Fovea Jewelry (FJHL) 10-Q 2022 Q1 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(MARK ONE)

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

For the quarterly period ended March 31, 2022

OR

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

For the transition period from _______ to ______

Commission File No. 000-56156

FOVEA JEWELRY HOLDINGS, LTD.

(Exact name of registrant as specified in its charter)

Wyoming	95-4202424
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

Room 403, 4/F, Phase 1 Austin Tower

22-26A Austin Avenue

Tsim Sha Tsui, Hong Kong

(Address of principal executive offices, zip code)

+852 6847 6812

(Registrant’s telephone number, including area code)

______________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Trading Symbol(s) Name of each exchange on which registered

Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, 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. (check one):

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

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

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act): Yes ☐   No ☒

APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY

PROCEEDINGS DURING THE PRECEDING FIVE YEARS:

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐   No ☐

APPLICABLE ONLY TO CORPORATE ISSUERS

As of April 7, 2022, there were approximately 8,099,119 shares of common stock, $0.001 par value per share, outstanding.

FOVEA JEWELRY HOLDINGS, LTD.

QUARTERLY REPORT ON FORM 10-Q

FOR THE PERIOD ENDED MARCH 31, 2022

INDEX

Index		Page
Part I. Financial Information
Item 1.	Financial Statements	4
	Consolidated Balance Sheets at March 31, 2022 (Unaudited) and December 31, 2021	4
	Consolidated Statements of Operations and Comprehensive Income for the Three Months Ended March 31, 2022 and 2021 (unaudited).	5
	Consolidated Statements of Cash Flows for the Three Months ended March 31, 2022 and 2021 (unaudited).	6
	Consolidated Statements of Changes in Stockholders’ Equity (deficit) for the Three Months ended March 31, 2022 and 2021 (Unaudited).	7
	Notes to Condensed Consolidated Financial Statements (unaudited).	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	17
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	19
Item 4.	Controls and Procedures.	19
Part II. Other Information
Item 1.	Legal Proceedings.	20
Item 1A.	Risk Factors	20
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	20
Item 3.	Defaults Upon Senior Securities.	20
Item 4.	Mine Safety Disclosures.	20
Item 5.	Other Information.	20
Item 6.	Exhibits.	21
Signatures		22

2

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q of Fovea Jewelry Holdings, Ltd., a Wyoming corporation (the “Company”), contains “forward-looking statements,” as defined in the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “will”, “should”, “could”, “expects”, “plans”, “intends”, “anticipates”, “believes”, “estimates”, “predicts”, “potential” or “continue” or the negative of such terms and other comparable terminology. These forward-looking statements include, without limitation, statements about our market opportunity, our strategies, competition, expected activities and expenditures as we pursue our business plan, and the adequacy of our available cash resources. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. Actual results may differ materially from the predictions discussed in these forward-looking statements. The economic environment within which we operate could materially affect our actual results. Additional factors that could materially affect these forward-looking statements and/or predictions include, among other things: the volatility of oil and gas prices, the possibility that equipment development efforts will not produces equipment that prospective customers want to purchase, the Company’s need for and ability to obtain additional financing, other factors over which we have little or no control; and other factors discussed in the Company’s filings with the Securities and Exchange Commission (“SEC”).

Our management has included projections and estimates in this Form 10-Q, which are based primarily on management’s experience in the industry, assessments of our results of operations, discussions and negotiations with third parties and a review of information filed by our competitors with the SEC or otherwise publicly available. We caution readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. We disclaim any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

3

PART I. FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS.

