Document And Entity Information
Document And Entity Information | 12 Months Ended |
Sep. 30, 2020shares | |
Document Information Line Items | |
Entity Registrant Name | Huadi International Group Co., Ltd. |
Document Type | 20-F |
Current Fiscal Year End Date | --09-30 |
Entity Common Stock, Shares Outstanding | 10,000,000 |
Amendment Flag | false |
Entity Central Index Key | 0001791725 |
Entity Current Reporting Status | Yes |
Entity Voluntary Filers | No |
Entity Filer Category | Non-accelerated Filer |
Entity Well-known Seasoned Issuer | No |
Document Period End Date | Sep. 30, 2020 |
Document Fiscal Year Focus | 2020 |
Document Fiscal Period Focus | FY |
Entity Emerging Growth Company | true |
Entity Shell Company | false |
Entity Ex Transition Period | false |
Document Annual Report | true |
Document Shell Company Report | false |
Document Transition Report | false |
Entity File Number | 001-39904 |
Entity Incorporation, State or Country Code | E9 |
Entity Interactive Data Current | Yes |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 796,794 | $ 1,057,992 |
Restricted cash | 908,410 | 1,958,680 |
Accounts receivable, net of allowance for doubtful accounts of $2,910,554 and $2,764,735, respectively | 13,618,697 | 14,001,714 |
Accounts receivable – related parties | 1,914,380 | 498,125 |
Notes receivable | 555,612 | 517,649 |
Inventories | 20,837,594 | 17,845,405 |
Advances to suppliers | 998,123 | 1,306,926 |
Advances to suppliers – related parties | 5,342,512 | 5,251,600 |
Other receivables | 2,375,031 | 5,494,060 |
Total current assets | 47,347,153 | 47,932,151 |
Property, plant and equipment, net | 6,687,642 | 6,479,256 |
Intangible assets, net | 1,202,687 | 1,171,883 |
Long-term investments | 13,449,305 | 12,775,494 |
Deferred tax assets | 436,583 | 414,710 |
TOTAL ASSETS | 69,123,370 | 68,773,494 |
Current liabilities: | ||
Accounts payable | 1,855,047 | 1,124,061 |
Accrued expenses and other current liabilities | 1,587,826 | 1,887,934 |
Notes payable | 1,517,026 | 3,696,652 |
Advances from customers | 1,515,452 | 1,221,152 |
Due to related parties | 1,407,711 | 4,101,710 |
Short-term borrowings | 31,221,280 | 31,488,660 |
Tax payable | 4,230,328 | 4,046,225 |
TOTAL LIABILITIES | 43,334,670 | 47,566,394 |
COMMITMENTS AND CONTIGENCIES | ||
Shareholders’ equity: | ||
Common stock, $0.0002 par value, 250,000,000 shares authorized, 10,000,000 shares issued and outstanding | 2,000 | 2,000 |
Additional paid-in capital | 22,531,620 | 22,531,620 |
Accumulated deficit | (159,189) | (3,481,925) |
Accumulated other comprehensive income | 3,189,856 | 1,976,808 |
Total equity attributable to Huadi International Group Co., Ltd. | 25,564,287 | 21,028,503 |
Equity attributable to non-controlling interests | 224,413 | 178,597 |
Total shareholders’ equity | 25,788,700 | 21,207,100 |
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 69,123,370 | $ 68,773,494 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for doubtful accounts, net (in Dollars) | $ 2,910,554 | $ 2,764,735 |
Common stock par value (in Dollars per share) | $ 0.0002 | $ 0.0002 |
Common stock, shares authorized | 250,000,000 | 250,000,000 |
Common stock, shares issued | 10,000,000 | 10,000,000 |
Common stock, shares outstanding | 10,000,000 | 10,000,000 |
Consolidated Statements of Inco
Consolidated Statements of Income and Comprehensive Income - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | |||
Sales | $ 57,767,081 | $ 65,518,316 | $ 60,386,004 |
Production service revenue | 1,370,197 | ||
Cost of sales | (48,473,061) | (50,895,644) | (47,142,750) |
Gross profit | 10,664,217 | 14,622,672 | 13,243,254 |
Operating expenses: | |||
Selling, general and administrative | 3,938,511 | 4,467,058 | 3,341,647 |
Research and development | 2,120,649 | 1,777,110 | 1,447,196 |
Bad debt | 144,472 | 256,857 | |
Total operating expenses | 6,203,632 | 6,244,168 | 5,045,700 |
Operating income | 4,460,585 | 8,378,504 | 8,197,554 |
Other income (expenses): | |||
Interest expenses, net | (2,162,589) | (2,149,077) | (2,082,680) |
Other income, net | 1,277,252 | 222,250 | 470,750 |
Total other expenses, net | (885,337) | (1,926,827) | (1,611,930) |
Income before income taxes | 3,575,248 | 6,451,677 | 6,585,624 |
Income tax provision | (218,949) | (1,005,190) | (1,337,092) |
Net income | 3,356,299 | 5,446,487 | 5,248,532 |
Net income attributable to non-controlling interests | 33,563 | 54,465 | 52,485 |
Net income attributable to Huadi International Group Co., Ltd. | 3,322,736 | 5,392,022 | 5,196,047 |
Net income | 3,356,299 | 5,446,487 | 5,248,532 |
Other comprehensive income (loss): | |||
Foreign currency translation adjustment | 1,225,301 | (857,879) | (628,173) |
Total comprehensive income | 4,581,600 | 4,588,608 | 4,620,359 |
Comprehensive income attributable to non-controlling interests | 45,816 | 45,886 | 46,204 |
Comprehensive income attributable to Huadi International Group Co., Ltd. | $ 4,535,784 | $ 4,542,722 | $ 4,574,155 |
Basic and diluted earnings per share | |||
Basic (in Dollars per share) | $ 0.34 | $ 0.54 | $ 0.52 |
Diluted (in Dollars per share) | $ 0.34 | $ 0.54 | $ 0.52 |
Weighted average numbers of common shares outstanding | |||
Basic (in Shares) | 10,000,000 | 10,000,000 | 10,000,000 |
Diluted (in Shares) | 10,000,000 | 10,000,000 | 10,000,000 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) | Common Stock | Additional paid-in capital | Accumulated deficit | Accumulated other comprehensive income | Shareholders’ equity to Huadi International Group Co., Ltd. | Non- controlling interests | Total |
Balance at Sep. 30, 2017 | $ 2,000 | $ 22,531,620 | $ (14,069,994) | $ 3,448,000 | $ 11,911,626 | $ 86,507 | $ 11,998,133 |
Balance (in Shares) at Sep. 30, 2017 | 10,000,000 | ||||||
Foreign currency translation gain (loss) | (621,892) | (621,892) | (6,281) | (628,173) | |||
Net income | 5,196,047 | 5,196,047 | 52,485 | 5,248,532 | |||
Balance at Sep. 30, 2018 | $ 2,000 | 22,531,620 | (8,873,947) | 2,826,108 | 16,485,781 | 132,711 | 16,618,492 |
Balance (in Shares) at Sep. 30, 2018 | 10,000,000 | ||||||
Foreign currency translation gain (loss) | (849,300) | (849,300) | (8,579) | (857,879) | |||
Net income | 5,392,022 | 5,392,022 | 54,465 | 5,446,487 | |||
Balance at Sep. 30, 2019 | $ 2,000 | 22,531,620 | (3,481,925) | 1,976,808 | 21,028,503 | 178,597 | 21,207,100 |
Balance (in Shares) at Sep. 30, 2019 | 10,000,000 | ||||||
Foreign currency translation gain (loss) | 1,213,048 | 1,213,048 | 12,253 | 1,225,301 | |||
Net income | 3,322,736 | 3,322,736 | 33,563 | 3,356,299 | |||
Balance at Sep. 30, 2020 | $ 2,000 | $ 22,531,620 | $ (159,189) | $ 3,189,856 | $ 25,564,287 | $ 224,413 | $ 25,788,700 |
Balance (in Shares) at Sep. 30, 2020 | 10,000,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Cash Flows from Operating Activities: | |||
Net income | $ 3,356,299 | $ 5,446,487 | $ 5,248,532 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation | 723,586 | 617,634 | 691,695 |
Amortization | 30,048 | 30,617 | 34,964 |
Bad debt expense | 256,857 | ||
Deferred tax benefits (expenses) | 296,163 | (53,681) | |
Loss (gain) on disposal of fixed assets | (654,138) | 19,051 | |
Changes in operating assets and liabilities: | |||
Accounts receivable | (260,202) | 996,761 | (2,906,387) |
Notes receivable | (10,332) | 2,606,326 | 653,983 |
Inventories | (1,987,737) | 3,566,204 | (1,570,427) |
Advances to suppliers | 366,087 | 1,387,753 | (1,518,134) |
Advances to suppliers – related party | 180,333 | (5,459,669) | 8,612,469 |
Other receivables | 3,303,687 | (838,251) | (1,222,110) |
Accounts payable | 650,988 | (13,033) | (7,445,939) |
Accrued expenses and other current liabilities | (387,358) | 843,625 | (4,830,841) |
Notes payable | (2,301,375) | (3,795,141) | 600,653 |
Advances from customers | 222,805 | (4,257,789) | 3,476,023 |
Tax payable | (28,401) | 899,869 | 1,182,113 |
Net cash provided by operating activities | 3,204,290 | 2,346,607 | 1,209,770 |
Cash Flows from Investing Activities: | |||
Purchases of property, plant and equipment | (664,996) | (912,702) | (527,755) |
Proceeds from disposition of property, plant and equipment | 724,782 | ||
Net cash provided by (used in) investing activities | 59,786 | (912,702) | (527,755) |
Cash Flows from Financing Activities: | |||
Proceeds from short-term borrowings | 38,620,077 | 39,715,044 | 49,463,573 |
Repayments on short-term borrowings | (40,488,791) | (46,605,766) | (49,132,022) |
Advances from related parties | 3,068,965 | 7,926,927 | 611,920 |
Repayments to related parties | (5,889,557) | (4,526,092) | |
Net cash provided by (used in) financing activities | (4,689,306) | (3,489,887) | 943,471 |
Effect of exchange rate changes on cash and cash equivalents and restricted cash | 113,762 | (125,041) | (196,191) |
Net increase (decrease) in cash and cash equivalents and restricted cash | (1,311,468) | (2,181,023) | 1,429,295 |
Cash and cash equivalents and restricted cash at the beginning of year | 3,016,672 | 5,197,695 | 3,768,400 |
Cash and cash equivalents and restricted cash at the end of year | 1,705,204 | 3,016,672 | 5,197,695 |
Supplemental disclosures of cash flows information: | |||
Cash paid for income taxes | 135,262 | 202,702 | 221,937 |
Cash paid for interest | $ 1,951,622 | $ 2,258,101 | $ 2,082,680 |
Organization and Nature of Oper
Organization and Nature of Operations | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
ORGANIZATION AND NATURE OF OPERATIONS | NOTE 1 – ORGANIZATION AND NATURE OF OPERATIONS Entity Name Registered Location Date of Incorporation Ownership as of the issuance date of the report Huadi International Group Co., Ltd. (“Huadi International”) Cayman Island September 27, 2018 Parent Yongqiang Tuoxing Limited. (“Yongqiang Tuoxing”) British Virgin Island October 2, 2018 100% by the Parent Hong Kong Beach Limited. (“HK Beach”) Hong Kong November 7, 2018 100% by Yongqiang Tuoxing Wenzhou Hongshun Stainless Steel Limited. (“Hongshun”) Wenzhou, China June 3,2019 100% by HK Beach Huadi Steel Group Limited. (“Huadi Steel”) Wenzhou, China November 12,1998 99% by Hongshun Huadi International Group Co., Ltd. (“Huadi International”) Huadi International was incorporated on September 27, 2018 under the laws of Cayman Islands. Under its memorandum of association, Huadi International is authorized to issue 250,000,000 ordinary shares of a single class, par value $0.0002 per ordinary share. The paid in capital was zero as of September 30, 2020. There are currently 10,000,000 issued and outstanding ordinary shares, of which 16.64% and 83.36% held by Yongqiang Maituo Limited and Yongqiang Donghai Limited, respectively. Huadi International is a holding company and is currently not actively engaged in any business. Huadi International’s registered agent is Harneys Fiduciary (Cayman) Limited and its registered office is at 4th Floor, Harbour Place, 103 South Church Street, P.O. Box 10240, Grand Cayman, KY1-1002, Cayman Islands. Yongqiang Tuoxing Limited (“Yongqiang Tuoxing”) Yongqiang Tuoxing was incorporated on October 2, 2018 under the laws of British Virgin Islands. Under its memorandum of association, Yongqiang Tuoxing is authorized to issue 50,000 ordinary shares of a single class, par value $1.00 per ordinary share. The paid in capital was zero as of September 30, 2020. Yongqiang Tuoxing is a wholly owned subsidiary of Huadi International and is currently not actively engaged in any business. Yongqiang Tuoxing’s registered agent is Harneys Corporate Services Limited and its registered office is at Craigmuir Chambers, Road Town, Tortola, VG1110, British Virgin Islands. Hong Kong Beach Limited (“HK Beach”) HK Beach was incorporated on November 7, 2018 under the laws of Hong Kong and is a wholly owned subsidiary of Yongqiang Tuoxing. The paid in capital was zero as of September 30, 2020. HK Beach did not have any operations as of September 30, 2020. Wenzhou Hongshun Stainless Steel Ltd. (“Wenzhou Hongshun”) Wenzhou Hongshun was incorporated on June 3, 2019 in China and is a wholly owned subsidiary of HK Beach. Wenzhou Hongshun is a wholly-foreign owned enterprise organized under the laws of the People’s Republic of China. The registered capital is USD 10,000,000 and the paid in capital was zero as of September 30, 2020. The registered principal activities of Wenzhou Hongshun are sales of stainless steel pipes, stainless steel bars, stainless steel elbows, stainless steel products, auto parts and components; import and export of goods, technology import and export. Wenzhou Hongshun did not have any operations as of September 30, 2020. Huadi Steel Group Limited. (“Huadi Steel”) Huadi Steel was incorporated on November 12, 1998 under the laws of the People’s Republic of China. The registered and paid in capital is RMB 168,800,000. Since August 18, 2015, Huadi Steel was owned by nine shareholders in People’s Republic of China (“PRC Shareholders”). Huadi Steel focuses on manufacturing of industrial stainless steel seamless pipes and tubes products with extensive distribution facilities and network in China. Except where the context otherwise requires and for purposes of this financial statement only, “the Company”, “we”, “us”, “our company”, “our” and “Huadi” refer to the above-mentioned entities. Reorganization In or about August 2019, the Company completed a corporate reorganization to roll several controlled entities (now referred to as the subsidiaries) into one legal corporation (the Company). Di Wang, one of the PRC Shareholders transferred 5% equity of Huadi Steel to a Hong Kong entity which was subsequently transferred to Wenzhou Hongshun on August 28, 2019. On August 22, 2019, Wenzhou Hongshun acquired 94% equity of Huadi Steel from the PRC Shareholders. As a result, Wenzhou Huadi Steel’s equity interest is 99% held by Wenzhou Hongshun and 1% held by Di Wang as of September 30, 2020. During the years presented in these consolidated financial statements, the control of the entities has never changed (always under the control of the PRC Shareholders). Accordingly, the combination has been treated as a corporate restructuring (reorganization) of entities under common control and thus the current capital structure has been retroactively presented in prior periods as if such structure existed at that time and in accordance with ASC 805-50-45-5, the entities under common control are presented on a combined basis for all periods to which such entities were under common control. The consolidation of the Company and its subsidiaries has been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements. Impact of COVID-19 Recently, there is an ongoing outbreak of a novel strain of coronavirus (COVID-19) first identified in China and has since spread rapidly globally. The pandemic has resulted in quarantines, travel restrictions, and the temporary closure of stores and business facilities globally for the past few months. In March 2020, the World Health Organization declared the COVID-19 as a pandemic. Given the rapidly expanding nature of the COVID-19 pandemic, and because substantially all of our business operations and our workforce are concentrated in China, we believe there is a risk that our business, results of operations, and financial condition will be adversely affected, especially for our export related business. Potential impact to our results of operations will also depend on future developments and new information that may emerge regarding the duration and severity of the COVID-19 and the actions taken by government authorities and other entities to contain the COVID-19 or mitigate its impact, almost all of which are beyond our control. The impacts of COVID-19 on our business, financial condition, and results of operations include, but are not limited to, the following: ● Wenzhou entered into a city-wide lockdown on February 3, 2020. We temporarily closed our offices and production facilities to adhere to the policy beginning in February 2020, as required by relevant PRC regulatory authorities. Our offices were reopened on February 18, 2020 and production facilities are now fully operational. ● Some of our customers have been negatively impacted by the outbreak, which reduced the demand of our products. The total sales from international customers decreased from $17.9 million for the 2019 fiscal year to $11.9 million for the fiscal year 2020 representing a 34% reduction. However, domestic demand remained stable because of the recovery initiative within China. Total revenue decreased by approximately $6.4 million for the fiscal year 2020 comparing to the fiscal year 2019. ● We have experienced some disruptions to our supply chain during the Chinese government mandated lockdown, with suppliers increasing lead times and purchase price for raw materials. While all our major suppliers are currently fully operational, any future disruption in their operations would impact our ability to manufacture and deliver our products to customers. In addition, reductions in commercial airline and cargo flights, disruptions to ports and other shipping infrastructure resulting from the pandemic are resulting in increased transport times to deliver materials and components to our facilities and may also affect our ability to timely ship our products to international customers. As a result of these supply chain disruptions, we have increased customer order lead times. This may limit our ability to fulfil orders with short lead times and means that we may be unable to satisfy all of the demand for our products in a timely manner, which may adversely affect our relationships with our customers. ● Our workforce remains stable throughout fiscal year 2020. While the local government has provided funding to subsidize our labor cost, the implementation of various safety measures has increased the total cost of our operation. We are required to provide our employees with protective gears and regularly monitor and trace the health condition of our employees. Workers are also required to practice social distancing during mealtime at our own cafeteria. ● The global stock markets have experienced, and may continue to experience, significant decline from the COVID-19 outbreak. It is possible that the price of our ordinary shares will decline significantly after the consummation of this offering, in which case you may lose your investment. ● During the year ended September 30, 2020, we were able to repay all our debt and other obligations without taking advantage of any available payment deferral or forbearance term. In the long term, the COVID-19 pandemic is likely to adversely affect the economies and financial markets of many countries and could result in a global economic downturn or a recession. This would likely adversely affect demand on some of our products and those of our customers, which may, in turn negatively impact our results of operations. While we continue to observe a stable demand in our products, the market remains uncertain, and it may not be sustainable in the long term. The degree to which the pandemic ultimately impacts our business and results of operations will depend on future developments beyond our control, including the severity of the pandemic, the actions to contain or treat the virus, how quickly and to what extent the economic and operating conditions can resume, and the severity and duration of the global economic downturn as a result of the pandemic. