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What changed in Farmmi, Inc.'s 20-F — 2024 vs 2025

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Paragraph-level year-over-year comparison of Farmmi, Inc.'s 2024 and 2025 20-F annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+448 added−353 removedSource: 20-F (2026-02-10) vs 20-F (2025-01-24)

Top changes in Farmmi, Inc.'s 2025 20-F

448 paragraphs added · 353 removed · 252 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

46 edited+17 added−10 removed432 unchanged
Biggest changeFor the year ended September 30, 2024 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Revenues $ 9,400 $ 64,121,932 - - $ 64,131,332 Cost of revenues (4,480 ) (60,253,138 ) - - (60,257,618 ) Gross profit 4,920 3,868,794 - - 3,873,714 Operating expenses (338,119 ) (1,936,427 ) (803,483 ) - (3,078,029 ) (Loss) income from operations (333,199 ) 1,932,367 (803,483 ) - 795,685 Other (expenses) income (4,853,175 ) 4,529,659 (5,099,677 ) - (5,423,193 ) (Loss) income before income taxes (5,186,374 ) 6,462,026 (5,903,160 ) - (4,627,508 ) Income tax expenses 949 (1,213 ) - - (264 ) Net (loss) income $ (5,185,425 ) $ 6,460,813 $ (5,903,160 ) - $ (4,627,772 ) For the year ended September 30, 2023 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 74,224,063 $ 16,034,543 $ 20,106,281 - $ 110,364,887 Cost of revenues (70,021,350 ) (16,023,779 ) (20,033,003 ) - (106,078,132 ) Gross profit 4,202,713 10,764 73,278 - 4,286,755 Operating expenses (1,028,294 ) (71,676 ) (231,462 ) (913,948 ) (2,245,380 ) Income (loss) from operations 3,174,419 (60,912 ) (158,184 ) (913,948 ) 2,041,375 Other income (expenses) 1,514,162 (68,416 ) 634,225 (1,264,040 ) 815,931 Income (loss) before income taxes 4,688,581 (129,328 ) 476,041 (2,177,988 ) 2,857,306 Provision for income taxes (270,874 ) (8,556 ) (34,063 ) - (313,493 ) Net income (loss) $ 4,417,707 $ (137,884) $ 441,978 $ (2,177,988) $ 2,543,813 For the year ended September 30, 2022 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 64,795,082 $ 9,111,073 $ 25,307,224 - $ 99,213,379 Cost of revenues (60,272,018 ) (9,053,547 ) (24,449,728 ) - (93,775,293 ) Gross profit 4,523,064 57,526 857,496 - 5,438,086 Operating expenses (782,009 ) (50,344 ) (701,516 ) (2,961,849 ) (4,495,718 ) Income (loss) from operations 3,741,055 7,182 155,980 (2,961,849 ) 942,368 Other income (expenses) 560,497 20,510 213,771 368,466 1,163,244 Income (loss) before income taxes 4,301,552 27,692 369,751 (2,593,383 ) 2,105,612 Provision for income taxes 114,801 9,182 (5,616 ) - 118,367 Net income (loss) $ 4,416,353 $ 36,874 $ 364,135 $ (2,593,383) $ 2,223,979 8 Table of Contents The tables below disaggregated the Consolidated Balance Sheets of the Company into FAMI, PRC subsidiaries and non-PRC subsidiaries as of September 30, 2024, and into FAMI, the VIE and its subsidiaries, the WFOE that was the primary beneficiary of the VIEs and an aggregation of other entities that were consolidated as of September 30, 2023.
Biggest changeFor the Year Ended September 30, 2025 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Revenues $ 7,326,921 $ 20,644,439 - - $ 27,971,360 Cost of revenues (8,805,651 ) (18,364,186 ) - - (27,169,837 ) Gross (loss) profit (1,478,730 ) 2,280,253 - - 801,523 Operating expenses (821,384 ) (55,099,230 ) (997,285 ) - (56,917,899 ) Loss from operations (2,300,114 ) (52,818,977 ) (997,285 ) - (56,116,376 ) Other income (expenses) 1,233,449 2,071,039 (574,058 ) - 2,730,430 Loss before income taxes (1,066,665 ) (50,747,938 ) (1,571,343 ) - (53,385,946 ) Income tax expenses - (42 ) - - (42 ) Net loss $ (1,066,665 ) $ (50,747,980 ) $ (1,571,343 ) - $ (53,385,988 ) For the year ended September 30, 2024 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Revenues $ 9,400 $ 64,121,932 - - $ 64,131,332 Cost of revenues (4,480 ) (60,253,138 ) - - (60,257,618 ) Gross profit 4,920 3,868,794 - - 3,873,714 Operating expenses (338,119 ) (1,936,427 ) (803,483 ) - (3,078,029 ) (Loss) income from operations (333,199 ) 1,932,367 (803,483 ) - 795,685 Other (expenses) income (4,853,175 ) 4,529,659 (5,099,677 ) - (5,423,193 ) (Loss) income before income taxes (5,186,374 ) 6,462,026 (5,903,160 ) - (4,627,508 ) Income tax expenses 949 (1,213 ) - - (264 ) Net (loss) income $ (5,185,425 ) $ 6,460,813 $ (5,903,160 ) - $ (4,627,772 ) For the year ended September 30, 2023 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Revenues $ 74,224,063 $ 16,034,543 $ 20,106,281 - $ 110,364,887 Cost of revenues (70,021,350 ) (16,023,779 ) (20,033,003 ) - (106,078,132 ) Gross profit 4,202,713 10,764 73,278 - 4,286,755 Operating expenses (1,028,294 ) (71,676 ) (231,462 ) (913,948 ) (2,245,380 ) Income (loss) from operations 3,174,419 (60,912 ) (158,184 ) (913,948 ) 2,041,375 Other income (expenses) 1,514,162 (68,416 ) 634,225 (1,264,040 ) 815,931 Income (loss) before income taxes 4,688,581 (129,328 ) 476,041 (2,177,988 ) 2,857,306 Provision for income taxes (270,874 ) (8,556 ) (34,063 ) - (313,493 ) Net income (loss) $ 4,417,707 $ (137,884 ) $ 441,978 $ (2,177,988 ) $ 2,543,813 8 Table of Contents The tables below disaggregated the Consolidated Balance Sheets of the Company into FAMI, PRC subsidiaries and non-PRC subsidiaries as of September 30, 2025 and 2024.
Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions.
Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions.
We are subject to exchange rate risk between U.S. dollar and Renminbi because we sell our products in U.S. dollar from time to time, and our export distributors settle in U.S. dollar and these distributors may also be affected by U.S. dollar exchange rate.
We are subject to exchange rate risk between U.S. dollar and Renminbi because we sell our products in U.S. dollar from time to time, and our export distributors settle in U.S. dollar and these distributors may also be affected by U.S. dollar exchange rate.
Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment.
Such classification would likely result in unfavorable tax consequences to us and our non-PRC shareholders and have a material adverse effect on our results of operations and the value of your investment.
Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements.
Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain procedural requirements.
Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents.
Therefore, our PRC subsidiaries are able to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign exchange regulation, such as the overseas investment registrations by our shareholders or the ultimate shareholders of our corporate shareholders who are PRC residents.
But approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
But approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies.
For foreign investors, after reporting and being reviewed and approved by the appropriate government authorities, the foreign investors can transfer money through banks and other payment institutions, but the daily limit is $50,000 and the amount of each remittance cannot exceed $10,000.
For foreign investors, after reporting and being reviewed and approved by the appropriate government authorities, the foreign investors can transfer money through banks and other payment institutions, but the daily limit is $50,000 and the amount of each remittance cannot exceed $10,000.
In addition, we can also distribute and transfer profits or dividends through our overseas third-party institutions in accordance with the law. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account transactions.
In addition, we can also distribute and transfer profits or dividends through our overseas third-party institutions in accordance with the law. The PRC government may also, at its discretion, restrict access in the future to foreign currencies for current account transactions.
Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected. Risks Related to Ownership of Our Ordinary Shares 29 Table of Contents We are a Cayman Islands exempted company with limited liability.
Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected. 29 Table of Contents Risks Related to Ownership of Our Ordinary Shares We are a Cayman Islands exempted company with limited liability.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
The rules apply to registrants that the SEC identifies as having filed an annual report with an audit report issued by a registered public accounting firm that is located in a foreign jurisdiction and that PCAOB is unable to inspect or investigate completely because of a position taken by an authority in foreign jurisdictions.
Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions.
Under the agreement, (a) the PCAOB has sole discretion to select the firms, audit engagements and potential violations it inspects and investigates without consultation with, or input from, PRC authorities; (b) procedures are in place for PCAOB inspectors and investigators to view complete audit work papers with all information included and for the PCAOB to retain information as needed; (c) the PCAOB has direct access to interview and take testimony from all personnel associated with the audits the PCAOB inspects or investigates; and (d) the PCAOB shall have the unfettered ability to transfer information to the SEC in accordance with the Sarbanes-Oxley Act, and the SEC can use the information for all regulatory purposes, including administrative or civil enforcement actions.
The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our Board of Directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year. 35 Table of Contents
The registration of transfers may, on 14 days’ notice being given by advertisement in such one or more newspapers or by electronic means, be suspended and the register closed at such times and for such periods as our Board of Directors may from time to time determine, provided, however, that the registration of transfers shall not be suspended nor the register closed for more than 30 days in any year. 34 Table of Contents
As of the date of this report, as advised by our PRC legal counsel, Zhengbiao Law Firm, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked.
As of the date of this report, as advised by our PRC legal counsel, Zhiheng Law Firm, we and our PRC subsidiaries have received all requisite permits, approvals and certificates from the PRC government authorities to conduct our business operations in China. To our knowledge, no permission or approval has been denied or revoked.
The selected consolidated statements of operations data for the fiscal years ended September 30, 2024, 2023, and 2022 and the selected consolidated balance sheets data as of September 30, 2024 and 2023 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
The selected consolidated statements of operations data for the fiscal years ended September 30, 2025, 2024, and 2023 and the selected consolidated balance sheets data as of September 30, 2025 and 2024 have been derived from our audited consolidated financial statements, which are included in this annual report beginning on page F-1.
Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company. Our corporate affairs are governed by our Third Amended and Restated Memorandum and Articles of Association, by the Companies Law (as revised) of the Cayman Islands and the common law of the Cayman Islands.
Our shareholders may face difficulties in protecting their interests because we are a Cayman Islands exempted company. Our corporate affairs are governed by our Fourth Amended and Restated Memorandum and Articles of Association, by the Companies Law (as revised) of the Cayman Islands and the common law of the Cayman Islands.
However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties. From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties. 22 Table of Contents From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights.
There are significant legal and operational risks associated with conducting a substantial portion of our operations in mainland China, including those changes in the legal, political, and economic policies of the PRC government, the relations between China and the United States, or PRC or U.S. regulations may materially and adversely affect our business, financial condition, results of operations, and the market price of our ordinary shares.
There are significant legal and operational risks associated with conducting a substantial portion of our operations in mainland China, including those changes in the legal, political, and economic policies of the PRC government, the relations between China and the United States, or PRC or U.S. regulations may materially and adversely affect our business, financial condition, results of operations, and the market price of our Class A ordinary shares (the “Class A Ordinary Shares” or “Ordinary Shares”).
During the years ended September 30, 2024, 2023, and 2022, we had the following suppliers that accounted for 15% or more of our purchases.
During the years ended September 30, 2025, 2024, and 2023, we had the following suppliers that accounted for 15% or more of our purchases.
Zhang that will compete directly with our business operations, it is possible that the enforceability of these agreements is challenged and a conflict of interest occurs. Outstanding bank loans may reduce our available funds. As of September 30, 2024 and 2023, we had approximately $2.4 million and $4.7 million in outstanding loans.
Zhang that will compete directly with our business operations, it is possible that the enforceability of these agreements is challenged and a conflict of interest occurs. Outstanding bank loans may reduce our available funds. As of September 30, 2025 and 2024, we had approximately nil and $2.4 million in outstanding bank loans.
Cash maintained in banks within the People’s Republic of China of less than RMB 0.5 million (equivalent to $72,149) per bank are covered by "Deposit Insurance Regulation" promulgated by the State Council of the People’s Republic of China. Our cash accounts are not insured or otherwise protected.
Cash maintained in banks within the People’s Republic of China of less than RMB 0.5 million (equivalent to $70,235) per bank are covered by "Deposit Insurance Regulation" promulgated by the State Council of the People’s Republic of China. Our cash accounts are not insured or otherwise protected.
We do not believe failure to refinance from certain banks will have significant negative impact on our normal business operations. For the years ended September 30, 2023 and 2021, our operating cash flow was negative. While for the year ended September 30, 2022, our operating cash flow was positive.
We do not believe failure to refinance from certain banks will have significant negative impact on our normal business operations. For the years ended September 30, 2024 and 2023, our operating cash flow was negative, while for the year ended September 30, 2025, our operating cash flow was positive.
For the fiscal years ended September 30, 2024, 2023, and 2022, sales to Yunmihui accounted for approximately 55.0%, 40.5%, and 31.2% of our total revenue, respectively. If we cannot maintain long-term relationships with these major customers, the loss of our sales to them could have an adverse effect on our business, financial condition and results of operations.
For the fiscal years ended September 30, 2025, 2024, and 2023, sales to Yunmihui accounted for approximately 68.1%, 55.0%, and 40.5% of our total revenue, respectively. If we cannot maintain long-term relationships with these major customers, the loss of our sales to them could have an adverse effect on our business, financial condition and results of operations.
For the fiscal year ended September 30, 2024, we provided working capital loans of $151.8 million in aggregate to our subsidiaries.
For the fiscal year ended September 30, 2025, we provided working capital loans of $157.7 million in aggregate to our subsidiaries. For the fiscal year ended September 30, 2024, we provided working capital loans of $151.8 million in aggregate to our subsidiaries.
The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’ equity. The relevant exchange rates are listed below: For the years ended September 30, 2024 2023 2022 Period ended exchange rate US$1=RMB 7.0176 7.2960 7.1124 Period average exchange rate US$1=RMB 7.2043 7.0533 6.5746 B.
The effects of foreign currency translation adjustments are included as a component of accumulated other comprehensive income (loss) in shareholders’ equity. The relevant exchange rates are listed below: For the Years Ended September 30, 2025 2024 2023 Period ended exchange rate US$1=RMB 7.1190 7.0176 7.2960 Period average exchange rate US$1=RMB 7.2125 7.2043 7.0533 B.
The rights of our shareholders may be different from the rights of shareholders governed by the laws of U.S. jurisdictions. · As a “foreign private issuer,” we are exempt from certain U.S. federal securities law provisions applicable to U.S. domestic issuers and are also permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, and such exemptions may afford less protection to shareholders. · Our shares may be delisted if we are unable to comply with Nasdaq continued listing requirements. · The market price of our ordinary shares has been, and may continue to be, highly volatile, and such volatility could cause the market price of our Ordinary Shares to decrease and could cause you to lose some or all of your investment in our Ordinary Shares.
The rights of our shareholders may be different from the rights of shareholders governed by the laws of U.S. jurisdictions. · As a “foreign private issuer,” we are exempt from certain U.S. federal securities law provisions applicable to U.S. domestic issuers and are also permitted to rely on exemptions from certain Nasdaq corporate governance standards applicable to U.S. issuers, and such exemptions may afford less protection to shareholders. · Our shares may be delisted if we are unable to comply with Nasdaq continued listing requirements. · The market price of our Ordinary Shares has been, and may continue to be, highly volatile, and such volatility could cause the market price of our Ordinary Shares to decrease and could cause you to lose some or all of your investment in our Ordinary Shares. · Our dual class share structure may limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial.
For the years ended September 30, Supplier Name 2024 2023 2022 Ningbo Caixiang Trading Co., Ltd - 8.2 % 23.0 % Jingning Liannong Trading Co., Ltd 23.8 % 13.5 % 20.9 % Lishui Zhelin Trading Co., Ltd 15.7 % 9.5 % 6.0 % Qingyuan Nongbang Mushroom Industry Co., Ltd 22.3 % 7.9 % 9.3 % Because we purchase a material amount of our raw materials from these suppliers, the loss of any such suppliers could result in increased expenses for our company and result in adverse impact on our business, financial condition and results of operations.
For the Years Ended September 30, Supplier Name 2025 2024 2023 Jingning Liannong Trading Co., Ltd. 36.4 % 23.8 % 13.5 % Qingyuan Nongbang Mushroom Industry Co., Ltd. 34.9 % 22.3 % 7.9 % Changsha Golden Eagle Cross-Border Ltd 20.1 % - - Lishui Zhelin Trading Co., Ltd. - 15.7 % 9.5 % Because we purchase a material amount of our raw materials from these suppliers, the loss of any such suppliers could result in increased expenses for our company and result in adverse impact on our business, financial condition and results of operations.
