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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Sep. 30, 2020

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Schedule of carrying amounts of the assets, liabilities, the results of operations and cash flows of the VIE and its subsidiaries

The carrying amounts of the assets, liabilities, the results of operations and cash flows of the VIE and its subsidiaries included in the Group’s consolidated financial statements after the elimination of intercompany balances and transactions among the VIE and its subsidiaries, and other entities within the Group are as follows:

		September 30,			September 30,
		2020			2019
ASSETS
Current assets:
Cash and cash equivalents		$	5,493,215		$	4,594,440
Accounts receivable, net			660,398			603,760
Bank acceptance receivable			11,460,512			5,476,707
Inventories, net			11,994,471			12,522,884
Advances to suppliers, net			465,755			958,005
Other current assets			535,981			813,932
Total current assets			30,610,332			24,969,728
Property and equipment, net			7,395,965			7,665,322
Intangible assets, net			1,881,722			1,834,130
Long-term investment			540,517			539,680
Long term security deposits			179,325			—
Right of use assets-lease			134,511			—
Deferred tax assets			361,250			259,384
Total assets		$	41,103,622		$	35,268,244
LIABILITIES
Current liabilities:
Bank loans		$	7,349,375		$	4,903,128
Accounts payable			3,958,804			3,570,148
Advance from customers			3,511,198			1,911,748
Advance from customers - related parties			33,152			2,171
Deferred government grants - current			384,802			391,142
Taxes payable			1,322,354			347,930
Operating lease liabilities, current			22,354			—
Accrued expenses and other payables			1,301,881			531,713
Total current liabilities			17,883,920			11,657,980
Operating lease liabilities, long term			124,406			—
Deferred government grants - noncurrent			722,137			972,338
Total liabilities			18,730,463			12,630,318

		For the year ended
		September 30,
		2020			2019			2018
Net revenue		$	46,731,913		$	46,096,684		$	50,369,013
Net income		$	4,936,357		$	5,908,479		$	5,202,609

		For the Year Ended
		September 30,
		2020			2019			2018
Net cash provided by (used in) operating activities		$	4,131,468		$	(580,197)		$	4,438,015
Net cash used in investing activities			(5,648,762)			(666,629)			(1,386,080)
Net cash provided by financing activities			2,140,503			373,650			(3,116,213)
Effect of exchange rate on cash			275,566			(157,163)			(181,798)
Net increase (decrease) in cash and cash equivalents		$	898,775		$	(1,030,339)		$	(246,076)

Schedule of estimated useful lives of the assets

The straight-line depreciation method is used to compute depreciation over the estimated useful lives of the assets, as follows:

Items		Useful life
Property and buildings		20–25 years
Leasehold improvement		Lesser of useful life and lease term
Machinery and equipment		5–10 years
Automobiles		3–5 years
Office and electric equipment		3–5 years

Schedule of estimated useful lives of intangible assets

Intangible assets are amortized using the straight-line method with the following estimated useful lives:

Items		Useful life
Land use rights		50 years
Software		10 years
License for drug manufacturing		10 years

Schedule of shareholders' equity for the non-controlling interest from each subsidiary that is not 100% owned

The following table summarizes the shareholders’ equity for the non-controlling interest from each subsidiary that is not 100% owned by the Company:

		As of
		September 30,			September 30,
		2020			2019
Gansu QLS		$	387,420		$	298,322
Chengdu QLS			2,355,853			2,448,765
Ahan			—			(2,511)
Total		$	2,743,273		$	2,744,576

Schedule of currency exchange rates

The following table outlines the currency exchange rates that were used in creating the consolidated financial statements in this report:

		September 30, 2020		September 30, 2019		September 30, 2028
Year-end spot rate		US$1=RMB 6.8033		US$1=RMB 7.1383		US$1=RMB 6.8683
Average rate		US$1=RMB 7.0077		US$1=RMB 6.8767		US$1=RMB 6.5400

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