30, 2018 and December 31, 2017, the Company reported accumulated deficits of $607,294 and $445,673, respectively. As of June 30, 2018, the Company had working capital deficit of approximately $300,749. In addition, the Company had net cash outflows of $138,170 from operating activities during the six months June 30, 2018. These conditions continue to raise substantial doubt as to whether the Company will continue as a going concern. In an effort to improve its financial position, the Company is working to obtain new working capital through the sale of equity or debt securities to investors for cash to fund operations and further expansion. The Company also relies on relates parties to provided financing and management services at cost that may not be the prevailing market rate for such services. If the Company is not able to generate positive operating cash flows, raise additional capital, and retain the services of certain related parties, it may become insolvent. |
Accounts and Other Receivables
Accounts and Other Receivables | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Accounts and Other Receivables | NOTE 4 - ACCOUNTS AND OTHER RECEIVABLES Accounts and other receivables consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Gross accounts and other receivables $ 21,464 $ 15,317 Less: Allowance for doubtful accounts - - $ 21,464 $ 15,317 |
Inventories
Inventories | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | NOTE 5 – INVENTORIES Inventories consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Finished goods $ 265,760 $ 273,491 |
Equipment
Equipment | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Equipment | NOTE 6 - EQUIPMENT Property, plant and equipment consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 At Cost: Equipment 64,853 63,512 Less: Accumulated depreciation Equipment 54,096 49,688 $ 10,757 $ 13,824 |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 7 - INCOME TAXES The Company’s primary operations are in the PRC, and the Company is taxed in accordance with the relevant tax laws and regulations. The corporate income tax rate for each country is as follows: ● PRC tax rate is 25%. ● Hong Kong tax rate is 16.5% ● Seychelles is on permanent tax holiday ● USA tax rate is 21% The Company is registered the British Virgin Islands, which is a tax-exempt region. The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for three months ended June 30, 2018 and March 31, 2017: June 30, 2018 June 30, 2017 Income attributed to PRC operations $ (50,703 ) $ (24,789 ) Loss attributed to Seychelles and HK (37 ) (56 ) Loss attributed to US (13,978 ) (22,482 ) Loss before tax (64,718 ) (47,327 ) PRC Statutory Tax at 25% Rate 12,676 6,197 Effect of Seychelles, PRC, HK, deductions and other reconciling items (12,676 ) (6,197 ) Income tax $ - $ - The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows for three months ended June 30, 2018 and 2017: June 30, 2018 June 30, 2017 U.S. federal statutory income tax rate 21.0 % 34.0 % Lower rates in PRC, net -9.0 % -9.0 % Net operating losses in PRC and other jurisdictions 0.0 % 0.0 % Unrecognized deferred tax benefit -12.0 % -25.0 % The Company’s effective tax rate 0.0 % 0.0 % |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 8- RELATED PARTY TRANSACTIONS Amounts due to related parties as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 (Restated) Mr. Yumin Lin Director, CEO, Shareholder $ 422,290 $ 360,018 Mr. Sheng Former Director of the Company 21,500 21,500 Ms. Qingmei Lin Mr. Yumin Lin’s wife 15,869 25,902 Mr. Naiyong Luo Director of DIGL 113,292 93,188 $ 572,951 $ 500,608 The outstanding payables due to Mr. Yumin Lin are comprised of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing. The amounts due to Ms. Qingmei Lin are for office rental expenses. The Company’s operating facilities are located within a building owned by Ms. Qingmei Lin. The amounts due to Mr Naiyong Luo are payments received in advanced for future purchases of products. The amounts due to Mr.Xinlong Sheng are comprised of working capital advances and borrowings. These amounts are due on demand and are non-interest bearing. |
Lease Commitments
Lease Commitments | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Lease Commitments | NOTE 9 – LEASE COMMITMENTS The Company has a non-cancelable operating lease agreement with Ms. Qingmei Lin, a related party, for the premises in Dongguan City, PRC. The term of the lease is from May 1, 2017 to April 30, 2027. The monthly rent expense was $3,811 (RMB 25,000), but effective as of May 1,2018 was lowered to $2,323 (RMB15,000) based on agreement between Ms. Qingmei and Company. The total rental rent expense for six months ended June 30, 2018 and 2017 was $20,134 and $8,475 respectively. The agreement does not call for a rental deposit or equivalent. Minimum operating lease commitment for the agreement is as follows: 2018 27,876 2019 27,876 2020 27,876 2021 27,876 2022 27,876 Thereafter: 111,504 $ 250,884 |
