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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Sep. 30, 2021

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 VIE’s subsidiaries included in the Company, its subsidiaries, the VIE and VIE subsidiaries’ consolidated financial statements after the elimination of intercompany balances and transactions among the VIE and VIE’s subsidiaries, and the Company and its subsidiaries are as follows:

​

​	​	​	​	​	​	​
​		​	​		​
​	​	September 30,		​	September 30,
​	​	2021		​	2020
ASSETS	​		​	​		​
Current assets:		​			​
Cash and cash equivalents	​	$	4,161,582	​	$	5,493,215
Restricted cash	​	​	2,140,016	​	​	—
Accounts receivable, net	​		1,733,306	​		660,398
Bank acceptance receivable	​		11,722,096	​		11,460,512
Inventories, net	​		12,495,831	​		11,994,471
Advances to suppliers, net	​		1,380,757	​		465,755
Other current assets	​		423,331	​		535,981
Total current assets	​		34,056,919	​		30,610,332
Property and equipment, net	​		9,041,995	​		7,395,965
Intangible assets, net	​		1,927,933	​		1,881,722
Long-term investment	​		639,466	​		540,517
Long term security deposits	​		188,913	​		179,325
Right of use assets-lease	​		118,154	​		134,511
Deferred tax assets	​		427,172	​		361,250
Total assets	​	$	46,400,552	​	$	41,103,622
LIABILITIES	​			​
Current liabilities:	​			​
Bank loans	​	$	—	​	$	7,349,375
Accounts payable	​		6,642,625	​		3,958,804
Advance from customers	​		2,467,296	​		3,511,198
Advance from customers - related parties	​		17,318	​		33,152
Bank notes payable	​	​	7,867,018	​	​	—
Deferred government grants - current	​		351,567	​		384,802
Taxes payable	​		371,325	​		1,322,354
Operating lease liabilities, current	​		55,847	​		22,354
Accrued expenses and other payables	​		466,188	​		1,301,881
Total current liabilities	​		18,239,184	​		17,883,920
Operating lease liabilities, long term	​		106,180	​		124,406
Deferred government grants - noncurrent	​		403,745	​		722,137
Total liabilities	​		18,749,109	​		18,730,463

​

​	​	​	​	​	​	​	​	​	​
​	​	For the year ended
​	​	September 30,
​	​	2021		​	2020		​	2019
Net revenue		$	57,049,381		$	46,731,913		$	46,096,684
Income from operations	​	$	2,370,647	​	$	4,840,614	​	$	6,178,538
Net income	​	$	2,857,492	​	$	4,936,357	​	$	5,908,479

​

​	​	​	​	​	​	​	​	​	​
​	​	For the Year Ended
​	​	September 30,
​	​	2021		​	2020		​	2019
Net cash provided by (used in) operating activities		$	2,122,539		$	4,131,468		$	(580,193)
Net cash used in investing activities		​	(1,781,618)		​	(5,648,762)		​	(800,254)
Net cash provided by (used in) financing activities		​	123,697		​	2,140,503		​	507,202
Effect of exchange rate on cash		​	343,759		​	275,566		​	(157,094)
Net increase (decrease) in cash and cash equivalents	​	$	808,377	​	$	898,775	​	$	(1,030,339)

Schedule of estimated useful lives of the assets

​

​	​	​
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

​

​	​	​
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,
​	​	2021		​	2020
Gansu QLS		$	240,683		$	387,420
Chengdu QLS and subsidiaries		​	1,569,169		​	2,355,853
Total	​	$	1,809,852	​	$	2,743,273

Schedule of computation of basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share for the years ended September 30, 2021, 2020 and 2019:

​

​	​	​	​	​	​	​	​	​	​
​	​	For the Years ended September 30,
​		2021			2020			2019
Numerator:	​	​	​	​	​	​	​	​	​
Net income attributable to ordinary shareholders	​	$	3,152,868	​	$	5,063,710	​	$	5,332,318
​	​	​	​	​	​	​	​	​	​
Denominator:	​			​			​
Weighted-average number of ordinary shares outstanding – basic	​		34,089,286	​		30,000,000	​		30,000,000
Outstanding warrants	​	​	—	​		—	​		—
Potentially dilutive shares from outstanding options and warrants	​		—	​		—	​		—
Weighted-average number of ordinary shares outstanding – diluted	​		34,089,286	​		30,000,000	​		30,000,000
Earnings per share – basic	​	$	0.09	​	$	0.17	​	$	0.18
Earnings per share – diluted	​	$	0.09	​	$	0.17	​	$	0.18

Schedule of currency exchange rates

​

​	​	​	​	​	​	​
​		September 30, 2021		September 30, 2020		September 30, 2019
Year-end spot rate		US$1=RMB 6.4580		US$1=RMB 6.8033		US$1=RMB 7.1383
​	​	​	​	​	​	​
Average rate		US$1=RMB 6.5095		US$1=RMB 7.0077		US$1=RMB 6.8767

Schedule of reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on recurring basis

The following is a reconciliation of the beginning and ending balance of the assets and liabilities measured at fair value on a recurring basis for the year ended September 30, 2021 and 2020:

​

​	​	​	​	​	​	​
​		As of			As of
​	​	September 30,		​	September 30,
​	​	2021		​	2020
Beginning balance	​	$	—	​	$	—
Fair value of investment in available-for-sale securities at inception	​		20,000,000	​		—
Change in fair value	​		323,400	​		—
Ending balance	​	$	20,323,400	​	$	—

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