Cover
Cover - shares | 12 Months Ended | |
Sep. 30, 2022 | Jan. 20, 2023 | |
Document Information Line Items | ||
Entity Registrant Name | FARMMI, INC. | |
Entity Central Index Key | 0001701261 | |
Document Type | 20-F | |
Amendment Flag | false | |
Entity Voluntary Filers | No | |
Current Fiscal Year End Date | --09-30 | |
Entity Well Known Seasoned Issuer | No | |
Entity Shell Company | false | |
Entity Emerging Growth Company | true | |
Entity Current Reporting Status | Yes | |
Document Period End Date | Sep. 30, 2022 | |
Entity Filer Category | Non-accelerated Filer | |
Document Fiscal Period Focus | FY | |
Document Fiscal Year Focus | 2022 | |
Entity Ex Transition Period | false | |
Entity Common Stock Shares Outstanding | 23,906,985 | |
Document Annual Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38397 | |
Entity Incorporation State Country Code | E9 | |
Entity Address Address Line 1 | Fl 1, Building No. 1 | |
Entity Address Address Line 2 | 888 Tianning Street, Liandu District | |
Entity Address City Or Town | Lishui | |
Entity Address Country | CN | |
Entity Address Postal Zip Code | 323000 | |
Auditor Name | YCM CPA, Inc. | |
Auditor Location | Irvine, California | |
Auditor Firm Id | 6781 | |
Security 12b Title | Ordinary Shares, $0.025 par value per share | |
Trading Symbol | FAMI | |
Security Exchange Name | NASDAQ | |
Entity Interactive Data Current | Yes | |
Document Shell Company Report | false | |
Document Registration Statement | false | |
Entity Accounting Standard | U.S. GAAP | |
Business Contact [Member] | ||
Document Information Line Items | ||
Entity Address Address Line 1 | Fl 1, Building No. 1 | |
Entity Address Address Line 2 | 888 Tianning Street, Liandu District | |
Entity Address Region | Lishui | |
Entity Address Country | CN | |
Entity Address Postal Zip Code | 323000 | |
City Area Code | 86 | |
Local Phone Number | 0578-82612876 | |
Contact Personnel Email Address | wlg@farmmi.com | |
Contact Personnel Name | Lingge Wu |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Current Assets | ||
Cash | $ 41,167,501 | $ 59,251,904 |
Short-term deposit | 35,144,444 | 2,793,556 |
Short-term investments | 5,820 | 0 |
Notes receivable | 3,528,235 | 0 |
Accounts receivable, net | 16,351,244 | 24,473,318 |
Advances to suppliers, net | 48,633,604 | 66,718,632 |
Other receivable | 7,440,705 | 0 |
Inventories, net | 716,278 | 1,371,540 |
Other current assets | 206,566 | 490,699 |
Due from a related party | 59,983 | 0 |
Current assets from discontinued operations | 0 | 205,887 |
Total current assets | 153,254,380 | 155,305,536 |
Prepayment to acquire a subsidiary | 0 | 9,311,854 |
Biological assets | 9,638,722 | 0 |
Long-term investments | 140,578 | 0 |
Property, plant and equipment, net | 44,868 | 79,482 |
Intangible assets, net | 6,747 | 40,075 |
Right-of-use assets, net | 534,351 | 776,665 |
Deferred tax assets | 163,207 | 0 |
Non-current assets from discontinued operations | 0 | 173,289 |
Total Assets | 163,782,853 | 165,686,901 |
Current Liabilities | ||
Short-term bank loans | 0 | 2,172,766 |
Long-term bank loans - current portion | 1,505,353 | 0 |
Convertible promissory notes | 2,178,511 | 0 |
Derivative liability | 3,450,000 | 0 |
Note payable | 12,385 | 0 |
Accounts payable | 197,137 | 56,457 |
Due to related parties | 948 | 57,632 |
Operating lease liabilities - current | 46,543 | 155,532 |
Other current liabilities | 898,444 | 161,716 |
Current liabilities from discontinued operations | 0 | 1,542,323 |
Total current liabilities | 8,289,321 | 4,146,426 |
Long-term bank loans - non-current portion | 292,285 | 142,264 |
Operating lease liabilities - non-current | 517,156 | 605,793 |
Non-current liabilities from discontinued operations | 0 | 0 |
Total Liabilities | 9,098,762 | 4,894,483 |
Shareholders' Equity | ||
Ordinary share, $0.025 par value, 24,000,000 shares authorized, 23,906,985 and 22,311,215 shares issued and outstanding at September 30, 2022 and 2021, respectively1 | 597,675 | 557,781 |
Additional paid-in capital | 152,162,658 | 147,088,227 |
Statutory reserve | 1,153,813 | 973,555 |
Retained earnings | 14,903,491 | 9,127,377 |
Accumulated other comprehensive (loss) income | (14,133,546) | 2,128,972 |
Total Farmmi, Inc.'s Shareholders' Equity | 154,684,091 | 159,875,912 |
Noncontrolling Interest | 0 | 916,506 |
Total Shareholders' Equity | 154,684,091 | 160,792,418 |
Total Liabilities and Shareholders' Equity | $ 163,782,853 | $ 165,686,901 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 |
Consolidated Balance Sheets | ||
Ordinary share, par or stated value per share (in dollars per share) | $ 0.025 | $ 0.025 |
Ordinary share, shares authorized | 24,000,000 | 24,000,000 |
Ordinary share, shares, issued | 23,906,985 | 22,311,215 |
Ordinary share, shares, outstanding | 23,906,985 | 22,311,215 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2019 | |
Revenues | |||
Sales to third parties | $ 99,212,363 | $ 39,287,999 | $ 28,356,763 |
Sales to related parties | 1,016 | 1,952 | 7,200 |
Total revenues | 99,213,379 | 39,289,951 | 28,363,963 |
Cost of revenues | (93,775,293) | (34,180,670) | (23,712,541) |
Gross profit | 5,438,086 | 5,109,281 | 4,651,422 |
Operating expenses | |||
Allowance for doubtful accounts | (57,173) | 875,094 | (818,199) |
Selling and distribution expenses | (305,367) | (292,709) | (258,561) |
General and administrative expenses | (4,133,178) | (2,838,790) | (1,307,579) |
Total operating expenses | (4,495,718) | (2,256,405) | (2,384,339) |
Income from operations | 942,368 | 2,852,876 | 2,267,083 |
Other income (expenses) | |||
Change in Fair value of derivative liability | 419,649 | 0 | |
Interest income | 516,869 | 33,576 | 183 |
Interest expense | (134,144) | (73,866) | (168,657) |
Amortization of debt issuance costs | (48,160) | 0 | (1,093,440) |
Other expenses, net | 409,030 | (379,225) | 88,886 |
Total other income (expenses), net | 1,163,244 | (419,515) | (1,173,028) |
Income before income taxes | 2,105,612 | 2,433,361 | 1,094,055 |
Provision for income taxes | 118,367 | (25,571) | (16,753) |
Net income from continuing operations | 2,223,979 | 2,407,790 | 1,077,302 |
Discontinued operations | |||
Net loss from discontinued operations, net of tax | 0 | (51,352) | (263,847) |
Net income | 2,223,979 | 2,356,438 | 813,455 |
Net loss attributable to non-controlling interest from discontinued operations | 0 | 1,976 | 10,151 |
Net income attributable to Farmmi, Inc. | 2,223,979 | 2,358,414 | 823,606 |
Comprehensive (loss) income | |||
Net income | 2,223,979 | 2,356,438 | 813,455 |
Foreign currency translation | (16,344,967) | 1,990,561 | 1,423,862 |
Total comprehensive (loss) income | (14,120,988) | 4,398,351 | 2,237,317 |
Comprehensive income attributable to noncontrolling interest | 0 | (46,525) | (30,933) |
Comprehensive (loss) income attributable to Farmmi, Inc. | $ (14,120,988) | $ 4,351,826 | $ 2,206,384 |
Weighted average number of ordinary shares1 | |||
Basic | 23,247,874 | 4,113,700 | 649,794 |
Diluted | 23,247,874 | 4,178,208 | 649,794 |
Basic (loss) earnings per ordinary share1 | |||
Continuing operations | $ 0.10 | $ 0.59 | $ 1.66 |
Discontinued operations | 0 | (0.01) | (0.41) |
Diluted (loss) earnings per ordinary share1 | |||
Continuing operations | 0.10 | 0.58 | 1.66 |
Discontinued operations | $ 0 | $ (0.01) | $ (0.41) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders Equity - USD ($) | Total | Additional Paid-In Capital | Statutory Reserve | Retained Earnings (Accumulated Deficit) | Total Farmmi Inc Shareholders Equity | Noncontrolling Interest | Ordinary Shares | Accumulated other comprehensive Income (loss) |
Balance, shares at Sep. 30, 2019 | 503,594 | |||||||
Balance, amount at Sep. 30, 2019 | $ 22,337,551 | $ 15,762,867 | $ 597,528 | $ 6,321,384 | $ 21,498,503 | $ 839,048 | $ 12,590 | $ (1,195,866) |
Issuance of ordinary shares for convertible notes redemption, shares | 317,114 | |||||||
Issuance of ordinary shares for convertible notes redemption, amount | 4,580,289 | 4,572,361 | 0 | 0 | 4,580,289 | 0 | $ 7,928 | 0 |
Foreign currency translation gain | 1,423,862 | 0 | 0 | 0 | 1,382,778 | 41,084 | 0 | 1,382,778 |
Net income (loss) for the year | 813,455 | 0 | 0 | 823,606 | 823,606 | (10,151) | 0 | 0 |
Statutory reserve | 0 | 0 | 374,564 | (374,564) | 0 | 0 | 0 | 0 |
Balance, amount at Sep. 30, 2020 | 29,155,157 | 20,335,228 | 972,092 | 6,770,426 | 28,285,176 | 869,981 | $ 20,518 | 186,912 |
Balance, shares at Sep. 30, 2020 | 820,708 | |||||||
Foreign currency translation gain | 1,990,561 | 0 | 0 | 0 | 1,942,060 | 48,501 | $ 0 | 1,942,060 |
Net income (loss) for the year | 2,356,438 | 0 | 0 | 2,358,414 | 2,358,414 | (1,976) | $ 0 | 0 |
Share-based compensation expenses, shares | 23,864 | |||||||
Share-based compensation expenses, amount | 1,260,674 | 1,260,077 | 0 | 0 | 1,260,674 | 0 | $ 597 | 0 |
Issuance of ordinary shares and warrants, net, shares | 10,462,064 | |||||||
Issuance of ordinary shares and warrants, net, amount | 126,010,538 | 125,748,986 | 0 | 0 | 126,010,538 | $ 261,552 | 0 | |
Warrants exercised for cash, shares | 11,004,579 | |||||||
Warrants exercised for cash, amount | 19,050 | (256,064) | 0 | 0 | 19,050 | 0 | $ 275,114 | 0 |
Statutory reserve | 0 | 0 | 1,463 | (1,463) | 0 | 0 | 0 | 0 |
Balance, amount at Sep. 30, 2021 | 160,792,418 | 147,088,227 | 973,555 | 9,127,377 | 159,875,912 | 916,506 | $ 557,781 | 2,128,972 |
Balance, shares at Sep. 30, 2021 | 22,311,215 | |||||||
Foreign currency translation gain | (16,344,967) | 0 | 0 | 0 | (16,344,967) | 0 | $ 0 | (16,344,967) |
Net income (loss) for the year | 2,223,979 | 0 | 0 | 2,223,979 | 2,223,979 | 0 | 0 | 0 |
Share-based compensation expenses, amount | 2,007,328 | 1,997,328 | 0 | 0 | 2,007,328 | 0 | 10,000 | 0 |
Statutory reserve | 0 | 0 | 180,258 | (180,258) | 0 | 0 | $ 0 | 0 |
Share-based compensation expenses, shares | 400,000 | |||||||
Issuance of common shares, net, shares | 1,200,000 | |||||||
Issuance of common shares, net, amount | 6,000,000 | 5,970,000 | 0 | 0 | 6,000,000 | 0 | $ 30,000 | 0 |
Reverse share-split adjustment, shares | (4,230) | |||||||
Reverse share-split adjustment, amount | 0 | 106 | 0 | 0 | 0 | 0 | $ (106) | 0 |
Disposal of a subsidiary | 5,333 | (2,893,003) | 0 | 3,732,393 | 921,839 | (916,506) | 0 | 82,449 |
Balance, amount at Sep. 30, 2022 | $ 154,684,091 | $ 152,162,658 | $ 1,153,813 | $ 14,903,491 | $ 154,684,091 | $ 0 | $ 597,675 | $ (14,133,546) |
Balance, shares at Sep. 30, 2022 | 23,906,985 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities | |||
Net income | $ 2,223,979 | $ 2,356,438 | $ 813,455 |
Net loss from discontinued operations | 0 | 51,352 | 263,848 |
Net income from continuing operations | 2,223,979 | 2,407,790 | 1,077,303 |
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||
Changes in allowances - accounts receivables | (89) | (116,862) | 115,712 |
Changes in allowances - advances to suppliers | 3,526 | (758,232) | 702,486 |
Changes in allowances - inventories | 53,736 | (19,323) | 17,902 |
Depreciation and amortization | 64,287 | 68,418 | 65,232 |
Amortization of operating lease right-of-use assets | 85,280 | 0 | 0 |
Non-cash lease expenses | 0 | 91,573 | 17,437 |
Loss on short-term investment | 145,843 | 0 | 0 |
Gain from disposal of property and equipment | 0 | (55,801) | 0 |
Loss from disposal of a subsidiary | 15,243 | 0 | 0 |
Amortization of debt issuance costs | 48,160 | 0 | 135,867 |
Amortization of deferred financing costs | 0 | 0 | 1,093,440 |
Interest receivable from other receivable | (445,693) | ||
Amortization of biological assets | (218,317) | 0 | 0 |
Deferred income tax provision | (176,633) | 0 | 0 |
Change in fair value of derivative liability | (419,649) | 0 | 0 |
Share-based compensation | 2,007,328 | 1,260,674 | 0 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 6,483,703 | (13,040,158) | 3,929,712 |
Advances to suppliers | 12,767,241 | (40,989,649) | (9,115,037) |
Notes receivables | (3,818,479) | 0 | 0 |
Inventory, net | 515,599 | (1,212,031) | 380,175 |
Other current assets | (49,765) | (258,117) | 54,749 |
Accounts payable | 156,598 | 26,404 | (84,425) |
Operating lease liabilities | (38,478) | (75,879) | (46,082) |
Other current liabilities | 795,433 | (559,915) | (172,089) |
Net cash provided by (used in) operating activities from continuing operations | 20,635,487 | (53,231,108) | (1,827,618) |
Net cash provided by operating activities from discontinued operations | 0 | 324,095 | 211,195 |
Net cash provided by (used in) operating activities | 20,635,487 | (52,907,013) | (1,616,423) |
Cash flows from investing activities | |||
Purchase of property, plant and equipment | (2,946) | (4,686) | 0 |
Purchase of intangible assets | 0 | (1,363) | (82,195) |
Short-term deposits | (35,296,981) | (2,772,430) | 0 |
Advances to a third party | 0 | (107,817) | 0 |
Acquisition of subsidiaries | (1,521,422) | 0 | 0 |
Repayment of advances to a third party | 106,500 | 0 | 0 |
Proceeds from disposal of subsidiary | 2,662,459 | 0 | 0 |
Purchase of long-term investments | (152,142) | 0 | 0 |
Purchase of short-term investments | (152,142) | 0 | 0 |
Other receivables | (7,607,108) | (9,241,432) | 0 |
Advances to related parties | (27,297) | 0 | 0 |
Net cash used in investing activities from continuing operations | (41,991,079) | (12,127,728) | (82,195) |
Net cash used in investing activities from discontinued operations | 0 | (130,492) | (165,045) |
Net cash used in investing activities | (41,991,079) | (12,258,220) | (247,240) |
Cash flows from financing activities | |||
Gross proceeds from capital contribution | 0 | 0 | 428,100 |
Gross proceeds from bank acceptance notes payable | 13,404 | 0 | 3,139,400 |
Repayment of bank acceptance notes payable | 0 | (3,388,525) | 0 |
Net proceeds from shares issuance | 6,000,000 | 126,029,588 | 0 |
Net proceeds from convertible notes issuance | 6,000,000 | 0 | 0 |
Borrowings from bank loans | 1,959,591 | 2,310,358 | 570,800 |
Repayments of bank loans | (2,283,527) | (628,931) | 0 |
Repayment of advances from related parties | (54,600) | (2,147,199) | (938,071) |
Proceeds from advances from related parties | 0 | 489,997 | 0 |
Net cash provided by financing activities from continuing operations | 11,634,868 | 122,665,288 | 3,200,229 |
Net cash (used by) provided by financing activities from discontinued operations | 0 | (252,488) | 1,416 |
Net cash provided by financing activities | 11,634,868 | 122,412,800 | 3,201,645 |
Effect of exchange rate changes on cash and restricted cash | (8,363,679) | (150,204) | 73,354 |
Net (decrease) increase in cash and restricted cash | (18,084,403) | 57,097,363 | 1,411,336 |
Cash and restricted cash, beginning of year | 59,251,904 | 2,165,151 | 753,815 |
Cash and restricted cash, end of year | 41,167,501 | 59,251,904 | 2,165,151 |
Less: cash from discontinued operations | 0 | (10,610) | (66,245) |
Cash and restricted cash, end of year | 41,167,501 | 59,251,904 | 2,098,906 |
Reconciliation of cash and restricted cash, beginning of year | |||
Cash | 59,251,904 | 481,906 | 118,688 |
Restricted cash | 0 | 1,617,000 | 618,690 |
Cash from continuing operations | 59,251,904 | 2,098,906 | 737,378 |
Cash from discontinued operations | 0 | 66,245 | 16,437 |
Cash and restricted cash, beginning of year | 59,251,904 | 2,165,151 | 753,815 |
Cash | 41,167,501 | 59,251,904 | 481,906 |
Restricted cash | 0 | 0 | 1,617,000 |
Cash from continuing operations | 41,167,501 | 59,251,904 | 2,098,906 |
Cash from discontinued operations | 0 | 10,610 | 66,245 |
Cash and restricted cash, End Of Year | 41,167,501 | 59,262,514 | 2,165,151 |
Supplemental disclosure information: | |||
Income taxes paid | 5,443 | 22,100 | 29,771 |
Interest paid | 82,970 | 116,700 | 87,249 |
Non-cash financing activities | |||
Right of use assets obtained in exchange for operating lease obligations | 0 | 593,457 | 827,118 |
Conversion of notes to 7,927,846 ordinary shares | 0 | 0 | 4,580,289 |
Accrued interest for convertible notes | $ 5,753 | $ 0 | $ 135,867 |
Organization and nature of busi
Organization and nature of business | 12 Months Ended |
Sep. 30, 2022 | |
Organization and nature of business | |
Organization and nature of business | Note 1 - Organization and nature of business Farmmi, Inc. (“FAMI” or the “Company”) is a holding company incorporated under the laws of the Cayman Islands on July 28, 2015. FAMI owns 100% equity interest of Farmmi International Limited (“Farmmi International”), a Hong Kong company, which in turn owns 100% equity interest of Farmmi (Hangzhou) Enterprise Management Co., Ltd. (“Farmmi Enterprise”), Lishui Farmmi Technology Co., Ltd. (“Farmmi Technology”), Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co., Ltd. (“Farmmi Ecology”) and Farmmi (Hangzhou) Health Development Co., Ltd (“Farmmi Heath Development”), four wholly foreign-owned entities (each, a “WFOE”) formed by Farmmi International under the laws of the People’s Republic of China (“PRC” or “China”). Farmmi Health Development owns 100% equity interest in Zhejiang Farmmi Medical Health Technology Co., Ltd (“Farmmi Medical Health”) which was established under the laws of the PRC on September 18, 2021. Farmmi Enterprise, Farmmi Technology and Farmmi Ecology own 30%, 40% and 30% of equity interests in Zhejiang Farmmi Holdings Group Co., Ltd. (“Farmmi Holdings”), respectively, which was established under the laws of the PRC on September 18, 2021. On December 23, 2021, a board resolution of Zhejiang Farmmi Agricultural Technology Group Co., Ltd. (“Farmmi Agricultural”) (formerly known as Hangzhou Suyuan Agriculture Technology Co., Ltd., “Suyuan Agriculture”), a company incorporated in the PRC, was passed to reorganize certain companies mentioned below with nil consideration. Under the above-mentioned reorganization, (i) on December 30, 2021, Farmmi Holdings started to own 100% interest in Farmmi Agricultural, which was previously owned by Farmmi Enterprise (31.7%) and Farmmi Technology (68.3%); (ii) Farmmi Agricultural owns 100% of the equity interest of Zhejiang Farmmi Agricultural Supply Chain Co., Ltd (“Farmmi Supply Chain”), a company established under the laws of the PRC, on February 10, 2022 and was previously 100% owned by Farmmi Ecology. On September 27, 2021, the Company, through its subsidiary, Zhejiang Farmmi Agricultural Supply Chain Co., Ltd., acquired Jiangxi Xiangbo Agriculture and Forestry Development Co. Ltd (“Jiangxi Xiangbo”), established under the laws of the PRC, from Ganzhou Tengguang Agriculture and Forestry Development Co., Ltd. for a total price of RMB70 million ($11 million). After the consummation of the acquisition, Farmmi Supply Chain owns 100% equity interest in Jiangxi Xiangbo, which in turn owns 100% interest in Yudu County Yada Forestry Co., Ltd, established under the laws of the PRC (“Yudu Yada”). As a result, Jiangxi Xiangbo and Yudu Yada became the subsidiaries of the Company. On September 27, 2021, the Company, through its subsidiary, Zhejiang Farmmi Agricultural Supply Chain Co., Ltd., acquired Guoning Zhonghao (Ningbo) Trading Co., Ltd. (“Guoning Zhonghao”), established under the laws of the PRC, from Ningbo Guoning Zhonghao Technology Co., Ltd. and Jianxin Huang, an individual, for a total consideration of RMB5,000 ($788). After the consummation of the acquisition, Farmmi Supply Chain owns 100% equity interest in Guoning Zhonghao. Farmmi Agricultural owns 100% of equity interests in Zhejiang FLS Mushroom Co., Ltd. (“FLS Mushroom”), Zhejiang Farmmi Biotechnology Co., Ltd. (“Farmmi Biotech”) and Zhejiang Farmmi Food Co., Ltd. (“Farmmi Food”) and 77.2% equity interest in Lishui Farmmi E-Commerce Co., Ltd. (“Farmmi E-Commerce”). FLS Mushroom, Farmmi Biotech, Farmmi Food, and Farmmi E-Commerce”) were all established under the laws of the PRC. The remaining 22.8% equity interest in Farmmi E-Commerce is owned by Hangzhou Nongyuan Network Technology Co., Ltd. (“Nongyuan Network”). Nongyuan Network was incorporated on December 8, 2015 under the laws of the PRC and focuses on the development of network marketing and provides a network platform for sales of agriculture products. On September 18, 2016, Farmmi Agricultural entered into a series of contractual agreements with Zhengyu Wang, the then sole-owner of Nongyuan Network. These agreements include an Exclusive Management Consulting and Technology Agreement, an Equity Pledge Agreement, an Exclusive Call Option Agreement, a Proxy Agreement and a Power of Attorney (collectively, the “Original VIE Agreements”). The Original VIE Agreements empowered Farmmi Agricultural to exercise management control over the activities that most significantly impact the operation results of Nongyuan Network, obligated Farmmi Agricultural to absorb a majority of the risk of loss from Nongyuan Network’s activities, and entitled Farmmi Agricultural to receive a majority of their residual returns. In essence, Farmmi Agricultural and the Company had gained effective control over Nongyuan Network. On December 4, 2019, Zhengyu Wang transferred 100% of his shares of Nongyuan Network to his daughter Xinyang Wang. As a result, Xinyang Wang started to hold 100% of the ownership interest of Nongyuan Network. On December 10, 2019, Xinyang Wang, as the new sole owner of Nongyuan Network, signed a series of VIE agreements (the “Xinyang Wang VIE Agreements”) with Nongyuan Network and Farmmi Agricultural. On May 15, 2020, the following agreements were signed with the effective date of December 10, 2019: (1) Zhengyu Wang, Nongyuan Network and Farmmi Agricultural signed a termination agreement to confirm that the Original VIE Agreements had been terminated because Zhengyu Wang was no longer the shareholder of Nongyuan Network; (2) Zhengyu Wang, Dehong Zhang (the legal representative of Nongyuan Network), Xinyang Wang, Nongyuan Network and Farmmi Agricultural signed a joint statement to confirm that the board of directors of the Company had the ultimate authority over the matters of the VIE (defined below), Nongyuan Network. FAMI believes that Xinyang Wang VIE Agreements enable Farmmi Agricultural and FAMI to keep effective control over Nongyuan Network, and as a result Nongyuan Network should be considered as a Variable Interest Entity (“VIE”) under the Statement of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 810 Consolidation. Accordingly, the accounts of Nongyuan Network are consolidated with those of Farmmi Agricultural. On September 7, 2021, Zhejiang Yitang Medical Service Co., Ltd. (“Yitang Mediservice”) was established under the laws of the PRC. Nongyuan Network and Farmmi Ecology own 95% and 5% of the equity interests in Yitang Mediservice, respectively. On September 17, 2021, Zhejiang Yiting Medical Technology Co., Ltd. (“Yiting Meditech”) was established under the laws of the PRC. Yitang Mediservice owns 100% interest in Yiting Meditech. On November 23, 2021, the Company incorporated Shanghai Zhongjian Yiting Healthcare Technology Partnership (Limited Partnership) (“Zhongjian Yiting”), and Yiting Meditech owns 93.75% of the ownership interest of it. On January 10, 2022, Lishui Yifeng Medical Health Technology Co., Ltd (“Yifeng Medihealth”) was established under the laws of the PRC. Yitang Mediservice owns 100% of the equity interest in Yifeng Medihealth. On January 10, 2022, Lishui Yilong Enterprise Management Co., Ltd (“Yilong Enterprise”) was established under the laws of the PRC. Yitang Mediservice owns 100% of the equity interest in Yilong Enterprise. On January 19, 2022, Lishui Yifeng Yilong Medical Technology Development Partnership (Limited Partnership) (“YF YL MediTech”) was established under the laws of the PRC. Yifeng Medihealth owns 20% and Yilong Enterprise owns 80% interest in YF YL MediTech. On January 19, 2022, Lishui Yitang Shangke Medical and Health Technology Partnership (Limited Partnership) (“YT SK Medihealth”) was established under the laws of the PRC. Yifeng Medihealth owns 20% and Yilong Enterprise owns 80% interest in YT SK Medihealth. On May 27, 2022, Zhejiang Farmmi Ecological Agriculture Technology Co., Ltd (“Farmmi Eco Agri”) was established under the laws of the PRC. FLS Mushroom owns 100% of the equity interest in Farmmi Eco Agri. On July 13, 2022, Farmmi Canada Inc. (Farmmi Canada) was established under the laws of the Canada. Farmmi Inc. owns 100% of the equity interest in Farmmi Canada. On September 27, 2021, an agreement was signed to divest 100% interest in Forest Food to a third party for total cash consideration of RMB18.2 million (approximately $2.8 million) on October 1, 2021. Certain prior periods of the Company have been reclassified to conform to current period presentation as discontinued operations. Such reclassifications had no effect on net income (loss) or cash flows as previously reported. On September 30, 2022, an agreement was signed to divest 100% interest in FLS Mushroom to a third party for total cash consideration of RMB24.1 million (approximately $3.4 million) on October 1, 2022. On November 14, 2022, Ningbo Farmmi Baitong Trade Co., Ltd (“Ningbo Farmmi Trade”) was established under the laws of the PRC. Farmmi Agricultural owns 100% equity of Ningbo Farmmi Trade. As of September 30, 2022, details of the subsidiaries of FAMI are set out below: Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal activities FAMI July 28, 2015 Cayman Parent Holding company Farmmi International August 20, 2015 Hong Kong 100% Holding company Farmmi Enterprise May 23, 2016 Zhejiang, China 100% Holding company Farmmi Technology June 6, 2016 Zhejiang, China 100% Holding company Farmmi Agricultural December 8, 2015 Zhejiang, China 100% Holding company FLS Mushroom March 25, 2011 Zhejiang, China 100% Light processing and distribution of dried mushrooms Farmmi Food December 26, 2017 Zhejiang, China 100% Dehydrating, further processing and distribution of edible fungus Farmmi E-Commerce March 22, 2019 Zhejiang, China 100% Technology development, technical services and technical consultation related to agricultural products Farmmi Biotech April 7, 2021 Zhejiang, China 100% Research and development of mushroom powder and mushroom extract Farmmi Ecology April 25, 2021 Zhejiang, China 100% Holding company Farmmi Supply Chain May 11, 2021 Zhejiang, China 100% Agricultural products supply chain Farmmi Health Development September 17, 2021 Zhejiang, China 100% Health development Farmmi Medical Health September 18, 2021 Zhejiang, China 100% Medical health Farmmi Holdings September 18, 2021 Zhejiang, China 100% Holding company Jiangxi Xiangbo June 18, 2021 Jiangxi, China 100% Holding company Yudu Yada November 10, 2010 Jiangxi, China 100% Forestry development Guoning Zhonghao June 15, 2021 Zhejiang, China 100% Agriculture exporting Farmmi Eco Agri May 27, 2022 Zhejiang, China 100% Agriculture products Farmmi Canada July 13, 2022 Canada 100% Agriculture products Ningbo Farmmi Trade November 14, 2022 Zhejiang, China 100% Agriculture products Nongyuan Network July 7, 2016 Zhejiang, China 0 (VIE) Trading Yitang Mediservice September 7, 2021 Zhejiang, China 100% subsidiary of the VIE Medical services Yiting Meditech September 17, 2021 Zhejiang, China 100% subsidiary of the VIE Medical technology Yifeng Medihealth January 10, 2022 Zhejiang, China 100% subsidiary of the VIE Medical health Yilong Enterprise January 10, 2022 Zhejiang, China 100% subsidiary of the VIE Management services YF YL MediTech January 19, 2022 Zhejiang, China 100% subsidiary of the VIE Medical technology YT SK Medihealth January 19, 2022 Zhejiang, China 100% subsidiary of the VIE Medical health FAMI through its subsidiaries, VIE and VIE’s subsidiaries (herein collectively referred to as the “Company”) are principally engaged in processing, distributing and trading dried Shiitake mushrooms, Mu Er (also known as auricularia auricula-judae or jelly fungi), corn, cotton, forestry and other products. |