Risks
Risks | 6 Months Ended |
Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Risks | NOTE 10 - RISKS Credit risk The Company is subject to risk borne from credit extended to customers. FTVL and QHDX bank deposits are with banks located in the PRC. DILHK’s bank account is with located in Hong Kong. DIGLS does not have any bank accounts. The bank accounts that the Company uses that that are located outside of the U.S. do not carry federal deposit insurance. Interest risk The Company is subject to interest rate risk when its loans become due and require refinancing. Economic and political risks The Company’s operations are conducted in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by changes in the political, economic, and legal environments in the PRC. As alcoholic beverages are considered a luxury item, they may be subject to political pressure and risks. The PRC has government from time to time limited the amount of import of foreign alcoholic beverages based on their relationships with those foreign countries. The Company’s results of operations may be materially adversely affected if the are unable to procure such products because the PRC government has limited the amount of imports. Inflation risk Management monitors changes in prices levels. Historically inflation has not materially impacted the Company’s financial statements; however, significant increases in the price of wine and liquors that cannot be passed on the Company’s customers could adversely impact the Company’s results of operations. Concentrations risks During the six months ended June 30, 2018 and in fiscal year 2017, the Company had a concentration of risk in its supply of raw materials, one vendor supplied all of the Company’s purchases for finished goods inventory. |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 11 - SUBSEQUENT EVENTS Company evaluates subsequent events that have occurred after the balance sheet date but before the financial statements are issued. There are two types of subsequent events: (1) recognized, or those that provide additional evidence with respect to conditions that existed at the date of the balance sheet, including the estimates inherent in the process of preparing financial statements, and (2) non-recognized, or those that provide evidence with respect to conditions that did not exist at the date of the balance sheet but arose subsequent to that date. There were no other events that management deems necessary for disclosure. |
Correction of Error
Correction of Error | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Correction of Error | NOTE 12 - CORRECTION OF ERROR During the six months ended June 30, 2018, management discovered an error in its audited December 31, 2017 balance sheet. An amount $93,188 due to Mr. Naiyong Luo was not properly disclosed as a due to related party. The table below shows the original and restated figures for the year ended December 31, 2017: Original AJE Restated Customers advances and deposits 104,885 (93,188 ) 11,697 Due to related parties 407,420 93,188 500,608 Current liabilities 558,668 - 558,668 Total liabilities 558,668 - 558,668 The Company’s results of operations for the year ended December 31, 2017 unaffected by this correction of error. Accordingly, the company loss per share for the year ended December 31, 2017 remains unchanged. |
Summary of Significant Accoun19
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation These consolidated financial statements, accompanying notes, and related disclosures have been prepared pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). These financial statements have been prepared using the accrual basis of accounting in accordance with the generally accepted accounting principles (“GAAP”) in the United States. The Company’s fiscal year end is December 31. The Company’s financial statements are presented in US dollars. |
Basis of Consolidation | Basis of consolidation The consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated. Entity Name Incorporation date Entity Owned By Nature of Operation Country of Incorporation DaXingHuaShang Investment Group Limited July 4, 2016 FVTI Investment holding Seychelles DaXingHuaShang Investment (Hong Kong) Ltd (“DILHK”) June 22, 2016 DIGLS Investment holding Hong Kong, China Qianhai DaXingHuaShang Investment (Shenzhen) Co. Ltd. (“QHDX”) November 3, 2016 DILHK Investment holding China Dongguan City France Vin Tout Ltd. (“FVTL”) May 31, 2011 QHDX Trading of wine China |
Use of Estimates | Use of estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. The estimates and judgments will also affect the reported amounts for certain revenues and expenses during the reporting period. Actual results may materially differ from these estimates. |