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United Stated of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of the Company and its majority-owned and controlled subsidiaries. All significant inter-company transactions and balances have been eliminated upon consolidation. Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Such estimates include, but are not limited to, allowances for doubtful accounts, inventory valuation, useful lives of property, plant and equipment, intangible assets, impairment in equity investment, and income taxes related to realization of deferred tax assets and uncertain tax position. Actual results could differ from those estimates. Foreign Currency Translation The financial records of the Company’s subsidiaries in People’s Republic of China (“PRC”) are maintained in their local currencies which are Chinese Yuan (“CNY” or “RMB”). Monetary assets and liabilities denominated in currencies other than their local currencies are translated into local currencies at the rates of exchange in effect at the consolidated balance sheet dates. Transactions denominated in currencies other than their local currencies during the year are converted into local currencies at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in other income, net in the consolidated statements of income and comprehensive income. The Company maintained its financial record using the United States dollar (“US dollar”) as the functional currency, while the subsidiaries of the Company in Hong Kong and mainland China maintained their financial records using RMB as the functional currencies. The reporting currency of the Company is US dollar. When translating local financial reports of the Company’s subsidiaries into US dollar, assets and liabilities are translated at the exchange rates at the consolidated balance sheet date, equity accounts are translated at historical exchange rates and revenue, expenses, gains and losses are translated at the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the consolidated statements of income and comprehensive income. The relevant exchange rates are listed below: For the Fiscal Years 2020 2019 2018 Period Ended RMB: USD exchange rate 6.7896 7.1477 6.8680 Period Average RMB: USD exchange rate 7.0056 6.8753 6.5368 Cash and Cash Equivalents Cash and cash equivalents primarily consist of cash and deposits with financial institutions which are unrestricted as to withdrawal and use. Cash equivalents consist of highly liquid investments that are readily convertible to cash generally with original maturities of three months or less when purchased. Restricted Cash The Company has bank acceptance notes outstanding with the bank and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. Those notes are generally short term in nature due to their short maturity period of six to nine months; thus, restricted cash is classified as a current asset. Restricted cash is included in the beginning or ending balance of cash and cash equivalents, and restricted cash in the consolidated statements of cash flows. As of September 30, 2020 and 2019, restricted cash was $908,410 and $1,958,680, respectively. No cash is restricted to assure future credit availability. Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on management of customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The allowance for doubtful accounts recognized as of September 30, 2020 and 2019 was $2,910,554 and $2,764,735, respectively. Inventories Inventories are stated at the lower of cost or net realizable value. Cost is principally determined using the weighted-average method. The Company records adjustments to inventory for excess quantities, obsolescence or impairment when appropriate to reflect inventory at net realizable value. These adjustments are based upon a combination of factors including current sales volume, market conditions, lower of cost or market analysis and expected realizable value of the inventory. There were no write-downs recognized of inventories for the years ended September 30, 2020, 2019 and 2018. Advances to Suppliers Advances to suppliers refer to advances for purchase of materials or other service agreements, which are applied against accounts payable when the materials or services are received. The Company reviews a supplier’s credit history and background information before advancing a payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would write off such amount in the period when it is considered as impaired. For the years ended September 30, 2020, 2019 and 2018, the Company had no wrote off for advances to suppliers. Advances from Customers Advances from customers refer to advances received from customers regarding product sales, which are applied against accounts receivable when products are sold. Property and Equipment, net Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation commences upon placing the asset in usage and is recognized on a straight-line basis over the estimated useful lives of the assets with 5% of residual value, as follows: Useful lives Buildings 10-32 years Machinery and equipment 5-20 years Transportation vehicles 3-10 years Office equipment 3-10 years Electronic equipment 3-10 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. Intangible Assets Intangible assets consist of land use rights. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership.” Land use rights are stated at cost less accumulated amortization. Intangible assets are amortized using the straight-line method with the following estimated useful lives: Useful lives Land use rights 50 years Long-term Investments The Company accounts for investments less than 20% ownership under the cost method and assess impairment at the end of each fiscal year. The carrying value of the investments was $13,449,305 and $12,775,494 as of September 30, 2020 and 2019, respectively. The Company determined that there was no impairment in these investments as of September 30, 2020, 2019 and 2018. Impairment of Long-lived Assets The Company’s management reviews the carrying values of long-lived assets whenever events and circumstances, such as a significant decline in the asset’s market value, obsolescence or physical damage affecting the asset, significant adverse changes in the assets use, deterioration in the expected level of the assets performance, cash flows for maintaining the asset are higher than forecast, indicate that the net book value of an asset may not be recovered through expected future cash flows from its use and eventual disposition. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There was no impairment charge recognized for long-lived assets for the years ended September 30, 2020, 2019 and 2018. Fair Value Measurement Fair Value Measurements and Disclosures requires disclosure of the fair value of financial instruments held by the Company. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 inputs to the valuation methodology are quoted prices 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 prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. For the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, other current liabilities, notes receivable, notes payable, advances to suppliers, advances from customers, bank loans, and income tax payable and other receivables, the carrying amounts approximate their fair values due to their short maturities as of September 30, 2020 and 2019. Value-added Tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. All of the Company’s products are sold in the PRC and are subject to a VAT on the gross sales price. The Company is subject to a VAT rate of 17% before May 1, 2018, a VAT rate of 16% effective on May 1, 2018, and the most current VAT rate of 13% effective on April 1, 2019. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. Revenue Recognition The Company generates its revenues mainly from sales of steel piping products. The Company follows Financial Accounting Standards Board (FASB) ASC 606 and accounting standards updates (“ASU”) 2014-09 for revenue recognition. On October 1, 2018, the Company has early adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation. Results for reporting periods beginning after October 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606, and there have not been any significant changes to company’s business processes, systems, or internal controls as a result of implementing the standard. The Company considers customer purchase orders and production service agreement, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of its consideration of the contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on their relative standalone selling price. Revenues are reported net of all value added taxes. The Company does not routinely permit customers to return products, while in certain conditions product changes are allowed, and historically customer returns have been immaterial and due to the nature of company’s products no warranty is offered. Sales revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied at a point in time), which typically occurs at delivery. Production service revenue is recognized when production order is fulfilled and VAT invoice is issued to customer. The Company sells its products either under free onboard (“FOB”) shipping point term or under FOB destination term. For sales under FOB shipping point term, the Company recognize revenues when products are loaded on the ships. Product delivery is evidenced by warehouse shipping logs as well assigned shipping bills from the shipping companies. For sales under FOB destination term, the Company recognize revenues when the products are delivered and accepted by customers. Product delivery is evidenced by signed receipt documents and title transfers upon delivery. Prices are determined based on negotiations with the Company’s customers and are not subject to adjustment. As a result, the Company expects returns to be minimal. Government Grant Government grants are recognized when received and all the conditions for their receipt have been met. Government grants as the compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related cost are recognized in profit or loss in the period in which they become receivable. For the years ended September 30, 2020, 2019 and 2018, the Company received government grants of $410,532, $59,131 and $100,916, respectively. The grants were recorded as other income in the consolidated statements for income. Research and Development Costs Research and development activities are directed toward the development of new products as well as improvements in existing processes. These costs, which primarily include salaries, contract services and supplies, are expensed as incurred. Shipping and Handling Costs Shipping and handling costs are expensed when incurred and are included in selling and marketing expense. Shipping and handling costs were $804,264, $1,011,670 and $337,237 for the years ended September 30, 2020, 2019 and 2018, respectively. Advertising Costs Advertising costs are expensed as incurred in accordance with ASC 720-35, “Other Expenses-Advertising Costs”. Advertising costs were $104,933, $147,363 and $105,734 for years ended September 30, 2020, 2019 and 2018 respectively. Income Taxes The Company accounts for income taxes using the asset and liability method whereby it calculates deferred tax assets or liabilities for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits by applying enacted tax rates applicable to the years in which those temporary differences are expected to be reversed or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The components of the deferred tax assets and liabilities are individually classified as non-current amounts. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. To the extent applicable, the Company records interest and penalties as other expense. All of the tax returns of the Company’s PRC subsidiaries remain subject to examination by PRC tax authorities for five years from the date of filing. The fiscal years for tax purpose in PRC is December 31. The Company and its subsidiaries are not subject to U.S. tax laws and local state tax laws. The Company’s income and that of its related entities must be computed in accordance with Chinese and foreign tax laws, as applicable, and all of which may be changed in a manner that could adversely affect the amount of distributions to shareholders. There can be no assurance that Income Tax Laws of PRC will not be changed in a manner that adversely affects shareholders. In particular, any such change could increase the amount of tax payable by the Company, reducing the amount available to pay dividends to the holders of the Company’s ordinary shares. Earnings Per Share Earnings (loss) per share is calculated in accordance with ASC 260 Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is computed in accordance with the treasury stock method and based on the weighted average number of ordinary shares and dilutive common share equivalents. Dilutive common share equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive. There were no dilutive common share equivalents outstanding during the years ended September 30, 2020, 2019 and 2018. Certain Risks and Concentration Exchange Rate Risks The Company operates in PRC, which may give rise to significant foreign currency risks mainly from fluctuations and the degree of volatility of foreign exchange rates between the USD and the RMB. Currency Convertibility Risks Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents, restricted cash, notes receivable. The Company places its cash and cash equivalents, restricted cash, and note receivable in good credit quality financial institutions in Hong Kong and PRC. Concentration of credit risks with respect to accounts receivables is linked to the concentration of revenue. To manage credit risk, the Company performs ongoing credit evaluations of customers’ financial condition. Interest Rate Risks The Company is subject to interest rate risk. The Company has bank interest bearing loans charged at variable interest rates. And although some bank interest bearing loans are charged at fixed interest rates within the reporting period, the Company is still subject to the risk of adverse changes in the interest rates charged by the banks when these loans are refinanced. Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. Liquidity Risks Our primary sources of liquidity consist of existing cash balances, cash flows from our operating activities and availability under our revolving credit facility. Our ability to generate sufficient cash flows from our operating activities is primarily dependent on our sales of steel pipe, tube and ancillary products to our customers at margins sufficient to cover fixed and variable expenses. As of September 30, 2020 and 2019, we had cash and cash equivalents of $796,794 and $1,057,992, respectively. We believe that our current cash, cash to be generated from our operations and access to loans from our related parties will be sufficient to meet our working capital needs for at least the next twelve months. However, we do not have any amounts committed to be provided by our related party. We are also not dependent upon this offering to meet our liquidity needs for the next twelve months. However, we plan to expand our business to implement our growth strategies in our existing market and strengthen our position in the marketplace. To do so, we will need more capital through equity financing to increase our production and meet market demands. Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize all assets and liabilities arising from leases on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and requires the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. Effective October 1, 2019, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed the Company not to recast comparative periods presented in its consolidated financial statements. The adoption of the new standard had no impact on our consolidated net earnings and cash flows. New Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). The amendments in this ASU modify the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company does not plan to early adopt ASU 2018-13 or expect this update will have a material impact on the Company’s consolidated financial position, results of operations and cash flows. |