Summary of significant accounti
Summary of significant accounting policies | 12 Months Ended |
Sep. 30, 2022 | |
Summary of significant accounting policies | |
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 conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Company include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiaries of the VIEs. All inter-company transactions and balances between the Company, its subsidiaries, the VIEs and the subsidiaries of the VIEs have been eliminated upon consolidation. Results of subsidiaries, businesses acquired from third parties and the VIEs are consolidated from the date on which control is transferred to the Company. Consolidation of variable interest entities In accordance with accounting standards regarding consolidation of variable interest entities (“VIEs”), VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. The Company determined that Nongyuan Network is a VIE because the Company is the primary beneficiary of risks and rewards of this VIE. The condensed consolidating table below disaggregated the Consolidated Balance Sheets of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated as of September 30, 2022 and 2021. As of September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Intercompany receivables $ 163,676,919 $ 114,994,912 - $ 140,445,311 - Current assets excluding intercompany receivables $ 91,926,232 $ 33,986 $ 57,133,125 $ 4,161,037 $ 153,254,380 Current assets $ 255,603,151 $ 115,028,898 $ 57,133,125 $ 144,606,348 $ 153,254,380 Investment in subsidiaries - $ 40,424,517 - - - Non-current assets excluding investment in subsidiaries $ 10,500,217 $ 8,484 $ 19,772 - $ 10,528,473 Non-current assets $ 10,500,217 $ 40,433,001 $ 19,772 - $ 10,528,473 Total assets $ 266,103,368 $ 155,461,899 $ 57,152,897 $ 144,606,348 $ 163,782,853 Intercompany payables $ 255,440,223 $ 109,255,668 $ 54,420,549 $ 702 - Current liabilities excluding intercompany payables $ 590,393 $ 226,814 $ 1,789,357 $ 5,682,757 $ 8,289,321 Current liabilities $ 256,030,616 $ 109,482,482 $ 56,209,906 $ 5,683,459 $ 8,289,321 Non-current liabilities $ 657,734 $ 151,707 - - $ 809,441 Total liabilities $ 256,688,350 $ 109,634,189 $ 56,209,906 $ 5,683,459 $ 9,098,762 Total shareholders' equity (net assets) $ 9,415,018 $ 45,827,710 $ 942,991 $ 138,922,889 $ 154,684,091 As of September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Intercompany receivables $ 10,263,832 $ 16,147,194 $ 582,137 $ 134,585,007 $ - Current assets excluding intercompany receivables $ 141,332,281 $ 6,658,940 $ 6,666,318 $ 647,997 $ 155,305,536 Current assets $ 151,596,113 $ 22,806,134 $ 7,248,455 $ 135,233,004 $ 155,305,536 Investment in subsidiaries $ - $ 9,016,979 $ - $ - $ - Non-current assets excluding investment in subsidiaries $ 10,126,547 $ - $ 254,818 $ - $ 10,381,365 Non-current assets $ 10,126,547 $ 9,016,979 $ 254,818 $ - $ 10,381,365 Total assets $ 161,722,660 $ 31,823,113 $ 7,503,273 $ 135,233,004 $ 165,686,901 Intercompany payables $ 151,314,338 $ 4,809,089 $ 3,785,283 $ 1,669,460 $ - Current liabilities excluding intercompany payables $ 1,682,220 $ 1,415 $ 2,408,191 $ 54,600 $ 4,146,426 Current liabilities $ 152,996,558 $ 4,810,504 $ 6,193,474 $ 1,724,060 $ 4,146,426 Non-current liabilities $ 691,808 $ - $ 56,249 $ - $ 748,057 Total liabilities $ 153,688,366 $ 4,810,504 $ 6,249,723 $ 1,724,060 $ 4,894,483 Total shareholders’ equity (net assets) $ 8,034,294 $ 27,012,609 $ 1,253,550 $ 133,508,944 $ 160,792,418 The condensed consolidating table below disaggregated the Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the financial years ended September 30, 2022, 2021 and 2020. For the year ended September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 64,795,082 $ 9,111,073 $ 25,307,224 - $ 99,213,379 Cost of revenues (60,272,018 ) (9,053,547 ) (24,449,728 ) - (93,775,293 ) Gross profit 4,523,064 57,526 857,496 - 5,438,086 Operating expenses (782,009 ) (50,344 ) (701,516 ) (2,961,849 ) (4,495,718 ) Income (loss) from operations 3,741,055 7,182 155,980 (2,961,849 ) 942,368 Other income (expenses) 560,497 20,510 213,771 368,466 1,163,244 Income (loss) before income taxes 4,301,552 27,692 369,751 (2,593,383 ) 2,105,612 Provision for income taxes 114,801 9,182 (5,616 ) - 118,367 Net income (loss) $ 4,416,353 $ 36,874 $ 364,135 (2,593,383) $ 2,223,979 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 33,068,045 $ 762,771 $ 5,459,135 $ - $ 39,289,951 Cost of revenues from continuing operations (28,847,801 ) (742,933 ) (4,589,936 ) - (34,180,670 ) Gross profit from continuing operations 4,220,244 19,838 869,199 - 5,109,281 Operating expenses 588,892 (8,940 ) (804,851 ) (2,031,506 ) (2,256,405 ) Income (loss) from operations 4,809,136 10,898 64,348 (2,031,506 ) 2,852,876 Other expenses (391,819 ) (19,990 ) (2,033 ) (5,673 ) (419,515 ) Income (loss) before income taxes 4,417,317 (9,092 ) 62,315 (2,037,179 ) 2,433,361 Provision for income taxes (8,085 ) - (17,486 ) - (25,571 ) Net income (loss) from continuing operations $ 4,409,232 $ (9,092 ) $ 44,829 $ (2,037,179 ) $ 2,407,790 For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 23,805,109 $ - $ 4,558,854 $ - $ 28,363,963 Cost of revenues from continuing operations (19,899,410 ) - (3,813,131 ) - (23,712,541 ) Gross profit 3,905,699 - 745,723 - 4,651,422 Operating expenses (921,258 ) (6,956 ) (853,607 ) (602,518 ) (2,384,339 ) Income (loss) from operations 2,984,441 (6,956 ) (107,884 ) (602,518 ) 2,267,083 Other expenses 86,810 (30,215 ) 327 (1,229,950 ) (1,173,028 ) Income (loss) before income taxes 3,071,251 (37,171 ) (107,557 ) (1,832,468 ) 1,094,055 Provision for income taxes (10,948 ) - (5,805 ) - (16,753 ) Net income (loss) from continuing operations $ 3,060,303 $ (37,171 ) $ (113,362 ) $ (1,832,468 ) $ 1,077,303 The condensed consolidating table below disaggregated the Consolidated Statements of Cash Flows of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the financial years ended September 30, 2022, 2021 and 2020. For the year ended September 30, 2022 WFOE Other that is the entities primary VIE that are beneficiary and its Consolidated consolidated of the VIE subsidiaries FAMI total Net cash (used in) provided by operating activities from continuing operations $ (14,188,275) $ (3,189,440) $ 46,404,339 $ (8,391,136) $ 20,635,488 Net cash provided by (used in) investing activities from continuing operations 1,140,848 2,738,559 (45,870,486 ) - (41,991,079 ) Net cash provided by (used in) financing activities from continuing operations 649,782 373,382 (899,449 ) 11,511,153 11,634,868 Effect of exchange rate changes on cash and restricted cash (8,345,494 ) (5,078 ) (13,108 ) - (8,363,680 ) Net (decrease) increase in cash and restricted cash (20,743,139 ) (82,577 ) (378,704 ) 3,120,017 (18,084,403 ) Cash and restricted cash from continuing operations, beginning of year 183,030 116,447 434,135 522,915 59,251,904 Cash and restricted cash from continuing operations, end of year $ (20,560,109) $ 33,870 $ 55,431 $ 4,057,179 $ 41,167,501 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 67,709,967 $ 3,246,067 $ (338,559 ) $ (123,848,583 ) $ (53,231,108 ) Net cash used in investing activities from continuing operations (9,353,935 ) (2,772,430 ) (1,363 ) - (12,127,728 ) Net cash provided by (used in) financing activities from continuing operations 144,197 (616,095 ) (1,232,191 ) 124,369,377 122,665,288 Effect of exchange rate changes on cash and restricted cash (506,653 ) 258,485 94,714 - (153,454 ) Net increase (decrease) in cash and restricted cash 57,993,576 116,027 (1,477,399 ) 520,794 57,152,998 Cash and restricted cash from continuing operations, beginning of year 183,030 420 1,913,335 2,121 2,098,906 Cash and restricted cash from continuing operations, $ 58,176,606 $ 116,447 $ 435,936 $ 522,915 $ 59,251,904 end of year For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 57,809 $ (560,411 ) $ (1,629,913 ) $ 304,897 $ (1,827,618 ) Net cash used in investing activities from continuing operations - - (82,195 ) - (82,195 ) Net cash provided by (used in) financing activities from continuing operations 10,437 560,358 3,567,505 (938,071 ) 3,200,229 Effect of exchange rate changes on cash and restricted cash 15,087 19 56,006 - 71,112 Net increase (decrease) in cash and restricted cash 83,333 (34 ) 1,911,403 (633,174 ) 1,361,528 Cash and restricted cash from continuing operations, beginning of year 99,697 454 1,932 635,295 737,378 Cash and restricted cash from continuing operations, end of year $ 183,030 $ 420 $ 1,913,335 $ 2,121 $ 2,098,906 Cash is transferred within the Company through the banking system in PRC. Under the VIE agreements, the Company intends to distribute 95% of VIE’s earnings after eliminating VIE’s accumulated losses and making appropriation of VIE’s after-tax net income into the statutory surplus reserve based on at least 10% of the after-tax net income determined in accordance with generally accepted accounting principles of the PRC. When there are retained earnings available for distribution, the distribution of VIE’s earnings will be through payment of service fees to Farmmi Agricultural, such service fee is subject to 6% value-added sales tax, other taxes of 12% which calculation is based on 6% value-added taxes and Farmmi Agricultural is subject to corporate income tax up to 25% for its net income. Under the VIE agreements, when there is a change of shareholder in VIE, amount owed by VIE to the Company should be first settled. The condensed consolidating table below quantified the transfer between FAMI, its subsidiaries, VIE and its subsidiaries, WFOE that is the primary beneficiary of the VIE and the investors for the years ended September 30, 2022, 2021 and 2020, respectively. These transfers were mainly for the purpose of providing working capital between FAMI, its subsidiaries, VIE and its subsidiaries and WFOE that is the primary beneficiary of the VIE. For the year ended September 30, 2022 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ 1,217,137 - $ 913,005 - WFOE that is the primary beneficiary of the VIE - $ 14,594,586 $ 19,188,742 - VIE and its subsidiaries - $ 6,394,084 $ 15,293,176 - Other entities that are consolidated $ 984,655 $ 26,961,378 $ 14,744,568 - For the year ended September 30, 2021 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ 45,500 $ 124,670,237 $ - WFOE that is the primary beneficiary of the VIE $ 1,668,758 $ - $ 38,204,550 $ - VIE and its subsidiaries $ - $ - $ 1,601,406 $ - Other entities that are consolidated $ 319,981 $ 24,075,199 $ 5,624,880 $ - Consolidation of variable interest entities (Continued) For the year ended September 30, 2020 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ - $ 400,960 $ - WFOE that is the primary beneficiary of the VIE $ - $ - $ 1,812,810 $ - VIE and its subsidiaries $ - $ - $ 2,199,053 $ - Other entities that are consolidated $ 394,742 $ 1,832,576 $ 770,216 $ - Use of estimates In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include allowance for doubtful accounts and advances to suppliers, the valuation of inventories, the useful lives of property, plant and equipment, the valuation of beneficial conversion feature of the convertible notes, valuation of the warrants and the valuation of deferred tax assets. Cash Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. All cash balances are in bank accounts in PRC. Cash maintained in banks within the People’s Republic of China of less than RMB0.5 million (equivalent to $70,289) per bank are covered by "deposit insurance regulation" promulgated by the State Council of the People’s Republic of China. Restricted cash The Company adopted Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash Short-term deposit Short-term deposit relates to fixed terms cash deposits with financial institutions with original maturities of more than three months and less than a year. As of September 30, 2022 and 2021, the Company had short-term deposit of $35,144,444 and $2,793,556, earning interest at 2.05% and 2% per annum with one year maturity on October 15, 2022 and March 23, 2022, respectively. Accounts receivable, net Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of September 30, 2022 and 2021, allowance for doubtful accounts was $7,249 and $8,094, respectively. Advances to suppliers, net Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are directly related to the purchases of raw materials used to fulfill sales orders. The Company is required from time to time to make cash advances when placing its purchase orders. These advances are settled upon suppliers delivering raw materials to the Company when the transfer of ownership occurs. The Company reviews its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to the Company or refund an advance. As of September 30, 2022 and 2021, allowance for doubtful accounts was $3,258 and nil, respectively. Inventory, net The Company values its inventories at the lower of cost, determined on a weighted average basis, or net realizable value. The Company reviews its inventories periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. The Company recorded inventory reserve of $49,652 and nil as of September 30, 2022 and 2021, respectively. Biological a ssets Biological assets mainly consist of bamboo forests managed for future bamboo harvest and sales, of which the Company owned 82 forest right certificates with expiry dates ranging from December 30, 2026 to December 9, 2070 and with an area of 9.6 km 2 Amortization expense was $218,317 for the year ended September 30, 2022. Property, plant and equipment, net Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. The estimated useful lives for significant property and equipment are as follows: Plant, machinery and equipment 5 - 10 years Transportation equipment 4 years Office 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. Intangible assets, net Intangible assets consist primarily of purchased software. Intangible assets are stated at cost less accumulated amortization, which are amortized using the straight-line method with the estimated useful lives of three years. Amortization expenses were $31,984, $46,085 and $42,758 for the years ended September 30, 2022, 2021 and 2020, respectively. Estimated amortization expenses of the existing intangible assets for the next five years are $6,748, nil, nil, nil and nil for the years ending September 30, 2023, 2024, 2025, 2026 and 2027, respectively. Impairment of long-lived assets The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for fiscal years ended September 30, 2022, 2021 and 2020. Revenue recognition The Company follows ASU 2014-09 Revenue from Contracts with Customers 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. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per ton. The Company’s contract liabilities primarily include advance from customers. As of September 30, 2022 and 2021, the contract liabilities are $637,165 and $12,177, respectively, and included in other current liabilities on the consolidated balance sheets. For fiscal years ended September 30, 2022, 2021 and 2020, there was no revenue recognized from performance obligations related to prior periods. Refer to Note 16 - Segment reporting for details of revenue segregation. Cost of revenues Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues. Earnings (loss) per share The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share The component of basic and diluted EPS were as follows: Year Ended September 30, 2022 2021 2020 Net income (loss) available for ordinary shareholders (A) $ 2,223,979 $ 2,356,438 $ 813,455 - continuing operations $ 2,223,979 $ 2,407,790 $ 1,077,302 - discontinued operations - $ (51,352 ) $ (263,847 ) Weighted average outstanding ordinary shares (B) - basic 23,247,874 4,113,700 649,794 - diluted 23,247,874 4,178,208 649,794 Earnings (loss) per ordinary share - basic (A/B) $ 0.10 $ 0.57 $ 1.25 - Continuing operations $ 0.10 $ 0.59 $ 1.66 - Discontinued operations $ - $ (0.01 ) $ (0.41 ) Earnings (loss) per ordinary share - diluted (A/B) $ 0.10 $ 0.56 $ 1.25 - Continuing operations $ 0.10 $ 0.58 $ 1.66 - Discontinued operations - $ (0.01 ) $ (0.41 ) ____________ 1. On May 31, 2022, the Company consolidated its ordinary shares at the ratio of one-for-twenty-five. The weighted average number of basic ordinary shares had been retrospectively adjusted from 102,842,495 to 4,113,700 for the year ended September 30, 2021 and from 16,244,856 to 649,794 for the year ended September 30, 2020. The weighted average number of diluted ordinary shares had been retrospectively adjusted from 104,455,189 to 4,178,208 for the year ended September 30, 2021. As a result, the basic and diluted earnings per ordinary share had been retrospectively adjusted from $0.02 to $0.57 and from $0.02 to $0.56 for the year ended September 30, 2021. The basic and diluted earnings per ordinary share had been retrospectively adjusted from $0.05 to $1.25 for the year ended September 30, 2020. The basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.02 to $0.59 and from $0.02 to $0.58 for the year ended September 30, 2021, respectively. For the year ended September 30, 2020, the basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.07 to $1.66. For discontinued operations, the basic and diluted loss per ordinary share had been retrospectively adjusted from ($0.00) to ($0.01) and from ($0.02) to ($0.41) for the years ended September 30, 2021 and 2020, respectively. Fair value of financial instruments The FASB ASC Topic 820, Fair Value Measurements The three levels are defined 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, restricted cash, accounts receivable, advances to suppliers, other current assets, accounts payable, due to related parties, operating lease liabilities -current, other current liabilities, short-term bank loans and bank acceptance notes payable approximate their recorded values due to their short-term maturities. The fair value of longer term long-term bank loan and operating lease liabilities approximate their recorded values as their stated interest rates approximate the rates currently available. Beneficial conversion feature The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes is due using the effective interest method. If the notes payable is retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion. Debt issuance costs and debt discounts The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. Fair v alue of the embedded derivatives in the convertible promissory notes The convertible promissory notes consisted of a liability component (“financial liability”) and an embedded derivative conversion feature (“derivative liability”). The net proceeds of these convertible promissory notes were first allocated to the fair value of the derivative liability. Subsequent changes in fair value of the derivative liability were recorded in other income. The Company measures the fair value of the embedded derivative by reference to the fair value on the issuance date and maturity date of the convertible promissory notes and revalues them at each reporting date. In determining the fair value of the embedded derivatives, the Company used the Black-Scholes option pricing model with the following assumptions: average volatility rate; market price at the reporting date; risk-free interest rate; and the remaining life of the embedded derivatives. The inputs used in the Black-Scholes model are taken from observable markets. Changes to assumptions used can affect the amounts recognized in the consolidated financial statements. Concentrations of credit risk Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivable and advances to suppliers. As of September 30, 2022 and 2021, $76,308,051 and $3,985,359 of the Company’s cash is maintained in banks within the People’s Republic of China of which deposits of RMB0.5 million (equivalent to $70,289) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the People’s Republic of China. The Company has not experienced any losses in such accounts. A significant portion of the Company’s sales are credit sales primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also makes cash advances to certain suppliers to ensure the stable supply of key raw materials. The Company performs ongoing credit evaluations of its customers and key suppliers to help further reduce credit risk. Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustment from the Company not using the U.S. dollar as its functional currency. Leases The Company adopted ASU 2016-02, Leases Foreign currency translation The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. 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. The exchange rates in effect as of September 30, 2022 and 2021 were RMB1 for $0.1406 and $0.1552, respectively. The average exchange rates for the years ended September 30, 2022, 2021 and 2020 were RMB1 for $0.1521, $0.1540 and $0.1427, respectively. Shipping and handling expenses All shipping and handling costs are expensed as incurred and included in selling expenses. Total shipping and handling expenses were $244,490, $235,956 and $202,171 for the years ended September 30, 2022, 2021 and 2020, respectively. Value added tax The Company is generally subject to the value added tax (“VAT”) for selling merchandise, except for FLS Mushroom. Before May 1, 2018, the applicable VAT rate was 13% or 17% (depending on the type of goods involved) for products sold in PRC. After May 1, 2018, the Company is subject to a tax rate of 12% or 16%, and after April 1, 2019, the tax rate was further reduced to 9% or 13% based on the new Chinese tax law. Pursuant to approval issued by the State Administration of Taxation, FLS Mushroom’s and Nongyuan Network’s major operation can be classified as agriculture products and its revenue is exempt from VAT. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax authorities have the right to assess a penalty based on the amount of taxes which is determined to be late or deficient, with any penalty being expensed in the period when a determination is made by the tax authorities that a penalty is due. During the reporting periods, the Company had no dispute with PRC tax authorities and there was no tax penalty incurred. Income taxes The Company is subject to the income tax laws of the PRC and a subsidiary in Canada is subject to income tax laws of Canada. No taxable income was generated outside the PRC for the years ended September 30, 2021 and 2020. The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax |
Business combinations
Business combinations | 12 Months Ended |
Sep. 30, 2022 | |
Business combinations | |
Business combinations | Note 3 - Business combinations During the year ended September 30, 2022, the Company completed two acquisitions. These acquisitions are expected to strengthen the Company’s business expansion and to generate synergy with the Company’s organic business. The results of the acquired entities’ operations have been included in the Company’s consolidated financial statements since their respective dates of acquisition. The Company completed the valuation necessary to assess the fair value of the acquired assets and liabilities, resulting from which the amounts of goodwill were determined and recognized as of the respective acquisition dates. Goodwill arising from the business combinations, which are not tax deductible, are mainly attributable to synergies expected to be achieved from the acquisitions. Pro forma financial information of the acquirees is not presented as the effects of the acquisitions on the Company’s consolidated financial statements were not material. On September 27, 2021, the Company acquired Guoning Zhonghao from Ningbo Guoning Zhonghao Technology Co., Ltd. and Jianxin Huang for a total consideration of RMB5,000 ($789). The acquisition closed on November 22, 2021 when the Company obtained control of 100% Guoning Zhonghao equity interest. The allocation of the purchase price as of the date of acquisition is summarized as follows: For the year ended September 30, 2022 2022 RMB $ Net tangible liabilities (i) (15,219 ) (2,401 ) Goodwill (20,219 ) (3,189 ) Total fair value of purchase price allocation 5,000 788 Consideration 5,000 788 (i) Net tangible liabilities primarily included cash of RMB9,941 ($1,568), other current assets of RMB840 ($133) and other current liabilities of RMB26,000 ($4,101) as of the date of acquisition. |
Accounts receivable, net
Accounts receivable, net | 12 Months Ended |
Sep. 30, 2022 | |
Accounts receivable, net | |
Accounts receivable, net | Note 4 - Accounts receivable, net Accounts receivable from the Company’s continuing operations consisted of the following: As of As of September 30, September 30, 2022 2021 Accounts receivable - trade $ 16,358,493 $ 24,481,363 Accounts receivable - related party - 49 Accounts receivable 16,358,493 24,481,412 Less: allowance for doubtful accounts (7,249 ) (8,094 ) Accounts receivable, net $ 16,351,244 $ 24,473,318 Allowance for doubtful accounts of $7,249 and $8,094 was made for certain accounts receivable as of September 30, 2022 and 2021, respectively. The Company’s accounts receivable primarily includes balance due from customers when the Company’s products are sold and delivered to customers. $3.9 million or 24.3% of the September 30, 2022 balance has been subsequently collected as of February 07, 2023. The Company expects to collect the remaining balance of accounts receivable by March 2023. |
Advances to suppliers, net
Advances to suppliers, net | 12 Months Ended |
Sep. 30, 2022 | |
Advances to suppliers, net | |