FOVEA JEWELRY HOLDINGS, LTD

CONDENSED CONSOLIDATED BALANCE SHEETS

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	March 31, 2022			December 31, 2021
	(Unaudited)			(Audited)
ASSETS
Current asset:
Cash and cash equivalents	$	1,735		$	1,476
Amount due from a shareholder		99,641			100,188
Inventories		727,939			731,038
Total current assets		829,315			832,584
Non-current asset:
Plant and equipment		18,518			20,521
TOTAL ASSETS	$	847,833		$	853,105
LIABILTIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accrued liabilities	$	74,500		$	74,500
Income tax payable		255			234
Deferred tax liabilities		3,055			3,386
Total current liabilities		77,810			78,120
TOTAL LIABILITIES		77,810			78,120
Commitments and contingencies		0			0
STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value; 5,000,000 shares authorized, no share issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		0			0
Series A preferred stock, $0.001 par value,1,000,000 shares designated; 1,000,000 issued and outstanding, as of March 31, 2022 and December 31, 2021, respectively		1,000			1,000
Common stock, $0.001 par value; 2,000,000,000 shares authorized; 8,099,119 and 8,099,119 shares issued and outstanding as of March 31, 2022 and December 31, 2021, respectively		8,099			8,099
Common stock to be issued		-			-
Additional paid-in capital		131,700			131,700
Accumulated other comprehensive loss		(24,278	)		(20,678	)
Retained earnings		653,502			654,864
Stockholders’ equity		770,023			774,985
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	847,833		$	853,105

See accompanying notes to condensed consolidated financial statements.

4

FOVEA JEWELRY HOLDINGS, LTD

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

	Three Months ended March 31,
	2022			2021
Revenue, net	$	1,217		$	162,887
Cost of revenue		(952	)		(81,682	)
Gross profit		265			81,205
Operating expenses:
General and administrative expenses		(1,922	)		(8,509	)
Total operating expenses		(1,922	)		(8,509	)
(LOSS) INCOME BEFORE INCOME TAXES		(1,657	)		72,696
Income tax expenses		295			319
NET (LOSS) INCOME		(1,362	)		73,015
Other comprehensive loss:
– Foreign currency adjustment loss		(3,600	)		(7,757	)
COMPREHENSIVE (LOSS) INCOME	$	(4,962	)	$	65,258
Net (loss) income per share – Basic and Diluted	$	(0.01	)	$	0.01
Weighted average common shares outstanding
– Basic and Diluted		8,099,119			10,889,119

See accompanying notes to condensed consolidated financial statements.

5

FOVEA JEWELRY HOLDINGS, LTD

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in United States Dollars (“US$”))

(Unaudited)

	Three Months ended March 31,
	2022			2021
Cash flow from operating activities:
Net (loss) income	$	(1,362	)	$	73,015
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation of plant and equipment		1,922			1,934
Change in operating assets and liabilities:
Inventories		3,099			0
Deferred tax liabilities		(331	)		(319	)
Amount due from a shareholder		429			0
Net cash provided by operating activities		3,757			74,630
Foreign currency translation adjustment		(3,498	)		(7,695	)
Net change in cash and cash equivalents		259			66,935
BEGINNING OF PERIOD		1,476			832,151
END OF PERIOD	$	1,735		$	899,086
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes	$	0		$	0
Cash paid for interest	$	0		$	0

See accompanying notes to condensed consolidated financial statements.

6

FOVEA JEWELRY HOLDINGS, LTD

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

	For the Three Months ended March 31, 2021 and 2022
	Series A preferred stock				Common stock				Common stock			Additional paid-in			Accumulated other comprehensive income			Retained		Total stockholders’
	No. of shares		Amount		No. of shares		Amount		to be issued			capital			(loss)			earnings		equity
Balance as of January 1, 2021		1,000,000	$	1,000		10,199,119	$	10,199	$	90		$	129,510		$	(10,591	)	$	725,403	$	855,611
Shares issued to service providers		-		0		900,000		900		(90	)		(810	)		0			0		0
Foreign currency translation adjustment		-		0		-		0		0			0			(7,757	)		0		(7,757	)
Net income for the period		-		0		-		0		0			0			0			73,015		73,015
Balance as of March 31, 2021		1,000,000	$	1,000		10,161,039	$	10,161	$	0		$	128,700		$	(18,348	)	$	798,418	$	920,869
Balance as of January 1, 2022		1,000,001	$	1,000		8,099,119	$	8,099	$	0		$	131,700		$	(20,678	)	$	654,864	$	774,985
Foreign currency translation adjustment		-		0		-		0		0			0			(24,278	)		0		(24,278	)
Net income for the period		-		0		-		0		0			0			0			1,362		1,362
Balance as of March 31, 2022		1,000,001	$	1,000		8,099,119	$	8,099	$	0		$	131,700		$	(44,956	)	$	656,226	$	752,069

See accompanying notes to condensed consolidated financial statements.

