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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 12/16/21 Fortune Valley Treasures, Inc. S-1 85:14M M2 Compliance LLC/FA |
Document/Exhibit Description Pages Size
1: S-1 Registration Statement (General Form) HTML 2.14M
2: EX-4.2 Instrument Defining the Rights of Security Holders HTML 43K
3: EX-5.2 Opinion of Counsel re: Legality HTML 47K
4: EX-10.2 Material Contract HTML 29K
5: EX-21.1 Subsidiaries List HTML 27K
6: EX-23.1 Consent of Expert or Counsel HTML 24K
7: EX-23.2 Consent of Expert or Counsel HTML 25K
14: R1 Cover HTML 51K
15: R2 Condensed Consolidated Balance Sheets HTML 161K
16: R3 Condensed Consolidated Balance Sheets HTML 30K
(Parenthetical)
17: R4 Condensed Consolidated Statements of Operations HTML 149K
and Comprehensive Income (Loss)
18: R5 Condensed Consolidated Statements of Operations HTML 25K
and Comprehensive Income (Loss) (Parenthetical)
19: R6 Condensed Consolidated Statements of Stockholders' HTML 88K
Equity
20: R7 Condensed Consolidated Statements of Cash Flows HTML 132K
21: R8 Organization and Description of Business HTML 42K
22: R9 Organization and Summary of Significant Accounting HTML 301K
Policies
23: R10 Going Concern HTML 29K
24: R11 Accounts Receivable, Net HTML 35K
25: R12 Prepayments and Other Current Assets HTML 37K
26: R13 Property and Equipment, Net HTML 43K
27: R14 Business Combination and Goodwill HTML 43K
28: R15 Intangible Assets HTML 54K
29: R16 Income Taxes HTML 104K
30: R17 Related Party Transactions HTML 161K
31: R18 Operating Leases HTML 71K
32: R19 Bank and Other Borrowings HTML 49K
33: R20 Subsequent Events HTML 43K
34: R21 Summary of Significant Accounting Policies HTML 301K
35: R22 Organization and Summary of Significant Accounting HTML 360K
Policies (Policies)
36: R23 Summary of Significant Accounting Policies HTML 265K
(Policies)
37: R24 Organization and Summary of Significant Accounting HTML 187K
Policies (Tables)
38: R25 Accounts Receivable, Net (Tables) HTML 33K
39: R26 Prepayments and Other Current Assets (Tables) HTML 33K
40: R27 Property and Equipment, Net (Tables) HTML 39K
41: R28 Business Combination and Goodwill (Tables) HTML 38K
42: R29 Intangible Assets (Tables) HTML 52K
43: R30 Income Taxes (Tables) HTML 78K
44: R31 Related Party Transactions (Tables) HTML 148K
45: R32 Operating Leases (Tables) HTML 58K
46: R33 Bank and Other Borrowings (Tables) HTML 34K
47: R34 Summary of Significant Accounting Policies HTML 177K
(Tables)
48: R35 Schedule of Entities and Its Subsidiaries HTML 94K
(Details)
49: R36 Schedule of Foreign Currency Exchange Rate HTML 32K
Translation (Details)
50: R37 Schedule of Estimated Useful Lives of Property and HTML 32K
Equipment (Details)
51: R38 Schedule of Estimated Useful Lives of Amortization HTML 27K
(Details)
52: R39 Organization and Description of Business (Details HTML 78K
Narrative)
53: R40 Schedule of Disaggregation Revenue (Details) HTML 42K
54: R41 Organization and Summary of Significant Accounting HTML 74K
Policies (Details Narrative)
55: R42 Going Concern (Details Narrative) HTML 36K
56: R43 Schedule of Accounts Receivable (Details) HTML 31K
57: R44 Schedule of Prepayments and Other Current Assets HTML 31K
(Details)
58: R45 Prepayments and Other Current Assets (Details HTML 29K
Narrative)
59: R46 Schedule of Property and Equipment, Net (Details) HTML 38K
60: R47 Property and Equipment, Net (Details Narrative) HTML 26K