For example, we are not required to issue quarterly reports or proxy statements. We are not required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers are not required to report equity holdings under Section 16 of the Exchange Act and are not subject to the insider short-swing profit disclosure and recovery regime.
For example, we are not required to issue quarterly reports or proxy statements. We are not required to disclose detailed individual executive compensation information. Furthermore, our directors and executive officers are not subject to the insider short-swing profit disclosure and recovery regime.
It is possible that we or our non-PRC resident investors may become at risk of being taxed under SAT Bulletin 7 and may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we or our non-PRC resident investors should not be taxed under SAT Bulletin 7, which may have an adverse effect on our financial condition and results of operations or such non-PRC resident investors’ investment in us. 28 Table of Contents Our PRC subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements.
It is possible that we or our non-PRC resident investors may become at risk of being taxed under SAT Bulletin 7 and may be required to expend valuable resources to comply with SAT Bulletin 7 or to establish that we or our non-PRC resident investors should not be taxed under SAT Bulletin 7, which may have an adverse effect on our financial condition and results of operations or such non-PRC resident investors’ investment in us.
The loss of any of our key customers could reduce our revenues and our profitability. Our key customers in fiscal year 2024 were principally Shanghai Yunmihui Supply Chain Group Co. Ltd (“Yunmihui”), and Ningbo Senjia Yamei Trading Co., Ltd (“Senjia Yamei”). They are unrelated parties.
The loss of any of our key customers could reduce our revenues and our profitability. Our key customers in fiscal year 2025 were principally Shanghai Yunmihui Supply Chain Group Co. Ltd (“Yunmihui”), and Lil Republic Limited (“Lil Republic”). They are unrelated parties.
(All amounts in U.S. dollars) Statements of operations data: For the Years Ended September 30, 2024 2023 2022 2021 2020 Revenues $ 64,131,332 $ 110,364,887 $ 99,213,379 $ 39,289,951 $ 28,363,963 Gross profit 3,873,714 4,286,755 5,438,086 5,109,281 4,651,422 Operating expenses (3,078,029 ) (2,245,380 ) (4,495,718 ) (2,256,405 ) (2,384,339 ) Income from operations 795,685 2,041,375 942,368 2,852,876 2,267,083 Income tax expenses (264 ) (313,493 ) 118,367 (25,571 ) (16,753 ) Net (loss) income from continuing operations (4,627,772 ) 2,543,813 2,223,979 2,407,790 1,077,302 Net loss from discontinued operations, net of tax - - - (51,352 ) (263,847 ) Net (loss) income $ (4,627,772) $ 2,543,813 $ 2,223,979 $ 2,356,438 $ 813,455 (Loss) earnings per share, basic Continuing operations (0.66 ) 0.70 0.77 4.68 13.26 Discontinued operations - - - (0.10 ) (3.25 ) (Loss) earnings per share, diluted Continuing operations (0.66 ) 0.30 0.77 4.61 13.26 Discontinued operations - - - (0.10 ) (3.25 ) Weighted average ordinary share outstanding, basic 7,088,326 3,628,923 2,905,984 514,212 81,224 Weighted average ordinary share outstanding, diluted 7,088,326 8,452,875 2,905,984 522,276 81,224 7 Table of Contents Balance sheets data 2024 2023 2022 2021 2020 Current assets $ 161,925,796 $ 158,171,175 $ 153,254,380 $ 155,305,536 $ 37,022,171 Total assets $ 186,733,719 $ 174,800,086 $ 163,782,853 $ 165,686,901 $ 38,191,746 Current liabilities $ 10,060,240 $ 10,712,982 $ 8,289,321 $ 4,146,426 $ 8,367,387 Total liabilities $ 16,717,482 $ 12,824,160 $ 9,098,762 $ 4,894,483 $ 9,036,589 Total shareholders' equity (net assets) $ 170,016,237 $ 161,975,926 $ 154,684,091 $ 160,792,418 $ 29,155,157 Selected Consolidated Financial Schedule The tables below disaggregated the Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company into FAMI, PRC subsidiaries, and non-PRC subsidiaries for the year ended September 30, 2024, and into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the fiscal years ended September 30, 2023, and 2022.
(All amounts in U.S. dollars) Statements of operations data: For the Years Ended September 30, 2025 2024 2023 2022 2021 Revenues $ 27,971,360 $ 64,131,332 $ 110,364,887 $ 99,213,379 $ 39,289,951 Gross profit 801,523 3,873,714 4,286,755 5,438,086 5,109,281 Operating expenses (56,917,899 ) (3,078,029 ) (2,245,380 ) (4,495,718 ) (2,256,405 ) (Loss) income from operations (56,116,376 ) 795,685 2,041,375 942,368 2,852,876 Income tax (expenses) benefits (42 ) (264 ) (313,493 ) 118,367 (25,571 ) Net (loss) income from continuing operations (53,385,988 ) (4,627,772 ) 2,543,813 2,223,979 2,407,790 Net loss from discontinued operations, net of tax - - - - (51,352 ) Net (loss) income $ (53,385,988 ) $ (4,627,772 ) $ 2,543,813 $ 2,223,979 $ 2,356,438 (Loss) earnings per share, basic Continuing operations (29.08 ) (7.83 ) 8.41 9.18 56.19 Discontinued operations - - - - (1.20 ) (Loss) earnings per share, diluted Continuing operations (29.08 ) (7.83 ) 8.41 9.18 56.19 Discontinued operations - - - - (1.18 ) Weighted average ordinary share outstanding, basic 1,836,043 590,694 302,410 242,165 42,851 Weighted average ordinary share outstanding, diluted 1,836,043 590,694 704,406 242,165 43,523 7 Table of Contents Balance sheets data 2025 2024 2023 2022 2021 Current assets $ 93,125,955 $ 161,925,796 $ 158,171,175 $ 153,254,380 $ 155,305,536 Total assets $ 147,033,182 $ 186,733,719 $ 174,800,086 $ 163,782,853 $ 165,686,901 Current liabilities $ 9,956,330 $ 10,060,240 $ 10,712,982 $ 8,289,321 $ 4,146,426 Total liabilities $ 23,175,730 $ 16,717,482 $ 12,824,160 $ 9,098,762 $ 4,894,483 Total shareholders' equity (net assets) $ 123,857,452 $ 170,016,237 $ 161,975,926 $ 154,684,091 $ 160,792,418 Selected Consolidated Financial Schedule The tables below disaggregated the Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company into FAMI, PRC subsidiaries, and non-PRC subsidiaries for the years ended September 30, 2025 and 2024, and into FAMI, the VIE and its subsidiaries, the WFOE that is the primary beneficiary of the VIEs and an aggregation of other entities that are consolidated for the fiscal year ended September 30, 2023.
Between January 1, 2024 and the date of this report, our shares have closed between a low of $0.195 and a high of $1.42 per share, and the last reported trading price on January 22, 2025 was $0.2622 per Ordinary Share.
Between January 1, 2025 and the date of this report, our shares have closed between a low of $1.11 and a high of $4.4018 per share, and the last reported trading price on February 6, 2026 was $1.19 per Ordinary Share.
However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed. 34 Table of Contents Shareholders of Cayman Islands exempted companies (such as us) have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders.
However, Cayman Islands statutory law provides a mechanism for a dissenting shareholder in a merger or consolidation to apply to the Grand Court for a determination of the fair value of the dissenter’s shares if it is not possible for the company and the dissenter to agree on a fair price within the time limits prescribed.
The Holding Foreign Companies Accountable Act Our ordinary shares may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the PCAOB is unable to inspect our auditors for two consecutive years.
We have not installed any cash management policies that dictate the amount of such funds and how such funds are transferred. The Holding Foreign Companies Accountable Act Our Ordinary Shares may be prohibited from trading on a national exchange or “over-the-counter” markets under the HFCAA if the PCAOB is unable to inspect our auditors for two consecutive years.
Among our export sales for the year ended September 30, 2024, approximately 8.19% were sold to U.S., 37.87% sold to Canada, 17.08% sold to Japan, 10.87% sold to Europe, and 25.47% sold to the Middle East. Settlement currency is USD for export transactions no matter what the destination country is.
Among our export sales for the year ended September 30, 2025, approximately 18.96% were sold to U.S., 16.48% sold to Canada, 10.12% sold to Japan, 15.96% sold to Europe, and 38.48% sold to the Middle East. Settlement currency is USD for export transactions no matter what the destination country is.
In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our PRC subsidiaries’ ability to pay dividends and other distributions to us.
Furthermore, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. 28 Table of Contents In addition, the PRC tax authorities may require us to adjust our taxable income under the contractual arrangements we currently have in place in a manner that would materially and adversely affect our PRC subsidiaries’ ability to pay dividends and other distributions to us.
While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a merger or consolidation of a company.
Therefore, you may have more difficulty protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the comparatively less formal nature of Cayman Islands law in this area. 33 Table of Contents While Cayman Islands law allows a dissenting shareholder to express the shareholder’s view that a court sanctioned reorganization of a Cayman Islands company would not provide fair value for the shareholder’s shares, Cayman Islands statutory law does not specifically provide for shareholder appraisal rights in connection with a merger or consolidation of a company.
We are a holding company incorporated in the Cayman Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements. Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
Current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations.
Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations. 22 Table of Contents Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completed our auditors for two consecutive years.
Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business and impede our ability to continue our operations.
On November 5, 2021, we purchased 124,590,064 shares of Shanghai Jiaoda Onlly Co., Ltd (“Jiaoda Onlly”), a Shanghai Stock Exchange listed company under the ticker 600530.SH, from shareholders of Jiaoda Onlly. Jiaoda Onlly operates elderly care institutions and engages in the research and development, production and sale of health food.
This could have a material adverse effect on our financial condition and results of operations. Our investments in other businesses may not be successful. On November 5, 2021, we purchased 124,590,064 shares of Shanghai Jiaoda Onlly Co., Ltd (“Jiaoda Onlly”), a Shanghai Stock Exchange listed company under the ticker 600530.SH, from shareholders of Jiaoda Onlly.
We have not declared or paid any cash dividends, nor do we have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business. As of the date of this report, we do not anticipate any difficulties on our ability to transfer cash between subsidiaries.
For the fiscal year ended September 30, 2023, we provided working capital loans of $151.7 million in aggregate to our subsidiaries. 5 Table of Contents For the fiscal years ended September 30, 2022, we provided working capital loans of $140.4 million in aggregate to our wholly owned subsidiaries.
For the fiscal year ended September 30, 2023, we provided working capital loans of $151.7 million in aggregate to our subsidiaries. 5 Table of Contents We have not declared or paid any cash dividends, nor do we have any present plan to pay any cash dividends on our ordinary shares in the foreseeable future.
In recent years, U.S. regulatory authorities have continued to express their concerns about challenges in their oversight of financial statement audits of U.S.-listed companies with significant operations in China.
Trading in our securities may be prohibited under the Holding Foreign Companies Accountable Act if the PCAOB determines that it cannot inspect or investigate completed our auditors for two consecutive years. In recent years, U.S. regulatory authorities have continued to express their concerns about challenges in their oversight of financial statement audits of U.S.-listed companies with significant operations in China.
As of September 30, 2024 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Intercompany receivables $ 63,632,744 $ 7,653 $ 151,457,184 $ (215,097,581 ) - Current assets excluding intercompany receivables 680,374 160,950,651 294,771 - 161,925,796 Current assets 64,313,118 160,958,304 151,751,955 (215,097,581 ) 161,925,796 Investment in subsidiaries 68,019,556 - (68,019,556 ) - Non-current assets excluding investment in subsidiaries 7,969,062 16,838,861 - - 24,807,923 Non-current assets 75,988,618 16,838,861 - (68,019,556 ) 24,807,923 Total assets 140,301,736 177,797,165 151,751,955 (283,117,137 ) 186,733,719 Intercompany payables 135,718,879 78,130,518 962,080 (214,811,477 ) - Current liabilities excluding intercompany payables 3,564,540 1,057,154 5,438,546 - 10,060,240 Current liabilities 139,283,419 79,187,672 6,400,626 (214,811,477 ) 10,060,240 Non-current liabilities 6,237,130 420,112 - - 6,657,242 Total liabilities 145,520,549 79,607,784 6,400,626 (214,811,477 ) 16,717,482 Total shareholders' equity (net assets) $ (5,218,813 ) $ 98,189,381 $ 145,351,329 $ (68,305,660 ) $ 170,016,237 As of September 30, 2023 Other entities WFOE that is that are the primary VIE and its Consolidated consolidated beneficiary subsidiaries FAMI total Intercompany receivables $ 144,664,527 $ 131,992,092 $ 7,086,579 $ 151,681,406 - Current assets excluding intercompany receivables 138,871,675 353,985 18,841,671 103,844 $ 158,171,175 Current assets $ 283,536,202 $ 132,346,077 $ 25,928,250 $ 151,785,250 $ 158,171,175 Investment in subsidiaries - $ 37,712,692 - - - Non-current assets excluding investment in subsidiaries $ 16,627,615 - $ 1,296 - $ 16,628,911 Non-current assets $ 16,627,615 $ 37,712,692 $ 1,296 - $ 16,628,911 Total assets $ 300,163,817 $ 170,058,769 $ 25,929,546 $ 151,785,250 $ 174,800,086 Intercompany payables $ 290,760,077 $ 124,634,218 $ 19,812,080 $ 218,229 - Current liabilities excluding intercompany payables 634,111 756,017 3,530,735 5,792,119 $ 10,712,982 Current liabilities $ 291,394,188 $ 125,390,235 $ 23,342,815 $ 6,010,348 $ 10,712,982 Non-current liabilities $ 533,315 $ 106,737 1,471,126 - $ 2,111,178 Total liabilities $ 291,927,503 $ 125,496,972 $ 24,813,941 $ 6,010,348 $ 12,824,160 Total shareholders' equity (net assets) $ 8,236,314 $ 44,561,797 $ 1,115,605 $ 145,774,902 $ 161,975,926 9 Table of Contents Exchange Rate Information Our financial information is presented in U.S. dollars.
As of September 30, 2025 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Intercompany receivables $ 15,120,843 $ 8,188 $ 157,699,303 $ (172,828,334 ) - Current assets excluding intercompany receivables 31,988,835 61,137,050 70 - 93,125,955 Current assets 47,109,678 61,145,238 157,699,373 (172,828,334 ) 93,125,955 Investment in subsidiaries 69,019,556 - - (69,019,556 ) - Non-current assets excluding investment in subsidiaries 46,933,699 6,973,528 - - 53,907,227 Non-current assets 115,953,255 6,973,528 - (69,019,556 ) 53,907,227 Total assets 163,062,933 68,118,766 157,699,373 (241,847,890 ) 147,033,182 Intercompany payables 148,633,480 22,321,325 3,270 (170,958,075 ) - Current liabilities excluding intercompany payables 6,520,299 406,446 3,029,585 - 9,956,330 Current liabilities 155,153,779 22,727,771 3,032,855 (170,958,075 ) 9,956,330 Non-current liabilities 13,194,630 24,770 - - 13,219,400 Total liabilities 168,348,409 22,752,541 3,032,855 (170,958,075 ) 23,175,730 Total shareholders' equity (net assets) $ (5,285,476 ) $ 45,366,225 $ 154,666,518 $ (70,889,815 ) $ 123,857,452 As of September 30, 2024 Non-PRC PRC Consolidated Subsidiaries Subsidiaries FAMI Eliminations total Intercompany receivables $ 63,632,744 $ 7,653 $ 151,457,184 $ (215,097,581 ) - Current assets excluding intercompany receivables 680,374 160,950,651 294,771 - 161,925,796 Current assets 64,313,118 160,958,304 151,751,955 (215,097,581 ) 161,925,796 Investment in subsidiaries 68,019,556 - (68,019,556 ) - Non-current assets excluding investment in subsidiaries 7,969,062 16,838,861 - - 24,807,923 Non-current assets 75,988,618 16,838,861 - (68,019,556 ) 24,807,923 Total assets 140,301,736 177,797,165 151,751,955 (283,117,137 ) 186,733,719 Intercompany payables 135,718,879 78,130,518 962,080 (214,811,477 ) - Current liabilities excluding intercompany payables 3,564,540 1,057,154 5,438,546 - 10,060,240 Current liabilities 139,283,419 79,187,672 6,400,626 (214,811,477 ) 10,060,240 Non-current liabilities 6,237,130 420,112 - - 6,657,242 Total liabilities 145,520,549 79,607,784 6,400,626 (214,811,477 ) 16,717,482 Total shareholders' equity (net assets) $ (5,218,813 ) $ 98,189,381 $ 145,351,329 $ (68,305,660 ) $ 170,016,237 9 Table of Contents Exchange Rate Information Our financial information is presented in U.S. dollars.