Foreign Currency Translation and Re-measurement | Foreign currency translation and re-measurement The Company translates its foreign operations to the U.S. dollar in accordance with ASC 830, “ Foreign Currency Matters The reporting currency for the Company and its subsidiaries is the US dollar. The Company’s, DIGLS’, and DILH’s functional currency is the U.S. dollar; QHDX and FVTL use the Chinese Renminbi (“RMB”) as their functional currency. The Company’s subsidiaries, whose records are not maintained in that company’s functional currency, re-measure their records into their functional currency as follows: ● Monetary assets and liabilities at exchange rates in effect at the end of each period ● Nonmonetary assets and liabilities at historical rates ● Revenue and expense items at the average rate of exchange prevailing during the period Gains and losses from these re-measurements were not significant and have been included in the Company’s results of operations. The Company’s subsidiaries, whose functional currency is not the U.S. dollar, translate their records into the U.S. dollar as follows: ● Assets and liabilities at the rate of exchange in effect at the balance sheet date ● Equities at the historical rate ● Revenue and expense items at the average rate of exchange prevailing during the period Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity. June 30, 2018 December 31, 2017 June 30, 2017 Spot RMB: USD exchange rate $ 0.1511 0.14415 $ 0.1476 Average RMB: USD exchange rate $ 0.1549 0.15031 $ 0.1461 The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US Dollars at the rates used in translation. |
Cash and Cash Equivalents | Cash and cash equivalents Cash and cash equivalents include cash on hand, deposits in banks, and any investments with maturities with less three months from inception to maturity. The Company’s primary bank deposits are located in the Hong Kong and the PRC; those deposits are not provided protection under FDIC insurance; however, management has determined that the risk of loss from insolvency by those financial institution at which it has deposited it funds is insignificant. |
Accounts Receivable | Accounts receivable Accounts receivable are carried at the amounts invoiced to customers less allowance for doubtful accounts. The allowance is an estimate based on a review of individual customer accounts on a regular basis. Accounts receivable are written off when deemed uncollectible. Recoveries of accounts receivable previously written off are recorded when received. The Company reviews the collectability of accounts receivable based on an assessment of historical experience, current economic conditions, and other collection indicators. During the two years ended December 31, 2017 and the six months ended June 30, 2018, the Company did not experience any delinquent or uncollectible balances; accordingly, the Company did not record any valuation allowance for bad debt during this period. |
Inventories | Inventories Inventories consisting of finished goods are stated at the lower of cost or market value. The Company used the weighted average cost method of accounting for inventory. Inventories on hand are evaluated on an on-going basis to determine if any items are obsolete, spoiled, or in excess of future demand. The Company provides impairment that is charged directly to cost of sales when is has been determined the product is obsolete, spoiled, and the Company will not be able to sell it at a normal profit above its carrying cost. The Company’s primary products are alcoholic beverages; the selling price of alcoholic beverages tend to increase over time; however, there are circumstances where alcoholic beverages may be subject to spoilage if stored for prolong periods of time. The Company did not experience an impairment on inventory during the six months ended June 30, 2018. |
Advances and Prepayments to Suppliers | Advances and prepayments to suppliers In certain instances, in order to secure the supply of limited and sought-after wines and liquors, the Company will make advance payments to suppliers for the procurement of inventory. Upon physical receipt and inspection of such products from those suppliers, the applicable balances are reclassified from advances and prepayments to suppliers to inventory. |
Property, Plant and Equipment | Property, plant and equipment Equipment is carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method. Estimated useful lives of the equipment are as follows: Equipment 7 - 20 years The cost of maintenance and repairs is charged to expenses as incurred, whereas significant renewals and betterments are capitalized. |