Accounts Receivable
Accounts Receivable | 12 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 3 – ACCOUNTS RECEIVABLE Accounts receivable as of September 30, 2020 and 2019 consisted of the following: 2020 2019 Accounts receivable $ 16,529,251 $ 16,766,449 Accounts receivable – related parties 1,914,380 498,125 Less: allowance for doubtful accounts (2,910,554 ) (2,764,735 ) Accounts receivable, net $ 15,533,077 $ 14,499,839 The Company’s customers are for the most part, various levels of government, state-owned entities and construction companies. Due to the nature of the customers and the practice of the industry, the Company generally allows credit period of 180 days to its customers. The average accounts receivable turnover period was approximately 93 days, 84 days and 91 days for the fiscal years ended September 30, 2020, 2019 and 2018, respectively. Changes of allowance for doubtful accounts for the years ended September 30, 2019 and 2018 are as follow: 2020 2019 Beginning balance $ 2,764,735 $ 2,912,310 Bad debt write-off - (33,612 ) Exchange difference 145,819 (113,963 ) Ending balance $ 2,910,554 $ 2,764,735 No bad debt expense recorded by the Company during the years ended September 30, 2020 and 2019. The Company recorded bad debt write-off of $0, $33,612 and $40,101 during the years ended September 30, 2020, 2019 and 2018, respectively. |
Notes Receivable
Notes Receivable | 12 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
NOTES RECEIVABLE | NOTE 4 –NOTES RECEIVABLE Notes receivable consisted of bank acceptance notes of $555,612 and $517,649 received from the Company’s customers as of September 30, 2020 and 2019, respectively. These notes with 3-6 months maturity dates were issued by customers to pay their payable balances to the Company; and these notes were guaranteed by the banks. |
Inventories
Inventories | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 5 – INVENTORIES Inventories as of September 30, 2020 and 2019 consisted of the following: 2020 2019 Raw materials $ 11,305,744 $ 10,489,858 Work in process 913,751 252,749 Finished goods 8,618,099 7,102,798 Total $ 20,837,594 $ 17,845,405 There was no inventory write-downs recognized for the years ended September 30, 2020, 2019 and 2018. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 6 – PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment as of September 30, 2020 and 2019 consisted of the following: 2020 2019 Buildings $ 4,930,868 $ 4,785,642 Machinery and equipment 7,706,598 8,302,445 Transportation vehicles 932,472 936,908 Office equipment 460,943 442,343 Construction in progress (“CIP”) 235,266 124,276 Total property plant and equipment, at cost 14,266,147 14,591,614 Less: accumulated depreciation (7,578,505 ) (8,112,358 ) Property, plant and equipment, net $ 6,687,642 $ 6,479,256 Depreciation expense was $723,586, $617,634 and $691,695 for the years ended September 30, 2020, 2019 and 2018, respectively. During fiscal year ended September 30, 2020, the Company sold fixed assets with a net carrying value of $70,644, and recorded gain on sale of fixed assets of $654,138. During fiscal year ended September 30, 2019, the Company disposed certain fixed assets and recorded loss on disposal of fixed assets of $19,051. As of September 30, 2020 and 2019, the Company pledged buildings and machinery to secure banking facilities granted to the Company. The carrying values of the pledged buildings to secure bank borrowings by the Company are shown in Note 10 |
Intangible Assets
Intangible Assets | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
INTANGIBLE ASSETS | NOTE 7 – INTANGIBLE ASSETS Intangible assets as of September 30, 2020 and 2019 consisted of the following: 2020 2019 Land use rights, cost $ 1,632,277 $ 1,550,500 Less: accumulated amortization (429,590 ) (378,617 ) Intangible assets, net $ 1,202,687 $ 1,171,883 The land use right represents the Company’s land use rights in Wenzhou’s plant, which had been pledged to secure the Company’s banking facilities granted to the Company as of September 30, 2020 and 2019. The carrying values of the pledged land use rights to secure bank borrowings by the Company are shown in Note 10 Amortization expense was $30,048, $30,617 and $34,964 for the years ended September 30, 2020, 2019 and 2018, respectively. |
Long-Term Investments
Long-Term Investments | 12 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
LONG-TERM INVESTMENTS | NOTE 8 – LONG-TERM INVESTMENTS Long-term investments consisted of the following as of September 30, 2020 and 2019: 2020 2019 Huashang Micro Finance Co. $ 5,596,795 $ 5,316,395 Longwan Rural Commercial Bank 6,625,133 6,293,213 Wenzhou Longlian Development Co., Ltd 1,227,377 1,165,886 Total $ 13,449,305 $ 12,775,494 In 2009, the Company made an investment of RMB 90,000,000 ($13,203,257 in USD) to acquire 22.5% in Huashang Micro Finance Co. (“Huashang”), a finance company offers micro loans to its customers. In 2015, as the result of a capital reduction, the Company’s ownership was reduced by 3.5% to 19% for a cash consideration of RMB 52,000,000 ($8,535,827 in USD), of which RMB 7,000,000 ($1,030,989 and $979,336 in USD, respectively) has not been collected as of September 30, 2020 and 2019 and recorded as other receivable. The Company carries this investment at the cost on its consolidated balance sheets. The Company did not receive any dividend income from Huashang during the years ended September 30, 2020, 2019 and 2018. In 2011, the Company made an investment of RMB 8,333,400 ($1,307,982 in USD) to acquire 8.3334% in Wenzhou Longlian Development Co., Ltd. (“Longlian”), a property and infrastructure development company. The Company carries this investment at the cost on its consolidated balance sheets. The Company did not receive any dividend income from Longlian during the years ended September 30, 2020, 2019 and 2018. In 2012, the Company made an investment of RMB 44,982,000 ($7,172,207 in USD) to acquire 2.1% in Longwan Rural Commercial Bank. (“LRCB”), a private bank accepting deposits and providing short-term or long-term lending to its customers. The Company carries this investment at the cost on its consolidated balance sheets. During the year ended September 30, 2020, the Company received dividend income of RMB 3,087,000 ($440,647 in USD) from LRCB. During the year ended September 30, 2019, the Company received dividend income of RMB 3,307,500 ($481,070 in USD) from LRCB. During the year ended September 30, 2018, the Company received dividend income of RMB 3,307,500 ($505,982 in USD) from LRCB. |
Notes Payable
Notes Payable | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
NOTES PAYABLE | NOTE 9 –NOTES PAYABLE Notes payable consisted of bank notes payable of $1,517,026 and $3,696,652 provided by the Company to its customers as of September 30, 2020 and 2019, respectively. These short-term bank notes can be endorsed and assigned to suppliers as payments for purchases. The bank notes payables are generally payable within six months. These short-term notes payables are guaranteed by the bank for their full face value. In addition, the banks usually require the Company to deposit a certain amount of at the bank as a guarantee deposit, which is classified on the consolidated balance sheets as restricted cash. |
Short-Term Borrowings
Short-Term Borrowings | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
SHORT-TERM BORROWINGS | NOTE 10 – SHORT-TERM BORROWINGS Short-term borrowings consisted of the following at September 30, 2020: Bank Name Amount - RMB Amount - USD Issuance Date Expiration Date Interest Agricultural Bank 9,990,000 $ 1,471,367 11/4/2019 11/3/2020 5.40 % Agricultural Bank 5,000,000 736,420 11/13/2019 11/12/2020 5.40 % Agricultural Bank 7,000,000 1,030,989 11/28/2019 11/18/2020 5.35 % Agricultural Bank 9,500,000 1,399,199 12/19/2019 12/18/2020 5.35 % Agricultural Bank 9,990,000 1,471,368 12/27/2019 12/10/2020 5.35 % Agricultural Bank 5,700,000 839,519 1/8/2020 1/7/2021 5.35 % Agricultural Bank 9,990,000 1,471,368 1/14/2020 1/13/2021 5.35 % Agricultural Bank 9,000,000 1,325,557 2/28/2020 2/27/2021 5.60 % Agricultural Bank 4,990,000 734,948 3/4/2020 3/3/2021 5.60 % Agricultural Bank 13,400,000 1,973,607 3/13/2020 3/12/2021 5.25 % Agricultural Bank 5,000,000 736,420 3/27/2020 3/15/2021 5.25 % Agricultural Bank 4,500,000 662,778 7/10/2020 7/1/2021 4.80 % Agricultural Bank 10,500,000 1,546,483 7/24/2020 7/15/2021 4.75 % Agricultural Bank 14,500,000 2,135,619 8/3/2020 8/2/2021 4.75 % China CITIC Bank 4,500,000 662,778 10/11/2019 10/10/2020 5.35 % China CITIC Bank 6,500,000 957,347 10/16/2019 10/15/2020 5.35 % China CITIC Bank 4,000,000 589,136 10/29/2019 10/28/2020 5.35 % China CITIC Bank 6,000,000 883,704 9/22/2020 9/21/2021 5.00 % China CITIC Bank 6,500,000 957,347 9/23/2020 9/22/2021 5.00 % China CITIC Bank 8,000,000 1,178,273 9/24/2020 9/23/2021 5.00 % Bank of China 7,540,000 1,110,522 1/7/2020 1/2/2021 4.50 % Bank of China 7,730,000 1,138,506 1/9/2020 1/7/2021 4.50 % Minsheng Bank 11,400,000 1,679,039 4/22/2020 4/15/2021 5.50 % Zhejiang Commerce Bank 8,500,000 1,251,915 4/22/2020 4/16/2021 4.20 % Zhejiang Commerce Bank 4,750,000 699,599 5/21/2020 5/18/2021 4.20 % Zhejiang Commerce Bank 7,000,000 1,030,989 6/3/2020 5/14/2021 4.20 % Zhejiang Commerce Bank 10,500,000 1,546,483 9/18/2020 6/18/2021 5.22 % Total RMB211,980,000 $ 31,221,280 Short-term borrowings consisted of the following at September 30, 2019: Bank Name Amount - RMB Amount - USD Issuance Date Expiration Date Interest Agricultural Bank RMB9,990,000 $ 1,397,654 11/2/2018 11/1/2019 5.44 % Agricultural Bank 7,000,000 979,336 12/3/2018 12/2/2019 5.44 % Agricultural Bank 5,000,000 699,526 12/7/2018 11/15/2019 5.44 % Agricultural Bank 9,500,000 1,329,099 1/11/2019 1/10/2020 5.44 % Agricultural Bank 9,990,000 1,397,652 1/21/2019 1/20/2020 5.13 % Agricultural Bank 5,700,000 797,459 1/25/2019 1/24/2020 5.13 % Agricultural Bank 9,990,000 1,397,652 2/1/2019 1/30/2020 5.13 % Agricultural Bank 9,000,000 1,259,146 3/4/2019 3/3/2020 5.35 % Agricultural Bank 9,990,000 1,397,652 3/8/2019 3/7/2020 5.35 % Agricultural Bank 13,400,000 1,874,729 4/2/2019 4/1/2020 5.13 % Agricultural Bank 5,000,000 699,526 4/24/2019 4/15/2020 5.13 % Agricultural Bank 4,500,000 629,573 7/2/2019 7/1/2020 5.66 % Agricultural Bank 10,500,000 1,469,004 8/2/2019 8/1/2020 5.66 % Agricultural Bank 14,500,000 2,028,625 8/14/2019 8/12/2020 5.66 % China CITIC Bank 2,614,096 365,725 10/17/2018 10/12/2019 4.90 % China CITIC Bank 6,500,000 909,383 10/17/2018 10/17/2019 5.66 % China CITIC Bank 5,147,400 720,148 1/4/2019 12/30/2019 5.00 % China CITIC Bank 6,000,000 839,431 9/24/2009 9/22/2020 5.35 % China CITIC Bank 6,500,000 909,383 9/25/2019 9/23/2020 5.35 % China CITIC Bank 8,000,000 1,119,241 9/26/2019 9/24/2020 5.35 % Bank of China 8,880,000 1,242,358 1/10/2019 1/6/2020 5.44 % Bank of China 7,540,000 1,054,885 1/9/2019 1/6/2020 5.44 % Bank of China 3,350,000 468,682 1/25/2019 1/22/2020 5.22 % Bank of China 3,580,000 500,860 1/25/2019 1/2/2020 5.22 % Minsheng Bank 14,900,000 2,084,587 4/25/2019 4/25/2020 6.53 % Zhejiang Commerce Bank 1,000,000 139,905 4/23/2019 10/23/2019 6.09 % Zhejiang Commerce Bank 7,000,000 979,336 4/23/2019 10/23/2019 6.09 % Zhejiang Commerce Bank 4,500,000 629,573 4/29/2019 10/29/2019 6.09 % Zhejiang Commerce Bank 10,500,000 1,469,004 4/29/2019 10/29/2019 6.09 % Total RMB220,071,496 $ 30,789,134 Short-term borrowings also include loans from various individuals with interest rate around 8% and maturing within one year. As of September 30, 2020 and 2019, the total amount of these loans was $0 and $699,526, respectively. The Company’s short-term bank borrowings are pledged by its assets as listed below, and guaranteed by the Company’s major shareholders: Di Wang, Jueqin Wang, their immediate family members, third-party individuals, and third-party companies: As of September 30, 2020 2019 Buildings, net $ 3,405,140 $ 2,873,733 Long-term Investment 6,625,133 7,459,099 Total $ 10,030,273 $ 10,332,832 For the years ended September 30, 2020, 2019 and 2018, interest expense on all short-term borrowings and notes payable amounted to $2,162,589, $2,149,077 and $2,082,680, respectively. |
Customer and Supplier Concentra
Customer and Supplier Concentrations | 12 Months Ended |
Sep. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
CUSTOMER AND SUPPLIER CONCENTRATIONS | NOTE 11 – CUSTOMER AND SUPPLIER CONCENTRATIONS Significant customers and suppliers are those that account for greater than 10% of the Company’s revenues and purchases. The Company had no significant customer during the year ended September 30, 2020. There were two customers accounted for a significant portion of total accounts receivable for the year ended September 30, 2020, which combined accounted for 26.31% of the Company’s total accounts receivable. The Company sold a substantial portion of products to one customer (10.13% of total revenues) during the year ended September 30, 2019. As of September 30, 2019, amount due from this customer included in accounts receivable was $293,640. There was one customer accounted for a significant portion (11.48%) of total accounts receivable for the year ended September 30, 2019. The Company sold a substantial portion of products to one customer (14.46% of total revenues) during the year ended September 30, 2018. As of September 30, 2018, amount due from this customer included in accounts receivable was $6,048,446, representing 31.83% of total accounts receivable. There was no other significant concentration (over 10%) of accounts receivable for the year ended September 30, 2018. The loss of our significant customer or the failure to attract new customers could have a material adverse effect on our business, consolidated results of operations and financial condition. For the year ended September 30, 2020, three suppliers accounted for 32.05%, 16.60% and 11.16% of the Company’s total purchase. There were three suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2020, which combined accounted for 63.47% of the Company’s total accounts payable. For the year ended September 30, 2019, two suppliers accounted for 29.13% and 18.09% of the Company’s total purchase. There were three suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2019, which combined accounted for 63.47% of the Company’s total accounts payable. For the year ended September 30, 2018, two suppliers accounted for 29.02% and 12.97% of the Company’s total raw material purchase. There were two suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2018, which combined accounted for 53.35% of the Company’s total accounts payable. The Company believes there are numerous other suppliers that could be substituted should the supplier become unavailable or non-competitive. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 12 – RELATED PARTY TRANSACTIONS 1) Nature of relationships with related parties: Name Relationship with the Company Taizhou Huadi Industrial Ltd. (“Taizhou Huadi”) An entity 30% owned by Jueqin Wang Huashang Micro Finance Co. (“Huashang”) An entity 19% owned by the Company Taizhou Huadi Material Technology Co. An entity 100% owned by Yiyu Wang Jueqin Wang Principal shareholder of the Company Di Wang Principal shareholder of the Company Huizhi Wang Principal shareholder of the Company Juelin Wang Principal shareholder of the Company Yiyu Wang Immediate family member of majority shareholder of the Company Bing Zhang Principal shareholder of the Company 2) Related party transactions During the year ended September 30, 2020, the Company purchased a total of $14,521,129 raw materials from Taizhou Huadi. These raw materials primarily consisted of stainless steel bars and stainless steel strips. As of September 30, 2020, the Company had no outstanding accounts payable balance to this entity. To lock down the prices for raw materials and hedge against price rise risk, the Company periodically pays Taizhou Huadi in advance. As of September 30, 2020, the Company had outstanding balance of USD $5,342,512 to Taizhou Huadi. During the year ended September 30, 2020, the Company sold a total of $3,228,396 steel materials to Taizhou Huadi. As of September 30, 2020, the Company had accounts receivable of $1,880,762 from this entity. During the year ended September 30, 2019, the Company purchased a total of $11,641,219 raw materials from Taizhou Huadi. These raw materials primarily consisted of stainless steel bars and stainless steel strips. As of September 30, 2019, the Company had no outstanding accounts payable balance to this entity. To lock down the prices for raw materials and hedge against price rise risk, the Company periodically pays Taizhou Huadi in advance. As of September 30, 2019, the Company had outstanding advance balance of $5,251,600 to Taizhou Huadi. During the year ended September 30, 2018, the Company purchased a total of $12,265,399 raw materials from Taizhou Huadi. These raw materials primarily consisted of stainless steel bars and stainless steel strips. As of September 30, 2018, the Company had no outstanding balance of accounts payable to Taizhou Huadi. During the year ended September 30, 2019, the Company sold a total of $1,276,462 steel materials to Taizhou Huadi Material Technology Co. As of September 30, 2019, the Company had accounts receivable of $498,125 from this entity. In 2009, the Company made an investment of RMB 90,000,000 ($13,203,257 in USD) to acquire 22.5% in Huashang Micro Finance Co., a finance company offers micro loans to its customers. In 2015, as the result of a capital reduction, the Company’s ownership reduced by 3.5% to 19% for a cash consideration of RMB 52,000,000 ($8,535,827 in USD), of which RMB 7,000,000 ($1,030,989, $979,336 and $1,019,220 in USD, respectively) has not been collected as of September 30, 2020, 2019 and 2018. Jueqin Wang periodically provides working capitals to support the Company’s operations when needed. During fiscal year 2020, Jueqin Wang advanced RMB 500,000 ($71,371 in USD). As of September 30, 2020, and 2019 and 2018, the Company had outstanding payable due to Jueqin Wang with an amount of $341,374, and $254,319 and $281,892, respectively. This represented unsecured, due on demand and interest free borrowings between the Company and Jueqin Wang. During the year ended September 30, 2020, the Company borrowed RMB 10,000,000 ($1,427,429 in USD) with 8% annual interest rate from Huizhi Wang as working capitals to support the Company’s operations. During fiscal year 2020, the Company has fully repaid. During fiscal year 2019, the Company borrowed RMB 5,000,000 ($699,526 in USD) with 8% annual interest rate from Huizhi Wang as working capitals to support the Company’s operations. The borrowing is unsecured and due on demand with no fixed term. The balance has been fully paid in fiscal year 2020. During the year ended September 30, 2018, the Company borrowed RMB 4,000,000 ($582,411 in USD) with 8.1% annual interest rate from Huizhi Wang as working capitals to support the Company’s operations. The borrowing is unsecured and due on demand with no fixed term. The balance has been fully paid in fiscal year 2019. During the year ended September 30, 2020, the Company borrowed RMB 5,000,000 ($713,715 in USD), from Juelin Wang as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and was subject to 8% annual interest rate. During fiscal year 2020, the Company fully repaid the loan. During the year ended September 30, 2019, the Company net borrowed RMB 5,000,000 ($699,526 in USD), from Juelin Wang as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and was subject to 8% annual interest rate. The borrowing has been fully paid in fiscal year 2020. During the year ended September 30, 2019, the Company borrowed RMB 12,500,000 ($1,748,814 in USD), from Yiyu Wang, an immediate family member of majority shareholder of the Company, as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and was subject to 8% annual interest rate. During fiscal year 2020, a total of RMB 6,260,000 ($893,571 in USD) was repaid by The Company, and as of September 30, 2020 the Company had outstanding payable due to Yiyu Wang with an amount of $919,053. During the year ended September 30, 2020, the Company borrowed RMB 5,000,000 ($713,713 in USD), from Bing Zhang as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and was subject to 8% annual interest rate. The borrowing has been fully paid in fiscal year 2020. During the year ended September 30, 2019, the Company net borrowed RMB 5,000,000 ($699,526 in USD), from Bing Zhang as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and was subject to 8% annual interest rate. The borrowing has been fully paid in fiscal year 2020. During the year ended September 30, 2020, the Company borrowed RMB 1,000,000 ($142,743 in USD), from Di Wang as working capitals to support the Company’s operations. The borrowing is unsecured, due on demand, and interest free. 3) Related party balances Net outstanding balances with related parties consisted of the following as of September 30, 2020 and 2019: Accounts Name of related parties 2020 2019 Receivables from related parties: Advances to suppliers Taizhou Huadi Industrial Ltd. $ 5,342,512 $ 5,251,600 Accounts receivable Taizhou Huadi Industrial Ltd. 1,880,762 - Other receivables Huashang Micro Finance Co. 1,030,989 979,336 Accounts receivable Taizhou Huadi Material Technology Co. - 498,125 Liabilities to related parties: Due to related parties Di Wang (147,284 ) - Due to related parties Jueqin Wang (341,374 ) (254,319 ) Due to related parties Huizhi Wang - (699,526 ) Due to related parties Juelin Wang - (699,526 ) Due to related parties Yiyu Wang (919,053 ) (1,748,813 ) Due to related parties Bing Zhang - (699,526 ) Net receivables from related parties $ 6,846,552 $ 2,627,351 |
Shareholders' Equity
Shareholders' Equity | 12 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
SHAREHOLDERS' EQUITY | NOTE 13 – SHAREHOLDERS’ EQUITY Ordinary shares As the result of the 2 for 1 reverse split which occurred on October 9, 2020, Huadi International is authorized to issue 250,000,000 ordinary shares of a single class, par value $0.0002 per ordinary share. There are currently 10,000,000 issued and outstanding ordinary shares, of which 16.64% and 83.36% held by Yongqiang Maituo Limited and Yongqiang Donghai Limited, respectively, as of September 30, 2020. All share information included in the consolidated financial statements and notes thereto have been retroactively adjusted as if such occurred on the first day of the first period presented. Non-controlling interests Non-controlling interests represent the interest of non-controlling shareholder in Huadi Steel based on his proportionate interests in the equity of that company adjusted for its proportionate share of income or losses from operations. In August 2019, Wenzhou Hongshun acquired 99% equity percentage of Huadi Steel from the PRC Shareholders. As the result, Huadi Steel’s equity interest is 99% held by Wenzhou Hongshun and 1% held by Di Wang. The non-controlling interest in Huadi Steel was 1% as of September 30, 2020 and 2019. |
Income Taxes
Income Taxes | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 14 – INCOME TAXES Enterprise Income Taxes (“EIT”) Huadi International is incorporated in Cayman Island as an offshore holding company and is not subject to tax on income or capital gain under the laws of Cayman Island. Tuoxing is incorporated in BVI as an offshore holding company and is not subject to tax on income or capital gain under the laws of BVI. HK Beach is established in Hong Kong and is subject to statutory income tax rate at 16.5%. Hongshun is established in PRC and is subject to statutory income tax rate at 25%. Huadi Steel, the Company’s main operating subsidiary in PRC, was entitled High and New Technology Enterprise (“HNTE”) and enjoyed preferential tax rate of 15% for a three-year validity period from fiscal year 2019, and the HNTE certificate needs to be renewed every three years. Thus, Huadi Steel is eligible for a 15% preferential tax rate for fiscal years 2020 and 2019, and 25% standard tax rate for fiscal year 2018. As of September 30, 2020, the tax years ended December 31, 2015 through December 31, 2020 for the Company’s PRC entities remain open for statutory examination by PRC tax authorities. The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September30, 2020 and 2019 the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the fiscal years ended September 30, 2020 and 2019, respectively, and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from September 30, 2020. Per the consolidated statements of income and comprehensive income, the income tax expenses for the Company can be reconciled to the income before income taxes for the years ended September 30, 2020, 2019, and 2018 as follows: 2020 2019 2018 Income before taxes excluded the amounts of loss incurring entities $ 3,575,248 $ 6,446,944 $ 6,585,624 PRC EIT tax rates 15 % 15 % 25 % Tax at the PRC EIT tax rates $ 536,287 967,042 1,646,406 Tax effect of R&D expenses deduction (238,573 ) (199,925 ) (271,349 ) Tax effect of non-taxable investment income and government grant (120,754 ) (72,160 ) (126,495 ) Tax effect of non-deductible expenses 41,989 310,233 88,530 Income tax expenses $ 218,949 $ 1,005,190 $ 1,337,092 Income taxes for the years ended September 30, 2020, 2019 and 2018 are attributed to the Company’s continuing operations in China and consisted of: 2020 2019 2018 Current income tax $ 218,949 $ 709,027 $ 1,390,773 Deferred income tax - 296,163 (53,681 ) Total income tax expense $ 218,949 $ 1,005,190 $ 1,337,092 The tax effects of temporary differences that give rise to significant portions of the deferred tax asset at September 30, 2020 and 2019 are presented below: As of September 30, 2020 2019 Deferred tax assets: Bad debt allowance $ 436,583 $ 414,710 Total $ 436,583 $ 414,710 There were no valuation allowance for the deferred tax assets as of September 30, 2020 and 2019. In assessing the realizability of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon the level of historical taxable income, projections for future taxable income over the periods in which the deferred tax assets are deductible, and the scheduled reversal of deferred tax liabilities, management believes it is more likely than not the company will realize the benefits of those deductible differences at September 30, 2020 and 2019. |
Commitment and Contingencies
Commitment and Contingencies | 12 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
COMMITMENT AND CONTINGENCIES | NOTE 15 – COMMITMENT AND CONTINGENCIES As of September 30, 2020 and 2019, the Company has no material purchase commitments or significant leases. From time to time, the Company is involved in various legal proceedings, claims and other disputes arising from commercial operations, employees, and other matters which, in general, are subject to uncertainties and in which the outcomes are not predictable. The Company determines whether an estimated loss from a contingency should be accrued by assessing whether a loss is deemed probable and can be reasonably estimated. Although the Company can give no assurances about the resolution of pending claims, litigation or other disputes and the effect such outcomes may have on the Company, the Company believes that any ultimate liability resulting from the outcome of such proceedings, to the extent not otherwise provided or covered by insurance, will not have a material adverse effect on our consolidated financial position or results of operations or liquidity. As of September 30, 2020 and 2019, the Company had no pending legal proceedings outstanding. |
Segment Reporting
Segment Reporting | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT REPORTING | NOTE 16 – SEGMENT REPORTING ASC 280, “Segment Reporting”, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments. 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. Management, including the chief operating decision maker, reviews operation results by the revenue of different products. Based on management’s assessment, the Company has determined that it has only one operating segment as defined by ASC 280. The following table presents revenues by geographic areas for the years ended September 30, 2020 and 2019, respectively. September 30, 2020 September 30, 2019 September 30, 2018 Top 5 International Markets: Sales Amount (In USD) As % Sales Amount (In USD) As % Sales Amount (In USD) As % of Sales China $ 47,271,235 79.93 % $ 47,606,489 72.66 % 35,487,131 58.77 % India 5,082,525 8.59 % 3,795,089 5.79 % 13,497,542 22.35 % US 2,996,803 5.07 % 8,285,920 12.65 % 5,542,392 9.18 % Australia 1,327,488 2.24 % 473,613 0.72 % 468,588 0.78 % Canada 925,420 1.56 % 2,039,051 3.11 % 2,745,347 4.55 % Other foreign countries 1,533,807 2.59 % 3,318,154 5.07 % 2,675,004 4.37 % Due to the nature of the Company’s products, it is impractical to disclose revenues generated from each product or each group of similar products. Also, as the Company’s long-lived assets are primarily located in the PRC, no geographical segments are presented. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 17 – SUBSEQUENT EVENTS Reverse Stock Split On October 9, 2020, the Board of the Directors of Huadi International approved a 2 for 1 reverse stock split whereby every two authorized, issued and outstanding ordinary share was exchanged for one new ordinary shares (the “Reverse Stock Split”) and as a result of the Reverse Stock Split, the authorized ordinary shares decreased from 500,000,000 shares to 250,000,000 shares, par value of each ordinary share increased from $0.0001 to $0.0002, and the number of issued and outstanding ordinary shares decreased from 20,000,000 shares to 10,000,000 shares. All share information included in the consolidated financial statements and notes thereto have been retroactively adjusted as if such occurred on the first day of the first period presented. Short-term Bank Loans The Company refinanced its loans with its banks subsequent to the expiration of the loans disclosed in Note 10 – Short-term Borrowings Shares Issuances On January 26, 2021, the Company completed its initial public offering (“IPO”) of 3,125,000 shares of its common stock at a public offering price of $8.00 per share. The gross proceeds from the offering were approximately $25 million before deducting placement agents’ commissions and other offering expenses. The offering was conducted on a firm commitment basis. We issued warrants to the Underwriters equal to six percent (6%) of the shares issued in the IPO (the “Representative Warrants”). The Representative Warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective date of the offering, which period shall not extend further than four and one-half year years from the effective date of the registration statement in compliance with FINRA Rule 5110(f)(2)(G)(i). The Representative Warrants are exercisable at a per share price of $10.00, which is 125% of the Public Offering Price. The Representative Warrants are also exercisable on a cashless basis. The offering closed on January 26, 2021 and shares began trading on January 22, 2021 on NASDAQ Capital Market under the symbol “HUDI.” On February 19, 2021, the board of Wenzhou Hongshun approved the resolution to increase investment into Huadi Steel by RMB 99 million, of which RMB 32 million has been paid by Wenzhou Hongshun as of March 30, 2021, with Di Wang invested additional RMB 1 million. As a result, the shareholder structure remains the same with Wenzhou Huadi Steel’s equity interest 99% held by Wenzhou Hongshun and 1% held by Di Wang. In preparing these consolidated financial statements, the Company has evaluated events and transactions for potential recognition or disclosure through March 30, 2020, the date the financial statements were available to be issued. No additional events require adjustment to or disclosure in the consolidated financial statements. |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Principles of Consolidation | Basis of Presentation and Principles of Consolidation The accompanying consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United Stated of America (“US GAAP”) and have been consistently applied. The accompanying consolidated financial statements include the financial statements of the Company and its majority-owned and controlled subsidiaries. All significant inter-company transactions and balances have been eliminated upon consolidation. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the amounts reported and disclosed in the consolidated financial statements and the accompanying notes. Such estimates include, but are not limited to, allowances for doubtful accounts, inventory valuation, useful lives of property, plant and equipment, intangible assets, impairment in equity investment, and income taxes related to realization of deferred tax assets and uncertain tax position. Actual results could differ from those estimates. |
Foreign Currency Translation | Foreign Currency Translation The financial records of the Company’s subsidiaries in People’s Republic of China (“PRC”) are maintained in their local currencies which are Chinese Yuan (“CNY” or “RMB”). Monetary assets and liabilities denominated in currencies other than their local currencies are translated into local currencies at the rates of exchange in effect at the consolidated balance sheet dates. Transactions denominated in currencies other than their local currencies during the year are converted into local currencies at the applicable rates of exchange prevailing when the transactions occur. Transaction gains and losses are recorded in other income, net in the consolidated statements of income and comprehensive income. The Company maintained its financial record using the United States dollar (“US dollar”) as the functional currency, while the subsidiaries of the Company in Hong Kong and mainland China maintained their financial records using RMB as the functional currencies. The reporting currency of the Company is US dollar. When translating local financial reports of the Company’s subsidiaries into US dollar, assets and liabilities are translated at the exchange rates at the consolidated balance sheet date, equity accounts are translated at historical exchange rates and revenue, expenses, gains and losses are translated at the average rate for the period. Translation adjustments are reported as cumulative translation adjustments and are shown as a separate component of other comprehensive income in the consolidated statements of income and comprehensive income. The relevant exchange rates are listed below: For the Fiscal Years 2020 2019 2018 Period Ended RMB: USD exchange rate 6.7896 7.1477 6.8680 Period Average RMB: USD exchange rate 7.0056 6.8753 6.5368 |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash and cash equivalents primarily consist of cash and deposits with financial institutions which are unrestricted as to withdrawal and use. Cash equivalents consist of highly liquid investments that are readily convertible to cash generally with original maturities of three months or less when purchased. |