61: R48 Schedule of Recognized Identified Assets Acquired HTML 41K
and Liabilities Assumed (Details)
62: R49 Schedule of Business Acquisition, Pro Forma HTML 30K
Information (Details)
63: R50 Business Combination and Goodwill (Details HTML 39K
Narrative)
64: R51 Schedule of Intangible Assets (Details) HTML 38K
65: R52 Schedule of Future Amortization Expense for HTML 44K
Distribution Channels (Details)
66: R53 Intangible Assets (Details Narrative) HTML 26K
67: R54 Schedule of Components of Income Tax Provision HTML 46K
(Details)
68: R55 Schedule of United States and Foreign Income HTML 32K
(Loss) Before Income Taxes (Details)
69: R56 Schedule of Effective Income Tax Rate (Details) HTML 47K
70: R57 Schedule of Components of Deferred Tax Assets HTML 38K
(Details)
71: R58 Income Taxes (Details Narrative) HTML 64K
72: R59 Schedule of Amount Due From and Due to Related HTML 98K
Parties (Details)
73: R60 Schedule of Revenue Generated From Related Parties HTML 65K
(Details)
74: R61 Related Party Transactions (Details Narrative) HTML 46K
75: R62 Schedule of Components of Lease Expense and HTML 39K
Supplemental Cash Flow Information (Details)
76: R63 Schedule of Maturities of Lease Obligations HTML 46K
(Details)
77: R64 Operating Leases (Details Narrative) HTML 47K
78: R65 Schedule of Balance of Loan Borrowed Under Credit HTML 32K
Lines (Details)
79: R66 Bank and Other Borrowings (Details Narrative) HTML 68K
80: R67 Subsequent Events (Details Narrative) HTML 77K
81: R68 Summary of Significant Accounting Policies HTML 80K
(Details Narrative)
83: XML IDEA XML File -- Filing Summary XML 163K
13: XML XBRL Instance -- forms-1_htm XML 2.56M
82: EXCEL IDEA Workbook of Financial Reports XLSX 134K
9: EX-101.CAL Inline XBRL Taxonomy Extension Calculation XML 207K
Linkbase Document -- fvti-20201213_cal
10: EX-101.DEF Inline XBRL Taxonomy Extension Definition Linkbase XML 574K
Document -- fvti-20201213_def
11: EX-101.LAB Inline XBRL Taxonomy Extension Label Linkbase XML 1.13M
Document -- fvti-20201213_lab
12: EX-101.PRE Inline XBRL Taxonomy Extension Presentation XML 885K
Linkbase Document -- fvti-20201213_pre
8: EX-101.SCH Inline XBRL Taxonomy Extension Schema Document -- XSD 197K
fvti-20201213
84: JSON XBRL Instance as JSON Data -- MetaLinks 365± 512K
85: ZIP XBRL Zipped Folder -- 0001493152-21-031748-xbrl Zip 1.71M
Exhibit 4.2
DESCRIPTION OF SECURITIES
REGISTERED PURSUANT TO SECTION 12 OF THE SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED
The following is a brief description of shares of common stock (“common stock”) of Fortune Valley Treasures, Inc. (“we,” “our,” “us” or the “Company”). The brief description is based upon our Articles of Incorporation, including the Certificate of Change to our Articles of Incorporation, (as amended, our “Articles of Incorporation”), our Bylaws (our “Bylaws”), and provisions of applicable Nevada law. This summary does not purport to be complete and is subject to, and qualified in its entirety by, the full text of our Articles of Incorporation and Bylaws, each of which is herein incorporated by reference.
GENERAL
Our Articles of Incorporation authorizes us to issue up to 150,000,000 shares of capital stock, par value $0.001 per share, of which 15,655,038 shares of common were issued and outstanding as of the date hereof. Our Articles of Incorporation authorizes our board of directors to determine, at any time and from time to time, the number of authorized shares, as described below.