Advances to suppliers, net | Note 5 - Advances to suppliers, net Movement of advances to suppliers from the Company’s continuing operations is as follows: As of As of September 30, September 30, 2022 2021 Beginning balance $ 66,718,632 $ 24,074,122 Increased during the year 227,342,938 88,407,729 Less: utilized during the year (240,110,179 ) (47,418,080 ) Exchange rate difference (5,314,529 ) 1,654,861 Sub-total 48,636,862 66,718,632 Less: allowance for doubtful accounts (3,258 ) - Ending balance $ 48,633,604 $ 66,718,632 On April 1, 2016, the Company entered into two separate framework supply agreements (“Framework Agreements”) with two co-operatives, Jingning Liannong Trading Co., Ltd (“JLT”) and Qingyuan Nongbang Mushroom Industry Co., Ltd (“QNMI”). These two Framework Agreements were renewed for another three years in April 2019 upon expiration and were further renewed for another three years in June 2021. Jingning County and Qingyuan County where JLT and QNMI are located produce premium Shiitake and Mu Er. In order to enter into the trading of agricultural products in bulk, the Company signed a framework agreement on agricultural products purchase and sales cooperation with Ningbo Caixiang Trading Co., Ltd. on May 25, 2021. Ningbo Caixiang Trading Co., Ltd. is located in Ningbo City, a port city, and is the gathering and distributing place of agriculture products in bulks in the Yangtze River Delta region, with rich resources of agricultural products. The contract with Ningbo Caixiang Trading Co., Ltd. expired in May 2022, and the two parties renewed the agricultural product supply agreement in May 2022, with a validity of 3 years. The agreement agreed that Ningbo Caixiang should provide the Company with agricultural products of no less than RMB200 million yuan (including but not limited to cotton, corn, etc.) and pay part of the payment in advance to lock up the goods. On April 1, 2020, the Company signed a framework cooperation agreement with Lishui Zhelin Trade Co., Ltd. (“Zhelin Trade”), which is valid for 4 years. Zhelin Trade is located in the agricultural product distribution center in Liandu District - Southwest Zhejiang Agricultural Trade City, which has convenient logistics and timely agricultural product information. Therefore, the cooperation agreement stipulates that Zhelin Trade will process and deliver edible mushroom products on behalf of Zhelin Trade, and the Company is required to make advance payment to ensure the timeliness of goods supply and delivery. Many competitors of the Company and other large buyers go there to source their supplies. Family farms and co-operatives traditionally request advance payments to secure supplies. By making advance payments to these suppliers, the Company is also able to lock in a more favorable price for premium quality than would be available in the open market. Allowance for doubtful accounts of $3,258 and nil was made for certain advances to suppliers as of September 30, 2022 and 2021. The Framework Agreements only provide general guidelines. Actual prices are negotiated and agreed upon in individual purchase orders, and are typically set at market prices based on the quality grade and quantities determined and agreed with the suppliers. Prices may vary based on market demand and crop condition etc. The Company can generally secure the premium quality raw material supplies at prices slightly higher than the typical market prices for average quality raw materials. The quality of supplies must meet standardized specifications of both the mushroom industry and standards set by the Company. The Company advances certain initial payments based on its estimated purchase plan from these suppliers and additional advances based on individual purchase orders placed. The Company pays advances for no other reason than to secure an adequate supply of dried mushrooms to meet its sales demands. The Company’s purchase orders require that the advances shall be refunded by suppliers if they fail to produce any dried mushrooms or fail to deliver supplies to the Company timely. Advances to suppliers are carried at cost and evaluated for recoverability. The realizability evaluation process is similar to that of the lower of cost or net realizable value evaluation process for inventories. The Company periodically evaluates its advances for recoverability by monitoring suppliers’ ability to deliver a sufficient supply of mushrooms as well as current crop and market condition. This includes analyzing historical quantity and quality of production with monitoring of crop information provided by the Company’s field personnel related to weather or disaster or any other reason. If for any reason the Company believes that it will not receive supplies of the contracted volumes, the Company will assess its advances for any likelihood of recoverability and adjust advances on its financial statements at the lower of cost or estimated recoverable amounts. The advances are made primarily to these suppliers, which are co-operatives formed by many family farms, with which the Company has had long-term relationships over the years. If any of these family farms fail to deliver supplies, the Company would expect to receive a refund of the advances through these suppliers. The Company accrues for any allowance for possible loss on advances when there is doubt as to the collectability of the refund. As of February 07, 2023, approximately $16.3 million, or 35.5% has been utilized, and the remaining balance is expected to be utilized by September 2023. The Company continuously makes advances to its suppliers on a rolling basis, which typically represent 30% of the total amount of each purchase order. The Company may maintain its outstanding advance payments at a relatively high level going forward because the Company anticipates continuous large orders from its customers. |
Inventories, net
Inventories, net | 12 Months Ended |
Sep. 30, 2022 | |
Inventories, net | |
Inventories, net | Note 6 - Inventories, net Inventories, net, from the Company’s continuing operations consisted of the following: As of As of September 30, September 30, 2022 2021 Raw materials $ 620,252 $ 1,070,837 Packaging materials 63,703 56,723 Finished goods 81,975 243,980 Inventory 765,930 1,371,540 Less: allowance for inventory reserve (49,652 ) - Inventory, net $ 716,278 $ 1,371,540 |
Other receivable
Other receivable | 12 Months Ended |
Sep. 30, 2022 | |
Other receivable | |
Other receivable | Note 7 - Other receivable On November 5, 2021, one of the Company’s subsidiaries singed an Equity Transfer Framework Agreement to invest 15.97% interest in an entity, Shanghai Jiaoda Onlly Co., Ltd., from four third parties for a total consideration of RMB509.6 million (approximately $71.6 million). On November 5, 2021, the Company paid a deposit of RMB50 million ($7.0 million) as a prepayment for the acquisition. However, the Company decided to withdraw from the investment due to the adjustment of its business strategy and a third party is willing to undertake the above-mentioned investment. Upon consummation of the investment by that third party, the above-mentioned deposit will be returned to the Company from the seller and the Company may charge that third party with an interest of 6.5% per annum on that deposit counting from the payment date. The Company received RMB50 million ($7.0 million) in full on October 12, 2022. As of September 30, 2022, interest receivable amounted to RMB2.9 million ($0.4 million). |
Property, plant and equipment,
Property, plant and equipment, net | 12 Months Ended |
Sep. 30, 2022 | |
Property, plant and equipment, net | |
Property, plant and equipment, net | Note 8 - Property, plant and equipment, net Property, plant and equipment from the Company’s continuing operations, stated at cost less accumulated depreciation, consisted of the following: As of As of September 30, September 30, 2022 2021 Plant, machinery and equipment $ 64,449 $ 70,113 Transportation equipment 49,241 54,362 Office equipment 20,254 21,474 Subtotal 133,944 145,949 Accumulated depreciation (89,076 ) (66,467 ) Total $ 44,868 $ 79,482 Depreciation expense was $32,303, $22,332 and $22,474 for the years ended September 30, 2022, 2021 and 2020, respectively. On September 27, 2021, Farmmi Supply Chain entered into an acquisition agreement with Ganzhou Tengguang Agriculture and Forestry Development Co., Ltd., a third party, to acquire all the shares of Jiangxi Xiangbo for a total price of RMB70 million ($11 million) based on the Company’s strategy to expand its forest related business. The acquisition closed on October 25, 2021 when the Company obtained 100% of its equity interest. |
Loans
Loans | 12 Months Ended |
Sep. 30, 2022 | |
Loans | |
Loans | Note 9 - Loans Short-term and long-term loans from the Company’s continuing operations consist of the following: As of As of September 30, September 30, 2022 2021 Short-term loan Zhejiang Mintai Commercial Bank (Hangzhou Branch) (1) - $ 2,172,766 Total short-term loan - 2,172,766 Long-term loans - current portion Bank of Beijing (Hangzhou Branch) (2) $ 1,124,622 - China Resources Shenzhen Investment Trust Co., Ltd. (3) and (5) 159,321 - Jiangsu Suning Bank (4) 140,578 - Huaneng Guicheng Trust Co., Ltd. (6) 80,832 - Total long-term loans - current portion 1,505,353 - Long-term loans - non-current portion Jiangsu Suning Bank (4) 140,578 - China Resources Shenzhen Investment Trust Co., Ltd. (5) 93,719 142,264 Huaneng Guicheng Trust Co., Ltd. (6) 57,988 - Total long-term loans - non-current portion 292,285 142,264 Total short-term and long-term loans $ 1,797,638 $ 2,315,030 ___________ (1) The loan in the amount of RMB14 million ($2 million) from Zhejiang Mintai Commercial Bank (Hangzhou Branch), was facilitated on August 5, 2021 through Nongyuan, a subsidiary of the Company, as working capital for nine months, with the original maturity of July 5, 2022 at an annual effective interest rate of 7.056%. This loan was fully repaid on maturity. The loan is guaranteed by Ci Ge Ma Holdings (Hangzhou) Co., Ltd., and Aijiang Wang and is secured by a real property owned by Xinyang Wang, the 100% shareholder of Nongyuan Network. (2) On April 6, 2022, Nongyuan, a subsidiary of the Company, entered into a secured revolving loan agreement with Bank of Beijing (Hangzhou Branch) borrowing RMB8 million ($1.1 million) as working capital with original maturity of April 5, 2026 at an annual effective interest rate of 4.8%. The loans of RMB8 million ($1.1 million) were drawn down on April 21, 2022 which has a maturity date on April 20, 2023. The loan is guaranteed by Ms Xinyang Wang, the 100% shareholder of Nongyuan Network, for up to RMB16 million ($2.2 million) of the outstanding principal and interest and is collateralized by a property owned by Ms Xinyang Wang which has a valuation of RMB19.2 million ($2.7 million). (3) The revolving loan in the amount of RMB1 million ($157,746) from China Resources Shenzhen Investment Trust Co., Ltd., was facilitated on April 30, 2021 through Farmmi Food, a subsidiary of the Company, as working capital for two years, with the original maturity of April 28, 2023 at an annual effective interest rate of 10.8%. As of September 30, 2022, the outstanding amount of the revolving loan was RMB0.3 million (approximately $46,859). This revolving loan is guaranteed by a related party, Mr. Dehong Zhang, a legal representative of Farmmi Food. (4) On September 2, 2022, Farmmi Technology, a subsidiary of the Company, entered into a secured loan agreement with Jiangsu Suning Bank borrowing RMB2 million (approximately $281,156) as working capital with original maturity of August 29, 2027 at an annual effective interest rate of 12%. Principal repayment is required to be repaid on a monthly basis, of which RMB1 million ($0.1 million) will be due within one year while the remaining principal will be due over one year. This loan is guaranteed by the CEO of the Company, Ms Yefang Zhang on the outstanding principal and interest. (5) On July 1, 2022, Farmmi Agricultural, a subsidiary of the Company, entered into two secured loan agreements with China Resources Shenzhen Investment Trust Co., Ltd. borrowing RMB1.6 million ($0.2 million) as working capital with original maturity of July 1, 2024 at an annual effective interest rate of 14.4%. Principal repayment is required to be repaid on a monthly basis, of which RMB1.4 million ($0.2 million) will be due within one year while the remaining principal will be due over one year. These loans are guaranteed by a related party, Mr. Dehong Zhang, a legal representative of Farmmi Agricultural for up to RMB3 million ($0.4 million) of the outstanding principal and interest. (6) On August 14, 2022, Farmmi Agricultural, a subsidiary of the Company, entered into two secured loan agreements with Huaneng Guicheng Trust Co., Ltd. borrowing RMB1.2 million ($0.2 million) as working capital with original maturity of August 1, 2024 at an annual effective interest rate of 14.4%. Principal repayment is required to be repaid on a monthly basis, of which RMB0.6 million ($0.08 million) will be due within one year while the remaining principal will be due over one year. These loans are guaranteed by a related party, Mr. Dehong Zhang, a legal representative of Farmmi Agricultural for up to RMB3 million ($0.4 million) of the outstanding principal and interest. Interest expenses amounted to $134,144, $53,009 and $166,089 for the years ended September 30, 2022, 2021 and 2020, respectively. |
Convertible promissory note and
Convertible promissory note and derivative liability | 12 Months Ended |
Sep. 30, 2022 | |
Convertible promissory note and derivative liability | |
Convertible promissory note and derivative liability | Note 10 - Convertible promissory note and derivative liability On September 26, 2022, the Company completed a $6.42 million convertible promissory note with an institutional investor (the “Investor”). Pursuant to the Securities Purchase Agreement, dated as of September 26, 2022, the Company issued and sold to the Investor a convertible promissory note of $6.42 million due on September 25, 2023, convertible into ordinary shares, $0.025 par value per share, at a discount of $0.42 million. Upon issuance, this convertible promissory note converts at the 80% of the market price. The Company accounted for this conversion feature as a derivative liability. In connection herewith, the Company recorded a derivative liability of $3.87 million and a debt discount of $3.87 million upon issuance of this convertible promissory note. As of September 30, 2022, the fair value of this derivative liability was $3.45 million, the change in fair value of derivative liability of $0.42 million was recorded in other income. The debt discount was amortized over the term of the convertible promissory note and, as of September 30, 2022 the Company recorded amortization of debt issuance cost of $48,160 in other expenses. As of September 30, 2022, the balance of the convertible promissory note, net of amortization, amounted to $2.18 million. Subsequent to year end, the Company received comments from the Staff of NASDAQ Listing Qualifications that the Note did not provide for a floor price for the possible future conversions and that a future priced security without a floor price has public interest implications pursuant to NASDAQ Listing Rule 5101 (the “Rule”); management of the Company has determined that the floor price under the Note is assumed to be $0.12, which is calculated based on an 80% discount of the Nasdaq Minimum Price of $0.5785 on the date of the Company’s entry into the Agreement with the Investor; and the Company believes it to be in the best interests of the Company and the shareholders that the Company shall repay the Note in cash in the event conversions would result in the aggregate effective conversion price falling below $0.12. |
Convertible notes payable
Convertible notes payable | 12 Months Ended |
Sep. 30, 2022 | |
Convertible notes payable | |
Convertible notes payable | Note 11 - Convertible notes payable On November 1, 2018, the Company completed a $7.5 million private placement with an institutional investor (the “Buyer”). Pursuant to the Securities Purchase Agreement, dated as of November 1, 2018 (the “Securities Purchase Agreement”), the Company issued and sold to the Buyer an aggregate of $7.5 million of senior convertible notes due on April 1, 2020 (the “Notes”) and warrants (the “Investor Warrants”) to purchase an aggregate of 800,000 of the Company’s ordinary shares, $0.001 par value per share (“Ordinary Shares”). Additionally, the Company issued warrants to purchase 10% of the shares placed under the Notes (initially 119,808) to the placement agent, at an exercise price of $7.183 per share (the “Placement Agent Warrants”). The Placement Agent Warrants have a term of four years and are subject to adjustment under certain events. The Notes were initially convertible into 1,198,084 Ordinary Shares at the rate of $6.26 per Ordinary Share, which rate is subject to adjustment as referenced in the form of Notes. The Notes bear interest at 10% per year. The Investor Warrants are exercisable by the holder thereof at any time on or after November 1, 2018 and before November 1, 2022. One year from the date of issuance of the Investor Warrants, the Exercise Price of the Investor Warrants will be lowered to the then-current Market Price (as such term is defined in the Notes) of an Ordinary Share, if such Market Price is less than the initial Exercise Price of $6.53 per Ordinary Share. On March 10, 2020, the Company adjusted the warrant exercise price of the Investor Warrants and the Placement Agent Warrants to $2 per Ordinary Share according to the terms of these warrants. On July 10, 2020, according to the terms of the Placement Agent Warrants, the Company adjusted the number of shares underlying the Placement Agent Warrants from 119,808 to 812,694, ten percent (10%) of the number of Ordinary Shares issued by the Company in repayment of principal under the Notes. At the time of issuance, the Company allocated the proceeds to the Notes and Investor Warrants based on their relative fair values, and evaluated the intrinsic value of the beneficial conversion feature (“BCF”) associated with the conversion feature of the Notes. The Investor Warrants and BCF were recorded into additional paid-in capital. The Investor Warrants were treated as a discount on the Notes and were valued at $1,496,153. Additionally, the Notes were considered to have an embedded BCF because the effective conversion price was less than the fair value of the Company’s common stock on November 1, 2018. The value of the BCF was $670,618 and was also recorded as a discount on the Notes. Hence, in connection with the issuance of the Notes and the Investor Warrants, together with other issuance costs, the Company recorded a total debt discount of $3,206,932 that was amortized over the term of the Notes. The Company repaid $2.6 million in cash for the Notes and $6.1 million (including principal and interest) was converted into 8,585,702 shares as of June 22, 2020. At September 30, 2020, the Notes balance was Nil. On March 29, 2021, May 4, 2021, September 20, 2021 and February 28, 2022, the Company adjusted the warrant exercise price of the Investor Warrants and the Placement Agent Warrants to $1.15, $0.30, $0.22 and $0.20 per Ordinary Share according to the terms of these warrants, respectively. On May 31, 2022, the Company consolidated its ordinary share at the ratio of one-for-twenty-five and, as a result, the warrant exercise price was adjusted to $5 per Ordinary Share. The Company measured the modified warrants of each date and recognized a fair value totaled of $462,592. |
Shareholders Equity
Shareholders Equity | 12 Months Ended |
Sep. 30, 2022 | |
Shareholders Equity | |
Shareholders' Equity | Note 12 -Shareholders’ Equity Ordinary shares On September 12, 2020, the authorized share capital of the Company was increased from 20,000,000 ordinary shares of $0.001 par value each to 200,000,000 ordinary shares of $0.001 par value each. On July 22, 2021, the authorized share capital of the Company was increased from 200,000,000 ordinary shares of $0.001 par value each to 600,000,000 ordinary shares of $0.001 par value each. On May 31, 2022, the Company consolidated its ordinary share at the ratio of one-for-twenty-five. The authorized number of ordinary shares was reduced from 600,000,000 ordinary shares, $0.001 par value, to 24,000,000 ordinary shares, $0.025 par value. During the year ended September 30, 2022, the Company issued 30,000,000 ordinary shares at $0.20 per ordinary share for a gross proceed of $6,000,000 in February 2022. Warrants A summary of the status of the Company’s outstanding warrants as of September 30, 2022 and 2021 and changes during the years then ended are presented below: Weighted Weighted average Number average Total remaining of exercise intrinsic contractual warrants price value life (in years) Outstanding as of September 30, 2021 1,612,694 $ 0.22 $ 391,078 1.1 Outstanding as of September 30, 2022 1,612,694 $ 0.20 - 0.1 Warrants exercisable as of September 30, 2022 1,612,694 $ 5.00 - 0.1 On March 29, 2021, May 4, 2021, September 20, 2021 and February 28, 2022, the Company adjusted the warrant exercise price of the Investor Warrants and the Placement Agent Warrants to $1.15, $0.30, $0.22 and $0.20 per Ordinary Share according to the terms of these warrants, respectively. The Company measured the modified warrants of each date and recognized a fair value of $7,328 for the year ended September 30, 2022. The fair value of the warrants has been estimated using Black-Scholes option pricing model. Inherent in the assumptions related to expected stock price volatility, expected life, risk-free interest rate and dividend yield as presented below: For the Years Ended September 30, 2022 2021 2020 Exercise price $5 - $5.5 $5.50 - $7.50 $50.00 - $179.58 Stock price $3.25 - $9.75 $5.25 - $27.00 $17.00 - $18.00 Term (in years) 0.1 - 1.1 1.14 - 1.59 2.31 - 2.64 Volatility 137% 108.36% - 146.04% 99.55% - 113.25% Risk-free interest rate 0.09% - 0.69% 0.06% - 0.14% 0.16% - 0.58% Dividend yield - - - The fair value of the Investor Warrants and Placement Agent Warrants was computed using the Black-Scholes option-pricing model. Variables used in the option-pricing model include (1) risk-free interest rate of 2.94% at the date of grant, (2) expected warrant life of 4 years, (3) expected volatility of 72.57%, and (4) expected dividend yield of 0. The Investor Warrants and Placement Agent Warrants were expired on October 31, 2022 without being exercised as they are out-of-money. Share incentive plan The Company established a pool for shares and share options for employees. This pool contains shares and options to purchase 1,168,000 ordinary shares, equal to 10% of the number of ordinary shares outstanding at the conclusion of the initial public offering. Subject to approval by the Compensation Committee of our Board of Directors, the Company may grant shares or options in any percentage determined for a particular grant. Any options granted will vest at a rate of 20% per year for five years and have a per share exercise price equal to the fair market value of one of ordinary shares on the date of grant. For the year ended September 30, 2021, 596,600 ordinary shares were issued to four employees and $805,410 was accounted as share-based compensation expense in general and administration expenses. As of September 30, 2022, the remaining ordinary shares available to be issued are 571,400 and, after the share consolidation on May 31, 2022, the remaining ordinary shares available to be issued are 22,856. On July 22, 2021, the Company’s shareholders approved the 2021 Stock Incentive Plan (the “2021 Plan”) and authorized the Company to reserve a total of 40,000,000 unissued ordinary shares (the “Shares”) for issuance under the 2021 Plan. On February 14, 2022, the Company filed a Form S-8 to issue 10,000,000 Shares under the 2021 Plan to certain employees, all of which had been issued. On February 15, 2022, the Company cancelled the reserved but unissued 30,000,000 Shares under the 2021 Plan and released the reservation of such Shares. Share-based compensation expenses related to the restricted share units granted was recognized with the amount of $2,000,000 for the year ended September 30, 2022 in general and administration expenses. Statutory reserve The Company is required to make appropriations to reserve funds, comprising the statutory surplus reserve and 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 entities’ registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors. As of September 30, 2022 and 2021, the balance of the required statutory reserves was $1,153,813 and $973,555, respectively. Noncontrolling interest The Company’s noncontrolling interest of 3.85% in Forest Food as of September 30, 2021, respectively, consists of the following: As of As of September 30, September 30, Non-controlling interest 2022 2021 Paid-in capital - $ 107,461 Additional paid-in capital - 807,953 Foreign currency translation gain (loss) attributed to noncontrolling interest - 14,588 Net loss attributed to noncontrolling interest - (13,496 ) Total noncontrolling interest - $ 916,506 |
Taxes
Taxes | 12 Months Ended |
Sep. 30, 2022 | |
Taxes | |
Taxes | Note 13 - Taxes Corporation income tax (“CIT”) The Company is subject to income taxes on an entity basis on income derived from the location in which each entity is domiciled. FAMI is incorporated in the Cayman Islands as an offshore holding company and is not subject to tax on income or capital gain under the laws of the Cayman Islands. Farmmi International is incorporated in Hong Kong as a holding company with no activities. Under the Hong Kong tax laws, an entity is not subject to income tax if no revenue is generated in Hong Kong. In China the Corporate Income Tax Law generally applies an income tax rate of 25% to all enterprises. Farmmi Agricultural and Farmmi Supply Chain and are subject to corporate income tax at a statutory rate of 25% on net income reported after certain tax adjustments. Nongyuan Network, Farmmi Technology, Farmmi E-Commerce and Farmmi Biotech are approved by local government as small-scaled minimal profit enterprises. Once an enterprise meets certain requirements and is identified as a small-scale minimal profit enterprise, the part of its taxable income not more than RMB1 million is subject to a reduced rate of 5% and the part between RMB1 million and 3 million is subject to a reduced rate of 10%. FLS Mushroom, Nongyuan Network, Farmmi Agricultural, Farmmi Technology, Farmmi Food, Farmmi Biotech and Farmmi Supply Chain are entities with primary operating activities. Farmmi Enterprise, Farmmi Ecology and Farmmi Holdings are holding companies with no activities. Farmmi E-commerce, Farmmi Medical Health, Farmmi Health Development, Yitang Mediservice and Yiting Meditech are dormant companies with no activities. Under the Enterprise Income Tax (“EIT”) Law of PRC, domestic enterprises and foreign investment enterprises 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. EIT is typically governed by the local tax authority in China. Each local tax authority at times may grant special tax treatment to local enterprises as a way to encourage specific agricultural industry and stimulate local economy. FLS Mushroom and Farmmi Food are engaged in agricultural industry and their income are tax exempted. Nongyuan Network, Farmmi Technology, Farmmi E-Commerce and Farmmi Biotech are subject to corporate income tax at a reduced rate of 5% as approved by local government as small-scaled minimal profit enterprises. Net income of $2.8 million, $4.02 million and $3.84 million was exempt from income tax for the years ended September 30, 2022, 2021 and 2020, respectively. The estimated tax savings as the result of the tax break for the years ended September 30, 2022, 2021 and 2020 amounted to $691,394, $1,004,365 and $960,097, respectively. Per share effect of the tax exemption were $0.03, $0.01 and $0.06 for the years ended September 30, 2022, 2021 and 2020, respectively. The following table reconciles PRC statutory rates to the Company’s effective tax rates for the years ended September 30, 2022, 2021 and 2020: For the Years Ended September 30, 2022 2021 2020 Statutory PRC income tax rate 25.0 % 25.0 % 25.0 % Effect of income tax exemption (a) (50.8 )% (41.0 )% (27.5 )% Favorable tax rate impact (a) (14.8 )% (0.3 )% (1.5 )% Permanent difference 0.1 % (8.2 )% 0.0 % Changes of deferred tax assets valuation allowances 7.2 % 2.0 % 5.3 % Non-PRC entities not subject PRC income tax 27.7 % 23.6 % 2.8 % Total (5.6 )% 1.1 % 4.1 % ____________ (a) FLS Mushroom, Farmmi Food and Farmmi EAST are engaged in agricultural industry and their income are tax exempted. Farmmi Technology, Farmmi E-Commerce, Farmmi Biotech, Nongyuan Network and its subsidiaries, subject to corporate income tax at a reduced rate of 5% as approved by local government as small-scaled minimal profit enterprises. Corporation income tax (“CIT”) (Continued) The provision for income tax from the Company’s continuing operations consists of the following: For the Years Ended September 30, 2022 2021 2020 Current income tax provision $ 58,266 $ 25,571 $ 16,753 Deferred income tax provision (176,633 ) - - Total $ (118,367 ) $ 25,571 $ 16,753 Deferred tax liabilities and assets attributable to different tax jurisdictions are not offset. Components of deferred tax assets and liabilities were as follows: As of As of September 30, September 30, 2022 2021 Net operating loss (“NOL”) carry forward $ 168,126 $ 13,569 Allowance for inventory 12,413 - Allowance for doubtful accounts 836 - Valuation allowance (18,168 ) (13,569 ) Total $ 163,207 - The deferred tax expense (benefit) is the change of deferred tax assets and deferred tax liabilities resulting from the temporary difference between tax basis and U.S. GAAP. Certain subsidiaries had a cumulative net operating loss of approximately $0.7 million as of September 30, 2022, which may be available to reduce future taxable income. Deferred tax assets were primarily the result of these net operating losses. As of each reporting date, management considers evidence, both positive and negative, that could affect its view of the future realization of deferred tax assets. On the basis of this evaluation, a valuation allowance of $18,168 was recorded against the gross deferred tax asset balance at September 30, 2022. The amount of the deferred tax asset is considered unrealizable because it is more likely than not that certain subsidiaries will not generate sufficient future taxable income to utilize the net operating loss. |