Restricted Cash | Restricted Cash The Company has bank acceptance notes outstanding with the bank and is required to keep certain amounts on deposit that are subject to withdrawal restrictions. Those notes are generally short term in nature due to their short maturity period of six to nine months; thus, restricted cash is classified as a current asset. Restricted cash is included in the beginning or ending balance of cash and cash equivalents, and restricted cash in the consolidated statements of cash flows. As of September 30, 2020 and 2019, restricted cash was $908,410 and $1,958,680, respectively. No cash is restricted to assure future credit availability. |
Accounts Receivable and Allowance for Doubtful Accounts | Accounts Receivable and Allowance for Doubtful Accounts Accounts receivable are recognized and carried at original invoiced amount less an estimated allowance for uncollectible accounts. The Company usually determines the adequacy of reserves for doubtful accounts based on individual account analysis and historical collection trends. The Company establishes a provision for doubtful receivables when there is objective evidence that the Company may not be able to collect amounts due. The allowance is based on management’s best estimates of specific losses on individual exposures, as well as a provision on historical trends of collections. Based on management of customers’ credit and ongoing relationship, management makes conclusions whether any balances outstanding at the end of the period will be deemed uncollectible on an individual basis and on aging analysis basis. The provision is recorded against accounts receivables balances, with a corresponding charge recorded in the consolidated statements of income and comprehensive income. Delinquent account balances are written-off against the allowance for doubtful accounts after management has determined that the likelihood of collection is not probable. The allowance for doubtful accounts recognized as of September 30, 2020 and 2019 was $2,910,554 and $2,764,735, respectively. |
Inventories | Inventories Inventories are stated at the lower of cost or net realizable value. Cost is principally determined using the weighted-average method. The Company records adjustments to inventory for excess quantities, obsolescence or impairment when appropriate to reflect inventory at net realizable value. These adjustments are based upon a combination of factors including current sales volume, market conditions, lower of cost or market analysis and expected realizable value of the inventory. There were no write-downs recognized of inventories for the years ended September 30, 2020, 2019 and 2018. |
Advances to Suppliers | Advances to Suppliers Advances to suppliers refer to advances for purchase of materials or other service agreements, which are applied against accounts payable when the materials or services are received. The Company reviews a supplier’s credit history and background information before advancing a payment. If the financial condition of its suppliers were to deteriorate, resulting in an impairment of their ability to deliver goods or provide services, the Company would write off such amount in the period when it is considered as impaired. For the years ended September 30, 2020, 2019 and 2018, the Company had no wrote off for advances to suppliers. |
Advances from Customers | Advances from Customers Advances from customers refer to advances received from customers regarding product sales, which are applied against accounts receivable when products are sold. |
Property and Equipment, net | Property and Equipment, net Property, plant, and equipment are recorded at cost less accumulated depreciation. Depreciation commences upon placing the asset in usage and is recognized on a straight-line basis over the estimated useful lives of the assets with 5% of residual value, as follows: Useful lives Buildings 10-32 years Machinery and equipment 5-20 years Transportation vehicles 3-10 years Office equipment 3-10 years Electronic equipment 3-10 years Expenditures for maintenance and repairs, which do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other comprehensive income in other income or expenses. |
Intangible Assets | Intangible Assets Intangible assets consist of land use rights. Under the PRC law, all land in the PRC is owned by the government and cannot be sold to an individual or company. The government grants individuals and companies the right to use parcels of land for specified periods of time. These land use rights are sometimes referred to informally as “ownership.” Land use rights are stated at cost less accumulated amortization. Intangible assets are amortized using the straight-line method with the following estimated useful lives: Useful lives Land use rights 50 years |
Long-term Investments | Long-term Investments The Company accounts for investments less than 20% ownership under the cost method and assess impairment at the end of each fiscal year. The carrying value of the investments was $13,449,305 and $12,775,494 as of September 30, 2020 and 2019, respectively. The Company determined that there was no impairment in these investments as of September 30, 2020, 2019 and 2018. |
Impairment of Long-lived Assets | Impairment of Long-lived Assets The Company’s management reviews the carrying values of long-lived assets whenever events and circumstances, such as a significant decline in the asset’s market value, obsolescence or physical damage affecting the asset, significant adverse changes in the assets use, deterioration in the expected level of the assets performance, cash flows for maintaining the asset are higher than forecast, indicate that the net book value of an asset may not be recovered through expected future cash flows from its use and eventual disposition. If the estimated cash flows from the use of the asset and its eventual disposition are below the asset’s carrying value, then the asset is deemed to be impaired and written down to its fair value. There was no impairment charge recognized for long-lived assets for the years ended September 30, 2020, 2019 and 2018. |
Fair Value Measurement | Fair Value Measurement Fair Value Measurements and Disclosures requires disclosure of the fair value of financial instruments held by the Company. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows: ● Level 1 inputs to the valuation methodology are quoted prices 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 prices for identical or similar assets in inactive markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. ● Level 3 inputs to the valuation methodology use one or more unobservable inputs which are significant to the fair value measurement. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs. For the Company’s financial instruments, including cash and cash equivalents, restricted cash, accounts receivable, accounts payable, accrued expenses, other current liabilities, notes receivable, notes payable, advances to suppliers, advances from customers, bank loans, and income tax payable and other receivables, the carrying amounts approximate their fair values due to their short maturities as of September 30, 2020 and 2019. |
Value-added Tax (“VAT”) | Value-added Tax (“VAT”) Sales revenue represents the invoiced value of goods, net of VAT. All of the Company’s products are sold in the PRC and are subject to a VAT on the gross sales price. The Company is subject to a VAT rate of 17% before May 1, 2018, a VAT rate of 16% effective on May 1, 2018, and the most current VAT rate of 13% effective on April 1, 2019. The VAT may be offset by VAT paid by the Company on raw materials and other materials included in the cost of producing or acquiring its finished products. |
Revenue Recognition | Revenue Recognition The Company generates its revenues mainly from sales of steel piping products. The Company follows Financial Accounting Standards Board (FASB) ASC 606 and accounting standards updates (“ASU”) 2014-09 for revenue recognition. On October 1, 2018, the Company has early adopted ASU 2014-09, which is a comprehensive new revenue recognition model that requires revenue to be recognized in a manner to depict the transfer of goods or services to a customer at an amount that reflects the consideration expected to be received in exchange for those goods or services. The Company considers revenue realized or realizable and earned when all the five following criteria are met: (1) Identify the Contract with a Customer, (2) Identify the Performance Obligations in the Contract, (3) Determine the Transaction Price, (4) Allocate the Transaction Price to the Performance Obligations in the Contract, and (5) Recognize Revenue When (or As) the Entity Satisfies a Performance Obligation. Results for reporting periods beginning after October 1, 2018 are presented under ASU 2014-09, while prior period amounts are not adjusted and continue to be reported under the previous accounting standards. The Company has assessed the impact of the guidance by reviewing its existing customer contracts and current accounting policies and practices to identify differences that will result from applying the new requirements, including the evaluation of its performance obligations, transaction price, customer payments, transfer of control and principal versus agent considerations. Based on the assessment, the Company concluded that there was no change to the timing and pattern of revenue recognition for its current revenue streams in scope of Topic 606 and therefore there was no material changes to the Company’s consolidated financial statements upon adoption of ASC 606, and there have not been any significant changes to company’s business processes, systems, or internal controls as a result of implementing the standard. The Company considers customer purchase orders and production service agreement, which in some cases are governed by master sales agreements, to be the contracts with a customer. As part of its consideration of the contract, the Company evaluates certain factors including the customer’s ability to pay (or credit risk). For each contract, the Company considers the promise to transfer products, each of which are distinct, to be the identified performance obligations. In determining the transaction price the Company evaluates whether the price is subject to refund or adjustment to determine the net consideration to which the Company expects to be entitled. As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under ASC 606-10-32-18 to not assess whether a contract has a significant financing component. The Company allocates the transaction price to each distinct product based on their relative standalone selling price. Revenues are reported net of all value added taxes. The Company does not routinely permit customers to return products, while in certain conditions product changes are allowed, and historically customer returns have been immaterial and due to the nature of company’s products no warranty is offered. Sales revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied at a point in time), which typically occurs at delivery. Production service revenue is recognized when production order is fulfilled and VAT invoice is issued to customer. The Company sells its products either under free onboard (“FOB”) shipping point term or under FOB destination term. For sales under FOB shipping point term, the Company recognize revenues when products are loaded on the ships. Product delivery is evidenced by warehouse shipping logs as well assigned shipping bills from the shipping companies. For sales under FOB destination term, the Company recognize revenues when the products are delivered and accepted by customers. Product delivery is evidenced by signed receipt documents and title transfers upon delivery. Prices are determined based on negotiations with the Company’s customers and are not subject to adjustment. As a result, the Company expects returns to be minimal. |
Government Grant | Government Grant Government grants are recognized when received and all the conditions for their receipt have been met. Government grants as the compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Company with no future related cost are recognized in profit or loss in the period in which they become receivable. For the years ended September 30, 2020, 2019 and 2018, the Company received government grants of $410,532, $59,131 and $100,916, respectively. The grants were recorded as other income in the consolidated statements for income. |
Research and Development Costs | Research and Development Costs Research and development activities are directed toward the development of new products as well as improvements in existing processes. These costs, which primarily include salaries, contract services and supplies, are expensed as incurred. |
Shipping and Handling Costs | Shipping and Handling Costs Shipping and handling costs are expensed when incurred and are included in selling and marketing expense. Shipping and handling costs were $804,264, $1,011,670 and $337,237 for the years ended September 30, 2020, 2019 and 2018, respectively. |
Advertising Costs | Advertising Costs Advertising costs are expensed as incurred in accordance with ASC 720-35, “Other Expenses-Advertising Costs”. Advertising costs were $104,933, $147,363 and $105,734 for years ended September 30, 2020, 2019 and 2018 respectively. |
Income Taxes | Income Taxes The Company accounts for income taxes using the asset and liability method whereby it calculates deferred tax assets or liabilities for temporary differences between the tax basis of assets and liabilities and their reported amounts in the consolidated financial statements, net operating loss carry forwards and credits by applying enacted tax rates applicable to the years in which those temporary differences are expected to be reversed or settled. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. The components of the deferred tax assets and liabilities are individually classified as non-current amounts. The Company records uncertain tax positions in accordance with ASC 740 on the basis of a two-step process whereby (1) the Company determines whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more-likely-than-not recognition threshold, the Company recognizes the largest amount of tax benefit that is more than 50 percent likely to be realized upon ultimate settlement with the related tax authority. To the extent applicable, the Company records interest and penalties as other expense. All of the tax returns of the Company’s PRC subsidiaries remain subject to examination by PRC tax authorities for five years from the date of filing. The fiscal years for tax purpose in PRC is December 31. The Company and its subsidiaries are not subject to U.S. tax laws and local state tax laws. The Company’s income and that of its related entities must be computed in accordance with Chinese and foreign tax laws, as applicable, and all of which may be changed in a manner that could adversely affect the amount of distributions to shareholders. There can be no assurance that Income Tax Laws of PRC will not be changed in a manner that adversely affects shareholders. In particular, any such change could increase the amount of tax payable by the Company, reducing the amount available to pay dividends to the holders of the Company’s ordinary shares. |
Earnings Per Share | Earnings Per Share Earnings (loss) per share is calculated in accordance with ASC 260 Earnings per Share. Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to shareholders of the Company by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share is computed in accordance with the treasury stock method and based on the weighted average number of ordinary shares and dilutive common share equivalents. Dilutive common share equivalents are excluded from the computation of diluted earnings per share if their effects would be anti-dilutive. There were no dilutive common share equivalents outstanding during the years ended September 30, 2020, 2019 and 2018. |