7

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE – 1 DESCRIPTION OF BUSINESS AND ORGANIZATION

Fovea Jewelry Holdings, Ltd (the “Company” or “FJHL”) was originally founded on February 1, 2006 as Dycam, Inc. On March 4, 2019, the Company redomiciled from Nevada to Wyoming. Currently, the Company through its subsidiary, mainly commenced to operate an online store to sell the quality jewelry at affordable prices on www.fovea-jewellery.com. The goal is to "Deliver A Better Living". All products selling on the online store are with great quality, natural, socially responsible and niche.

Description of subsidiaries

Name	Place of incorporation and kind of legal entity	Principal activities and place of operation	Particulars of registered/ paid up share capital	Effective interest held
Fovea International Holdings Limited	British Virgin Islands	Investment holding	100 ordinary shares at par value of US$1	100%
Fovea Jewellery Holdings Limited	Hong Kong	Sales and marketing in Hong Kong	1 ordinary share at par value of HK$1	100%
Gold Shiny International Limited	British Virgin Islands	Investment holding	115 ordinary shares at par value of US$1	100%
Gold Shiny (Asia) Limited	Hong Kong	Sales and marketing in Hong Kong	1 ordinary share at par value of HK$1	100%

The Company and its subsidiaries are hereinafter referred to as (the “Company”).

NOTE – 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying condensed consolidated financial statements reflect the application of certain significant accounting policies as described in this note and elsewhere in the accompanying condensed consolidated financial statements and notes.

• Basis of presentation

These accompanying condensed consolidated financial statements have been prepared in U.S. Dollars in conformity with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary to make the financial statements not misleading have been included. Operating results for the interim period ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The information included in this Form 10-Q should be read in conjunction with Management’s Discussion and Analysis, and the financial statements and notes thereto included in the Company’s Form 10-K for the fiscal year ended December 31, 2021, filed with the SEC on April 29, 2022.

8

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

• Use of estimates and assumptions

In preparing these condensed consolidated financial statements, management makes estimates and assumptions that affect the reported amounts of assets and liabilities in the balance sheet and revenues and expenses during the periods reported. Actual results may differ from these estimates.

• Basis of consolidation

The condensed consolidated financial statements include the accounts of FJHL and its subsidiaries. All significant inter-company balances and transactions within the Company have been eliminated upon consolidation.

• Cash and cash equivalents

Cash and cash equivalents are carried at cost and represent cash on hand, demand deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less as of the purchase date of such investments.

• Plant and equipment

Plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational and after taking into account their estimated residual values:

	Expected useful lives
Computer equipment	5 years

Expenditures for repairs and maintenance are expensed as incurred. When assets have been retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

Depreciation expense for the three months ended March 31, 2022 and 2021 were $1,922 and $1,930, respectively.

• Revenue recognition

The Company adopted Accounting Standards Codification (“ASC”) “606 – Revenue from Contracts with Customers” (“ASC 606”).

Under ASC 606, a performance obligation is a promise within a contract to transfer a distinct good or service, or a series of distinct goods and services, to a customer. Revenue is recognized when performance obligations are satisfied and the customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for goods or services. Under the standard, a contract’s transaction price is allocated to each distinct performance obligation. To determine revenue recognition for arrangements that the Company determines are within the scope of ASC 606, the Company performs the following five steps:

• identify the contract with a customer;

• identify the performance obligations in the contract;

• determine the transaction price;

• allocate the transaction price to performance obligations in the contract; and

• recognize revenue as the performance obligation is satisfied.