Concentration of major customer
Concentration of major customers and suppliers | 12 Months Ended |
Sep. 30, 2022 | |
Concentration of major customers and suppliers | |
Concentration of major customers and suppliers | Note 14 - Concentration of major customers and suppliers For the year ended September 30, 2022, two major customers accounted for approximately 31% and 16% of the Company’s total sales, respectively. For the year ended September 30, 2021, two major customers accounted for approximately 64% and 14% of the Company’s total sales, respectively. For the years ended September 30, 2020, one major customer accounted for approximately 63% of the Company’s total sales. Any decrease in sales to this major customer may negatively impact the Company’s operations and cash flows if the Company fails to increase its sales to other customers. As of September 30, 2022, two major customers accounted for approximately 65% and 34% of the Company’s accounts receivable balance, respectively. As of September 30, 2021, two major customers accounted for approximately 75% and 18% of the Company’s accounts receivable balance, respectively. For the year ended September 30, 2022, two major suppliers accounted for approximately 23% and 21% of the total purchases, respectively. For the year ended September 30, 2021, four major suppliers accounted for approximately 37%, 20%, 18% and 16% of the total purchases, respectively. For the year ended September 30, 2020, two major suppliers accounted for approximately 41% and 39% of the total purchases, respectively. As of September 30, 2022, four major suppliers accounted for approximately 35%, 26%, 15% and 15% of the Company’s advances to suppliers’ balance. As of September 30, 2021, four major suppliers accounted for approximately 32%, 28%, 24% and 16% of the Company’s advances to suppliers’ balance. |
Leases
Leases | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Leases | Note 15 - Leases The Company rent its factories in Lishui City Zhejiang Province from a related party, Zhejiang Tantech Bamboo Technology Co., Ltd., for processing dried edible fungi and a floor in an office building in Hangzhou from third parties. As of September 30, 2022 and 2021, the remaining average lease term was an average of 8.2 years and 7.9 years, respectively. The Company’s lease agreements do not provide a readily determinable implicit rate nor is it available to the Company from its lessors. Instead, the Company estimates its incremental borrowing rate based on actual incremental borrowing interest rates from financial institutions in order to discount lease payments to present value. The weighted average discount rate of the Company’s operating leases was 10.0% per annum and 9.3% per annum, as of September 30, 2022 and 2021, respectively. Supplemental balance sheet information related to operating leases from the Company’s continuing operations was as follows: As of As of September 30, September 30, 2022 2021 Right-of-use assets under operating leases $ 534,351 $ 776,665 Operating lease liabilities, current 46,543 155,532 Operating lease liabilities, non-current 517,156 605,793 Total operating lease liabilities $ 563,699 $ 761,325 As of September 30, Twelve months ending September 30, 2022 2023 $ 99,850 2024 99,850 2025 99,850 2026 99,850 2027 99,850 Thereafter 331,924 Total Future minimum lease payments 831,174 Less: Imputed interest (267,475 ) Total $ 563,699 |
Segment reporting
Segment reporting | 12 Months Ended |
Sep. 30, 2022 | |
Segment reporting | |
Segment reporting | Note 16 - Segment reporting ASC 280, Segment Reporting The Company uses the “management approach” in determining reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company currently has three main products from which revenue is earned and expenses are incurred: Shiitake Mushroom, Mu Er Mushroom and other edible fungi and other agricultural products. The operations of these product categories have similar economic characteristics. In particular, the Company uses the same or similar production processes; sells to the same or similar type of customers and uses the same or similar methods to distribute these products. The resources required by these products share high similarity. Switching cost between different products is minimal. Production is primarily determined by sales orders received and market trend. Therefore, management, including the chief operating decision maker, primarily relies on the revenue data of different products in allocating resources and assessing performance. Based on management’s assessment, the Company has determined that it has only one operating segment and therefore one reportable segment as defined by ASC. Since June 2021, the Company’s operations were expanded into bulk agricultural commodity trading, such as cotton and corn bulk trading, The Company obtains control over these commodities as a principal from its suppliers before selling these commodities to its customers. The following table presents revenue by major product categories (from third parties and related party) from the Company’s continuing operations for the years ended September 30, 2022, 2021 and 2020, respectively: For the Years Ended September 30, 2022 2021 2020 Shiitake $ 19,859,533 $ 20,494,362 $ 15,098,877 Mu Er 19,123,152 16,524,723 12,082,365 Cotton 47,950,345 - - Corn 10,778,197 1,796,006 - Other products 1,502,152 474,860 1,182,721 Total $ 99,213,379 $ 39,289,951 $ 28,363,963 1. For the year ended September 30, 2021, other products of $2,270,866 contained $1,796,006 of revenue generated from sales of corn, which was reclassified into $1,796,006 as corn and $474,860 as other products for comparatives. |
Related party transactions
Related party transactions | 12 Months Ended |
Sep. 30, 2022 | |
Related party transactions | |
Related party transactions | Note 17 - Related party transactions The relationship and the nature of related party transactions are summarized as follow: Name of related party Relationship to the Company Nature of transactions Forasen Group Co., Ltd. ("Forasen Group") Owned by Mr Zhengyu Wang, the Chairman of Board of Directors of the Company Purchases from the Company Zhejiang Tantech Bamboo Technology Co., Ltd Under common control of Mr Zhengyu Wang and Ms Yefang Zhang, CEO of the Company Lease factory building to the Company; purchases from the Company Hangzhou Forasen Technology Co., Ltd Controlled by Mr. Zhengyu Wang Sublease of office space from the Company. Xinyang Wang Shareholder of Nongyuan Network Provide a real property as additional security for a short-term bank. Dehong Zhang CEO of the Company, Ms Yefang Zhang's brother Provide a guarantee as an additional security for a revolving loan Due to related parties from the Company’s continuing operations consisted of the following: As of As of September 30, September 30, 2022 2021 Farmnet - $ 54,600 Zhejiang Tantech Bamboo Technology Co., Ltd. 948 3,032 Total $ 948 $ 57,632 As of September 30, 2022 and 2021, the balance of due to related parties mainly consisted of expenses paid on behalf of a related party and advances from the Company’s principal shareholder for working capital purposes during the Company’s normal course of business, respectively. These payments and advances are non-interest bearing and due on demand. Sales to related parties The Company periodically sells merchandise to its affiliates during the ordinary course of business. For the years ended September 30, 2022, 2021 and 2020, the Company recorded sales to related parties of $1,016, $1,952 and $7,200, respectively. Operating lease from related parties In October 2009, the Company entered into a lease agreement with Forasen Group for leasing the factory building. The lease term was 10 years with monthly rent of RMB 22,400 (equivalent of $3,293). The lease agreement was renewed in October 2019 for another 10 years with the same monthly rent. This lease agreement was terminated on July 31, 2020. In July 2020, the Company entered into a lease agreement with Zhejiang Tantech Bamboo Technology Co., Ltd. for leasing the factory building. The lease term is 10 years with annual rent of RMB 459,360 (equivalent of $67,526). This lease agreement was terminated on July 13, 2021. In August 2020, the Company entered into a one-year lease agreement with Forasen Group for leasing a processing facility, with monthly rent of RMB 9,200 (equivalent of $1,313). This lease agreement was not renewed upon maturity. In July 2021, the Company entered into two lease agreements with Zhejiang Tantech Bamboo Technology Co., Ltd. for leasing the factory building of 1,180 square meters and 1,914 square meters. Both lease terms are 10 years from August 1, 2021 to July 31, 2031 with annual rent of RMB 168,854 ($25,690) and from July 14, 2021 to July 13, 2031 with annual rent of RMB 421,431 ($64,117), respectively. For the years ended September 30, 2022 and 2021, the Company incurred lease expenses of $88,847, $86,556 and 47,785, respectively. Sublease to a related party In August 2020, the Company entered into a sublease agreement with Hangzhou Forasen Technology Co., Ltd to sublease its office space. The lease term is two years with annual rent of RMB 283,258 (equivalent of $41,639). This lease was terminated on February 14, 2022. For the years ended September 30, 2022, 2021 and 2020, the Company recorded lease income of $14,262, $40,026 and $5,791, respectively. Guarantees provided by related parties The Company’s related parties provide guarantees for the Company’s short-term bank loans (see Note 9). The Company’s related parties also pledged their properties as collaterals to safeguard the Company’s short-term bank loans (see Note 9). The Company and Forasen Group signed a Non-Competition Agreement which provides that Forasen Group should not engage in any business that the Company engages in, except purchasing products from us. In addition, Mr. Wang and Ms. Zhang signed a Non-Competition Agreement with the Company and Tantech which provides that Mr. Wang and Ms. Zhang shall not vote in favor or otherwise cause Tantech to engage in the business that the Company conducts. |
Disposition of a subsidiary
Disposition of a subsidiary | 12 Months Ended |
Sep. 30, 2022 | |
Disposition of a subsidiary | |
Disposition of a subsidiary | Note 18 - Disposition of a subsidiary On September 27, 2021, an agreement was signed to divest 100% interest in Forest Food to a third party for total cash consideration of RMB 18.2 million (approximately $2.82 million) on October 1, 2021. As of September 30, 2021, the net assets of Forest Food were RMB 17.7 million (approximately $2.75 million), the gain of disposal of discontinued operations was RMB 0.48 million (approximately $74,000). The divestment was completed on October 1, 2021. The Company received the whole proceed of disposal on November 5, 2021. The following is a reconciliation of the carrying amounts of major classes of assets and liabilities held for sale in the consolidated balance sheet as of September 30, 2022 and 2021. As of As of September 30, September 30, 2022 2021 Carrying amounts of major classes of assets held for sale: Cash - $ 10,610 Accounts receivable, net - 168,203 Advances to suppliers - - Due from related parties - 3,913,260 Inventories - - Other receivables - 27,074 Property, plant and equipment - 173,289 Operating lease right-of-use assets, net - - Total assets of disposal group - $ 4,292,436 Carrying amounts of major classes of liabilities held for sale: Short-term bank loan - $ 1,299,104 Accounts payable - 181,391 Other current liabilities - 61,828 Total liabilities of disposal group - $ 1,542,323 The following is a reconciliation of the amounts of major classes of operations classified as discontinued operations in the consolidated statements of operations and other comprehensive income (loss) for the years ended September 30, 2022 and 2021. For the Years Ended September 30, 2022 2021 Revenue - $ 2,022,846 Cost of revenues - (1,783,156 ) Gross profit - 239,690 Operating expenses - (221,586 ) Income from operations - 18,104 Other expenses - (69,875 ) Income before income taxes - (51,771 ) Provision for income taxes - 419 Net loss from discontinued operations, net of tax - $ (51,352 ) |
Subsequent events
Subsequent events | 12 Months Ended |
Sep. 30, 2022 | |
Subsequent events | |
Subsequent events | Note 19 - Subsequent events 1. On September 30, 2022, an agreement was signed to divest 100% interest in FLS Mushroom to a third party for total cash consideration of RMB 24.1 million (approximately $3.4 million) on October 1, 2022. The transaction was completed on October 1, 2022. 2. On November 14, 2022, Ningbo Farmmi Baitong Trade Co., Ltd (“Ningbo Farmmi Trade”) was established under the laws of the PRC. Farmmi Agricultural owns 100% equity of Ningbo Farmmi Trade. 3. On December 30, 2022, Farmmi Food, a subsidiary of the Company, entered into a secured loan agreements with Huaneng Guicheng Trust Co., Ltd. borrowing RMB0.86 million ($0.12 million) as working capital with original maturity of December 28, 2024 at an annual effective interest rate of 16.56%. Principal repayment is required to be repaid on a monthly basis. This loan is guaranteed by a related party, Mr. Dehong Zhang, a legal representative of Farmmi Food. 4. On January 16,2023, Nongyuan Network, a subsidiary of the Company,obtained a secured loan from a local bank for a sum not exceeding RMB2.0 million ($0.3 million). This loan is guaranteed by a related party, Mr.Dehong Zhang, a legal representative of Farmmi Food.As of February 13, 2023, RMB2.0 million ($0.3 million) was released to the Company, with an annual effective interest rate of 5.13%and a maturity date of January 14, 2024. 5. On January 17, 2023, Farmmi Agricultural, a subsidiary of the Company, obtained a letter of credit from a local bank for a sum not exceeding RMB3.0 million ($0.4 million). No collateral is required for the letter of credit. As of February 13, 2023, RMB3.0 million ($0.4 million) was released to the Company, with an annual effective interest rate of 4.65% and a maturity date of January 17, 2024. |
Condensed Financial Information
Condensed Financial Information of the Parent Company | 12 Months Ended |
Sep. 30, 2022 | |
Condensed Financial Information of the Parent Company | |
Condensed Financial Information of the Parent Company | Note 20 - Condensed financial information of the parent company Pursuant to the requirements of Rule 12-04(a), 5-04(c) and 4-08(e)(3) of Regulation S-X, the condensed financial information of the parent company shall 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 subsidiaries 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 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 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. Such investment is presented on the condensed balance sheets as “Investment in subsidiaries” and the respective profit or loss as “Equity in earnings of subsidiaries” on the condensed statements of 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, 2022 and 2021, 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. Farmmi, Inc. Parent Company Balance Sheets As of As of September 30, September 30, 2022 2021 Assets Current assets Cash $ 4,057,179 $ 522,915 Due from related parties - - Other receivables 103,858 125,081 4,161,037 647,996 Non-current assets Investment in subsidiaries 156,151,565 160,199,022 Total assets $ 160,312,602 $ 160,847,018 Liabilities and Shareholders’ Equity Current liabilities Due to related parties, - 54,600 Convertible promissory notes 2,178,511 - Derivative liability 3,450,000 - Total liabilities 5,628,511 $ 54,600 Commitments and contingencies Shareholders’ equity Ordinary share, $0.025 par value, 24,000,000 shares authorized, 23,906,985 and 22,311,215 shares issued and outstanding at September 30, 2022 and 2021, respectivel y1 597,675 557,781 Additional paid-in capital 152,162,658 147,088,227 Retained earnings 1,923,758 13,146,410 Total shareholders’ equity 154,684,091 160,792,418 Total liabilities and shareholders’ equity $ 160,312,602 $ 160,847,018 1. On May 31, 2022, the Company consolidated its ordinary shares at the ratio of one-for-twenty-five. The weighted average number of basic ordinary shares had been retrospectively adjusted from 102,842,495 to 4,113,700 for the year ended September 30, 2021 and from 16,244,856 to 649,794 for the year ended September 30, 2020. The weighted average number of diluted ordinary shares had been retrospectively adjusted from 104,455,189 to 4,178,208 for the year ended September 30, 2021. As a result, the basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.02 to $0.59 and from $0.02 to $0.58 for the year ended September 30, 2021, respectively. For the year ended September 30, 2020, the basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.07 to $1.66. For discontinued operations, the basic and diluted loss per ordinary share had been retrospectively adjusted from ($0.00) to ($0.01) and from ($0.02) to ($0.41) for the years ended September 30, 2021 and 2020, respectively. Farmmi, Inc. Parent Company Statements of Operations For the Years Ended September 30, 2022 2021 2020 Operating expenses: General and administrative expenses $ (2,961,849) $ (2,031,506) $ (602,518) Other expenses Change in fair value of derivative liability 419,649 - - Interest expenses - - (135,867 ) Amortization of debt issuance costs (48,160 ) - (1,093,440 ) Other expenses (3,024 ) (5,672 ) (648 ) Loss from operations (2,593,384 ) (2,037,178 ) (1,832,469 ) Equity in income of subsidiaries and VIE 4,817,363 4,395,592 2,656,075 Comprehensive income attributable to the Company $ 2,223,979 $ 2,358,414 $ 823,606 Farmmi, Inc. Parent Company Statements of Cash Flows For the Years Ended September 30, 2022 2021 2020 Cash flows from operating activities Net income $ 2,223,979 $ 2,358,414 $ 823,606 Adjustments to reconcile net income to net cash used in operating activities Equity in earnings of subsidiaries (4,817,363 ) (4,395,592 ) (2,656,075 ) Amortization of debt issuance costs 48,160 - 135,867 Amortization of deferred financing costs - - 1,093,440 Change in fair value of derivative liability (419,649 ) Share-based compensation 2,007,328 1,260,674 - Other current assets 21,223 (125,081 ) - Other current liabilities 54,246 (40,000 ) 40,000 Net cash used in operating activities (882,076 ) (941,585 ) (563,162 ) Cash flows from investing activities Investing in subsidiaries (7,529,060 ) (122,726,999 ) 688,060 Net cash (used in) provided by investing activities (7,529,060 ) (122,726,999 ) 688,060 Cash flows from financing activities Net proceeds from share issuance 6,000,000 126,029,588 - Net proceeds from issuance of convertible promissory notes 6,000,000 - - Proceeds from advances from related parties - 298,297 - Repayment of advances from related parties (54,600 ) (2,138,508 ) (758,071 ) Net cash provided by (used in) financing activities 11,945,400 124,189,377 (758,071 ) Net increase (decrease) in cash and restricted cash 3,534,264 520,793 (633,173 ) Cash, beginning of year 522,915 2,122 635,295 Cash, end of year $ 4,057,179 $ 522,915 $ 2,122 |
Summary of significant accoun_2
Summary of significant accounting policies (Policies) | 12 Months Ended |
Sep. 30, 2022 | |
Summary of significant accounting policies | |
Basis of Presentation and Principles of Consolidation | The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and have been consistently applied. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. The consolidated financial statements of the Company include the financial statements of the Company, its subsidiaries, the VIEs and the subsidiaries of the VIEs. All inter-company transactions and balances between the Company, its subsidiaries, the VIEs and the subsidiaries of the VIEs have been eliminated upon consolidation. Results of subsidiaries, businesses acquired from third parties and the VIEs are consolidated from the date on which control is transferred to the Company. |
Consolidation of Variable Interest Entities | In accordance with accounting standards regarding consolidation of variable interest entities (“VIEs”), VIEs are generally entities that lack sufficient equity to finance their activities without additional financial support from other parties or whose equity holders lack adequate decision-making ability. All VIEs with which the Company is involved must be evaluated to determine the primary beneficiary of the risks and rewards of the VIE. The primary beneficiary is required to consolidate the VIE for financial reporting purposes. The Company determined that Nongyuan Network is a VIE because the Company is the primary beneficiary of risks and rewards of this VIE. The condensed consolidating table below disaggregated the Consolidated Balance Sheets of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated as of September 30, 2022 and 2021. As of September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Intercompany receivables $ 163,676,919 $ 114,994,912 - $ 140,445,311 - Current assets excluding intercompany receivables $ 91,926,232 $ 33,986 $ 57,133,125 $ 4,161,037 $ 153,254,380 Current assets $ 255,603,151 $ 115,028,898 $ 57,133,125 $ 144,606,348 $ 153,254,380 Investment in subsidiaries - $ 40,424,517 - - - Non-current assets excluding investment in subsidiaries $ 10,500,217 $ 8,484 $ 19,772 - $ 10,528,473 Non-current assets $ 10,500,217 $ 40,433,001 $ 19,772 - $ 10,528,473 Total assets $ 266,103,368 $ 155,461,899 $ 57,152,897 $ 144,606,348 $ 163,782,853 Intercompany payables $ 255,440,223 $ 109,255,668 $ 54,420,549 $ 702 - Current liabilities excluding intercompany payables $ 590,393 $ 226,814 $ 1,789,357 $ 5,682,757 $ 8,289,321 Current liabilities $ 256,030,616 $ 109,482,482 $ 56,209,906 $ 5,683,459 $ 8,289,321 Non-current liabilities $ 657,734 $ 151,707 - - $ 809,441 Total liabilities $ 256,688,350 $ 109,634,189 $ 56,209,906 $ 5,683,459 $ 9,098,762 Total shareholders' equity (net assets) $ 9,415,018 $ 45,827,710 $ 942,991 $ 138,922,889 $ 154,684,091 As of September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Intercompany receivables $ 10,263,832 $ 16,147,194 $ 582,137 $ 134,585,007 $ - Current assets excluding intercompany receivables $ 141,332,281 $ 6,658,940 $ 6,666,318 $ 647,997 $ 155,305,536 Current assets $ 151,596,113 $ 22,806,134 $ 7,248,455 $ 135,233,004 $ 155,305,536 Investment in subsidiaries $ - $ 9,016,979 $ - $ - $ - Non-current assets excluding investment in subsidiaries $ 10,126,547 $ - $ 254,818 $ - $ 10,381,365 Non-current assets $ 10,126,547 $ 9,016,979 $ 254,818 $ - $ 10,381,365 Total assets $ 161,722,660 $ 31,823,113 $ 7,503,273 $ 135,233,004 $ 165,686,901 Intercompany payables $ 151,314,338 $ 4,809,089 $ 3,785,283 $ 1,669,460 $ - Current liabilities excluding intercompany payables $ 1,682,220 $ 1,415 $ 2,408,191 $ 54,600 $ 4,146,426 Current liabilities $ 152,996,558 $ 4,810,504 $ 6,193,474 $ 1,724,060 $ 4,146,426 Non-current liabilities $ 691,808 $ - $ 56,249 $ - $ 748,057 Total liabilities $ 153,688,366 $ 4,810,504 $ 6,249,723 $ 1,724,060 $ 4,894,483 Total shareholders’ equity (net assets) $ 8,034,294 $ 27,012,609 $ 1,253,550 $ 133,508,944 $ 160,792,418 The condensed consolidating table below disaggregated the Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the financial years ended September 30, 2022, 2021 and 2020. For the year ended September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 64,795,082 $ 9,111,073 $ 25,307,224 - $ 99,213,379 Cost of revenues (60,272,018 ) (9,053,547 ) (24,449,728 ) - (93,775,293 ) Gross profit 4,523,064 57,526 857,496 - 5,438,086 Operating expenses (782,009 ) (50,344 ) (701,516 ) (2,961,849 ) (4,495,718 ) Income (loss) from operations 3,741,055 7,182 155,980 (2,961,849 ) 942,368 Other income (expenses) 560,497 20,510 213,771 368,466 1,163,244 Income (loss) before income taxes 4,301,552 27,692 369,751 (2,593,383 ) 2,105,612 Provision for income taxes 114,801 9,182 (5,616 ) - 118,367 Net income (loss) $ 4,416,353 $ 36,874 $ 364,135 (2,593,383) $ 2,223,979 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 33,068,045 $ 762,771 $ 5,459,135 $ - $ 39,289,951 Cost of revenues from continuing operations (28,847,801 ) (742,933 ) (4,589,936 ) - (34,180,670 ) Gross profit from continuing operations 4,220,244 19,838 869,199 - 5,109,281 Operating expenses 588,892 (8,940 ) (804,851 ) (2,031,506 ) (2,256,405 ) Income (loss) from operations 4,809,136 10,898 64,348 (2,031,506 ) 2,852,876 Other expenses (391,819 ) (19,990 ) (2,033 ) (5,673 ) (419,515 ) Income (loss) before income taxes 4,417,317 (9,092 ) 62,315 (2,037,179 ) 2,433,361 Provision for income taxes (8,085 ) - (17,486 ) - (25,571 ) Net income (loss) from continuing operations $ 4,409,232 $ (9,092 ) $ 44,829 $ (2,037,179 ) $ 2,407,790 For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 23,805,109 $ - $ 4,558,854 $ - $ 28,363,963 Cost of revenues from continuing operations (19,899,410 ) - (3,813,131 ) - (23,712,541 ) Gross profit 3,905,699 - 745,723 - 4,651,422 Operating expenses (921,258 ) (6,956 ) (853,607 ) (602,518 ) (2,384,339 ) Income (loss) from operations 2,984,441 (6,956 ) (107,884 ) (602,518 ) 2,267,083 Other expenses 86,810 (30,215 ) 327 (1,229,950 ) (1,173,028 ) Income (loss) before income taxes 3,071,251 (37,171 ) (107,557 ) (1,832,468 ) 1,094,055 Provision for income taxes (10,948 ) - (5,805 ) - (16,753 ) Net income (loss) from continuing operations $ 3,060,303 $ (37,171 ) $ (113,362 ) $ (1,832,468 ) $ 1,077,303 The condensed consolidating table below disaggregated the Consolidated Statements of Cash Flows of the Company into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the financial years ended September 30, 2022, 2021 and 2020. For the year ended September 30, 2022 WFOE Other that is the entities primary VIE that are beneficiary and its Consolidated consolidated of the VIE subsidiaries FAMI total Net cash (used in) provided by operating activities from continuing operations $ (14,188,275) $ (3,189,440) $ 46,404,339 $ (8,391,136) $ 20,635,488 Net cash provided by (used in) investing activities from continuing operations 