Certain Risks and Concentration | Certain Risks and Concentration Exchange Rate Risks The Company operates in PRC, which may give rise to significant foreign currency risks mainly from fluctuations and the degree of volatility of foreign exchange rates between the USD and the RMB. Currency Convertibility Risks Substantially all of the Company’s operating activities are transacted in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the People’s Bank of China or other banks authorized to buy and sell foreign currencies at the exchange rates quoted by the People’s Bank of China. Approval of foreign currency payments by the People’s Bank of China or other regulatory institutions requires submitting a payment application form together with other information such as suppliers’ invoices, shipping documents and signed contracts. Concentration of Credit Risks Financial instruments that potentially subject the Company to concentration of credit risks consist primarily of cash and cash equivalents, restricted cash, notes receivable. The Company places its cash and cash equivalents, restricted cash, and note receivable in good credit quality financial institutions in Hong Kong and PRC. Concentration of credit risks with respect to accounts receivables is linked to the concentration of revenue. To manage credit risk, the Company performs ongoing credit evaluations of customers’ financial condition. Interest Rate Risks The Company is subject to interest rate risk. The Company has bank interest bearing loans charged at variable interest rates. And although some bank interest bearing loans are charged at fixed interest rates within the reporting period, the Company is still subject to the risk of adverse changes in the interest rates charged by the banks when these loans are refinanced. Risks and Uncertainties The operations of the Company are located in the PRC. Accordingly, the Company’s business, financial condition, and results of operations may be influenced by political, economic, and legal environments in the PRC, as well as by the general state of the PRC economy. The Company’s results may be adversely affected by changes in the political, regulatory and social conditions in the PRC. Although the Company has not experienced losses from these situations and believes that it is in compliance with existing laws and regulations including its organization and structure disclosed in Note 1, this may not be indicative of future results. Liquidity Risks Our primary sources of liquidity consist of existing cash balances, cash flows from our operating activities and availability under our revolving credit facility. Our ability to generate sufficient cash flows from our operating activities is primarily dependent on our sales of steel pipe, tube and ancillary products to our customers at margins sufficient to cover fixed and variable expenses. As of September 30, 2020 and 2019, we had cash and cash equivalents of $796,794 and $1,057,992, respectively. We believe that our current cash, cash to be generated from our operations and access to loans from our related parties will be sufficient to meet our working capital needs for at least the next twelve months. However, we do not have any amounts committed to be provided by our related party. We are also not dependent upon this offering to meet our liquidity needs for the next twelve months. However, we plan to expand our business to implement our growth strategies in our existing market and strengthen our position in the marketplace. To do so, we will need more capital through equity financing to increase our production and meet market demands. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements New Accounting Pronouncements Recently Adopted In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” which increases lease transparency and comparability among organizations. Under the new standard, lessees will be required to recognize all assets and liabilities arising from leases on the balance sheet, with the exception of leases with a term of 12 months or less, which permits a lessee to make an accounting policy election by class of underlying asset not to recognize lease assets and liabilities. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years, and early adoption is permitted. In March 2018, the FASB approved an alternative transition method to the modified retrospective approach, which eliminates the requirement to restate prior period financial statements and requires the cumulative effect of the retrospective allocation to be recorded as an adjustment to the opening balance of retained earnings at the date of adoption. Effective October 1, 2019, the Company adopted the new lease accounting standard using a modified retrospective transition method which allowed the Company not to recast comparative periods presented in its consolidated financial statements. The adoption of the new standard had no impact on our consolidated net earnings and cash flows. New Accounting Pronouncements Not Yet Adopted In August 2018, the FASB issued ASU No. 2018-13, “Fair Value Measurement (Topic 820): Disclosure Framework Changes to the Disclosure Requirements for Fair Value Measurement” (“ASU 2018-13”). The amendments in this ASU modify the disclosure requirements on fair value measurements. ASU 2018-13 is effective for public entities for fiscal years beginning after December 15, 2019, with early adoption permitted for any removed or modified disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company does not plan to early adopt ASU 2018-13 or expect this update will have a material impact on the Company’s consolidated financial position, results of operations and cash flows. |
Organization and Nature of Op_2
Organization and Nature of Operations (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of organization and nature of operations | Entity Name Registered Location Date of Incorporation Ownership as of the issuance date of the report Huadi International Group Co., Ltd. (“Huadi International”) Cayman Island September 27, 2018 Parent Yongqiang Tuoxing Limited. (“Yongqiang Tuoxing”) British Virgin Island October 2, 2018 100% by the Parent Hong Kong Beach Limited. (“HK Beach”) Hong Kong November 7, 2018 100% by Yongqiang Tuoxing Wenzhou Hongshun Stainless Steel Limited. (“Hongshun”) Wenzhou, China June 3,2019 100% by HK Beach Huadi Steel Group Limited. (“Huadi Steel”) Wenzhou, China November 12,1998 99% by Hongshun |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of relevant exchange rates | For the Fiscal Years 2020 2019 2018 Period Ended RMB: USD exchange rate 6.7896 7.1477 6.8680 Period Average RMB: USD exchange rate 7.0056 6.8753 6.5368 |
Schedule of estimated useful life plant and equipment, net | Useful lives Buildings 10-32 years Machinery and equipment 5-20 years Transportation vehicles 3-10 years Office equipment 3-10 years Electronic equipment 3-10 years Useful lives Land use rights 50 years |
Accounts Receivable (Tables)
Accounts Receivable (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable [Abstract] | |
Schedule of accounts receivable | 2020 2019 Accounts receivable $ 16,529,251 $ 16,766,449 Accounts receivable – related parties 1,914,380 498,125 Less: allowance for doubtful accounts (2,910,554 ) (2,764,735 ) Accounts receivable, net $ 15,533,077 $ 14,499,839 |
Schedule of changes of allowance for doubtful accounts | 2020 2019 Beginning balance $ 2,764,735 $ 2,912,310 Bad debt write-off - (33,612 ) Exchange difference 145,819 (113,963 ) Ending balance $ 2,910,554 $ 2,764,735 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | 2020 2019 Raw materials $ 11,305,744 $ 10,489,858 Work in process 913,751 252,749 Finished goods 8,618,099 7,102,798 Total $ 20,837,594 $ 17,845,405 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of property, plant and equipment | 2020 2019 Buildings $ 4,930,868 $ 4,785,642 Machinery and equipment 7,706,598 8,302,445 Transportation vehicles 932,472 936,908 Office equipment 460,943 442,343 Construction in progress (“CIP”) 235,266 124,276 Total property plant and equipment, at cost 14,266,147 14,591,614 Less: accumulated depreciation (7,578,505 ) (8,112,358 ) Property, plant and equipment, net $ 6,687,642 $ 6,479,256 |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of intangible assets | 2020 2019 Land use rights, cost $ 1,632,277 $ 1,550,500 Less: accumulated amortization (429,590 ) (378,617 ) Intangible assets, net $ 1,202,687 $ 1,171,883 |
Long-Term Investments (Tables)
Long-Term Investments (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of long-term investments | 2020 2019 Huashang Micro Finance Co. $ 5,596,795 $ 5,316,395 Longwan Rural Commercial Bank 6,625,133 6,293,213 Wenzhou Longlian Development Co., Ltd 1,227,377 1,165,886 Total $ 13,449,305 $ 12,775,494 |
Short-Term Borrowings (Tables)
Short-Term Borrowings (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of short-term borrowings | Bank Name Amount - RMB Amount - USD Issuance Date Expiration Date Interest Agricultural Bank 9,990,000 $ 1,471,367 11/4/2019 11/3/2020 5.40 % Agricultural Bank 5,000,000 736,420 11/13/2019 11/12/2020 5.40 % Agricultural Bank 7,000,000 1,030,989 11/28/2019 11/18/2020 5.35 % Agricultural Bank 9,500,000 1,399,199 12/19/2019 12/18/2020 5.35 % Agricultural Bank 9,990,000 1,471,368 12/27/2019 12/10/2020 5.35 % Agricultural Bank 5,700,000 839,519 1/8/2020 1/7/2021 5.35 % Agricultural Bank 9,990,000 1,471,368 1/14/2020 1/13/2021 5.35 % Agricultural Bank 9,000,000 1,325,557 2/28/2020 2/27/2021 5.60 % Agricultural Bank 4,990,000 734,948 3/4/2020 3/3/2021 5.60 % Agricultural Bank 13,400,000 1,973,607 3/13/2020 3/12/2021 5.25 % Agricultural Bank 5,000,000 736,420 3/27/2020 3/15/2021 5.25 % Agricultural Bank 4,500,000 662,778 7/10/2020 7/1/2021 4.80 % Agricultural Bank 10,500,000 1,546,483 7/24/2020 7/15/2021 4.75 % Agricultural Bank 14,500,000 2,135,619 8/3/2020 8/2/2021 4.75 % China CITIC Bank 4,500,000 662,778 10/11/2019 10/10/2020 5.35 % China CITIC Bank 6,500,000 957,347 10/16/2019 10/15/2020 5.35 % China CITIC Bank 4,000,000 589,136 10/29/2019 10/28/2020 5.35 % China CITIC Bank 6,000,000 883,704 9/22/2020 9/21/2021 5.00 % China CITIC Bank 6,500,000 957,347 9/23/2020 9/22/2021 5.00 % China CITIC Bank 8,000,000 1,178,273 9/24/2020 9/23/2021 5.00 % Bank of China 7,540,000 1,110,522 1/7/2020 1/2/2021 4.50 % Bank of China 7,730,000 1,138,506 1/9/2020 1/7/2021 4.50 % Minsheng Bank 11,400,000 1,679,039 4/22/2020 4/15/2021 5.50 % Zhejiang Commerce Bank 8,500,000 1,251,915 4/22/2020 4/16/2021 4.20 % Zhejiang Commerce Bank 4,750,000 699,599 5/21/2020 5/18/2021 4.20 % Zhejiang Commerce Bank 7,000,000 1,030,989 6/3/2020 5/14/2021 4.20 % Zhejiang Commerce Bank 10,500,000 1,546,483 9/18/2020 6/18/2021 5.22 % Total RMB211,980,000 $ 31,221,280 Bank Name Amount - RMB Amount - USD Issuance Date Expiration Date Interest Agricultural Bank RMB9,990,000 $ 1,397,654 11/2/2018 11/1/2019 5.44 % Agricultural Bank 7,000,000 979,336 12/3/2018 12/2/2019 5.44 % Agricultural Bank 5,000,000 699,526 12/7/2018 11/15/2019 5.44 % Agricultural Bank 9,500,000 1,329,099 1/11/2019 1/10/2020 5.44 % Agricultural Bank 9,990,000 1,397,652 1/21/2019 1/20/2020 5.13 % Agricultural Bank 5,700,000 797,459 1/25/2019 1/24/2020 5.13 % Agricultural Bank 9,990,000 1,397,652 2/1/2019 1/30/2020 5.13 % Agricultural Bank 9,000,000 1,259,146 3/4/2019 3/3/2020 5.35 % Agricultural Bank 9,990,000 1,397,652 3/8/2019 3/7/2020 5.35 % Agricultural Bank 13,400,000 1,874,729 4/2/2019 4/1/2020 5.13 % Agricultural Bank 5,000,000 699,526 4/24/2019 4/15/2020 5.13 % Agricultural Bank 4,500,000 629,573 7/2/2019 7/1/2020 5.66 % Agricultural Bank 10,500,000 1,469,004 8/2/2019 8/1/2020 5.66 % Agricultural Bank 14,500,000 2,028,625 8/14/2019 8/12/2020 5.66 % China CITIC Bank 2,614,096 365,725 10/17/2018 10/12/2019 4.90 % China CITIC Bank 6,500,000 909,383 10/17/2018 10/17/2019 5.66 % China CITIC Bank 5,147,400 720,148 1/4/2019 12/30/2019 5.00 % China CITIC Bank 6,000,000 839,431 9/24/2009 9/22/2020 5.35 % China CITIC Bank 6,500,000 909,383 9/25/2019 9/23/2020 5.35 % China CITIC Bank 8,000,000 1,119,241 9/26/2019 9/24/2020 5.35 % Bank of China 8,880,000 1,242,358 1/10/2019 1/6/2020 5.44 % Bank of China 7,540,000 1,054,885 1/9/2019 1/6/2020 5.44 % Bank of China 3,350,000 468,682 1/25/2019 1/22/2020 5.22 % Bank of China 3,580,000 500,860 1/25/2019 1/2/2020 5.22 % Minsheng Bank 14,900,000 2,084,587 4/25/2019 4/25/2020 6.53 % Zhejiang Commerce Bank 1,000,000 139,905 4/23/2019 10/23/2019 6.09 % Zhejiang Commerce Bank 7,000,000 979,336 4/23/2019 10/23/2019 6.09 % Zhejiang Commerce Bank 4,500,000 629,573 4/29/2019 10/29/2019 6.09 % Zhejiang Commerce Bank 10,500,000 1,469,004 4/29/2019 10/29/2019 6.09 % Total RMB220,071,496 $ 30,789,134 |
Schedule of short-term bank borrowings are pledged by its assets | As of September 30, 2020 2019 Buildings, net $ 3,405,140 $ 2,873,733 Long-term Investment 6,625,133 7,459,099 Total $ 10,030,273 $ 10,332,832 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of nature of relationships with related parties | Name Relationship with the Company Taizhou Huadi Industrial Ltd. (“Taizhou Huadi”) An entity 30% owned by Jueqin Wang Huashang Micro Finance Co. (“Huashang”) An entity 19% owned by the Company Taizhou Huadi Material Technology Co. An entity 100% owned by Yiyu Wang Jueqin Wang Principal shareholder of the Company Di Wang Principal shareholder of the Company Huizhi Wang Principal shareholder of the Company Juelin Wang Principal shareholder of the Company Yiyu Wang Immediate family member of majority shareholder of the Company Bing Zhang Principal shareholder of the Company |
Schedule of net outstanding balances with related parties | Accounts Name of related parties 2020 2019 Receivables from related parties: Advances to suppliers Taizhou Huadi Industrial Ltd. $ 5,342,512 $ 5,251,600 Accounts receivable Taizhou Huadi Industrial Ltd. 1,880,762 - Other receivables Huashang Micro Finance Co. 1,030,989 979,336 Accounts receivable Taizhou Huadi Material Technology Co. - 498,125 Liabilities to related parties: Due to related parties Di Wang (147,284 ) - Due to related parties Jueqin Wang (341,374 ) (254,319 ) Due to related parties Huizhi Wang - (699,526 ) Due to related parties Juelin Wang - (699,526 ) Due to related parties Yiyu Wang (919,053 ) (1,748,813 ) Due to related parties Bing Zhang - (699,526 ) Net receivables from related parties $ 6,846,552 $ 2,627,351 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of consolidated statements of income and comprehensive income of reconciliation for income taxes | 2020 2019 2018 Income before taxes excluded the amounts of loss incurring entities $ 3,575,248 $ 6,446,944 $ 6,585,624 PRC EIT tax rates 15 % 15 % 25 % Tax at the PRC EIT tax rates $ 536,287 967,042 1,646,406 Tax effect of R&D expenses deduction (238,573 ) (199,925 ) (271,349 ) Tax effect of non-taxable investment income and government grant (120,754 ) (72,160 ) (126,495 ) Tax effect of non-deductible expenses 41,989 310,233 88,530 Income tax expenses $ 218,949 $ 1,005,190 $ 1,337,092 |
Schedule of attributed continuing operations | 2020 2019 2018 Current income tax $ 218,949 $ 709,027 $ 1,390,773 Deferred income tax - 296,163 (53,681 ) Total income tax expense $ 218,949 $ 1,005,190 $ 1,337,092 |
Schedule of tax effects of significant portions of the deferred tax asset | As of September 30, 2020 2019 Deferred tax assets: Bad debt allowance $ 436,583 $ 414,710 Total $ 436,583 $ 414,710 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of revenues by geographic areas | September 30, 2020 September 30, 2019 September 30, 2018 Top 5 International Markets: Sales Amount (In USD) As % Sales Amount (In USD) As % Sales Amount (In USD) As % of Sales China $ 47,271,235 79.93 % $ 47,606,489 72.66 % 35,487,131 58.77 % India 5,082,525 8.59 % 3,795,089 5.79 % 13,497,542 22.35 % US 2,996,803 5.07 % 8,285,920 12.65 % 5,542,392 9.18 % Australia 1,327,488 2.24 % 473,613 0.72 % 468,588 0.78 % Canada 925,420 1.56 % 2,039,051 3.11 % 2,745,347 4.55 % Other foreign countries 1,533,807 2.59 % 3,318,154 5.07 % 2,675,004 4.37 % |
Organization and Nature of Op_3
Organization and Nature of Operations (Details) | 12 Months Ended | ||||||
Sep. 30, 2020USD ($)$ / sharesshares | Oct. 09, 2020$ / sharesshares | Sep. 30, 2020CNY (¥)shares | Sep. 30, 2019$ / sharesshares | Aug. 28, 2019 | Aug. 22, 2019 | Sep. 30, 2009 | |
Organization and Nature of Operations (Details) [Line Items] | |||||||
Ordinary stock, shares authorized (in Shares) | shares | 250,000,000 | 250,000,000 | 250,000,000 | ||||
Ordinary stock, par value (in Dollars per share) | $ / shares | $ 0.0002 | $ 0.0002 | |||||
Ordinary stock, shares issued (in Shares) | shares | 10,000,000 | 10,000,000 | 10,000,000 | ||||
Interest rate | 20.00% | 20.00% | 22.50% | ||||
Description of sales transaction | The total sales from international customers decreased from $17.9 million for the 2019 fiscal year to $11.9 million for the fiscal year 2020 representing a 34% reduction. However, domestic demand remained stable because of the recovery initiative within China. Total revenue decreased by approximately $6.4 million for the fiscal year 2020 comparing to the fiscal year 2019. | ||||||
Huadi International Group Co., Ltd [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Ordinary stock, shares authorized (in Shares) | shares | 250,000,000 | ||||||
Ordinary stock, par value (in Dollars per share) | $ / shares | $ 0.0002 | ||||||
Capital paid amount | $ 0 | ||||||
Yongqiang Maituo Limited [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Ordinary shares, percentage | 16.64% | 16.64% | |||||
Yongqiang Donghai Limited [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Ordinary shares, percentage | 83.36% | 83.36% | |||||
Yongqiang Tuoxing Limited [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Ordinary stock, shares authorized (in Shares) | shares | 50,000 | 50,000 | |||||
Ordinary stock, par value (in Dollars per share) | $ / shares | $ 1 | ||||||
Cash paid in capital (in Dollars) | $ 0 | ||||||
Hong Kong Beach Limited (“HK Beach”) [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Cash paid in capital (in Dollars) | 0 | ||||||
Wenzhou Hongshun Stainless Steel Ltd [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Capital paid amount | 10,000,000 | ||||||
Cash paid in capital (in Dollars) | $ 0 | ||||||
Interest rate | 99.00% | 99.00% | 5.00% | 94.00% | |||
Huadi Steel Group Limited. (“Huadi Steel”) [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Capital paid amount | ¥ | ¥ 168,800,000 | ||||||