Majority of the Company's income is derived from contracts with customers in the sale of diamond and jewelry products, and as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The Company’s revenue recognition policies are in compliance with ASC 606, as follows:

9

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

Product sales consist of a single performance obligation that the Company satisfies at a point in time. The Company recognizes product revenue when the following events have occurred: (a) the Company has transferred physical possession of the products, depending upon the method of distribution and shipping terms set forth in the customer contract, (b) the Company has a present right to payment, (c) the customer has legal title to the products, and (d) the customer bears significant risks and rewards of ownership of the products.

For these sales, the Company determined that the customer is able to direct the use of and obtain substantially all of the benefits from, the products at the time the products are delivered.

• Cost of revenue

Cost of revenue consists primarily of the purchase cost of diamond and jewelry products, which are directly attributable to the sales of products.

• Income taxes

The Company adopted the ASC 740 Income tax provisions of paragraph 740-10-25-13, which addresses the determination of whether tax benefits claimed or expected to be claimed on a tax return should be recorded in the condensed consolidated financial statements. Under paragraph 740-10-25-13, the Company may recognize the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the condensed consolidated financial statements from such a position should be measured based on the largest benefit that has a greater than fifty percent (50%) likelihood of being realized upon ultimate settlement. Paragraph 740-10-25-13 also provides guidance on de-recognition, classification, interest and penalties on income taxes, accounting in interim periods and requires increased disclosures. The Company had no material adjustments to its liabilities for unrecognized income tax benefits according to the provisions of paragraph 740-10-25-13.

The estimated future tax effects of temporary differences between the tax basis of assets and liabilities are reported in the accompanying balance sheets, as well as tax credit carry-backs and carry-forwards. The Company periodically reviews the recoverability of deferred tax assets recorded on its balance sheets and provides valuation allowances as management deems necessary.

• Uncertain tax positions

The Company did not take any uncertain tax positions and had no adjustments to its income tax liabilities or benefits pursuant to the ASC 740 provisions of Section 740-10-25 for the three months ended March 31, 2022 and 2021.

• Foreign currencies translation

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the condensed consolidated statement of operations.

10

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

The reporting currency of the Company is United States Dollar ("US$") and the accompanying condensed consolidated financial statements have been expressed in US$. In addition, the Company is operating in Hong Kong and maintain its books and record in its local currency, Hong Kong Dollars (“HKD”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiary whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “ Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive income within the statements of changes in stockholder’s equity.

Translation of amounts from HKD into US$ has been made at the following exchange rates for the period ended March 31, 2022 and 2021:

	March 31, 2022		March 31, 2021
Period-end HKD:US$ exchange rate		0.1277		0.1286
Period average HKD:US$ exchange rate		0.1281		0.1289

• Comprehensive income

ASC Topic 220, “Comprehensive Income”, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive income, as presented in the accompanying condensed consolidated statements of changes in stockholders’ equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive income is not included in the computation of income tax expense or benefit.

• Related parties

The Company follows the ASC 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825–10–15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The condensed consolidated financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

11

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

• Commitments and contingencies

The Company follows the ASC 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s condensed consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

• Fair value of financial instruments

The Company follows paragraph 825-10-50-10 of the FASB Accounting Standards Codification for disclosures about fair value of its financial instruments and has adopted paragraph 820-10-35-37 of the FASB Accounting Standards Codification (“Paragraph 820-10-35-37”) to measure the fair value of its financial instruments. Paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a framework for measuring fair value in generally accepted accounting principles (GAAP) and expands disclosures about fair value measurements. To increase consistency and comparability in fair value measurements and related disclosures, paragraph 820-10-35-37 of the FASB Accounting Standards Codification establishes a fair value hierarchy which prioritizes the inputs to valuation techniques used to measure fair value into three (3) broad levels. The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three (3) levels of fair value hierarchy defined by paragraph 820-10-35-37 of the FASB Accounting Standards Codification are described below:

Level 1	Quoted market prices available in active markets for identical assets or liabilities as of the reporting date.
Level 2	Pricing inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.
Level 3	Pricing inputs that are generally observable inputs and not corroborated by market data.