Accounting for Long-lived Assets | Accounting for long-lived assets The Company annually reviews its long-lived assets for impairment or whenever events or changes in circumstances indicate that the carrying amount of assets may not be recoverable. Impairment may be the result of becoming obsolete from a change in the industry or new technologies. Impairment is present if the carrying amount of an asset is less than its undiscounted cash flows to be generated. If an asset is considered impaired, a loss is recognized based on the amount by which the carrying amount exceeds the fair market value of the asset. Assets to be disposed of are reported at the lower of the carrying amount or fair value less costs to sell. |
Customer Advances and Deposits | Customer advances and deposits On certain occasions, the Company may receive prepayments from downstream retailers or retails customer for wines and liquor prior to their taking possession of the Company’s products; the Company records these receipts as customer advances and deposits until it has met all the criteria for recognition of revenue including the passing possession of the products to its customer, at such point Company will reduce the customer and deposits balance and credit the Company’s revenues. |
Revenue Recognition | Revenue recognition Revenues are recognized when the Company has negotiated the terms of the transaction, which includes determining and fixing the sales price, the transfer of possession of the product to the customer, the customer does not have the right to return the product, the customer is able to further sell or transfer the product onto others for economic benefit without any other obligation to be fulfilled by the Company, and the Company is reasonably assured that funds have been or will be collected from the customer. The Company’s gross revenue consists the value of goods invoiced, net of any value-added tax (VAT) or excise tax. |
Advertising | Advertising All advertising costs are expensed as incurred. Advertising expense for the three and six months ended June 30, 2018 and June 30, 2017 were $0 and 0, respectively. |
Shipping and Handling | Shipping and handling Outbound shipping and handling are expensed as incurred. |
Retirement Benefits | Retirement benefits Retirement benefits in the form of mandatory government sponsored defined contribution plans are charged to the either expenses as incurred or allocated to inventory as a part of overhead. |
Income Taxes | Income taxes The Company accounts for income tax using an asset and liability approach and allows for recognition of deferred tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future realization is uncertain. |
Statutory Reserves | Statutory reserves Statutory reserves are referring to the amount appropriated from the net income in accordance with laws or regulations, which can be used to recover losses and increase capital, as approved, and are to be used to expand production or operations. PRC laws prescribe that an enterprise operating at a profit must appropriate and reserve, on an annual basis, an amount equal to 10% of its profit. Such an appropriation is necessary until the reserve reaches a maximum that is equal to 50% of the enterprise’s PRC registered capital. |
Earnings Per Share | Earnings per share The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, “Earnings per share”. Basic EPS is measured as the income or loss available to common shareholders divided by the weighted average common shares outstanding for the period. Diluted EPS is similar to basic EPS but presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options, and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e. those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. |
Financial Instruments | Financial instruments The Company’s accounts for financial instruments in accordance to ASC Topic 820, “Fair Value Measurements and Disclosures,” which requires disclosure of the fair value of financial instruments held by the Company and ASC Topic 825, “Financial Instruments,” which defines fair value, and establishes a three-level valuation hierarchy for disclosures of fair value measurement that enhances disclosure requirements for fair value measures. The carrying amounts reported in the consolidated balance sheets for receivables and current liabilities each qualify as financial instruments and are a reasonable estimate of their fair values because of the short period of time between the origination of such instruments and their expected realization and their current market rate of interest. The three levels of valuation hierarchy are defined as follows: ● Level 1 inputs to the valuation methodology are quoted prices for identical assets or liabilities in active markets. ● Level 2 inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology are unobservable and significant to the fair value measurement. |
