Document and Entity Information
Document and Entity Information | 12 Months Ended |
Sep. 30, 2020 | |
Cover [Abstract] | |
Entity Registrant Name | Bon Natural Life Ltd |
Entity Central Index Key | 0001816815 |
Document Type | F-1/A |
Amendment Flag | true |
Amendment Description | Amendment No. 2 |
Entity Emerging Growth Company | true |
Entity Ex Transition Period | false |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | |
CURRENT ASSETS | |||
Cash | $ 53,106 | $ 293,771 | |
Accounts receivable, net | 5,771,008 | 5,236,270 | |
Inventories, net | 1,016,442 | 2,603,864 | |
Advance to suppliers, net | 3,491,145 | 367,656 | |
Deferred initial public offering costs | 510,079 | ||
Prepaid expenses and other current assets | 7,434 | 77,871 | |
TOTAL CURRENT ASSETS | 10,840,214 | 8,579,432 | |
Acquisition deposit | 1,305,407 | ||
Property, plant and equipment, net | 14,171,963 | 9,498,052 | |
Intangible assets, net | 140,993 | 138,372 | |
Deferred tax assets, net | 49,059 | 39,149 | |
TOTAL ASSETS | 25,202,229 | 19,560,412 | |
CURRENT LIABILITIES | |||
Short-term loans | 1,289,081 | 2,052,309 | |
Current portion of long-term loans | 1,227,346 | 1,821,162 | |
Third party loans | 690,327 | 424,191 | |
Accounts payable | 1,288,629 | 3,220,857 | |
Due to related parties | 2,322,990 | 1,165,865 | |
Taxes payable | 4,402,625 | 1,577,176 | |
Accrued expenses and other current liabilities | 442,582 | 239,305 | |
Capital lease liabilities, current | 33,389 | 363,485 | |
TOTAL CURRENT LIABILITIES | 11,696,969 | 10,864,350 | |
Long-term loans | 2,482,251 | 1,400,894 | |
Capital lease liabilities, noncurrent | 31,822 | ||
TOTAL LIABILITIES | 14,179,220 | 12,297,066 | |
COMMITMENTS AND CONTINGENCIES | |||
EQUITY | |||
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 5,800,000 and 5,166,667 shares issued and outstanding as of September 30, 2020 and 2019, respectively * | [1] | 580 | 517 |
Additional paid in capital | 5,251,205 | 5,040,156 | |
Statutory reserve | 579,922 | 257,409 | |
Retained earnings | 5,072,672 | 2,368,512 | |
Accumulated other comprehensive loss | (388,102) | (828,243) | |
TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS’ EQUITY | 10,516,277 | 6,838,351 | |
Non-controlling interest | 506,732 | 424,995 | |
Total equity | 11,023,009 | 7,263,346 | |
TOTAL LIABILITIES AND EQUITY | $ 25,202,229 | $ 19,560,412 | |
[1] | Retrospectively restated for effect of 1-for-3 shares reverse split, see Note 14. |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 24, 2020 | Dec. 11, 2019 | |
Statement of Financial Position [Abstract] | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Ordinary shares, shares issued | 5,800,000 | 5,166,667 | 5,166,667 | 15,500,000 |
Ordinary shares, shares outstanding | 5,800,000 | 5,166,667 | 5,166,667 | |
Reverse split, description | 1-for-3 shares reverse split | 1-for-3 shares reverse split |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Income Statement [Abstract] | |||
REVENUE | $ 18,219,959 | $ 16,396,018 | |
COST OF REVENUE | (13,017,646) | (11,113,922) | |
GROSS PROFIT | 5,202,313 | 5,282,096 | |
OPERATING EXPENSES | |||
Selling expenses | (161,719) | (273,841) | |
General and administrative expenses | (1,367,070) | (1,310,215) | |
Research and development expenses | (205,359) | (522,867) | |
Total operating expenses | (1,734,148) | (2,106,923) | |
INCOME FROM OPERATIONS | 3,468,165 | 3,175,173 | |
OTHER INCOME (EXPENSES) | |||
Interest income | 714 | 2,271 | |
Interest expense | (329,102) | (333,190) | |
Unrealized foreign transaction exchange gain (loss) | (248) | 5,281 | |
Gain on disposal of fixed assets | 20,150 | ||
Government subsidies | 362,187 | 140,295 | |
Other income | 132,713 | ||
Total other income (expenses) | 186,414 | (185,343) | |
INCOME BEFORE INCOME TAX PROVISION | 3,654,579 | 2,989,830 | |
INCOME TAX PROVISION | (556,262) | (427,194) | |
NET INCOME | 3,098,317 | 2,562,636 | |
Less: net income (loss) attributable to non-controlling interest | 71,644 | (11,167) | |
NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | 3,026,673 | 2,573,803 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |||
Total foreign currency translation adjustment | 450,234 | (281,699) | |
TOTAL COMPREHENSIVE INCOME | 3,548,551 | 2,280,937 | |
Less: comprehensive income (loss) attributable to non-controlling interest | 81,737 | (10,969) | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | $ 3,466,814 | $ 2,291,906 | |
EARNINGS PER SHARE PER COMMON SHARE | |||
Basic and diluted | $ 0.58 | $ 0.5 | |
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | |||
Basic and diluted | [1] | 5,210,649 | 5,166,667 |
[1] | Retrospectively restated for effect of 1-for-3 shares reverse split. |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Common Shares [Member] | Additional Paid-in Capital [Member] | Statutory Reserve [Member] | Retained Earnings [Member] | Accumulated Other Comprehensive Loss [Member] | Total Shareholders' Equity [Member] | Non-controlling Interest [Member] | Total |
Balance at Sep. 30, 2018 | $ 517 | $ 5,040,156 | $ 52,118 | $ (546,346) | $ 4,546,445 | $ 4,546,445 | ||
Balance, shares at Sep. 30, 2018 | 5,166,667 | |||||||
Appropriation to statutory reserve | 257,409 | (257,409) | ||||||
Net income (loss) | 2,573,803 | 2,573,803 | (11,167) | 2,562,636 | ||||
Capital contribution by non-controlling interest | 435,964 | 435,964 | ||||||
Foreign currency translation adjustment | (281,897) | (281,897) | 198 | (281,699) | ||||
Balance at Sep. 30, 2019 | $ 517 | 5,040,156 | 257,409 | 2,368,512 | (828,243) | 6,838,351 | 424,995 | 7,263,346 |
Balance, shares at Sep. 30, 2019 | 5,166,667 | |||||||
Ordinary shares issued | $ 63 | 63 | 63 | |||||
Ordinary shares issued, shares | 633,333 | |||||||
Amortization of share-based compensation | 211,049 | 211,049 | 211,049 | |||||
Appropriation to statutory reserve | 322,513 | (322,513) | ||||||
Net income (loss) | 3,026,673 | 3,026,673 | 71,644 | 3,098,317 | ||||
Foreign currency translation adjustment | 440,141 | 440,141 | 10,093 | 450,234 | ||||
Balance at Sep. 30, 2020 | $ 580 | $ 5,251,205 | $ 579,922 | $ 5,072,672 | $ (388,102) | $ 10,516,277 | $ 506,732 | $ 11,023,009 |
Balance, shares at Sep. 30, 2020 | 5,800,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities | ||
Net income | $ 3,098,317 | $ 2,562,636 |
Adjustments to reconcile net income to cash provided by operating activities | ||
Allowance for doubtful accounts | 22,137 | 34,328 |
Depreciation and amortization | 230,597 | 226,633 |
Inventory reserve | 29,539 | |
Deferred income tax benefit | (7,751) | (5,149) |
Unrealized foreign currency exchange loss (gains) | 248 | (5,281) |
Gain on disposal of property and equipment | (20,150) | |
Changes in operating assets and liabilities: | ||
Accounts receivable | (284,546) | (2,912,222) |
Inventories | 1,636,321 | 6,681,972 |
Advance to suppliers | (3,021,739) | 168,868 |
Prepaid expenses and other current assets | 72,116 | 173,609 |
Accounts payable | (1,982,205) | (78,356) |
Taxes payable | 2,662,542 | 1,538,662 |
Accrued expenses and other current liabilities | 207,650 | (1,280,877) |
Net cash provided by operating activities | 2,643,076 | 7,104,822 |
Cash flows from investing activities | ||
Purchase of property and equipment | (31,885) | (213,634) |
Capital expenditures on construction-in-progress | (4,301,103) | (6,861,257) |
Refund (payment) of acquisition deposit | 1,329,945 | (1,355,067) |
Net cash used in investing activities | (3,003,043) | (8,429,958) |
Cash flows from financing activities | ||
Proceeds from short-term loans | 2,033,570 | 4,008,293 |
Proceeds from long-term loans | 319,342 | |
Repayment of short-term loans | (2,872,778) | (4,514,482) |
Proceeds from borrowings from related parties | 1,067,808 | 543,976 |
Proceeds from third party loans | 238,133 | (101,793) |
Principal payment from (repayment of) capital lease | (392,030) | 432,722 |
Capital contribution from non-controlling interest | 435,964 | |
Payment for deferred initial public offering costs | (281,553) | |
Net cash provided by financing activities | 112,492 | 804,680 |
Effect of changes of foreign exchange rates on cash | 6,810 | (6,630) |
Net decrease in cash | (240,665) | (527,085) |
Cash, beginning of year | 293,771 | 820,856 |
Cash, end of year | 53,106 | 293,771 |
Supplemental disclosure of cash flow information | ||
Cash paid for interest expense | 276,671 | 333,190 |
Cash paid for income tax | 115,179 | |
Supplemental disclosure of non-cash investing and financing activities | ||
Share-based compensation for initial public offering services | $ 211,112 |
Organization and Business Descr
Organization and Business Description | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Organization and Business Description | NOTE 1 – ORGANIZATION AND BUSINESS DESCRIPTION Business Bon Natural Life Limited (“Bon Natural “ or the “Company”), through its wholly-owned subsidiaries and entities controlled through contractual arrangements, is engaged in the research and development, manufacturing and sales of functional active ingredients extracted from natural herb plants which are widely used by manufacturer customers in the functional food, personal care, cosmetic and pharmaceutical industries. The Company sells its products to customers located in both Chinese and international markets. Organizations Bon Natural Life Limited was incorporated as an exempted company with limited liability under the laws of the Cayman Islands on December 11, 2019. Bon Natural owns 100% equity interest of Tea Essence Limited (“Tea Essence”), an entity incorporated on January 9, 2020 in accordance with the laws and regulations in Hong Kong. Xi’an Cell and Molecule Information Technology Limited. (“Xi’an CMIT”) was formed on April 9, 2020, as a Wholly Foreign-Owned Enterprise (“WOFE”) in the People’s Republic of China (“PRC”). Bon Natural , Tea Essence and Xi’an CMIT are currently not engaging in any active business operations and merely acting as holding companies. Prior to the reorganization described below, Mr. Yongwei Hu, the chairman of the board of directors and the chief executive officer of the Company, was the controlling shareholder of Xi’an App-Chem Bio(Tech) Co., Ltd. (“Xi’an App-Chem”), an entity incorporated on April 23, 2006 in accordance with PRC laws. Xi’an App-Chem owns 100% of the equity interests of the following subsidiaries: (1) Shaanxi App-Chem Health Industry Co., Ltd. (“App-Chem Health”) was incorporated on April 17, 2006 in Tongchuan City in accordance with PRC laws; (2), Shaanxi App-Chem Ag-tech Co., Ltd (“App-Chem Ag-tech”) was incorporated on April 19, 2013 in Dali County, Shaanxi Province in accordance with PRC laws; (3) Xi’an Yanhuang TCM Medical Research & Development Co., Ltd (“Xi’an YH”) was incorporated on September 15, 2009 in Xi’an City in accordance with PRC laws; (4) Balikun Tianmei Bio(Tech) Co., Ltd. (“Balikun”) was incorporated on December 16, 2016 in Balikun City in accordance with PRC laws; (5) App-Chem Bio (Tech) (Guangzhou) Co., Ltd. (“App-Chem Guangzhou”) was incorporated on April 27, 2018 in Guangzhou City in accordance with PRC laws and (6) Tongchuan Dietary Therapy Health Technology Co., Ltd. (“Tongchuan DT”) was incorporated on May 22, 2017 in Tongchuan City in accordance with PRC laws. In addition, Xi’an App-Chem also owns majority of the equity interest in the following two entities: Xi’an Dietary Therapy Medical Technology Co., Ltd (“Xi’an DT”) was incorporated on April 24, 2015 in accordance with PRC laws, with 75% equity ownership interest owned by Xi’an App-Chem; Tianjin Yonghexiang Bio(Tech) Co., Ltd. (“Tianjin YHX”) was incorporated on September 16, 2019 in accordance with PRC laws, with 51% equity ownership interest owned by Xi’an App-Chem. On March 11, 2020, Xi’an App-Chem established a new 100% controlled subsidiary, Gansu Baimeikang Bioengineering Co., Ltd. (“Gansu BMK”). The above-listed entities are collectively referred to as the “Bon Operating Companies” below. Reorganization A reorganization of our legal structure (“Reorganization”) was completed on May 28, 2020. The reorganization involved the incorporation of Bon Natural Life, Tea Essence and Xi’an CMIT, and entering into certain contractual arrangements between Xi’an CMIT, the shareholders of Bon Operating Companies and the Bon Operating Companies. Consequently, the Company became the ultimate holding company of Tea Essence, Xi’an CMIT and Bon Operating Companies. On May 28, 2020, Xi’an CMIT entered into a series of contractual arrangements with the shareholders of the Bon Operating Companies. These agreements include, Exclusive Service Agreement, Share Pledge Agreement, Proxy Agreement, Exclusive Option Agreement, Powers of Attorney, Spousal Consent Letter, and Loan Agreement intended to guarantee the exercise of the Exclusive Option Agreements and Spouse Consents (collectively the “VIE Agreements”). Pursuant to the VIE Agreements, Xi’an CMIT has the exclusive right to provide to the Bon Operating Companies consulting services related to business operations including technical and management consulting services. The VIE Agreements are designed to provide Xi’an CMIT with the power, rights, and obligations equivalent in all material respects to those it would possess as the sole equity holder of each of the Bon Operating Companies, including absolute control rights and the rights to the assets, property, and revenue of each of the Bon Operating Companies. As a result of our direct ownership in Xi’an CMIT and the VIE Agreements, we believe that the Bon Operating Companies should be treated as Variable Interest Entities (“VIEs”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation and we are regarded as the primary beneficiary of our VIEs. We treat our VIEs as our consolidated entities under U.S. GAAP. The Company, together with its wholly owned subsidiaries and its VIEs, is effectively controlled by the same shareholders before and after the Reorganization and therefore the Reorganization is considered as a recapitalization of entities under common control. The consolidation of the Company, its subsidiaries, and its VIEs has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. Upon the completion of the Reorganization, the Company has subsidiaries in countries and jurisdictions in the PRC and Hong Kong. Details of the subsidiaries of the Company as of September 30, 2020 were set out below: Name of Entity Date of Place of % of Principal Activities Bon Natural Life December 11, 2019 Cayman Islands Parent, 100% Investment holding Tea Essence January 9, 2020 Hong Kong 100% Investment holding Xi’an CMIT April 9, 2020 Xi.an City, PRC 100% WOFE, Investment holding VIE of the Company: Xi’an App- Chem Bio (Tech) April 23, 2006 Xi’an City, PRC VIE General administration and sales of the Company’s products to customers Bon Operating Companies (owned by VIE) App-Chem Health April 17, 2006 Tongchuan City, PRC 100% owned by VIE Product manufacturing App-Chem Ag-tech April 19, 2013 Dali County, PRC 100% owned by VIE Registered owner of land with an area of 12,904 square meters , no other business activities Xi’an YH September 15, 2009 Xi.an City, PRC 100% owned by VIE Research and development of product Balikun December 16, 2016 Balikun City, PRC 100% owned by VIE No active business operation App-Chem Guangzhou April 27, 2018 Guangzhou City, PRC 100% owned by VIE Raw material purchase Tongchuan DT May 22, 2017 Tongchuan City, PRC 100% owned by VIE Product manufacturing Gansu BMK March 11, 2020 Jinquan City, PRC 100% owned by VIE Raw material purchase Xi’an DT April 24, 2015 Xi’an City, PRC 75% owned by VIE Research and development of product Tianjin YHX September 16, 2019 Tianjin City, PRC 51% owned by VIE Raw material purchase The VIE contractual arrangements The Company’s main operating entities, Xi’an App-Chem, and Shaanxi App-Chem Health (or the “Bon Operating Companies” as referred above), are controlled through contractual arrangements in lieu of direct equity ownership by the Company. A VIE is an entity which has a total equity investment that is insufficient to finance its activities without additional subordinated financial support, or whose equity investors lack the characteristics of a controlling financial interest, such as through voting rights, right to receive the expected residual returns of the entity or obligation to absorb the expected losses of the entity. The variable interest holder, if any, that has a controlling financial interest in a VIE is deemed to be the primary beneficiary of, and must consolidate, the VIE. Xi’an CMIT is deemed to have a controlling financial interest in and be the primary beneficiary of the Bon Operating Companies because it has both of the following characteristics: ● The power to direct activities of the Bon Operating Companies that most significantly impact such entities’ economic performance, and ● The obligation to absorb losses of, and the right to receive benefits from, the Bon Operating Companies that could potentially be significant to such entities. Pursuant to these contractual arrangements, the Bon Operating Companies shall pay service fees equal to all of their net profit after tax payments to Xi’an CMIT. At the same time, Xi’an CMIT is obligated to absorb all of their losses. Such contractual arrangements are designed so that the operations of the Bon Operating Companies are solely for the benefit of Xi’an CMTI and ultimately, the Company. Risks associated with the VIE structure The Company believes that the contractual arrangements with its VIE and the shareholders of its VIE are in compliance with PRC laws and regulations and are legally enforceable. However, uncertainties in the PRC legal system could limit the Company’s ability to enforce the contractual arrangements. If the legal structure and contractual arrangements were found to be in violation of PRC laws and regulations, the PRC government could: ● revoke the business and operating licenses of the Company’s PRC subsidiary and VIE; ● discontinue or restrict the operations of any related-party transactions between the Company’s PRC subsidiary and VIE; ● limit the Company’s business expansion in China by way of entering into contractual arrangements; ● impose fines or other requirements with which the Company’s PRC subsidiary and VIEs may not be able to comply; ● require the Company or the Company’s PRC subsidiary and VIE to restructure the relevant ownership structure or operations; or ● restrict or prohibit the Company’s use of the proceeds from public offering to finance the Company’s business and operations in China. The Company’s ability to conduct its financial service businesses may be negatively affected if the PRC government were to carry out of any of the aforementioned actions. As a result, the Company may not be able to consolidate its VIE and VIE’s subsidiaries in its consolidated financial statements as it may lose the ability to exert effective control over the VIE and their shareholders and it may lose the ability to receive economic benefits from the VIE. The Company, however, does not believe such actions would result in the liquidation or dissolution of the Company, its PRC subsidiary and its VIE. The Company, Tea Essence and Xi’an CMIT are essentially holding companies and do not have active operations as of September 30, 2020 and 2019. As a result, total assets and liabilities presented on the Consolidated Balance Sheets and revenue, expenses, and net income presented on the Consolidated Statement of Comprehensive Income as well as the cash flows from operating, investing and financing activities presented on the Consolidated Statement of Cash Flows are substantially the financial position, operation and cash flow of the Company’s VIE and VIE’s subsidiaries. The Company has not provided any financial support to the VIE for the years ended September 30, 2020 and 2019. The following financial statement amounts and balances of the VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: September 30, 2020 September 30, Current assets $ 10,840,214 $ 8,579,432 Non-current assets 14,362,015 10,980,980 Total assets $ 25,202,229 $ 19,560,412 Current liabilities $ 11,696,969 $ 10,864,350 Non-current liabilities 2,482,251 1,432,716 Total liabilities $ 14,179,220 $ 12,297,066 For the Years Ended September 30, 2020 2019 Revenue $ 18,219,959 $ 16,396,018 Net income $ 3,098,317 $ 2,562,636 For the Years Ended September 30, 2020 2019 Net cash provided by operating activities $ 2,643,076 $ 7,104,822 Net cash used in investing activities $ (3,003,043 ) $ (8,429,958 ) Net cash provided by financing activities $ 112,492 $ 804,680 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, and entities it controlled through VIE agreements. All inter-company balances and transactions are eliminated upon consolidation. Non-controlling interests Non-controlling interests represent minority shareholders’ 25% ownership interest in Xi’an DT and a minority shareholder’s 49% ownership interest in Tianjin YHX as of September 30, 2020 and 2019. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results of the Company are presented on the face of the consolidated statements of operations and comprehensive income as an allocation of the total income or loss for the years ended September 30, 2020 and 2019 between non-controlling interest holders and the shareholders of the Company. Uses of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, fair value of stock based compensation, revenue recognition and realization of deferred tax assets. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Actual results could differ from those estimates. Risks and Uncertainties The main operation of the Company is located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. The development and commercialization of natural and healthy extracts and compounds products is highly competitive, and the industry currently is characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. The Company may face competition with respect to its current and future pharmaceutical product candidates from major pharmaceutical companies in China. The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. The Company’s operations may be affected by the ongoing outbreak of COVID-19 which in March 2020, had been declared as a pandemic by the World Health Organization. To reduce the spread of the COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 outbreak, including, but not limited to, the temporary closure of the Company’s factory and operations beginning in early February until to March 2, 2020, limited support from the Company’s employees, delayed access to raw material supplies and inability to deliver products to customers on a timely basis, the Company’s business was negatively impacted and generated lower revenue and net income during the period from February to March 2020 as compared to same period of 2019. Although the Company resumed its operations on March 2, 2020 and the COVID-19 impact on the Company’s operating results and financial performance for fiscal year 2020 seems to be temporary, a resurgence could negatively affect the execution of customer contracts, the collection of customer payments, or disruption of the Company’s supply chain. The continued uncertainties associated with COVID 19 may cause the Company’s revenue and cash flows to underperform in the next 12 months. The extent of the future impact of COVID-19 is still highly uncertain and cannot be predicted as of the financial statement reporting date. Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. Accounts receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the collection is not probable. Allowance for uncollectable balances amounted to $93,032 and $73,386 as of September 30, 2020 and 2019, respectively. Advances to Suppliers, net Advances to suppliers consist of balances paid to suppliers for inventory raw materials and construction materials associated with the Company’s construction-in-progress projects that have not been provided or received. Advances to suppliers are short-term in nature. Advances to Suppliers are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for unrealizable balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of September 30, 2020 and 2019, allowance for doubtful account amounted to $13,341 and $6,377, respectively. Inventories, net Inventories are stated at net realizable value using weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging, expiration dates, as applicable, taking into consideration historical and expected future product sales. The Company recorded inventory reserve of $439,486 and $389,867 as of September 30, 2020 and 2019, respectively. Deferred initial public offering (“IPO”) costs The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred offering costs consist of underwriting, legal , and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred offering costs will be charged to shareholders’ equity upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Deferred initial public offering costs amounted to $501,079 and $Nil as of September 30, 2020 and 2019, respectively. Fair value of financial instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, inventories, advance to suppliers, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, approximate the fair value of the respective assets and liabilities as of September 30, 2020 and 2019 based upon the short-term nature of the assets and liabilities. The Company believes that the carrying amount of long-term loans approximates fair value at September 30, 2020 and 2019 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates. Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 5–10 years Automobiles 8 years Office and electric equipment 3–5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. Construction-in-Progress (“CIP”) Construction-in-progress represents property and buildings under construction and consists of construction expenditures, equipment procurement, and other direct costs attributable to the construction. Construction-in-progress is not depreciated. Upon completion and ready for intended use, construction-in-progress is reclassified to the appropriate category within property, plant and equipment. Intangible assets, net The Company’s intangible assets primarily includes a land use right. A land use right in the PRC represents an exclusive right to occupy, use and develop a piece of land during the contractual term of the land use right. The cost of a land use right is usually paid in one lump sum at the date the right is granted. The prepayment usually covers the entire period of the land use right. The lump sum advance payment is capitalized and recorded as land use right and then charged to expense on a straight-line basis over the period of the right, which is normally 50 years. Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights and long-term investment, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized as of September 30, 2020 and 2019. Capital lease obligation In accordance with ASC 840, Leases On October 6, 2018, the Company’s VIE, Xi’an App-Chem (the “Lessee”) entered into a capital lease agreement with Guian Hengxin Finance Lease (Shanghai) Ltd. (“the Lessor”) and sold part of its plant machines with carrying value of RMB 5 million (approximately $0.7 million) to the lessor and then leases them back from the lessor within two years. Pursuant to the terms of the contract, the Company is required to pay to the lessor monthly lease payment and interest, and is entitled to obtain the ownership of these machinery and equipment at a nominal price upon the expiration of the lease. Management deemed the arrangement as a capital lease (see Note 13). Foreign Currency Translation The functional currency for Bon Natural is the U.S Dollar (“US$”). Tea Essence uses Hong Kong dollar as its functional currency. However, Bon Natural, and Tea Essence currently only serve as the holding companies and did not have active operations as of the date of this report. The Company operates its business through its subsidiary and VIEs in the PRC as of September 30, 2020. The functional currency of the Company’s subsidiary and VIEs is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. 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 Period-end spot rate US$1=RMB 6.8033 US$1=RMB 7.1383 Average rate US$1=RMB7.0066 US$1=RMB 6.8767 Revenue recognition On October 1, 2017, the Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not In accordance to ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products to its customers, in which the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods. All of the Company’s contracts have single performance obligation as the promise is to transfer the individual goods to customers, and there is no other separately identifiable promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of September 30, 2020 and 2019, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended September 30, 2020 and 2019 are disclosed in Note 17 of the consolidation financial statements. Research and development expenses The Company expenses all internal research and development costs as incurred, which primarily comprise employee costs, internal and external costs related to execution of studies, including manufacturing costs, facility costs of the research center, and amortization and depreciation to intangible assets and property, plant and equipment used in the research and development activities. For the years ended September 30, 2020 and 2019, research and development expense were approximately $205,359 and $522,867, respectively. Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represents primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. Advertising expense Advertising expenses primarily relate to promotion of the Company’s brand name and products through outdoor billboards and social media such as Weibo and WeChat. Advertising expenses are included in selling expenses in the consolidated statements of income and comprehensive income. Advertising expenses amounted to $14,264 and $51,257 for the years ended September 30, 2020 and 2019, respectively. Government subsidies Government subsidies primarily relate to local government’s cash award to High and New Technology Enterprises (“HNTEs”) to encourage entrepreneurship and stimulate local economy. Such awards are granted on a case-by-case basis by local government. The Company’s VIE, Xi’an App-chem was approved as a HNTE and received government subsidy in the form of export sales refund and cash awards based on annual financial performance. The Company recognizes government subsidies as other operating income when they are received because they are not subject to any past or future conditions, there are no performance conditions or conditions of use, and they are not subject to future refunds. Government subsidies received and recognized as other operating income totalled $362,187 and $140,295 for the years ended September 30, 2020 and 2019, respectively. Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of September 30, 2020, the Company had income tax payable of approximately $0.85 million, primarily related to the unpaid income tax in China. Based on statutory penalty rate, the Company recorded an accrued penalty of $24,942 as reflected in the consolidated statements of income and comprehensive income. The Company expects to settle the income tax liabilities in May 2021 when the 2020 annual income tax return is to be filed with local tax authority. r. The Company’s operating subsidiary and VIE in China are subject to the income tax laws of the PRC. No significant income was generated outside the PRC for years ended September 30, 2020 and 2019. As of September 30, 2020 and September 30, 2019, all of the Company’s tax returns of its PRC subsidiary, its VIE and VIE’s subsidiaries remain open for statutory examination by PRC tax authorities. Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or recoverable net of VAT payments in the accompanying consolidated financial statements. For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. As of September 30, 2020, the Company had large VAT tax payable of approximately $3.5 million, primarily related to the unpaid VAT tax in China. Based on statutory penalty rate, the Company recorded an accrued penalty of $247,823 as reflected in the consolidated statements of income and comprehensive income. For the unpaid VAT tax liabilities, management has discussed with local tax authorities and expects to fully settle the tax liabilities before September 30, 2021. Employee Defined Contribution Plan The Company’s subsidiaries in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund are provided to eligible full-time employees. The relevant labor regulations require the Company’s subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions based on the applicable benchmarks and rates stipulated by the local government. The contributions to the plan are expensed as incurred. Employee social security and welfare benefits included as expenses in the accompanying consolidated statements of income and comprehensive income amounted to $30,724 and $68,128 for the years ended September 30, 2020 and 2019, respectively. Share Based Compensation On June 23, 2020, the Company entered into consulting service agreements with three third-party consultants (collectively the “Consultants”), pursuant to which, the Consultants will provide public listing related consulting services to the Company in connection with the Company’s intended IPO effort. The Company issued 633,333 of its ordinary shares to the Consultants in lieu of cash payment for such services. The 633,333 shares are valued at $633,333. Such service fee will be amortized over the service period from June 23, 2020 to June 22, 2021 (see Note 14). The Company applied ASC 718 and related interpretations in accounting for measuring the cost of share-based compensation over the period during which the consultants are required to provide services in exchange for the issued shares. For the year ended September 30, 2020, $211,112 share-based compensation expenses was recognized and capitalized as part of the deferred initial public offering costs, as the consultants’ services directly related to the Company’s intended IPO. Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended September 30, 2020 and 2019, there were no dilutive shares. Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. Segment Reporting The Company uses the management approach in determining reportable operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker for making operating decisions about the allocation of resources of the segment and the assessment of its performance in determining the Company’s reportable operating segments. Management has determined that the Company has one operating segment (See Note 17). Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. In July 2018, FASB issued ASU 2018-11 Leases (Topic 842) – Targeted Improvements that reduces costs and eases implementation of the leases standard for financial statement preparers. The ASU simplifies transition requirements and, for lessors, provides a practical expedient for the separation of non-lease components from lease components. In March 2019, the FASB issued Accounting Standards Update No. 2019-01, Leases (Topic 842): Codification Improvements Accounting Changes and Error Corrections Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Targeted Transition Relief. In August 2018, the FASB Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)” (“ASU 2019-10”). ASU 2019-10 (i) provides a framework to stagger effective dates for future major accounting standards and (ii) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, ASU 2019-10 changes some effective dates for certain new standards on the following topics in the FASB Accounting Standards Codification (ASC): (a) Derivatives and Hedging (ASC 815) – now effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021; (b) Leases (ASC 842) - now effective for fiscal years beginning after December 15, 2020 and interim periods withi |
Liquidity
Liquidity | 12 Months Ended |
Sep. 30, 2020 | |
Liquidity | |
Liquidity | NOTE 3— LIQUIDITY As reflected in the Company’s consolidated financial statements, the Company had negative working capital of approximately $0.9 million as of September 30, 2020. In addition, the Company is currently constructing a new manufacturing plant. As of September 30, 2020, the Company had future minimum capital expenditure commitment on its construction-in-progress (“CIP”) project of approximately $0.6 million within the next twelve months. The Company also had large unpaid tax liabilities of approximately $4.4 million, which are expected to be settled with local tax authorities within one year. Furthermore, the ongoing outbreak of COVID-19 may continue to negatively impact the Company’s business operations. A resurgence could negatively affect the Company’s ability to fulfil customer sales orders and collect customer payments timely, or disrupt the Company’s supply chain. As a result, there is a possibility that the Company’s revenue and cash flows may underperform in the next 12 months. In assessing its liquidity, management monitors and analyzes the Company’s cash on-hand, its ability to generate sufficient revenue sources in the future, and its operating and capital expenditure commitments. As of September 30, 2020, the Company only had cash on hand of $53,106. The Company also had had outstanding accounts receivable of approximately $5.8 million, of which approximately $5.6 million or 96.9% has been subsequently collected as of the date of this report. Cash collection from accounts receivable become available for use as working capital. As of September 30, 2020, the Company had outstanding bank loans of approximately $5.0 million from several PRC banks (including short-term bank loans of approximately $1.3 million, current portion of long-term bank loans of approximately $1.2 million and long-term loan of $2.5 million). Management expects that it would be able to renew all of its existing bank loans upon their maturity based on past experience and the Company’s good credit history. From October to December, 2020, the Company secured an aggregate of $0.8 million (RMB 5.5 million) loans with PRC banks and financial institutions as working capital loan (see Note 18). In addition to the current borrowings, from April and December 2020, the Company secured an aggregate of $8.7 million (RMB 59 million) lines of credit with PRC banks as working capital loan (including $2.2 million line of credit with Huaxia Bank for one to three years, $1.9 million line of credit with Bohai Bank for one year, $2.6 million line of credit with Bank of China for one year and $1.9 million (RMB 13 million) line of credit with Qishang Bank for three years.) (see Note 10 and Note 18). As of the date of this filing, the Company had borrowed $1.6 million (RMB 11 million) out of these lines of credit and had the availability to borrow an additional maximum loans of RMB48 million (approximately $7.1 million) under these lines of credit before April 2023. The Company currently plans to support its ongoing CIP project construction through cash flows from operations and bank borrowings. The Company also plans to settle the $4.4 million tax liabilities before September 30, 2021. The above mentioned $7.1 million unused line of credit may be able to cover future minimum CIP expenditure of $0.6 million and $4.4 million unpaid tax liabilities within the next 12 months from the date of this filing. Furthermore, the Company’s controlling shareholder, Mr. Yongwei Hu, also made pledges to provide continuous financial support to the Company for at least next 12 months from the issuance of the Company’s consolidated financial statements. Currently, the Company is working to improve its liquidity and capital sources primarily through cash flows from operation, debt financing, capital lease and financial support from its principal shareholder. In order to fully implement its business plan and sustain continued growth, the Company may also seek equity financing from outside investors. At the present time, however, the Company does not have commitments of funds from any potential investors. No assurance can be given that additional financing, if required, would be available on favorable terms or at all. Based on the current operating plan, management believes that the above-mentioned measures collectively will provide sufficient liquidity for the Company to meet its future liquidity and capital requirement for at least 12 months from the date of this filing. |
Accounts Receivable, Net
Accounts Receivable, Net | 12 Months Ended |
Sep. 30, 2020 | |
Credit Loss [Abstract] | |
Accounts Receivable, Net | NOTE 4 — ACCOUNTS RECEIVABLE, NET Accounts receivable, net, consists of the following: September 30, 2020 September 30, 2019 Accounts receivable $ 5,864,040 $ 5,309,656 Less: allowance for doubtful accounts (93,032 ) (73,386 ) Accounts receivable, net $ 5,771,008 $ 5,236,270 The Company’s accounts receivable primarily includes balance due from customers when the Company’s products are sold and delivered to customers. Approximately $5.6 million or 96.9% of net accounts receivable balances as of September 30, 2020 has been collected as of the date of this report. The following table summarizes the Company’s accounts receivable and subsequent collection by aging bucket: Accounts Receivable by aging bucket Balance as of Subsequent % of Less than 3 months $ 4,751,705 $ 4,587,583 96.5 % From 4 to 6 months 1,010,693 993,403 98.3 % From 7 to 9 months 12 - 0.0 % From 10 to 12 months 1,151 585 50.8 % Over 1 year 100,479 7,837 7.8 % Total gross accounts receivable 5,864,040 5,589,408 95.3 % Allowance for doubtful accounts (93,032 ) - Accounts Receivable, net $ 5,771,008 $ 5,589,408 96.9 % Allowance for doubtful accounts movement is as follows: September 30, 2020 September 30, 2019 Beginning balance $ 73,386 $ 48,529 Additions 15,569 27,709 Reductions - - Foreign currency translation adjustments 4,077 (2,852 ) Ending balance $ 93,032 $ 73,386 |
Inventories, Net
Inventories, Net | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventories, Net | NOTE 5 – INVENTORIES, NET Inventories, net, consist of the following: September 30, 2020 September 30, 2019 Raw materials $ 246,383 $ 891,604 Finished goods 1,209,545 2,102,127 Inventory valuation allowance (439,486 ) (389,867 ) Total inventory, net $ 1,016,442 $ 2,603,864 |
Advances to Suppliers, Net
Advances to Suppliers, Net | 12 Months Ended |
Sep. 30, 2020 | |
Advances To Suppliers Net | |
Advances to Suppliers, Net | NOTE 6 –ADVANCES TO SUPPLIERS, NET Advances to suppliers, net, consist of the following: September 30, 2020 September 30, 2019 Advances to suppliers for inventory raw materials $ 3,504,486 $ 374,033 Less: allowance for doubtful accounts (13,141 ) (6,377 ) Advances to suppliers, net $ 3,491,145 $ 367,656 As of the date of this report, approximately $2.92 million or 84% of advance to suppliers balances as of September 30, 2020 has been realized when the Company received the purchased inventory raw materials from suppliers, and the remaining balance is expected to be realized before April 30, 2021. |
Acquisition Deposit
Acquisition Deposit | 12 Months Ended |
Sep. 30, 2020 | |
Acquisition Deposit | |
Acquisition Deposit | NOTE 7— ACQUISITION DEPOSIT On December 15, 2017, the Company’s VIE, Xi’an App-Chem Bio (Tech) Co., Ltd entered into a share transfer agreement with the shareholders of Tianjian Youli Fruits and Vegetables Co., Ltd. (“Tianjin Youli” ), an unaffiliated vendor to the Company, in order to acquire 51% of the equity ownership interest in Tianjin Youli. The purpose of the acquisition is to expand the Company’s research, development and sale of vegetable extracts and dietary foods in northern China. The proposed purchase price was approximately RMB11.7 million (approximately $1.6 million), subject to adjustment based on the fair value of the total assets and liabilities of Tianjin Youli upon closing. The Company made an acquisition deposit of approximately RMB 9.3 million (approximately $1.3 million) to Tianjin Youli as of September 30, 2019. Due to change in market conditions as affected by the COVID-19 outbreak and spread, the Company and Tianjin Youli agreed not to proceed with any definitive agreement. In May 2020, Tianjin Youli refunded the acquisition deposit of $1.3 million to the Company and the intended acquisition was fully terminated. |
Property, Plant and Equipment,
Property, Plant and Equipment, Net | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, Net | NOTE 8— PROPERTY, PLANT AND EQUIPMENT, NET Property, plant and equipment, net, consists of the following: September 30, 2020 September 30, 2019 Buildings $ 601,408 $ 573,184 Machinery, equipment and furniture 1,920,530 1,848,703 Motor Vehicles 175,117 166,899 Construction-in-progress (“CIP”) (1) 12,832,806 8,008,814 Subtotal 15,529,861 10,597,600 Less: accumulated depreciation (1,357,898 ) (1,099,548 ) Property, plant and equipment, net $ 14,171,963 $ 9,498,052 Depreciation expense was $226,527 and $222,486 for the years ended September 30, 2020 and 2019, respectively. (1)Construction-in-progress (“CIP”) represents direct costs of construction incurred for the Company’s manufacturing facilities. On August 16, 2017, the Company’s VIE, Xi’an App-Chem Bio(Tech)Co.,Ltd. started to construct a new manufacturing plant in Tongchuan City (“Tongchuan Project”) , Shaanxi Province, with total budget of RMB 95 million (approximately $14.0 million) for construction of the main body of the manufacturing plant, plant decoration and purchase of machinery and equipment. As of September 30, 2020, the Company has spent approximately RMB84.3 million (approximately $12.5 million) on the construction of the main body of the manufacturing plant and future minimum capital expenditure on this CIP project is estimated to be approximately $1.5 million), among which approximately $0.6 million is required for the next 12 months. The Company currently plans to support its ongoing CIP project construction through cash flows from operations and $7.1 million unused line of credit that the Company already obtained from PRC banks (see Note 3). The construction of this new manufacturing facility is expected to be fully completed and put into production by March 2022. As of September 30, 2020, future minimum capital expenditures on the Company’s CIP project are estimated as follows: Years ending September 30, Capital Expenditure on CIP 2021 $ 630,402 2022 342,859 2023 - 2024 - 2025 532,340 Total $ 1,505,601 |
Intangible Asset, Net
Intangible Asset, Net | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets, Net | NOTE 9 – INTANGIBLE ASSET, NET Intangible asset, net mainly consist of the following: September 30, 2020 September 30, 2019 Land use rights $ 193,168 $ 184,103 Less: accumulated amortization (52,175 ) (45,731 ) Land use right, net $ 140,993 $ 138,372 Amortization expense was $4,070 and $4,147 for the years ended September 30, 2020 and 2019, respectively. Estimated future amortization expense for intangible assets is as follows: Years ending September 30, Amortization expense 2021 $ 3,863 2022 3,863 2023 3,863 2024 3,863 2025 3,863 Thereafter 121,678 $ 140,993 |
Debt