1,140,848 2,738,559 (45,870,486 ) - (41,991,079 ) Net cash provided by (used in) financing activities from continuing operations 649,782 373,382 (899,449 ) 11,511,153 11,634,868 Effect of exchange rate changes on cash and restricted cash (8,345,494 ) (5,078 ) (13,108 ) - (8,363,680 ) Net (decrease) increase in cash and restricted cash (20,743,139 ) (82,577 ) (378,704 ) 3,120,017 (18,084,403 ) Cash and restricted cash from continuing operations, beginning of year 183,030 116,447 434,135 522,915 59,251,904 Cash and restricted cash from continuing operations, end of year $ (20,560,109) $ 33,870 $ 55,431 $ 4,057,179 $ 41,167,501 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 67,709,967 $ 3,246,067 $ (338,559 ) $ (123,848,583 ) $ (53,231,108 ) Net cash used in investing activities from continuing operations (9,353,935 ) (2,772,430 ) (1,363 ) - (12,127,728 ) Net cash provided by (used in) financing activities from continuing operations 144,197 (616,095 ) (1,232,191 ) 124,369,377 122,665,288 Effect of exchange rate changes on cash and restricted cash (506,653 ) 258,485 94,714 - (153,454 ) Net increase (decrease) in cash and restricted cash 57,993,576 116,027 (1,477,399 ) 520,794 57,152,998 Cash and restricted cash from continuing operations, beginning of year 183,030 420 1,913,335 2,121 2,098,906 Cash and restricted cash from continuing operations, $ 58,176,606 $ 116,447 $ 435,936 $ 522,915 $ 59,251,904 end of year For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 57,809 $ (560,411 ) $ (1,629,913 ) $ 304,897 $ (1,827,618 ) Net cash used in investing activities from continuing operations - - (82,195 ) - (82,195 ) Net cash provided by (used in) financing activities from continuing operations 10,437 560,358 3,567,505 (938,071 ) 3,200,229 Effect of exchange rate changes on cash and restricted cash 15,087 19 56,006 - 71,112 Net increase (decrease) in cash and restricted cash 83,333 (34 ) 1,911,403 (633,174 ) 1,361,528 Cash and restricted cash from continuing operations, beginning of year 99,697 454 1,932 635,295 737,378 Cash and restricted cash from continuing operations, end of year $ 183,030 $ 420 $ 1,913,335 $ 2,121 $ 2,098,906 Cash is transferred within the Company through the banking system in PRC. Under the VIE agreements, the Company intends to distribute 95% of VIE’s earnings after eliminating VIE’s accumulated losses and making appropriation of VIE’s after-tax net income into the statutory surplus reserve based on at least 10% of the after-tax net income determined in accordance with generally accepted accounting principles of the PRC. When there are retained earnings available for distribution, the distribution of VIE’s earnings will be through payment of service fees to Farmmi Agricultural, such service fee is subject to 6% value-added sales tax, other taxes of 12% which calculation is based on 6% value-added taxes and Farmmi Agricultural is subject to corporate income tax up to 25% for its net income. Under the VIE agreements, when there is a change of shareholder in VIE, amount owed by VIE to the Company should be first settled. The condensed consolidating table below quantified the transfer between FAMI, its subsidiaries, VIE and its subsidiaries, WFOE that is the primary beneficiary of the VIE and the investors for the years ended September 30, 2022, 2021 and 2020, respectively. These transfers were mainly for the purpose of providing working capital between FAMI, its subsidiaries, VIE and its subsidiaries and WFOE that is the primary beneficiary of the VIE. For the year ended September 30, 2022 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ 1,217,137 - $ 913,005 - WFOE that is the primary beneficiary of the VIE - $ 14,594,586 $ 19,188,742 - VIE and its subsidiaries - $ 6,394,084 $ 15,293,176 - Other entities that are consolidated $ 984,655 $ 26,961,378 $ 14,744,568 - For the year ended September 30, 2021 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ 45,500 $ 124,670,237 $ - WFOE that is the primary beneficiary of the VIE $ 1,668,758 $ - $ 38,204,550 $ - VIE and its subsidiaries $ - $ - $ 1,601,406 $ - Other entities that are consolidated $ 319,981 $ 24,075,199 $ 5,624,880 $ - For the year ended September 30, 2020 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ - $ 400,960 $ - WFOE that is the primary beneficiary of the VIE $ - $ - $ 1,812,810 $ - VIE and its subsidiaries $ - $ - $ 2,199,053 $ - Other entities that are consolidated $ 394,742 $ 1,832,576 $ 770,216 $ - |
Use of Estimates | In preparing the consolidated financial statements in conformity with U.S. GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year. Significant items subject to such estimates and assumptions include allowance for doubtful accounts and advances to suppliers, the valuation of inventories, the useful lives of property, plant and equipment, the valuation of beneficial conversion feature of the convertible notes, valuation of the warrants and the valuation of deferred tax assets. |
Cash | Cash includes currency on hand and deposits held by banks that can be added or withdrawn without limitation. All cash balances are in bank accounts in PRC. Cash maintained in banks within the People’s Republic of China of less than RMB0.5 million (equivalent to $70,289) per bank are covered by "deposit insurance regulation" promulgated by the State Council of the People’s Republic of China. |
Restricted Cash | The Company adopted Accounting Standards Update (“ASU”) No. 2016-18, Statement of Cash Flows: Restricted Cash |
Short-term deposit | Short-term deposit relates to fixed terms cash deposits with financial institutions with original maturities of more than three months and less than a year. As of September 30, 2022 and 2021, the Company had short-term deposit of $35,144,444 and $2,793,556, earning interest at 2.05% and 2% per annum with one year maturity on October 15, 2022 and March 23, 2022, respectively. |
Accounts Receivable, net | Accounts receivable are presented net of an allowance for doubtful accounts. The Company maintains an allowance for doubtful accounts for estimated losses. The Company reviews its accounts receivable on a periodic basis and makes general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, the Company considers many factors, including the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends. Accounts are written off after efforts at collection prove unsuccessful. As of September 30, 2022 and 2021, allowance for doubtful accounts was $7,249 and $8,094, respectively. |
Advances to Suppliers, net | Advances to suppliers represent prepayments made to ensure continuous high-quality supplies and favorable purchase prices for premium quality. These advances are directly related to the purchases of raw materials used to fulfill sales orders. The Company is required from time to time to make cash advances when placing its purchase orders. These advances are settled upon suppliers delivering raw materials to the Company when the transfer of ownership occurs. The Company reviews its advances to suppliers on a periodic basis and makes general and specific allowances when there is doubt as to the ability of a supplier to provide supplies to the Company or refund an advance. As of September 30, 2022 and 2021, allowance for doubtful accounts was $3,258 and nil, respectively. |
Inventory, net | The Company values its inventories at the lower of cost, determined on a weighted average basis, or net realizable value. The Company reviews its inventories periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. The Company recorded inventory reserve of $49,652 and nil as of September 30, 2022 and 2021, respectively. |
Biological assets | Biological assets mainly consist of bamboo forests managed for future bamboo harvest and sales, of which the Company owned 82 forest right certificates with expiry dates ranging from December 30, 2026 to December 9, 2070 and with an area of 9.6 km 2 Amortization expense was $218,317 for the year ended September 30, 2022. |
Property, Plant and Equipment, net | Property, plant and equipment are stated at cost less accumulated depreciation. The cost of an asset comprises its purchase price and any directly attributable costs of bringing the asset to its present working condition and location for its intended use. Depreciation is computed on a straight-line basis over the estimated useful lives of the related assets. The estimated useful lives for significant property and equipment are as follows: Plant, machinery and equipment 5 - 10 years Transportation equipment 4 years Office 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. |
Intangible Assets, net | Intangible assets consist primarily of purchased software. Intangible assets are stated at cost less accumulated amortization, which are amortized using the straight-line method with the estimated useful lives of three years. Amortization expenses were $31,984, $46,085 and $42,758 for the years ended September 30, 2022, 2021 and 2020, respectively. Estimated amortization expenses of the existing intangible assets for the next five years are $6,748, nil, nil, nil and nil for the years ending September 30, 2023, 2024, 2025, 2026 and 2027, respectively. |
Impairment of Long-lived Assets | The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for fiscal years ended September 30, 2022, 2021 and 2020. |
Revenue Recognition | The Company follows ASU 2014-09 Revenue from Contracts with Customers 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. All of the Company’s contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per ton. The Company’s contract liabilities primarily include advance from customers. As of September 30, 2022 and 2021, the contract liabilities are $637,165 and $12,177, respectively, and included in other current liabilities on the consolidated balance sheets. For fiscal years ended September 30, 2022, 2021 and 2020, there was no revenue recognized from performance obligations related to prior periods. Refer to Note 16 - Segment reporting for details of revenue segregation. |
Cost of Revenues | Cost of revenues includes cost of raw materials purchased, inbound freight cost, cost of direct labor, depreciation expense and other overhead. Write-down of inventory for lower of cost or net realizable value adjustments is also recorded in cost of revenues. |
Earnings (loss) per share | The Company computes earnings (loss) per share (“EPS”) in accordance with ASC 260, Earnings per Share The component of basic and diluted EPS were as follows: Year Ended September 30, 2022 2021 2020 Net income (loss) available for ordinary shareholders (A) $ 2,223,979 $ 2,356,438 $ 813,455 - continuing operations $ 2,223,979 $ 2,407,790 $ 1,077,302 - discontinued operations - $ (51,352 ) $ (263,847 ) Weighted average outstanding ordinary shares (B) - basic 23,247,874 4,113,700 649,794 - diluted 23,247,874 4,178,208 649,794 Earnings (loss) per ordinary share - basic (A/B) $ 0.10 $ 0.57 $ 1.25 - Continuing operations $ 0.10 $ 0.59 $ 1.66 - Discontinued operations $ - $ (0.01 ) $ (0.41 ) Earnings (loss) per ordinary share - diluted (A/B) $ 0.10 $ 0.56 $ 1.25 - Continuing operations $ 0.10 $ 0.58 $ 1.66 - Discontinued operations - $ (0.01 ) $ (0.41 ) ____________ 1. On May 31, 2022, the Company consolidated its ordinary shares at the ratio of one-for-twenty-five. The weighted average number of basic ordinary shares had been retrospectively adjusted from 102,842,495 to 4,113,700 for the year ended September 30, 2021 and from 16,244,856 to 649,794 for the year ended September 30, 2020. The weighted average number of diluted ordinary shares had been retrospectively adjusted from 104,455,189 to 4,178,208 for the year ended September 30, 2021. As a result, the basic and diluted earnings per ordinary share had been retrospectively adjusted from $0.02 to $0.57 and from $0.02 to $0.56 for the year ended September 30, 2021. The basic and diluted earnings per ordinary share had been retrospectively adjusted from $0.05 to $1.25 for the year ended September 30, 2020. The basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.02 to $0.59 and from $0.02 to $0.58 for the year ended September 30, 2021, respectively. For the year ended September 30, 2020, the basic and diluted earnings per ordinary share for continuing operations had been retrospectively adjusted from $0.07 to $1.66. For discontinued operations, the basic and diluted loss per ordinary share had been retrospectively adjusted from ($0.00) to ($0.01) and from ($0.02) to ($0.41) for the years ended September 30, 2021 and 2020, respectively. |
Fair Value of Financial Instruments | The FASB ASC Topic 820, Fair Value Measurements The three levels are defined 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, restricted cash, accounts receivable, advances to suppliers, other current assets, accounts payable, due to related parties, operating lease liabilities -current, other current liabilities, short-term bank loans and bank acceptance notes payable approximate their recorded values due to their short-term maturities. The fair value of longer term long-term bank loan and operating lease liabilities approximate their recorded values as their stated interest rates approximate the rates currently available. |
Beneficial Conversion Feature | The Company evaluates the conversion feature to determine whether it was beneficial as described in ASC 470-20. The intrinsic value of a beneficial conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible notes payable and may not be settled in cash upon conversion, is treated as a discount to the convertible notes payable. This discount is amortized over the period from the date of issuance to the date the notes is due using the effective interest method. If the notes payable is retired prior to the end of their contractual term, the unamortized discount is expensed in the period of retirement to interest expense. In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at the commitment date to be received upon conversion. |
Debt Issuance Costs and Debt Discounts | The Company may record debt issuance costs and/or debt discounts in connection with raising funds through the issuance of debt. These costs may be paid in the form of cash, or equity (such as warrants). These costs are amortized to interest expense through the maturity of the debt. If a conversion of the underlying debt occurs prior to maturity a proportionate share of the unamortized amounts is immediately expensed. Fair v alue of the embedded derivatives in the convertible promissory notes The convertible promissory notes consisted of a liability component (“financial liability”) and an embedded derivative conversion feature (“derivative liability”). The net proceeds of these convertible promissory notes were first allocated to the fair value of the derivative liability. Subsequent changes in fair value of the derivative liability were recorded in other income. The Company measures the fair value of the embedded derivative by reference to the fair value on the issuance date and maturity date of the convertible promissory notes and revalues them at each reporting date. In determining the fair value of the embedded derivatives, the Company used the Black-Scholes option pricing model with the following assumptions: average volatility rate; market price at the reporting date; risk-free interest rate; and the remaining life of the embedded derivatives. The inputs used in the Black-Scholes model are taken from observable markets. Changes to assumptions used can affect the amounts recognized in the consolidated financial statements. |
Concentrations of Credit Risk | Financial instruments which potentially subject the Company to concentrations of credit risk consist principally of cash, accounts receivable and advances to suppliers. As of September 30, 2022 and 2021, $76,308,051 and $3,985,359 of the Company’s cash is maintained in banks within the People’s Republic of China of which deposits of RMB0.5 million (equivalent to $70,289) per bank are covered by “deposit insurance regulation” promulgated by the State Council of the People’s Republic of China. The Company has not experienced any losses in such accounts. A significant portion of the Company’s sales are credit sales primarily to customers whose ability to pay is dependent upon the industry economics prevailing in these areas. The Company also makes cash advances to certain suppliers to ensure the stable supply of key raw materials. The Company performs ongoing credit evaluations of its customers and key suppliers to help further reduce credit risk. |
Comprehensive Income (loss) | Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss). Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of stockholders’ equity but are excluded from net income (loss). Other comprehensive income (loss) consists of foreign currency translation adjustment from the Company not using the U.S. dollar as its functional currency. |
Leases | The Company adopted ASU 2016-02, Leases |
Foreign Currency Translation | The Company’s financial information is presented in U.S. dollars (“USD”). The functional currency of the Company is the Chinese Yuan Renminbi (“RMB”), the currency of PRC. Any transactions which are denominated in currencies other than RMB are translated into RMB at the exchange rate quoted by the People’s Bank of China prevailing at the dates of the transactions, and exchange gains and losses are included in the statements of operations as foreign currency transaction gain or loss. The consolidated financial statements of the Company have been translated into U.S. dollars in accordance with ASC 830, Foreign Currency Matters. The financial information is first prepared in RMB and then translated into U.S. dollars at period-end exchange rates for assets and liabilities and average exchange rates for revenue and expenses. Capital accounts are translated at their historical exchange rates when the capital transactions occurred. The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in stockholders’ equity. Cash flows from the Company’s operations are calculated based upon the local currencies using the average translation rate. 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. The exchange rates in effect as of September 30, 2022 and 2021 were RMB1 for $0.1406 and $0.1552, respectively. The average exchange rates for the years ended September 30, 2022, 2021 and 2020 were RMB1 for $0.1521, $0.1540 and $0.1427, respectively. |
Shipping and Handling Expenses | All shipping and handling costs are expensed as incurred and included in selling expenses. Total shipping and handling expenses were $244,490, $235,956 and $202,171 for the years ended September 30, 2022, 2021 and 2020, respectively. |
Value Added Tax | The Company is generally subject to the value added tax (“VAT”) for selling merchandise, except for FLS Mushroom. Before May 1, 2018, the applicable VAT rate was 13% or 17% (depending on the type of goods involved) for products sold in PRC. After May 1, 2018, the Company is subject to a tax rate of 12% or 16%, and after April 1, 2019, the tax rate was further reduced to 9% or 13% based on the new Chinese tax law. Pursuant to approval issued by the State Administration of Taxation, FLS Mushroom’s and Nongyuan Network’s major operation can be classified as agriculture products and its revenue is exempt from VAT. The amount of VAT liability is determined by applying the applicable tax rate to the invoiced amount of goods sold (output VAT) less VAT paid on purchases made with the relevant supporting invoices (input VAT). Under the commercial practice of PRC, the Company pays VAT based on tax invoices issued. The tax invoices may be issued subsequent to the date on which revenue is recognized, and there may be a considerable delay between the date on which the revenue is recognized and the date on which the tax invoice is issued. In the event the PRC tax authorities dispute the date on which revenue is recognized for tax purposes, the PRC tax authorities have the right to assess a penalty based on the amount of taxes which is determined to be late or deficient, with any penalty being expensed in the period when a determination is made by the tax authorities that a penalty is due. During the reporting periods, the Company had no dispute with PRC tax authorities and there was no tax penalty incurred. |
Income Taxes | The Company is subject to the income tax laws of the PRC and a subsidiary in Canada is subject to income tax laws of Canada. No taxable income was generated outside the PRC for the years ended September 30, 2021 and 2020. The Company accounts for income taxes in accordance with ASC 740, Income Taxes. ASC 740 requires an asset and liability approach for financial accounting and reporting for income taxes and allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or not be deductible in the future. ASC 740-10-25 prescribes a more-likely-than-not threshold for financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. It also provides guidance on the recognition of income tax assets and liabilities, classification accounting for interest and penalties associated with tax positions, years open for tax examination, accounting for income taxes in interim periods and income tax disclosures. There were no material uncertain tax positions as of September 30, 2022 and 2021. As of September 30, 2022, the tax years ended December 31, 2015 through December 31, 2021 for the Company’s subsidiaries remain open for statutory examination by PRC and Canada tax authorities. |
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. |
Risks and Uncertainties | The operations of the Company are located in PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by the political, economic, and legal environments in PRC, in addition to the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political and social conditions in PRC, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, and rates and methods of taxation, among other things. The Company’s sales, purchases and expense transactions are denominated in RMB, and a substantial part of the Company’s assets and liabilities are also denominated in RMB. RMB is not freely convertible into foreign currencies under the current law. In China, 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, the central bank of China. Remittances in currencies other than RMB may require certain supporting documentation in order to effect the remittance. The Company’s operating entities in PRC do not carry any business interruption insurance, product liability insurance or any other insurance policy except for a limited property insurance policy. As a result, the Company may incur uninsured losses, increasing the possibility that investors would lose their entire investment in the Company. 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. In December 2019, a novel strain of coronavirus (“COVID-19”) was identified in Wuhan, China. On March 11, 2020, the World Health Organization declared COVID-19 a pandemic-the first pandemic caused by a coronavirus. The outbreak has reached more than 160 countries, resulting in the implementation of significant governmental measures, including lockdowns, closures, quarantines, and travel bans, intended to control the spread of the virus. The Chinese government has ordered quarantines, travel restrictions, and the temporary closure of stores and facilities. Companies are also taking precautions, such as requiring employees to work remotely, imposing travel restrictions and temporarily closing businesses. Because of the shelter-in-place orders and travel restrictions mandated by the Chinese government, the production and sales activities of the Company temporarily suspended during the end of January and February 2020, which adversely impacted the Company’s production and sales during that period. Although the production and sales have resumed at the end of March 2020, if COVID-19 further impacts its production and sales, the Company’s financial condition, results of operations, and cash flows could continue to be adversely affected. Consequently, the COVID-19 outbreak has adversely affected the Company’s business operations and condition and operating results for 2020, including but not limited to material negative impact on its total revenue, slower collection of accounts receivable and accrued allowance for bad debt, slower utilization of advances to suppliers and accrued allowance, and inventory allowance. The COVID-19 impact on the Company’s business operations and operating results for fiscal 2022 appears to be minimal and appears to be temporary. The Company will continue to monitor and modify the operating strategies. |
Recent Accounting Pronouncements | The Company considers the applicability and impact of all ASUs. Management periodically reviews new accounting standards that are issued. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses Codification Improvements to Topic 326, Financial Instruments - Credit Losses Derivatives and Hedging Financial Instruments Targeted Transition Relief In August 2020, the FASB issued ASU 2020-06, Debt-Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (ASU 2020-06) |
Organization and nature of bu_2
Organization and nature of business (Table) | 12 Months Ended |
Sep. 30, 2022 | |
Organization and nature of business | |
details of the subsidiaries of FAMI | Name of Entity Date of Incorporation Place of Incorporation % of Ownership Principal activities FAMI July 28, 2015 Cayman Parent Holding company Farmmi International August 20, 2015 Hong Kong 100% Holding company Farmmi Enterprise May 23, 2016 Zhejiang, China 100% Holding company Farmmi Technology June 6, 2016 Zhejiang, China 100% Holding company Farmmi Agricultural December 8, 2015 Zhejiang, China 100% Holding company FLS Mushroom March 25, 2011 Zhejiang, China 100% Light processing and distribution of dried mushrooms Farmmi Food December 26, 2017 Zhejiang, China 100% Dehydrating, further processing and distribution of edible fungus Farmmi E-Commerce March 22, 2019 Zhejiang, China 100% Technology development, technical services and technical consultation related to agricultural products Farmmi Biotech April 7, 2021 Zhejiang, China 100% Research and development of mushroom powder and mushroom extract Farmmi Ecology April 25, 2021 Zhejiang, China 100% Holding company Farmmi Supply Chain May 11, 2021 Zhejiang, China 100% Agricultural products supply chain Farmmi Health Development September 17, 2021 Zhejiang, China 100% Health development Farmmi Medical Health September 18, 2021 Zhejiang, China 100% Medical health Farmmi Holdings September 18, 2021 Zhejiang, China 100% Holding company Jiangxi Xiangbo June 18, 2021 Jiangxi, China 100% Holding company Yudu Yada November 10, 2010 Jiangxi, China 100% Forestry development Guoning Zhonghao June 15, 2021 Zhejiang, China 100% Agriculture exporting Farmmi Eco Agri May 27, 2022 Zhejiang, China 100% Agriculture products Farmmi Canada July 13, 2022 Canada 100% Agriculture products Ningbo Farmmi Trade November 14, 2022 Zhejiang, China 100% Agriculture products Nongyuan Network July 7, 2016 Zhejiang, China 0 (VIE) Trading Yitang Mediservice September 7, 2021 Zhejiang, China 100% subsidiary of the VIE Medical services Yiting Meditech September 17, 2021 Zhejiang, China 100% subsidiary of the VIE Medical technology Yifeng Medihealth January 10, 2022 Zhejiang, China 100% subsidiary of the VIE Medical health Yilong Enterprise January 10, 2022 Zhejiang, China 100% subsidiary of the VIE Management services YF YL MediTech January 19, 2022 Zhejiang, China 100% subsidiary of the VIE Medical technology YT SK Medihealth January 19, 2022 Zhejiang, China 100% subsidiary of the VIE Medical health |