Our shares may be delisted if we are unable to comply with Nasdaq continued listing requirements. As a Nasdaq listed company, we are required to comply with Nasdaq continued listing requirements. On April 22, 2023, we received a letter from The Nasdaq Stock Market LLC.
We may be unable to comply with the applicable continued listing requirements of the Nasdaq Capital Market and as a result, our Ordinary Shares could be delisted from Nasdaq, which may cause the price of our shares to decline and adversely impact our ability to raise capital. Our Ordinary Shares are traded on the Nasdaq Capital Market.
There can be no assurance that the Company will be able to regain compliance with the Minimum Bid Price Rule or maintain compliance with the other listing requirements necessary for the Company to maintain the listing of its ordinary shares on Nasdaq.
Although we regained compliance, there can be no assurance we will continue to meet the minimum bid price requirements or any other requirements in the future, in which case our Ordinary Shares could be delisted.
Removed
As of the date of this report, we do not anticipate any difficulties on our ability to transfer cash between subsidiaries. We have not installed any cash management policies that dictate the amount of such funds and how such funds are transferred.
Added
Failure to comply with these cybersecurity and data privacy requirements in a timely manner, or at all, may subject us to government enforcement actions and investigations, fines, penalties, suspension or disruption of our operations.
Removed
This could have a material adverse effect on our financial condition and results of operations. Stock price volatility may expose investors to significant investment risk. In three public offerings on March 22, 2021, April 28, 2021, and September 13, 2021, we offered an aggregate of more than 500 million shares.
Added
Pursuant to the Cybersecurity Law of the PRC, which was promulgated on October 28, 2025 and came into effect on January 1, 2026, listed companies are required, among other things, (a) to fulfill their security protection obligations in accordance with the requirements of the cybersecurity tiered protection system, to prevent networks from being disturbed, damaged, or accessed without authorization, as well as data leakage, theft, or tampering; (b) to take technical measures and other necessary measures to ensure the secure and stable operation of their networks, effectively respond to cybersecurity incidents, guard against cyber-related criminal activities; and strictly keep personal information collected confidential, without disclosing, tampering with, or damaging it; (c) to set up a dedicated security management organization and responsible person, conduct security background checks, and regularly provide cybersecurity education, technical training, and skill assessments for employees, if listed companies operate critical information infrastructure, and operators of critical information infrastructure are required to conduct at least one security inspection and assessment each year, report the results and improvement measures to relevant departments, and also develop emergency response plans and conduct regular drills; and (d) for listed companies that store network data overseas or provide data to overseas entities, to undergo security assessments or take corresponding security measures to ensure the security of cross-border data flows.
Removed
The significant increase in the number of outstanding shares that resulted from such offerings, together with successively decreasing offering prices per share, has resulted in material volatility in our stock price. Between October 1, 2023 and the date of this report, our shares have closed between a low of $0.1979 and a high of $1.65 per share.
Added
Listed companies that violate cybersecurity regulations may face penalties such as warnings, fines, suspension of related business activities, revocation of licenses or business licenses, etc. If the violation constitutes a crime, criminal responsibility shall be pursued according to law.
Removed
If we engage in future capital raises at dilutive prices, or if investors believe that we will do so, our stock price could continue to be volatile. Our investments in other businesses may not be successful.
Added
The PRC regulatory requirements with respect to cybersecurity and data security are constantly evolving and can be subject to varying interpretations and significant changes, resulting in uncertainties about the scope of our responsibilities in that regard.
Removed
Furthermore, if our PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us.
Added
Jiaoda Onlly operates elderly care institutions and engages in the research and development, production and sale of health food.
Removed
(“Nasdaq”) stating that for 30 consecutive business days preceding the date of the Notice, the bid price of our ordinary shares had closed below the $1.00 per share minimum required for continued listing under Listing Rule 5550(a)(2) (the “Minimum Bid Price Rule”). We were provided 180 calendar days, or until October 21, 2024, to regain compliance with the rule.
Added
Our PRC subsidiaries are subject to restrictions on paying dividends or making other payments to us, which may restrict our ability to satisfy our liquidity requirements. We are a holding company incorporated in the Cayman Islands. We may need dividends and other distributions on equity from our PRC subsidiaries to satisfy our liquidity requirements.
Removed
On October 22, 2024, Nasdaq granted us an additional 180 calendar day period, or until April 21, 2025, to regain compliance with the Minimum Bid Price Rule.
Added
Our dual class share structure may limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A Ordinary Shares may view as beneficial. Our authorized and issued ordinary shares are divided into Class A Ordinary Shares and Class B Ordinary Shares.
Removed
Nasdaq’s determination to grant the second compliance period was based on the Company meeting the continued listing requirement for market value of publicly held shares and all other applicable requirements for initial listing on the Nasdaq Capital Market, with the exception of the bid price requirement, and the Company’s written notice of its intention to cure the deficiency during the second compliance period by effecting a reverse stock split, if necessary. 33 Table of Contents To regain compliance, the bid price of the Company’s ordinary shares must close at or above $1.00 per share for a minimum of ten consecutive business days at any time during the second 180-day compliance period.
Added
Each Class A Ordinary Share is entitled to one vote, while each Class B Ordinary Share is entitled to fifty votes, with all ordinary shares voting together as a single class on most matters.
Removed
If we fail to regain compliance or maintain compliance with other applicable listing requirements, Nasdaq may delist our ordinary shares. We do not intend to pay dividends for the foreseeable future.
Added
Each Class B Ordinary Share is convertible into one Class A Ordinary Share at any time by the holder thereof, while Class A Ordinary Shares are not convertible into Class B Ordinary Shares under any circumstances. Only Class A Ordinary Shares are listed and traded on Nasdaq.
Removed
Therefore, you may have more difficulty protecting your interests than would shareholders of a corporation incorporated in a jurisdiction in the United States, due to the comparatively less formal nature of Cayman Islands law in this area.
Added
Our CEO, Chairwoman and founder, Yefang Zhang, owns all of the issued Class B Ordinary Shares. As a result of the dual class share structure and the effective control of our Company, the holder of Class B Ordinary Shares has considerable influence over matters such as decisions regarding election of directors and other significant corporate actions.
Added
This control may discourage, delay, or prevent a change in control of us, which could have the effect of depriving our other shareholders of the opportunity to receive a premium for their shares as part of a sale of us and may reduce our share price.
Added
This concentrated control will limit the ability of holders of Class A Ordinary Shares to influence corporate matters and could discourage others from pursuing any potential merger, takeover, or other change of control transactions that holders of Class A Ordinary Shares may view as beneficial.
Added
Nasdaq rules require us to maintain a minimum closing bid price of $1.00 per common share. The closing bid price of our Ordinary Shares previously fell below $1.00 per share for 30 consecutive trading days, and as a result, we were not compliant with Nasdaq’s listing standards.
Added
In the event that our Ordinary Shares are delisted from Nasdaq and are not eligible for quotation or listing on another market or exchange, trading of our Ordinary Shares could be conducted only in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the OTC.
Added
In such event, it could become more difficult to sell or obtain accurate price quotations for our Ordinary Shares and there would likely also be a reduction in our coverage by securities analysts and news media, which could cause the price of our Ordinary Shares to decline further.
Added
In addition, our ability to raise additional capital may be severely impacted, which may negatively affect our plans and the results of our operations. We do not intend to pay dividends for the foreseeable future.
Added
Shareholders of Cayman Islands exempted companies (such as us) have no general rights under Cayman Islands law to inspect corporate records and accounts or to obtain copies of lists of shareholders.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

116 edited+48 added−41 removed245 unchanged
Biggest changeOn August 17, 2021, the State Administration for Market Regulation, or the SAMR, issued a discussion draft of Provisions on the Prohibition of Unfair Competition on the Internet, under which business operators should not use data or algorithms to hijack traffic or influence users’ choices, or use technical means to illegally capture or use other business operators’ data.
Biggest changeRegulations on Anti-Monopoly and Competition On April 25, 2024, the State Council Anti-Monopoly and Anti-Unfair Competition Committee issued the Antitrust Compliance Guidelines for Business Operators, which requires business operators to establish anti-monopoly compliance management systems under the PRC Anti-Monopoly Law to manage anti-monopoly compliance risks. 67 Table of Contents On May 6, 2024, the State Administration for Market Regulation (SAMR) released the Provisional Regulation on Prohibiting Unfair Competition Online, under which business operators should not use data or algorithms to hijack traffic or influence users’ choices, or use technical means to illegally capture or use other business operators’ data.
Zhejiang Province Modern Agricultural Association Member Entity Attend meetings such as Industry Leader Meeting of REGULATIONS We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business. This section summarizes the principal PRC laws, rules and regulations relevant to our business and operations.
Zhejiang Province Modern Agricultural Association of Member Entity Attend meetings such as Industry Leader Meeting REGULATIONS We are subject to a variety of PRC and foreign laws, rules and regulations across a number of aspects of our business. This section summarizes the principal PRC laws, rules and regulations relevant to our business and operations.
According to the PRC Foreign Investment Law, foreign investments shall enjoy pre-entry national treatment, except for those foreign-invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” While foreign investors shall refrain from investing in any of the foreign “prohibited” industries, foreign-invested entities operating in foreign “restricted” industries shall require market entry clearance and other approvals from relevant PRC governmental authorities.
According to the Foreign Investment Law, foreign investments shall enjoy pre-entry national treatment, except for those foreign-invested entities that operate in industries deemed to be either “restricted” or “prohibited” in the “negative list.” While foreign investors shall refrain from investing in any of the foreign “prohibited” industries, foreign-invested entities operating in foreign “restricted” industries shall require market entry clearance and other approvals from relevant PRC governmental authorities.
The Offering was conducted pursuant to the Company’s registration statement on Form F-1 (File No. 333-255387) declared effective by the Securities and Exchange Commission on April 28, 2021, an abbreviated registration statement on Form F-1 pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”) (File No. 333-255590) effective upon filing on April 28, 2021, and a prospectus dated April 28, 2021, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. · In May 2021, Farmmi Ecology incorporated Zhejiang Farmmi Agricultural Supply Chain Co., Ltd (“Farmmi Supply Chain”) in China. · In July 2021, at the 2021 annual shareholder meeting of the Company, the shareholders approved an ordinary resolution that the authorized share capital of the Company be increased from 20,000,000 ordinary shares of $0.001 par value each to 600,000,000 ordinary shares of $0.001 par value each. · In July 22, 2021, shareholders approved the 2021 Share Incentive Plan (the “2021 Plan”) and authorized the Company to reserve a total of 40,000,000 unissued ordinary shares (the “Shares”) for issuance under the 2021 Plan. · On August 26, 2021, Suyuan Agriculture has changed its name to Zhejiang Farmmi Agricultural Science and Technology Group Co., Ltd, and its capital was increased to RMB 50 million. · Zhejiang Yitang Medical Service Co., Ltd was incorporated on September 7, 2021.
The Offering was conducted pursuant to the Company’s registration statement on Form F-1 (File No. 333-255387) declared effective by the Securities and Exchange Commission on April 28, 2021, an abbreviated registration statement on Form F-1 pursuant to Rule 462(b) under the Securities Act of 1933, as amended (the “Securities Act”) (File No. 333-255590) effective upon filing on April 28, 2021, and a prospectus dated April 28, 2021, after deducting underwriting discounts and commissions and estimated offering expenses payable by the Company. · In May 2021, Farmmi Ecology incorporated Zhejiang Farmmi Agricultural Supply Chain Co., Ltd (“Farmmi Supply Chain”) in China. · In July 2021, at the 2021 annual shareholder meeting of the Company, the shareholders approved an ordinary resolution that the authorized share capital of the Company be increased from 20,000,000 ordinary shares of $0.001 par value each to 600,000,000 ordinary shares of $0.001 par value each. · In July 22, 2021, shareholders approved the 2021 Share Incentive Plan (the “2021 Plan”) and authorized the Company to reserve a total of 40,000,000 unissued ordinary shares for issuance under the 2021 Plan. · On August 26, 2021, Suyuan Agriculture has changed its name to Zhejiang Farmmi Agricultural Science and Technology Group Co., Ltd, and its capital was increased to RMB 50 million. · Zhejiang Yitang Medical Service Co., Ltd was incorporated on September 7, 2021.
In this connection, “actual control” is broadly defined in the draft Foreign Investment Law to cover the following summarized categories: (i) holding 50% of more of the voting rights of the subject entity; (ii) holding less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats on the board or other equivalent decision making bodies, or having the voting power to materially influence the board, the shareholders’ meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations.
In this connection, “actual control” is broadly defined in the Foreign Investment Law to cover the following summarized categories: (i) holding 50% of more of the voting rights of the subject entity; (ii) holding less than 50% of the voting rights of the subject entity but having the power to secure at least 50% of the seats on the board or other equivalent decision making bodies, or having the voting power to materially influence the board, the shareholders’ meeting or other equivalent decision making bodies; or (iii) having the power to exert decisive influence, via contractual or trust arrangements, over the subject entity’s operations, financial matters or other key aspects of business operations.
Zhengyu Wang founded Lishui Jingning Huali Co., Ltd in China to start edible fungi business by selling dried edible fungi. · May 2003: Forest Food was established in China. · December 2006: We passed ISO 22000 certification. · December 2008: We passed QS certification. · August 2010: We passed BRC certification. · March 2011: FLS Mushroom was established in China. · July 2015: Farmmi, Inc. was incorporated in the Cayman Islands. · August 2015: Farmmi International was incorporated in Hong Kong. · December 2015: Nongyuan Network was established in China. · December 2015: Suyuan Agriculture was established in China. · May 2016: Farmmi Enterprise was established in China. · July 2016: Farmmi Technology was established in China. · December 2016: Farmmi Liangpin Market ( www.farmmi.com/www.farmmi88.com ) began operating. 36 Table of Contents · February 2018: FAMI completed its initial public offering and its Ordinary Shares commenced trading on Nasdaq under the symbol “FAMI.” We raised approximately $6 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us. · May 2018: Farmmi Food started operation in China. · August 2018: Farmmi Liangpin Market ( www.farmmi.com/www.farmmi88.com ) was restructured as two online stores: Farmmi Jicai ( www.farmmi88.com ) targeting centralized procurement and Farmmi Liangpin Market ( www.farmmi.com ) targeting direct retail for consumption.
Zhengyu Wang founded Lishui Jingning Huali Co., Ltd in China to start edible fungi business by selling dried edible fungi. · May 2003: Forest Food was established in China. · December 2006: We passed ISO 22000 certification. · December 2008: We passed QS certification. · August 2010: We passed BRC certification. · March 2011: FLS Mushroom was established in China. · July 2015: Farmmi, Inc. was incorporated in the Cayman Islands. · August 2015: Farmmi International was incorporated in Hong Kong. · December 2015: Nongyuan Network was established in China. · December 2015: Suyuan Agriculture was established in China. · May 2016: Farmmi Enterprise was established in China. · July 2016: Farmmi Technology was established in China. · December 2016: Farmmi Liangpin Market ( www.farmmi.com/www.farmmi88.com ) began operating. 35 Table of Contents · February 2018: FAMI completed its initial public offering and its Ordinary Shares commenced trading on Nasdaq under the symbol “FAMI.” We raised approximately $6 million in net proceeds after deducting underwriting commissions and the offering expenses payable by us. · May 2018: Farmmi Food started operation in China. · August 2018: Farmmi Liangpin Market ( www.farmmi.com/www.farmmi88.com ) was restructured as two online stores: Farmmi Jicai ( www.farmmi88.com ) targeting centralized procurement and Farmmi Liangpin Market ( www.farmmi.com ) targeting direct retail for consumption.
Awards and Recognition 2010 Famous Trademark in Zhejiang Province (Forest) 2010 - 2011 Model Enterprise of Food Safety in Liandu Area, Lishui City, Zhejiang Province 2012 Zhejiang Exportation and Importation Enterprise of Quality and Integrity 2012 - 2013 Model Enterprise of Food Safety in Liandu Area, Lishui City, Zhejiang Province 2013 Famous Brand Products in Zhejiang (Forest Shiitake and Mu Er) 2016 2016 Famous Brand Products in Zhejiang (Forasen) 2016 Famous Brand Products in Lishui 2017 Healthy Products with Premium Quality in China’s Longevity Village (authorized to use “Longevity” mark for three years) Listed Brand selected by China Edible Fungi Business Website and Edible Fungi Market 62 Table of Contents 2019 Yangtze River Delta Famous Food Honor Top Ten Excellent Enterprise by Zhejiang Edible Fungi Association 2020 China Mushroom Industry Development Boom Observation Unit by China Edible Fungi Association Eco-premium agricultural products by Lishui government (Black Fungus and dried mushrooms). 2021 The first batch of assured consumer company in Liandu District Key agricultural leading enterprises in Liandu District, Lishui City Zhejiang Farmmi Biotechnology Co., Ltd and Zhejiang Farmmi Food Co., Ltd subsidiaries awarded title of Sunshine Factory 2022 Joined the National Restaurant Association.