Financial assets are considered Level 3 when their fair values are determined using pricing models, discounted cash flow methodologies or similar techniques and at least one significant model assumption or input is unobservable.

The fair value hierarchy gives the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. If the inputs used to measure the financial assets and liabilities fall within more than one level described above, the categorization is based on the lowest level input that is significant to the fair value measurement of the instrument.

The carrying amounts of the Company’s financial assets and liabilities, such as cash and cash equivalents, approximate their fair values because of the short maturity of these instruments.

12

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

• Recent accounting pronouncements

Accounting Standards Adopted

In May 2021, the FASB issued ASU 2021-04, Earnings Per Share (Topic 260), Debt-Modifications and Extinguishments (Subtopic 470-50), Compensation-Stock Compensation (Topic 718), and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40), (“ASU 2021-04”). This ASU reduces diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. This ASU provides guidance for a modification or an exchange of a freestanding equity-classified written call option that is not within the scope of another Topic. It specifically addresses: (1) how an entity should treat a modification of the terms or conditions or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; (2) how an entity should measure the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange; and (3) how an entity should recognize the effect of a modification or an exchange of a freestanding equity-classified written call option that remains equity classified after modification or exchange. This ASU will be effective for all entities for fiscal years beginning after December 15, 2021. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. Early adoption is permitted, including adoption in an interim period. The adoption of ASU 2021-04 on January 1, 2022 did not have a material impact on the Company’s financial statements or disclosures.

The Company has reviewed all recently issued, but not yet effective, accounting pronouncements and do not believe the future adoption of any such pronouncements may be expected to cause a material impact on its financial condition or the results of its operations.

NOTE – 3 STOCKHOLDERS’ EQUITY

Authorized shares

The Company’s authorized shares were 5,000,000 shares of preferred stock, with a par value of $0.001.

The Company’s authorized shares were 2,000,000,000 shares of common stock, with a par value of $0.001.

Issued and outstanding shares

As of March 31, 2022 and December 31, 2021, the Company had 1,000,000 shares of Series A preferred stock issued and outstanding.

As of March 31, 2022 and December 31, 2021, the Company had 8,099,119 and 8,099,119 shares of common stock issued and outstanding, respectively.

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FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE – 4 INCOME TAX

The provision for income taxes consisted of the following: 

	Three months ended March 31,
	2022			2021
Current tax	$	22		$	6,157
Deferred tax		(317	)		(319	)
Income tax expense	$	(295	)	$	5,838

The effective tax rate in the periods presented is the result of the mix of income earned in various tax jurisdictions that apply a broad range of income tax rate. The Company mainly operates in Hong Kong that is subject to taxes in the jurisdictions in which they operate, as follows:

United States of America

FJHL is registered in the State of Wyoming and is subject to the tax laws of United States of America.

For the three months ended March 31, 2022 and 2021, there was no operation in the United States of America.

BVI

Under the current BVI law, the Company is not subject to tax on income.

Hong Kong

The Company’s subsidiary operating in Hong Kong is subject to the Hong Kong Profits Tax at the two-tiered profits tax rates from 8.25% to 16.5% on the estimated assessable profits arising in Hong Kong during the current year, after deducting a tax concession for the tax year. The reconciliation of income tax rate to the effective income tax rate for the three months ended March 31, 2022 And 2021 is as follows:

	Three months ended March 31,
	2022			2021
Income before income taxes	$	1,657		$	72,696
Statutory income tax rate		16.5	%		16.5	%
Income tax expense at statutory rate		273			11,994
Tax effect of non-deductible items		317			319
Tax effect of tax holiday		(568	)		(6,156	)
Income tax expense	$	22		$	6,157

The following table sets forth the significant components of the deferred tax liabilities of the Company as of March 31, 2022 and December 31, 2021:

	As of
	March 31,			December 31,
	2022			2021
Deferred tax liabilities:
Accelerated depreciation	$	(3,055	)	$	(3,386	)

NOTE – 5 RELATED PARTY TRANSACTIONS

Apart from the transactions and balances detailed elsewhere in these accompanying condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.