Debt | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | NOTE 10— DEBT The Company borrowed from PRC banks, other financial institutions and third-parties as working capital funds. As of September 30, 2020 and 2019, the Company’s debt consisted of the following: (a) Short-term loans: September 30, 2020 September 30, 2019 Xi’an Bank (1) $ - $ 560,358 Webank Co., Ltd. (2) - 105,067 Ningxia Bank (3) - 420,268 Bank of Beijing (4) - 686,438 Xi’an Guosen Micro-Credit Co., Ltd. (5) 279,276 280,178 Xi’ an Xinchang Micro-lending Co. Ltd. (6) 110,241 - China Construction Bank (7) 17,640 - Bohai Bank (8) 440,962 - Huaxia Bank (9) 440,962 - Total short-term loans $ 1,289,081 $ 2,052,309 (1) On November 23, 2018, the Company’s VIE, Xi’an App-Chem entered into a loan agreement with Xi’an bank to borrow RMB4.0 million (equivalent to $0.6 million) as working capital for one year, with maturity date on October 22, 2019. The loan bears an interest rate of 5.655% per annum. A third-party guarantee company provided guarantee to this loan. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Xi’an Bank as collateral to safeguard these loans. The loan was repaid in full upon maturity. (2) On December 12, 2018, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB750,000 (equivalent to US$0.1 million) as working capital for one year, with maturity date on December 12, 2019 and a daily interest rate of 0.05%. The loan was fully repaid upon maturity. (3) On January 30, 2019, the Company’s VIE , Xi’an App-Chem , entered into a loan agreement with Ningxia Bank to borrow RMB3.0 million (equivalent to $0.4 million) as working capital for one year, with maturity date on January 29, 2020. The loan bears an interest rate of 7.4% per annum. The loan was guaranteed by a third-party guarantee company. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Ningxia Bank as collateral to safeguard this loan. The loan was fully repaid upon maturity. (4) On August 7, 2019, the Company’s VIE, Xi’an App-Chem, entered into another loan agreement with Bank of Beijing to borrow RMB4.0 million (equivalent to US$0.6 million) for one year, with maturity date on August 26, 2020 and interest rate of 5.22% per annum. A third-party guarantee company provided guarantee to this loan. In addition, The Company pledged certain free patent owned by the Company as collateral to safeguard this loan. The loan was fully repaid upon maturity. (5) On July 1, 2019, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Xi’an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on December 27, 2019 and interest rate of 17% per annum. The loan was fully repaid upon maturity. On July 22, 2020, the Company’s VIE, Xi’an App-Chem, entered into another loan agreement with Xi’an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on January 21, 2021 and interest rate of 17% per annum. The loan was subsequently fully repaid upon maturity. (6) On June 1, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement Xi’ an Xinchang Micro-lending Co. Ltd., to borrow RMB750,002 (equivalent to US$110,241) as working capital for one year, with maturity date on May 31, 2021 and interest rate of 18.0% per annum. (7) On January 19, 2020, the Company’s VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB100,000 (equivalent to US$14,699) as working capital for one year, with maturity date on January 19, 2021 and interest rate of 5.0% per annum. The loan was subsequently fully repaid upon maturity. On May 15, 2020, the Company’s VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB20,000 (equivalent to US$2,941) as working capital for one year, with maturity date on May 15, 2021 and interest rate of 4.1% per annum. (8) On May 22, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Bohai Bank for a maximum of RMB 13 million (approximately $1.8 million) loans as working capital for one year. On July 22, 2020, the Company borrowed RMB3 million (equivalent to US$0.4 million) short-term loan out of this line of credit as working capital for one year, with interest rate of 5.4% per annum and maturity date on July 21, 2021. The Company’s controlling shareholder, Mr. Yongwei Hu and his wife Ms. Jing Liu, and a third-party Shannxi Jinma Financial Guarantee Co., Ltd. provided joint guarantee to this loan. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before May 22, 2021. (9) On April 3, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Huaxia Bank for a maximum of RMB 15 million (approximately $2.2 million) loans, including RMB 3 million (approximately $0.4 million) loans as working capital for one year with fixed interest rate of 9% per annum and RMB 12 million (approximately $1.8 million) loans as working capital for three years with fixed interest rate of 6.6% per annum. From June 16, 2020 to June 29, 2020, the Company’s VIE, Xi’an App-Chem, entered into two loan agreements with Huaxia Bank to borrow total of a RMB3 million (equivalent to US$440,962) as working capital for one year, with interest rate of 9.0% per annum and maturity date on April 16, 2021 and June 29, 2021, respectively. In addition, on April 16, 2020, the Company borrowed additional RMB2 million (equivalent to US$293,975) out of this line of credit as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. The Company’s controlling shareholder, Mr. Yongwei Hu and his wife Ms.Jing Liu, pledged their personal properties as collateral to safeguard the loans with Huaxia Bank. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before April 2023. (b) Long-term loans: September 30, 2020 September 30,2019 Xi’an Investment Holding Co., Ltd. (10) $ 2,204,812 $ 2,101,341 Xi’an High-Tech Emerging Industry Investment Fund Partnership (11) 1,175,900 1,120,715 Webank Co., Ltd. (12) 34,910 Huaxia Bank (13) 293,975 - Total 3,709,597 3,222,056 Less: current portion of long-term loans 1,227,346 1,821,162 Total long-term loans $ 2,482,251 $ 1,400,894 (10) On February 14, 2017 and on December 13, 2017, the Company’s VIE, Xi’an App-Chem entered into loan agreements with third-party Xi’an Investment Holdings Co., Ltd. (the “Lender”), to borrow an aggregate of RMB 15.0 million (approximately $2.2 million) as working capital for three years, with interest rate ranging from 2% to 4% per annum. Among the total RMB 15.0 million loans, RMB5.0 million (equivalent to US$0.7 million) matured on February 13, 2020 and RMB10.0 million (approximately $1.5 million) matured on December 12, 2020. The Company did not make the loan repayment upon maturities. In accordance with a COVID-19 relief notice issued by local government, for RMB 5 million matured on February 13, 2020, the loan payment term has been extended to February 12, 2022, and for RMB 10 million matured on December 12, 2020, the payment term has been extended to December 12, 2022. Loan interest rates remain unchanged. The Company’s controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi’an App-chem and his personal bank savings as collateral to safeguard these loans. (11) On June 26, 2017, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with third-party Xi’an High-tech Emerging Industries Investment Fund Partnership (the “Lender”) to borrow RMB 8.0 million (approximately $1.1 million) as working capital for three years, with maturity date on June 25, 2020 and an interest rate of 3.8% per annum. The Company’s controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi’an App-chem as collateral safeguard this loan. As of September 30, 2020, this loan was reclassified as current portion of long term loans. The loan matured on June 26, 2020 and not repaid on time due to COVID-19 impact. The Company has negotiated with the Lender to extend the loan repayment date for additional 12 months in accordance with a COVID-19 relief notice issued by local government. (12) On January 19, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB287,500 (equivalent to US$40,552) as working capital for 27 months, with maturity date on April 12, 2022 and interest rate of 18.0% per annum. (13) As disclosed in (9) above, on April 16, 2020, the Company borrowed RMB2 million (equivalent to US$293,975) out of a line of credit from Huaxia Bank as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. For the above-mentioned short-term and long-term loans from PRC banks and financial institutions, interest expense amounted to $329,102 and $333,190 for the years ended September 30, 2020 and 2019, respectively. In addition to the above mentioned short-term and long-term loans, on June 2, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Bank of China for a maximum of RMB 18 million (approximately $2.6 million) loans as working capital for one year. The interest rate will be determined when the loan is released to the Company. As of the date of this filing, the Company has not borrowed out of the line of credit with Bank of China and has the availability to borrow out of this line of credit before November 8, 2021. Subsequently, in December 2020, the Company secured another line of credit of $1.9 million with Qishang Bank (see Note 18). As of the date of this report, the Company had the availability to borrow an aggregate of approximately $7.1 million (RMB 48 million) line of credit from the following financial institutions before April 2023: Name of financial institution: Amount Bohai Bank $ 1,469,875 Huaxia Bank 1,469,875 Bank of China 2,645,775 Qishang Bank 1,469,875 Total $ 7,055,400 (c) Third party loans September 30, 2020 September 30, 2019 Wei Wang (14) $ 440,962 $ 420,268 Xueyan Zhou (14) - 3,923 Shaanxi Keyi Technology Co. Ltd. (14) 73,494 - Biyun Xue (14) 9,775 - Xi’ an Kaimei Medical Technology Co., Ltd. (14) 166,096 - Total third-party loans $ 690,327 $ 424,191 (14) During the Company’s normal course of business, the Company also borrows funds from several third-party individuals or third party companies as working capital. These borrowings are short-term, interest free and payable on demand. As of September 30, 2020 and 2019, loans payable to third-parties amounted to $690,327 and $424,191, respectively. The September 30, 2020 third-party loans balance has been fully repaid in December 2020. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 11 — RELATED PARTY TRANSACTIONS (a) Due to related parties Related party relationship September 30, 2020 September 30, 2019 Shaanxi Meishengyuang Bio-Technoloy Co., Ltd 5.5% of shareholder of Xi’an App-chem $ 738,864 $ 770,532 Wenhu Guo Senior Management of the Company 368,145 388,075 Yongwei Hu Chief Executive Officer and Controlling shareholder of the Company 1,208,337 - Jing Liu Wife of the controlling shareholder 4,410 4,203 Sheying Wang Senior Management of the Company 3,234 3,055 Total due to related parties $ 2,322,990 $ 1,165,865 As of September 30, 2020 and 2019, the balance of due to related parties was comprised of the Company’s borrowings from related parties and was used for working capital during the Company’s normal course of business. Such advance was non-interest bearing and due on demand. (b) Loan guarantee provided by related parties In connection with the Company’s short-term and long-term loans borrowed from PRC banks and other financial institutions, the Company’s controlling shareholder, Mr. Yongwei Hu pledged his proportionate ownership interest in Xi’an App-chem, and his personal bank savings as collateral to safeguard the Company’s borrowings from the banks and financial institutions. Mr. Yongwei Hu and his wife Ms. Jing Liu also jointly pledged their personal residence property to guarantee the Company’s certain loans (see Note 10). |
Taxes
Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Taxes | NOTE 12 — TAXES (a) Corporate Income Taxes (“CIT”) Cayman Islands Under the current tax laws of the Cayman Islands, Bon Natural Life Limited (“Bon Natural Life”) is not subject to tax on its income or capital gains. In addition, no Cayman Islands withholding tax will be imposed upon the payment of dividends by the Company to its shareholders. Hong Kong Tea Essence Limited (“Tea Essence”) is incorporated in Hong Kong and is subject to profit taxes in Hong Kong at a rate of 16.5%. However, Tea Essence did not generate any assessable profits derived from Hong Kong sources for the years ended September 30, 2020 and 2019, and accordingly no provision for Hong Kong profits tax has been made in these periods. PRC Under PRC CIT Law, domestic enterprises and Foreign Investment Enterprises (“FIEs”) are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High and New Technology Enterprises (“HNTEs”). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for their HNTE status every three years. The Company’s VIE, Xi’an App-Chem was approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning October 18, 2017, which is valid for three years. In October 2020, Xi’an App-Chem successfully renewed its HNTE Certificate with local government and will continue to enjoy the reduced income tax rate of 15% for another three years by October 26, 2023. CIT is typically governed by the local tax authority in PRC. Each local tax authority at times may grant tax holidays to local enterprises as a way to encourage entrepreneurship and stimulate local economy. The corporate income taxes for the years ended September 30, 2020 and 2019 were reported at a blended reduced rate as a result of Xi’an App-chem being approved as a HNTE and enjoying a 15% reduced income tax rate, but subsidiaries of Xi’an App-chem are subject to a 25% income tax rate. The impact of the tax holidays noted above decreased foreign taxes by and $372,517 and $314,080 for the years ended September 30, 2020 and 2019, respectively. The benefit of the tax holidays on net income per share (basic and diluted) $0.07 and $0.06 for the years ended September 30, 2020 and 2019, respectively. The following table reconciles the China statutory rates to the Company’s effective tax rate for the years ended September 30, 2020 and 2019: For the Years Ended September 30, 2020 2019 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday (10.0 )% (10.0 )% Permanent difference 0.0 % 0.1 % Research and development deduction (0.4 )% (1.9 )% Change in valuation allowance 0.6 % 1.1 % Effective tax rate 15.2 % 14.3 % The components of the income tax provision (benefit) are as follows: For the Years Ended September 30, 2020 2019 Current tax provision: Cayman Islands $ - $ - Hong Kong - - China 564,013 432,343 564,013 432,343 Deferred tax provision (benefit): Cayman Islands - - Hong Kong - - China (7,751 ) (5,149 ) (7,751 ) (5,149 ) Income tax provision $ 556,262 $ 427,194 Deferred tax assets The Company’s deferred tax assets are comprised of the following: September 30, 2020 September 30, 2019 Deferred tax assets derived from allowance for doubtful accounts and net operating losses (“NOL”) $ 370,184 $ 357,721 Less: valuation allowance (321,125 ) (318,572 ) Deferred tax assets $ 49,059 $ 39,149 The Company follows ASC 740, “Income Taxes”, which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates, applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. The Company continually evaluates expiring statutes of limitations, audits, proposed settlements, changes in tax law and new authoritative rulings. As of September 30, 2020, all of the Company’s tax returns of its PRC subsidiary, its VIE and VIE’s subsidiaries remain open for statutory examination by PRC tax authorities. (b) Taxes payable Taxes payable consist of the following: September 30, 2020 September 30, 2019 Income tax payable $ 850,834 $ 233,526 Value added tax payable 3,463,146 1,259,006 Other taxes 88,645 84,644 Total taxes payable $ 4,402,625 $ 1,577,176 As of September 30, 2020 and September 30, 2019, Company had accrued tax liabilities of approximately $4.4 million and $1.58 million, respectively, mostly related to the unpaid value added tax and income tax in China. According to PRC taxation regulation, if tax has not been fully paid, tax authorities may impose tax and late payment penalties within three years. In practice, since all of the taxes owed are local taxes, the local tax authority is typically more flexible and willing to provide incentives or settlements with local small and medium-size businesses to relieve their burden and to stimulate the local economy. For the year ended September 30, 2020, based on statutory penalty rate, the Company accrued and recorded penalty of $247,823 associated with unpaid VAT tax liabilities and penalty of $24,942 associated with unpaid income tax liabilities, which have been reflected in the consolidated statements of income and comprehensive income. For the $0.85 million income tax payable as of September 30, 2020, the Company expects to settle the liabilities in May 2021 when the 2020 annual income tax return is to be filed with local tax authority. For the unpaid VAT tax liabilities, management has discussed with local tax authorities and expects to settle the tax liabilities before September 30, 2021. |
Capital Lease Liabilities
Capital Lease Liabilities | 12 Months Ended |
Sep. 30, 2020 | |
Capital Lease Liabilities | |
Capital Lease Liabilities | NOTE 13 — CAPITAL LEASE LIABILITIES On October 6, 2018, the Company’s VIE, Xi’an App-Chem (the “Lessee”) entered into a capital lease agreement with Guian Hengxin Finance Lease (Shanghai) Ltd. (“the Lessor”). Under the arrangement, the Lessee sells part of its plant machines to the lessor and leased them back from the lessor. Management deemed these specialized equipment under leases classified as capital lease. The leased equipment is amortized on a straight line basis over 2 years. Total accumulated interest on the leased equipment is RMB1,743 (equivalent to $256) as of September 30, 2020. The maturities of the Company’s capital lease liabilities is as follows: US$ Year ending September 30, 2021 $ 33,389 Total $ 33,389 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | NOTE 14— SHAREHOLDERS’ EQUITY Ordinary Shares Bon Natural Life Limited (“Bon Natural Life”, or the “Company”) was incorporated under the laws of Cayman Islands on December 11, 2019. The authorized number of ordinary shares was 50,000,000 shares with par value of US$0.0001 and 15,500,000 shares were issued. On June 17, 2020, the Company’s shareholders approved a reverse split of the outstanding ordinary shares at a ratio of 1-for-3 shares (the “Reverse Split”), which led to a redemption of 10,333,333 shares out of the 15,500,000 ordinary shares previously issued to existing shareholders. The Reverse Split did not change the authorized number of ordinary shares and only changed the issued and outstanding ordinary shares. The Reverse Split took effective on June 24, 2020. As a result of this reverse split, there were 5,166,667 shares issued and outstanding. The issuance of these 5,166,667 shares is considered as a part of the Reorganization of the Company, which was retroactively applied as if the transaction occurred at the beginning of the period presented. On June 23, 2020, the Company entered into consulting service agreements with three third-party consultants (collectively the “Consultants”), pursuant to which, the Consultants will provide public listing related consulting services to the Company in connection with the Company’s intended IPO effort. Such consulting services include but not limit to market research and feasibility study, business plan drafting, reorganization, pre-listing education and tutoring, reorganization, legal and audit firm recommendation and coordination, investor referral and pre-listing equity financing source identification and recommendations, and independent directors and audit committee candidate’s recommendation, etc. The Company issued 633,333 of its ordinary shares to the Consultants in lieu of cash payment for such services. The 633,333 shares are valued at $633,333. Such service fee is amortized over the service period from June 23, 2020 to June 22, 2021. For the year ended September 30, 2020, 211,112 ordinary shares have been vested and recognized as share-based compensation expense based on services rendered. As of September 30, 2020, $211,112 share-based compensation expense has been capitalized as part of deferred initial public offering costs because the services performed by the consultants directly related to the Company’s intended IPO. As of September 30, 2020 and 2019, the Company had 5,800,000 shares and 5,166,667 shares of ordinary shares issued and outstanding, respectively. Non-controlling interest The Company’s VIE, Xi’an App-chem, owns majority of the equity interest in the following two entities: Xi’an Dietary Therapy Medical Technology Co., Ltd (“Xi’an DT”) and Tianjin Yonghexiang Bio(Tech) Co., Ltd. (“Tianjin YHX”) Non-controlling interests represent minority shareholders’ 25% ownership interests in Xi’an DT and 49% ownership interest in Tianjin YHX. The following table reconciles the non-controlling interest as of September 30, 2020 and 2019: Xi’an DT Tianjin YHX Total As of September 30, 2019 $ 424,995 $ - $ 424,995 Net income attributable to non-controlling interest 57,943 13,701 71,644 Foreign currency translation adjustment 9,815 278 10,093 As of September 30, 2020 $ 492,753 $ 13,979 $ 506,732 Statutory reserve and restricted net assets Relevant PRC laws and regulations restrict the Company’s PRC subsidiary VIE and VIE’s subsidiaries from transferring a portion of their net assets, equivalent to their statutory reserves and their share capital, to the Company in the form of loans, advances or cash dividends. Only PRC entities’ accumulated profits may be distributed as dividends to the Company without the consent of a third party. The Company is required to make appropriations to certain reserve funds, comprising the statutory surplus reserve and the discretionary surplus reserve, based on after-tax net income determined in accordance with generally accepted accounting principles of the PRC (“PRC GAAP”). Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity’s registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. The statutory reserve may be applied against prior year losses, if any, and may be used for general business expansion and production or increase in registered capital, but are not distributable as cash dividends. The payment of dividends by entities organized in China is subject to limitations, procedures and formalities. Regulations in the PRC currently permit payment of dividends only out of accumulated profits as determined in accordance with accounting standards and regulations in China. The results of operations reflected in the consolidated financial statements prepared in accordance with U.S GAAP differ from those in the statutory financial statements of the WFOE and VIE. Remittance of dividends by a wholly foreign-owned company out of China is subject to examination by the banks designated by State Administration of Foreign Exchange. In light of the foregoing restrictions, the Company’s WFOE Xi’an CMIT, VIE and VIE’s subsidiaries are restricted in their ability to transfer their net assets to the Company. Foreign exchange and other regulations in the PRC may further restrict the WFOE, VIE and VIE’s subsidiaries from transferring funds to the Company in the form of dividends, loans and advances. As of September 30, 2020 and 2019, the restricted amounts as determined pursuant to PRC statutory laws totaled $579,922 and $257,409, respectively, and total restricted net assets amounted to $5,831,707 and $5,298,082, respectively. |
Concentration