Awards and Recognition 2010 Famous Trademark in Zhejiang Province (Forest) 2010 - 2011 Model Enterprise of Food Safety in Liandu Area, Lishui City, Zhejiang Province 2012 Zhejiang Exportation and Importation Enterprise of Quality and Integrity 2012 - 2013 Model Enterprise of Food Safety in Liandu Area, Lishui City, Zhejiang Province 2013 Famous Brand Products in Zhejiang (Forest Shiitake and Mu Er) 2016 2016 Famous Brand Products in Zhejiang (Forasen) 2016 Famous Brand Products in Lishui 2017 Healthy Products with Premium Quality in China’s Longevity Village (authorized to use “Longevity” mark for three years) Listed Brand selected by China Edible Fungi Business Website and Edible Fungi Market 63 Table of Contents 2019 Yangtze River Delta Famous Food Honor Top Ten Excellent Enterprise by Zhejiang Edible Fungi Association 2020 China Mushroom Industry Development Boom Observation Unit by China Edible Fungi Association Eco-premium agricultural products by Lishui government (Black Fungus and dried mushrooms). 2021 The first batch of assured consumer company in Liandu District Key agricultural leading enterprises in Liandu District, Lishui City Zhejiang Farmmi Biotechnology Co., Ltd and Zhejiang Farmmi Food Co., Ltd subsidiaries awarded title of Sunshine Factory 2022 Joined the National Restaurant Association.
Regulations Related to M&A and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the SAT, the SAIC, the China Securities Regulatory Commission, or CSRC, and the SAFE, jointly issued the Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors , or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.
Regulations Related to M&A and Overseas Listings On August 8, 2006, six PRC regulatory agencies, including the Ministry of Commerce, the State-owned Assets Supervision and Administration Commission, the SAT, the SAIC, the China Securities Regulatory Commission, or CSRC, and the SAFE, jointly issued the Provisions on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors , or the M&A Rules, which became effective on September 8, 2006 and was amended on June 22, 2009.
Specifically, the draft regulations require data processors to, among others, (i) adopt immediate remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing of personal information, management of important data and proposed overseas transfer of data.
Specifically, the regulations require data processors to, among others, (i) adopt immediate remediation measures when finding that network products and services they use or provide have security defects and vulnerabilities, or threaten national security or endanger public interest, and (ii) follow a series of detailed requirements with respect to processing of personal information, management of important data and proposed overseas transfer of data.
The Post-Effective Amendment No. 1 was declared effective by the SEC on December 3, 2019. · December 2019: Xinyang Wang, as the new shareholder of Nongyuan Network, signed a series of VIE agreements (the “Xinyang Wang VIE Agreements”) with Nongyuan Network and Suyuan Agriculture. · May 2020: To clarify the legal effect of the Original VIE Agreements (as defined below) and to sustain the effective control over Nongyuan Network by the Company, Nongyuan Network and Suyuan Agriculture signed a series of documents with the effective date of December 10, 2019. · September 2020: At the 2020 annual shareholder meeting of the Company, the shareholders approved an ordinary resolution that the authorized share capital of the Company be increased from 20,000,000 ordinary shares of $0.001 par value each to 200,000,000 ordinary shares of $0.001 par value each. · December 2020: We closed Farmmi Liangpin Market, including the mobile application and the WeChat mini program. 37 Table of Contents · On March 22, 2021, Farmmi entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.
The Post-Effective Amendment No. 1 was declared effective by the SEC on December 3, 2019. · December 2019: Xinyang Wang, as the new shareholder of Nongyuan Network, signed a series of VIE agreements (the “Xinyang Wang VIE Agreements”) with Nongyuan Network and Suyuan Agriculture. · May 2020: To clarify the legal effect of the Original VIE Agreements (as defined below) and to sustain the effective control over Nongyuan Network by the Company, Nongyuan Network and Suyuan Agriculture signed a series of documents with the effective date of December 10, 2019. · September 2020: At the 2020 annual shareholder meeting of the Company, the shareholders approved an ordinary resolution that the authorized share capital of the Company be increased from 20,000,000 ordinary shares of $0.001 par value each to 200,000,000 ordinary shares of $0.001 par value each. · December 2020: We closed Farmmi Liangpin Market, including the mobile application and the WeChat mini program. 36 Table of Contents · On March 22, 2021, Farmmi entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.
The Company plans to use Farmmi USA as a platform to sell its high-quality agricultural products to the North America market and to sell high-quality food products from North America to Asia. · On July 12, 2023, we entered into a securities purchase agreement with certain non-U.S. purchasers in reliance on Regulation S, pursuant to which we issued and sold an aggregate of 21,052,632 ordinary shares, par value $0.025 per share of the Company, at a price of $0.38 per share for aggregate gross proceeds of US$8,000,000.00. · On September 21, 2023, at an extraordinary general meeting of shareholders (EGM), the Company’s shareholders approved a proposal to effect a share consolidation of the Company’s authorized shares including issued and unissued ordinary shares at the ratio of one-for-eight (the “Share Consolidation”).
The Company plans to use Farmmi USA as a platform to sell its high-quality agricultural products to the North America market and to sell high-quality food products from North America to Asia. · On July 12, 2023, we entered into a securities purchase agreement with certain non-U.S. purchasers in reliance on Regulation S, pursuant to which we issued and sold an aggregate of 21,052,632 ordinary shares, par value $0.025 per share of the Company, at a price of $0.38 per share for aggregate gross proceeds of US$8,000,000.00. · On September 21, 2023, at an extraordinary general meeting of shareholders (EGM), the Company’s shareholders approved a proposal to effect a share consolidation of the Company’s authorized shares including issued and unissued ordinary shares at the ratio of one-for-eight.
The draft Foreign Investment Law emphasizes the security review requirements, whereby all foreign investments concerning national security must be reviewed and approved in accordance with the security review procedure. In addition, the draft Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable FIEs.
The Foreign Investment Law emphasizes the security review requirements, whereby all foreign investments concerning national security must be reviewed and approved in accordance with the security review procedure. In addition, the Foreign Investment Law imposes stringent ad hoc and periodic information reporting requirements on foreign investors and the applicable FIEs.
However, the draft Foreign Investment Law has not taken a position on what actions will be taken with respect to the existing companies with the “variable interest entity” structure, whether or not these companies are controlled by Chinese parties.
However, the Foreign Investment Law has not taken a position on what actions will be taken with respect to the existing companies with the “variable interest entity” structure, whether or not these companies are controlled by Chinese parties.
Other edible fungi Based on the clients’ needs and the supply, we also process and sell other edible fungi from time to time, such as bamboo fungi (Zhu Sun in Chinese), agrocybe aegerila (Cha Shu Gu in Chinese), pleurotus eryngii (Xin Bao Gu in Chinese), grifola frondosa (Hui Shu Hua in Chinese), coprinus comatus (Ji Tui Gu in Chinese), and hericium erinaceus (Hou Tou Gu in Chinese). 48 Table of Contents Other agricultural products Historically, we had sold tea and other agricultural products through our online stores and e-commerce channels.
Other edible fungi Based on the clients’ needs and the supply, we also process and sell other edible fungi from time to time, such as bamboo fungi (Zhu Sun in Chinese), agrocybe aegerila (Cha Shu Gu in Chinese), pleurotus eryngii (Xin Bao Gu in Chinese), grifola frondosa (Hui Shu Hua in Chinese), coprinus comatus (Ji Tui Gu in Chinese), and hericium erinaceus (Hou Tou Gu in Chinese). 49 Table of Contents Other agricultural products Historically, we had sold tea and other agricultural products through our online stores and e-commerce channels.
After the share transfer, Farmmi Agriculture’s contractual arrangements with Nongyuan Network has been transferred to the buyer. · On July 30, 2024, the Company entered into a note purchase agreement (the “Purchase Agreement”) with Atlas Sciences, LLC, a Utah limited liability company (the “Atlas”), pursuant to which the Company issued to Atlas an unsecured promissory note dated July 30, 2024 in the original principal amount of $5,355,000.00 (the “Atlas Note”) for $5,000,000.00 in gross proceeds.
After the share transfer, Farmmi Agriculture’s contractual arrangements with Nongyuan Network has been transferred to the buyer. · On July 30, 2024, the Company entered into a note purchase agreement with Atlas Sciences, LLC, a Utah limited liability company (the “Atlas”), pursuant to which the Company issued to Atlas an unsecured promissory note dated July 30, 2024 in the original principal amount of $5,355,000.00 (the “Atlas Note”) for $5,000,000.00 in gross proceeds.
As a result, our product sales have primarily relied on traditional sales channels which may limit our growth and prospects. 61 Table of Contents Competitive Position Mushroom cultivation in the Lishui area of China has a history going back 1,800 years, and the region is famous throughout China for producing some of the finest quality, best flavored mushrooms available.
As a result, our product sales have primarily relied on traditional sales channels which may limit our growth and prospects. 62 Table of Contents Competitive Position Mushroom cultivation in the Lishui area of China has a history going back 1,800 years, and the region is famous throughout China for producing some of the finest quality, best flavored mushrooms available.
According to the draft Foreign Investment Law, VIEs would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors, and be subject to restrictions on foreign investments.
According to the Foreign Investment Law, VIEs would also be deemed as FIEs, if they are ultimately “controlled” by foreign investors, and be subject to restrictions on foreign investments.
From 2006 to 2020, the edible fungi consumed by China market increased from 14,140,000 metric tons (approximately 31 billion pounds) to 40,614,231 metric tons (approximately 89 billion pounds). 44 Table of Contents Figure 2006-2020 China Edible Fungus Market Consumption Volume and Growth Rate Source: China Edible Fungus Association The Belt and Road Initiative implemented by the Chinese government is expected to bring more opportunities to Chinese edible fungi industry.
From 2006 to 2020, the edible fungi consumed by China market increased from 14,140,000 metric tons (approximately 31 billion pounds) to 40,614,231 metric tons (approximately 89 billion pounds). 45 Table of Contents Figure 2006-2020 China Edible Fungus Market Consumption Volume and Growth Rate Source: China Edible Fungus Association The Belt and Road Initiative implemented by the Chinese government is expected to bring more opportunities to Chinese edible fungi industry.
Pursuant to the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates , which was issued on January 29, 2008 and supplemented and revised on February 29, 2008, and the Arrangement between Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Prevention of Fiscal Evasion with Respect to Taxes on Income , which became effective on December 8, 2006 and applies to income derived in any year of assessment commencing on or after April 1, 2007 in Hong Kong and in any year commencing on or after January 1, 2007 in the PRC, such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is deemed the beneficial owner of any dividend paid by a PRC subsidiary by PRC tax authorities and holds at least 25% of the equity interest in that particular PRC subsidiary at all times within the 12-month period immediately before distribution of the dividends.
Pursuant to the Notice of the State Administration of Taxation on Negotiated Reduction of Dividends and Interest Rates , which was issued on January 29, 2008 and supplemented and revised on February 29, 2008, and the Notice on the Entry into Force and Implementation of the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income , which became effective on December 8, 2006 and applies to income derived in any year of assessment commencing on or after April 1, 2007 in Hong Kong and in any year commencing on or after January 1, 2007 in the PRC, such withholding tax rate may be lowered to 5% if a Hong Kong enterprise is deemed the beneficial owner of any dividend paid by a PRC subsidiary by PRC tax authorities and holds at least 25% of the equity interest in that particular PRC subsidiary at all times within the 12-month period immediately before distribution of the dividends.
Lishui produces approximately 0.6 million tons of edible fungi every year, contributing to 50% volume of Zhejiang Province. Lishui also has rich species of edible fungi, among which there are over 30 species of commercially cultivated mushroom. 42 Table of Contents We sell most of our products to domestic distributors in China, which then sell in China and internationally.
Lishui produces approximately 0.6 million tons of edible fungi every year, contributing to 50% volume of Zhejiang Province. Lishui also has rich species of edible fungi, among which there are over 30 species of commercially cultivated mushroom. 43 Table of Contents We sell most of our products to domestic distributors in China, which then sell in China and internationally.
Under the Several Provisions on Regulating the Market Order of Internet Information Services which was promulgated by MIIT on December 29, 2011, an Internet content service operator may not collect any user personal information or provide any such information to third parties without the consent of a user, unless otherwise stipulated by laws and administrative regulations.
Under the Provisions on Regulating the Market Order of Internet-based Information Services which was promulgated by MIIT on December 29, 2011, an Internet content service operator may not collect any user personal information or provide any such information to third parties without the consent of a user, unless otherwise stipulated by laws and administrative regulations.
As of the date of this report, we hold over 100 registered trademarks related to “Farmmi”, “Farmmi Liangpin”, “Forasen” and “Puyangtang” in different applicable trademark categories in China. 43 Table of Contents Our Industry Edible Fungi (Edible Mushroom) Edible fungi, or edible mushroom, is our major product category. Edible fungi are edible fruit bodies of several species of macrofungi.
As of the date of this report, we hold over 100 registered trademarks related to “Farmmi”, “Farmmi Liangpin”, “Forasen” and “Puyangtang” in different applicable trademark categories in China. 44 Table of Contents Our Industry Edible Fungi (Edible Mushroom) Edible fungi, or edible mushroom, is our major product category. Edible fungi are edible fruit bodies of several species of macrofungi.
On December 30, 2019, MOFCOM and SAMR jointly promulgated the Measures for Information Reporting on Foreign Investment, which became effective on January 1, 2020.
On December 30, 2019, MOFCOM and SAMR jointly promulgated the Measures for the Reporting of Foreign Investment Information, which became effective on January 1, 2020.
We also keep stock of raw materials from time to time before we receive orders to meet new clients’ demand. For large orders, if our contracting suppliers are not able to provide enough raw materials, we may purchase additional raw materials from local farmer markets. 50 Table of Contents Previously, we purchased all raw materials directly from various family farms.
We also keep stock of raw materials from time to time before we receive orders to meet new clients’ demand. For large orders, if our contracting suppliers are not able to provide enough raw materials, we may purchase additional raw materials from local farmer markets. 51 Table of Contents Previously, we purchased all raw materials directly from various family farms.
We then package, sell and market the dried edible fungi products. 54 Table of Contents Table of Contents Our Processing Workflow of Shiitake We develop and manufacture our Shiitake products using the following workflow: 55 Table of Contents Our Processing Workflow of Mu Er We develop and manufacture our Mu Er products using the following workflow: 56 Table of Contents Seasonality Prior to the divestiture transaction in September 2022, most of the sales of FLS Mushroom were made to China Forest.
We then package, sell and market the dried edible fungi products. 55 Table of Contents Our Processing Workflow of Shiitake We develop and manufacture our Shiitake products using the following workflow: 56 Table of Contents Our Processing Workflow of Mu Er We develop and manufacture our Mu Er products using the following workflow: 57 Table of Contents Seasonality Prior to the divestiture transaction in September 2022, most of the sales of FLS Mushroom were made to China Forest.
Such arrangements allow these family farms to better share resources such as procurement information and enjoy the advantage of scale. 49 Table of Contents The family farms supplying raw materials to us, through JLT/QNMI or directly, are responsible for growing, harvesting, dehydrating, roughly sorting and selecting edible fungi.
Such arrangements allow these family farms to better share resources such as procurement information and enjoy the advantage of scale. 50 Table of Contents The family farms supplying raw materials to us, through JLT/QNMI or directly, are responsible for growing, harvesting, dehydrating, roughly sorting and selecting edible fungi.
In addition to consumption, the farm will serve as a base for the popular immersive entertainment experience called "Agritainment" or farm-based tourism. 60 Table of Contents Methods of Competition and Competitive Position Competitive Advantages 1. Sophisticated quality control system. Product quality is always our major focus.
In addition to consumption, the farm will serve as a base for the popular immersive entertainment experience called "Agritainment" or farm-based tourism. 61 Table of Contents Methods of Competition and Competitive Position Competitive Advantages 1. Sophisticated quality control system. Product quality is always our major focus.
There are different kinds of e-commerce business models: web portal model, online content provider, online retailer, online distributor, online market maker, online community provider and cloud application service provider. Our online sales operations make profits by selling products made by the manufacturers online. 45 Table of Contents Our e-commerce focuses on agricultural products.
There are different kinds of e-commerce business models: web portal model, online content provider, online retailer, online distributor, online market maker, online community provider and cloud application service provider. Our online sales operations make profits by selling products made by the manufacturers online. 46 Table of Contents Our e-commerce focuses on agricultural products.
At different stage, we have different employees in the quality control group to conduct quality control. 58 Table of Contents Traceability System We have established and used a traceability system since 2006 for our products of edible fungi. First, we use mark cards to designate the vendors which provided the materials.