Summary of significant accoun_3
Summary of significant accounting policies (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Summary of significant accounting policies | |
Schedule of Cash Flows Of The Company into FAMI, the VIE and its subsidiaries | As of September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Intercompany receivables $ 163,676,919 $ 114,994,912 - $ 140,445,311 - Current assets excluding intercompany receivables $ 91,926,232 $ 33,986 $ 57,133,125 $ 4,161,037 $ 153,254,380 Current assets $ 255,603,151 $ 115,028,898 $ 57,133,125 $ 144,606,348 $ 153,254,380 Investment in subsidiaries - $ 40,424,517 - - - Non-current assets excluding investment in subsidiaries $ 10,500,217 $ 8,484 $ 19,772 - $ 10,528,473 Non-current assets $ 10,500,217 $ 40,433,001 $ 19,772 - $ 10,528,473 Total assets $ 266,103,368 $ 155,461,899 $ 57,152,897 $ 144,606,348 $ 163,782,853 Intercompany payables $ 255,440,223 $ 109,255,668 $ 54,420,549 $ 702 - Current liabilities excluding intercompany payables $ 590,393 $ 226,814 $ 1,789,357 $ 5,682,757 $ 8,289,321 Current liabilities $ 256,030,616 $ 109,482,482 $ 56,209,906 $ 5,683,459 $ 8,289,321 Non-current liabilities $ 657,734 $ 151,707 - - $ 809,441 Total liabilities $ 256,688,350 $ 109,634,189 $ 56,209,906 $ 5,683,459 $ 9,098,762 Total shareholders' equity (net assets) $ 9,415,018 $ 45,827,710 $ 942,991 $ 138,922,889 $ 154,684,091 As of September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Intercompany receivables $ 10,263,832 $ 16,147,194 $ 582,137 $ 134,585,007 $ - Current assets excluding intercompany receivables $ 141,332,281 $ 6,658,940 $ 6,666,318 $ 647,997 $ 155,305,536 Current assets $ 151,596,113 $ 22,806,134 $ 7,248,455 $ 135,233,004 $ 155,305,536 Investment in subsidiaries $ - $ 9,016,979 $ - $ - $ - Non-current assets excluding investment in subsidiaries $ 10,126,547 $ - $ 254,818 $ - $ 10,381,365 Non-current assets $ 10,126,547 $ 9,016,979 $ 254,818 $ - $ 10,381,365 Total assets $ 161,722,660 $ 31,823,113 $ 7,503,273 $ 135,233,004 $ 165,686,901 Intercompany payables $ 151,314,338 $ 4,809,089 $ 3,785,283 $ 1,669,460 $ - Current liabilities excluding intercompany payables $ 1,682,220 $ 1,415 $ 2,408,191 $ 54,600 $ 4,146,426 Current liabilities $ 152,996,558 $ 4,810,504 $ 6,193,474 $ 1,724,060 $ 4,146,426 Non-current liabilities $ 691,808 $ - $ 56,249 $ - $ 748,057 Total liabilities $ 153,688,366 $ 4,810,504 $ 6,249,723 $ 1,724,060 $ 4,894,483 Total shareholders’ equity (net assets) $ 8,034,294 $ 27,012,609 $ 1,253,550 $ 133,508,944 $ 160,792,418 For the year ended September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 64,795,082 $ 9,111,073 $ 25,307,224 - $ 99,213,379 Cost of revenues (60,272,018 ) (9,053,547 ) (24,449,728 ) - (93,775,293 ) Gross profit 4,523,064 57,526 857,496 - 5,438,086 Operating expenses (782,009 ) (50,344 ) (701,516 ) (2,961,849 ) (4,495,718 ) Income (loss) from operations 3,741,055 7,182 155,980 (2,961,849 ) 942,368 Other income (expenses) 560,497 20,510 213,771 368,466 1,163,244 Income (loss) before income taxes 4,301,552 27,692 369,751 (2,593,383 ) 2,105,612 Provision for income taxes 114,801 9,182 (5,616 ) - 118,367 Net income (loss) $ 4,416,353 $ 36,874 $ 364,135 (2,593,383) $ 2,223,979 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 33,068,045 $ 762,771 $ 5,459,135 $ - $ 39,289,951 Cost of revenues from continuing operations (28,847,801 ) (742,933 ) (4,589,936 ) - (34,180,670 ) Gross profit from continuing operations 4,220,244 19,838 869,199 - 5,109,281 Operating expenses 588,892 (8,940 ) (804,851 ) (2,031,506 ) (2,256,405 ) Income (loss) from operations 4,809,136 10,898 64,348 (2,031,506 ) 2,852,876 Other expenses (391,819 ) (19,990 ) (2,033 ) (5,673 ) (419,515 ) Income (loss) before income taxes 4,417,317 (9,092 ) 62,315 (2,037,179 ) 2,433,361 Provision for income taxes (8,085 ) - (17,486 ) - (25,571 ) Net income (loss) from continuing operations $ 4,409,232 $ (9,092 ) $ 44,829 $ (2,037,179 ) $ 2,407,790 For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary VIE and its Consolidated consolidated of the VIE subsidiaries FAMI total Revenues from continuing operations $ 23,805,109 $ - $ 4,558,854 $ - $ 28,363,963 Cost of revenues from continuing operations (19,899,410 ) - (3,813,131 ) - (23,712,541 ) Gross profit 3,905,699 - 745,723 - 4,651,422 Operating expenses (921,258 ) (6,956 ) (853,607 ) (602,518 ) (2,384,339 ) Income (loss) from operations 2,984,441 (6,956 ) (107,884 ) (602,518 ) 2,267,083 Other expenses 86,810 (30,215 ) 327 (1,229,950 ) (1,173,028 ) Income (loss) before income taxes 3,071,251 (37,171 ) (107,557 ) (1,832,468 ) 1,094,055 Provision for income taxes (10,948 ) - (5,805 ) - (16,753 ) Net income (loss) from continuing operations $ 3,060,303 $ (37,171 ) $ (113,362 ) $ (1,832,468 ) $ 1,077,303 For the year ended September 30, 2022 WFOE Other that is the entities primary VIE that are beneficiary and its Consolidated consolidated of the VIE subsidiaries FAMI total Net cash (used in) provided by operating activities from continuing operations $ (14,188,275) $ (3,189,440) $ 46,404,339 $ (8,391,136) $ 20,635,488 Net cash provided by (used in) investing activities from continuing operations 1,140,848 2,738,559 (45,870,486 ) - (41,991,079 ) Net cash provided by (used in) financing activities from continuing operations 649,782 373,382 (899,449 ) 11,511,153 11,634,868 Effect of exchange rate changes on cash and restricted cash (8,345,494 ) (5,078 ) (13,108 ) - (8,363,680 ) Net (decrease) increase in cash and restricted cash (20,743,139 ) (82,577 ) (378,704 ) 3,120,017 (18,084,403 ) Cash and restricted cash from continuing operations, beginning of year 183,030 116,447 434,135 522,915 59,251,904 Cash and restricted cash from continuing operations, end of year $ (20,560,109) $ 33,870 $ 55,431 $ 4,057,179 $ 41,167,501 For the financial year ended September 30, 2021 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 67,709,967 $ 3,246,067 $ (338,559 ) $ (123,848,583 ) $ (53,231,108 ) Net cash used in investing activities from continuing operations (9,353,935 ) (2,772,430 ) (1,363 ) - (12,127,728 ) Net cash provided by (used in) financing activities from continuing operations 144,197 (616,095 ) (1,232,191 ) 124,369,377 122,665,288 Effect of exchange rate changes on cash and restricted cash (506,653 ) 258,485 94,714 - (153,454 ) Net increase (decrease) in cash and restricted cash 57,993,576 116,027 (1,477,399 ) 520,794 57,152,998 Cash and restricted cash from continuing operations, beginning of year 183,030 420 1,913,335 2,121 2,098,906 Cash and restricted cash from continuing operations, $ 58,176,606 $ 116,447 $ 435,936 $ 522,915 $ 59,251,904 end of year For the financial year ended September 30, 2020 WFOE Other that is the entities primary that are beneficiary of VIE and its Consolidated consolidated the VIE subsidiaries FAMI total Net cash provided by (used in) operating activities from continuing operations $ 57,809 $ (560,411 ) $ (1,629,913 ) $ 304,897 $ (1,827,618 ) Net cash used in investing activities from continuing operations - - (82,195 ) - (82,195 ) Net cash provided by (used in) financing activities from continuing operations 10,437 560,358 3,567,505 (938,071 ) 3,200,229 Effect of exchange rate changes on cash and restricted cash 15,087 19 56,006 - 71,112 Net increase (decrease) in cash and restricted cash 83,333 (34 ) 1,911,403 (633,174 ) 1,361,528 Cash and restricted cash from continuing operations, beginning of year 99,697 454 1,932 635,295 737,378 Cash and restricted cash from continuing operations, end of year $ 183,030 $ 420 $ 1,913,335 $ 2,121 $ 2,098,906 For the year ended September 30, 2022 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ 1,217,137 - $ 913,005 - WFOE that is the primary beneficiary of the VIE - $ 14,594,586 $ 19,188,742 - VIE and its subsidiaries - $ 6,394,084 $ 15,293,176 - Other entities that are consolidated $ 984,655 $ 26,961,378 $ 14,744,568 - For the year ended September 30, 2021 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ 45,500 $ 124,670,237 $ - WFOE that is the primary beneficiary of the VIE $ 1,668,758 $ - $ 38,204,550 $ - VIE and its subsidiaries $ - $ - $ 1,601,406 $ - Other entities that are consolidated $ 319,981 $ 24,075,199 $ 5,624,880 $ - For the year ended September 30, 2020 Transfer to WFOE that is the Other primary VIE entities beneficiary and its that are Transfer from FAMI of the VIE subsidiaries consolidated Investors FAMI $ - $ - $ 400,960 $ - WFOE that is the primary beneficiary of the VIE $ - $ - $ 1,812,810 $ - VIE and its subsidiaries $ - $ - $ 2,199,053 $ - Other entities that are consolidated $ 394,742 $ 1,832,576 $ 770,216 $ - |
Schedule of useful lives of property, plant and equipment, net | Plant, machinery and equipment 5 - 10 years Transportation equipment 4 years Office equipment 3 - 5 years |
Summary of component of basic and diluted EPS | Year Ended September 30, 2022 2021 2020 Net income (loss) available for ordinary shareholders (A) $ 2,223,979 $ 2,356,438 $ 813,455 - continuing operations $ 2,223,979 $ 2,407,790 $ 1,077,302 - discontinued operations - $ (51,352 ) $ (263,847 ) Weighted average outstanding ordinary shares (B) - basic 23,247,874 4,113,700 649,794 - diluted 23,247,874 4,178,208 649,794 Earnings (loss) per ordinary share - basic (A/B) $ 0.10 $ 0.57 $ 1.25 - Continuing operations $ 0.10 $ 0.59 $ 1.66 - Discontinued operations $ - $ (0.01 ) $ (0.41 ) Earnings (loss) per ordinary share - diluted (A/B) $ 0.10 $ 0.56 $ 1.25 - Continuing operations $ 0.10 $ 0.58 $ 1.66 - Discontinued operations - $ (0.01 ) $ (0.41 ) |
Business combinations (Tables)
Business combinations (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Business combinations | |
Schedule of purchase price as of the date of acquisition | For the year ended September 30, 2022 2022 RMB $ Net tangible liabilities (i) (15,219 ) (2,401 ) Goodwill (20,219 ) (3,189 ) Total fair value of purchase price allocation 5,000 788 Consideration 5,000 788 |
Accounts receivable net (Tables
Accounts receivable net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Accounts receivable, net | |
Schedule of accounts receivable | As of As of September 30, September 30, 2022 2021 Accounts receivable - trade $ 16,358,493 $ 24,481,363 Accounts receivable - related party - 49 Accounts receivable 16,358,493 24,481,412 Less: allowance for doubtful accounts (7,249 ) (8,094 ) Accounts receivable, net $ 16,351,244 $ 24,473,318 |
Advances to suppliers net (Tabl
Advances to suppliers net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Advances to suppliers, net | |
Schedule of advance to suppliers | As of As of September 30, September 30, 2022 2021 Beginning balance $ 66,718,632 $ 24,074,122 Increased during the year 227,342,938 88,407,729 Less: utilized during the year (240,110,179 ) (47,418,080 ) Exchange rate difference (5,314,529 ) 1,654,861 Sub-total 48,636,862 66,718,632 Less: allowance for doubtful accounts (3,258 ) - Ending balance $ 48,633,604 $ 66,718,632 |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Inventories, net | |
Schedule of inventory | As of As of September 30, September 30, 2022 2021 Raw materials $ 620,252 $ 1,070,837 Packaging materials 63,703 56,723 Finished goods 81,975 243,980 Inventory 765,930 1,371,540 Less: allowance for inventory reserve (49,652 ) - Inventory, net $ 716,278 $ 1,371,540 |
Property plant and equipment ne
Property plant and equipment net (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Property, plant and equipment, net | |
Schedule of property, plant and equipment, stated at cost less accumulated depreciation | As of As of September 30, September 30, 2022 2021 Plant, machinery and equipment $ 64,449 $ 70,113 Transportation equipment 49,241 54,362 Office equipment 20,254 21,474 Subtotal 133,944 145,949 Accumulated depreciation (89,076 ) (66,467 ) Total $ 44,868 $ 79,482 |
Stockholder Equity (Tables)
Stockholder Equity (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Shareholders Equity | |
Schedule of Company's outstanding warrants | Weighted Weighted average Number average Total remaining of exercise intrinsic contractual warrants price value life (in years) Outstanding as of September 30, 2021 1,612,694 $ 0.22 $ 391,078 1.1 Outstanding as of September 30, 2022 1,612,694 $ 0.20 - 0.1 Warrants exercisable as of September 30, 2022 1,612,694 $ 5.00 - 0.1 |
Schedule of Black-Scholes option pricing model | For the Years Ended September 30, 2022 2021 2020 Exercise price $5 - $5.5 $5.50 - $7.50 $50.00 - $179.58 Stock price $3.25 - $9.75 $5.25 - $27.00 $17.00 - $18.00 Term (in years) 0.1 - 1.1 1.14 - 1.59 2.31 - 2.64 Volatility 137% 108.36% - 146.04% 99.55% - 113.25% Risk-free interest rate 0.09% - 0.69% 0.06% - 0.14% 0.16% - 0.58% Dividend yield - - - |
Schedule of Non-controlling interest | As of As of September 30, September 30, Non-controlling interest 2022 2021 Paid-in capital - $ 107,461 Additional paid-in capital - 807,953 Foreign currency translation gain (loss) attributed to noncontrolling interest - 14,588 Net loss attributed to noncontrolling interest - (13,496 ) Total noncontrolling interest - $ 916,506 |
Loans (Tables)
Loans (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Loans | |
Short-term and long-term loans from the Company's continuing operations | As of As of September 30, September 30, 2022 2021 Short-term loan Zhejiang Mintai Commercial Bank (Hangzhou Branch) (1) - $ 2,172,766 Total short-term loan - 2,172,766 Long-term loans - current portion Bank of Beijing (Hangzhou Branch) (2) $ 1,124,622 - China Resources Shenzhen Investment Trust Co., Ltd. (3) and (5) 159,321 - Jiangsu Suning Bank (4) 140,578 - Huaneng Guicheng Trust Co., Ltd. (6) 80,832 - Total long-term loans - current portion 1,505,353 - Long-term loans - non-current portion Jiangsu Suning Bank (4) 140,578 - China Resources Shenzhen Investment Trust Co., Ltd. (5) 93,719 142,264 Huaneng Guicheng Trust Co., Ltd. (6) 57,988 - Total long-term loans - non-current portion 292,285 142,264 Total short-term and long-term loans $ 1,797,638 $ 2,315,030 |
Taxes (Tables)
Taxes (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Taxes | |
Schedule of effective tax rates | For the Years Ended September 30, 2022 2021 2020 Statutory PRC income tax rate 25.0 % 25.0 % 25.0 % Effect of income tax exemption (a) (50.8 )% (41.0 )% (27.5 )% Favorable tax rate impact (a) (14.8 )% (0.3 )% (1.5 )% Permanent difference 0.1 % (8.2 )% 0.0 % Changes of deferred tax assets valuation allowances 7.2 % 2.0 % 5.3 % Non-PRC entities not subject PRC income tax 27.7 % 23.6 % 2.8 % Total (5.6 )% 1.1 % 4.1 % |
Schedule of provision for income tax | For the Years Ended September 30, 2022 2021 2020 Current income tax provision $ 58,266 $ 25,571 $ 16,753 Deferred income tax provision (176,633 ) - - Total $ (118,367 ) $ 25,571 $ 16,753 |
Schedule of components of deferred tax | As of As of September 30, September 30, 2022 2021 Net operating loss (“NOL”) carry forward $ 168,126 $ 13,569 Allowance for inventory 12,413 - Allowance for doubtful accounts 836 - Valuation allowance (18,168 ) (13,569 ) Total $ 163,207 - |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Leases | |
Summary of supplemental balance sheet information related to operating leases | As of As of September 30, September 30, 2022 2021 Right-of-use assets under operating leases $ 534,351 $ 776,665 Operating lease liabilities, current 46,543 155,532 Operating lease liabilities, non-current 517,156 605,793 Total operating lease liabilities $ 563,699 $ 761,325 |
Summary of maturities of operating lease liabilities | As of September 30, Twelve months ending September 30, 2022 2023 $ 99,850 2024 99,850 2025 99,850 2026 99,850 2027 99,850 Thereafter 331,924 Total Future minimum lease payments 831,174 Less: Imputed interest (267,475 ) Total $ 563,699 |
Segment reporting (Tables)
Segment reporting (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Segment reporting | |
Schedule of revenue by major product categories | For the Years Ended September 30, 2022 2021 2020 Shiitake $ 19,859,533 $ 20,494,362 $ 15,098,877 Mu Er 19,123,152 16,524,723 12,082,365 Cotton 47,950,345 - - Corn 10,778,197 1,796,006 - Other products 1,502,152 474,860 1,182,721 Total $ 99,213,379 $ 39,289,951 $ 28,363,963 |
Related party transactions (Tab
Related party transactions (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Related party transactions | |
Schedule of relationship and the nature of related party transactions | Name of related party Relationship to the Company Nature of transactions Forasen Group Co., Ltd. ("Forasen Group") Owned by Mr Zhengyu Wang, the Chairman of Board of Directors of the Company Purchases from the Company Zhejiang Tantech Bamboo Technology Co., Ltd Under common control of Mr Zhengyu Wang and Ms Yefang Zhang, CEO of the Company Lease factory building to the Company; purchases from the Company Hangzhou Forasen Technology Co., Ltd Controlled by Mr. Zhengyu Wang Sublease of office space from the Company. Xinyang Wang Shareholder of Nongyuan Network Provide a real property as additional security for a short-term bank. Dehong Zhang CEO of the Company, Ms Yefang Zhang's brother Provide a guarantee as an additional security for a revolving loan |
Schedule of due to related parties | As of As of September 30, September 30, 2022 2021 Farmnet - $ 54,600 Zhejiang Tantech Bamboo Technology Co., Ltd. 948 3,032 Total $ 948 $ 57,632 |
Disposition of a subsidiary (Ta
Disposition of a subsidiary (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Disposition of a subsidiary | |
Schedule of major classes of assets and liabilities | As of As of September 30, September 30, 2022 2021 Carrying amounts of major classes of assets held for sale: Cash - $ 10,610 Accounts receivable, net - 168,203 Advances to suppliers - - Due from related parties - 3,913,260 Inventories - - Other receivables - 27,074 Property, plant and equipment - 173,289 Operating lease right-of-use assets, net - - Total assets of disposal group - $ 4,292,436 Carrying amounts of major classes of liabilities held for sale: Short-term bank loan - $ 1,299,104 Accounts payable - 181,391 Other current liabilities - 61,828 Total liabilities of disposal group - $ 1,542,323 |
Schedule of major classes of operations classified as discontinued operations | For the Years Ended September 30, 2022 2021 Revenue - $ 2,022,846 Cost of revenues - (1,783,156 ) Gross profit - 239,690 Operating expenses - (221,586 ) Income from operations - 18,104 Other expenses - (69,875 ) Income before income taxes - (51,771 ) Provision for income taxes - 419 Net loss from discontinued operations, net of tax - $ (51,352 ) |
Condensed Financial Informati_2
Condensed Financial Information of the Parent Company (Tables) | 12 Months Ended |
Sep. 30, 2022 | |
Condensed Financial Information of the Parent Company | |
Summary of Parent Company Balance Sheets | As of As of September 30, September 30, 2022 2021 Assets Current assets Cash $ 4,057,179 $ 522,915 Due from related parties - - Other receivables 103,858 125,081 4,161,037 647,996 Non-current assets Investment in subsidiaries 156,151,565 160,199,022 Total assets $ 160,312,602 $ 160,847,018 Liabilities and Shareholders’ Equity Current liabilities Due to related parties, - 54,600 Convertible promissory notes 2,178,511 - Derivative liability 3,450,000 - Total liabilities 5,628,511 $ 54,600 Commitments and contingencies Shareholders’ equity Ordinary share, $0.025 par value, 24,000,000 shares authorized, 23,906,985 and 22,311,215 shares issued and outstanding at September 30, 2022 and 2021, respectivel y1 597,675 557,781 Additional paid-in capital 152,162,658 147,088,227 Retained earnings 1,923,758 13,146,410 Total shareholders’ equity 154,684,091 160,792,418 Total liabilities and shareholders’ equity $ 160,312,602 $ 160,847,018 |
Summary of Parent Company Statements of Operations | For the Years Ended September 30, 2022 2021 2020 Operating expenses: General and administrative expenses $ (2,961,849) $ (2,031,506) $ (602,518) Other expenses Change in fair value of derivative liability 419,649 - - Interest expenses - - (135,867 ) Amortization of debt issuance costs (48,160 ) - (1,093,440 ) Other expenses (3,024 ) (5,672 ) (648 ) Loss from operations (2,593,384 ) (2,037,178 ) (1,832,469 ) Equity in income of subsidiaries and VIE 4,817,363 4,395,592 2,656,075 Comprehensive income attributable to the Company $ 2,223,979 $ 2,358,414 $ 823,606 |
Summary of Parent Company Statements of Cash Flows | For the Years Ended September 30, 2022 2021 2020 Cash flows from operating activities Net income $ 2,223,979 $ 2,358,414 $ 823,606 Adjustments to reconcile net income to net cash used in operating activities Equity in earnings of subsidiaries (4,817,363 ) (4,395,592 ) (2,656,075 ) Amortization of debt issuance costs 48,160 - 135,867 Amortization of deferred financing costs - - 1,093,440 Change in fair value of derivative liability (419,649 ) Share-based compensation 2,007,328 1,260,674 - Other current assets 21,223 (125,081 ) - Other current liabilities 54,246 (40,000 ) 40,000 Net cash used in operating activities (882,076 ) (941,585 ) (563,162 ) Cash flows from investing activities Investing in subsidiaries (7,529,060 ) (122,726,999 ) 688,060 Net cash (used in) provided by investing activities (7,529,060 ) (122,726,999 ) 688,060 Cash flows from financing activities Net proceeds from share issuance 6,000,000 126,029,588 - Net proceeds from issuance of convertible promissory notes 6,000,000 - - Proceeds from advances from related parties - 298,297 - Repayment of advances from related parties (54,600 ) (2,138,508 ) (758,071 ) Net cash provided by (used in) financing activities 11,945,400 124,189,377 (758,071 ) Net increase (decrease) in cash and restricted cash 3,534,264 520,793 (633,173 ) Cash, beginning of year 522,915 2,122 635,295 Cash, end of year $ 4,057,179 $ 522,915 $ 2,122 |
Organization and nature of bu_3
Organization and nature of business (Details) | 12 Months Ended |
Sep. 30, 2022 | |
Farmmi Enterprise | |
Date of Incorporation | May 23, 2016 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Lishui Yifeng Yilong Medical Technology Development Partnership | |
Date of Incorporation | Jan. 19, 2022 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Medical technology |
% of Ownership (VIE) | 100% |
Guoning Zhonghao. | |
Date of Incorporation | Jun. 15, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Agriculture exporting |
FAMI | |
Date of Incorporation | Jul. 28, 2015 |
Entity Incorporation, State Country Name | Cayman |
% of Ownership | 100% |
Principal Activities | Holding company |
Farmmi International | |
Date of Incorporation | Aug. 20, 2015 |
Entity Incorporation, State Country Name | Hong Kong |
% of Ownership | 100% |
Principal Activities | Holding company |
Lishui Farmmi E-Commerce Co., Ltd. | |
Date of Incorporation | Mar. 22, 2019 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Technology development, technical services and technical consultation related to agricultural products |
Zhejiang Farmmi Biotechnology Co., Ltd. | |
Date of Incorporation | Apr. 07, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Research and development of mushroom powder and mushroom extract |
Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co., Ltd. | |
Date of Incorporation | Apr. 25, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Farmmi Supply Chain. | |
Date of Incorporation | May 11, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Agricultural products supply chain |
Farmmi (Hangzhou) Health Development Co Ltd | |
Date of Incorporation | Sep. 17, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Health development |
Zhejiang Farmmi Medical Health Technology Co., Ltd. | |
Date of Incorporation | Sep. 18, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Medical health |
Zhejiang Farmmi Holdings Group Co., Ltd. | |
Date of Incorporation | Sep. 18, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Zhejiang Farmmi Holdings Group Co., Ltd. | Farmmi Enterprise | |
% of Ownership | 30% |
Jiangxi Xiangbo. | |
Date of Incorporation | Jun. 18, 2021 |
Entity Incorporation, State Country Name | Jiangxi, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Yada Forestry Company Limited. | |
Date of Incorporation | Nov. 10, 2010 |
Entity Incorporation, State Country Name | Jiangxi, China |
% of Ownership | 100% |
Principal Activities | Forestry development |
Nongyuan Network Technology Co., Ltd. | |
Date of Incorporation | Jul. 07, 2016 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Trading |
% of Ownership (VIE) | 0% |
Zhejiang Yitang Medical Service Co Ltd | |
Date of Incorporation | Sep. 07, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Medical services |
% of Ownership (VIE) | 100% |
Zhejiang Yiting Medical Technology Co Ltd | |
Date of Incorporation | Sep. 17, 2021 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Medical technology |
% of Ownership (VIE) | 100% |
Lishui Yifeng Medical Health Technology Co Ltd | |
Date of Incorporation | Jan. 10, 2022 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Medical health |
% of Ownership (VIE) | 100% |
Lishui Yitang Shangke Medical and Health Technology Partnership. | |
Date of Incorporation | Jan. 19, 2022 |
Entity Incorporation, State Country Name | Zhejiang, China |
Principal Activities | Medical health |
% of Ownership (VIE) | 100% |
Farmmi Canada Inc. | |
% of Ownership | 100% |
Farmmi Food | |
Date of Incorporation | Dec. 26, 2017 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Dehydrating, further processing and distribution of edible fungus |
FLS Mushroom | |
Date of Incorporation | Mar. 25, 2011 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Light processing and distribution of dried mushrooms |
Farmmi Agricultural [Member] | |
Date of Incorporation | Dec. 08, 2015 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Farmmi Technology | |
Date of Incorporation | Jun. 06, 2016 |
Entity Incorporation, State Country Name | Zhejiang, China |
% of Ownership | 100% |
Principal Activities | Holding company |
Organization and nature of bu_4
Organization and nature of business (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||||||||
Sep. 27, 2021 CNY (¥) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2021 USD ($) | Jul. 13, 2022 | May 27, 2022 | Feb. 10, 2022 | Feb. 09, 2022 | Jan. 19, 2022 | Jan. 10, 2022 | Dec. 31, 2021 | Nov. 23, 2021 | Sep. 17, 2021 | Sep. 07, 2021 | Dec. 04, 2019 | |
Business acquisition total price | ¥ 70,000,000 | |||||||||||||
Lishui Yifeng Yilong Medical Technology Development Partnership | ||||||||||||||
Ownership (VIE) | 100% | |||||||||||||
Ownership (VIE) | 100% | |||||||||||||
Farmmi Enterprise | ||||||||||||||
Ownership | 100% | |||||||||||||
% of Ownership | 100% | |||||||||||||
Represents member information pertaining to Nongyuan Network Technology Co Ltd | Represents information pertaining to Xinyang Wang. | ||||||||||||||
Ownership | 100% | |||||||||||||
Represents member information pertaining to Nongyuan Network Technology Co Ltd | Represents information pertaining to Xinyang Wang. | Represents information of Zhengyu Wang. | ||||||||||||||
Ownership | 100% | |||||||||||||
Lishui Farmmi E-Commerce Co., Ltd. | ||||||||||||||
% of Ownership | 100% | |||||||||||||
Ownership in subsidiary | 77.20% | |||||||||||||
Lishui Farmmi E-Commerce Co., Ltd. | Represents member information pertaining to Nongyuan Network Technology Co., Ltd. | ||||||||||||||