Concentration | 12 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Concentration | NOTE 15- CONCENTRATION A majority of the Company’s revenue and expense transactions are denominated in RMB and a significant portion of the Company and its subsidiaries’ assets and liabilities are denominated in RMB. RMB is not freely convertible into foreign currencies. In the PRC, certain foreign exchange transactions are required by law to be transacted only by authorized financial institutions at exchange rates set by the People’s Bank of China (“PBOC”). Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory bodies which require certain supporting documentation in order to affect the remittance. For the years ended September 30, 2020 and 2019, the Company’s substantial assets were located in the PRC and the Company’s substantial revenues were derived from its subsidiaries located in the PRC. As of September 30, 2020 and 2019, $49,668 and $265,293 of the Company’s cash was on deposit at financial institutions in the PRC where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. As of September 30, 2020 and 2019, the Company’s substantial assets were located in the PRC and the Company’s substantial revenues were derived from its subsidiaries and VIEs located in the PRC. The Company sells its products primarily through direct distributors in the People’s Republic of China (the “PRC”) and to some extent, the overseas customers in European countries, North America and Middle East. For the year ended September 30, 2020, three customers accounted for 29.0%, 27.2% and 14.1% of the Company’s total revenue, respectively. For the year ended September 30, 2019, three customers accounted for 17.2%, 12.1% and 10.2% of the Company’s total revenue, respectively. As of September 30, 2020, three customers accounted for approximately 43.7%, 25.8% and 10.4% of the total accounts receivable balance, respectively. As of September 30, 2019, three customers accounted for approximately 24.6%, 17.5% and 15.4% of the total accounts receivable balance, respectively. For the year ended September 30, 2020, two suppliers accounted for approximately 28.9% and 28.8% of the total purchases, respectively. For the year ended September 30, 2019, three suppliers accounted for approximately 24.1%, 14.8% and 10.1% of the total purchases, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 16 —COMMITMENTS AND CONTINGENCIES From time to time, the Company is a party to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. For the years ended September 30, 2020 and 2019, the Company did not have any material legal claims or litigation that, individually or in aggregate, could have a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows. The Company has an ongoing CIP project associated with the construction of a new manufacturing facility. As of September 30, 2020, future minimum capital expenditures on the Company’s CIP project amounted to approximately $1.5 million, among which approximately $0.63 million is required for the next 12 months from the date of this report (see Note 8). |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Reporting | NOTE 17— SEGMENT REPORTING An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment. The Company’s conducts its business in China through its wholly-owned subsidiary and entities controlled through contractual arrangements. The Company’s VIE, Xi’an App-chem, is primarily engaged in the general administration and sales of the Company’s products. The VIE’s subsidiaries are engaged in the manufacturing, research and development and raw material purchase (see Note 1). The Company develops, manufactures and sells products to customers located in both Chinese and international markets. The Company’s products have similar economic characteristics with respect to raw materials, vendors, marketing and promotions, customers and methods of distribution. The Company’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company, rather than by product types or geographic area; hence the Company has only one reporting segment. Revenue by region For Years ended September 30, 2020 2019 PRC $ 15,461,801 $ 11,192,324 Overseas 2,758,158 5,203,694 Total revenue $ 18,219,959 $ 16,396,018 Revenue by product categories The summary of our total revenues by product categories for the years ended September 30, 2020 and 2019 was as follows: September 30, 2020 September 30, 2019 Fragrance compounds $ 7,879,300 $ 6,738,274 Health supplements (solid drinks) 3,887,096 4,342,490 Bioactive food ingredients 6,453,563 5,315,254 Total revenue $ 18,219,959 $ 16,396,018 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18— SUBSEQUENT EVENTS Bank Loans From October 2020 to January 31, 2020, the Company repaid total of $406,665 short-term loans to PRC banks upon maturity (see Note 10). From October to December, 2020, the Company secured an aggregate of $0.8 million (RMB 5.5 million) loans with PRC banks and financial institutions as working capital loan as detailed below: (1) On October 22, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB1.5 million (equivalent to US$0.2 million) as working capital for two years, with maturity date on October 22, 2022 and interest rate of 14.4% per annum. (2) On November 4, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement Xi’ an Xinchang Small Loan Co. Ltd. to borrow RMB1.0 million (equivalent to US$146,987) as working capital for one year, with maturity date on November 3, 2021 and interest rate of 15.33% per annum. (3) On December 10, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Qishang Bank Co., Ltd. (“Qishang Bank”) for a maximum of RMB 13 million (approximately $1.9 million) loans as working capital. On December 15, 2020, the Company borrowed RMB3.0 million (equivalent to 0.4 million)out of this line of credit as working capital for three years, with maturity date on December 13, 2023 and interest rate of 6.65% per annum. In addition, the Company pledged certain free patent owned by the Company as collateral to guarantee this loan. The Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his personal residence property as collateral to safeguard this loan. As of the date of this report, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Qishang Bank before December 9, 2021. Capital Lease On December 25, 2020, the Company’s VIE, Xi’an App-Chem, entered into a capital lease agreement with Taizhongyin Finance Lease (Suzhou) Co. Ltd. (“the Lessor”), pursuant to which, Xi’an App-chem sold part of its plant machines with carrying value of RMB 2.3 million (approximately $0.3 million) to the Lessor and leases them back from the Lessor for two years, with interest rate of 7% per annum and lease maturity date on December 24, 2022. The Company is required to pay to the lessor monthly lease payment and interest, and is entitled to obtain the ownership of these machinery and equipment at a nominal price upon the expiration of the lease. The Company’s controlling shareholder, Mr. Yongwei Hu and his wife Ms. Jing Liu, signed guarantee agreement with the lessor to jointly guarantee the monthly lease payment over the lease term. |
Condensed Financial Information
Condensed Financial Information of the Parent Company | 12 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Condensed Financial Information of the Parent Company | NOTE 19 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X require the condensed financial information of the parent company to be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. The Company performed a test on the restricted net assets of consolidated subsidiaries in accordance with such requirement and concluded that it was applicable to the Company as the restricted net assets of the Company’s PRC subsidiary and VIE exceeded 25% of the consolidated net assets of the Company, therefore, the condensed financial statements for the parent company are included herein. For purposes of the above test, restricted net assets of consolidated subsidiaries and VIE shall mean that amount of the Company’s proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries and VIE in the form of loans, advances or cash dividends without the consent of a third party. The condensed financial information of the parent company has been prepared using the same accounting policies as set out in the Company’s consolidated financial statements except that the parent company used the equity method to account for investment in its subsidiaries and VIEs. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries and VIE” and the respective profit or loss as “Equity in earnings of subsidiaries and VIE” on the condensed statements of comprehensive income. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Company. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S GAAP have been condensed or omitted. The Company did not pay any dividend for the periods presented. As of September 30, 2020 and 2019, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Company, except for those which have been separately disclosed in the consolidated financial statements, if any. BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY BALANCE SHEETS September 30, 2020 September 30, 2019 ASSETS Non-current assets Investment in subsidiaries and VIE $ 10,516,277 $ 6,838,351 Total assets $ 10,516,277 $ 6,838,351 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES $ - $ - COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 5,800,000 and 5,166,667 shares issued and outstanding as of September 30, 2020 and 2019, respectively $ 580 $ 517 Additional paid-in capital 5,251,205 5,040,156 Retained earnings 5,652,594 2,625,921 Accumulated other comprehensive loss (388,102 ) (828,243 ) Total Bon Natural Life Limited shareholders’ equity 10,516,277 6,838,351 Total liabilities and Bon Natural Life Limited shareholders’ equity $ 10,516,277 $ 6,838,351 BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended September 30, 2020 2019 EQUITY IN EARNINGS OF SUBSIDIARIES AND VIE $ 3,026,673 $ 2,573,803 NET INCOME 3,026,673 2,573,803 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS 440,141 (281,897 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED $ 3,466,814 $ 2,291,906 BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended September 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,026,673 $ 2,573,803 Adjustments to reconcile net cash flows from operating activities: Equity in earnings of subsidiary and VIEs (3,026,673 ) (2,573,803 ) Net cash used in operating activities - - CHANGES IN CASH AND RESTRICTED CASH - - CASH AND RESTRICTED CASH, beginning of period - - CASH AND RESTRICTED CASH, end of period $ - $ - |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). The accompanying consolidated financial statements include the financial statements of the Company, its wholly owned subsidiaries, and entities it controlled through VIE agreements. All inter-company balances and transactions are eliminated upon consolidation. |
Non-Controlling Interests | Non-controlling interests Non-controlling interests represent minority shareholders’ 25% ownership interest in Xi’an DT and a minority shareholder’s 49% ownership interest in Tianjin YHX as of September 30, 2020 and 2019. The non-controlling interests are presented in the consolidated balance sheets, separately from equity attributable to the shareholders of the Company. Non-controlling interests in the results of the Company are presented on the face of the consolidated statements of operations and comprehensive income as an allocation of the total income or loss for the years ended September 30, 2020 and 2019 between non-controlling interest holders and the shareholders of the Company. |
Uses of Estimates | Uses of estimates In preparing the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“US GAAP”), management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These estimates are based on information as of the date of the consolidated financial statements. Significant estimates required to be made by management include, but are not limited to, the allowance for estimated uncollectible receivables, inventory valuations, useful lives of property, plant and equipment, intangible assets, the recoverability of long-lived assets, provision necessary for contingent liabilities, fair value of stock based compensation, revenue recognition and realization of deferred tax assets. The inputs into the Company’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Actual results could differ from those estimates. |
Risks and Uncertainties | Risks and Uncertainties The main operation of the Company is located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. The development and commercialization of natural and healthy extracts and compounds products is highly competitive, and the industry currently is characterized by rapidly changing technologies, significant competition and a strong emphasis on intellectual property. The Company may face competition with respect to its current and future pharmaceutical product candidates from major pharmaceutical companies in China. The Company’s business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, which could significantly disrupt the Company’s operations. The Company’s operations may be affected by the ongoing outbreak of COVID-19 which in March 2020, had been declared as a pandemic by the World Health Organization. To reduce the spread of the COVID-19, the Chinese government has employed measures including city lockdowns, quarantines, travel restrictions, suspension of business activities and school closures. Due to difficulties resulting from the COVID-19 outbreak, including, but not limited to, the temporary closure of the Company’s factory and operations beginning in early February until to March 2, 2020, limited support from the Company’s employees, delayed access to raw material supplies and inability to deliver products to customers on a timely basis, the Company’s business was negatively impacted and generated lower revenue and net income during the period from February to March 2020 as compared to same period of 2019. Although the Company resumed its operations on March 2, 2020 and the COVID-19 impact on the Company’s operating results and financial performance for fiscal year 2020 seems to be temporary, a resurgence could negatively affect the execution of customer contracts, the collection of customer payments, or disruption of the Company’s supply chain. The continued uncertainties associated with COVID 19 may cause the Company’s revenue and cash flows to underperform in the next 12 months. The extent of the future impact of COVID-19 is still highly uncertain and cannot be predicted as of the financial statement reporting date. |
Cash and Cash Equivalents | Cash and cash equivalents Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. The Company maintains most of its bank accounts in the PRC. Cash balances in bank accounts in PRC are not insured by the Federal Deposit Insurance Corporation or other programs. |
Accounts Receivable, Net | Accounts receivable, net Accounts receivable are presented net of allowance for doubtful accounts. The Company determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trend. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimate of specific losses on individual exposures, as well as a provision on historical trends of collections. Actual amounts received may differ from management’s estimate of credit worthiness and the economic environment. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the collection is not probable. Allowance for uncollectable balances amounted to $93,032 and $73,386 as of September 30, 2020 and 2019, respectively. |
Advances to Suppliers, Net | Advances to Suppliers, net Advances to suppliers consist of balances paid to suppliers for inventory raw materials and construction materials associated with the Company’s construction-in-progress projects that have not been provided or received. Advances to suppliers are short-term in nature. Advances to Suppliers are reviewed periodically to determine whether their carrying value has become impaired. The Company considers the assets to be impaired if the collectability of the advance becomes doubtful. The Company uses the aging method to estimate the allowance for unrealizable balances. In addition, at each reporting date, the Company generally determines the adequacy of allowance for doubtful accounts by evaluating all available information, and then records specific allowances for those advances based on the specific facts and circumstances. As of September 30, 2020 and 2019, allowance for doubtful account amounted to $13,341 and $6,377, respectively. |
Inventories, Net | Inventories, net Inventories are stated at net realizable value using weighted average method. Costs include the cost of raw materials, freight, direct labor and related production overhead. Any excess of the cost over the net realizable value of each item of inventories is recognized as a provision for diminution in the value of inventories. Net realizable value is the estimated selling price in the normal course of business less any costs to complete and sell products. The Company evaluates inventories on a quarterly basis for its net realizable value adjustments, and reduces the carrying value of those inventories that are obsolete or in excess of the forecasted usage to their estimated net realizable value based on various factors including aging, expiration dates, as applicable, taking into consideration historical and expected future product sales. The Company recorded inventory reserve of $439,486 and $389,867 as of September 30, 2020 and 2019, respectively. |
Deferred Initial Public Offering ("IPO") Costs | Deferred initial public offering (“IPO”) costs The Company complies with the requirement of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin (“SAB”) Topic 5A — “Expenses of Offering”. Deferred offering costs consist of underwriting, legal , and other expenses incurred through the balance sheet date that are directly related to the intended IPO. Deferred offering costs will be charged to shareholders’ equity upon the completion of the IPO. Should the IPO prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to operations. Deferred initial public offering costs amounted to $501,079 and $Nil as of September 30, 2020 and 2019, respectively. |
Fair Value of Financial Instruments | Fair value of financial instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 — inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. ● Level 2 — inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, quoted market prices for identical or similar assets in markets that are not active, inputs other than quoted prices that are observable and inputs derived from or corroborated by observable market data. ● Level 3 — inputs to the valuation methodology are unobservable. Unless otherwise disclosed, the fair value of the Company’s financial instruments, including cash, accounts receivable, inventories, advance to suppliers, prepaid expenses and other current assets, accounts payable, short-term bank loans, accrued expenses and other current liabilities, taxes payable and due to related parties, approximate the fair value of the respective assets and liabilities as of September 30, 2020 and 2019 based upon the short-term nature of the assets and liabilities. The Company believes that the carrying amount of long-term loans approximates fair value at September 30, 2020 and 2019 based on the terms of the borrowings and current market rates as the rates of the borrowings are reflective of the current market rates. |
Property, Plant and Equipment, Net | Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 5–10 years Automobiles 8 years Office and electric equipment 3–5 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. Construction-in-Progress (“CIP”) Construction-in-progress represents property and buildings under construction and consists of construction expenditures, equipment procurement, and other direct costs attributable to the construction. Construction-in-progress is not depreciated. Upon completion and ready for intended use, construction-in-progress is reclassified to the appropriate category within property, plant and equipment. |
Intangible Assets, Net | Intangible assets, net The Company’s intangible assets primarily includes a land use right. A land use right in the PRC represents an exclusive right to occupy, use and develop a piece of land during the contractual term of the land use right. The cost of a land use right is usually paid in one lump sum at the date the right is granted. The prepayment usually covers the entire period of the land use right. The lump sum advance payment is capitalized and recorded as land use right and then charged to expense on a straight-line basis over the period of the right, which is normally 50 years. |
Impairment of Long-Lived Assets | Impairment of long-lived Assets Long-lived assets, such as property, plant and equipment, land use rights and long-term investment, are reviewed for impairment when events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Recoverability of a long-lived asset or asset group to be held and used is measured by a comparison of the carrying amount of an asset or asset group to the estimated undiscounted future cash flows expected to be generated by the asset or asset group. If the carrying value of an asset or asset group exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount that the carrying value exceeds the estimated fair value of the asset or asset group. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as considered necessary. Assets to be disposed are reported at the lower of carrying amount or fair value less costs to sell, and are no longer depreciated. No impairment of long-lived assets was recognized as of September 30, 2020 and 2019. |
Capital Lease Obligation | Capital lease obligation In accordance with ASC 840, Leases On October 6, 2018, the Company’s VIE, Xi’an App-Chem (the “Lessee”) entered into a capital lease agreement with Guian Hengxin Finance Lease (Shanghai) Ltd. (“the Lessor”) and sold part of its plant machines with carrying value of RMB 5 million (approximately $0.7 million) to the lessor and then leases them back from the lessor within two years. Pursuant to the terms of the contract, the Company is required to pay to the lessor monthly lease payment and interest, and is entitled to obtain the ownership of these machinery and equipment at a nominal price upon the expiration of the lease. Management deemed the arrangement as a capital lease (see Note 13). |
Foreign Currency Translation | Foreign Currency Translation The functional currency for Bon Natural is the U.S Dollar (“US$”). Tea Essence uses Hong Kong dollar as its functional currency. However, Bon Natural, and Tea Essence currently only serve as the holding companies and did not have active operations as of the date of this report. The Company operates its business through its subsidiary and VIEs in the PRC as of September 30, 2020. The functional currency of the Company’s subsidiary and VIEs is the Chinese Yuan (“RMB”). The Company’s consolidated financial statements have been translated into US$. Assets and liabilities accounts are translated using the exchange rate at each reporting period end date. Equity accounts are translated at historical rates. Income and expense accounts are translated at the average rate of exchange during the reporting period. The resulting translation adjustments are reported under other comprehensive income. Gains and losses resulting from the translations of foreign currency transactions and balances are reflected in the results of operations. The RMB is not freely convertible into foreign currency and all foreign exchange transactions must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into US$ at the rates used in translation. 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 Period-end spot rate US$1=RMB 6.8033 US$1=RMB 7.1383 Average rate US$1=RMB7.0066 US$1=RMB 6.8767 |
Revenue Recognition | Revenue recognition On October 1, 2017, the Company adopted Accounting Standards Codification (“ASC”) 606 using the modified retrospective approach. To determine revenue recognition for contracts with customers, the Company performs the following five steps : (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not In accordance to ASC 606, the Company recognizes revenue when it transfers its goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. The Company accounts for the revenue generated from sales of its products to its customers, in which the Company is acting as a principal in these transactions, is subject to inventory risk, has latitude in establishing prices, and is responsible for fulfilling the promise to provide customers the specified goods. All of the Company’s contracts have single performance obligation as the promise is to transfer the individual goods to customers, and there is no other separately identifiable promises in the contracts. The Company’s revenue streams are recognized at a point in time when title and risk of loss passes and the customer accepts the goods, which generally occurs at delivery. The Company’s products are sold with no right of return and the Company does not provide other credits or sales incentive to customers. The Company’s sales are net of value added tax (“VAT”) and business tax and surcharges collected on behalf of tax authorities in respect of product sales. Contract Assets and Liabilities Payment terms are established on the Company’s pre-established credit requirements based upon an evaluation of customers’ credit. Contract assets are recognized for in related accounts receivable. Contract liabilities are recognized for contracts where payment has been received in advance of delivery. The contract liability balance can vary significantly depending on the timing when an order is placed and when shipment or delivery occurs. As of September 30, 2020 and 2019, other than accounts receivable and advances from customers, the Company had no other material contract assets, contract liabilities or deferred contract costs recorded on its consolidated balance sheet. Costs of fulfilling customers’ purchase orders, such as shipping, handling and delivery, which occur prior to the transfer of control, are recognized in selling, general and administrative expense when incurred. Disaggregation of Revenues The Company disaggregates its revenue from contracts by product types, as the Company believes it best depicts how the nature, amount, timing and uncertainty of the revenue and cash flows are affected by economic factors. The Company’s disaggregation of revenues for the years ended September 30, 2020 and 2019 are disclosed in Note 17 of the consolidation financial statements. |
Research and Development Expenses | Research and development expenses The Company expenses all internal research and development costs as incurred, which primarily comprise employee costs, internal and external costs related to execution of studies, including manufacturing costs, facility costs of the research center, and amortization and depreciation to intangible assets and property, plant and equipment used in the research and development activities. For the years ended September 30, 2020 and 2019, research and development expense were approximately $205,359 and $522,867, respectively. |
Selling, General and Administrative Expenses | Selling, General and Administrative Expenses Selling expenses represents primarily costs of payroll, benefits, commissions for sales representatives and advertising expenses. General and administrative expenses represents primarily payroll and benefits costs for administrative employees, rent and operating costs of office premises, depreciation and amortization of office facilities, professional fees and other administrative expenses. |
Advertising Expense | Advertising expense Advertising expenses primarily relate to promotion of the Company’s brand name and products through outdoor billboards and social media such as Weibo and WeChat. Advertising expenses are included in selling expenses in the consolidated statements of income and comprehensive income. Advertising expenses amounted to $14,264 and $51,257 for the years ended September 30, 2020 and 2019, respectively. |