COMMON STOCK
Holders of common stock are entitled to one vote per share on all matters submitted to a vote of the stockholders. Our holders of common stock do not have cumulative voting rights. Holders of common stock will be entitled to receive ratably such dividends as may be declared by the board out of funds legally available therefor, which may be paid in cash, property, or in shares of the Company’s capital stock. Upon liquidation, dissolution or winding up of the Company, either voluntarily or involuntarily, the holders of common stock will be entitled to receive their ratable share of the net assets of the Company legally available for distribution after payment of all debts and other liabilities. There are no conversion, preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to the common stock.
DIVIDENDS
We have not declared or paid any dividends on our common stock since our inception and do not anticipate paying dividends for the foreseeable future. The payment of dividends is subject to the discretion of our board and will depend, among other things, upon our earnings, our capital requirements, our financial condition, and other relevant factors. We intend to reinvest any earnings in the development and expansion of our business. Any cash dividends in the future to common stockholders will be payable when, as and if declared by our board, based upon the board’s assessment of our financial condition and performance, earnings, need for funds, capital requirements, prior claims of preferred stock to the extent issued and outstanding, and other factors, including income tax consequences, restrictions and applicable laws. There can be no assurance, therefore, that any dividends on our common stock will ever be paid.
ANTI-TAKEOVER EFFECTS OF PROVISIONS OF OUR ARTICLES OF INCORPORATION, BYLAWS AND NEVADA LAW
The following is a brief description of the provisions in our Articles of Incorporation, Bylaws and Nevada Law that could have an effect of delaying, deferring, or preventing a change in control of the Company.
Anti-Takeover Effects of Nevada Law
Business Combinations
We are a Nevada corporation and are generally governed by the Nevada Private Corporations Code, Title 78 of the Nevada Revised Statutes, or NRS.
C:
The “business combination” provisions of Sections 78.411 to 78.444, inclusive, of the NRS, generally prohibit a Nevada corporation with at least 200 stockholders from engaging in various “combination” transactions with any interested stockholder for a period of two years after the date of the transaction in which the person became an interested stockholder, unless the transaction is approved by the board of directors prior to the date the interested stockholder obtained such status or the combination is approved by the board of directors and thereafter is approved at a meeting of the stockholders by the affirmative vote of stockholders representing at least 60% of the outstanding voting power held by disinterested stockholders, and extends beyond the expiration of the two-year period, unless:
● the combination was approved by the board of directors prior to the person becoming an interested stockholder or the transaction by which the person first became an interested stockholder was approved by the board of directors before the person became an interested stockholder or the combination is later approved by a majority of the voting power held by disinterested stockholders; or
● consideration to be paid by the interested stockholder is at least equal to the highest of: (a) the highest price per share paid by the interested stockholder within the two years immediately preceding the date of the announcement of the combination or in the transaction in which it became an interested stockholder, whichever is higher, (b) the market value per share of common stock on the date of announcement of the combination and the date the interested stockholder acquired the shares, whichever is higher, or (c) for holders of preferred stock, the highest liquidation value of the preferred stock, if it is higher.
A “combination” is generally defined to include mergers or consolidations or any sale, lease exchange, mortgage, pledge, transfer, or other disposition, in one transaction or a series of transactions, with an “interested stockholder” having: (a) an aggregate market value equal to 5% or more of the aggregate market value of the assets of the corporation, (b) an aggregate market value equal to 5% or more of the aggregate market value of all outstanding shares of the corporation, (c) 10% or more of the earning power or net income of the corporation, and (d) certain other transactions with an interested stockholder or an affiliate or associate of an interested stockholder.