Commitments and Contingencies | Commitments and contingencies Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. |
Comprehensive Income | Comprehensive income Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other financial statements. The Company’s current component of other comprehensive income includes the foreign currency translation adjustment and unrealized gain or loss. |
Goodwill | Goodwill Goodwill represents the excess of the purchase price over the fair value of the net tangible and identifiable assets acquired in a business combination. In accordance with FASB ASC Topic 350, “Goodwill and Other Intangible Assets”, goodwill is no longer subject to amortization. Rather, goodwill is subject to at least an annual assessment for impairment, applying a fair-value based test. Fair value is generally determined using a discounted cash flow analysis. |
Recent Accounting Pronouncements | Recent accounting pronouncements On January 5, 2016, the FASB issued ASU 2016-01 “Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities”, which amends the guidance in U.S. GAAP on the classification and measurement of financial instruments. Although the ASU retains many current requirements, it significantly revises an entity’s accounting related to (1) the classification and measurement of investments in equity securities and (2) the presentation of certain fair value changes for financial liabilities measured at fair value. The ASU also amends certain disclosure requirements associated with the fair value of financial instruments. The new standard is effective for fiscal years and interim periods within those fiscal years beginning after December 15, 2017. Management has determined that the new pronouncement did not have a material impact on these financial statements. On February 25, 2016, the FASB issued ASU 2016-02 “Leases (Topic 842)”, its new standard on accounting for leases. ASU 2016-02 introduces a lessee model that brings most leases on the balance sheet. The new standard also aligns many of the underlying principles of the new lessor model with those in ASC 606, the FASB’s new revenue recognition standard (e.g., those related to evaluating when profit can be recognized). Furthermore, the ASU addresses other concerns related to the current leases model. For example, the ASU eliminates the requirement in current U.S. GAAP for an entity to use bright-line tests in determining lease classification. The standard also requires lessors to increase the transparency of their exposure to changes in value of their residual assets and how they manage that exposure. The new model represents a wholesale change to lease accounting. As a result, entities will face significant implementation challenges during the transition period and beyond, such as those related to: Applying judgment and estimating. ● Managing the complexities of data collection, storage, and maintenance. ● Enhancing information technology systems to ensure their ability to perform the calculations necessary for compliance with reporting requirements. ● Refining internal controls and other business processes related to leases. ● Determining whether debt covenants are likely to be affected and, if so, working with lenders to avoid violations. ● Addressing any income tax implications. The new guidance will be effective for public business entities for annual periods beginning after December 15, 2018 (e.g., calendar periods beginning on January 1, 2019), and interim periods therein. Management is still evaluating the accounting impact of the new pronouncement. On March 15, 2016, the FASB issued ASU 2016-07 “Investments—Equity Method and Joint Ventures (Topic 323): Simplifying the Transition to the Equity Method of Accounting”, which simplifies the equity method of accounting by eliminating the requirement to retrospectively apply the equity method to an investment that subsequently qualifies for such accounting as a result of an increase in the level of ownership interest or degree of influence. Consequently, when an investment qualifies for the equity method (as a result of an increase in the level of ownership interest or degree of influence), the cost of acquiring the additional interest in the investee would be added to the current basis of the investor’s previously held interest and the equity method would be applied subsequently from the date on which the investor obtains the ability to exercise significant influence over the investee. The ASU further requires that unrealized holding gains or losses in accumulated other comprehensive income related to an available-for-sale security that becomes eligible for the equity method be recognized in earnings as of the date on which the investment qualifies for the equity method. The guidance in the ASU is effective for all entities