At different stage, we have different employees in the quality control group to conduct quality control. 59 Table of Contents Traceability System We have established and used a traceability system since 2006 for our products of edible fungi. First, we use mark cards to designate the vendors which provided the materials.
Upon formation, Farmmi USA owns directly 75% of the outstanding shares of SuppChains, with the remaining 25% owned by Ttone Trucking Inc, a California company owned by Hui Xu, an unrelated third party. · In October 2024, SuppChains formed a wholly-owned subsidiary, SuppChains Transport Inc (“SuppChains Transport”), a California corporation.
Farmmi USA owns directly 75% of the outstanding shares of SuppChains, with the remaining 25% owned by Ttone Trucking Inc, a California company owned by Hui Xu, an unrelated third party. · In October 2024, SuppChains formed a wholly-owned subsidiary, SuppChains Transport Inc (“SuppChains Transport”), a California corporation.
For example, it is believed that it can help with health issues by benefiting the lungs, stomach and liver if consumed regularly. 47 Table of Contents Depending on the growing area, our Mu Er products include varieties from Zhejiang Mu Er and Northeastern Mu Er.
For example, it is believed that it can help with health issues by benefiting the lungs, stomach and liver if consumed regularly. 48 Table of Contents Depending on the growing area, our Mu Er products include varieties from Zhejiang Mu Er and Northeastern Mu Er.
The quality of supplies must meet standardized specifications of both the mushroom industry and standards set by the Company. 53 Table of Contents Dried Edible Fungi Production Process The process of producing dried edible fungi products consists of the following steps, which we and/or our suppliers perform, as indicated: 1.
The quality of supplies must meet standardized specifications of both the mushroom industry and standards set by the Company. 54 Table of Contents Dried Edible Fungi Production Process The process of producing dried edible fungi products consists of the following steps, which we and/or our suppliers perform, as indicated: 1.
We sell most of our products to domestic distributors in China, which then sell in China and internationally. Most of our products are sold in mainland China. The chart below is a breakdown of total revenues by geographic market for the years ended September 2024, 2023, and 2022, respectively.
We sell most of our products to domestic distributors in China, which then sell in China and internationally. Most of our products are sold in mainland China. The chart below is a breakdown of total revenues by geographic market for the years ended September 2025, 2024, and 2023, respectively.
Farmmi USA engages in trading in USA. SuppChains Group Inc (“SuppChains”) Farmmi USA formed SuppChains Group Inc, a California corporation in July 2024. Farmmi USA owns directly 75% of the outstanding shares of SuppChains, with the remaining 25% owned by Ttone Trucking Inc, a California company owned by Hui Xu, an unrelated third party.
Farmmi USA engages in trading in the U.S. SuppChains Group Inc (“SuppChains”) Farmmi USA formed SuppChains Group Inc, a California corporation in July 2024. Farmmi USA owns directly 75% of the outstanding shares of SuppChains, with the remaining 25% owned by Ttone Trucking Inc, a California company owned by Hui Xu, an unrelated third party.
Foreign investments in business sectors outside of the “negative list” will only be subject to filing procedures, in contrast to the existing prior approval requirements, whereas foreign investments in the restricted industries must apply for approval from the foreign investment administration authority. 70 Table of Contents The draft Foreign Investment Law for the first time defines “foreign investor,” “foreign investment,” “Chinese investor” and “actual control.” A foreign investor is not only determined based on the place of its incorporation, but also on the conditions of the “actual control.” The draft Foreign Investment Law specifically provides that entities established in China but “controlled” by foreign investors, such as via contracts or trust, will be treated as Foreign-invested enterprises, or FIEs, whereas foreign investment in China in the foreign investment restricted industries by a foreign investor may nonetheless apply for being, when approving market entry clearance by the foreign investment administration authority, treated as a PRC domestic investment if the foreign investor is determined by the foreign investment administration authority as being “controlled” by PRC subsidiaries and/or citizens.
Foreign investments in business sectors outside of the “negative list” will only be subject to filing procedures, in contrast to the existing prior approval requirements, whereas foreign investments in the restricted industries must apply for approval from the foreign investment administration authority. 71 Table of Contents The Foreign Investment Law for defines “foreign investor,” “foreign investment,” “Chinese investor” and “actual control.” A foreign investor is not only determined based on the place of its incorporation, but also on the conditions of the “actual control.” The Foreign Investment Law specifically provides that entities established in China but “controlled” by foreign investors, such as via contracts or trust, will be treated as Foreign-invested enterprises, or FIEs, whereas foreign investment in China in the foreign investment restricted industries by a foreign investor may nonetheless apply for being, when approving market entry clearance by the foreign investment administration authority, treated as a PRC domestic investment if the foreign investor is determined by the foreign investment administration authority as being “controlled” by PRC subsidiaries and/or citizens.
Furthermore, the PRC Foreign Investment Law provides that foreign-invested enterprises that have been established before the implementation of PRC Foreign Investment Law according to the then existing laws regulating foreign investments may maintain their structure and corporate governance within five years after the implementation of the PRC Foreign Investment Law. 65 Table of Contents On December 19, 2020, MOFCOM and NDRC released the Measures for the Security Review of Foreign Investments, which took effect on January 18, 2021.
Furthermore, the Foreign Investment Law provides that foreign-invested enterprises that have been established before the implementation of the Foreign Investment Law according to the then existing laws regulating foreign investments may maintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law. 66 Table of Contents On December 19, 2020, MOFCOM and NDRC released the Measures for the Security Review of Foreign Investments, which took effect on January 18, 2021.
Farmmi Canada was deregistered on December 31, 2024. · We incorporated Zhejiang Suyuan Agricultural Technology Co., Ltd on July 25, 2022. 40 Table of Contents · On September 26, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued to Streeterville, in an unregistered private transaction, an unsecured promissory note on September 26, 2022 in the original principal amount of $6,440,000.00 (the “Note”), convertible into ordinary shares, $0.025 par value, of the Company (the “Ordinary Shares”), for $6,000,000.00 in gross proceeds.
Farmmi Canada was deregistered on December 31, 2024. · We incorporated Zhejiang Suyuan Agricultural Technology Co., Ltd on July 25, 2022. 39 Table of Contents · On September 26, 2022, the Company entered into a securities purchase agreement with Streeterville Capital, LLC, pursuant to which the Company issued to Streeterville, in an unregistered private transaction, an unsecured promissory note on September 26, 2022 in the original principal amount of $6,440,000.00 (the “Note”), convertible into ordinary shares, $0.025 par value, for $6,000,000.00 in gross proceeds.
Longquan Mu Er usually grows from October to May. 51 Table of Contents In accordance with our clients’ needs, we also purchase and process Mu Er from Northeastern China. Mu Er from Northeastern China is famous for its premium quality. Northeastern Mu Er usually grows from July to November.
Longquan Mu Er usually grows from October to May. 52 Table of Contents In accordance with our clients’ needs, we also purchase and process Mu Er from Northeastern China. Mu Er from Northeastern China is famous for its premium quality. Northeastern Mu Er usually grows from July to November.
Examination of Family Farms We use the following checklist to examine the family farms before we sign the purchase agreements with them: 1. Basic condition: a. location b. equipment on site c. marks on site 52 Table of Contents 2. Cultivation management: a.
Examination of Family Farms We use the following checklist to examine the family farms before we sign the purchase agreements with them: 1. Basic condition: a. location b. equipment on site c. marks on site 53 Table of Contents 2. Cultivation management: a.
In addition, for a foreign investor to acquire any equity interest in a business providing value-added telecommunications services in China, it must demonstrate a positive track record and experience in providing such services. 69 Table of Contents On July 13, 2006, the MIIT issued the Circular on Strengthening the Administration of Foreign Investment in Value-added Telecommunications Services, or the MIIT Circular 2006, which requires that (i) foreign investors can only operate a telecommunications business in China through establishing a telecommunications enterprise with a valid telecommunications business operation license; (ii) domestic license holders are prohibited from leasing, transferring or selling telecommunications business operation licenses to foreign investors in any form, or providing any resource, sites or facilities to foreign investors to facilitate the unlicensed operation of telecommunications business in China; (iii) value-added telecommunications services providers or their shareholders must directly own the domain names and registered trademarks they use in their daily operations; (iv) each value-added telecommunications services provider must have the necessary facilities for its approved business operations and maintain such facilities in the geographic regions covered by its license; and (v) all value-added telecommunications services providers should improve network and information security, enact relevant information safety administration regulations and set up emergency plans to ensure network and information safety.
In addition, for a foreign investor to acquire any equity interest in a business providing value-added telecommunications services in China, it must demonstrate a positive track record and experience in providing such services. 70 Table of Contents On July 13, 2006, the MIIT issued the Notice of the Ministry of Information Industry on Strengthening the Administration of Foreign-Invested Operation of Value-Added Telecommunications Services, or the MIIT Circular 2006, which requires that (i) foreign investors can only operate a telecommunications business in China through establishing a telecommunications enterprise with a valid telecommunications business operation license; (ii) domestic license holders are prohibited from leasing, transferring or selling telecommunications business operation licenses to foreign investors in any form, or providing any resource, sites or facilities to foreign investors to facilitate the unlicensed operation of telecommunications business in China; (iii) value-added telecommunications services providers or their shareholders must directly own the domain names and registered trademarks they use in their daily operations; (iv) each value-added telecommunications services provider must have the necessary facilities for its approved business operations and maintain such facilities in the geographic regions covered by its license; and (v) all value-added telecommunications services providers should improve network and information security, enact relevant information safety administration regulations and set up emergency plans to ensure network and information safety.
According to the 2016 MIIT Catalog, internet information services, which include information release and delivery services, information search and query services, information community platform services, information real-times interactive services, and information protection and processing services, continues to be classified as a category of value-added telecommunication services.
According to the 2015 MIIT Catalog, internet information services, which include information release and delivery services, information search and query services, information community platform services, information real-times interactive services, and information protection and processing services, continues to be classified as a category of value-added telecommunication services.
After the transfer, Yitang Medical Service becomes one of our wholly owned subsidiaries. 38 Table of Contents · On September 13, 2021, Farmmi entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.
After the transfer, Yitang Medical Service becomes one of our wholly owned subsidiaries. 37 Table of Contents · On September 13, 2021, Farmmi entered into an underwriting agreement (the “Underwriting Agreement”) with Aegis Capital Corp.
It was deregistered in April 2023. 39 Table of Contents · Lishui Yifeng Medical Health Technology Co., Ltd, a subsidiary of Nongyuan Network, was incorporated on January 10, 2022. It was deregistered in April 2023. · Lishui Yifeng Yilong Medical Technology Development Partnership (Limited Partnership) was formed on January 19, 2022.
It was deregistered in April 2023. 38 Table of Contents · Lishui Yifeng Medical Health Technology Co., Ltd, a subsidiary of Nongyuan Network, was incorporated on January 10, 2022. It was deregistered in April 2023. · Lishui Yifeng Yilong Medical Technology Development Partnership (Limited Partnership) was formed on January 19, 2022.
Pursuant to the Measures for Information Reporting on Foreign Investment, where a foreign investor carries out investment activities in China directly or indirectly, the foreign investor or the foreign-invested enterprise shall submit the investment information to the competent commerce department.
Pursuant to the Measures for the Reporting of Foreign Investment Information, where a foreign investor carries out investment activities in China directly or indirectly, the foreign investor or the foreign-invested enterprise shall submit the investment information to the competent commerce department.
On March 30, 2015, SAFE released the Notice on the Reform of the Management Method for the Settlement of Foreign Exchange Capital of Foreign-invested Enterprises , or Circular 19, which has made certain adjustments to some regulatory requirements on the settlement of foreign exchange capital of foreign-invested enterprises, lifted some foreign exchange restrictions under Circular 142, and annulled Circular 142 and Circular 36.
On March 30, 2015, SAFE released the Notice on Reforming the Management of Foreign Exchange Capital Settlement for Foreign-Invested Enterprises , or Circular 19, which has made certain adjustments to some regulatory requirements on the settlement of foreign exchange capital of foreign-invested enterprises, lifted some foreign exchange restrictions under Circular 142, and annulled Circular 142 and Circular 36.
The Company used all of the proceeds from the Atlas Note to repay its indebtedness owed to Streeterville Capital, LLC under the Convertible Promissory Note it issued on September 26, 2022. · On August 22, 2024, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such Purchasers an aggregate of 3,433,167 ordinary shares, par value $0.20 per share, in a registered direct offering and Series A warrants to purchase up to 3,433,167 Ordinary Shares in a concurrent private placement for gross proceeds of approximately $1.03 million before deducting the placement agent’s fees and other estimated offering expenses. · On September 18, 2024, Farmmi International Limited, a wholly owned subsidiary of the Company (“Farmmi International”), entered into a share transfer agreement with Lishui Jiuanju Trading Co., Ltd, an unrelated third party.
The Company used all of the proceeds from the Atlas Note to repay its indebtedness owed to Streeterville Capital, LLC under the Convertible Promissory Note it issued on September 26, 2022. 40 Table of Contents · On August 22, 2024, the Company and certain institutional investors entered into a securities purchase agreement, pursuant to which the Company agreed to sell to such Purchasers an aggregate of 3,433,167 ordinary shares, par value $0.20 per share, in a registered direct offering and Series A warrants to purchase up to 3,433,167 ordinary shares in a concurrent private placement for gross proceeds of approximately $1.03 million before deducting the placement agent’s fees and other estimated offering expenses. · On September 18, 2024, Farmmi International Limited entered into a share transfer agreement with Lishui Jiuanju Trading Co., Ltd, an unrelated third party.
Pursuant to the Administration Rules of the Settlement, Sale and Payment of Foreign Exchange promulgated on June 20, 1996 by the People’s Bank of China, foreign-invested enterprises in China may purchase or remit foreign currency for settlement of current account transactions without the approval of the SAFE.
Pursuant to the Regulations on the Sale and Purchase of and Payment in Foreign Exchange promulgated on June 20, 1996 by the People’s Bank of China, foreign-invested enterprises in China may purchase or remit foreign currency for settlement of current account transactions without the approval of the SAFE.
The tenth batch of city-level key agricultural leading enterprises of Lishui, Zhejiang Province Business Development Efforts We believe technological innovations will help our Company achieve its long-term strategic objectives. Our business development employees provide technology support to the family farms in need, improve the technology used in our production, and help with the maintenance of our online stores.
The tenth batch of city-level key agricultural leading enterprises of Lishui, Zhejiang Province Business Development Efforts We believe technological innovations will help our Company achieve its long-term strategic objectives. Our business development employees provide technology support to the family farms in need and improve the technology used in our production.
In addition, the Decision on Strengthening Network Information Protection, which was promulgated by the Standing Committee of NPC on December 28, 2012, provides that electronic information that is able to identify personal identities of citizens or is concerned with personal privacy of citizens is protected by law and shall not be unlawfully obtained or provided.
In addition, the Decision on Strengthening Network Information Protection, which was promulgated by the Decision of Strengthening Information Protection on Networks on December 28, 2012, provides that electronic information that is able to identify personal identities of citizens or is concerned with personal privacy of citizens is protected by law and shall not be unlawfully obtained or provided.
Sales increased from July to September because the client places significantly more orders with FLS Mushroom during this period. From December to January, there was usually a peak because people spend more on food including edible fungi to prepare for Chinese New Year celebrations.
Sales increased from July to September because the client places significantly more orders with FLS Mushroom during this period. From December to January or February, there is usually a peak because people spend more on food including edible fungi to prepare for Chinese New Year celebrations.
On August 22, 2019, the CAC promulgated the Provisions on the Cyber Protection of Children’s Personal Information which requires, among others, that network operators who collect, store, use, transfer and disclose personal information of children under the age of 14 shall establish special rules and user agreements for the protection of children’s personal information, inform the children’s guardians in a noticeable and clear manner, and shall obtain the consent of the children’s guardians. 67 Table of Contents On November 28, 2019, the CAC, MIIT, the Ministry of Public Security and SAMR jointly promulgated the Measures for the Determination of the Collection and Use of Personal Information by Apps in Violation of Laws and Regulations, which provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through mobile apps, and for the app operators to conduct self-examination and self-correction and social supervision by citizens.
On August 22, 2019, the CAC promulgated the Provisions on the Cyber Protection of Children’s Personal Information which requires, among others, that network operators who collect, store, use, transfer and disclose personal information of children under the age of 14 shall establish special rules and user agreements for the protection of children’s personal information, inform the children’s guardians in a noticeable and clear manner, and shall obtain the consent of the children’s guardians. 68 Table of Contents On November 28, 2019, the CAC, MIIT, the Ministry of Public Security and SAMR jointly promulgated the Measures for Determining Illegal and Non-compliant Collection and Use of Personal Information on Apps which provides guidance for the regulatory authorities to identify the illegal collection and use of personal information through mobile apps, and for the app operators to conduct self-examination and self-correction and social supervision by citizens.