Government Subsidies | Government subsidies Government subsidies primarily relate to local government’s cash award to High and New Technology Enterprises (“HNTEs”) to encourage entrepreneurship and stimulate local economy. Such awards are granted on a case-by-case basis by local government. The Company’s VIE, Xi’an App-chem was approved as a HNTE and received government subsidy in the form of export sales refund and cash awards based on annual financial performance. The Company recognizes government subsidies as other operating income when they are received because they are not subject to any past or future conditions, there are no performance conditions or conditions of use, and they are not subject to future refunds. Government subsidies received and recognized as other operating income totalled $362,187 and $140,295 for the years ended September 30, 2020 and 2019, respectively. |
Income Taxes | Income taxes The Company accounts for current income taxes in accordance with the laws of the relevant tax authorities. Deferred income taxes are recognized when temporary differences exist between the tax bases of assets and liabilities and their reported amounts in the consolidated financial statements. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. An uncertain tax position is recognized only if it is “more likely than not” that the tax position would be sustained in a tax examination. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. As of September 30, 2020, the Company had income tax payable of approximately $0.85 million, primarily related to the unpaid income tax in China. Based on statutory penalty rate, the Company recorded an accrued penalty of $24,942 as reflected in the consolidated statements of income and comprehensive income. The Company expects to settle the income tax liabilities in May 2021 when the 2020 annual income tax return is to be filed with local tax authority. r. The Company’s operating subsidiary and VIE in China are subject to the income tax laws of the PRC. No significant income was generated outside the PRC for years ended September 30, 2020 and 2019. As of September 30, 2020 and September 30, 2019, all of the Company’s tax returns of its PRC subsidiary, its VIE and VIE’s subsidiaries remain open for statutory examination by PRC tax authorities. |
Value Added Tax ("VAT") | Value added tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. The Company recorded a VAT payable or recoverable net of VAT payments in the accompanying consolidated financial statements. For export sales, VAT is not imposed on gross sales price, but the VAT related to purchasing raw materials is refunded after the export is completed. As of September 30, 2020, the Company had large VAT tax payable of approximately $3.5 million, primarily related to the unpaid VAT tax in China. Based on statutory penalty rate, the Company recorded an accrued penalty of $247,823 as reflected in the consolidated statements of income and comprehensive income. For the unpaid VAT tax liabilities, management has discussed with local tax authorities and expects to fully settle the tax liabilities before September 30, 2021. |
Employee Defined Contribution Plan | Employee Defined Contribution Plan The Company’s subsidiaries in the PRC participate in a government-mandated multi-employer defined contribution plan pursuant to which pension, work-related injury benefits, maternity insurance, medical insurance, unemployment benefit and housing fund are provided to eligible full-time employees. The relevant labor regulations require the Company’s subsidiaries in the PRC to pay the local labor and social welfare authorities monthly contributions based on the applicable benchmarks and rates stipulated by the local government. The contributions to the plan are expensed as incurred. Employee social security and welfare benefits included as expenses in the accompanying consolidated statements of income and comprehensive income amounted to $30,724 and $68,128 for the years ended September 30, 2020 and 2019, respectively. |
Share Based Compensation | Share Based Compensation On June 23, 2020, the Company entered into consulting service agreements with three third-party consultants (collectively the “Consultants”), pursuant to which, the Consultants will provide public listing related consulting services to the Company in connection with the Company’s intended IPO effort. The Company issued 633,333 of its ordinary shares to the Consultants in lieu of cash payment for such services. The 633,333 shares are valued at $633,333. Such service fee will be amortized over the service period from June 23, 2020 to June 22, 2021 (see Note 14). The Company applied ASC 718 and related interpretations in accounting for measuring the cost of share-based compensation over the period during which the consultants are required to provide services in exchange for the issued shares. For the year ended September 30, 2020, $211,112 share-based compensation expenses was recognized and capitalized as part of the deferred initial public offering costs, as the consultants’ services directly related to the Company’s intended IPO. |
Earnings Per Share | Earnings per Share The Company computes earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share” (“ASC 260”). ASC 260 requires companies with complex capital structures to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average common shares outstanding for the period. Diluted presents the dilutive effect on a per share basis of potential common shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential common shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the years ended September 30, 2020 and 2019, there were no dilutive shares. |
Comprehensive Income (Loss) | Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income (loss). The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to US$ is reported in other comprehensive income (loss) in the consolidated statements of income and comprehensive income. |
Statement of Cash Flows | Statement of Cash Flows In accordance with ASC 230, “Statement of Cash Flows”, cash flows from the Company’s operations are formulated based upon the local currencies. As a result, amounts related to assets and liabilities reported on the statements of cash flows will not necessarily agree with changes in the corresponding balances on the balance sheets. |
Segment Reporting | Segment Reporting The Company uses the management approach in determining reportable operating segments. The management approach considers the internal reporting used by the Company’s chief operating decision maker for making operating decisions about the allocation of resources of the segment and the assessment of its performance in determining the Company’s reportable operating segments. Management has determined that the Company has one operating segment (See Note 17). |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In February 2016, the FASB issued Accounting Standards Update (ASU) No. 2016-02, Leases (Topic 842), which requires lessees to recognize a right-of-use asset and lease liability on the balance sheet for all leases, including operating leases, with a term in excess of 12 months. The guidance also expands the quantitative and qualitative disclosure requirements. The new guidance requires the lessee to record operating leases on the balance sheet with a right-of-use asset and corresponding liability for future payment obligations. In July 2018, FASB issued ASU 2018-11 Leases (Topic 842) – Targeted Improvements that reduces costs and eases implementation of the leases standard for financial statement preparers. The ASU simplifies transition requirements and, for lessors, provides a practical expedient for the separation of non-lease components from lease components. In March 2019, the FASB issued Accounting Standards Update No. 2019-01, Leases (Topic 842): Codification Improvements Accounting Changes and Error Corrections Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326), which requires entities to measure all expected credit losses for financial assets held at the reporting date based on historical experience, current conditions, and reasonable and supportable forecasts. This replaces the existing incurred loss model and is applicable to the measurement of credit losses on financial assets measured at amortized cost. ASU 2016-13 was subsequently amended by Accounting Standards Update 2018-19, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Codification Improvements to Topic 326, Financial Instruments—Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments Targeted Transition Relief. In August 2018, the FASB Accounting Standards Board issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). ASU 2018-13 modifies the disclosure requirements on fair value measurements. ASU 2018-13 is effective for all entities for fiscal years and interim periods within those fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company does not expect this guidance will have a material impact on its consolidated financial statements. In November 2019, the FASB issued ASU 2019-10, “Financial Instruments—Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842)” (“ASU 2019-10”). ASU 2019-10 (i) provides a framework to stagger effective dates for future major accounting standards and (ii) amends the effective dates for certain major new accounting standards to give implementation relief to certain types of entities. Specifically, ASU 2019-10 changes some effective dates for certain new standards on the following topics in the FASB Accounting Standards Codification (ASC): (a) Derivatives and Hedging (ASC 815) – now effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021; (b) Leases (ASC 842) - now effective for fiscal years beginning after December 15, 2020 and interim periods within fiscal years beginning after December 15, 2021; (c) Financial Instruments — Credit Losses (ASC 326) - now effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years; and (d) Intangibles — Goodwill and Other (ASC 350) - now effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740)—Simplifying the Accounting for Income Taxes. ASU 2019-12 is intended to simplify accounting for income taxes. It removes certain exceptions to the general principles in Topic 740 and amends existing guidance to improve consistent application. ASU 2019-12 is effective for fiscal years beginning after December 15, 2020 and interim periods within those fiscal years, which is fiscal 2021 for us, with early adoption permitted. The Company does not expect the adoption of the new guidance to have a significant impact on its consolidated financial statements. In February 2020, the FASB issued ASU 2020-02, “Financial Instruments – Credit Losses (Topic 326) and Leases (topic 842) Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 119 and Update to SEC Section on Effective Date Related to Accounting Standards Update No. 2016-02, Leases (topic 842)”. This ASU provides guidance regarding methodologies, documentation, and internal controls related to expected credit losses. This ASU is effective for interim and annual periods beginning after December 15, 2019, and early adoption is permitted. The Company is evaluating the impact of this guidance on its consolidated financial statements. |
Organization and Business Des_2
Organization and Business Description (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Subsidiaries Company | Upon the completion of the Reorganization, the Company has subsidiaries in countries and jurisdictions in the PRC and Hong Kong. Details of the subsidiaries of the Company as of September 30, 2020 were set out below: Name of Entity Date of Place of % of Principal Activities Bon Natural Life December 11, 2019 Cayman Islands Parent, 100% Investment holding Tea Essence January 9, 2020 Hong Kong 100% Investment holding Xi’an CMIT April 9, 2020 Xi.an City, PRC 100% WOFE, Investment holding VIE of the Company: Xi’an App- Chem Bio (Tech) April 23, 2006 Xi’an City, PRC VIE General administration and sales of the Company’s products to customers Bon Operating Companies (owned by VIE) App-Chem Health April 17, 2006 Tongchuan City, PRC 100% owned by VIE Product manufacturing App-Chem Ag-tech April 19, 2013 Dali County, PRC 100% owned by VIE Registered owner of land with an area of 12,904 square meters , no other business activities Xi’an YH September 15, 2009 Xi.an City, PRC 100% owned by VIE Research and development of product Balikun December 16, 2016 Balikun City, PRC 100% owned by VIE No active business operation App-Chem Guangzhou April 27, 2018 Guangzhou City, PRC 100% owned by VIE Raw material purchase Tongchuan DT May 22, 2017 Tongchuan City, PRC 100% owned by VIE Product manufacturing Gansu BMK March 11, 2020 Jinquan City, PRC 100% owned by VIE Raw material purchase Xi’an DT April 24, 2015 Xi’an City, PRC 75% owned by VIE Research and development of product Tianjin YHX September 16, 2019 Tianjin City, PRC 51% owned by VIE Raw material purchase |
Schedule of Financial Statement Amounts and Balances of VIE | The following financial statement amounts and balances of the VIE were included in the accompanying consolidated financial statements after elimination of intercompany transactions and balances: September 30, 2020 September 30, Current assets $ 10,840,214 $ 8,579,432 Non-current assets 14,362,015 10,980,980 Total assets $ 25,202,229 $ 19,560,412 Current liabilities $ 11,696,969 $ 10,864,350 Non-current liabilities 2,482,251 1,432,716 Total liabilities $ 14,179,220 $ 12,297,066 For the Years Ended September 30, 2020 2019 Revenue $ 18,219,959 $ 16,396,018 Net income $ 3,098,317 $ 2,562,636 For the Years Ended September 30, 2020 2019 Net cash provided by operating activities $ 2,643,076 $ 7,104,822 Net cash used in investing activities $ (3,003,043 ) $ (8,429,958 ) Net cash provided by financing activities $ 112,492 $ 804,680 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Useful Lives of Property, Plant and Equipment | Property, plant and equipment are stated at cost less accumulated depreciation and amortization. Depreciation and amortization of property and equipment is provided using the straight-line method over their expected useful lives, as follows: Useful life Buildings 20 years Machinery and equipment 5–10 years Automobiles 8 years Office and electric equipment 3–5 years |
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 Period-end spot rate US$1=RMB 6.8033 US$1=RMB 7.1383 Average rate US$1=RMB7.0066 US$1=RMB 6.8767 |
Accounts Receivable, Net (Table
Accounts Receivable, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Credit Loss [Abstract] | |
Schedule of Accounts Receivable, Net | Accounts receivable, net, consists of the following: September 30, 2020 September 30, 2019 Accounts receivable $ 5,864,040 $ 5,309,656 Less: allowance for doubtful accounts (93,032 ) (73,386 ) Accounts receivable, net $ 5,771,008 $ 5,236,270 |
Schedule of Accounts Receivable and Subsequent Collection by Aging Bucket | The following table summarizes the Company’s accounts receivable and subsequent collection by aging bucket: Accounts Receivable by aging bucket Balance as of Subsequent % of Less than 3 months $ 4,751,705 $ 4,587,583 96.5 % From 4 to 6 months 1,010,693 993,403 98.3 % From 7 to 9 months 12 - 0.0 % From 10 to 12 months 1,151 585 50.8 % Over 1 year 100,479 7,837 7.8 % Total gross accounts receivable 5,864,040 5,589,408 95.3 % Allowance for doubtful accounts (93,032 ) - Accounts Receivable, net $ 5,771,008 $ 5,589,408 96.9 % |
Schedule of Allowance for Doubtful Accounts | Allowance for doubtful accounts movement is as follows: September 30, 2020 September 30, 2019 Beginning balance $ 73,386 $ 48,529 Additions 15,569 27,709 Reductions - - Foreign currency translation adjustments 4,077 (2,852 ) Ending balance $ 93,032 $ 73,386 |
Inventories, Net (Tables)
Inventories, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net, consist of the following: September 30, 2020 September 30, 2019 Raw materials $ 246,383 $ 891,604 Finished goods 1,209,545 2,102,127 Inventory valuation allowance (439,486 ) (389,867 ) Total inventory, net $ 1,016,442 $ 2,603,864 |
Advances to Suppliers, Net (Tab
Advances to Suppliers, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Advances To Suppliers Net | |
Schedule of Advances to Suppliers, Net | Advances to suppliers, net, consist of the following: September 30, 2020 September 30, 2019 Advances to suppliers for inventory raw materials $ 3,504,486 $ 374,033 Less: allowance for doubtful accounts (13,141 ) (6,377 ) Advances to suppliers, net $ 3,491,145 $ 367,656 |
Property, Plant and Equipment_2
Property, Plant and Equipment, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment, Net | Property, plant and equipment, net, consists of the following: September 30, 2020 September 30, 2019 Buildings $ 601,408 $ 573,184 Machinery, equipment and furniture 1,920,530 1,848,703 Motor Vehicles 175,117 166,899 Construction-in-progress (“CIP”) (1) 12,832,806 8,008,814 Subtotal 15,529,861 10,597,600 Less: accumulated depreciation (1,357,898 ) (1,099,548 ) Property, plant and equipment, net $ 14,171,963 $ 9,498,052 |
Schedule of Future Minimum Capital Expenditures on the Construction-in-progress | As of September 30, 2020, future minimum capital expenditures on the Company’s CIP project are estimated as follows: Years ending September 30, Capital Expenditure on CIP 2021 $ 630,402 2022 342,859 2023 - 2024 - 2025 532,340 Total $ 1,505,601 |
Intangible Asset, Net (Tables)
Intangible Asset, Net (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets, Net | Intangible asset, net mainly consist of the following: September 30, 2020 September 30, 2019 Land use rights $ 193,168 $ 184,103 Less: accumulated amortization (52,175 ) (45,731 ) Land use right, net $ 140,993 $ 138,372 |
Schedule of Estimated Future Amortization Expense for Intangible Assets | Estimated future amortization expense for intangible assets is as follows: Years ending September 30, Amortization expense 2021 $ 3,863 2022 3,863 2023 3,863 2024 3,863 2025 3,863 Thereafter 121,678 $ 140,993 |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Short-Term Loans | (a) Short-term loans: September 30, 2020 September 30, 2019 Xi’an Bank (1) $ - $ 560,358 Webank Co., Ltd. (2) - 105,067 Ningxia Bank (3) - 420,268 Bank of Beijing (4) - 686,438 Xi’an Guosen Micro-Credit Co., Ltd. (5) 279,276 280,178 Xi’ an Xinchang Micro-lending Co. Ltd. (6) 110,241 - China Construction Bank (7) 17,640 - Bohai Bank (8) 440,962 - Huaxia Bank (9) 440,962 - Total short-term loans $ 1,289,081 $ 2,052,309 (1) On November 23, 2018, the Company’s VIE, Xi’an App-Chem entered into a loan agreement with Xi’an bank to borrow RMB4.0 million (equivalent to $0.6 million) as working capital for one year, with maturity date on October 22, 2019. The loan bears an interest rate of 5.655% per annum. A third-party guarantee company provided guarantee to this loan. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Xi’an Bank as collateral to safeguard these loans. The loan was repaid in full upon maturity. (2) On December 12, 2018, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB750,000 (equivalent to US$0.1 million) as working capital for one year, with maturity date on December 12, 2019 and a daily interest rate of 0.05%. The loan was fully repaid upon maturity. (3) On January 30, 2019, the Company’s VIE , Xi’an App-Chem , entered into a loan agreement with Ningxia Bank to borrow RMB3.0 million (equivalent to $0.4 million) as working capital for one year, with maturity date on January 29, 2020. The loan bears an interest rate of 7.4% per annum. The loan was guaranteed by a third-party guarantee company. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Ningxia Bank as collateral to safeguard this loan. The loan was fully repaid upon maturity. (4) On August 7, 2019, the Company’s VIE, Xi’an App-Chem, entered into another loan agreement with Bank of Beijing to borrow RMB4.0 million (equivalent to US$0.6 million) for one year, with maturity date on August 26, 2020 and interest rate of 5.22% per annum. A third-party guarantee company provided guarantee to this loan. In addition, The Company pledged certain free patent owned by the Company as collateral to safeguard this loan. The loan was fully repaid upon maturity. (5) On July 1, 2019, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Xi’an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on December 27, 2019 and interest rate of 17% per annum. The loan was fully repaid upon maturity. On July 22, 2020, the Company’s VIE, Xi’an App-Chem, entered into another loan agreement with Xi’an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on January 21, 2021 and interest rate of 17% per annum. The loan was subsequently fully repaid upon maturity. (6) On June 1, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement Xi’ an Xinchang Micro-lending Co. Ltd., to borrow RMB750,002 (equivalent to US$110,241) as working capital for one year, with maturity date on May 31, 2021 and interest rate of 18.0% per annum. (7) On January 19, 2020, the Company’s VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB100,000 (equivalent to US$14,699) as working capital for one year, with maturity date on January 19, 2021 and interest rate of 5.0% per annum. The loan was subsequently fully repaid upon maturity. On May 15, 2020, the Company’s VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB20,000 (equivalent to US$2,941) as working capital for one year, with maturity date on May 15, 2021 and interest rate of 4.1% per annum. (8) On May 22, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Bohai Bank for a maximum of RMB 13 million (approximately $1.8 million) loans as working capital for one year. On July 22, 2020, the Company borrowed RMB3 million (equivalent to US$0.4 million) short-term loan out of this line of credit as working capital for one year, with interest rate of 5.4% per annum and maturity date on July 21, 2021. The Company’s controlling shareholder, Mr. Yongwei Hu and his wife Ms. Jing Liu, and a third-party Shannxi Jinma Financial Guarantee Co., Ltd. provided joint guarantee to this loan. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before May 22, 2021. (9) On April 3, 2020, the Company’s VIE, Xi’an App-Chem, obtained an approval of line of credit from Huaxia Bank for a maximum of RMB 15 million (approximately $2.2 million) loans, including RMB 3 million (approximately $0.4 million) loans as working capital for one year with fixed interest rate of 9% per annum and RMB 12 million (approximately $1.8 million) loans as working capital for three years with fixed interest rate of 6.6% per annum. From June 16, 2020 to June 29, 2020, the Company’s VIE, Xi’an App-Chem, entered into two loan agreements with Huaxia Bank to borrow total of a RMB3 million (equivalent to US$440,962) as working capital for one year, with interest rate of 9.0% per annum and maturity date on April 16, 2021 and June 29, 2021, respectively. In addition, on April 16, 2020, the Company borrowed additional RMB2 million (equivalent to US$293,975) out of this line of credit as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. The Company’s controlling shareholder, Mr. Yongwei Hu and his wife Ms.Jing Liu, pledged their personal properties as collateral to safeguard the loans with Huaxia Bank. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before April 2023. |
