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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)

12 Months Ended

Sep. 30, 2022

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,
​	​	2022		​	2021
ASSETS	​		​	​		​
Current assets:		​			​
Cash and cash equivalents	​	$	10,027,168	​	$	4,161,582
Restricted cash	​	​	659,779	​	​	2,140,016
Accounts receivable, net	​		815,022	​		1,733,306
Bank acceptance receivable	​		2,585,886	​		11,722,096
Inventories, net	​		8,879,486	​		12,495,831
Advances to suppliers, net	​		1,214,951	​		1,380,757
Other current assets	​		1,493,304	​		423,331
Total current assets	​		25,675,596	​		34,056,919
Property and equipment, net	​		9,361,862	​		9,041,995
Intangible assets, net	​		1,726,928	​		1,927,933
Long-term investment	​		617,570	​		639,466
Other long-term assets	​		172,911	​		188,913
Right of use assets-lease	​		86,584	​		118,154
Deferred tax assets	​		212,876	​		427,172
Total assets	​	$	37,854,327	​	$	46,400,552
LIABILITIES	​		​	​
Current liabilities:	​		​	​
Bank loans	​	$	140,578	​	$	—
Accounts payable	​		5,266,571	​		6,642,625
Advance from customers	​		556,418	​		2,467,296
Advance from customers - related parties	​		—	​		17,318
Bank notes payable	​	​	1,531,649	​	​	7,867,018
Deferred government grants - current	​		121,542	​		351,567
Taxes payable	​		825,301	​		371,325
Operating lease liabilities, current	​		23,859	​		55,847
Accrued expenses and other payables	​		701,263	​		466,188
Total current liabilities	​		9,167,181	​		18,239,184
Operating lease liabilities, long term	​		72,537	​		106,180
Deferred government grants - noncurrent	​		309,943	​		403,745
Total liabilities	​		9,549,661	​		18,749,109

​

​	​	​	​	​	​	​	​	​	​
​	​	For the year ended
​	​	September 30,
​	​	2022		​	2021		​	2020
Net revenue		$	64,468,807		$	57,049,381		$	46,731,913
Income from operations	​	$	2,502,014	​	$	2,370,647	​	$	4,840,614
Net income	​	$	2,752,212	​	$	2,857,492	​	$	4,936,357

​

​	​	​	​	​	​	​	​	​	​
​	​	For the Year Ended
​	​	September 30,
​	​	2022		​	2021		​	2020
Net cash provided by operating activities		$	12,901,270		$	2,122,539		$	4,131,468
Net cash used in investing activities		​	(1,153,972)		​	(1,781,618)		​	(5,648,762)
Net cash provided by (used in) financing activities		​	(5,937,529)		​	123,697		​	2,140,503
Effect of exchange rate on cash		​	(1,018,698)		​	343,759		​	275,566
Net increase in cash and cash equivalents	​	$	4,791,071	​	$	808,377	​	$	898,775

​

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,
​	​	2022		​	2021
Gansu QLS		$	237,397		$	240,683
Chengdu QLS and subsidiaries		​	1,673,997		​	1,569,169
Total	​	$	1,911,394	​	$	1,809,852

​

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, 2022, 2021 and 2020:

​

​	​	​	​	​	​	​	​	​	​
​	​	For the Years ended September 30,
​		2022			2021			2020
Numerator:	​	​	​	​	​	​	​	​	​
Net income attributable to ordinary shareholders	​	$	1,076,693	​	$	3,152,868	​	$	5,063,710
​	​	​	​	​	​	​	​	​	​
Denominator:	​			​			​
Weighted-average number of ordinary shares outstanding – basic	​		35,750,000	​		34,089,286	​		30,000,000
Outstanding warrants	​	​	—	​		—	​		—
Potentially dilutive shares from outstanding options and warrants	​		—	​		—	​		—
Weighted-average number of ordinary shares outstanding – diluted	​		35,750,000	​		34,089,286	​		30,000,000
Earnings per share – basic	​	$	0.03	​	$	0.09	​	$	0.17
Earnings per share – diluted	​	$	0.03	​	$	0.09	​	$	0.17

​

Schedule of currency exchange rates

​

​	​	​	​	​	​	​
​		September 30, 2022		September 30, 2021		September 30, 2020
Year-end spot rate		US$1=RMB 7.1135		US$1=RMB 6.4580		US$1=RMB 6.8033
​	​	​	​	​	​	​
Average rate		US$1=RMB 6.5532		US$1=RMB 6.5095		US$1=RMB 7.0077

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

The Company noted no transfers between levels during any of the periods presented.

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, 2022 and 2021:

​

​	​	​	​	​	​	​
​		As of			As of
​	​	September 30,		​	September 30,
​	​	2022		​	2021
Beginning balance	​	$	20,323,400	​	$	—
Fair value of investment in available-for-sale securities at inception	​		(853,000)	​		20,000,000
Change in fair value	​		—	​		323,400
Ending balance	​	$	19,470,400	​	$	20,323,400

​

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