Interest rate | 99.00% | 99.00% | |||||
Di Wang [Member] | |||||||
Organization and Nature of Operations (Details) [Line Items] | |||||||
Interest rate | 1.00% | 1.00% |
Organization and Nature of Op_4
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations | 12 Months Ended |
Sep. 30, 2020 | |
Huadi International Group Co., Ltd. (“Huadi International”) [Member] | |
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations [Line Items] | |
Registered Location | Cayman Island |
Date of Incorporation | Sep. 27, 2018 |
Ownership as of the issuance date of the report | Parent |
Yongqiang Tuoxing Limited. (“Yongqiang Tuoxing”) [Member] | |
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations [Line Items] | |
Registered Location | British Virgin Island |
Date of Incorporation | Oct. 2, 2018 |
Ownership as of the issuance date of the report | 100% by the Parent |
Hong Kong Beach Limited. (“HK Beach”) [Member] | |
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations [Line Items] | |
Registered Location | Hong Kong |
Date of Incorporation | Nov. 7, 2018 |
Ownership as of the issuance date of the report | 100% by Yongqiang Tuoxing |
Wenzhou Hongshun Stainless Steel Limited. (“Hongshun”) [Member] | |
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations [Line Items] | |
Registered Location | Wenzhou, China |
Date of Incorporation | Jun. 3, 2019 |
Ownership as of the issuance date of the report | 100% by HK Beach |
Huadi Steel Group Limited. (“Huadi Steel”) [Member] | |
Organization and Nature of Operations (Details) - Schedule of organization and nature of operations [Line Items] | |
Registered Location | Wenzhou, China |
Date of Incorporation | Nov. 12, 1998 |
Ownership as of the issuance date of the report | 99% by Hongshun |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2009 | |
Accounting Policies [Abstract] | ||||
Restricted cash | $ 908,410 | $ 1,958,680 | ||
Allowance for doubtful accounts | $ 2,910,554 | 2,764,735 | ||
Residual value Percentage | 5.00% | |||
Ownership percentage | 20.00% | 22.50% | ||
Investments | 12,775,494 | $ 13,449,305 | ||
Description of VAT rate | The Company is subject to a VAT rate of 17% before May 1, 2018, a VAT rate of 16% effective on May 1, 2018, and the most current VAT rate of 13% effective on April 1, 2019. | |||
Received government grants | $ 410,532 | 59,131 | 100,916 | |
Shipping and handling costs | 804,264 | 1,011,670 | 337,237 | |
Advertising costs | 104,933 | 147,363 | $ 105,734 | |
Cash and cash equivalents | $ 796,794 | $ 1,057,992 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of relevant exchange rates - RMB [Member] | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Significant Accounting Policies (Details) - Schedule of relevant exchange rates [Line Items] | |||
Period Ended RMB: USD exchange rate | 6.7896 | 7.1477 | 6.8680 |
Period Average RMB: USD exchange rate | 7.0056 | 6.8753 | 6.5368 |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net | 12 Months Ended |
Sep. 30, 2020 | |
Buildings [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 10 years |
Buildings [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 32 years |
Machinery and equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 5 years |
Machinery and equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 20 years |
Transportation vehicles [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 3 years |
Transportation vehicles [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 10 years |
Office equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 3 years |
Office equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 10 years |
Electronic equipment [Member] | Minimum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 3 years |
Electronic equipment [Member] | Maximum [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 10 years |
Land use rights [Member] | |
Significant Accounting Policies (Details) - Schedule of estimated useful life plant and equipment, net [Line Items] | |
Estimated useful life | 50 years |
Accounts Receivable (Details)
Accounts Receivable (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Accounts Receivable (Details) [Line Items] | |||
Allows credit period | 180 days | ||
Average accounts receivable turnover period | 93 years | ||
Bad debt write-off | $ 0 | $ 33,612 | $ 40,101 |
Minimum [Member] | |||
Accounts Receivable (Details) [Line Items] | |||
Average accounts receivable turnover period | 84 years | ||
Maximum [Member] | |||
Accounts Receivable (Details) [Line Items] | |||
Average accounts receivable turnover period | 91 years |
Accounts Receivable (Details) -
Accounts Receivable (Details) - Schedule of accounts receivable - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of accounts receivable [Abstract] | ||
Accounts receivable | $ 16,529,251 | $ 16,766,449 |
Accounts receivable – related parties | 1,914,380 | 498,125 |
Less: allowance for doubtful accounts | (2,910,554) | (2,764,735) |
Accounts receivable, net | $ 15,533,077 | $ 14,499,839 |
Accounts Receivable (Details)_2
Accounts Receivable (Details) - Schedule of changes of allowance for doubtful accounts - USD ($) | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Schedule of changes of allowance for doubtful accounts [Abstract] | ||
Beginning balance | $ 2,764,735 | $ 2,912,310 |
Bad debt write-off | (33,612) | |
Exchange difference | 145,819 | (113,963) |
Ending balance | $ 2,910,554 | $ 2,764,735 |
Notes Receivable (Details)
Notes Receivable (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Receivables [Abstract] | ||
Notes received | $ 555,612 | $ 517,649 |
Inventories (Details) - Schedul
Inventories (Details) - Schedule of inventories - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of inventories [Abstract] | ||
Raw materials | $ 11,305,744 | $ 10,489,858 |
Work in process | 913,751 | 252,749 |
Finished goods | 8,618,099 | 7,102,798 |
Total | $ 20,837,594 | $ 17,845,405 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation expense | $ 723,586 | $ 617,634 | $ 691,695 |
Net carrying value of sold on fixed assets | 70,644 | ||
Gain on sale of fixed assets | $ 654,138 | ||
Loss on disposal of fixed assets | $ 19,051 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details) - Schedule of property, plant and equipment - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 14,266,147 | $ 14,591,614 |
Less: accumulated depreciation | (7,578,505) | (8,112,358) |
Property, plant and equipment, net | 6,687,642 | 6,479,256 |
Buildings [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 4,930,868 | 4,785,642 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 7,706,598 | 8,302,445 |
Transportation vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 932,472 | 936,908 |
Office equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 460,943 | 442,343 |
Construction in progress [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 235,266 | $ 124,276 |
Intangible Assets (Details)
Intangible Assets (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 30,048 | $ 30,617 | $ 34,964 |
Intangible Assets (Details) - S
Intangible Assets (Details) - Schedule of intangible assets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of intangible assets [Abstract] | ||
Land use rights, cost | $ 1,632,277 | $ 1,550,500 |
Less: accumulated amortization | (429,590) | (378,617) |
Intangible assets, net | $ 1,202,687 | $ 1,171,883 |
Long-Term Investments (Details)
Long-Term Investments (Details) | 12 Months Ended | ||||||||||||
Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Sep. 30, 2019USD ($) | Sep. 30, 2019CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥) | Sep. 30, 2015 | Sep. 30, 2012USD ($) | Sep. 30, 2012CNY (¥) | Sep. 30, 2011USD ($) | Sep. 30, 2011CNY (¥) | Sep. 30, 2009USD ($) | Sep. 30, 2009CNY (¥) | |
Long-Term Investments (Details) [Line Items] | |||||||||||||
Investment acquire percentage | 20.00% | 20.00% | 22.50% | 22.50% | |||||||||
Cash consideration description | In 2015, as the result of a capital reduction, the Company’s ownership was reduced by 3.5% to 19% for a cash consideration of RMB 52,000,000 ($8,535,827 in USD), of which RMB 7,000,000 ($1,030,989 and $979,336 in USD, respectively) has not been collected as of September 30, 2020 and 2019 and recorded as other receivable. | ||||||||||||
Dividend income received | $ 440,647 | ¥ 3,087,000 | |||||||||||
Huashang Micro Finance Co. (“Huashang”) [Member] | |||||||||||||
Long-Term Investments (Details) [Line Items] | |||||||||||||
Investment amount | $ 13,203,257 | ¥ 90,000,000 | |||||||||||
Investment acquire percentage | 22.50% | 22.50% | |||||||||||
Wenzhou Longlian Development Co., Ltd. (“Longlian”) [Member] | |||||||||||||
Long-Term Investments (Details) [Line Items] | |||||||||||||
Investment amount | $ 1,307,982 | ¥ 8,333,400 | |||||||||||
Investment acquire percentage | 8.3334% | 8.3334% | |||||||||||
Longwan Rural Commercial Bank. (“LRCB”) [Member] | |||||||||||||
Long-Term Investments (Details) [Line Items] | |||||||||||||
Investment amount | $ 7,172,207 | ¥ 44,982,000 | |||||||||||
Investment acquire percentage | 2.10% | 2.10% | |||||||||||
Dividend income received | $ 481,070 | ¥ 3,307,500 | $ 505,982 | ¥ 3,307,500 |
Long-Term Investments (Detail_2
Long-Term Investments (Details) - Schedule of long-term investments - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of Investments [Line Items] | ||
Long-term investments | $ 13,449,305 | $ 12,775,494 |
Huashang Micro Finance Co. [Member] | ||
Schedule of Investments [Line Items] | ||
Long-term investments | 5,596,795 | 5,316,395 |
Longwan Rural Commercial Bank [Member] | ||
Schedule of Investments [Line Items] | ||
Long-term investments | 6,625,133 | 6,293,213 |
Wenzhou Longlian Development Co., Ltd [Member] | ||
Schedule of Investments [Line Items] | ||
Long-term investments | $ 1,227,377 | $ 1,165,886 |
Notes Payable (Details)
Notes Payable (Details) - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Debt Disclosure [Abstract] | ||
Note payable | $ 1,517,026 | $ 3,696,652 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |||
Short-term borrowings various interest rate percentage | 8.00% | ||
Short-term borrowings maturity year | 1 year | ||
Short term borrowings amount | $ 0 | $ 699,526 | |
Interest expense on debt | $ 2,162,589 | $ 2,149,077 | $ 2,082,680 |
Short-Term Borrowings (Detail_2
Short-Term Borrowings (Details) - Schedule of short-term borrowings | 12 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020CNY (¥) | Sep. 30, 2019CNY (¥) | |
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 31,221,280 | $ 30,789,134 | ||
Agricultural Bank [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,471,367 | $ 1,397,654 | ¥ 9,990,000 | |
Issuance date | Nov. 4, 2019 | Nov. 2, 2018 | ||
Expiration date | Nov. 3, 2020 | Nov. 1, 2019 | ||
Interest rate percentage | 5.40% | 5.44% | 5.40% | 5.44% |
Agricultural Bank 1 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 736,420 | $ 979,336 | ¥ 5,000,000 | ¥ 7,000,000 |
Issuance date | Nov. 13, 2019 | Dec. 3, 2018 | ||
Expiration date | Nov. 12, 2020 | Dec. 2, 2019 | ||
Interest rate percentage | 5.40% | 5.44% | 5.40% | 5.44% |
Agricultural Bank 2 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,030,989 | $ 699,526 | ¥ 7,000,000 | ¥ 5,000,000 |
Issuance date | Nov. 28, 2019 | Dec. 7, 2018 | ||
Expiration date | Nov. 18, 2020 | Nov. 15, 2019 | ||
Interest rate percentage | 5.35% | 5.44% | 5.35% | 5.44% |
Agricultural Bank 3 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,399,199 | $ 1,329,099 | ¥ 9,500,000 | ¥ 9,500,000 |
Issuance date | Dec. 19, 2019 | Jan. 11, 2019 | ||
Expiration date | Dec. 18, 2020 | Jan. 10, 2020 | ||
Interest rate percentage | 5.35% | 5.44% | 5.35% | 5.44% |
Agricultural Bank 4 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,471,368 | $ 1,397,652 | ¥ 9,990,000 | ¥ 9,990,000 |
Issuance date | Dec. 27, 2019 | Jan. 21, 2019 | ||
Expiration date | Dec. 10, 2020 | Jan. 20, 2020 | ||
Interest rate percentage | 5.35% | 5.13% | 5.35% | 5.13% |
Agricultural Bank 5 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 839,519 | $ 797,459 | ¥ 5,700,000 | ¥ 5,700,000 |
Issuance date | Jan. 8, 2020 | Jan. 25, 2019 | ||
Expiration date | Jan. 7, 2021 | Jan. 24, 2020 | ||
Interest rate percentage | 5.35% | 5.13% | 5.35% | 5.13% |
Agricultural Bank 6 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,471,368 | $ 1,397,652 | ¥ 9,990,000 | ¥ 9,990,000 |
Issuance date | Jan. 14, 2020 | Feb. 1, 2019 | ||
Expiration date | Jan. 13, 2021 | Jan. 30, 2020 | ||
Interest rate percentage | 5.35% | 5.13% | 5.35% | 5.13% |
Agricultural Bank 7 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,325,557 | $ 1,259,146 | ¥ 9,000,000 | ¥ 9,000,000 |
Issuance date | Feb. 28, 2020 | Mar. 4, 2019 | ||
Expiration date | Feb. 27, 2021 | Mar. 3, 2020 | ||
Interest rate percentage | 5.60% | 5.35% | 5.60% | 5.35% |
Agricultural Bank 8 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 734,948 | $ 1,397,652 | ¥ 4,990,000 | ¥ 9,990,000 |
Issuance date | Mar. 4, 2020 | Mar. 8, 2019 | ||
Expiration date | Mar. 3, 2021 | Mar. 7, 2020 | ||
Interest rate percentage | 5.60% | 5.35% | 5.60% | 5.35% |
Agricultural Bank 9 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,973,607 | $ 1,874,729 | ¥ 13,400,000 | ¥ 13,400,000 |
Issuance date | Mar. 13, 2020 | Apr. 2, 2019 | ||
Expiration date | Mar. 12, 2021 | Apr. 1, 2020 | ||
Interest rate percentage | 5.25% | 5.13% | 5.25% | 5.13% |
Agricultural Bank 10 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 736,420 | $ 699,526 | ¥ 5,000,000 | ¥ 5,000,000 |
Issuance date | Mar. 27, 2020 | Apr. 24, 2019 | ||
Expiration date | Mar. 15, 2021 | Apr. 15, 2020 | ||
Interest rate percentage | 5.25% | 5.13% | 5.25% | 5.13% |
Agricultural Bank 11 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 662,778 | $ 629,573 | ¥ 4,500,000 | ¥ 4,500,000 |
Issuance date | Jul. 10, 2020 | Jul. 2, 2019 | ||
Expiration date | Jul. 1, 2021 | Jul. 1, 2020 | ||
Interest rate percentage | 4.80% | 5.66% | 4.80% | 5.66% |
Agricultural Bank 12 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,546,483 | $ 1,469,004 | ¥ 10,500,000 | ¥ 10,500,000 |
Issuance date | Jul. 24, 2020 | Aug. 2, 2019 | ||
Expiration date | Jul. 15, 2021 | Aug. 1, 2020 | ||
Interest rate percentage | 4.75% | 5.66% | 4.75% | 5.66% |
Agricultural Bank 13 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 2,135,619 | $ 2,028,625 | ¥ 14,500,000 | ¥ 14,500,000 |
Issuance date | Aug. 3, 2020 | Aug. 14, 2019 | ||
Expiration date | Aug. 2, 2021 | Aug. 12, 2020 | ||
Interest rate percentage | 4.75% | 5.66% | 4.75% | 5.66% |
China CITIC Bank [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 662,778 | $ 365,725 | ¥ 4,500,000 | ¥ 2,614,096 |
Issuance date | Oct. 11, 2019 | Oct. 17, 2018 | ||
Expiration date | Oct. 10, 2020 | Oct. 12, 2019 | ||
Interest rate percentage | 5.35% | 4.90% | 5.35% | 4.90% |
China CITIC Bank 1 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 957,347 | $ 909,383 | ¥ 6,500,000 | ¥ 6,500,000 |
Issuance date | Oct. 16, 2019 | Oct. 17, 2018 | ||
Expiration date | Oct. 15, 2020 | Oct. 17, 2019 | ||
Interest rate percentage | 5.35% | 5.66% | 5.35% | 5.66% |
China CITIC Bank 2 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 589,136 | $ 720,148 | ¥ 4,000,000 | ¥ 5,147,400 |
Issuance date | Oct. 29, 2019 | Jan. 4, 2019 | ||
Expiration date | Oct. 28, 2020 | Dec. 30, 2019 | ||
Interest rate percentage | 5.35% | 5.00% | 5.35% | 5.00% |
China CITIC Bank 3 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 883,704 | $ 839,431 | ¥ 6,000,000 | ¥ 6,000,000 |
Issuance date | Sep. 22, 2020 | Sep. 24, 2009 | ||
Expiration date | Sep. 21, 2021 | Sep. 22, 2020 | ||
Interest rate percentage | 5.00% | 5.35% | 5.00% | 5.35% |
China CITIC Bank 4 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 957,347 | $ 909,383 | ¥ 6,500,000 | ¥ 6,500,000 |
Issuance date | Sep. 23, 2020 | Sep. 25, 2019 | ||
Expiration date | Sep. 22, 2021 | Sep. 23, 2020 | ||
Interest rate percentage | 5.00% | 5.35% | 5.00% | 5.35% |
China CITIC Bank 5 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,178,273 | $ 1,119,241 | ¥ 8,000,000 | ¥ 8,000,000 |
Issuance date | Sep. 24, 2020 | Sep. 26, 2019 | ||
Expiration date | Sep. 23, 2021 | Sep. 24, 2020 | ||
Interest rate percentage | 5.00% | 5.35% | 5.00% | 5.35% |
Bank of China [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,110,522 | $ 1,242,358 | ¥ 7,540,000 | ¥ 8,880,000 |
Issuance date | Jan. 7, 2020 | Jan. 10, 2019 | ||
Expiration date | Jan. 2, 2021 | Jan. 6, 2020 | ||
Interest rate percentage | 4.50% | 5.44% | 4.50% | 5.44% |
Bank of China 1 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,138,506 | $ 1,054,885 | ¥ 7,730,000 | ¥ 7,540,000 |
Issuance date | Jan. 9, 2020 | Jan. 9, 2019 | ||
Expiration date | Jan. 7, 2021 | Jan. 6, 2020 | ||
Interest rate percentage | 4.50% | 5.44% | 4.50% | 5.44% |
Minsheng Bank [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,679,039 | $ 2,084,587 | ¥ 11,400,000 | ¥ 14,900,000 |
Issuance date | Apr. 22, 2020 | Apr. 25, 2019 | ||
Expiration date | Apr. 15, 2021 | Apr. 25, 2020 | ||
Interest rate percentage | 5.50% | 6.53% | 5.50% | 6.53% |
Zhejiang Commerce Bank [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,251,915 | $ 139,905 | ¥ 8,500,000 | ¥ 1,000,000 |
Issuance date | Apr. 22, 2020 | Apr. 23, 2019 | ||
Expiration date | Apr. 16, 2021 | Oct. 23, 2019 | ||
Interest rate percentage | 4.20% | 6.09% | 4.20% | 6.09% |
Zhejiang Commerce Bank 1 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 699,599 | $ 979,336 | ¥ 4,750,000 | ¥ 7,000,000 |
Issuance date | May 21, 2020 | Apr. 23, 2019 | ||