Schedule of Long-Term Loans | (b) Long-term loans: September 30, 2020 September 30,2019 Xi’an Investment Holding Co., Ltd. (10) $ 2,204,812 $ 2,101,341 Xi’an High-Tech Emerging Industry Investment Fund Partnership (11) 1,175,900 1,120,715 Webank Co., Ltd. (12) 34,910 Huaxia Bank (13) 293,975 - Total 3,709,597 3,222,056 Less: current portion of long-term loans 1,227,346 1,821,162 Total long-term loans $ 2,482,251 $ 1,400,894 (10) On February 14, 2017 and on December 13, 2017, the Company’s VIE, Xi’an App-Chem entered into loan agreements with third-party Xi’an Investment Holdings Co., Ltd. (the “Lender”), to borrow an aggregate of RMB 15.0 million (approximately $2.2 million) as working capital for three years, with interest rate ranging from 2% to 4% per annum. Among the total RMB 15.0 million loans, RMB5.0 million (equivalent to US$0.7 million) matured on February 13, 2020 and RMB10.0 million (approximately $1.5 million) matured on December 12, 2020. The Company did not make the loan repayment upon maturities. In accordance with a COVID-19 relief notice issued by local government, for RMB 5 million matured on February 13, 2020, the loan payment term has been extended to February 12, 2022, and for RMB 10 million matured on December 12, 2020, the payment term has been extended to December 12, 2022. Loan interest rates remain unchanged. The Company’s controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi’an App-chem and his personal bank savings as collateral to safeguard these loans. (11) On June 26, 2017, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with third-party Xi’an High-tech Emerging Industries Investment Fund Partnership (the “Lender”) to borrow RMB 8.0 million (approximately $1.1 million) as working capital for three years, with maturity date on June 25, 2020 and an interest rate of 3.8% per annum. The Company’s controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi’an App-chem as collateral safeguard this loan. As of September 30, 2020, this loan was reclassified as current portion of long term loans. The loan matured on June 26, 2020 and not repaid on time due to COVID-19 impact. The Company has negotiated with the Lender to extend the loan repayment date for additional 12 months in accordance with a COVID-19 relief notice issued by local government. (12) On January 19, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB287,500 (equivalent to US$40,552) as working capital for 27 months, with maturity date on April 12, 2022 and interest rate of 18.0% per annum. (13) As disclosed in (9) above, on April 16, 2020, the Company borrowed RMB2 million (equivalent to US$293,975) out of a line of credit from Huaxia Bank as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. |
Schedule of Line of Credit | As of the date of this report, the Company had the availability to borrow an aggregate of approximately $7.1 million (RMB 48 million) line of credit from the following financial institutions before April 2023: Name of financial institution: Amount Bohai Bank $ 1,469,875 Huaxia Bank 1,469,875 Bank of China 2,645,775 Qishang Bank 1,469,875 Total $ 7,055,400 |
Schedule of Third Party Loans | (c) Third party loans September 30, 2020 September 30, 2019 Wei Wang (14) $ 440,962 $ 420,268 Xueyan Zhou (14) - 3,923 Shaanxi Keyi Technology Co. Ltd. (14) 73,494 - Biyun Xue (14) 9,775 - Xi’ an Kaimei Medical Technology Co., Ltd. (14) 166,096 - Total third-party loans $ 690,327 $ 424,191 (14) During the Company’s normal course of business, the Company also borrows funds from several third-party individuals or third party companies as working capital. These borrowings are short-term, interest free and payable on demand. As of September 30, 2020 and 2019, loans payable to third-parties amounted to $690,327 and $424,191, respectively. The September 30, 2020 third-party loans balance has been fully repaid in December 2020. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule Due to Related Parties | (a) Due to related parties Related party relationship September 30, 2020 September 30, 2019 Shaanxi Meishengyuang Bio-Technoloy Co., Ltd 5.5% of shareholder of Xi’an App-chem $ 738,864 $ 770,532 Wenhu Guo Senior Management of the Company 368,145 388,075 Yongwei Hu Chief Executive Officer and Controlling shareholder of the Company 1,208,337 - Jing Liu Wife of the controlling shareholder 4,410 4,203 Sheying Wang Senior Management of the Company 3,234 3,055 Total due to related parties $ 2,322,990 $ 1,165,865 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of Effective Tax Rate | The following table reconciles the China statutory rates to the Company’s effective tax rate for the years ended September 30, 2020 and 2019: For the Years Ended September 30, 2020 2019 PRC statutory income tax rate 25.0 % 25.0 % Effect of income tax holiday (10.0 )% (10.0 )% Permanent difference 0.0 % 0.1 % Research and development deduction (0.4 )% (1.9 )% Change in valuation allowance 0.6 % 1.1 % Effective tax rate 15.2 % 14.3 % |
Schedule of Components of the Income Tax Provision (Benefit) | The components of the income tax provision (benefit) are as follows: For the Years Ended September 30, 2020 2019 Current tax provision: Cayman Islands $ - $ - Hong Kong - - China 564,013 432,343 564,013 432,343 Deferred tax provision (benefit): Cayman Islands - - Hong Kong - - China (7,751 ) (5,149 ) (7,751 ) (5,149 ) Income tax provision $ 556,262 $ 427,194 |
Schedule of Deferred Tax Assets | The Company’s deferred tax assets are comprised of the following: September 30, 2020 September 30, 2019 Deferred tax assets derived from allowance for doubtful accounts and net operating losses (“NOL”) $ 370,184 $ 357,721 Less: valuation allowance (321,125 ) (318,572 ) Deferred tax assets $ 49,059 $ 39,149 |
Schedule of Taxes Payable | Taxes payable consist of the following: September 30, 2020 September 30, 2019 Income tax payable $ 850,834 $ 233,526 Value added tax payable 3,463,146 1,259,006 Other taxes 88,645 84,644 Total taxes payable $ 4,402,625 $ 1,577,176 |
Capital Lease Liabilities (Tabl
Capital Lease Liabilities (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Capital Lease Liabilities | |
Schedule of Maturities of the Company's Capital Lease Liabilities | The maturities of the Company’s capital lease liabilities is as follows: US$ Year ending September 30, 2021 $ 33,389 Total $ 33,389 |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Equity [Abstract] | |
Schedule of Table Reconciles the Non-controlling Interest | The following table reconciles the non-controlling interest as of September 30, 2020 and 2019: Xi’an DT Tianjin YHX Total As of September 30, 2019 $ 424,995 $ - $ 424,995 Net income attributable to non-controlling interest 57,943 13,701 71,644 Foreign currency translation adjustment 9,815 278 10,093 As of September 30, 2020 $ 492,753 $ 13,979 $ 506,732 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | Revenue by region For Years ended September 30, 2020 2019 PRC $ 15,461,801 $ 11,192,324 Overseas 2,758,158 5,203,694 Total revenue $ 18,219,959 $ 16,396,018 |
Schedule of Revenue by Product Categories | Revenue by product categories The summary of our total revenues by product categories for the years ended September 30, 2020 and 2019 was as follows: September 30, 2020 September 30, 2019 Fragrance compounds $ 7,879,300 $ 6,738,274 Health supplements (solid drinks) 3,887,096 4,342,490 Bioactive food ingredients 6,453,563 5,315,254 Total revenue $ 18,219,959 $ 16,396,018 |
Condensed Financial Informati_2
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Condensed Financial Information Disclosure [Abstract] | |
Schedule of Consolidated Financial Statements | BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY BALANCE SHEETS September 30, 2020 September 30, 2019 ASSETS Non-current assets Investment in subsidiaries and VIE $ 10,516,277 $ 6,838,351 Total assets $ 10,516,277 $ 6,838,351 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES $ - $ - COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 5,800,000 and 5,166,667 shares issued and outstanding as of September 30, 2020 and 2019, respectively $ 580 $ 517 Additional paid-in capital 5,251,205 5,040,156 Retained earnings 5,652,594 2,625,921 Accumulated other comprehensive loss (388,102 ) (828,243 ) Total Bon Natural Life Limited shareholders’ equity 10,516,277 6,838,351 Total liabilities and Bon Natural Life Limited shareholders’ equity $ 10,516,277 $ 6,838,351 BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF COMPREHENSIVE INCOME For the Years Ended September 30, 2020 2019 EQUITY IN EARNINGS OF SUBSIDIARIES AND VIE $ 3,026,673 $ 2,573,803 NET INCOME 3,026,673 2,573,803 FOREIGN CURRENCY TRANSLATION ADJUSTMENTS 440,141 (281,897 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED $ 3,466,814 $ 2,291,906 BON NATURAL LIFE LIMITED AND SUBSIDIARIES PARENT COMPANY STATEMENTS OF CASH FLOWS For the Years Ended September 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 3,026,673 $ 2,573,803 Adjustments to reconcile net cash flows from operating activities: Equity in earnings of subsidiary and VIEs (3,026,673 ) (2,573,803 ) Net cash used in operating activities - - CHANGES IN CASH AND RESTRICTED CASH - - CASH AND RESTRICTED CASH, beginning of period - - CASH AND RESTRICTED CASH, end of period $ - $ - |
Organization and Business Des_3
Organization and Business Description (Details Narrative) | Sep. 30, 2020 | Mar. 11, 2020 | Jan. 09, 2020 | Sep. 16, 2019 | Apr. 24, 2015 | Apr. 23, 2006 |
Tea Essence Limited [Member] | ||||||
Equity ownership | 100.00% | 100.00% | ||||
App-Chem Bio(Tech) Co., Ltd [Member] | ||||||
Equity ownership | 100.00% | |||||
Dietary Therapy Medical Technology Co., Ltd [Member] | ||||||
Equity ownership | 75.00% | |||||
Tianjin Yonghexiang Bio(Tech) Co., Ltd [Member] | ||||||
Equity ownership | 51.00% | |||||
Gansu Baimeikang Bioengineering Co., Ltd [Member] | ||||||
Equity ownership | 100.00% |
Organization and Business Des_4
Organization and Business Description - Schedule of Subsidiaries Company (Details) | 12 Months Ended | |
Sep. 30, 2020 | Jan. 09, 2020 | |
Bon Natural Life [Member] | ||
Date of Incorporation | Dec. 11, 2019 | |
Place of Incorporation | Cayman Islands | |
% of Ownership | 100.00% | |
Principal activities | Investment holding | |
Tea Essence Limited [Member] | ||
Date of Incorporation | Jan. 9, 2020 | |
Place of Incorporation | Hong Kong | |
% of Ownership | 100.00% | 100.00% |
Principal activities | Investment holding | |
Xi'an CMIT [Member] | ||
Date of Incorporation | Apr. 9, 2020 | |
Place of Incorporation | Xi.an City, PRC | |
% of Ownership | 100.00% | |
Principal activities | WOFE, Investment holding | |
Xi'an App-Chem Bio(Tech) Co., Ltd [Member] | ||
Date of Incorporation | Apr. 23, 2006 | |
Place of Incorporation | Xi'an City, PRC | |
% of Ownership | ||
Principal activities | General administration and sales of the Company's products to customers | |
App-Chem Health [Member] | ||
Date of Incorporation | Apr. 17, 2006 | |
Place of Incorporation | Tongchuan City, PRC | |
% of Ownership | 100.00% | |
Principal activities | Product manufacturing | |
App-Chem Ag-tech [Member] | ||
Date of Incorporation | Apr. 19, 2013 | |
Place of Incorporation | Dali County, PRC | |
% of Ownership | 100.00% | |
Principal activities | Registered owner of land with an area of 12,904 square meters , no other business activities | |
Xi'an YH [Member] | ||
Date of Incorporation | Sep. 15, 2009 | |
Place of Incorporation | Xi.an City, PRC | |
% of Ownership | 100.00% | |
Principal activities | Research and development of product | |
Balikun [Member] | ||
Date of Incorporation | Dec. 16, 2016 | |
Place of Incorporation | Balikun City, PRC | |
% of Ownership | 100.00% | |
Principal activities | No active business operation | |
App-Chem Guangzhou [Member] | ||
Date of Incorporation | Apr. 27, 2018 | |
Place of Incorporation | Guangzhou City, PRC | |
% of Ownership | 100.00% | |
Principal activities | Raw material purchase | |
Tongchuan DT [Member] | ||
Date of Incorporation | May 22, 2017 | |
Place of Incorporation | Tongchuan City, PRC | |
% of Ownership | 100.00% | |
Principal activities | Product manufacturing | |
Gansu BMK [Member] | ||
Date of Incorporation | Mar. 11, 2020 | |
Place of Incorporation | Jinquan City, PRC | |
% of Ownership | 100.00% | |
Principal activities | Raw material purchase | |
Xi'an DT [Member] | ||
Date of Incorporation | Apr. 24, 2015 | |
Place of Incorporation | Xi'an City, PRC | |
% of Ownership | 75.00% | |
Principal activities | Research and development of product | |
Tianjin YHX [Member] | ||
Date of Incorporation | Sep. 16, 2019 | |
Place of Incorporation | Tianjin City, PRC | |
% of Ownership | 51.00% | |
Principal activities | Raw material purchase |
Organization and Business Des_5
Organization and Business Description - Schedule of Financial Statement Amounts and Balances of VIE (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Current assets | $ 10,840,214 | $ 8,579,432 |
Total assets | 25,202,229 | 19,560,412 |
Current liabilities | 11,696,969 | 10,864,350 |
Total liabilities | 14,179,220 | 12,297,066 |
Revenue | 18,219,959 | 16,396,018 |
Net income | 3,098,317 | 2,562,636 |
Net cash provided by operating activities | 2,643,076 | 7,104,822 |
Net cash used in investing activities | (3,003,043) | (8,429,958) |
Net cash provided by financing activities | 112,492 | 804,680 |
Variable Interest Entity [Member] | ||
Current assets | 10,840,214 | 8,579,432 |
Non-current assets | 14,362,015 | 10,980,980 |
Total assets | 25,202,229 | 19,560,412 |
Current liabilities | 11,696,969 | 10,864,350 |
Non-current liabilities | 2,482,251 | 1,432,716 |
Total liabilities | 14,179,220 | 12,297,066 |
Revenue | 18,219,959 | 16,396,018 |
Net income | 3,098,317 | 2,562,636 |
Net cash provided by operating activities | 2,643,076 | 7,104,822 |
Net cash used in investing activities | (3,003,043) | (8,429,958) |
Net cash provided by financing activities | $ 112,492 | $ 804,680 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details Narrative) | Jun. 23, 2020USD ($)shares | Jun. 23, 2020USD ($)shares | Oct. 06, 2018USD ($) | Oct. 06, 2018CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) |
Allowance for uncollectable balances | $ 93,032 | $ 73,386 | $ 48,529 | ||||
Allowance for doubtful account | 13,341 | 6,377 | |||||
Inventory reserve | 439,486 | 389,867 | |||||
Deferred public offering costs | $ 510,079 | ||||||
Estimated useful lives of intangible assets | 50 years | ||||||
Lease description | For the lessee, a lease is a capital lease if any of the following conditions exist: a) ownership is transferred to the lessee by the end of the lease term, b) there is a bargain purchase option, c) the lease term is at least 75% of the property's estimated remaining economic life or d) the present value of the minimum lease payments at the beginning of the lease term is 90% or more of the fair value of the leased property to the lessor at the inception date. | ||||||
Sale of cost | $ 700,000 | ||||||
Research and development expense | $ 205,359 | 522,867 | |||||
Advertising expenses | 14,264 | 51,257 | |||||
Government subsidies | $ 362,187 | 140,295 | |||||
Value added tax rate description | The VAT is based on gross sales price and VAT rates range up to 17% (starting from May 1, 2018, VAT rate was lowered to 16%, and starting from April 1, 2019, VAT rate was further lowered to 13%), depending on the type of products sold. | ||||||
Interest and penalty accrued | |||||||
Employee defined cost | 30,724 | $ 68,128 | |||||
Number of shares issued for service | shares | 633,333 | ||||||
Number of shares issued for service, value | $ 633,333 | ||||||
Share-based compensation expenses | 211,112 | ||||||
Consulting Service Agreements [Member] | Consultants [Member] | |||||||
Number of shares issued for service | shares | 633,333 | ||||||
Number of shares issued for service, value | $ 633,333 | ||||||
VAT [Member] | |||||||
Income tax payable | 3,500,000 | ||||||
Interest and penalty accrued | 247,823 | ||||||
China [Member] | |||||||
Income tax payable | 850,000 | ||||||
Interest and penalty accrued | $ 24,942 | ||||||
RMB [Member] | |||||||
Sale of cost | ¥ | ¥ 5,000,000 | ||||||
Xi'an DT [Member] | |||||||
Non-controlling interests rate | 25.00% | 25.00% | |||||
Tianjin YHX [Member] | |||||||
Non-controlling interests rate | 49.00% | 49.00% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Useful Lives of Property, Plant and Equipment (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Buildings [Member] | |
Estimated useful life | 20 years |
Machinery and Equipment [Member] | Minimum [Member] | |
Estimated useful life | 5 years |
Machinery and Equipment [Member] | Maximum [Member] | |
Estimated useful life | 10 years |
Automobiles [Member] | |
Estimated useful life | 8 years |
Office and Electric Equipment [Member] [Member] | Minimum [Member] | |
Estimated useful life | 3 years |
Office and Electric Equipment [Member] [Member] | Maximum [Member] | |
Estimated useful life | 5 years |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Currency Exchange Rates (Details) | Sep. 30, 2020 | Sep. 30, 2019 |
Period-End Spot Rate [Member] | ||
Exchange rate | 1 | 1 |
Period-End Spot Rate [Member] | RMB [Member] | ||
Exchange rate | 6.8033 | 7.1383 |
Average Rate [Member] | ||
Exchange rate | 1 | 1 |
Average Rate [Member] | RMB [Member] | ||
Exchange rate | 7.0066 | 6.8767 |
Liquidity (Details Narrative)
Liquidity (Details Narrative) | Mar. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2021CNY (¥) | Dec. 31, 2020CNY (¥) | Sep. 30, 2019USD ($) |
Working capital deficiency | $ 900,000 | |||||
Construction in progress | 600,000 | |||||
unpaid tax liabilities | 4,400,000 | $ 1,580,000 | ||||
Cash on hand | 53,106 | 293,771 | ||||
Accounts receivable | 5,771,008 | 5,236,270 | ||||
Short-term bank loans | 1,289,081 | 2,052,309 | ||||
Long-term bank loans current | 1,227,346 | 1,821,162 | ||||
Long-term bank loans non-current | 2,482,251 | $ 1,400,894 | ||||
Lines of credit | 7,055,400 | |||||
Line of credit borrowing capacity | $ 1,600,000 | |||||
Construction-in-progress description | The Company currently plans to support its ongoing CIP project construction through cash flows from operations and bank borrowings. The Company also plans to settle the $4.4 million tax liabilities before September 30, 2021. The above mentioned $7.1 million unused line of credit may be able to cover future minimum CIP expenditure of $0.6 million and $4.4 million unpaid tax liabilities within the next 12 months from the date of this filing. | |||||
PRC Banks [Member] | ||||||
Debt outstanding | $ 5,000,000 | |||||
Huaxia Bank [Member] | ||||||
Lines of credit | 1,469,875 | |||||
Bohai Bank [Member] | ||||||
Lines of credit | 1,469,875 | |||||
Bank of China [Member] | ||||||
Lines of credit | 2,645,775 | |||||
Qishang Bank [Member] | ||||||
Lines of credit | $ 1,469,875 | |||||
Subsequent Event [Member] | ||||||
Accounts receivable | $ 5,600,000 | |||||
Concentration Risk, Percentage | 96.90% | |||||
Lines of credit | $ 1,600,000 | |||||
Subsequent Event [Member] | Maximum [Member] | ||||||
Line of credit borrowing capacity | 7,100,000 | |||||
Subsequent Event [Member] | RMB [Member] | ||||||
Line of credit borrowing capacity | ¥ | ¥ 11,000,000 | |||||
Subsequent Event [Member] | RMB [Member] | Maximum [Member] | ||||||
Line of credit borrowing capacity | $ 48,000,000 | |||||
Subsequent Event [Member] | PRC Banks [Member] | ||||||
Lines of credit | $ 8,700,000 | |||||
Subsequent Event [Member] | PRC Banks [Member] | RMB [Member] | ||||||
Lines of credit | ¥ | ¥ 59,000,000 | |||||
Subsequent Event [Member] | PRC Banks and Financial Institutions [Member] | ||||||
Lines of credit | 800,000 | |||||
Subsequent Event [Member] | PRC Banks and Financial Institutions [Member] | RMB [Member] | ||||||
Lines of credit | 5,500,000 | |||||
Subsequent Event [Member] | Huaxia Bank [Member] | ||||||
Lines of credit | $ 2,200,000 | |||||
Subsequent Event [Member] | Huaxia Bank [Member] | Minimum [Member] | ||||||
Period of line of credit | 1 year | |||||
Subsequent Event [Member] | Huaxia Bank [Member] | Maximum [Member] | ||||||
Period of line of credit | 3 years | |||||
Subsequent Event [Member] | Bohai Bank [Member] | ||||||
Lines of credit | $ 1,900,000 | |||||
Period of line of credit | 1 year | |||||
Subsequent Event [Member] | Bank of China [Member] | ||||||
Lines of credit | $ 2,600,000 | |||||
Period of line of credit | 1 year | |||||
Subsequent Event [Member] | Qishang Bank [Member] | ||||||
Lines of credit | $ 1,900,000 | |||||
Period of line of credit | 3 years | |||||
Subsequent Event [Member] | Qishang Bank [Member] | RMB [Member] | ||||||
Lines of credit | $ 13,000,000 |
Accounts Receivable, Net (Detai
Accounts Receivable, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts receivable | $ 5,771,008 | $ 5,236,270 |
Accounts Receivable [Member] | ||
Accounts receivable | $ 5,600,000 | |
Concentration Risk, Percentage | 96.90% |
Accounts Receivable, Net - Sche
Accounts Receivable, Net - Schedule of Accounts Receivable, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Credit Loss [Abstract] | |||
Accounts receivable | $ 5,864,040 | $ 5,309,656 | |
Less: allowance for doubtful accounts | (93,032) | (73,386) | $ (48,529) |
Accounts receivable, net | $ 5,771,008 | $ 5,236,270 |
Accounts Receivable, Net - Sc_2
Accounts Receivable, Net - Schedule of Accounts Receivable and Subsequent Collection by Aging Bucket (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Total gross accounts receivable | $ 5,864,040 | $ 5,309,656 | |
Allowance for doubtful accounts | (93,032) | (73,386) | $ (48,529) |
Accounts Receivable, net | 5,771,008 | $ 5,236,270 | |
Subsequent Collection [Member] | |||
Total gross accounts receivable | $ 5,589,408 | ||
Percentage of subsequent collection | 95.30% | ||
Percentage of subsequent collection, net | 96.90% | ||
Allowance for doubtful accounts | |||
Accounts Receivable, net | 5,589,408 | ||
Less than 3 Months [Member] | |||
Total gross accounts receivable | 4,751,705 | ||
Less than 3 Months [Member] | Subsequent Collection [Member] | |||
Total gross accounts receivable | $ 4,587,583 | ||
Percentage of subsequent collection | 96.50% | ||
From 4 to 6 Months [Member] | |||
Total gross accounts receivable | $ 1,010,693 | ||
From 4 to 6 Months [Member] | Subsequent Collection [Member] | |||
Total gross accounts receivable | $ 993,403 | ||
Percentage of subsequent collection | 98.30% | ||
From 7 to 9 Months [Member] | |||
Total gross accounts receivable | $ 12 | ||
From 7 to 9 Months [Member] | Subsequent Collection [Member] | |||
Total gross accounts receivable | |||
Percentage of subsequent collection | 0.00% | ||
From 10 to 12 Months [Member] | |||
Total gross accounts receivable | $ 1,151 | ||
From 10 to 12 Months [Member] | Subsequent Collection [Member] | |||
Total gross accounts receivable | $ 585 | ||
Percentage of subsequent collection | 50.80% | ||
Over 1 Year [Member] | |||
Total gross accounts receivable | $ 100,479 | ||
Over 1 Year [Member] | Subsequent Collection [Member] | |||
Total gross accounts receivable | $ 7,837 | ||
Percentage of subsequent collection | 7.80% |
Accounts Receivable, Net - Sc_3
Accounts Receivable, Net - Schedule of Allowance for Doubtful Accounts (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Credit Loss [Abstract] | ||
Beginning balance | $ 73,386 | $ 48,529 |
Additions | 15,569 | 27,709 |
Reductions | ||
Foreign currency translation adjustments | 4,077 | (2,852) |
Ending balance | $ 93,032 | $ 73,386 |
Inventories, Net - Schedule of
Inventories, Net - Schedule of Inventories, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 246,383 | $ 891,604 |
Finished goods | 1,209,545 | 2,102,127 |
Inventory valuation allowance | (439,486) | (389,867) |
Total inventory, net | $ 1,016,442 | $ 2,603,864 |
Advances to Suppliers, Net (Det
Advances to Suppliers, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Advances to suppliers | $ 3,491,145 | $ 367,656 |
Advance to Suppliers [Member] | ||
Advances to suppliers | $ 2,920,000 | |
Concentration Risk, Percentage | 84.00% |
Advances to Suppliers, Net - Sc
Advances to Suppliers, Net - Schedule of Advances to Suppliers, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Advances To Suppliers Net | ||
Advances to suppliers for inventory raw materials | $ 3,504,486 | $ 374,033 |
Less: allowance for doubtful accounts | (13,341) | (6,377) |
Advances to suppliers, net | $ 3,491,145 | $ 367,656 |
Acquisition Deposit (Details Na
Acquisition Deposit (Details Narrative) | Dec. 15, 2017USD ($) | Dec. 15, 2017CNY (¥) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | May 31, 2020USD ($) |
Tianjin Youli [Member] | |||||
Refunded the acquisition deposit | $ 1,300,000 | ||||
Share Transfer Agreement [Member] | |||||
Purchase price | $ 1,600,000 | ||||
Share Transfer Agreement [Member] | RMB [Member] | |||||
Purchase price | ¥ | ¥ 11,700,000 | ||||
Share Transfer Agreement [Member] | Tianjin Youli [Member] | |||||
Equity ownership | 51.00% | 51.00% | |||
Acquisition deposit | $ 1,300,000 | ||||
Share Transfer Agreement [Member] | Tianjin Youli [Member] | RMB [Member] | |||||
Acquisition deposit | ¥ | ¥ 9,300,000 |
Property, Plant and Equipment_3
Property, Plant and Equipment, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Property, Plant and Equipment [Abstract] | ||
Depreciation expense | $ 226,527 | $ 222,486 |
Property, Plant and Equipment_4
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | |
Subtotal | $ 15,529,861 | $ 10,597,600 | |
Less: accumulated depreciation | (1,357,898) | (1,099,548) | |
Property, plant and equipment, net | 14,171,963 | 9,498,052 | |
Buildings [Member] | |||
Subtotal | 601,408 | 573,184 | |
Machinery, Equipment and Furniture [Member] | |||
Subtotal | 1,920,530 | 1,848,703 | |
Motor Vehicles [Member] | |||