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FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE – 6 CONCENTRATIONS OF RISK

The Company is exposed to the following concentrations of risk:

(a) Major customers

For the three months ended March 31, 2022 and 2021, the individual customer who accounts for 10% or more of the Company’s revenues and its outstanding receivable balances as at period-end dates, are presented as follows:

	Three months ended March 31, 2022					March 31, 2022
Customers	Revenues		Percentage of revenues			Accounts receivable
Customer A	$	1,217		100	%	$	0

	Three months ended March 31, 2021					March 31, 2021
Customers	Revenues		Percentage of revenues			Accounts receivable
Customers B	$	50,922		31	%	$	0
Customers C		45,766		28	%		0
Customers D		40,738		25	%		0
Customers E		25,461		16	%		0
Total:	$	162,887		100	%	$	0

All of the Company’s customers are located in Hong Kong.

(b) Major vendor

For the three months ended March 31, 2022 and 2021, there was one vender represented more than 10% of the Company’s operating cost. This vendor accounted for 100% of the Company’s operating cost with no accounts payable at March 31, 2022 and 2021.

The Company’s vendor is located in Hong Kong.

(c) Economic and political risk

The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

(d) Exchange rate risk

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is a possibility that the Company could post the same amount of profit for two comparable periods and because of the fluctuating exchange rate actually post higher or lower profit depending on exchange rate of HKD converted to US$ on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

15

FOVEA JEWELRY HOLDINGS, LTD

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

FOR THE THREE MONTHS ENDED MARCH 31, 2022

(Currency expressed in United States Dollars (“US$”), except for number of shares)

(Unaudited)

NOTE – 7 COMMITMENTS AND CONTINGENCIES

As of March 31, 2022, the Company has no material commitments or contingencies.

NOTE – 8 SUBSEQUENT EVENTS

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before condensed consolidated financial statements are issued, the Company has evaluated all events or transactions that occurred after March 31, 2022, up through the date the Company issued the unaudited condensed consolidated financial statements.

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

The following information should be read in conjunction with (i) the financial statements of Fovea Jewelry Holdings, Ltd., a Wyoming corporation (the “Company”), and the notes thereto appearing elsewhere in this Form 10-Q together with (ii) the more detailed business information and the December 31, 2021 audited financial statements and related notes included in the Company’s Annual Report on Form 10-K, as filed with the Securities and Exchange Commission on April 29, 2022. Statements in this section and elsewhere in this Form 10-Q that are not statements of historical or current fact constitute “forward-looking” statements.

OVERVIEW

The Company is incorporated in the State of Wyoming as a result of a domestication from the State of Nevada on March 4, 2019 and has a fiscal year end of December 31.

CRITICAL ACCOUNTING POLICIES

PLAN OF OPERATION

Our plan of operations over the next 12 month period is to continue developing our website to have a fully functioning online store and sell our diamond products.

Results of Operations

Comparison of the three months ended March 31, 2022 and March 31, 2021

The following table sets forth certain operational data for the three months ended March 31, 2022, compared to the three months ended March 31, 2021:

	Three months ended March 31,
	2022			2021
Revenue	$	1,217		$	162,887
Cost of revenue		(952	)		(81,682	)
Gross profit		265			81,205
Operating Expenses		(1,922	)		(8,509	)
Income from operations		(1,657	)		72,696
Income tax expense		295			(5,838	)
NET (LOSS) INCOME	$	(1,362	)	$	66,858

Revenue. We generated revenues of $1,217 and $162,887 for the three months ended March 31, 2022 and 2021, respectively. The decrease in revenue is attributable to the decrease in market demand from the Omicron outbreak in the first fiscal quarter of 2022.

Cost of Revenue. Cost of revenue for the three months ended March 31, 2022, was $952, as compared to cost of revenue of $81,682 for the same period ended March 31, 2021. Cost of revenue decreased primarily as a result of the decrease in market demand.