Foreign-invested entities of the group have businesses that conduct Internet services but not related to national security within the scope of the regulations above. On December 26, 2019, the State Council promulgated the Regulations for Implementing the PRC Foreign Investment Law, which took effect on January 1, 2020.
Foreign-invested entities of the group have businesses that conduct Internet services but not related to national security within the scope of the regulations above. On December 26, 2019, the State Council promulgated the Regulation for Implementing the Foreign Investment Law of the People's Republic of China, which took effect on January 1, 2020.
Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided. In April 2018, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjusting the Tax Rate of Value-added Tax (Circular 32 of Finance and Taxation, 2018).
Unlike business tax, a taxpayer is allowed to offset the qualified input VAT paid on taxable purchases against the output VAT chargeable on the modern services provided. In April 2018, the Ministry of Finance and the State Administration of Taxation jointly issued the Notice on Adjusting the Value-Added Tax Rates (Notice32 of Finance and Taxation, 2018).
On August 20, 2021, the SCNPC adopted the Personal Information Security Law, which took effect on November 1, 2021.
On August 20, 2021, the SCNPC adopted the Personal Information Protection Law, which took effect on November 1, 2021.
Based on the advice of our PRC legal counsel, Zhejiang Zhengbiao Law Firm, PRC laws and regulations allow foreign-owned entities to conduct such business directly, rather than through contractual VIE agreements. To comply with the above-mentioned foreign ownership restrictions, we operate our e-commerce websites in China through Nongyuan Network, which is owned by Ms.
Based on the advice of our PRC legal counsel, Zhejiang Zhiheng Law Firm, PRC laws and regulations allow foreign-owned entities to conduct such business directly, rather than through contractual VIE agreements. To comply with the above-mentioned foreign ownership restrictions, we operate our e-commerce websites in China through Nongyuan Network.
The Draft PRC Foreign Investment Law On January 19, 2015, MOFCOM published a discussion draft of the proposed Foreign Investment Law for public review and comments. The draft Foreign Investment Law purports to change the existing “case-by-case” approval regime to a “filing or approval” procedure for foreign investments in China.
The Foreign Investment Law of PRC On January 19, 2015, MOFCOM published a discussion draft of the proposed Foreign Investment Law for public review and comments. On January 1, 2020, the Foreign Investment Law took effect, which purports to change the existing “case-by-case” approval regime to a “filing or approval” procedure for foreign investments in China.
For the years ended September 30, 2024 2023 2022 International Markets 1.3 % 0.6 % 1.8 % Domestic Markets 98.7 % 99.4 % 98.2 % Total 100.0 % 100.0 % 100.0 % International Markets and Customers The majority of our export items are dried Shiitake and dried Mu Er.
For the years ended September 30, 2025 2024 2023 International Markets 3.7 % 1.3 % 0.6 % Domestic Markets 96.3 % 98.7 % 99.4 % Total 100.0 % 100.0 % 100.0 % International Markets and Customers The majority of our export items are dried Shiitake and dried Mu Er.
Marketing Channels We mainly market our products by attending trade fairs, such as The China Import and Export Fair, Anuga (originally short for Allgemeine Nahrungs und Genussmittel-Ausstellung, a leading international food fair) and FOODEX JAPAN. 63 Table of Contents Capital Expenditures and Divestitures We had capital expenditures of approximately $29,450, $314, and $2,946 for the years ended September 30, 2024, 2023 and 2022, respectively.
Marketing Channels We mainly market our products by attending trade fairs, such as The China Import and Export Fair, Anuga (originally short for Allgemeine Nahrungs und Genussmittel-Ausstellung, a leading international food fair) and FOODEX JAPAN. 64 Table of Contents Capital Expenditures and Divestitures We had capital expenditures of approximately $16,667, $29,450, and $314 for the years ended September 30, 2025, 2024, and 2023, respectively.
The online sales platforms had helped diversify our product categories and expand our product sales. In June 2021, we started our bulk agricultural commodity trading business through Zhejiang Farmmi Agricultural Supply Chain Co., Ltd and Zhejiang Farmmi Agricultural Science and Technology Group Co., Ltd.
The online sales platforms had helped diversify our product categories and expand our product sales. In June 2021, we started our bulk agricultural commodity trading business through our prior subsidiaries Zhejiang Farmmi Agricultural Supply Chain Co., Ltd and Zhejiang Farmmi Agricultural Science and Technology Group Co., Ltd, but now through Zhejiang Farmmi Ecological Agricultural Technology Co. Ltd..
To this end, the State Council issued the Circular on Several Measures for Actively and Effectively Utilizing Foreign Investment to Promote High-quality Economic Development (Circular 19, 2018), which guides foreign investment to invest more in modern agriculture and ecological construction, among other industries.
To this end, the State Council issued the Notice on Several Measures for Actively and Effectively Using Foreign Investment to Promote Quality Economic Development (No. 19 [2018] of the State Council), which guides foreign investment to invest more in modern agriculture and ecological construction, among other industries.
On March 1, 2009, the MIIT promulgated the Administrative Measures on Telecommunications Business Operating Licenses, which set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.
On July 3, 2017, MIIT promulgated the Administrative Measures for Operating Licenses of Telecommunications Services, which set forth more specific provisions regarding the types of licenses required to operate value-added telecommunications services, the qualifications and procedures for obtaining such licenses and the administration and supervision of such licenses.
Compared to Circular 19, Circular 16 not only provides that, in addition to foreign exchange capital, foreign debt funds and proceeds remitted from foreign listings should also be subject to the discretional foreign exchange settlement, but also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying the bank loans in Renminbi that have been sub-lent to the third party. 73 Table of Contents Circular 37 On July 4, 2014, SAFE promulgated the Circular on Relevant Issues Concerning Foreign Exchange Control on Domestic Residents’ Offshore Investment and Financing and Roundtrip Investment through Special Purpose Vehicles , or Circular 37, which replaced the former circular commonly known as Circular 75 promulgated by SAFE on October 21, 2005.
Compared to Circular 19, Circular 16 not only provides that, in addition to foreign exchange capital, foreign debt funds and proceeds remitted from foreign listings should also be subject to the discretional foreign exchange settlement, but also lifted the restriction, that foreign exchange capital under the capital accounts and the corresponding Renminbi capital obtained from foreign exchange settlement should not be used for repaying the inter-enterprise borrowings (including advances by the third party) or repaying the bank loans in Renminbi that have been sub-lent to the third party. 74 Table of Contents Circular 37 On July 4, 2014, SAFE promulgated the Circular of the SAFE on Foreign Exchange Administration of Overseas Investments and Financing and Round-Trip Investments by Domestic Residents via Special Purpose Vehicles or Circular 37, which replaced the former circular commonly known as Circular 75 promulgated by SAFE on October 21, 2005.
Inc. for twenty years to support them in their sales of edible fungi products, primarily to Asian supermarkets in the United States. Through domestic trading companies, we have supplied products to Loblaws supermarkets for nineteen years.
Inc. for twenty years to support them in their sales of edible fungi products, primarily to Asian supermarkets in the United States. Through domestic trading companies, we have supplied products to Loblaws supermarkets for nineteen years. Our cooperation with Maruhan began fifteen years ago.
For the years ended September 30, 2024, 2023, and 2022, JLT and QNMI contributed 23.8% and 22.3%, 13.5% and 7.9%, and 20.9% and 9.3%, respectively, of our edible fungi raw material supplies, respectively.
For the years ended September 30, 2025, 2024, and 2023, JLT and QNMI contributed 34.6% and 33.2%, 23.8% and 22.3%, and 13.5% and 7.9%, respectively, of our edible fungi raw material supplies, respectively.
From February to March, the sales of FLS Mushroom typically decreased because of the conclusion of Chinese New Year holiday. Farmmi Food focuses on producing and selling small packages of dried edible fungi. The sales peak is from December to January, as customers spend more on food including edible fungi to prepare for the New Year holidays.
From February to March, the sales of FLS Mushroom typically decreased because of the conclusion of Chinese New Year holiday. Some of the company’s products are small packages of dried edible fungi. The sales peak is from December to January, as customers spend more on food including edible fungi to prepare for the New Year holidays.
SuppChains and SuppChains Transport mainly conduct warehousing and logistics services business in the U.S. · On November 4, 2024, the Company formed a wholly owned subsidiary, Zhejiang Famimi Biotechnology Co., Ltd (“Famimi”), with the Company’s wholly-owned subsidiaries, Zhejiang Suyuan Agricultural Technology Co., Ltd and Lishui Farmmi E-Commerce Co. Ltd, owning 95% and 5%, respectively, of the equity of Famimi.
SuppChains and SuppChains Transport mainly conduct logistic and storage services business in the U.S. · On November 4, 2024, Zhejiang Famimi Biotechnology Co., Ltd (“Famimi”) was formed, with the Company’s wholly-owned subsidiaries, Zhejiang Suyuan Agricultural Technology Co., Ltd and Lishui Farmmi E-Commerce Co. Ltd, holding 95% and 5%, respectively, of the equity of Famimi.
In addition, SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.
In addition, SAFE promulgated the Provisions for Foreign Exchange Control in Connection with Direct Investment in China by Foreign Investors in May 2013, which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.
Its province-wide GDP of approximately RMB 8.25 trillion in 2023 placed it as the fourth highest in China in aggregate amount and fifth per capita. Lishui is a prefecture-level city located in southwest Zhejiang province. Approximately 2.52 million residents live in the city, and city-wide GDP is approximately RMB 196 billion in 2023.
Its province-wide GDP of approximately RMB 9.01 trillion in 2024 placed it as the fourth highest in China in aggregate amount and fifth per capita. Lishui is a prefecture-level city located in southwest Zhejiang province. Approximately 2.53 million residents live in the city, and city-wide GDP is approximately RMB 218 billion in 2024.
In July 2014, SAFE decided to further reform the foreign exchange administration system in order to satisfy and facilitate the business and capital operations of foreign invested enterprises and issued the Circular on the Relevant Issues Concerning the Launch of Reforming Trial of the Administration Model of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises in Certain Areas , or Circular 36, on August 4, 2014.
In July 2014, SAFE decided to further reform the foreign exchange administration system in order to satisfy and facilitate the business and capital operations of foreign invested enterprises and issued the Notice on Relevant Issues Concerning the Pilot Reform of the Foreign Exchange Capital Settlement Management for Foreign-Invested Enterprises in Certain Regions , or Circular 36, on August 4, 2014.
On November 14, 2021, the CAC published the Regulations of Internet Data Security Management (Draft for Comments), which further regulate the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate the obligations of internet platform operators, such as to establish a system for disclosure of platform rules, privacy policies and algorithmic strategies related to data.
On September 24, 2024, the State Council issued the Regulations on Network Data Security Management, which further regulate the internet data processing activities and emphasize the supervision and management of network data security, and further stipulate the obligations of internet platform operators, such as to establish a system for disclosure of platform rules, privacy policies and algorithmic strategies related to data.
For the year ended September 30, 2024, we sold approximately 98.66% of our products in China and 1.34% outside mainland China, including in the U.S., Japan, Canada, and other countries or regions.
For the year ended September 30, 2025, we sold approximately 96.31% of our products in China and 3.69% outside mainland China, including in the U.S., Japan, Canada, and other countries or regions.
In March 2016, the Ministry of Finance and the State Administration of Taxation further promulgated the Notice on Fully Promoting the Pilot Plan for Replacing Business Tax by Value-Added Tax , which became effective on May 1, 2016.
In November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax . In March 2016, the Ministry of Finance and the State Administration of Taxation further promulgated the Pilot Measures for Replacing Business Tax with Value-Added Tax , which became effective on May 1, 2016.
On February 13, 2015, SAFE released the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment , or Circular 13, which has amended Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
Circular 13 amended Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing.
Intellectual Property We rely on trademarks and service marks to protect our intellectual property and branding. As of the date of this report, we hold over 100 registered trademarks about or related to “Farmmi”, “Farmmi Liangpin”, “Forasen” and “Puyangtang” in different applicable trademark categories in China. We also own three domain names: farmmi.com, farmmi.com.cn and farmmi88.com.
As of the date of this report, we hold over 57 registered trademarks about or related to “Farmmi”, “Farmmi Liangpin”, “Forasen” and “Puyangtang” in different applicable trademark categories in China. We also own three domain names: farmmi.com, farmmi.com.cn and farmmi88.com. These websites are not part of this report.
According to the Notice on the Filing Management Arrangements for Overseas Offerings and Listings by Domestic Companies published by the CSRC on February 17, 2023, existing listed companies are not required to make any filings until they conduct a new offering or financing transaction in the future.
According to the Notice by the China Securities Regulatory Commission of Launching the Information System for the Filing-Based Administration of the Overseas Offering and Listing of Domestic Enterprises published by the CSRC on February 17, 2023, existing listed companies are not required to make any filings until they conduct a new offering or financing transaction in the future.
Famimi is focused on agricultural product export trading business for edible fungi and other agricultural products. 41 Table of Contents B. Business Overview General We are a supplier of agricultural products. Our business has historically been focused on the processing and/or sales of a variety of mushrooms, edible fungi and other agricultural products.
Bluesage engages in digital marketing business. 42 Table of Contents B. Business Overview General We are a supplier of agricultural products. Our business has historically been focused on the processing and/or sales of a variety of mushrooms, edible fungi and other agricultural products.
Prices may vary based on market demand and crop condition etc. The Company can generally secure the premium quality raw material supplies at prices slightly higher than the typical market prices for average quality raw materials.
The Company can generally secure the premium quality raw material supplies at prices slightly higher than the typical market prices for average quality raw materials.
On June 19, 2016, SAFE issued the Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement of Capital Accounts, or Circular 16, which took effect on the same day.
On June 19, 2016, SAFE issued the Notice on Reforming and Standardizing the Administration of Capital Account Settlement, or Circular 16 , which took effect on the same day.
According to the Catalog of Classification of Telecommunications Businesses effective from April 1, 2003, internet information services, also called internet content services, or ICP services, are deemed as a type of value-added telecommunications services.
According to the Catalog of Classification of Telecommunications Businesses effective from April 1, 2003, internet information services, also called internet content services, or ICP services, are deemed as a type of value-added telecommunications services. On December 28, 2015, MIIT issued the revised Catalogue of Telecommunication Services (2015 Edition), which took effect on March 1, 2016.
We intend to further investing our resources in promoting overseas market, including attending more export fairs and developing cross-border e-commerce. Domestic Markets and Customers Six categories of our products are mostly sold in China. Our domestic sales used to depend heavily on our major clients, Yunmihui contributed 55% of our total sales for the year ended September 30, 2024.
We intend to further investing our resources in promoting overseas market, including attending more export fairs and developing cross-border e-commerce. Domestic Markets and Customers Six categories of our products are mostly sold in China.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeAs illustrated in the table above, the increase was mainly attributed by the cost of revenue associated with trading of tapioca and corn, the increase was partially offset by the decrease in cost of revenue associated with trading of cotton and the decrease in sales volume of Mu Er. 93 Table of Contents Gross Profit The following table sets forth the breakdown of gross profit for the years ended September 30, 2023 and 2022, respectively: For the years ended September 30, Variance 2023 % 2022 % Amount % Tapioca $ 74,228 1.7 % - - $ 74,228 100.0 % Corn 1,003 0.02 % 108,996 2.0 % (107,993 ) (99.1 )% Shiitake 2,117,146 49.4 % 2,533,760 46.6 % (416,614 ) (16.4 )% Mu Er 2,065,014 48.2 % 2,434,016 44.8 % (369,002 ) (15.2 )% Cotton 116 0.0 % 235,336 4.3 % (235,220 ) (100 )% Corn starch 2,861 0.1 % - - 2,861 100.0 % Other edible fungi 26,387 0.6 % 125,978 2.3 % (99,591 ) (79.1 )% Total $ 4,286,755 100.0 % $ 5,438,086 100.0 % $ (1,151,331 ) (21.2 )% Overall gross profit decreased by $1.2 million, or 21.2%, to $4.3 million for the year ended September 30, 2023 from $5.4 million for the same period of fiscal 2022.
Biggest changeAs illustrated in the table above, the decrease was mainly attributed by the cost of revenue associated with trading of corn and red dates, and the decrease in sales of shiitake and Mu Er, the decrease was partially offset by the increase in cost of revenue associated with logistic services. 90 Table of Contents Gross Profit The following table sets forth the breakdown of gross profit for the years ended September 30, 2025 and 2024, respectively: For the Years Ended September 30, Variance 2025 % 2024 % Amount % Shiitake $ 1,271,645 158.7 % $ 2,105,545 54.4 % $ (833,900 ) (39.6 )% Mu Er 998,749 124.6 % 1,725,271 44.5 % (726,522 ) (42.1 )% Logistic services (1,478,730 ) (184.5 )% 4,920 0.1 % (1,483,650 ) (30,155.5 )% Corn 325 0.0 % 27,550 0.7 % (27,225 ) (98.8 )% Other edible fungi 9,534 1.2 % 9,759 0.3 % (225 ) (2.3 )% Red dates - - 669 0.0 % (669 ) (100.0 )% Total $ 801,523 100.0 % $ 3,873,714 100.0 % $ (3,072,191 ) (79.3 )% Overall gross profit decreased by $3.1 million, or 79.3%, to $0.8 million for the year ended September 30, 2025 from $3.9 million for the same period of last year.