for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years; early adoption is permitted for all entities. Entities are required to apply the guidance prospectively to increases in the level of ownership interest or degree of influence occurring after the ASU’s effective date. Additional transition disclosures are not required upon adoption. Management has determined that new pronouncement did not have a material effect on these financial statements. On March 17, 2016, the FASB issued ASU 2016-08 “Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net)”, which amends the principal-versus-agent implementation guidance and illustrations in the Board’s new revenue standard (ASU 2014-09). The FASB issued the ASU in response to concerns identified by stakeholders, including those related to (1) determining the appropriate unit of account under the revenue standard’s principal-versus-agent guidance and (2) applying the indicators of whether an entity is a principal or an agent in accordance with the revenue standard’s control principle. Among other things, the ASU clarifies that an entity should evaluate whether it is the principal or the agent for each specified good or service promised in a contract with a customer. As defined in the ASU, a specified good or service is “a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer.” Therefore, for contracts involving more than one specified good or service, the entity may be the principal for one or more specified goods or services and the agent for others. The ASU has the same effective date as the new revenue standard (as amended by the one-year deferral and the early adoption provisions in ASU 2015-14). In addition, entities are required to adopt the ASU by using the same transition method they used to adopt the new revenue standard. The Company has determined that it acts as a principal in its primary business operations. On March 30, 2016, the FASB issued ASU 2016-09 “Compensation—Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting”, which simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The ASU is for annual reporting periods beginning after December 15, 2016, including interim periods within those annual reporting periods. Management has determined that the new standard did not have a material impact on these financial statements. The Company is currently assessing the above the accounting pronouncements and their potential impact from their adoption on the financial statements. |
Summary of Significant Accoun20
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Entities and its Subsidiaries | All intercompany accounts and transactions have been eliminated. Entity Name Incorporation date Entity Owned By Nature of Operation Country of Incorporation DaXingHuaShang Investment Group Limited July 4, 2016 FVTI Investment holding Seychelles DaXingHuaShang Investment (Hong Kong) Ltd (“DILHK”) June 22, 2016 DIGLS Investment holding Hong Kong, China Qianhai DaXingHuaShang Investment (Shenzhen) Co. Ltd. (“QHDX”) November 3, 2016 DILHK Investment holding China Dongguan City France Vin Tout Ltd. (“FVTL”) May 31, 2011 QHDX Trading of wine China |
Schedule of Foreign Currency Exchange Rate Translation | Adjustments arising from such translations are included in accumulated other comprehensive income in shareholders’ equity. June 30, 2018 December 31, 2017 June 30, 2017 Spot RMB: USD exchange rate $ 0.1511 0.14415 $ 0.1476 Average RMB: USD exchange rate $ 0.1549 0.15031 $ 0.1461 |
Schedule of Estimated Useful Lives of Equipment | Estimated useful lives of the equipment are as follows: Equipment 7 - 20 years |
Accounts and Other Receivables
Accounts and Other Receivables (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Receivables [Abstract] | |
Schedule of Accounts and Other Receivables | Accounts and other receivables consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Gross accounts and other receivables $ 21,464 $ 15,317 Less: Allowance for doubtful accounts - - $ 21,464 $ 15,317 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 Finished goods $ 265,760 $ 273,491 |
Equipment (Tables)
Equipment (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 At Cost: Equipment 64,853 63,512 Less: Accumulated depreciation Equipment 54,096 49,688 $ 10,757 $ 13,824 |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Schedule of Reconciliation of Tax Expenses | The following tables provide the reconciliation of the differences between the statutory and effective tax expenses for three months ended June 30, 2018 and March 31, 2017: June 30, 2018 June 30, 2017 Income attributed to PRC operations $ (50,703 ) $ (24,789 ) Loss attributed to Seychelles and HK (37 ) (56 ) Loss attributed to US (13,978 ) (22,482 ) Loss before tax (64,718 ) (47,327 ) PRC Statutory Tax at 25% Rate 12,676 6,197 Effect of Seychelles, PRC, HK, deductions and other reconciling items (12,676 ) (6,197 ) Income tax $ - $ - |