Ownership in subsidiary | 22.80% | |||||||||||||
Farmmi (Hangzhou) Health Development Co Ltd | ||||||||||||||
Ownership | 100% | |||||||||||||
% of Ownership | 100% | |||||||||||||
Zhejiang Yitang Medical Service Co Ltd | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Ownership (VIE) | 100% | |||||||||||||
Zhejiang Yitang Medical Service Co Ltd | Represents member information pertaining to Nongyuan Network Technology Co Ltd | ||||||||||||||
Ownership in subsidiary | 95% | |||||||||||||
Zhejiang Yitang Medical Service Co Ltd | N/A. | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Zhejiang Yiting Medical Technology Co Ltd | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Ownership (VIE) | 100% | |||||||||||||
Zhejiang Yiting Medical Technology Co Ltd | This member stands for Zhongjian Yiting. | ||||||||||||||
Ownership | 93.75% | |||||||||||||
Lishui Yifeng Medical Health Technology Co Ltd | ||||||||||||||
Business acquisition total price | ¥ 5,000 | |||||||||||||
Ownership (VIE) | 100% | |||||||||||||
Farmmi Canada Inc. | ||||||||||||||
Ownership | 100% | |||||||||||||
% of Ownership | 100% | |||||||||||||
FLS Mushroom | ||||||||||||||
Net proceeds from initial public offering | ¥ 24,100,000 | |||||||||||||
% of Ownership | 100% | |||||||||||||
Farmmi Agricultural [Member] | ||||||||||||||
Ownership | 100% | |||||||||||||
% of Ownership | 100% | |||||||||||||
Represents the information pertaining to Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co Ltd | ||||||||||||||
% of Ownership | 100% | |||||||||||||
Represents the information pertaining to Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co Ltd | Represents the information pertaining to Zhejiang Farmmi Ecological Agriculture Technology Co Ltd | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Represents the information pertaining to Farmmi Supply Chain. | ||||||||||||||
% of Ownership | 100% | |||||||||||||
Represents the information pertaining to Farmmi Supply Chain. | Represents the information pertaining to Zhejiang Farmmi Agricultural Technology Group Co., Ltd. | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Represents the information pertaining to Farmmi Supply Chain. | This member stands for Jiangxi Xiangbo. | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Represents the information pertaining to Farmmi Supply Chain. | This member stands for Yudu county Yada Forestry Company Limited. | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Represents the information pertaining to Farmmi Supply Chain. | This member stands for Guoning Zhonghao. | ||||||||||||||
Ownership in subsidiary | 100% | |||||||||||||
Represents information pertaining to Zhejiang Farmmi Holdings Group Co., Ltd. | Represents the information pertaining to Zhejiang Farmmi (Hangzhou) Ecology Agriculture Development Co., Ltd. | ||||||||||||||
Ownership in subsidiary | 68.30% | 100% | 5% | |||||||||||
Zhejiang Farmmi Holdings Group Co., Ltd. | ||||||||||||||
% of Ownership | 100% | |||||||||||||
Zhejiang Farmmi Holdings Group Co., Ltd. | Farmmi Enterprise | ||||||||||||||
% of Ownership | 30% | |||||||||||||
Ownership in subsidiary | 30% | 31.70% | ||||||||||||
Represents the information pertaining to Yifeng Medihealth | ||||||||||||||
Ownership in subsidiary | 20% | |||||||||||||
Represents the information pertaining to Yifeng Medihealth | Lishui Yifeng Yilong Medical Technology Development Partnership | ||||||||||||||
Ownership in subsidiary | 80% | |||||||||||||
Represents the information pertaining to Yifeng Medihealth | N/A. | ||||||||||||||
Ownership in subsidiary | 20% | |||||||||||||
Represents the information pertaining to Yifeng Medihealth | Represents the information pertaining to Lishui Yitang Shangke Medical and Health Technology Partnership | ||||||||||||||
Ownership in subsidiary | 80% | |||||||||||||
IPO | Entity owned or controlled by another entity | ||||||||||||||
Ownership | 100% | |||||||||||||
Net proceeds from initial public offering | ¥ 18,200,000 | $ 2,800,000 |
Summary of significant accoun_4
Summary of significant accounting policies (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets from continuing operations excluding intercompany receivables | $ 153,254,380 | $ 155,305,536 | ||
Current assets from continuing operations | 153,254,380 | 155,305,536 | ||
Non-current assets excluding investment in subsidiaries | 10,528,473 | 10,381,365 | ||
Non-current assets | 10,528,473 | 10,381,365 | ||
Total assets from continuing operations | 163,782,853 | 165,686,901 | $ 38,191,746 | |
Amount of liabilities excluding intercompany payables. | 8,289,321 | 4,146,426 | ||
Current liabilities from continuing operations | 8,289,321 | 4,146,426 | ||
Non-current liabilities | 809,441 | 748,057 | ||
Total liabilities from continuing operations | 9,098,762 | 4,894,483 | ||
Total shareholders' equity (net assets) | 154,684,091 | 160,792,418 | $ 29,155,157 | $ 22,337,551 |
Total liabilities from continuing operations | 9,098,762 | 4,894,483 | ||
Other [Member] | ||||
Current assets from continuing operations excluding intercompany receivables | 91,926,232 | 141,332,281 | ||
Current assets from continuing operations | 255,603,151 | 151,596,113 | ||
Non-current assets excluding investment in subsidiaries | 10,500,217 | 10,126,547 | ||
Non-current assets | 10,500,217 | 10,126,547 | ||
Total assets from continuing operations | 266,103,368 | 161,722,660 | ||
Amount of liabilities excluding intercompany payables. | 590,393 | 1,682,220 | ||
Current liabilities from continuing operations | 256,030,616 | 152,996,558 | ||
Non-current liabilities | 657,734 | 691,808 | ||
Total shareholders' equity (net assets) | 9,415,018 | 8,034,294 | ||
Intercompany receivables | 163,676,919 | 10,263,832 | ||
Intercompany payables | 255,440,223 | 151,314,338 | ||
Total liabilities from continuing operations | 256,688,350 | 153,688,366 | ||
Nongyuan Network | ||||
Current assets from continuing operations excluding intercompany receivables | 33,986 | 6,658,940 | ||
Non-current assets excluding investment in subsidiaries | 8,484 | 1,415 | ||
Non-current assets | 40,433,001 | 9,016,979 | ||
Total assets from continuing operations | 155,461,899 | 31,823,113 | ||
Amount of liabilities excluding intercompany payables. | 226,814 | 1,415 | ||
Non-current liabilities | 151,707 | 0 | ||
Intercompany receivables | 114,994,912 | 16,147,194 | ||
Intercompany payables | 109,255,668 | 4,809,089 | ||
Total shareholders' equity (net assets) | 45,827,710 | 27,012,609 | ||
Current assets from continuing operations | 115,028,898 | 22,806,134 | ||
Investment in subsidiaries | 40,424,517 | 9,016,979 | ||
Current liabilities from continuing operations | 109,482,482 | 4,810,504 | ||
Total liabilities from continuing operations | 109,634,189 | 4,810,504 | ||
variable interest entity and subsidiaries. | ||||
Current assets from continuing operations excluding intercompany receivables | 57,133,125 | 6,666,318 | ||
Current assets from continuing operations | 57,133,125 | 7,248,455 | ||
Non-current assets excluding investment in subsidiaries | 19,772 | 254,818 | ||
Non-current assets | 19,772 | 254,818 | ||
Total assets from continuing operations | 57,152,897 | 7,503,273 | ||
Amount of liabilities excluding intercompany payables. | 1,789,357 | 2,408,191 | ||
Non-current liabilities | 0 | 56,249 | ||
Total liabilities from continuing operations | 56,209,906 | 6,249,723 | ||
Intercompany receivables | 0 | 582,137 | ||
Intercompany payables | 54,420,549 | 3,785,283 | ||
Total shareholders' equity (net assets) | 942,991 | 1,253,550 | ||
Current liabilities from continuing operations | 56,209,906 | 6,193,474 | ||
FAMI | ||||
Current assets from continuing operations excluding intercompany receivables | 4,161,037 | 647,997 | ||
Current assets from continuing operations | 144,606,348 | 135,233,004 | ||
Total assets from continuing operations | 144,606,348 | 135,233,004 | ||
Amount of liabilities excluding intercompany payables. | 5,682,757 | 54,600 | ||
Current liabilities from continuing operations | 5,683,459 | 1,724,060 | ||
Total shareholders' equity (net assets) | 138,922,889 | 133,508,944 | ||
Intercompany receivables | 140,445,311 | 134,585,007 | ||
Intercompany payables | 702 | 1,669,460 | ||
Total liabilities from continuing operations | $ 5,683,459 | $ 1,724,060 |
Summary of significant accoun_5
Summary of significant accounting policies (Details 1) - USD ($) | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues from continuing operations | $ 99,213,379 | $ 39,289,951 | $ 28,363,963 | |
Cost of revenues from continuing operations | (93,775,293) | (34,180,670) | (23,712,541) | |
Gross profit from continuing operations | 5,438,086 | 5,109,281 | 4,651,422 | $ 4,651,422 |
Operating expenses | (4,495,718) | (2,256,405) | (2,384,339) | (2,384,339) |
Income (loss) from operations | 942,368 | 2,852,876 | 2,267,083 | |
Other expenses | 1,163,244 | (419,515) | (1,173,028) | |
Income (loss) before income taxes | 2,105,612 | 2,433,361 | 1,094,055 | 1,094,055 |
Provision for income taxes | 118,367 | (25,571) | (16,753) | |
Net income (loss) from continuing operations | 2,223,979 | 2,407,790 | 1,077,303 | |
Income (loss) from operations | 942,368 | 2,852,876 | 2,267,083 | |
Cost of revenues | (93,775,293) | (34,180,670) | $ (23,712,541) | |
Other [Member] | ||||
Gross profit from continuing operations | 4,523,064 | 4,220,244 | 3,905,699 | |
Operating expenses | (782,009) | 588,892 | (921,258) | |
Other expenses | 560,497 | (391,819) | 86,810 | |
Income (loss) before income taxes | 4,301,552 | 4,417,317 | 3,071,251 | |
Provision for income taxes | (114,801) | 8,085 | 10,948 | |
Net income (loss) from continuing operations | 4,416,353 | 4,409,232 | 3,060,303 | |
Revenues from continuing operations | 64,795,082 | 33,068,045 | 23,805,109 | |
Cost of revenues | (60,272,018) | (28,847,801) | (19,899,410) | |
Income (loss) from operations | 3,741,055 | 4,809,136 | 2,984,441 | |
Nongyuan Network | ||||
Operating expenses | (50,344) | (8,940) | (6,956) | |
Other expenses | 20,510 | (19,990) | (30,215) | |
Provision for income taxes | (9,182) | 0 | 0 | |
Net income (loss) from continuing operations | 36,874 | (9,092) | (37,171) | |
Cost of revenues | (9,053,547) | (742,933) | ||
Gross profit from continuing operations | 57,526 | 19,838 | ||
Income (loss) before income taxes | 27,692 | (9,092) | (37,171) | |
Income (loss) from operations | 9,111,073 | 10,898 | (6,956) | |
Revenues from continuing operations | 9,111,073 | 762,771 | ||
variable interest entity and subsidiaries. | ||||
Cost of revenues from continuing operations | (24,449,728) | (4,589,936) | (3,813,131) | |
Operating expenses | (701,516) | (804,851) | (853,607) | |
Income (loss) from operations | 155,980 | 64,348 | (107,884) | |
Other expenses | 213,771 | (2,033) | 327 | |
Provision for income taxes | 5,616 | 17,486 | 5,805 | |
Net income (loss) from continuing operations | 364,135 | 44,829 | (113,362) | |
Revenues from continuing operations | 25,307,224 | 5,459,135 | 4,558,854 | |
Gross profit from continuing operations | 857,496 | 869,199 | 745,723 | |
Income (loss) before income taxes | 369,751 | 62,315 | (107,557) | |
FAMI | ||||
Gross profit from continuing operations | 0 | 4,220,244 | 3,905,699 | |
Operating expenses | (2,961,849) | (2,031,506) | (602,518) | |
Other expenses | 368,466 | (5,673) | (1,229,950) | |
Income (loss) before income taxes | (2,593,383) | (2,037,179) | (1,832,468) | |
Net income (loss) from continuing operations | (2,593,383) | (2,037,179) | (1,832,468) | |
Revenues from continuing operations | 0 | 33,068,045 | 23,805,109 | |
Income (loss) from operations | $ (2,961,849) | $ (2,031,506) | $ (602,518) |
Summary of significant accoun_6
Summary of significant accounting policies (Details 2) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net cash provided by (used in) operating activities from continuing operations | $ 20,635,488 | $ (53,231,108) | $ (1,827,618) |
Net cash used in investing activities from continuing operations | (41,991,079) | (12,127,728) | (82,195) |
Net cash provided by (used in) financing activities from continuing operations | 11,634,868 | 122,665,288 | 3,200,229 |
Effect of exchange rate changes on cash and restricted cash | (8,363,680) | (153,454) | 71,112 |
Net increase (decrease) in cash and restricted cash | (18,084,403) | 57,152,998 | 1,361,528 |
Cash and restricted cash from continuing operations, beginning of year | 59,251,904 | 2,098,906 | 737,378 |
Cash and restricted cash from continuing operations, end of year | 41,167,501 | 59,251,904 | 2,098,906 |
Net cash provided by (used in) operating activities from continuing operations | 20,635,487 | (53,231,108) | (1,827,618) |
Net cash used in investing activities from continuing operations | (41,991,079) | (12,258,220) | (247,240) |
Other [Member] | |||
Net cash used in investing activities from continuing operations | 1,140,848 | (9,353,935) | |
Effect of exchange rate changes on cash and restricted cash | (8,345,494) | (506,653) | 15,087 |
Net increase (decrease) in cash and restricted cash | (20,743,139) | 57,993,576 | 83,333 |
Cash and restricted cash from continuing operations, beginning of year | 183,030 | 183,030 | 99,697 |
Cash and restricted cash from continuing operations, end of year | (20,560,109) | 58,176,606 | 183,030 |
Net cash provided by (used in) operating activities from continuing operations | (14,188,275) | 67,709,967 | 57,809 |
Net cash provided by (used in) financing activities from continuing operations | 649,782 | 144,197 | 10,437 |
Nongyuan Network | |||
Effect of exchange rate changes on cash and restricted cash | (5,078) | 258,485 | 19 |
Net increase (decrease) in cash and restricted cash | (82,577) | 116,027 | (34) |
Cash and restricted cash from continuing operations, beginning of year | 116,447 | 420 | 454 |
Cash and restricted cash from continuing operations, end of year | 33,870 | 116,447 | 420 |
Net cash provided by (used in) financing activities from continuing operations | 373,382 | (616,095) | 560,358 |
Net cash provided by (used in) continuing operations | (3,189,440) | 3,246,067 | (560,411) |
Net cash used in investing activities from continuing operations | 2,738,559 | (2,772,430) | |
variable interest entity and subsidiaries. | |||
Effect of exchange rate changes on cash and restricted cash | (13,108) | 94,714 | 56,006 |
Net increase (decrease) in cash and restricted cash | (378,704) | (1,477,399) | 1,911,403 |
Cash and restricted cash from continuing operations, beginning of year | 434,135 | 1,913,335 | 1,932 |
Cash and restricted cash from continuing operations, end of year | 55,431 | 435,936 | 1,913,335 |
Net cash provided by (used in) operating activities from continuing operations | 46,404,339 | (338,559) | (1,629,913) |
Net cash used in investing activities from continuing operations | (45,870,486) | (1,363) | (82,195) |
Net cash provided by (used in) financing activities from continuing operations | (899,449) | (1,232,191) | 3,567,505 |
FAMI | |||
Net cash provided by (used in) financing activities from continuing operations | 11,511,153 | 124,369,377 | (938,071) |
Net increase (decrease) in cash and restricted cash | 3,120,017 | 520,794 | (633,174) |
Cash and restricted cash from continuing operations, beginning of year | 522,915 | 2,121 | 635,295 |
Cash and restricted cash from continuing operations, end of year | 4,057,179 | 522,915 | 2,121 |
Net cash provided by (used in) operating activities from continuing operations | $ (8,391,136) | $ (123,848,583) | $ 304,897 |
Summary of significant accoun_7
Summary of significant accounting policies (Details 3) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 |
Other [Member] | |||
FAMI | $ 913,005 | $ 124,670,237 | $ 400,960 |
WFOE that is the primary beneficiary of the VIE | 19,188,742 | 38,204,550 | 1,812,810 |
VIE and its subsidiaries | 15,293,176 | 1,601,406 | 2,199,053 |
Nongyuan Network | |||
FAMI | 1,217,137 | ||
Other entities that are consolidated | 26,961,378 | 24,075,199 | 1,832,576 |
VIE and its subsidiaries | 6,394,084 | ||
variable interest entity and subsidiaries. | |||
FAMI | 45,500 | ||
WFOE that is the primary beneficiary of the VIE | 14,594,586 | ||
Other entities that are consolidated | 14,744,568 | 5,624,880 | 770,216 |
FAMI | |||
WFOE that is the primary beneficiary of the VIE | 1,668,758 | ||
Other entities that are consolidated | $ 984,655 | $ 319,981 | $ 394,742 |
Summary of significant accoun_8
Summary of significant accounting policies (Details 4) | 12 Months Ended |
Sep. 30, 2022 | |
Transportation equipment | |
Intangible assets estimated useful lives | 4 years |
Minimum | Plant, machinery and equipment | |
Intangible assets estimated useful lives | 5 years |
Minimum | Office equipment | |
Intangible assets estimated useful lives | 3 years |
Maximum | Plant, machinery and equipment | |
Intangible assets estimated useful lives | 10 years |
Maximum | Office equipment | |
Intangible assets estimated useful lives | 5 years |
Summary of significant accoun_9
Summary of significant accounting policies (Details 5) - USD ($) | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Component of basic and diluted EPS | ||||
Net income (loss) available for common shareholders (A) | $ 2,223,979 | $ 2,356,438 | $ 813,455 | |
Weighted average outstanding shares of ordinary shares (B) | 23,247,874 | 4,113,700 | 649,794 | 649,794 |
Diluted ordinary shares and ordinary shares equivalents (C) | 23,247,874 | 4,178,208 | 649,794 | 649,794 |
Earnings per share | ||||
Basic (A/B) | $ 0.10 | $ 0.57 | $ 1.25 | |
Diluted (A/C) | $ 0.10 | $ 0.56 | $ 1.25 | |
Continuing operations | ||||
Component of basic and diluted EPS | ||||
Net income (loss) available for common shareholders (A) | $ 2,223,979 | $ 2,407,790 | $ 1,077,302 | |
Earnings per share | ||||
Basic (A/B) | $ 0.10 | $ 0.59 | $ 1.66 | |
Diluted (A/C) | $ 0.10 | $ 0.58 | $ 1.66 | |
Discontinued operations | ||||
Component of basic and diluted EPS | ||||
Net income (loss) available for common shareholders (A) | $ 0 | $ (51,352) | $ (263,847) | |
Earnings per share | ||||
Basic (A/B) | $ 0 | $ (0.01) | $ (0.41) | |
Diluted (A/C) | $ 0 | $ (0.01) | $ (0.41) |
Summary of significant accou_10
Summary of significant accounting policies (Details Narrative) | 1 Months Ended | 12 Months Ended | 53 Months Ended | ||||||
May 31, 2022 | Apr. 30, 2019 | Apr. 30, 2018 | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | Sep. 30, 2022 CNY (¥) | Sep. 30, 2022 USD ($) | |
Distribute percentage of earnings after eliminating Variable interest entity accumulated losses | 95% | ||||||||
Percentage of Variable interest entity after tax net income gain loss | 10% | ||||||||
Percentage of service fee is subject value added sales tax | 6% | ||||||||
Percentage of service fee is subject value added other taxe | 12% | ||||||||
Percentage of service fee is subject value added tax | 6% | 6% | |||||||
Subject to corporate income tax maximum percentage of net income loss | 25% | ||||||||
Cash, FDIC insured amount | ¥ | ¥ 500,000 | ||||||||
Allowance for doubtful accounts | $ 8,094 | $ 7,249 | |||||||
Inventory reserve | 0 | 49,652 | |||||||
Allowance for doubtful debts relating to advances to suppliers | $ 3,258 | ||||||||
Amortization expenses | $ 218,317 | ||||||||
Contract liabilities, current | 12,177 | 637,165 | |||||||
Cash maintained with People's Republic of China | $ 3,985,359 | $ 76,308,051 | |||||||
Exchange rates (per RMB1) | 0.1552 | 0.1406 | 0.1406 | ||||||
Average exchange rates | 0.1521 | 0.1540 | 0.1427 | ||||||
Applicable VAT rate | 17 | ||||||||
Represents the tax rate depending on the type of goods involved. | 13 | 16 | |||||||
Weighted average number share basic | one-for-twenty-five | 4,113,700 | 649,794 | ||||||
Weighted average number share diluted | 4,178,208 | ||||||||
Basic and diluted earnings per ordinary share | 0.56 | 1.25 | |||||||
Basic and diluted earnings per ordinary share for continuing operations | 0.58 | 1.66 | |||||||
Discontinued operations, the basic and diluted loss per ordinary share | 0.01 | 0.41 | |||||||
Investment Interest Rate | 2% | 2.05% | 2.05% | ||||||
Short-term deposit | $ 2,793,556 | $ 35,144,444 | |||||||
Shipping and handling | |||||||||
Shipping and handling expenses | $ 244,490 | 235,956 | $ 202,171 | ||||||
Amortization expenses | |||||||||
Amortization expenses | $ 6,748 | $ 31,984 | $ 46,085 | $ 42,758 |
Business combinations (Details)
Business combinations (Details) - This member stands for Guoning Zhonghao. | 12 Months Ended |
Sep. 30, 2022 USD ($) | |
Net tangible liabilities (i) | $ 2,401 |
Goodwill | 3,189 |
Total fair value of purchase price allocation | 788 |
Consideration | $ 788 |
Business combinations (Details
Business combinations (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 27, 2021 | Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2021 | |
Net tangible assets | $ 218,317 | |||
Other current assets | $ 206,566 | $ 490,699 | ||
Other current liabilities | $ 898,444 | $ 161,716 | ||
This member stands for Guoning Zhonghao. | ||||
Business Combination, Consideration Transferred | $ 789 | |||
Net tangible assets | $ 1,568 | |||
Business Acquisition, Percentage of Voting Interests Acquired | 100% | |||
Other current assets | $ 133 | |||
Other current liabilities | $ 4,101 |
Accounts receivable, net (Detai
Accounts receivable, net (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Accounts receivable, net | ||
Accounts receivable - trade | $ 16,358,493 | $ 24,481,363 |
Accounts receivable - related party | 0 | 49 |
Accounts receivable | 16,358,493 | 24,481,412 |
Less: allowance for doubtful accounts | (7,249) | (8,094) |
Accounts receivable, net | $ 16,351,244 | $ 24,473,318 |
Accounts receivable, net (Det_2
Accounts receivable, net (Details Narrative) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Accounts receivable, net | ||
Accounts receivable | $ 7,249 | $ 8,094 |
Sold to customers | $ 3,900,000 | |
Concentration Risk, Percentage | 24.30% |
Advances to suppliers, net (Det
Advances to suppliers, net (Details) - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Advances to suppliers, net | ||
Beginning balance | $ 66,718,632 | $ 24,074,122 |
Increased during the year | 227,342,938 | 88,407,729 |
Less: utilized during the year | 240,110,179 | 47,418,080 |
Exchange rate difference | (5,314,529) | 1,654,861 |
Sub-total | 48,636,862 | 66,718,632 |
Less: allowance for doubtful accounts | 3,258 | 0 |
Ending balance | $ 48,633,604 | $ 66,718,632 |
Advances to suppliers, net (D_2
Advances to suppliers, net (Details narrative) - USD ($) | 1 Months Ended | |||||||
Feb. 07, 2023 | Apr. 30, 2019 | Sep. 30, 2022 | Sep. 29, 2022 | Sep. 30, 2021 | Sep. 29, 2021 | Oct. 01, 2020 | Sep. 30, 2020 | |
Frame work Agreement | 3 years | |||||||
Allowance for doubtful accounts | $ 3,258 | |||||||
Advances to suppliers | $ 48,633,604 | $ 66,718,632 | $ 66,718,632 | $ 24,074,122 | $ 24,074,122 | $ 24,074,122 | ||
Represent two suppliers. | ||||||||
Advances to suppliers | $ 16,300,000 | |||||||
Percentage Of Advances To Supplier Utilized | 35.50% | |||||||
Percentage Of Advances To Suppliers On Each Purchase | 30% |
Inventories, net (Details)
Inventories, net (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Inventories, net | ||
Raw materials | $ 620,252 | $ 1,070,837 |
Packaging materials | 63,703 | 56,723 |
Finished goods | 81,975 | 243,980 |
Inventories | 765,930 | 1,371,540 |
Less: allowance for inventory reserve | (49,652) | 0 |
Total | $ 716,278 | $ 1,371,540 |
Other receivable (Details narra
Other receivable (Details narrative) - USD ($) $ in Millions | Oct. 12, 2022 | Nov. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 |
Frame work Agreement interest rate | 2.05% | 2% | ||
Shanghai Jiaoda Onlly Co Ltd [Member] | ||||
Company received amount | $ 0.4 | $ 7 | ||
Total consideration | 71.6 | |||
Payment to party | $ 7 | |||
Frame work Agreement interest rate | 15.97% |
Property plant and equipment _2
Property plant and equipment net (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Subtotal | $ 133,944 | $ 145,949 |
Accumulated depreciation | (89,076) | (66,467) |
Total | 44,868 | 79,482 |
Plant, machinery and equipment | ||
Subtotal | 64,449 | 70,113 |
Transportation equipment. | ||
Subtotal | 49,241 | 54,362 |
Office equipment | ||
Subtotal | $ 20,254 | $ 21,474 |
Property plant and equipment _3
Property plant and equipment net (Details narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property, plant and equipment, net | |||
Depreciation expense | $ 32,303 | $ 22,332 | $ 22,474 |
Loans (Details)
Loans (Details) - USD ($) | Sep. 30, 2022 | Aug. 14, 2022 | Jun. 04, 2022 | Sep. 30, 2021 | Aug. 05, 2021 |
Short-term loans | $ 0 | $ 2,172,766 | |||
Total long-term loans - current portion | 1,505,353 | 0 | |||
Total long-term loans - non-current portion | 292,285 | 142,264 | |||
Total short-term and long-term loans | 1,797,638 | 2,315,030 | |||
Zhejiang Mintai Commercial Bank (Hangzhou Branch). | |||||
Short-term loans | 0 | 2,172,766 | $ 2,000,000 | ||
Bank of Beijing Hangzhou Branch [Member] | |||||
Short-term loans | $ 1,100,000 | ||||
Total long-term loans - current portion | 1,124,622 | 0 | |||
China Resources Shenzhen Investment Trust Co Ltd [Member] | |||||
Total long-term loans - current portion | 159,321 | 0 | |||
Long-term loans - non-current portion | 93,719 | 142,264 | |||
Jiangsu Suning Bank Member | |||||
Total long-term loans - current portion | 140,578 | 0 | |||
Long-term loans - non-current portion | 140,578 | 0 | |||
Huaneng Guicheng Trust Co Ltd [Member] | |||||
Short-term loans | $ 200,000 | ||||
Total long-term loans - current portion | 80,832 | 0 | |||
Long-term loans - non-current portion | $ 57,988 | $ 0 |
Loans (Details Narrative)
Loans (Details Narrative) - USD ($) | 12 Months Ended | |||||||||
Sep. 02, 2022 | Aug. 14, 2022 | Jul. 02, 2022 | Jun. 04, 2022 | Aug. 05, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | Jul. 01, 2022 | |
Long-term loan | $ 292,285 | $ 142,264 | ||||||||
Interest expenses amount | 134,144 | 73,866 | $ 168,657 | |||||||
Short-term bank loans | 0 | 2,172,766 | ||||||||
Ms Xinyang Wang [Member] | ||||||||||
Percentage of ownership interest | 100% | |||||||||
Outstanding principal amount | $ 2,200,000 | |||||||||
Property owned | $ 2,700,000 | |||||||||
Mr Dehong Zhang [Member] | ||||||||||
Outstanding principal amount | $ 400,000 | |||||||||
Zhejiang Mintai Commercial Bank (Hangzhou Branch). | ||||||||||
Effective interest rate | 7.05% | |||||||||
Short-term bank loans | $ 2,000,000 | 0 | 2,172,766 | |||||||
Maturity dates | July 5, 2022 | |||||||||
Percentage of ownership interest | 100% | |||||||||
Bank of Beijing Hangzhou Branch [Member] | ||||||||||
Effective interest rate | 4.80% | |||||||||
Short-term bank loans | $ 1,100,000 | |||||||||
Maturity date | Apr. 05, 2026 | |||||||||
China Resources Shenzhen Investment Trust Co Ltd [Member] | ||||||||||
Loan repaid | $ 800,000 | |||||||||
Long-term loan | $ 157,746 | $ 200,000 | ||||||||
Maturity date | July 1, 2024 | April 28, 2023 | ||||||||
Effective interest rate | 10.80% | 14.40% | ||||||||
Outstanding amount | $ 468,590,000 | |||||||||
Jiangsu Suning Bank Member | ||||||||||
Loan repaid | $ 100,000 | |||||||||
Long-term loan | $ 281,156 | |||||||||
Effective interest rate | 12% | |||||||||
Maturity date | Aug. 29, 2027 | |||||||||
Huaneng Guicheng Trust Co Ltd [Member] | ||||||||||
Loan repaid | $ 80,000 | |||||||||
Effective interest rate | 14.40% | |||||||||
Interest expenses amount | $ 134,144,000,000 | $ 53,009,000,000 | $ 166,089,000,000 | |||||||