We have been actively participating in international trade exhibitions held in China and other countries, to expand our international sales network. We also intend to invest more in our online stores, continue to train our employees, upgrade information technology and supply chain system, with the goal of making an integrated sales network with an international approach.
We have been actively participating in international trade exhibitions held in China and other countries, to expand our international sales network. We also intend to invest more in our online stores, continue to train our employees, and upgrade information technology and supply chain system, with the goal of making an integrated sales network with an international approach.
Pursuant to the Securities Purchase Agreement, dated as of September 26, 2022, the Company issued and sold to the Investor a convertible promissory note of $6.42 million due on September 25, 2023, convertible into ordinary shares, $0.025 par value per share, at a discount of $0.42 million.
Pursuant to the Securities Purchase Agreement, dated as of September 26, 2022, the Company issued and sold to the Investor a convertible promissory note of $6.42 million due on September 25, 2023, convertible into ordinary shares, $0.025 par value per share, at a discount of $0.42 million.
The decrease in sales volume of Mu Er was caused by reduced customers’ orders which resulted by the decrease in market demand for Mu Er.
The decrease in sales volume of Mu Er was caused by reduced customers’ orders which resulted by the decrease in market demand for Mu Er.
Financing activities Net cash provided by financing activities was $1.8 million for the year ended September 30, 2024, which mainly consisted of proceeds of $5.0 million from promissory notes, $2.2 million borrowing from a third party and $0.8 million net proceeds from share issuance, as mainly offset by repayment of $6.1 million convertible promissory notes.
Net cash provided by financing activities was $1.8 million for the year ended September 30, 2024, which mainly consisted of proceeds of $5.0 million from promissory notes, $2.2 million borrowing from a third party and $0.8 million net proceeds from share issuance, as mainly offset by repayment of $6.1 million convertible promissory notes.
As illustrated in the table above, the decrease was mainly attributed by the cost of revenue associated with trading of tapioca, cotton and cornstarch, the decrease was partially offset by the increase in cost of revenue associated with trading of corn and red dates. 88 Table of Contents Gross Profit The following table sets forth the breakdown of gross profit for the years ended September 30, 2024 and 2023, respectively: For the years ended September 30, Variance 2024 % 2023 % Amount % Tapioca - - $ 53,168 1.2 % $ (53,168 ) 100.0 % Corn $ 27,550 0.7 % 18,394 0.4 % 9,156 49.8 % Shiitake 2,105,545 54.4 % 2,114,453 49.3 % (8,908 ) (0.4 %) Mu Er 1,725,271 44.5 % 2,062,850 48.1 % (337,579 ) (16.4 %) Cotton - - 8,325 0.2 % (8,325 ) (100.0 %) Red dates 669 0.1 % - - 669 100.0 % Corn starch - - 1,880 0.0 % (1,880 ) (100.0 %) Other edible fungi 9,759 0.3 % 27,685 0.6 % (17,926 ) (64.7 %) Logistic services 4,920 0.1 % - - 4,920 100.0 % Total $ 3,873,714 100.0 % $ 4,286,755 100.0 % $ (413,041 ) (9.6 %) Overall gross profit decreased by $0.4 million, or 9.8%, to $3.9 million for the year ended September 30, 2024 from $4.3 million for the same period of last year.
As illustrated in the table above, the decrease was mainly attributed by the cost of revenue associated with trading of tapioca, cotton and cornstarch, the decrease was partially offset by the increase in cost of revenue associated with trading of corn and red dates. 94 Table of Contents Gross Profit The following table sets forth the breakdown of gross profit for the years ended September 30, 2024 and 2023, respectively: For the years ended September 30, Variance 2024 % 2023 % Amount % Tapioca - - $ 53,168 1.2 % $ (53,168 ) 100.0 % Corn $ 27,550 0.7 % 18,394 0.4 % 9,156 49.8 % Shiitake 2,105,545 54.4 % 2,114,453 49.3 % (8,908 ) (0.4 )% Mu Er 1,725,271 44.5 % 2,062,850 48.1 % (337,579 ) (16.4 )% Cotton - - 8,325 0.2 % (8,325 ) (100.0 )% Red dates 669 0.1 % - - 669 100.0 % Corn starch - - 1,880 0.0 % (1,880 ) (100.0 )% Other edible fungi 9,759 0.3 % 27,685 0.6 % (17,926 ) (64.7 )% Logistic services 4,920 0.1 % - - 4,920 100.0 % Total $ 3,873,714 100.0 % $ 4,286,755 100.0 % $ (413,041 ) (9.6 )% Overall gross profit decreased by $0.4 million, or 9.8%, to $3.9 million for the year ended September 30, 2024 from $4.3 million for the same period of last year.
The purchase price to be paid by the buyer to Suyuan reflects the aggregate value of all the assets of the disposed entities. 90 Table of Contents On September 18, 2024, Farmmi International Limited (“Farmmi International”), a wholly owned subsidiary of the Registrant, entered into a share transfer agreement with Lishui Jiuanju Trading Co., Ltd (“Jiuanju”), an unrelated third party.
The purchase price to be paid by the buyer to Suyuan reflects the aggregate value of all the assets of the disposed entities. 96 Table of Contents On September 18, 2024, Farmmi International Limited (“Farmmi International”), a wholly owned subsidiary of the Registrant, entered into a share transfer agreement with Lishui Jiuanju Trading Co., Ltd (“Jiuanju”), an unrelated third party.
The decrease was mainly attributable to no trading of tapioca for the year ended September 30, 2024. 87 Table of Contents Revenue from sales of corn increased by $3.5 million, or 12.9%, to $31.0 million for the year ended September 30, 2024 from $27.4 million for the same period of last year.
The decrease was mainly attributable to no trading of tapioca for the year ended September 30, 2024. 93 Table of Contents Revenue from sales of corn increased by $3.5 million, or 12.9%, to $31.0 million for the year ended September 30, 2024 from $27.4 million for the same period of last year.
I ncome tax expenses For the years ended September 30, 2024 and 2023, our income tax expense was $264 and approximately $0.3 million respectively. The income tax expenses for the years ended September 30, 2024 and 2023 were as a result of certain PRC subsidiaries that have taxable income from operations.
Income tax expenses For the years ended September 30, 2024 and 2023, our income tax expense was $264 and approximately $0.3 million respectively. The income tax expenses for the years ended September 30, 2024 and 2023 were as a result of certain PRC subsidiaries that have taxable income from operations.
Moreover, we do not have any variable interest in any unconsolidated entity that we provide financing, liquidity, market risk or credit support to or engages in hedging or research and development services with us. 96 Table of Contents Capital Resources.
Moreover, we do not have any variable interest in any unconsolidated entity that we provide financing, liquidity, market risk or credit support to or engages in hedging or research and development services with us. 98 Table of Contents Capital Resources.
The change in fair value of derivative liability of $0.9 million was recorded in other income for the year ended September 30, 2023. No such other income for the year ended September 30, 2024.
The change in fair value of derivative liability of $0.9 million was recorded in other income for the year ended September 30, 2023. No other income was recognized for the year ended September 30, 2024.
At the same time, our sales volume of Mu Er for the year ended September 30, 2024 was approximately 1,186 tons, representing a decrease of 117 tons, as compared with 1,303 tons sales volume in fiscal 2023. The sales volume of Mu Er decreased due to market demand declined which reduced orders by customers.
At the same time, our sales volume of Mu Er for the year ended September 30, 2025 was approximately 746 tons, representing a decrease of 420 tons, as compared with 1,186 tons sales volume in fiscal 2024. The sales volume of Mu Er decreased due to market demand declined which reduced orders by customers.
As the table below illustrates, our sales volume of Shiitake mushroom for the year ended September 30, 2024 was approximately 1,496 tons, representing a decrease of 139 tons as compared with 1,635 tons sales volume in fiscal 2023. The decrease in sales of Shiitake mushroom was due to market demand declined which reduced orders by customers.
As the table below illustrates, our sales volume of Shiitake mushroom for the year ended September 30, 2025 was approximately 908 tons, representing a decrease of 588 tons as compared with 1,496 tons sales volume in fiscal 2024. The decrease in sales of Shiitake mushroom was due to market demand declined which reduced orders by customers.
We do not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial position, statements of operations and cash flows. 86 Table of Contents Results of Operations for the Years Ended September 30, 202 4 and 202 3 For the year ended September 30, Variance 2024 2023 Amount % Revenue $ 64,131,332 $ 110,364,887 $ (46,233,555 ) (41.9 %) Cost of revenues (60,257,618 ) (106,078,132 ) (45,820,514 ) (43.2 %) Gross profit 3,873,714 4,286,755 (413,041 ) (9.6 %) Allowance for doubtful debts (418,661 ) 32,007 450,668 1,408.0 % Selling and distribution expenses (135,848 ) (145,292 ) (9,444 ) (6.5 %) General and administrative expenses (2,523,520 ) (2,132,095 ) 391,425 18.4 % Income from operations 795,685 2,041,375 (1,245,690 ) (61.0 %) Change in fair value of derivative liability - 873,767 (873,767 ) (100.0 %) Interest income 3,887 743,858 (739,971 ) (99.5 %) Interest expense (1,690,551 ) (650,813 ) (1,039,738 ) (159.8 %) Amortization of debt issuance costs (60,301 ) (1,691,609 ) 1,631,308 96.4 % Government grant - 1,439,208 (1,439,208 ) (100.0 %) Other income, net 265,429 101,520 163,909 161.5 % Loss on disposal of subsidiaries (3,941,657 ) - (3,941,657 ) (100.0 %) (Loss) income before income taxes (4,627,508 ) 2,857,306 (7,484,814 ) (262.0 %) Income tax expenses (264 ) (313,493 ) (313,229 ) (99.9 %) Net (loss) income $ ($4,627,772 ) $ 2,543,813 $ (7,171,585 ) (281.9 %) Our revenue is generated from the following major product categories: Shiitake, Mu Er, bulk trading and other products.
Results of Operations for the Years Ended September 30, 2024 and 2023 For the year ended September 30, Variance 2024 2023 Amount % Revenue $ 64,131,332 $ 110,364,887 $ (46,233,555 ) (41.9 )% Cost of revenues (60,257,618 ) (106,078,132 ) (45,820,514 ) (43.2 )% Gross profit 3,873,714 4,286,755 (413,041 ) (9.6 )% Allowance for doubtful debts (418,661 ) 32,007 450,668 1,408.0 % Selling and distribution expenses (135,848 ) (145,292 ) (9,444 ) (6.5 )% General and administrative expenses (2,523,520 ) (2,132,095 ) 391,425 18.4 % Income from operations 795,685 2,041,375 (1,245,690 ) (61.0 )% Change in fair value of derivative liability - 873,767 (873,767 ) (100.0 )% Interest income 3,887 743,858 (739,971 ) (99.5 )% Interest expense (1,690,551 ) (650,813 ) (1,039,738 ) (159.8 )% Amortization of debt issuance costs (60,301 ) (1,691,609 ) 1,631,308 96.4 % Government grant - 1,439,208 (1,439,208 ) (100.0 )% Other income, net 265,429 101,520 163,909 161.5 % Loss on disposal of subsidiaries (3,941,657 ) - (3,941,657 ) (100.0 )% (Loss) income before income taxes (4,627,508 ) 2,857,306 (7,484,814 ) (262.0 )% Income tax expenses (264 ) (313,493 ) (313,229 ) (99.9 )% Net (loss) income $ (4,627,772 ) $ 2,543,813 $ (7,171,585 ) (281.9 )% 92 Table of Contents Our revenue is generated from the following major product categories: Shiitake, Mu Er, bulk trading and other products.
Net income As a result of the factors described above, our net income was $2.5 million for the year ended September 30, 2023, from net income of $2.2 million for the same period of last year. 95 Table of Contents Liquidity and Capital Resources We are a holding company incorporated in the Cayman Islands.
Net (loss) income As a result of the factors described above, our net loss was approximately $4.6 million for the year ended September 30, 2024, from net income of $2.5 million for the same period of last year. 97 Table of Contents Liquidity and Capital Resources We are a holding company incorporated in the Cayman Islands.
We made these advances based on the sales orders we received and expect to receive in the future months. As of September 30, 2024, we had accounts receivable of $32.0 million and we expect to collect the remaining balance by March 2025.
We made these advances based on the sales orders we received and expect to receive in the future months. As of September 30, 2025, we had accounts receivable of $13.1 million and we expect to collect the remaining balance by September 2026.
We intend to continue to carefully execute our growth plans and manage market risk. As of September 30, 2024, we had cash of $0.5 million. As of September 30, 2024, advances to suppliers amounted to $122.1 million and is expected to be fully utilized by September 2025.
We intend to continue to carefully execute our growth plans and manage market risk. As of September 30, 2025, we had cash of $0.8 million. As of September 30, 2025, advances to suppliers amounted to $46.3 million and is expected to be fully utilized by September 2026.
No such interest earned for the year ended September 30, 2024. 89 Table of Contents Interest expense Interest expense increased by approximately $1.0 million, 159.8%, to approximately $1.7 million for the year ended September 30, 2024 from approximately $0.7 million for the same period of last year.
No interest income was recognized for the year ended September 30, 2024. 95 Table of Contents Interest expense Interest expense increased by approximately $1.0 million, 159.8%, to approximately $1.7 million for the year ended September 30, 2024 from approximately $0.7 million for the same period of last year.
Net cash used in operating activities was $75.8 million for the year ended September 30, 2023, which mainly consisted of an increase of $71.3 million in advances to suppliers for purchasing mushrooms, corn, cotton, red dates and soybean in anticipation of sales orders and an increase of $9.0 million in accounts receivable due to sales, as mainly offset by net income of $2.5 million and collection of notes receivables of $3.6 million.
Net cash used in operating activities was $16.8 million for the year ended September 30, 2024, which mainly consisted of an increase of $9.3 million in advances to suppliers for purchasing mushrooms, corn, cotton, red dates and soybean in anticipation of sales orders and an increase of $10.6 million in accounts receivable due to sales, as mainly offset by an increase in accounts payable of $3.0 million.
General and administrative expenses General and administrative expenses decreased by $2.0 million, or 48.4%, to $2.1 million for the year ended September 30, 2023 from $4.1 million for the same period of last year.
General and administrative expenses General and administrative expenses increased by approximately $0.1 million, or 4.1%, to approximately $2.6 million for the year ended September 30, 2025 from approximately $2.5 million for the same period of last year.
Net cash provided by financing activities was $11.0 million for the year ended September 30, 2023, which mainly consisted of net proceeds of $7.9 million from issuance of ordinary shares and borrowing of $4.8 million loans, as mainly offset by repayment of $1.7 million loans.
Net cash provided by financing activities was $11.0 million for the year ended September 30, 2023, which mainly consisted of net proceeds of $7.9 million from issuance of ordinary shares and borrowing of $4.8 million loans, as mainly offset by repayment of $1.7 million loans. Tabular Disclosure of Contractual Obligations We have certain potential commitments that include future estimated payments.
Our total revenues for the year ended September 30, 2024 decreased by $46.2 million or 41.9%, compared to the same period in 2023.
Our total revenues for the year ended September 30, 2025 decreased by $36.2 million or 56.4%, compared to the same period in 2024.
(2) As of September 30, 2024, the Company had outstanding long-term loan of $2.4 million (see Note 9 of the notes to consolidated financial statements for details). (3) As of September 30, 2024, the Company had operating lease commitment of $7.9 million (see Note 15 of the notes to consolidated financial statements for details). 98 Table of Contents
(2) As of September 30, 2025, the Company had outstanding long-term loan of $1.8 million (see Note 12 of the notes to consolidated financial statements for details). (3) As of September 30, 2025, the Company had operating lease commitment of $22.3 million (see Note 16 of the notes to consolidated financial statements for details). 100 Table of Contents
Sales volume of Mu Er decreased to 1,303 tons for the year ended September 30, 2023 from 1,393 tons for the year ended September 30, 2022, which resulted in a decrease of $1.2 million in revenue from sales of Mu Er.
Sales volume of Mu Er decreased to 746 tons for the year ended September 30, 2025 from 1,186 tons for the same period of last year, which resulted in a decrease of $5.5 million in revenue from sales of Mu Er.
Our current liabilities amounted to $10.1 million as of September 30, 2024, in comparison to $10.7 million as of September 30, 2023. The decrease of current liabilities was mainly attributable to the full repayment of convertible promissory notes. Indebtedness. As of September 30, 2024, we have promissory notes of $5.3 million, and long-term loan of $2.4 million.