In general, an “interested stockholder” is a person who, together with affiliates and associates, owns (or within two years, did own) 10% or more of a corporation’s voting stock. The statute could prohibit or delay mergers or other takeover or change in control attempts and, accordingly, may discourage attempts to acquire our Company even though such a transaction may offer our stockholders the opportunity to sell their stock at a price above the prevailing market price.
Control Share Acquisitions
The “control share” provisions of Sections 78.378 to 78.3793, inclusive, of the NRS apply to “issuing corporations” that are Nevada corporations with at least 200 stockholders, including at least 100 stockholders of record who are Nevada residents, and that conduct business directly or indirectly in Nevada. The control share statute prohibits an acquirer, under certain circumstances, from voting its shares of a target corporation’s stock after crossing certain ownership threshold percentages, unless the acquirer obtains approval of the target corporation’s disinterested stockholders. The statute specifies three thresholds: one-fifth or more but less than one-third, one-third but less than a majority, and a majority or more, of the outstanding voting power.
Generally, once an acquirer crosses one of the above thresholds, those shares in an offer or acquisition and acquired within 90 days thereof become “control shares” and such control shares are deprived of the right to vote until disinterested stockholders restore the right. These provisions also provide that if control shares are accorded full voting rights and the acquiring person has acquired a majority or more of all voting power, all other stockholders who do not vote in favor of authorizing voting rights to the control shares are entitled to demand payment for the fair value of their shares in accordance with statutory procedures established for dissenters’ rights.
A corporation may elect to not be governed by, or “opt out” of, the control share provisions by making an election in its articles of incorporation or bylaws, provided that the opt-out election must be in place on the 10th day following the date an acquiring person has acquired a controlling interest, that is, crossing any of the three thresholds described above. We have not opted out of the control share statutes, and will be subject to these statutes if we are an “issuing corporation” as defined in such statutes.
The effect of the Nevada control share statutes is that the acquiring person, and those acting in association with the acquiring person, will obtain only such voting rights in the control shares as are conferred by a resolution of the stockholders at an annual or special meeting. The Nevada control share law, if applicable, could have the effect of discouraging takeovers of our Company.
C:
Number of Directors; Vacancies; Removal
Our Bylaws provide that our board may increase or decrease the number of directors or by stockholders at any meeting. Any vacancy on the board may be filled by the affirmative vote of a majority of the remaining directors though less than a quorum of the board. A director elected to fill a vacancy shall be elected for the unexpired term of his predecessor in office, and shall hold such office until his successor is duly elected and qualified. Any directorship to be filled by reason of an increase in the number of directors shall be filled by the affirmative vote of a majority of the directors then in office or by an election at an annual meeting, or at a special meeting of stockholders called for that purpose. A director chosen to fill a position resulting from an increase in the number of directors shall hold office only until the next election of directors by the stockholder.
Our Bylaws provide that any director or directors of the corporation may be removed from office at any time, with or without cause, by the vote or written consent of stockholders representing not less than a majority of the issued and outstanding capital stock entitled to voting power.
Authorized Shares
Without any action by our shareholders, we may increase or decrease the aggregate number of shares or the number of shares of any class we have authority to issue at any time. The board shall have authority to establish more than one class or series of shares of this corporation, and the different classes and series shall have such relative rights and preferences, with such designations, as the board may by resolution provide. Issuance of such a new class or series could, depending upon the terms of the class or series, delay, defer, or prevent a change of control of the Company.
Advance Notice Requirements for Stockholder Proposals and Director Nominations
Our Bylaws contain advance notice provisions that a stockholder must follow if it intends to bring business proposals or director nominations, as applicable, before a meeting of stockholders. These provisions may preclude our stockholders from bringing matters before the annual meeting of stockholders or from making nominations at the annual meeting of stockholders.
No Cumulative Voting
Holders of our common shares do not have cumulative voting rights in the election of directors. The absence of cumulative voting may make it more difficult for shareholders owning less than a majority of our common shares to elect any directors to our board.