Schedule of Effective Income Tax Rate | The difference between the U.S. federal statutory income tax rate and the Company’s effective tax rate was as follows for three months ended June 30, 2018 and 2017: June 30, 2018 June 30, 2017 U.S. federal statutory income tax rate 21.0 % 34.0 % Lower rates in PRC, net -9.0 % -9.0 % Net operating losses in PRC and other jurisdictions 0.0 % 0.0 % Unrecognized deferred tax benefit -12.0 % -25.0 % The Company’s effective tax rate 0.0 % 0.0 % |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Schedule of Amount Due to Related Parties | Amounts due to related parties as of June 30, 2018 and December 31, 2017: June 30, 2018 December 31, 2017 (Restated) Mr. Yumin Lin Director, CEO, Shareholder $ 422,290 $ 360,018 Mr. Sheng Former Director of the Company 21,500 21,500 Ms. Qingmei Lin Mr. Yumin Lin’s wife 15,869 25,902 Mr. Naiyong Luo Director of DIGL 113,292 93,188 $ 572,951 $ 500,608 |
Lease Commitments (Tables)
Lease Commitments (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Minimum Operating Lease Commitment | Minimum operating lease commitment for the agreement is as follows: 2018 27,876 2019 27,876 2020 27,876 2021 27,876 2022 27,876 Thereafter: 111,504 $ 250,884 |
Correction of Error (Tables)
Correction of Error (Tables) | 6 Months Ended |
Jun. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections Original and Restated Figures | The table below shows the original and restated figures for the year ended December 31, 2017: Original AJE Restated Customers advances and deposits 104,885 (93,188 ) 11,697 Due to related parties 407,420 93,188 500,608 Current liabilities 558,668 - 558,668 Total liabilities 558,668 - 558,668 |
Organization and Description 28
Organization and Description of Business (Details Narrative) - USD ($) | Apr. 11, 2018 | Jun. 30, 2018 | Jan. 29, 2018 | Dec. 31, 2017 | Nov. 11, 2016 | Jul. 04, 2016 |
Common stock shares authorized | 3,000,000,000 | 3,000,000,000 | ||||
Ownership percentage | 100.00% | |||||
DaXingHuaShang Investment Group Limited [Member] | ||||||
Common stock shares authorized | 250,000,000 | |||||
Number of common stock shares issued | 300,000,000 | |||||
Share capital | $ 100,000 | |||||
Common stock par value | $ 0.0004 | |||||
Maximum [Member] | ||||||
Common stock shares authorized | 3,000,000,000 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies (Details Narrative) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Advertising expense | $ 0 | $ 0 | $ 0 | $ 0 |
Percentage of statutory reserves | 10.00% | |||
Maximum [Member] | ||||
Percentage of statutory reserves | 50.00% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Entities and its Subsidiaries (Details) | 6 Months Ended |
Jun. 30, 2018 | |
FVTI [Member] | |
Entity Name | DaXingHuaShang Investment Group Limited |
Entity Incorporation date | Jul. 4, 2016 |
Nature of Operation | Investment holding |
Country of Incorporation | Seychelles |
DIGLS [Member] | |
Entity Name | DaXingHuaShang Investment (Hong Kong) Ltd ("DILHK") |
Entity Incorporation date | Jun. 22, 2016 |
Nature of Operation | Investment holding |
Country of Incorporation | Hong Kong, China |
DILHK [Member] | |
Entity Name | Qianhai DaXingHuaShang Investment (Shenzhen)Co. Ltd. ("QHDX") |
Entity Incorporation date | Nov. 3, 2016 |
Nature of Operation | Investment holding |
Country of Incorporation | China |
QHDX [Member] | |
Entity Name | Dongguan City France Vin Tout Ltd., ("FVTL") |
Entity Incorporation date | May 31, 2011 |
Nature of Operation | Trading of wine |
Country of Incorporation | China |
Summary of Significant Accoun31
Summary of Significant Accounting Policies - Schedule of Foreign Currency Exchange Rate Translation (Details) | Jun. 30, 2018 | Dec. 31, 2017 | Jun. 30, 2017 |
Spot RMB [Member] | |||
Foreign Currency Exchange Rate Translation | 0.1511 | 0.14415 | 0.1476 |
Average RMB [Member] | |||
Foreign Currency Exchange Rate Translation | 0.1549 | 0.15031 | 0.1461 |
Summary of Significant Accoun32
Summary of Significant Accounting Policies - Schedule of Estimated Useful Lives of Equipment (Details) - Equipment [Member] | 6 Months Ended |
Jun. 30, 2018 | |
Minimum [Member] | |
Estimated useful lives of equipment | 7 years |
Maximum [Member] | |
Estimated useful lives of equipment | 20 years |
Going Concern (Details Narrativ
Going Concern (Details Narrative) - USD ($) | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Accumulated deficit | $ 607,294 | $ 445,673 | |
Working capital deficit | 300,749 | ||
Net cash used in operating activities | $ 138,170 | $ 105,271 |
Accounts and Other Receivable34
Accounts and Other Receivables - Schedule of Accounts and Other Receivables (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Receivables [Abstract] | ||