Gross Profit. We achieved a gross profit of $265 and $81,205 for the three months ended March 31, 2022 and 2021, respectively. The decrease in gross profit is primarily attributable to the decreasing market demand.

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Operating Expenses. We incurred G&A expenses of $1,922 and $8,509 for the three months ended March 31, 2022, and 2021, respectively. The increase in G&A is primarily attributable to increase professional, administrative and other fees.

Income Tax Expense. Our income tax expenses for the three months ended March 31, 2022 and 2021 were $295 and $5,838, respectively.

Net (Loss) Income. During the three months ended March 31, 2022, we incurred a net income of $1,362, as compared to net income of $66,858 for the same period ended March 31, 2021.

Liquidity and Capital Resources

As of March 31, 2022, we had cash and cash equivalents of $1,735. As of December 31, 2021, we had cash and cash equivalents of $1,476.

	Three Months Ended March 31,
	2022		2021
Net cash provided by operating activities	$	3,757	$	68,473
Net cash used in investing activities	$	-	$	-
Net cash provided by financing activities	$	-	$	-

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Net Cash Provided By Operating Activities.

For the three months ended March 31, 2022, net cash provided by operating activities was $3,757 which consisted primarily of a net loss of $1,362, depreciation of property, plant and equipment of $1,922, an increase in inventories of $3,099 and offset by an increase in deferred tax liabilities of $331.

For the three months ended March 31, 2021, net cash provided by operating activities was $68,473, which consisted primarily of a net income of $66,858, depreciation of property, plant and equipment of $1,934 and a decrease in deferred tax liabilities of $319.

Net Cash Used In Investing Activities.

For the three months ended March 31, 2022 and 2021, net cash used in investing activities was $0.

Net Cash Provided By Financing Activities.

For the three months ended March 31, 2022, net cash provided by financing activities was $0.

Off-Balance Sheet Arrangements

The Company has no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on the financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that is material to stockholders.

Subsequent Events

None through the date of this filing.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 3.

ITEM 4. CONTROLS AND PROCEDURES.

DISCLOSURE CONTROLS AND PROCEDURES

Under the supervision and with the participation of our management, our Chief Executive Officer, who acts as both our principal executive officer and our principal financial officer, is responsible for conducting an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as of the end of the fiscal year covered by this report. Disclosure controls and procedures means that the material information required to be included in our Securities and Exchange Commission reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms relating to our company, including any consolidating subsidiaries, and was made known to us by others within those entities, particularly during the period when this report was being prepared. Based on this evaluation, our Chief Executive Officer, who acts as both principal executive officer and principal financial officer, concluded as of the evaluation date that our disclosure controls and procedures were not effective as of March 31, 2022.

There were no changes in the Company’s internal controls over financial reporting during the most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

The Company is not currently subject to any legal proceedings. From time to time, the Company may become subject to litigation or proceedings in connection with its business, as either a plaintiff or defendant. There are no such pending legal proceedings to which the Company is a party that, in the opinion of management, is likely to have a material adverse effect on the Company’s business, financial condition or results of operations.

ITEM 1A. RISK FACTORS

As a smaller reporting company (as defined in Rule 12b-2 of the Exchange Act), we are not required to provide the information called for by this Item 1A.

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

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

None.

ITEM 5. OTHER INFORMATION.

None.

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ITEM 6. EXHIBITS.

(a) Exhibits required by Item 601 of Regulation SK.:

Number	Description
31.1	Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification of Principal Executive Officer and Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document*+
101.SCH	XBRL Taxonomy Extension Schema Document*+
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document*+
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document*+
101.LAB	XBRL Taxonomy Extension Label Linkbase Document*+
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document*+

_________________

+ XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	FOVEA JEWELRY HOLDINGS, LTD.
Date: May 16, 2022	By:	/s/ Thomson Lee
	Name:	Thomson Lee
	Title:	Chief Executive Officer (principal executive officer, principal accounting officer and principal financial officer)

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