Subtotal | 175,117 | 166,899 | |
Construction in Progress [Member] | |||
Subtotal | [1] | $ 12,832,806 | $ 8,008,814 |
[1] | Construction-in-progress (“CIP”) represents direct costs of construction incurred for the Company’s manufacturing facilities. On August 16, 2017, the Company’s VIE, Xi’an App-Chem Bio(Tech)Co.,Ltd. started to construct a new manufacturing plant in Tongchuan City (“Tongchuan Project”) , Shaanxi Province, with total budget of RMB 95 million (approximately $14.0 million) for construction of the main body of the manufacturing plant, plant decoration and purchase of machinery and equipment. As of September 30, 2020, the Company has spent approximately RMB84.3 million (approximately $12.5 million) on the construction of the main body of the manufacturing plant and future minimum capital expenditure on this CIP project is estimated to be approximately $1.5 million), among which approximately $0.6 million is required for the next 12 months. The Company currently plans to support its ongoing CIP project construction through cash flows from operations and $7.1 million unused line of credit that the Company already obtained from PRC banks (see Note 3). The construction of this new manufacturing facility is expected to be fully completed and put into production by March 2022. |
Property, Plant and Equipment_5
Property, Plant and Equipment, Net - Schedule of Property, Plant and Equipment, Net (Details) (Parenthetical) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Aug. 16, 2017USD ($) | Aug. 16, 2017CNY (¥) |
Construction-in-progress | $ 600,000 | |||
Future minimum capital expenditures on the construction-in-progress | 1,500,000 | |||
Future minimum capital expenditures on the construction-in-progress next twelve months | 600,000 | |||
Unused line of credit | 7,100,000 | |||
PRC Banks [Member] | ||||
Unused line of credit | 7,100,000 | |||
RMB [Member] | ||||
Unused line of credit | ¥ | ¥ 48,000,000 | |||
Xi'an App-Chem Bio(Tech) Co., Ltd [Member] | ||||
Construction-in-progress | $ 12,500,000 | $ 14,000,000 | ||
Xi'an App-Chem Bio(Tech) Co., Ltd [Member] | RMB [Member] | ||||
Construction-in-progress | ¥ | ¥ 84,300,000 | ¥ 95,000,000 |
Property, Plant and Equipment_6
Property, Plant and Equipment, Net - Schedule of Future Minimum Capital Expenditures on the Construction-in-progress (Details) | Sep. 30, 2020USD ($) |
Property, Plant and Equipment [Abstract] | |
2021 | $ 630,402 |
2022 | 342,859 |
2023 | |
2024 | |
2025 | 532,340 |
Total | $ 1,505,601 |
Intangible Asset, Net (Details
Intangible Asset, Net (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Amortization expense | $ 4,070 | $ 4,147 |
Intangible Assets, Net - Schedu
Intangible Assets, Net - Schedule of Intangible Assets, Net (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Land use rights | $ 193,168 | $ 184,103 |
Less: accumulated amortization | (52,175) | (45,731) |
Land use right, net | $ 140,993 | $ 138,372 |
Intangible Assets, Net - Sche_2
Intangible Assets, Net - Schedule of Estimated Future Amortization Expense for Intangible Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2021 | $ 3,863 | |
2022 | 3,863 | |
2023 | 3,863 | |
2024 | 3,863 | |
2025 | 3,863 | |
Thereafter | 121,678 | |
Intangible assets, net | $ 140,993 | $ 138,372 |
Debt (Details Narrative)
Debt (Details Narrative) | Jun. 02, 2020USD ($) | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Mar. 31, 2021USD ($) | Sep. 30, 2020CNY (¥) | Jun. 02, 2020CNY (¥) |
Interest expenses | $ 329,102 | $ 333,190 | |||||
Lines of credit | 7,055,400 | ||||||
Line of credit remaining borrowing capacity | 7,100,000 | ||||||
Subsequent Event [Member] | |||||||
Lines of credit | $ 1,600,000 | ||||||
RMB [Member] | |||||||
Line of credit remaining borrowing capacity | ¥ | ¥ 48,000,000 | ||||||
Xi'an App-Chem [Member] | |||||||
Line of credit maximum borrowing capacity | $ 2,600,000 | ||||||
Period of line of credit | 1 year | ||||||
Xi'an App-Chem [Member] | RMB [Member] | |||||||
Line of credit maximum borrowing capacity | ¥ | ¥ 18,000,000 | ||||||
Qishang Bank [Member] | |||||||
Lines of credit | $ 1,469,875 | ||||||
Qishang Bank [Member] | Subsequent Event [Member] | |||||||
Period of line of credit | 3 years | ||||||
Lines of credit | $ 1,900,000 | ||||||
Qishang Bank [Member] | RMB [Member] | Subsequent Event [Member] | |||||||
Lines of credit | $ 13,000,000 |
Debt - Schedule of Short-Term L
Debt - Schedule of Short-Term Loans (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | |
Total short-term loans | $ 1,289,081 | $ 2,052,309 | |
Xi'an Bank [Member] | |||
Total short-term loans | [1] | 560,358 | |
WeBank Co., Ltd. [Member] | |||
Total short-term loans | [2] | 105,067 | |
Ningxia Bank [Member] | |||
Total short-term loans | [3] | 420,268 | |
Bank of Beijing [Member] | |||
Total short-term loans | [4] | 686,438 | |
Xi'an Guosen Micro-Credit Co., Ltd [Member] | |||
Total short-term loans | [5] | 279,276 | 280,178 |
Xi 'an Xinchang Micro-Lending Co. Ltd.[Member] | |||
Total short-term loans | [6] | 110,241 | |
China Construction Bank [Member] | |||
Total short-term loans | [7] | 17,640 | |
Bohai Bank [Member] | |||
Total short-term loans | [8] | 440,962 | |
Huaxia Bank [Member] | |||
Total short-term loans | [9] | $ 440,962 | |
[1] | On November 23, 2018, the Company’s VIE, Xi’an App-Chem entered into a loan agreement with Xi’an bank to borrow RMB4.0 million (equivalent to $0.6 million) as working capital for one year, with maturity date on October 22, 2019. The loan bears an interest rate of 5.655% per annum. A third-party guarantee company provided guarantee to this loan. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Xi’an Bank as collateral to safeguard these loans. The loan was repaid in full upon maturity. | ||
[2] | On December 12, 2018, the Company's VIE, Xian App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB750,000 (equivalent to US$0.1 million) as working capital for one year, with maturity date on December 12, 2019 and a daily interest rate of 0.05%. The loan was fully repaid upon maturity. | ||
[3] | On January 30, 2019, the Company’s VIE , Xi’an App-Chem , entered into a loan agreement with Ningxia Bank to borrow RMB3.0 million (equivalent to $0.4 million) as working capital for one year, with maturity date on January 29, 2020. The loan bears an interest rate of 7.4% per annum. The loan was guaranteed by a third-party guarantee company. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Ningxia Bank as collateral to safeguard this loan. The loan was fully repaid upon maturity. | ||
[4] | On August 7, 2019, the Company's VIE, Xian App-Chem, entered into another loan agreement with Bank of Beijing to borrow RMB4.0 million (equivalent to US$0.6 million) for one year, with maturity date on August 26, 2020 and interest rate of 5.22% per annum. A third-party guarantee company provided guarantee to this loan. In addition, The Company pledged certain free patent owned by the Company as collateral to safeguard this loan. The loan was fully repaid upon maturity. | ||
[5] | On July 1, 2019, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with Xi'an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on December 27, 2019 and interest rate of 17% per annum. The loan was fully repaid upon maturity. On July 22, 2020, the Company's VIE, Xi'an App-Chem, entered into another loan agreement with Xi'an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on January 21, 2021 and interest rate of 17% per annum. The loan was subsequently fully repaid upon maturity. | ||
[6] | On June 1, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement Xi’ an Xinchang Micro-lending Co. Ltd., to borrow RMB750,002 (equivalent to US$110,241) as working capital for one year, with maturity date on May 31, 2021 and interest rate of 18.0% per annum. | ||
[7] | On January 19, 2020, the Company's VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB100,000 (equivalent to US$14,699) as working capital for one year, with maturity date on January 19, 2021 and interest rate of 5.0% per annum. The loan was subsequently fully repaid upon maturity. On May 15, 2020, the Company's VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB20,000 (equivalent to US$2,941) as working capital for one year, with maturity date on May 15, 2021 and interest rate of 4.1% per annum. | ||
[8] | On May 22, 2020, the Company's VIE, Xi'an App-Chem, obtained an approval of line of credit from Bohai Bank for a maximum of RMB 13 million (approximately $1.8 million) loans as working capital for one year. On July 22, 2020, the Company borrowed RMB3 million (equivalent to US$0.4 million) short-term loan out of this line of credit as working capital for one year, with interest rate of 5.4% per annum and maturity date on July 21, 2021. The Company's controlling shareholder, Mr. Yongwei Hu and his wife Ms. Jing Liu, and a third-party Shannxi Jinma Financial Guarantee Co., Ltd. provided joint guarantee to this loan. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before May 22, 2021. | ||
[9] | On April 3, 2020, the Company's VIE, Xi'an App-Chem, obtained an approval of line of credit from Huaxia Bank for a maximum of RMB 15 million (approximately $2.2 million) loans, including RMB 3 million (approximately $0.4 million) loans as working capital for one year with fixed interest rate of 9% per annum and RMB 12 million (approximately $1.8 million) loans as working capital for three years with fixed interest rate of 6.6% per annum. From June 16, 2020 to June 29, 2020, the Company's VIE, Xi'an App-Chem, entered into two loan agreements with Huaxia Bank to borrow total of a RMB3 million (equivalent to US$440,962) as working capital for one year, with interest rate of 9.0% per annum and maturity date on April 16, 2021 and June 29, 2021, respectively. In addition, on April 16, 2020, the Company borrowed additional RMB2 million (equivalent to US$293,975) out of this line of credit as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. The Company's controlling shareholder, Mr. Yongwei Hu and his wife Ms.Jing Liu, pledged their personal properties as collateral to safeguard the loans with Huaxia Bank. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before April 2023. |
Debt - Schedule of Short-Term_2
Debt - Schedule of Short-Term Loans (Details) (Parenthetical) | Jul. 22, 2020USD ($) | Jun. 29, 2020USD ($) | Jun. 01, 2020USD ($) | May 22, 2020USD ($) | May 15, 2020USD ($) | Apr. 16, 2020USD ($) | Apr. 03, 2020USD ($) | Jan. 19, 2020USD ($) | Aug. 07, 2019USD ($) | Jul. 01, 2019USD ($) | Jan. 30, 2019USD ($) | Dec. 12, 2018USD ($) | Nov. 23, 2018USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Jul. 22, 2020CNY (¥) | Jun. 29, 2020CNY (¥) | Jun. 01, 2020CNY (¥) | May 22, 2020CNY (¥) | May 15, 2020CNY (¥) | Apr. 16, 2020CNY (¥) | Apr. 03, 2020CNY (¥) | Jan. 19, 2020CNY (¥) | Sep. 30, 2019USD ($) | Aug. 07, 2019CNY (¥) | Jul. 01, 2019CNY (¥) | Jan. 30, 2019CNY (¥) | Dec. 12, 2018CNY (¥) | Nov. 23, 2018CNY (¥) | |
Short-term bank loans | $ 1,289,081 | $ 2,052,309 | ||||||||||||||||||||||||||||
Line of credit remaining borrowing capacity | 7,100,000 | |||||||||||||||||||||||||||||
RMB [Member] | ||||||||||||||||||||||||||||||
Line of credit remaining borrowing capacity | ¥ | ¥ 48,000,000 | |||||||||||||||||||||||||||||
Xi'an Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [1] | 560,358 | ||||||||||||||||||||||||||||
WeBank Co., Ltd. [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [2] | 105,067 | ||||||||||||||||||||||||||||
Ningxia Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [3] | 420,268 | ||||||||||||||||||||||||||||
Bank of Beijing [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [4] | 686,438 | ||||||||||||||||||||||||||||
Xi'an Guosen Micro-Credit Co., Ltd [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [5] | 279,276 | 280,178 | |||||||||||||||||||||||||||
Xi 'an Xinchang Micro-Lending Co. Ltd.[Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [6] | 110,241 | ||||||||||||||||||||||||||||
China Construction Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [7] | 17,640 | ||||||||||||||||||||||||||||
Bohai Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [8] | 440,962 | ||||||||||||||||||||||||||||
Debt maturity date | Jul. 21, 2021 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with interest rate of 5.4% per annum and maturity date on July 21, 2021 | |||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | $ 1,800,000 | |||||||||||||||||||||||||||||
Period of line of credit | 1 year | |||||||||||||||||||||||||||||
Line of credit remaining borrowing capacity | 10,000,000 | |||||||||||||||||||||||||||||
Bohai Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 3,000,000 | |||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | ¥ | ¥ 13,000,000 | |||||||||||||||||||||||||||||
Line of credit remaining borrowing capacity | ¥ | 1,500,000 | |||||||||||||||||||||||||||||
Huaxia Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | [9] | 440,962 | ||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | $ 2,200,000 | |||||||||||||||||||||||||||||
Huaxia Bank [Member] | One Year With 9% [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | $ 400,000 | |||||||||||||||||||||||||||||
Period of line of credit | 1 year | |||||||||||||||||||||||||||||
Line of credit interest rate | 9.00% | 9.00% | ||||||||||||||||||||||||||||
Huaxia Bank [Member] | Three Year With 6.6% [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | $ 1,800,000 | |||||||||||||||||||||||||||||
Period of line of credit | 3 years | |||||||||||||||||||||||||||||
Line of credit interest rate | 6.60% | 6.60% | ||||||||||||||||||||||||||||
Huaxia Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | ¥ | ¥ 15,000,000 | |||||||||||||||||||||||||||||
Huaxia Bank [Member] | RMB [Member] | One Year With 9% [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | ¥ | 3,000,000 | |||||||||||||||||||||||||||||
Huaxia Bank [Member] | RMB [Member] | Three Year With 6.6% [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | ¥ | ¥ 12,000,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | $ 1,500,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Line of credit maximum borrowing capacity | ¥ | ¥ 10,000,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | Xi'an Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 600,000 | |||||||||||||||||||||||||||||
Debt maturity date | Oct. 22, 2019 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with maturity date on October 22, 2019. | |||||||||||||||||||||||||||||
Interest rate | 5.655% | 5.655% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Xi'an Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 4,000,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | WeBank Co., Ltd. [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 100,000 | |||||||||||||||||||||||||||||
Debt maturity date | Dec. 12, 2019 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with maturity date on December 12, 2019. | |||||||||||||||||||||||||||||
Interest rate | 0.05% | 0.05% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | WeBank Co., Ltd. [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 750,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | Ningxia Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 400,000 | |||||||||||||||||||||||||||||
Debt maturity date | Jan. 29, 2020 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with maturity date on January 29, 2020. | |||||||||||||||||||||||||||||
Interest rate | 7.40% | 7.40% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Ningxia Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 3,000,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | Bank of Beijing [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 600,000 | |||||||||||||||||||||||||||||
Debt maturity date | Aug. 26, 2020 | |||||||||||||||||||||||||||||
Debt maturity date, description | For one year, with maturity date on August 26, 2020. | |||||||||||||||||||||||||||||
Interest rate | 5.22% | 5.22% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Bank of Beijing [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 4,000,000 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | Xi'an Guosen Micro-Credit Co., Ltd [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 300,000 | $ 300,000 | ||||||||||||||||||||||||||||
Debt maturity date | Jan. 21, 2021 | Dec. 27, 2019 | ||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for six months, with maturity date on January 21, 2021. | As working capital for six months, with maturity date on December 27, 2019. | ||||||||||||||||||||||||||||
Interest rate | 17.00% | 17.00% | 17.00% | 17.00% | ||||||||||||||||||||||||||
Loan Agreement [Member] | Xi'an Guosen Micro-Credit Co., Ltd [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 2,000,000 | ¥ 2,000,000 | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Xi 'an Xinchang Micro-Lending Co. Ltd.[Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 110,241 | |||||||||||||||||||||||||||||
Debt maturity date | May 31, 2021 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with maturity date on May 31, 2021 | |||||||||||||||||||||||||||||
Interest rate | 18.00% | 18.00% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Xi 'an Xinchang Micro-Lending Co. Ltd.[Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 750,002 | |||||||||||||||||||||||||||||
Loan Agreement [Member] | China Construction Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 2,941 | $ 14,699 | ||||||||||||||||||||||||||||
Debt maturity date | May 15, 2021 | Jan. 19, 2021 | ||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with maturity date on May 15, 2021 | As working capital for one year, with maturity date on January 19, 2021 | ||||||||||||||||||||||||||||
Interest rate | 410.00% | 5.00% | 410.00% | 5.00% | ||||||||||||||||||||||||||
Loan Agreement [Member] | China Construction Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 20,000 | ¥ 100,000 | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Bohai Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 400,000 | |||||||||||||||||||||||||||||
Interest rate | 5.40% | 5.40% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Huaxia Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 293,975 | |||||||||||||||||||||||||||||
Debt maturity date | Apr. 16, 2023 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023 | |||||||||||||||||||||||||||||
Interest rate | 6.60% | 6.60% | ||||||||||||||||||||||||||||
Loan Agreement [Member] | Huaxia Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 2,000,000 | |||||||||||||||||||||||||||||
Two Loan Agreement [Member] | Huaxia Bank [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | $ 440,962 | |||||||||||||||||||||||||||||
Debt maturity date, description | As working capital for one year, with interest rate of 9.0% per annum and maturity date on April 16, 2021 and June 29, 2021, respectively | |||||||||||||||||||||||||||||
Interest rate | 9.00% | 9.00% | ||||||||||||||||||||||||||||
Two Loan Agreement [Member] | Huaxia Bank [Member] | RMB [Member] | ||||||||||||||||||||||||||||||
Short-term bank loans | ¥ | ¥ 3,000,000 | |||||||||||||||||||||||||||||
[1] | On November 23, 2018, the Company’s VIE, Xi’an App-Chem entered into a loan agreement with Xi’an bank to borrow RMB4.0 million (equivalent to $0.6 million) as working capital for one year, with maturity date on October 22, 2019. The loan bears an interest rate of 5.655% per annum. A third-party guarantee company provided guarantee to this loan. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Xi’an Bank as collateral to safeguard these loans. The loan was repaid in full upon maturity. | |||||||||||||||||||||||||||||
[2] | On December 12, 2018, the Company's VIE, Xian App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB750,000 (equivalent to US$0.1 million) as working capital for one year, with maturity date on December 12, 2019 and a daily interest rate of 0.05%. The loan was fully repaid upon maturity. | |||||||||||||||||||||||||||||
[3] | On January 30, 2019, the Company’s VIE , Xi’an App-Chem , entered into a loan agreement with Ningxia Bank to borrow RMB3.0 million (equivalent to $0.4 million) as working capital for one year, with maturity date on January 29, 2020. The loan bears an interest rate of 7.4% per annum. The loan was guaranteed by a third-party guarantee company. In addition, the Company’s controlling shareholder, Mr. Yongwei Hu, also pledged his proportionate ownership interest in Xi’an App-chem with Ningxia Bank as collateral to safeguard this loan. The loan was fully repaid upon maturity. | |||||||||||||||||||||||||||||
[4] | On August 7, 2019, the Company's VIE, Xian App-Chem, entered into another loan agreement with Bank of Beijing to borrow RMB4.0 million (equivalent to US$0.6 million) for one year, with maturity date on August 26, 2020 and interest rate of 5.22% per annum. A third-party guarantee company provided guarantee to this loan. In addition, The Company pledged certain free patent owned by the Company as collateral to safeguard this loan. The loan was fully repaid upon maturity. | |||||||||||||||||||||||||||||
[5] | On July 1, 2019, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with Xi'an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on December 27, 2019 and interest rate of 17% per annum. The loan was fully repaid upon maturity. On July 22, 2020, the Company's VIE, Xi'an App-Chem, entered into another loan agreement with Xi'an Guosen Micro-Credit Co., Ltd, to borrow RMB2.0 million (equivalent to US$0.3 million) as working capital for six months, with maturity date on January 21, 2021 and interest rate of 17% per annum. The loan was subsequently fully repaid upon maturity. | |||||||||||||||||||||||||||||
[6] | On June 1, 2020, the Company’s VIE, Xi’an App-Chem, entered into a loan agreement Xi’ an Xinchang Micro-lending Co. Ltd., to borrow RMB750,002 (equivalent to US$110,241) as working capital for one year, with maturity date on May 31, 2021 and interest rate of 18.0% per annum. | |||||||||||||||||||||||||||||
[7] | On January 19, 2020, the Company's VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB100,000 (equivalent to US$14,699) as working capital for one year, with maturity date on January 19, 2021 and interest rate of 5.0% per annum. The loan was subsequently fully repaid upon maturity. On May 15, 2020, the Company's VIE, Tongchuan Haoren entered into a loan agreement with China Construction Bank to borrow RMB20,000 (equivalent to US$2,941) as working capital for one year, with maturity date on May 15, 2021 and interest rate of 4.1% per annum. | |||||||||||||||||||||||||||||
[8] | On May 22, 2020, the Company's VIE, Xi'an App-Chem, obtained an approval of line of credit from Bohai Bank for a maximum of RMB 13 million (approximately $1.8 million) loans as working capital for one year. On July 22, 2020, the Company borrowed RMB3 million (equivalent to US$0.4 million) short-term loan out of this line of credit as working capital for one year, with interest rate of 5.4% per annum and maturity date on July 21, 2021. The Company's controlling shareholder, Mr. Yongwei Hu and his wife Ms. Jing Liu, and a third-party Shannxi Jinma Financial Guarantee Co., Ltd. provided joint guarantee to this loan. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before May 22, 2021. | |||||||||||||||||||||||||||||
[9] | On April 3, 2020, the Company's VIE, Xi'an App-Chem, obtained an approval of line of credit from Huaxia Bank for a maximum of RMB 15 million (approximately $2.2 million) loans, including RMB 3 million (approximately $0.4 million) loans as working capital for one year with fixed interest rate of 9% per annum and RMB 12 million (approximately $1.8 million) loans as working capital for three years with fixed interest rate of 6.6% per annum. From June 16, 2020 to June 29, 2020, the Company's VIE, Xi'an App-Chem, entered into two loan agreements with Huaxia Bank to borrow total of a RMB3 million (equivalent to US$440,962) as working capital for one year, with interest rate of 9.0% per annum and maturity date on April 16, 2021 and June 29, 2021, respectively. In addition, on April 16, 2020, the Company borrowed additional RMB2 million (equivalent to US$293,975) out of this line of credit as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. The Company's controlling shareholder, Mr. Yongwei Hu and his wife Ms.Jing Liu, pledged their personal properties as collateral to safeguard the loans with Huaxia Bank. As of September 30, 2020, the Company had the availability to borrow additional approximately $1.5 million (RMB10.0 million) from Bohai Bank before April 2023. |
Debt - Schedule of Long-Term Lo
Debt - Schedule of Long-Term Loans (Details) - USD ($) | Sep. 30, 2020 | Apr. 16, 2020 | Sep. 30, 2019 | |||