LIMITATION ON LIABILITY AND INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 78.138 of the NRS provides that, unless the corporation’s articles of incorporation provide otherwise, a director or officer will not be individually liable unless it is proven that (i) the director’s or officer’s acts or omissions constituted a breach of his or her fiduciary duties, and (ii) such breach involved intentional misconduct, fraud, or a knowing violation of the law.
Section 78.7502 of the NRS permits a company to indemnify its directors and officers against expenses, judgments, fines, and amounts paid in settlement actually and reasonably incurred in connection with a threatened, pending, or completed action, suit, or proceeding, if the officer or director (i) is not liable pursuant to NRS 78.138, or (ii) acted in good faith and in a manner the officer or director reasonably believed to be in or not opposed to the best interests of the corporation and, if a criminal action or proceeding, had no reasonable cause to believe the conduct of the officer or director was unlawful. Section 78.7502 of the NRS requires a corporation to indemnify a director or officer that has been successful on the merits or otherwise in defense of any action or suit. Section 78.7502 of the NRS precludes indemnification by the corporation if the officer or director has been adjudged by a court of competent jurisdiction, after exhaustion of all appeals, to be liable to the corporation or for amounts paid in settlement to the corporation, unless and only to the extent that the court determines that in view of all the circumstances, the person is fairly and reasonably entitled to indemnity for such expenses and requires a corporation to indemnify its officers and directors if they have been successful on the merits or otherwise in defense of any claim, issue, or matter resulting from their service as a director or officer.
C:
Section 78.751 of the NRS permits a Nevada company to indemnify its officers and directors against expenses incurred by them in defending a civil or criminal action, suit, or proceeding as they are incurred and in advance of final disposition thereof, upon determination by the stockholders, the disinterested board members, or by independent legal counsel. If so provided in the corporation’s articles of incorporation, bylaws, or other agreement, Section 78.751 of the NRS requires a corporation to advance expenses as incurred upon receipt of an undertaking by or on behalf of the officer or director to repay the amount if it is ultimately determined by a court of competent jurisdiction that such officer or director is not entitled to be indemnified by the company. Section 78.751 of the NRS further permits the company to grant its directors and officers additional rights of indemnification under its articles of incorporation, bylaws, or other agreement.
Section 78.752 of the NRS provides that a Nevada company may purchase and maintain insurance or make other financial arrangements on behalf of any person who is or was a director, officer, employee, or agent of the company, or is or was serving at the request of the company as a director, officer, employee, or agent of another company, partnership, joint venture, trust, or other enterprise, for any liability asserted against him and liability and expenses incurred by him in his capacity as a director, officer, employee, or agent, or arising out of his status as such, whether or not the company has the authority to indemnify him against such liability and expenses.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted to the Company’s directors, officers or controlling persons pursuant to the provisions described above, or otherwise, the Company has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.
Transfer Agent and Registrar
The transfer agent and registrar for our common stock is TranShare Corporation, with an address at Bayside Center 1, 17755 North US Highway 19 Suite 140, Clearwater, FL 33764, telephone number is (303) 662-1112.
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
Our common stock is currently trading on the OTC Pink Open Market under the symbol “FVTI.” We intend to apply to list our common stock on the NASDAQ Capital Market under the trading symbol “FVTI.”
C:
As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 10/21/21 Fortune Valley Treasures, Inc. 8-K:3,5,9 10/21/21 11:499K M2 Compliance LLC/FA 4/26/21 Fortune Valley Treasures, Inc. 10-K 12/31/20 85:5.2M M2 Compliance LLC/FA 12/20/19 Fortune Valley Treasures, Inc. 8-K:5,9 12/20/19 2:132K M2 Compliance LLC/FA 4/20/18 Fortune Valley Treasures, Inc. 8-K:1,2,3,5 4/19/18 4:7.2M M2 Compliance LLC/FA 12/05/14 Fortune Valley Treasures, Inc. S-1 4:2.3M Action Edgar Fil… Svc/FA |