Short-term bank loans | $ 200,000 | |||||||||
Maturity date | Aug. 01, 2024 |
Convertible promissory note (De
Convertible promissory note (Details Narrative) - USD ($) | 1 Months Ended | 12 Months Ended | ||
Sep. 26, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2019 | |
Derivative liability | $ 3,450,000 | $ 0 | ||
Amortization of debt issuance costs | (48,160) | $ 0 | $ (1,093,440) | |
Convertible promissory note [Member] | ||||
Issued Convertible promissory note | $ 6,420,000 | |||
Derivative liability | 3,870,000 | 3,450,000 | ||
Change in fair value of derivative liability | $ 420,000 | |||
Debt discount | 3,870,000 | |||
Convertible promissory note | $ 6,420,000 | |||
Convertible into ordinary shares | $ 0.025 | |||
description of amortized | the Company has determined that the floor price under the Note is assumed to be $0.12, which is calculated based on an 80% discount of the Nasdaq Minimum Price of $0.5785 on the date of the Company’s | |||
Discount amount | $ 420,000 | |||
Amortization of debt issuance costs | $ 48,160 | |||
Net of amortization | $ 2,180,000 | |||
Conversion price | $ 0.12 |
Convertible notes payable (Deta
Convertible notes payable (Details Narrative) - USD ($) | 1 Months Ended | ||||||||
Jul. 10, 2020 | Nov. 01, 2018 | Jun. 22, 2020 | Sep. 30, 2022 | Feb. 28, 2022 | Sep. 20, 2021 | May 04, 2021 | Mar. 29, 2021 | Mar. 10, 2020 | |
Investor warrants exercise price | $ 0.20 | $ 0.22 | $ 0.30 | $ 1.15 | |||||
Shares converted | 8,585,702 | ||||||||
Amount converted | $ 6,100,000 | ||||||||
Fair value of notes | $ 462,592 | ||||||||
Intrinsic value of the BCF | $ 670,618 | ||||||||
Total debt discount | 3,206,932 | ||||||||
Representing information pertaining to investor warrants. | |||||||||
Fair value of investor warrants | $ 1,496,153 | ||||||||
Represents the information pertaining to senior convertible notes due 2020. | |||||||||
Repayments of Debt | $ 2,600,000 | ||||||||
One institutional investor | Private placement | Information about placement agent warrants. | |||||||||
Investor warrants exercise price | $ 7.183 | ||||||||
Term of placement agent warrants | 4 years | ||||||||
One institutional investor | Private placement | Information about securities purchase agreement. | |||||||||
Investor warrants exercise price | $ 6.53 | ||||||||
Amount of aggregate principal securities sold under private placement | $ 7,500,000 | ||||||||
Number of aggregate principal securities sold under private placement | 800,000 | ||||||||
Ordinary shares, par value | $ 0.001 | ||||||||
Interest rate | 10% | ||||||||
Percentage of warrants issued to purchase note | 10% | ||||||||
One institutional investor | Private placement | Information about securities purchase agreement. | Information about placement agent warrants. | |||||||||
Investor warrants exercise price | $ 7.183 | $ 2 | |||||||
Percentage of warrants issued to purchase note | 10% | ||||||||
Number of investor warrant issued to purchase | 119,808 | ||||||||
One institutional investor | Private placement | Information about securities purchase agreement. | Minimum | Information about placement agent warrants. | |||||||||
Number of investor warrant issued to purchase | 119,808 | ||||||||
One institutional investor | Private placement | Information about securities purchase agreement. | Maximum | Information about placement agent warrants. | |||||||||
Number of investor warrant issued to purchase | 812,694 | ||||||||
One institutional investor | Private placement | Information about securities purchase agreement. | Represents the information pertaining to senior convertible notes due 2020. | |||||||||
Amount of aggregate principal securities sold under private placement | $ 7,500,000 | ||||||||
Number of aggregate principal securities sold under private placement | 119,808 | ||||||||
Sale of stock, price per share | $ 6.26 |
Shareholders Equity (Details)
Shareholders Equity (Details) | 12 Months Ended |
Sep. 30, 2022 USD ($) $ / shares shares | |
Shareholders Equity | |
Number of warrants outstanding, Beginning balance | shares | 1,612,694 |
Number of warrants outstanding, Ending balance | shares | 1,612,694 |
Number of warrants exercisable, Ending balance | shares | 1,612,694 |
Weighted average exercise price, Beginning balance | $ / shares | $ 0.22 |
Weighted average exercise price, Ending balance | $ / shares | 0.20 |
Weighted average exercise price exercisable | $ / shares | $ 5 |
Total intrinsic value, Beginning balance | $ | $ 391,078 |
Total intrinsic value, Endind balance | $ | 0 |
Total intrinsic value, Warrants exercisable, Endind balance | $ | $ 0 |
Weighted average remaining contractual life (in years) price, Outstanding, Beginning balance | 1 year 1 month 6 days |
Weighted average remaining contractual life (in years) price, Outstanding, Ending balance | 1 month 6 days |
Weighted average remaining contractual life (in years) exercisable | 1 month 6 days |
Shareholders Equity (Details 1)
Shareholders Equity (Details 1) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Volatility | |||
Warrants and Rights Outstanding, Measurement Input | 72.57% | ||
Risk-free interest rate | |||
Warrants and Rights Outstanding, Measurement Input | 2.94% | ||
Term (in years) | |||
Warrants and Rights Outstanding, Term | 4 years | ||
Warrant [Member] | Volatility | |||
Warrants and Rights Outstanding, Measurement Input | 137% | ||
Warrant [Member] | Dividend yield | |||
Warrants and Rights Outstanding, Measurement Input | 0 | ||
Minimum | Warrant [Member] | Exercise price | |||
Warrants and Rights Outstanding, Measurement Input | 5 | 5.50 | 50 |
Minimum | Warrant [Member] | Stock price | |||
Warrants and Rights Outstanding, Measurement Input | 3.25 | 5.25 | 17 |
Minimum | Warrant [Member] | Volatility | |||
Warrants and Rights Outstanding, Measurement Input | 108.36% | 99.55% | |
Minimum | Warrant [Member] | Risk-free interest rate | |||
Warrants and Rights Outstanding, Measurement Input | 0.09% | 0.06% | 0.16% |
Minimum | Warrant [Member] | Term (in years) | |||
Warrants and Rights Outstanding, Term | 1 month 6 days | 1 year 7 months 2 days | 2 years 3 months 21 days |
Maximum | Warrant [Member] | Exercise price | |||
Warrants and Rights Outstanding, Measurement Input | 5.5 | 7.50 | 179.58 |
Maximum | Warrant [Member] | Stock price | |||
Warrants and Rights Outstanding, Measurement Input | 9.75 | 27 | 18 |
Maximum | Warrant [Member] | Volatility | |||
Warrants and Rights Outstanding, Measurement Input | 146.04% | 113.25% | |
Maximum | Warrant [Member] | Risk-free interest rate | |||
Warrants and Rights Outstanding, Measurement Input | 0.69% | 0.14% | 0.58% |
Maximum | Warrant [Member] | Term (in years) | |||
Warrants and Rights Outstanding, Term | 1 year 1 month 6 days | 1 year 1 month 20 days | 2 years 7 months 20 days |
Shareholders Equity (Details 2)
Shareholders Equity (Details 2) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Total noncontrolling interest | $ 0 | $ 916,506 |
Paid-in capital | ||
Total noncontrolling interest | 0 | 107,461 |
Foreign currency translation loss attributed to non-controlling interest | ||
Total noncontrolling interest | 0 | 14,588 |
Net loss attributed to noncontrolling interest | ||
Total noncontrolling interest | 0 | (13,496) |
Additional Paid-In Capital | ||
Total noncontrolling interest | $ 0 | $ 807,953 |
Shareholders Equity (Details Na
Shareholders Equity (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||||||||
Feb. 28, 2022 USD ($) $ / shares | Feb. 15, 2022 shares | Feb. 14, 2022 shares | Sep. 30, 2022 USD ($) integer $ / shares shares | Sep. 30, 2021 USD ($) $ / shares shares | May 31, 2022 shares | Mar. 30, 2022 $ / shares shares | Sep. 20, 2021 $ / shares | Jul. 22, 2021 $ / shares shares | Jul. 21, 2021 $ / shares shares | May 04, 2021 $ / shares | Mar. 29, 2021 $ / shares | Sep. 12, 2020 $ / shares shares | Sep. 11, 2020 $ / shares shares | |
Common stock, shares authorized | 24,000,000 | 24,000,000 | 600,000,000 | 600,000,000 | 200,000,000 | 200,000,000 | 20,000,000 | |||||||
Ordinary shares, par value (in dollars per share) | $ / shares | $ 0.025 | $ 0.025 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | $ 0.001 | |||||||
Statutory reserve | $ | $ 1,153,813 | $ 973,555 | ||||||||||||
Share-based compensation expense | $ | $ 805,410 | |||||||||||||
Shares issued under Share incentive plan | 1,168,000 | |||||||||||||
Percentage of shares issued under share incentive plan | 10% | |||||||||||||
Vesting percentage | 20% | |||||||||||||
Vesting period | 5 years | |||||||||||||
Shares Vested under Share incentive plan | 596,600 | |||||||||||||
Number of employees exercised share incentive plan | integer | 4 | |||||||||||||
Remaining ordinary shares available Share incentive plan | 571,400 | 22,856 | ||||||||||||
Statutory surplus reserve | 10% | |||||||||||||
Issuance of common shares, net (in shares) | 30,000,000 | |||||||||||||
Price per share | $ / shares | $ 0.20 | |||||||||||||
Proceeds from issuance of common stock | $ | $ 6,000,000 | |||||||||||||
Minimum percentage of statutory reserve transferable | 3.85% | |||||||||||||
Investor warrants exercise price | $ / shares | $ 0.20 | $ 0.22 | $ 0.30 | $ 1.15 | ||||||||||
Farmmi Inc. | ||||||||||||||
Ownership in subsidiary | 50% | |||||||||||||
2021 Stock Incentive Plan | ||||||||||||||
Share-based compensation expense | $ | $ 2,000,000 | |||||||||||||
Shares authorized under the plan | 40,000,000 | |||||||||||||
Shares issued to employees | 10,000,000 | |||||||||||||
Shares cancelled | 30,000,000 | |||||||||||||
Risk-free interest rate | ||||||||||||||
Warrants and Rights Outstanding, Measurement Input | 2.94% | |||||||||||||
Term (in years) | ||||||||||||||
Warrants and Rights Outstanding, Term | 4 years | |||||||||||||
Volatility | ||||||||||||||
Warrants and Rights Outstanding, Measurement Input | 72.57% | |||||||||||||
Warrant [Member] | ||||||||||||||
Fair value of warrants | $ | $ 7,328 | |||||||||||||
Warrant [Member] | Dividend yield | ||||||||||||||
Warrants and Rights Outstanding, Measurement Input | 0 | |||||||||||||
Warrant [Member] | Volatility | ||||||||||||||
Warrants and Rights Outstanding, Measurement Input | 137% | |||||||||||||
Representing information pertaining to investor warrants and placement agent warrants. | ||||||||||||||
Investor warrants exercise price | $ / shares | $ 0.20 | $ 0.22 | $ 0.30 | $ 1.15 |
Taxes (Details)
Taxes (Details) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Taxes | |||
Statutory PRC income tax rate | 25% | 25% | 25% |
Effect of income tax exemption (a) | (50.80%) | (41.00%) | (27.50%) |
Favorable tax rate impact (a) | (14.80%) | 0.30% | (1.50%) |
Permanent difference | 0.10% | (8.20%) | 0% |
Changes of deferred tax assets valuation allowances | 7.20% | 2% | 5.30% |
Non-PRC entities not subject to PRC income tax | 27.70% | 23.60% | 2.80% |
Total | (5.60%) | 1.10% | 4.10% |
Taxes (Details 1)
Taxes (Details 1) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Taxes | |||
Current income tax provision | $ 58,266 | $ 25,571 | $ 16,753 |
Deferred income tax provision | (176,633) | 0 | 0 |
Total | $ (118,367) | $ 25,571 | $ 16,753 |
Taxes (Details 2)
Taxes (Details 2) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Taxes | ||
Net operating loss carryforwards | $ 168,126 | $ 13,569 |
Allowance for inventory | 12,413 | 0 |
Allowance for doubtful accounts | 836 | 0 |
Valuation allowance | (18,168) | (13,569) |
Total | $ 163,207 | $ 0 |
Taxes (Details narrative)
Taxes (Details narrative) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Corporate income tax at a statutory rate | 25% | 25% | 25% |
Net income exempt from income tax | $ 2,800,000 | $ 4,020,000 | $ 3,840,000 |
Tax savings from tax break | $ 691,394 | $ 1,004,365 | $ 960,097 |
Per share effect of the tax exemption | $ 0.03 | $ 0.01 | $ 0.06 |
Cumulative net operating loss | $ 700,000 | ||
Valuation allowance | $ 18,168 | $ 13,569 | |
Corporate income tax at a statutory rate | 25% | 25% | 25% |
One Customer | |||
Total sales | 31% | ||
Accounts receivable | 65% | 75% | |
Customer Two | |||
Total sales | 16% | 14% | |
Accounts receivable | 34% | 18% | |
Supplier One | |||
Total Purchase | 23% | 37% | 41% |
Advances to supplier | 35% | 32% | |
Supplier Two | |||
Total Purchase | 21% | 20% | 39% |
Advances to supplier | 26% | 28% | |
Supplier Three | |||
Total Purchase | 18% | ||
Advances to supplier | 15% | 24% | |
Supplier Four | |||
Total Purchase | 16% | ||
Advances to supplier | 15% | 16% | |
Minimum | |||
Corporate income tax at a statutory rate | 5% | ||
Represents the amount of threshold taxable income for determining tax rate. | $ 1,000,000 | ||
Scenario of Taxable Income Not More Than One Million. | |||
Corporate income tax at a statutory rate | 5% | ||
Scenario of Taxable Income Not More Than One Million. | Minimum | |||
Represents the amount of threshold taxable income for determining tax rate. | $ 1,000,000 | ||
Scenario of Taxable Income Between One Million And Three Million. | |||
Corporate income tax at a statutory rate | 10% | ||
Scenario of Taxable Income Between One Million And Three Million. | Maximum | |||
Represents the amount of threshold taxable income for determining tax rate. | $ 3,000,000 |
Leases (Details)
Leases (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Supplemental balance sheet information related to operating leases | ||
Right-of-use assets under operating leases | $ 534,351 | $ 776,665 |
Operating lease liabilities, current | 46,543 | 155,532 |
Operating lease liabilities, non-current | 517,156 | 605,793 |
Total operating lease liabilities | $ 563,699 | $ 761,325 |
Leases (Details 1)
Leases (Details 1) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Maturities of operating lease liabilities | ||
2023 | $ 99,850 | |
2024 | 99,850 | |
2025 | 99,850 | |
2026 | 99,850 | |
2027 | 99,850 | |
Thereafter | 331,924 | |
Total future minimum lease payments | 831,174 | |
Less: Imputed interest | (267,475) | |
Total | $ 563,699 | $ 761,325 |
Leases (Details Narrative)
Leases (Details Narrative) - Restatement adjustment - ASU 2016-02 | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Remaining lease term | 8 years 2 months 12 days | 7 years 10 months 24 days |
Discount rate | 10% | 9.30% |
Segment reporting (Details)
Segment reporting (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue from Contract with Customer, Including Assessed Tax | $ 99,213,379 | $ 39,289,951 | $ 28,363,963 |
Shiitake [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | 19,859,533 | 20,494,362 | 15,098,877 |
Mu Er [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | 19,123,152 | 16,524,723 | 12,082,365 |
Cotton [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | 47,950,345 | 0 | 0 |
Corn [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | 10,778,197 | 1,796,006 | 0 |
Other products [Member] | |||
Revenue from Contract with Customer, Including Assessed Tax | $ 1,502,152 | $ 474,860 | $ 1,182,721 |
Segment reporting (Details Narr
Segment reporting (Details Narrative) - USD ($) | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue generated from sales | $ 1,016 | $ 1,952 | $ 7,200 | $ 7,200 |
Corn [Member] | ||||
Sales | 1,796,006 | |||
Revenue generated from sales | 1,796,006 | |||
Other products [Member] | ||||
Sales | 474,860 | |||
Revenue generated from sales | $ 2,270,866 |
Related party transactions (Det
Related party transactions (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Due to related parties | $ 948 | $ 57,632 |
Represents information about Farm Net Limited. | ||
Due to related parties | 0 | 54,600 |
Represents information pertaining to Zhejiang Tantech Bamboo Technology Co., Ltd. | ||
Due to related parties | $ 948 | $ 3,032 |
Related party transactions (D_2
Related party transactions (Details Narrative) | 1 Months Ended | 12 Months Ended | ||||||||||
Jul. 31, 2021 CNY (¥) | Jul. 31, 2021 | Aug. 31, 2020 | Aug. 31, 2020 CNY (¥) | Jul. 31, 2020 | Oct. 31, 2019 | Oct. 31, 2009 CNY (¥) | Oct. 31, 2009 | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2020 USD ($) | Sep. 30, 2019 USD ($) | |
Revenue from Related Parties | $ | $ 1,016 | $ 1,952 | $ 7,200 | $ 7,200 | ||||||||
Represents information pertaining to Zhejiang Tantech Bamboo Technology Co., Ltd. | ||||||||||||
Terms of lease | 10 years | 10 years | ||||||||||
Annual rent | ¥ 459,360 | |||||||||||
Lease expenses | $ | 88,847 | 86,556 | 47,785 | |||||||||
Represent Forasen Group Co., Ltd. | ||||||||||||
Monthly rent | ¥ 9,200 | |||||||||||
Renewed term of lease | 10 years | |||||||||||
Terms of lease | 1 year | 10 years | ||||||||||
Represents information pertaining to Hangzhou Forasen Technology Co., Ltd. | ||||||||||||
Monthly rent | ¥ 22,400 | |||||||||||
Annual rent | ¥ 283,258 | |||||||||||
Terms of sublease agreement | 2 years | |||||||||||
Lease income | $ | $ 14,262 | $ 40,026 | $ 5,791 |
Disposition of a subsidiary (De
Disposition of a subsidiary (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 |
Total assets of disposal group | $ 0 | $ 205,887 |
Total liabilities of disposal group | 0 | 1,542,323 |
Held for sale | Entity owned or controlled by another entity | ||
Cash | 0 | 10,610 |
Accounts receivable, net | 0 | 168,203 |
Advances to suppliers | 0 | 0 |
Due from related parties | 0 | 3,913,260 |
Inventories | 0 | 0 |
Other receivables | 0 | 27,074 |
Property, plant and equipment | 0 | 173,289 |
Operating lease right-of-use assets, net | 0 | 0 |
Total assets of disposal group | 0 | 4,292,436 |
Short-term bank loan | 0 | 1,299,104 |
Accounts payable | 0 | 181,391 |
Other current liabilities | 0 | 61,828 |
Total liabilities of disposal group | $ 0 | $ 1,542,323 |
Disposition of a subsidiary (_2
Disposition of a subsidiary (Details 1) - Entity owned or controlled by another entity - USD ($) | 12 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2021 | |
Reconciliation of the amounts of major classes of operations classified as discontinued operations | ||
Revenue | $ 0 | $ 2,022,846 |
Cost of revenues | 0 | (1,783,156) |
Gross profit | 0 | 239,690 |
Operating expenses | 0 | (221,586) |
Income from operations | 0 | 18,104 |
Other expenses | 0 | (69,875) |
Income before income taxes | 0 | (51,771) |
Provision for income taxes | 0 | 419 |
Net loss from discontinued operations, net of tax | $ 0 | $ (51,352) |
Disposition of a subsidiary (_3
Disposition of a subsidiary (Details Narrative) ¥ in Thousands | 1 Months Ended | 12 Months Ended | |||||
Sep. 27, 2021 | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Oct. 01, 2021 USD ($) | Oct. 01, 2021 CNY (¥) | Sep. 30, 2021 CNY (¥) | Sep. 30, 2020 USD ($) | |
Multiemployer Plan [Line Items] | |||||||
Net assets | $ 165,686,901 | $ 163,782,853 | $ 38,191,746 | ||||
Held for sale | |||||||
Multiemployer Plan [Line Items] | |||||||
Net assets | 275,000 | ||||||
Total cash consideration | $ 282,000 | ||||||
Gain of disposal of discontinued operations | 74,000 | ||||||
Held for sale | Entity owned or controlled by another entity | |||||||
Multiemployer Plan [Line Items] | |||||||
Net assets | ¥ | ¥ 1,770 | ||||||
Percentage of interest divested | 100% | ||||||
Total cash consideration | ¥ | ¥ 1,820 | ||||||
Gain of disposal of discontinued operations | $ 48,000 |
Subsequent events (Details Narr
Subsequent events (Details Narrative) $ in Thousands, ¥ in Millions | 1 Months Ended | 12 Months Ended | |||||
Nov. 14, 2022 | Jan. 17, 2023 USD ($) | Jan. 16, 2023 USD ($) | Dec. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 CNY (¥) | Feb. 13, 2023 USD ($) | |
FLS Mushroom US | |||||||
Ownership interest rate | 100% | 100% | |||||
Total consideration transferred | $ 3,400 | ||||||
FLS Mushroom | |||||||
Total consideration transferred | ¥ | ¥ 24.1 | ||||||
December Thirty Two Thousand Twenty Two [Member] | Huaneng Guicheng Trust Co Ltd [Member] | |||||||
Secured loan | $ 120 | ||||||
Maturity date | Dec. 28, 2024 | ||||||
Interest rate | 16.56% | ||||||
January Sixteen Two Thousand Twenty Three [Member] | Mr Dehong Zhang [Member] | |||||||
Secured loan | $ 300 | $ 300 | |||||
Maturity date | Jan. 14, 2024 | ||||||
Interest rate | 5.13% | ||||||
Farmmi Agricultural [Member] | January Seventeen Two Thousand Twenty Three [Member] | |||||||
Secured loan | $ 400 | $ 400 | |||||
Maturity date | Jan. 17, 2024 | ||||||
Interest rate | 4.65% | ||||||
Subsequent Events [Member] | Farmmi Agricultural [Member] | |||||||
Ownership interest rate | 100% |
Condensed financial informati_3
Condensed financial information of the parent company Balance Sheets (Details) - USD ($) | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 |
Assets | ||||
Cash | $ 41,167,501 | $ 59,251,904 | ||
Current assets | ||||
Due from related parties | 59,983 | 0 | ||
Other receivables | 7,440,705 | 0 | ||
Total current assets | 153,254,380 | 155,305,536 | ||
Non-current assets | ||||
Net assets | 163,782,853 | 165,686,901 | $ 38,191,746 | |
Current liabilities | ||||
Due to related parties | 948 | 57,632 | ||
Derivative liability | 3,450,000 | 0 | ||
Total Liabilities | 9,098,762 | 4,894,483 | ||
Ordinary share, $0.025 par value, 24,000,000 shares authorized, 23,906,985 and 22,311,215 shares issued and outstanding at September 30, 2022 and 2021, respectively1 | 597,675 | 557,781 | ||
Shareholders' equity | ||||
Additional paid-in capital | 152,162,658 | 147,088,227 | ||
Retained earnings | 14,903,491 | 9,127,377 | ||
Total shareholders' equity (net assets) | 154,684,091 | 160,792,418 | $ 29,155,157 | $ 22,337,551 |
Total Liabilities and Equity | 163,782,853 | 165,686,901 | ||
FAMI | ||||
Current assets | ||||
Total current assets | 144,606,348 | 135,233,004 | ||
Non-current assets | ||||
Net assets | 144,606,348 | 135,233,004 | ||
Current liabilities | ||||
Total Liabilities | 5,683,459 | 1,724,060 | ||
Shareholders' equity | ||||
Total shareholders' equity (net assets) | 138,922,889 | 133,508,944 | ||
FAMI | Reportable legal entity | ||||
Assets | ||||
Cash | 4,057,179 | 522,915 | ||
Current assets | ||||
Due from related parties | 0 | 0 | ||
Other receivables | 103,858 | 125,081 | ||
Total current assets | 4,161,037 | 647,996 | ||
Non-current assets | ||||
Investment in subsidiaries | 156,151,565 | 160,199,022 | ||
Net assets | 160,312,602 | 160,847,018 | ||
Current liabilities | ||||
Due to related parties | 0 | 54,600 | ||
Convertible promissory notes | 2,178,511 | 0 | ||
Derivative liability | 3,450,000 | 0 | ||
Total Liabilities | 5,628,511 | 54,600 | ||
Ordinary share, $0.025 par value, 24,000,000 shares authorized, 23,906,985 and 22,311,215 shares issued and outstanding at September 30, 2022 and 2021, respectively1 | 597,675 | 557,781 | ||
Shareholders' equity | ||||
Additional paid-in capital | 152,162,658 | 147,088,227 | ||
Retained earnings | 1,923,758 | 13,146,410 | ||
Total shareholders' equity (net assets) | 154,684,091 | 160,792,418 | ||
Total Liabilities and Equity | $ 160,312,602 | $ 160,847,018 |
Condensed Financial Informati_4
Condensed Financial Information of the Parent Company Parentheticals (Details) - $ / shares | Sep. 30, 2022 | Sep. 30, 2021 |
Ordinary share, par or stated value per share (in dollars per share) | $ 0.025 | $ 0.025 |
Ordinary share, shares authorized | 24,000,000 | 24,000,000 |
Ordinary share, shares, issued | 23,906,985 | 22,311,215 |
Ordinary share, shares, outstanding | 23,906,985 | 22,311,215 |
FAMI | Reportable legal entity | ||
Ordinary share, par or stated value per share (in dollars per share) | $ 0.025 | $ 0.025 |
Ordinary share, shares authorized | 24,000,000 | 24,000,000 |
Ordinary share, shares, issued | 23,906,985 | 22,311,215 |
Ordinary share, shares, outstanding | 22,311,215 | 22,311,215 |
Condensed Financial Informati_5
Condensed Financial Information of the Parent Company (Details 1) - USD ($) | 12 Months Ended | |||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2019 | |
General and administrative expenses | $ (4,133,178) | $ (2,838,790) | $ (1,307,579) | |
Operating expenses: | ||||
Change in Fair value of derivative liability | 419,649 | 0 | ||
Interest expenses | (516,869) | (33,576) | (183) | |
Comprehensive income attributable to the Company | 2,223,979 | 2,356,438 | $ 813,455 | $ 813,455 |
FAMI | Reportable legal entity | ||||
General and administrative expenses | (2,961,849) | (2,031,506) | (602,518) | |
Operating expenses: | ||||
Change in Fair value of derivative liability | 419,649 | 0 | 0 | |
Interest expenses | 0 | 0 | (135,867) | |
Amortization of debt issuance costs | 48,160 | 0 | (1,093,440) | |
Other expenses | (3,024) | (5,672) | (648) | |
Loss from operations | (2,593,384) | (2,037,178) | (1,832,469) | |
Equity in income of subsidiaries and VIE | 4,817,363 | 4,395,592 | 2,656,075 | |
Comprehensive income attributable to the Company | $ 2,223,979 | $ 2,358,414 | $ 823,606 |
Condensed Financial Informati_6
Condensed Financial Information of the Parent Company (Details 2) - USD ($) | 12 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net income (loss) | $ 2,223,979 | $ 2,356,438 | $ 813,455 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Change in fair value of derivative liability | (419,649) | 0 | 0 |
Share-based compensation | 2,007,328 | 1,260,674 | 0 |
Other current assets | (49,765) | (258,117) | 54,749 |
Other current liabilities | 795,433 | (559,915) | (172,089) |
Net cash used in operating activities | 20,635,487 | (52,907,013) | (1,616,423) |
Cash flows from investing activities | |||
Net cash used in investing activities | (41,991,079) | (12,258,220) | (247,240) |
Cash flows from financing activities | |||
Net proceeds from stock issuance | 6,000,000 | 126,029,588 | 0 |
Net proceeds from issuance of convertible promissory notes | 6,000,000 | 0 | 0 |
Net cash provided by financing activities | 11,634,868 | 122,412,800 | 3,201,645 |
Net increase (decrease) in cash and restricted cash | (18,084,403) | 57,097,363 | 1,411,336 |
Cash and restricted cash, beginning of year | 59,251,904 | 2,165,151 | 753,815 |
Cash and restricted cash, end of year | 41,167,501 | 59,251,904 | 2,165,151 |
FAMI | Reportable legal entity | |||
Net income (loss) | 2,223,979 | 2,358,414 | 823,606 |
Cash flows from operating activities | |||
Amortization of deferred financing costs | 0 | 0 | 1,093,440 |
Adjustments to reconcile net income (loss) to net cash (used in) provided by operating activities: | |||
Equity in earnings of subsidiary | (4,817,363) | (4,395,592) | (2,656,075) |
Amortization of debt issuance costs | 48,160 | 0 | 135,867 |
Change in fair value of derivative liability | (419,649) | ||
Share-based compensation | 2,007,328 | 1,260,674 | 0 |
Other current assets | 21,223 | (125,081) | 0 |
Other current liabilities | 54,246 | (40,000) | 40,000 |
Net cash used in operating activities | (882,076) | (941,585) | (563,162) |
Investing in subsidiaries | (7,529,060) | (122,726,999) | (688,060) |
Cash flows from investing activities | |||
Net cash used in investing activities | (7,529,060) | (122,726,999) | 688,060 |
Cash flows from financing activities | |||
Net proceeds from stock issuance | 6,000,000 | 126,029,588 | 0 |
Net proceeds from issuance of convertible promissory notes | 6,000,000 | 0 | 0 |
Proceeds from advances from related parties | 0 | 298,297 | 0 |
Repayment of advances from related parties | (54,600) | (2,138,508) | (758,071) |
Net cash provided by financing activities | 11,945,400 | 124,189,377 | (758,071) |
Net increase (decrease) in cash and restricted cash | 3,534,264 | 520,793 | (633,173) |
Cash and restricted cash, beginning of year | 522,915 | 2,122 | 635,295 |
Cash and restricted cash, end of year | $ 4,057,179 | $ 522,915 | $ 2,122 |