Gross accounts and other receivables | $ 21,464 | $ 15,317 |
Less: Allowance for doubtful accounts | ||
Accounts and other receivables net | $ 21,464 | $ 15,317 |
Inventories - Schedule of Inven
Inventories - Schedule of Inventories (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 265,760 | $ 273,491 |
Equipment - Schedule of Propert
Equipment - Schedule of Property, Plant and Equipment (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Property, Plant and Equipment [Abstract] | ||
Equipment at cost | $ 64,853 | $ 63,512 |
Less: Accumulated depreciation | 54,096 | 49,688 |
Equipment | $ 10,757 | $ 13,824 |
Income Taxes (Details Narrative
Income Taxes (Details Narrative) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Corporate income tax rate | 0.00% | 0.00% |
People's Republic of China [Member] | ||
Corporate income tax rate | 25.00% | |
Hong Kong [Member] | ||
Corporate income tax rate | 16.50% | |
USA [Member] | ||
Corporate income tax rate | 21.00% |
Income Taxes - Schedule of Reco
Income Taxes - Schedule of Reconciliation of Tax Expenses (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2018 | Jun. 30, 2017 | Jun. 30, 2018 | Jun. 30, 2017 | |
Loss before tax | $ (64,644) | $ (46,839) | $ (161,566) | $ (86,303) |
PRC Statutory Tax at 25% Rate | 12,676 | 6,197 | ||
Effect of Seychelles, PRC, HK, deductions and other reconciling items | (12,676) | (6,197) | ||
Income tax | $ 376 | 376 | ||
People's Republic of China [Member] | ||||
Income Loss attributed | (50,703) | (24,789) | ||
Seychelles and HK [Member] | ||||
Income Loss attributed | (37) | (56) | ||
United States [Member] | ||||
Income Loss attributed | $ (13,978) | $ (22,482) |
Income Taxes - Schedule of Re39
Income Taxes - Schedule of Reconciliation of Tax Expenses (Details) (Parenthetical) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Statutory income tax rate | 21.00% | 34.00% |
People's Republic of China [Member] | ||
Statutory income tax rate | 25.00% | 25.00% |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate (Details) | 6 Months Ended | |
Jun. 30, 2018 | Jun. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||
U.S. federal statutory income tax rate | 21.00% | 34.00% |
Lower rates in PRC, net | (9.00%) | (9.00%) |
Net operating losses in PRC and other jurisdictions | 0.00% | 0.00% |
Unrecognized deferred tax benefit | (12.00%) | (25.00%) |
The Company's effective tax rate | 0.00% | 0.00% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Amount Due to Related Parties (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Amounts due to related parties | $ 587,144 | $ 500,608 |
Mr. Yumin Lin [Member] | Director, CEO, Shareholder [Member] | ||
Amounts due to related parties | 422,290 | 360,018 |
Mr. Sheng [Member] | Former Director of the Company [Member] | ||
Amounts due to related parties | 21,500 | 21,500 |
Ms. Qingmei Lin [Member] | Mr. Yumin Lin's Wife [Member] | ||
Amounts due to related parties | 15,869 | 25,902 |
Mr.Naiyong Luo [Member] | Director of DIGL [Member] | ||
Amounts due to related parties | $ 113,292 | $ 93,188 |
Lease Commitments (Details Narr
Lease Commitments (Details Narrative) | 6 Months Ended | ||
Jun. 30, 2018USD ($) | Jun. 30, 2018CNY (¥) | Jun. 30, 2017USD ($) | |
Agreement term | May 1, 2017 to April 30, 2027 | May 1, 2017 to April 30, 2027 | |
Monthly rent expense | $ 3,811 | ||
Lowered monthly rent expenses | 2,323 | ||
Rent expense | $ 20,134 | $ 8,475 | |
RMB [Member] | |||
Monthly rent expense | ¥ | ¥ 25,000 | ||
Lowered monthly rent expenses | ¥ | ¥ 15,000 |
Lease Commitments - Schedule of
Lease Commitments - Schedule of Minimum Operating Lease Commitment (Details) | Jun. 30, 2018USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2,018 | $ 27,876 |
2,019 | 27,876 |
2,020 | 27,876 |
2,021 | 27,876 |
2,022 | 27,876 |
Thereafter: | 111,504 |
Minimum operating lease commitment | $ 250,884 |
Correction of Error (Details Na
Correction of Error (Details Narrative) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Due to related party | $ 587,144 | $ 500,608 |
Mr. Naiyong Luo [Member] | ||
Due to related party | $ 93,188 |
Correction of Error - Schedule
Correction of Error - Schedule of Error Corrections Original and Restated Figures (Details) - USD ($) | Jun. 30, 2018 | Dec. 31, 2017 |
Customers advances and deposits | $ 44,497 | $ 11,697 |
Due to related parties | 587,144 | 500,608 |
Total current liabilities | 668,296 | 558,668 |
Total Liabilities | $ 668,296 | 558,668 |
Original [Member] | ||
Customers advances and deposits | 104,885 | |
Due to related parties | 407,420 | |
Total current liabilities | 558,668 | |
Total Liabilities | 558,668 | |
AJE [Member] | ||
Customers advances and deposits | (93,188) | |
Due to related parties | 93,188 | |
Total current liabilities | ||
Total Liabilities |