Expiration date | May 18, 2021 | Oct. 23, 2019 | ||
Interest rate percentage | 4.20% | 6.09% | 4.20% | 6.09% |
Zhejiang Commerce Bank 2 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,030,989 | $ 629,573 | ¥ 7,000,000 | ¥ 4,500,000 |
Issuance date | Jun. 3, 2020 | Apr. 29, 2019 | ||
Expiration date | May 14, 2021 | Oct. 29, 2019 | ||
Interest rate percentage | 4.20% | 6.09% | 4.20% | 6.09% |
Zhejiang Commerce Bank 3 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 1,546,483 | $ 1,469,004 | ¥ 10,500,000 | ¥ 10,500,000 |
Issuance date | Sep. 18, 2020 | Apr. 29, 2019 | ||
Expiration date | Jun. 18, 2021 | Oct. 29, 2019 | ||
Interest rate percentage | 5.22% | 6.09% | 5.22% | 6.09% |
Bank of China 2 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 468,682 | ¥ 3,350,000 | ||
Issuance date | Jan. 25, 2019 | |||
Expiration date | Jan. 22, 2020 | |||
Interest rate percentage | 5.22% | 5.22% | ||
Bank of China 3 [Member] | ||||
Short-term Debt [Line Items] | ||||
Short-term borrowings amount | $ 500,860 | ¥ 3,580,000 | ||
Issuance date | Jan. 25, 2019 | |||
Expiration date | Jan. 2, 2020 | |||
Interest rate percentage | 5.22% | 5.22% |
Short-Term Borrowings (Detail_3
Short-Term Borrowings (Details) - Schedule of short-term bank borrowings are pledged by its assets - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Short-Term Borrowings (Details) - Schedule of short-term bank borrowings are pledged by its assets [Line Items] | ||
Short-term bank borrowings, Total | $ 10,030,273 | $ 10,332,832 |
Buildings, net [Member] | ||
Short-Term Borrowings (Details) - Schedule of short-term bank borrowings are pledged by its assets [Line Items] | ||
Short-term bank borrowings, Total | 3,405,140 | 2,873,733 |
Long-term Investment [Member] | ||
Short-Term Borrowings (Details) - Schedule of short-term bank borrowings are pledged by its assets [Line Items] | ||
Short-term bank borrowings, Total | $ 6,625,133 | $ 7,459,099 |
Customer and Supplier Concent_2
Customer and Supplier Concentrations (Details) - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Customer and Supplier Concentrations (Details) [Line Items] | |||
Accounts receivable (in Dollars) | $ 293,640 | $ 6,048,446 | |
Number of suppliers | three | two | two |
Concentration Risk, Benchmark Description | There were three suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2020, which combined accounted for 63.47% of the Company’s total accounts payable. | There were three suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2019, which combined accounted for 63.47% of the Company’s total accounts payable. | There were two suppliers that have significant concentration (over 10%) of total accounts payable for the year ended September 30, 2018, which combined accounted for 53.35% of the Company’s total accounts payable. |
Revenues and Purchases [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Accounts Receivable [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 26.31% | 11.48% | 31.83% |
Number of customers | two | one | |
Revenues [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 10.13% | 14.46% | |
Number of customers | one | one | |
Supplier 1 [Member] | Accounts Receivable [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 10.00% | ||
Supplier 1 [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 32.05% | 29.13% | 29.02% |
Supplier 2 [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 16.60% | 18.09% | 12.97% |
Supplier 3 [Member] | |||
Customer and Supplier Concentrations (Details) [Line Items] | |||
Concentration risk percentage | 11.16% |
Related Party Transactions (Det
Related Party Transactions (Details) | 12 Months Ended | ||||||||
Sep. 30, 2020USD ($) | Sep. 30, 2020CNY (¥) | Sep. 30, 2019USD ($) | Sep. 30, 2019CNY (¥) | Sep. 30, 2018USD ($) | Sep. 30, 2018CNY (¥) | Sep. 30, 2015 | Sep. 30, 2009USD ($) | Sep. 30, 2009CNY (¥) | |
Related Party Transactions (Details) [Line Items] | |||||||||
Accounts receivable | $ 1,914,380 | $ 498,125 | |||||||
Investment | $ 13,203,257 | ||||||||
Acquire percentage | 20.00% | 22.50% | 22.50% | ||||||
Proceeds from related party debt | 699,526 | ||||||||
Annual interest rate | 8.00% | ||||||||
Repaid the borrowed amount | $ 5,889,557 | 4,526,092 | |||||||
Taizhou Huadi Industrial Ltd. [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Raw materials purchased from related party | 14,521,129 | 11,641,219 | $ 12,265,399 | ||||||
Outstanding balance | 5,342,512 | 5,251,600 | |||||||
Material sold to related party | 3,228,396 | 1,276,462 | |||||||
Accounts receivable | 1,880,762 | 498,125 | |||||||
Huashang Micro Finance Co. [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Investment | ¥ | ¥ 90,000,000 | ||||||||
Acquire percentage | 22.50% | 22.50% | |||||||
Description of capital reduction | In 2015, as the result of a capital reduction, the Company’s ownership reduced by 3.5% to 19% for a cash consideration of RMB 52,000,000 ($8,535,827 in USD), of which RMB 7,000,000 ($1,030,989, $979,336 and $1,019,220 in USD, respectively) has not been collected as of September 30, 2020, 2019 and 2018. | ||||||||
Jueqin Wang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Outstanding balance | 341,374 | 254,319 | 281,892 | ||||||
Advance from related party | 71,371 | ¥ 500,000 | |||||||
Proceeds from related party debt | $ 1,427,429 | ||||||||
Huizhi Wang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Proceeds from related party debt | 10,000,000 | $ 699,526 | ¥ 5,000,000 | $ 582,411 | ¥ 4,000,000 | ||||
Annual interest rate | 8.00% | 8.00% | 8.10% | ||||||
Juelin Wang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Proceeds from related party debt | $ 713,715 | 5,000,000 | 5,000,000 | ||||||
Annual interest rate | 8.00% | ||||||||
Yiyu Wang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Outstanding balance | 919,053 | ||||||||
Proceeds from related party debt | $ 1,748,814 | 12,500,000 | |||||||
Annual interest rate | 8.00% | ||||||||
Repaid the borrowed amount | 893,571 | 6,260,000 | |||||||
Bing Zhang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Proceeds from related party debt | $ 713,713 | 5,000,000 | $ 699,526 | ¥ 5,000,000 | |||||
Annual interest rate | 8.00% | 8.00% | |||||||
Di Wang [Member] | |||||||||
Related Party Transactions (Details) [Line Items] | |||||||||
Acquire percentage | 1.00% | ||||||||
Proceeds from related party debt | $ 142,743 | ¥ 1,000,000 |
Related Party Transactions (D_2
Related Party Transactions (Details) - Schedule of nature of relationships with related parties | 12 Months Ended |
Sep. 30, 2020 | |
Taizhou Huadi Industrial Ltd. (“Taizhou Huadi”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | An entity 30% owned by Jueqin Wang |
Huashang Micro Finance Co. (“Huashang”) [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | An entity 19% owned by the Company |
Taizhou Huadi Material Technology Co. [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | An entity 100% owned by Yiyu Wang |
Jueqin Wang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Principal shareholder of the Company |
Di Wang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Principal shareholder of the Company |
Huizhi Wang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Principal shareholder of the Company |
Juelin Wang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Principal shareholder of the Company |
Yiyu Wang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Immediate family member of majority shareholder of the Company |
Bing Zhang [Member] | |
Related Party Transaction [Line Items] | |
Relationship with the Company | Principal shareholder of the Company |
Related Party Transactions (D_3
Related Party Transactions (Details) - Schedule of net outstanding balances with related parties - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 |
Liabilities to related parties: | |||
Net receivables from related parties | $ 6,846,552 | $ 2,627,351 | |
Taizhou Huadi Industrial Ltd. [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (5,342,512) | (5,251,600) | |
Jueqin Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (341,374) | (254,319) | $ (281,892) |
Yiyu Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (919,053) | ||
Advances to Suppliers [Member] | Taizhou Huadi Industrial Ltd. [Member] | |||
Receivables from related parties: | |||
Receivables from related parties | 5,342,512 | 5,251,600 | |
Accounts Receivable [Member] | Taizhou Huadi Industrial Ltd. [Member] | |||
Receivables from related parties: | |||
Receivables from related parties | 1,880,762 | ||
Accounts Receivable [Member] | Taizhou Huadi Material Technology Co. [Member] | |||
Receivables from related parties: | |||
Receivables from related parties | 498,125 | ||
Other Receivables [Member] | Huashang Micro Finance Co. [Member] | |||
Receivables from related parties: | |||
Receivables from related parties | 1,030,989 | 979,336 | |
Due to Related Parties [Member] | Di Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (147,284) | ||
Due to Related Parties [Member] | Jueqin Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (341,374) | (254,319) | |
Due to Related Parties [Member] | Huizhi Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (699,526) | ||
Due to Related Parties [Member] | Juelin Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | (699,526) | ||
Due to Related Parties [Member] | Yiyu Wang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | $ (919,053) | (1,748,813) | |
Due to Related Parties [Member] | Bing Zhang [Member] | |||
Liabilities to related parties: | |||
Liabilities to related parties | $ (699,526) |
Shareholders' Equity (Details)
Shareholders' Equity (Details) - $ / shares | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Oct. 09, 2020 | Sep. 30, 2009 | |
Shareholders' Equity (Details) [Line Items] | ||||
Ordinary shares authorized (in Shares) | 250,000,000 | 250,000,000 | ||
Ordinary shares par value (in Dollars per share) | $ 0.0002 | $ 0.0002 | ||
Ordinary shares issued (in Shares) | 10,000,000 | 10,000,000 | ||
Equity interest percentage | 20.00% | 22.50% | ||
Equity non-controlling interest percentage | 1.00% | 1.00% | ||
Ordinary shares outstanding (in Shares) | 10,000,000 | 10,000,000 | ||
Huadi International Group Co., Ltd [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Ordinary shares authorized (in Shares) | 250,000,000 | |||
Ordinary shares par value (in Dollars per share) | $ 0.0002 | |||
Yongqiang Maituo Limited [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Issued and outstanding shares percentage | 16.64% | |||
Yongqiang Donghai Limited [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Issued and outstanding shares percentage | 83.36% | |||
Huadi Steel [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Equity interest percentage | 99.00% | |||
Wenzhou Hongshu [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Equity interest percentage | 99.00% | |||
Di Wang [Member] | ||||
Shareholders' Equity (Details) [Line Items] | ||||
Equity interest percentage | 1.00% |
Income Taxes (Details)
Income Taxes (Details) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Taxes (Details) [Line Items] | |||
Standard tax rate percentage | 25.00% | ||
Hong Kong [Member] | |||
Income Taxes (Details) [Line Items] | |||
Statuatry income tax rate percentage | 16.50% | ||
PRC [Member] | |||
Income Taxes (Details) [Line Items] | |||
Statuatry income tax rate percentage | 25.00% | ||
High and New Technology Enterprise [Member] | |||
Income Taxes (Details) [Line Items] | |||
Preferential tax rate percentage | 15.00% | ||
Huadi Steel [Member] | |||
Income Taxes (Details) [Line Items] | |||
Preferential tax rate percentage | 15.00% | 15.00% |
Income Taxes (Details) - Schedu
Income Taxes (Details) - Schedule of consolidated statements of income and comprehensive income of reconciliation for income taxes - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of consolidated statements of income and comprehensive income of reconciliation for income taxes [Abstract] | |||
Income before taxes excluded the amounts of loss incurring entities | $ 3,575,248 | $ 6,446,944 | $ 6,585,624 |
PRC EIT tax rates | 15.00% | 15.00% | 25.00% |
Tax at the PRC EIT tax rates | $ 536,287 | $ 967,042 | $ 1,646,406 |
Tax effect of R&D expenses deduction | (238,573) | (199,925) | (271,349) |
Tax effect of non-taxable investment income and government grant | (120,754) | (72,160) | (126,495) |
Tax effect of non-deductible expenses | 41,989 | 310,233 | 88,530 |
Income tax expenses | $ 218,949 | $ 1,005,190 | $ 1,337,092 |
Income Taxes (Details) - Sche_2
Income Taxes (Details) - Schedule of attributed continuing operations - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of attributed continuing operations [Abstract] | |||
Current income tax | $ 218,949 | $ 709,027 | $ 1,390,773 |
Deferred income tax | 296,163 | (53,681) | |
Total income tax expense | $ 218,949 | $ 1,005,190 | $ 1,337,092 |
Income Taxes (Details) - Sche_3
Income Taxes (Details) - Schedule of tax effects of significant portions of the deferred tax asset - USD ($) | Sep. 30, 2020 | Sep. 30, 2019 |
Deferred tax assets: | ||
Bad debt allowance | $ 436,583 | $ 414,710 |
Total | $ 436,583 | $ 414,710 |
Segment Reporting (Details)
Segment Reporting (Details) | 12 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Number of operating segment | 1 |
Segment Reporting (Details) - S
Segment Reporting (Details) - Schedule of revenues by geographic areas - USD ($) | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2018 | |
China [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 47,271,235 | $ 47,606,489 | $ 35,487,131 |
As % of Sales | 79.93% | 72.66% | 58.77% |
International Markets One [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 5,082,525 | $ 3,795,089 | $ 13,497,542 |
As % of Sales | 8.59% | 5.79% | 22.35% |
US [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 2,996,803 | $ 8,285,920 | $ 5,542,392 |
As % of Sales | 5.07% | 12.65% | 9.18% |
Australia [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 1,327,488 | $ 473,613 | $ 468,588 |
As % of Sales | 2.24% | 0.72% | 0.78% |
Canada [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 925,420 | $ 2,039,051 | $ 2,745,347 |
As % of Sales | 1.56% | 3.11% | 4.55% |
Other foreign countries [Member] | |||
Segment Reporting (Details) - Schedule of revenues by geographic areas [Line Items] | |||
Sales Amount | $ 1,533,807 | $ 3,318,154 | $ 2,675,004 |
As % of Sales | 2.59% | 5.07% | 4.37% |
Subsequent Events (Details)
Subsequent Events (Details) | Oct. 09, 2020 | Feb. 19, 2021 | Jan. 26, 2021 | Sep. 30, 2020 |
Subsequent Events (Details) [Line Items] | ||||
Short-term bank loan, description | The Company refinanced its loans with its banks subsequent to the expiration of the loans disclosed in Note 10 – Short-term Borrowings by repaying bank loans of $ $16,095,204 and borrowing a total of $ $17,649,051 and for the period from October 1, 2020 to March 30, 2021. Those loans have interest rate ranges from 4.75% to 5.22% and are maturing within one year. The Company had no default of payment during the subsequent period. | |||
Subsequent Event [Member] | ||||
Subsequent Events (Details) [Line Items] | ||||
Description of reverse stock split | the Board of the Directors of Huadi International approved a 2 for 1 reverse stock split whereby every two authorized, issued and outstanding ordinary share was exchanged for one new ordinary shares (the “Reverse Stock Split”) and as a result of the Reverse Stock Split, the authorized ordinary shares decreased from 500,000,000 shares to 250,000,000 shares, par value of each ordinary share increased from $0.0001 to $0.0002, and the number of issued and outstanding ordinary shares decreased from 20,000,000 shares to 10,000,000 shares. All share information included in the consolidated financial statements and notes thereto have been retroactively adjusted as if such Reverse Stock Split occurred on the first day of the first period presented. | |||
Shares issuances, description | the board of Wenzhou Hongshun approved the resolution to increase investment into Huadi Steel by RMB 99 million, of which RMB 32 million has been paid by Wenzhou Hongshun as of March 30, 2021, with Di Wang invested additional RMB 1 million. As a result, the shareholder structure remains the same with Wenzhou Huadi Steel’s equity interest 99% held by Wenzhou Hongshun and 1% held by Di Wang. | On January 26, 2021, the Company completed its initial public offering (“IPO”) of 3,125,000 shares of its common stock at a public offering price of $8.00 per share. The gross proceeds from the offering were approximately $25 million before deducting placement agents’ commissions and other offering expenses. The offering was conducted on a firm commitment basis. We issued warrants to the Underwriters equal to six percent (6%) of the shares issued in the IPO (the “Representative Warrants”). The Representative Warrants will be exercisable at any time, and from time to time, in whole or in part, during the period commencing 180 days from the effective date of the offering, which period shall not extend further than four and one-half year years from the effective date of the registration statement in compliance with FINRA Rule 5110(f)(2)(G)(i). The Representative Warrants are exercisable at a per share price of $10.00, which is 125% of the Public Offering Price. The Representative Warrants are also exercisable on a cashless basis. The offering closed on January 26, 2021 and shares began trading on January 22, 2021 on NASDAQ Capital Market under the symbol “HUDI.” |