Total | $ 3,709,597 | $ 3,222,056 | ||||
Less: current portion of long-term loans | 1,227,346 | 1,821,162 | ||||
Long-term loans | 2,482,251 | 1,400,894 | ||||
Xi'an Investment Holding Co., Ltd. [Member] | ||||||
Total | [1] | 2,204,812 | 2,101,341 | |||
Xi'an High-Tech Emerging Industry Investment Fund Partnership [Member] | ||||||
Total | [2] | 1,175,900 | 1,120,715 | |||
WeBank Co., Ltd. [Member] | ||||||
Total | [3] | 34,910 | ||||
Huaxia Bank [Member] | ||||||
Total | $ 293,975 | [4] | $ 293,975 | [4] | ||
[1] | On February 14, 2017 and on December 13, 2017, the Company's VIE, Xi'an App-Chem entered into loan agreements with third-party Xi'an Investment Holdings Co., Ltd. ("the Lender"), to borrow an aggregate of RMB 15.0 million (approximately $2.2 million) as working capital for three years, with interest rate ranging from 2% to 4% per annum. Among the total RMB 15.0 million loans, RMB5.0 million (equivalent to US$0.7 million) matured on February 13, 2020 and RMB10.0 million (approximately $1.5 million) matured on December 12, 2020. The Company did not make the loan repayment upon maturities. In accordance with a COVID-19 relief notice issued by local government, for RMB 5 million matured on February 13, 2020, the loan payment term has been extended to February 12, 2022, and for RMB 10 million matured on December 12, 2020, the payment term has been extended to December 12, 2022. Loan interest rates remain unchanged. The Company's controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi'an App-chem and his personal bank savings as collateral to safeguard these loans. | |||||
[2] | On June 26, 2017, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with third-party Xi'an High-tech Emerging Industries Investment Fund Partnership ("the Lender") to borrow RMB 8.0 million (approximately $1.1 million) as working capital for three years, with maturity date on June 25, 2020 and an interest rate of 3.8% per annum. The Company's controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi'an App-chem as collateral safeguard this loan. As of September 30, 2020, this loan was reclassified as current portion of long term loans. The loan matured on June 26, 2020 and not repaid on time due to COVID-19 impact. The Company has negotiated with the Lender to extend the loan repayment date for additional 12 months in accordance with a COVID-19 relief notice issued by local government. | |||||
[3] | On January 19, 2020, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB287,500 (equivalent to US$40,552) as working capital for 27 months, with maturity date on April 12, 2022 and interest rate of 18.0% per annum. | |||||
[4] | As disclosed in (9) above, on April 16, 2020, the Company borrowed RMB2 million (equivalent to US$293,975) out of a line of credit from Huaxia Bank as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. |
Debt - Schedule of Long-Term _2
Debt - Schedule of Long-Term Loans (Details) (Parenthetical) | Apr. 16, 2020USD ($) | Jan. 19, 2020USD ($) | Jun. 26, 2017USD ($) | Feb. 14, 2017USD ($) | Sep. 30, 2020USD ($) | Apr. 16, 2020CNY (¥) | Jan. 19, 2020CNY (¥) | Sep. 30, 2019USD ($) | Jun. 26, 2017CNY (¥) | Feb. 14, 2017CNY (¥) | |||
Long term borrowings | $ 3,709,597 | $ 3,222,056 | |||||||||||
Xi'an Investment Holding Co., Ltd. [Member] | |||||||||||||
Long term borrowings | [1] | 2,204,812 | 2,101,341 | ||||||||||
Xi'an High-Tech Emerging Industry Investment Fund Partnership [Member] | |||||||||||||
Long term borrowings | [2] | 1,175,900 | 1,120,715 | ||||||||||
WeBank Co., Ltd. [Member] | |||||||||||||
Long term borrowings | [3] | 34,910 | |||||||||||
Huaxia Bank [Member] | |||||||||||||
Long term borrowings | $ 293,975 | $ 293,975 | [4] | [4] | |||||||||
Debt maturity date, description | As working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. | ||||||||||||
Interest rate | 6.60% | 6.60% | |||||||||||
Debt maturity date | Apr. 16, 2023 | ||||||||||||
Huaxia Bank [Member] | RMB [Member] | |||||||||||||
Long term borrowings | ¥ | ¥ 2,000,000 | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | |||||||||||||
Long term borrowings | $ 2,200,000 | ||||||||||||
Debt maturity date, description | As working capital for three years. | ||||||||||||
Debt instrument description | The Company did not make the loan repayment upon maturities. In accordance with a COVID-19 relief notice issued by local government, for RMB 5 million matured on February 13, 2020, the loan payment term has been extended to February 12, 2022, and for RMB 10 million matured on December 12, 2020, the payment term has been extended to December 12, 2022. Loan interest rates remain unchanged. | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | Mature on February 13, 2020 [Member] | |||||||||||||
Loans payable | $ 700,000 | ||||||||||||
Debt maturity date | Feb. 13, 2020 | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | Mature on December 12, 2020 [Member] | |||||||||||||
Loans payable | $ 1,500,000 | ||||||||||||
Debt maturity date | Dec. 12, 2020 | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | Minimum [Member] | |||||||||||||
Interest rate | 2.00% | 2.00% | |||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | Maximum [Member] | |||||||||||||
Interest rate | 4.00% | 4.00% | |||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | RMB [Member] | |||||||||||||
Long term borrowings | ¥ | ¥ 15,000,000 | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | RMB [Member] | Mature on February 13, 2020 [Member] | |||||||||||||
Loans payable | ¥ | 5,000,000 | ||||||||||||
Loan Agreement [Member] | Xi'an Investment Holding Co., Ltd. [Member] | RMB [Member] | Mature on December 12, 2020 [Member] | |||||||||||||
Loans payable | ¥ | ¥ 10,000,000 | ||||||||||||
Loan Agreement [Member] | Xi'an High-Tech Emerging Industry Investment Fund Partnership [Member] | |||||||||||||
Long term borrowings | $ 1,100,000 | ||||||||||||
Debt maturity date, description | As working capital for three years, with maturity date on June 25, 2020. | ||||||||||||
Interest rate | 3.80% | 3.80% | |||||||||||
Debt maturity date | Jun. 25, 2020 | ||||||||||||
Loan Agreement [Member] | Xi'an High-Tech Emerging Industry Investment Fund Partnership [Member] | RMB [Member] | |||||||||||||
Long term borrowings | ¥ | ¥ 8,000,000 | ||||||||||||
Loan Agreement [Member] | WeBank Co., Ltd. [Member] | |||||||||||||
Long term borrowings | $ 40,552 | ||||||||||||
Debt maturity date, description | As working capital for 27 months, with maturity date on April 12, 2022. | ||||||||||||
Interest rate | 18.00% | 18.00% | |||||||||||
Debt maturity date | Jan. 30, 2022 | ||||||||||||
Loan Agreement [Member] | WeBank Co., Ltd. [Member] | RMB [Member] | |||||||||||||
Long term borrowings | ¥ | ¥ 287,500 | ||||||||||||
[1] | On February 14, 2017 and on December 13, 2017, the Company's VIE, Xi'an App-Chem entered into loan agreements with third-party Xi'an Investment Holdings Co., Ltd. ("the Lender"), to borrow an aggregate of RMB 15.0 million (approximately $2.2 million) as working capital for three years, with interest rate ranging from 2% to 4% per annum. Among the total RMB 15.0 million loans, RMB5.0 million (equivalent to US$0.7 million) matured on February 13, 2020 and RMB10.0 million (approximately $1.5 million) matured on December 12, 2020. The Company did not make the loan repayment upon maturities. In accordance with a COVID-19 relief notice issued by local government, for RMB 5 million matured on February 13, 2020, the loan payment term has been extended to February 12, 2022, and for RMB 10 million matured on December 12, 2020, the payment term has been extended to December 12, 2022. Loan interest rates remain unchanged. The Company's controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi'an App-chem and his personal bank savings as collateral to safeguard these loans. | ||||||||||||
[2] | On June 26, 2017, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with third-party Xi'an High-tech Emerging Industries Investment Fund Partnership ("the Lender") to borrow RMB 8.0 million (approximately $1.1 million) as working capital for three years, with maturity date on June 25, 2020 and an interest rate of 3.8% per annum. The Company's controlling shareholder, Mr. Yongwei Hu, pledged his proportionate ownership interest in Xi'an App-chem as collateral safeguard this loan. As of September 30, 2020, this loan was reclassified as current portion of long term loans. The loan matured on June 26, 2020 and not repaid on time due to COVID-19 impact. The Company has negotiated with the Lender to extend the loan repayment date for additional 12 months in accordance with a COVID-19 relief notice issued by local government. | ||||||||||||
[3] | On January 19, 2020, the Company's VIE, Xi'an App-Chem, entered into a loan agreement with Shenzhen Qianhai WeBank Co., Ltd, to borrow RMB287,500 (equivalent to US$40,552) as working capital for 27 months, with maturity date on April 12, 2022 and interest rate of 18.0% per annum. | ||||||||||||
[4] | As disclosed in (9) above, on April 16, 2020, the Company borrowed RMB2 million (equivalent to US$293,975) out of a line of credit from Huaxia Bank as working capital for three years, with the interest rate of 6.6% per annum and maturity date on April 16, 2023. |
Debt - Schedule of Line of Cred
Debt - Schedule of Line of Credit (Details) | Sep. 30, 2020USD ($) |
Total | $ 7,055,400 |
Bohai Bank [Member] | |
Total | 1,469,875 |
Huaxia Bank [Member] | |
Total | 1,469,875 |
Bank of China [Member] | |
Total | 2,645,775 |
Qishang Bank [Member] | |
Total | $ 1,469,875 |
Debt - Schedule of Third Party
Debt - Schedule of Third Party Loans (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | |
Total third-party loans | $ 690,327 | $ 424,191 | |
Wei Wang [Member] | |||
Total third-party loans | [1] | 440,962 | 420,268 |
Xueyan Zhou [Member] | |||
Total third-party loans | [1] | 3,923 | |
Shaanxi Keyi Technology Co. Ltd. [Member] | |||
Total third-party loans | [1] | 73,494 | |
Biyun Xue [Member] | |||
Total third-party loans | [1] | 9,775 | |
Xi’ an Kaimei Medical Technology Co.,Ltd. [Member] | |||
Total third-party loans | [1] | $ 166,096 | |
[1] | During the Company's normal course of business, the Company also borrows funds from several third-party individuals or third party companies as working capital. These borrowings are short-term, interest free and payable on demand. As of September 30, 2020 and 2019, loans payable to third-parties amounted to $690,327 and $424,191, respectively. The September 30, 2020 third-party loans balance has been fully repaid in December 2020. |
Debt - Schedule of Third Part_2
Debt - Schedule of Third Party Loans (Details) (Parenthetical) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | ||
Third-parties loans | $ 690,327 | $ 424,191 |
Related Party Transactions - Sc
Related Party Transactions - Schedule Due to Related Parties (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Due to related parties | $ 2,322,990 | $ 1,165,865 |
Shaanxi Meishengyuang Bio-Technoloy Co., Ltd [Member] | ||
Due to related parties | $ 738,864 | 770,532 |
Related party relationship description | 5.5% of shareholder of Xi'an App-chem | |
Wenhu Guo [Member] | ||
Due to related parties | $ 368,145 | 388,075 |
Related party relationship description | Senior Management of the Company | |
Yongwei Hu [Member] | ||
Due to related parties | $ 1,208,337 | |
Related party relationship description | Chief Executive Officer and Controlling shareholder of the Company | |
Jing Liu [Member] | ||
Due to related parties | $ 4,410 | 4,203 |
Related party relationship description | Wife of the controlling shareholder | |
Sheying Wang [Member] | ||
Due to related parties | $ 3,234 | $ 3,055 |
Related party relationship description | Senior Management of the Company |
Taxes (Details Narrative)
Taxes (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income tax description | Under PRC CIT Law, domestic enterprises and Foreign Investment Enterprises ("FIEs") are usually subject to a unified 25% enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on a case-by-case basis by local government as preferential tax treatment to High and New Technology Enterprises ("HNTEs"). Under this preferential tax treatment, HNTEs are entitled to an income tax rate of 15%, subject to a requirement that they re-apply for their HNTE status every three years. The Company's VIE, Xi'an App-Chem was approved as a HNTE and is entitled to a reduced income tax rate of 15% beginning October 18, 2017, which is valid for three years. In October 2020, Xi'an App-Chem successfully renewed its HNTE Certificate with local government and will continue to enjoy the reduced income tax rate of 15% for another three years by October 26, 2023. | |
Income tax rate | 15.20% | 14.30% |
Decreased foreign taxes | $ 372,517 | $ 314,080 |
Net income per share basic and diluted | $ 0.07 | $ 0.06 |
Accrued tax liabilities | $ 4,400,000 | $ 1,580,000 |
Interest and penalty accrued | ||
Taxes payable | 850,000 | |
VAT [Member] | ||
Interest and penalty accrued | $ 247,823 | |
High and New Technology Enterprises [Member] | ||
Income tax rate | 15.00% | 15.00% |
Xi'an App-Chem Bio(Tech) Co., Ltd [Member] | ||
Income tax rate | 25.00% | 25.00% |
Hong Kong [Member] | ||
Income tax rate foreign | 16.50% | 16.50% |
China [Member] | ||
Interest and penalty accrued | $ 24,942 |
Taxes - Schedule of Effective T
Taxes - Schedule of Effective Tax Rate (Details) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||
PRC statutory income tax rate | 25.00% | 25.00% |
Effect of income tax holiday | (10.00%) | (10.00%) |
Permanent difference | 0.00% | 0.10% |
Research and development deduction | (0.40%) | (1.90%) |
Change in valuation allowance | 0.60% | 1.10% |
Effective tax rate | 15.20% | 14.30% |
Taxes - Schedule of Components
Taxes - Schedule of Components of the Income Tax Provision (Benefit) (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Current tax provision | $ 564,013 | $ 432,343 |
Deferred tax provision (benefit) | (7,751) | (5,149) |
Income tax provision | 556,262 | 427,194 |
Cayman Islands [Member] | ||
Current tax provision | ||
Deferred tax provision (benefit) | ||
Hong Kong [Member] | ||
Current tax provision | ||
Deferred tax provision (benefit) | ||
China [Member] | ||
Current tax provision | 564,013 | 432,343 |
Deferred tax provision (benefit) | $ (7,751) | $ (5,149) |
Taxes - Schedule of Deferred Ta
Taxes - Schedule of Deferred Tax Assets (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Deferred tax assets derived from allowance for doubtful accounts and net operating losses ("NOL") | $ 370,184 | $ 357,721 |
Less: valuation allowance | (321,125) | (318,572) |
Deferred tax assets | $ 49,059 | $ 39,149 |
Taxes - Schedule of Taxes Payab
Taxes - Schedule of Taxes Payable (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Income Tax Disclosure [Abstract] | ||
Income tax payable | $ 850,834 | $ 233,526 |
Value added tax payable | 3,463,146 | 1,259,006 |
Other taxes | 88,645 | 84,644 |
Total taxes payable | $ 4,402,625 | $ 1,577,176 |
Capital Lease Liabilities (Deta
Capital Lease Liabilities (Details Narrative) - Sep. 30, 2020 | USD ($) | CNY (¥) |
Accumulated interest on the leased equipment | $ | $ 256 | |
RMB [Member] | ||
Accumulated interest on the leased equipment | ¥ | ¥ 1,743 |
Capital Lease Liabilities - Sch
Capital Lease Liabilities - Schedule of Maturities of the Company's Capital Lease Liabilities (Details) | Sep. 30, 2020USD ($) |
Capital Lease Liabilities | |
2021 | $ 33,389 |
Total | $ 33,389 |
Shareholders' Equity (Details N
Shareholders' Equity (Details Narrative) - USD ($) | Jun. 23, 2020 | Jun. 17, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 24, 2020 | Dec. 11, 2019 |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||
Ordinary shares, shares issued | 5,800,000 | 5,166,667 | 5,166,667 | 15,500,000 | ||
Reverse split, description | 1-for-3 shares reverse split | 1-for-3 shares reverse split | ||||
Ordinary shares, shares outstanding | 5,800,000 | 5,166,667 | 5,166,667 | |||
Number of stock issued, services, shares | 633,333 | |||||
Number of stock issued, services, values | $ 633,333 | |||||
Statutory surplus reserve | Appropriations to the statutory surplus reserve are required to be at least 10% of the after-tax net income determined in accordance with PRC GAAP until the reserve is equal to 50% of the entity's registered capital. | |||||
Statutory reserve | $ 579,922 | $ 257,409 | ||||
Restricted net assets | $ 5,831,707 | $ 5,298,082 | ||||
Xi'an DT [Member] | ||||||
Non-controlling interests rate | 25.00% | 25.00% | ||||
Tianjin YHX [Member] | ||||||
Non-controlling interests rate | 49.00% | 49.00% | ||||
Ordinary Shares Vested [Member] | ||||||
Number of stock issued, services, shares | 211,112 | |||||
Share based compensation | $ 211,112 | |||||
Forecast [Member] | ||||||
Reverse split, description | 1-for-3 shares | |||||
Redemption shares | 10,333,333 |
Shareholders' Equity - Schedule
Shareholders' Equity - Schedule of Table Reconciles the Non-controlling Interest (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Non-controlling interest, beginning balance | $ 424,995 | |
Net income attributable to non-controlling interest | 71,644 | $ (11,167) |
Foreign currency translation adjustment | 10,093 | |
Non-controlling interest, ending balance | 506,732 | 424,995 |
Xi'an DT [Member] | ||
Non-controlling interest, beginning balance | 424,995 | |
Net income attributable to non-controlling interest | 57,943 | |
Foreign currency translation adjustment | 9,815 | |
Non-controlling interest, ending balance | 492,753 | 424,995 |
Tianjin YHX [Member] | ||
Non-controlling interest, beginning balance | ||
Net income attributable to non-controlling interest | 13,701 | |
Foreign currency translation adjustment | 278 | |
Non-controlling interest, ending balance | $ 13,979 |
Concentration (Details Narrativ
Concentration (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash deposit at financial institutions | $ 49,668 | $ 265,293 |
Revenue [Member] | Customer One [Member] | ||
Concentration risk, percentage | 29.00% | 17.20% |
Revenue [Member] | Customer Two [Member] | ||
Concentration risk, percentage | 27.20% | 12.10% |
Revenue [Member] | Customer Three [Member] | ||
Concentration risk, percentage | 14.10% | 10.20% |
Accounts Receivable [Member] | ||
Concentration risk, percentage | 96.90% | |
Accounts Receivable [Member] | Customer One [Member] | ||
Concentration risk, percentage | 43.70% | 24.60% |
Accounts Receivable [Member] | Customer Two [Member] | ||
Concentration risk, percentage | 25.80% | 17.50% |
Accounts Receivable [Member] | Customer Three [Member] | ||
Concentration risk, percentage | 10.40% | 15.40% |
Purchase [Member] | Suppliers One [Member] | ||
Concentration risk, percentage | 28.90% | 24.10% |
Purchase [Member] | Suppliers Two [Member] | ||
Concentration risk, percentage | 28.80% | 14.80% |
Purchase [Member] | Suppliers Three [Member] | ||
Concentration risk, percentage | 10.10% |
Commitments and Contingencies (
Commitments and Contingencies (Details Narrative) - USD ($) | Mar. 31, 2021 | Sep. 30, 2020 |
Future captial expenditure | $ 1,500,000 | |
Subsequent Event [Member] | ||
Future captial expenditure | $ 630,000 |
Segment Reporting - (Details Na
Segment Reporting - (Details Narrative) | 12 Months Ended |
Sep. 30, 2020Integer | |
Segment Reporting [Abstract] | |
Reporting segment | 1 |
Segment Reporting - Schedule of
Segment Reporting - Schedule of Segment Reporting (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenue | $ 18,219,959 | $ 16,396,018 |
PRC [Member] | ||
Total revenue | 15,461,801 | 11,192,324 |
Overseas [Member] | ||
Total revenue | $ 2,758,158 | $ 5,203,694 |
Segment Reporting - Schedule _2
Segment Reporting - Schedule of Revenue by Product Categories (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Total revenue | $ 18,219,959 | $ 16,396,018 |
Fragrance Compounds [Member] | ||
Total revenue | 7,879,300 | 6,738,274 |
Health Supplements Solid Drinks [Member] | ||
Total revenue | 3,887,096 | 4,342,490 |
Bioactive Food Ingredients [Member] | ||
Total revenue | $ 6,453,563 | $ 5,315,254 |
Subsequent Events (Details Narr
Subsequent Events (Details Narrative) - Subsequent Event [Member] | Dec. 25, 2020USD ($) | Dec. 15, 2020USD ($) | Nov. 04, 2020USD ($) | Oct. 22, 2020USD ($) | Jan. 31, 2021USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020CNY (¥) | Dec. 25, 2020CNY (¥) | Dec. 15, 2020CNY (¥) | Dec. 10, 2020USD ($) | Nov. 04, 2020CNY (¥) | Oct. 22, 2020CNY (¥) |
Shenzhen Qianhai WeBank Co., Ltd [Member] | ||||||||||||
Loans payable | $ 200,000 | |||||||||||
Debt instrument, term | 2 years | |||||||||||
Debt maturity date, description | Maturity date on October 22, 2022 | |||||||||||
Interest rate | 14.40% | 14.40% | ||||||||||
Xinchang Small Loan Co. Ltd [Member] | ||||||||||||
Loans payable | $ 146,987 | |||||||||||
Debt instrument, term | 1 year | |||||||||||
Debt maturity date, description | Maturity date on November 3, 2021 | |||||||||||
Interest rate | 15.33% | 15.33% | ||||||||||
Qishang Bank Co., Ltd [Member] | ||||||||||||
Loans payable | $ 400,000 | $ 1,900,000 | ||||||||||
Debt instrument, term | 3 years | |||||||||||
Debt maturity date, description | Maturity date on December 13, 2023 | |||||||||||
Interest rate | 6.65% | 6.65% | ||||||||||
Qishang Bank Co., Ltd [Member] | December 9, 2021 [Member] | ||||||||||||
Loans payable | $ 10,000,000 | |||||||||||
Taizhongyin Finance Lease (Suzhou) Co. Ltd [Member] | ||||||||||||
Loans payable | $ 300,000 | |||||||||||
Debt instrument, term | 2 years | |||||||||||
Debt maturity date, description | Lease maturity date on December 24, 2022. | |||||||||||
Interest rate | 7.00% | 7.00% | ||||||||||
RMB [Member] | Shenzhen Qianhai WeBank Co., Ltd [Member] | ||||||||||||
Loans payable | ¥ | ¥ 1,500,000 | |||||||||||
RMB [Member] | Xinchang Small Loan Co. Ltd [Member] | ||||||||||||
Loans payable | ¥ | ¥ 1,000,000 | |||||||||||
RMB [Member] | Qishang Bank Co., Ltd [Member] | ||||||||||||
Loans payable | ¥ 3,000,000 | $ 13,000,000 | ||||||||||
RMB [Member] | Qishang Bank Co., Ltd [Member] | December 9, 2021 [Member] | ||||||||||||
Loans payable | ¥ | ¥ 150,000 | |||||||||||
RMB [Member] | Taizhongyin Finance Lease (Suzhou) Co. Ltd [Member] | ||||||||||||
Loans payable | ¥ | ¥ 2,300,000 | |||||||||||
PRC Banks [Member] | ||||||||||||
Repayments of loan | $ 406,665 | |||||||||||
Line of credit | $ 800,000 | |||||||||||
PRC Banks [Member] | RMB [Member] | ||||||||||||
Line of credit | ¥ | ¥ 5,500,000 |
Condensed Financial Informati_3
Condensed Financial Information of the Parent Company - Schedule of Consolidated Financial Statements (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | ||
Condensed Financial Information Disclosure [Abstract] | |||
Investment in subsidiaries and VIE | $ 8,405,375 | $ 6,838,351 | |
Total assets | 25,202,229 | 19,560,412 | |
LIABILITIES | 14,179,220 | 12,297,066 | |
COMMITMENTS AND CONTINGENCIES | |||
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 5,800,000 and 5,166,667 shares issued and outstanding as of September 30, 2020 and 2019, respectively | [1] | 580 | 517 |
Additional paid-in capital | 5,251,205 | 5,040,156 | |
Retained earnings | 5,072,672 | 2,368,512 | |
Accumulated other comprehensive loss | (388,102) | (828,243) | |
Total Bon Natural Life Limited shareholders' equity | 10,516,277 | 6,838,351 | |
Total liabilities and Bon Natural Life Limited shareholders' equity | 25,202,229 | 19,560,412 | |
EQUITY IN EARNINGS OF SUBSIDIARIES AND VIE | 3,026,673 | 2,573,803 | |
NET INCOME | 3,026,673 | 2,573,803 | |
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | 450,234 | (281,699) | |
COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | 3,466,814 | 2,291,906 | |
Net income | 3,026,673 | 2,573,803 | |
Equity in earnings of subsidiary and VIEs | (3,026,673) | (2,573,803) | |
Net cash used in operating activities | 2,643,076 | 7,104,822 | |
CHANGES IN CASH AND RESTRICTED CASH | |||
CASH AND RESTRICTED CASH, beginning | |||
CASH AND RESTRICTED CASH, end | |||
[1] | Retrospectively restated for effect of 1-for-3 shares reverse split, see Note 14. |
Condensed Financial Informati_4
Condensed Financial Information of the Parent Company - Schedule of Consolidated Financial Statements (Details) (Parenthetical) - $ / shares | Sep. 30, 2020 | Jun. 24, 2020 | Dec. 11, 2019 | Sep. 30, 2019 |
Condensed Financial Information Disclosure [Abstract] | ||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 500,000,000 | 500,000,000 | 500,000,000 | |
Ordinary shares, shares issued | 5,800,000 | 5,166,667 | 15,500,000 | 5,166,667 |
Ordinary shares, shares outstanding | 5,800,000 | 5,166,667 | 5,166,667 |