Our current liabilities amounted to $10.0 million as of September 30, 2025, in comparison to $10.1 million as of September 30, 2024. Indebtedness. As of September 30, 2025, we have promissory notes of $2.5 million, and long-term loan of $1.8 million.
Revenue from sales of tapioca increased by $40.0 million, or 100%, to $40.0 million for the year ended September 30, 2023 from nil for the same period of last year. The increase was mainly attributable to trading of tapioca for the year ended September 30, 2023, while no such trading for the same period of last year.
Revenue from sales of red dates decreased by $0.5 million, or 100%, to $0.5 million for the year ended September 30, 2025 from nil for the same period of last year. The decrease was mainly attributable to no trading of red dates in fiscal 2025.
For the years ended September 30, 2024 2023 2022 Net cash (used in) provided by operating activities $ (16,775,531 ) $ (75,754,162 ) $ 20,635,488 Net cash provided by (used in) investing activities 2,068,359 35,896,193 (41,991,079 ) Net cash provided by financing activities 1,827,370 11,017,942 11,634,868 Effect of exchange rate changes on cash 576,589 462,261 (8,363,680 ) Net decrease in cash (12,303,213 ) (28,377,766 ) (18,084,403 ) Cash, beginning of year 12,789,735 41,167,501 59,251,904 Cash, end of year $ 486,522 $ 12,789,735 $ 41,167,501 Operating activities Net cash used in operating activities was $16.8 million for the year ended September 30, 2024, which mainly consisted of an increase of $9.3 million in advances to suppliers for purchasing mushrooms, corn, cotton, red dates and soybean in anticipation of sales orders and an increase of $10.6 million in accounts receivable due to sales, as mainly offset by an increase in accounts payable of $3.0 million.
For the Years Ended September 30, 2025 2024 2023 Net cash provided by (used in) operating activities $ 52,461,825 $ (16,775,531 ) $ (75,754,162 ) Net cash (used in) provided by investing activities (59,702,705 ) 2,068,359 35,896,193 Net cash provided by (used in) financing activities 7,561,982 1,827,370 11,017,942 Effect of exchange rate changes on cash (3,526 ) 576,589 462,261 Net increase (decrease) in cash 317,576 (12,303,213 ) (28,377,766 ) Cash and restricted cash, beginning of year 486,522 12,789,735 41,167,501 Cash and restricted cash, end of year $ 804,098 $ 486,522 $ 12,789,735 Operating activities Net cash provided by operating activities was $52.5 million for the year ended September 30, 2025, which mainly consisted of a decrease of $62.8 million in advances to suppliers due to the refund of advances by certain suppliers, allowance for credit loss of $34.4 million for accounts receivable and $10.1 million for advances to suppliers due to deterioration of ageing, as mainly offset by net loss of $53.4 million.
Provision for income taxes For the years ended September 30, 2023 and 2022, our income tax expense was $0.3 million and income tax benefits of $0.1 million, respectively. The income tax expenses for the year ended September 30, 2023 were as a result of certain PRC subsidiaries that have taxable income from operations.
The income tax expenses for the years ended September 30, 2025 and 2024 were as a result of certain PRC subsidiaries that have taxable income from operations.
Revenue from sales of Mu Er decreased by $2.8 million, or 14.8%, to $16.3 million for the year ended September 30, 2023 from $19.1 million for the year ended September 30, 2022, mainly due to the decreased sales volume and decreased average unit sales price.
Revenue from sales of Mu Er decreased by $5.6 million, or 38.1%, to $9.2 million for the year ended September 30, 2025 from $14.8 million for the same period of last year, mainly due to the decreased sales volume.
The increase was mainly attributable to the increase in trading volume for the year ended September 30, 2023 as compared to the same period of last year. 92 Table of Contents Revenue from sales of Shiitake decreased by $0.2 million, or 1.0%, to $19.7 million for the year ended September 30, 2023 from $19.9 million for the same period of last year, mainly due to the decrease in average unit sales price of our Shiitake products.
Revenue from sales of corn decreased by $30.2 million, or 97.5%, to $0.8 million for the year ended September 30, 2025 from $31.0 million for the same period of last year. The decrease was mainly attributable to the decrease in trading volume for the year ended September 30, 2025 as compared to the same period of last year.
The average unit sales price of Shiitake decreased from $12,971 per ton for the year ended September 30, 2022 to $12,024 per ton for the year ended September 30, 2023, which resulted in a decrease of $1.5 million in revenue from sales of Shiitake.
The impact of average unit sales price of Shiitake on the revenue from sales of Shiitake was minimal, the average unit sales price of Shiitake was $11,751 per ton for the year ended September 30, 2025 as compared to $11,895 per ton for the same period of last year, which resulted in a decrease of $0.1 million in revenue from sales of Shiitake.
As of September 30, 2024, we had total assets of $186.7 million, which includes advances to suppliers of $122.1 million, accounts receivable of $32.5 million and inventory of $5.5 million, working capital of $151.8 million and total equity of $170.0 million.
As of September 30, 2025, we had total assets of $147.0 million, which includes notes receivables of $59.6 million, advances to suppliers of $46.3 million, accounts receivable of $13.1 million and inventory of $1.5 million, working capital of $831.2 million and total equity of $123.9 million. Working Capital.
Capital Needs. Our capital needs include our daily working capital needs and capital needs to finance the expansion of our business. Our management believes that income generated from our current operations can satisfy our daily working capital needs over the next 12 months.
Our management believes that income generated from our current operations can satisfy our daily working capital needs over the next 12 months. We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary.
Since June 2021, the Company’s operations were expanded into bulk agricultural commodity trading, such as cotton and corn bulk trading, The Company obtains control over these commodities as a principal from its suppliers before selling these commodities to its customers.
The Company obtains control over these commodities as a principal from its suppliers before selling these commodities to its customers.
Also, the average unit sales price of Mu Er decreased from $13,733 per ton for the year ended September 30, 2022 to $12,508 per ton for the year ended September 30, 2023, which resulted in a decrease of $1.6 million in revenue from sales of Mu Er.
The impact of average unit sales price of Mu Er on the revenue from sales of Mu Er was minimal, the average unit sales price of Mu Er was $12,286 per ton for the year ended September 30, 2025 as compared to $12,501 per ton for the same period of last year, which resulted in a decrease of $0.2 in revenue from sales of Mu Er.
The debt discount was amortized over the term of the convertible promissory note and, for the year ended September 30, 2023, the Company recorded amortization of debt issuance cost of $1.7 million and $48,150 in other expenses for the year ended September 30, 2023 and 2022, respectively.
The debt discount was amortized over the term of the promissory note and, for the year ended September 30, 2025, the Company recorded amortization of debt issuance cost of $0.3 million in other expenses. 91 Table of Contents Other income Other income increased by approximately $1.3 million, or 473.4%, to approximately $1.5 million for the year ended September 30, 2025 from approximately $0.3 million for the same period of last year.
The trading of agriculture products (i.e. tapioca, corn, cotton and cornstarch) was mainly based on market opportunity of matching suppliers and customers. Hence, the sales volume may fluctuate according to market demand and supply and there is no pattern of such agriculture product trading.
The trading of agriculture products (i.e. corn, and red dates) was mainly based on market opportunity of matching suppliers and customers.
The following table presents the company’s material contractual obligations as of September 30, 2024: Less than 1-2 3-5 More than Contractual obligations Total 1 year years years 5 years Promissory notes $ 5,256,238 $ 5,256,238 - - - Long-term loans 2,379,997 202,405 2,177,592 - - Operating lease obligations 7,886,019 3,656,722 3,782,108 278,959 168,230 Total $ 15,522,254 $ 9,115,365 $ 5,959,700 $ 278,959 $ 168,230 (1) As of September 30, 2024, the Company had outstanding promissory notes of $5.3 million (see Note 11 of the notes to consolidated financial statements for details).
The following table presents the company’s material contractual obligations as of September 30, 2025: Less than 1-2 3-5 More than Contractual obligations Total 1 year years years 5 years Promissory notes $ 2,519,134 $ 2,519,134 - - - Long-term loans 1,809,780 - - 1,809,780 - Operating lease obligations 22,282,865 7,025,712 3,456,560 10,798,040 1,002,553 Total $ 26,611,779 $ 9,544,846 $ 3,456,560 $ 12,607,820 $ 1,002,553 (1) As of September 30, 2025, the Company had outstanding promissory notes of $2.5 million (see Note 11 of the notes to consolidated financial statements for details).
We may also raise additional capital through public offerings or private placements to finance our business development and to consummate any merger or acquisition, if necessary. Cash flows The following table sets forth summary of our cash flows from continuing operations for the years ended September 30, 2024, 2023, and 2022.
Cash flows The following table sets forth summary of our cash flows from continuing operations for the years ended September 30, 2025, 2024, and 2023.
Revenue from sales of corn increased by $16.7 million, or 154.5%, to $27.4 million for the year ended September 30, 2023 from $10.8 million for the same period of last year.
Interest expense Interest expense decreased by $1.3 million, or 75.3%, to approximately $0.4 million for the year ended September 30, 2025 from $1.7 million for the same period of last year.
Amortization of debt issuance costs Amortization of debt issuance costs increased by $1.6 million, or 3,412.5%, to $1.7 million for the year ended September 30, 2023 from $0.05 million for the same period of last year. On September 26, 2022, the Company completed a $6.42 million convertible promissory note with an institutional investor (the “Investor”).
Amortization of debt issuance costs Amortization of debt issuance costs increased by $0.2 million, or 388.7%, to $0.3 million for the year ended September 30, 2025 from $60,301 for the same period of last year. On July 30, 2024, the Company and Atlas Sciences, LLC, (“Atlas”), entered into an agreement.
Revenue from sales of other edible fungi decreased by $1.4 million, or 92.5%, to $0.1 million for the year ended September 30, 2023 from $1.5 million for the same period of last year, mainly due to the decreased sales volume arising from reduced market demand of other edible fungi which resulted in a decrease of customer orders.
Hence, the sales volume may fluctuate according to market demand and supply and there is no pattern of such agriculture product trading. 89 Table of Contents Revenue from sales of Shiitake decreased by $7.1 million, or 40.0%, to $10.7 million for the year ended September 30, 2024 from $17.8 million for the same period of last year, mainly due to the decrease in sales volume from 1,496 tons for the year ended September 30, 2024 to 908 tons for the year ended September 30, 2025, which resulted in a decrease of $7.0 million in revenue from sales of Shiitake.
Net cash provided by operating activities from continuing operations was $20.6 million for the year ended September 30, 2022, which mainly consisted of (i) a decrease of $12.8 million in advances to suppliers for purchasing mushrooms in anticipation of the sales orders (the decrease of our advances to suppliers were to improve our cash flow from operations and to reduce our credit risk with advances to suppliers), (ii) a decrease of $6.5 million in accounts receivable due to collections, and (iii) net income of $2.2 million. 97 Table of Contents Investing activities Net cash provided by investing activities was $2.1 million for the year ended September 30, 2024, which mainly consisted of proceeds from disposal of subsidiaries.
Net cash used in operating activities was $75.8 million for the year ended September 30, 2023, which mainly consisted of an increase of $71.3 million in advances to suppliers for purchasing mushrooms, corn, cotton, red dates and soybean in anticipation of sales orders and an increase of $9.0 million in accounts receivable due to sales, as mainly offset by net income of $2.5 million and collection of notes receivables of $3.6 million. 99 Table of Contents Investing activities Net cash used in investing activities was $59.7 million for the year ended September 30, 2025, which mainly consisted of purchase of long-term investments of $59.7 million, proceeds from disposal of subsidiaries, net of cash, $60,538 and purchase of property and equipment of $16, 667.
The increase in sales volume of Shiitake was mainly attributable to the recovery of market demand for our Shiitake products.
The decrease in sales volume of Shiitake was caused by reduced customers’ orders which resulted by the decrease in market demand for Shiitake.
The decreased gross profit was caused by product mix for the year ended September 30, 2023, as compared to the prior period. Selling and distribution expenses Selling and distribution expenses decreased by $0.2 million, or 52.4%, to $0.1 million for the year ended September 30, 2023 from $0.3 million for the year ended September 30, 2022.
Selling and distribution expenses Selling and distribution expenses increased by $0.2 million, or 127.5%, to approximately $0.3 million for the year ended September 30, 2025 from approximately $0.1 million for the same period of last year. The increase was primarily attributable to selling and distribution expenses incurred for the “one piece shipping service” since December 2024.
Government grant Government grant increased by $1.4 million, or 100%, to $1.4 million for the year ended September 30, 2023 from nil for the same period of last year. Government grant was received from district government in respect of fund raised from capital market for the year ended September 30, 2023.
Impairment loss for biological assets Impairment loss for biological assets was approximately $8.9 million for the year ended September 30, 2025, representing an increase of approximately $8.9 million, or 100%, from nil for the same period of last year.
The FASB decided that the amendments should be effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted. The adoption of this guidance did not have a material impact on its financial position, results of operations and cash flows.
The amendments in this Update are effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, for public business entities and for interim reporting periods within annual reporting periods beginning after December 15, 2028, for entities other than public business entities. Early adoption is permitted for all entities.
Early adoption is permitted. The adoption of this guidance did not have a material impact on its financial position, results of operations and cash flows.
The Company’s management does not believe the adoption of ASU 2025-05 will have a material impact on its financial statements and disclosures.
Net cash provided by financing activities from continuing operations amounted to $11.6 million for the year ended September 30, 2022, which mainly consisted of (i) net proceeds of $6.0 million from stock issuance, and (ii) net proceeds of $6.0 million from convertible promissory note issuance. Tabular Disclosure of Contractual Obligations We have certain potential commitments that include future estimated payments.
Financing activities Net cash provided by financing activities was $7.6 million for the year ended September 30, 2025, which mainly consisted of issuance of ordinary shares of $9.9 million, and proceeds of $4.4 million from promissory notes, as partially offset by repayment of $4.8 million to a third-party loan and repayment of $2.6 million promissory notes.
Shiitake Mu Er Period (tons) (tons) Oct/23 212.25 102.37 Nov/23 105.71 90.51 Dec23 82.54 112.38 Jan/24 230.38 99.67 Feb/24 87.01 81.11 Mar/24 106.67 96.71 Apr/24 130.89 122.21 May/24 112.12 93.71 Jun/24 109.57 97.77 Jul/24 106.53 92.65 Aug/24 93.68 110.50 Sep/24 118.63 86.42 Total sales volume for fiscal 2024 1,496.00 1,186.00 Average unit selling price per ton for fiscal 2024 $ 11,895 $ 12,501 84 Table of Contents Critical Accounting Policies and Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires the use of estimates and assumptions that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures in the financial statements.
Shiitake Mu Er Period (tons) (tons) Oct/24 292.10 1.50 Nov/24 7.71 177.01 Dec/24 64.90 82.74 Jan/25 62.81 42.56 Feb/25 62.35 60.49 Mar/25 73.87 64.05 Apr/25 83.21 50.29 May/25 53.05 71.54 Jun/25 62.82 65.60 Jul/25 60.00 50.00 Aug/25 40.00 40.00 Sep/25 45.00 40.00 Total sales volume for fiscal 2025 907.81 745.77 Average unit selling price per ton for fiscal 2025 $ 84,756 $ 88.612 84 Table of Contents Recent accounting pronouncements The Company considers the applicability and impact of all ASUs.
Removed
Critical accounting policies are those accounting policies that may be material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters or the susceptibility of such matters to change, and that have a material impact on financial condition or operating performance.
Added
Management periodically reviews new accounting standards that are issued. In November 2024, the FASB issued ASU 2024-03, Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires that public business entities disclose additional information about specific expense categories in the notes to financial statements at interim and annual reporting periods.
Removed
While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies used in the preparation of our financial statements require significant judgments and estimates.
Added
This ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. This ASU may be applied either on a prospective or retrospective basis. We are currently evaluating the impact of this standard on our disclosures.
Removed
For additional information relating to these and other accounting policies, see Note 2 to our consolidated financial statements included elsewhere in this report.
Added
In November 2024, the FASB issued ASU 2024-04, Debt – Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.
Removed
Use of Estimates In preparing the consolidated financial statements in conformity with US GAAP, management makes estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the dates of the consolidated financial statements, as well as the reported amounts of revenues and expenses during the reporting year.
Added
This ASU is effective for fiscal years beginning after December 15, 2025 and interim reporting periods within those annual reporting periods, with early adoption permitted. We are currently evaluating the impact of this standard on our disclosures.
Removed
Significant items subject to such estimates and assumptions include allowance for doubtful accounts and advances to suppliers, the valuation of inventories, the useful lives of property and equipment, the valuation of derivative liabilities of the notes, the recoverability of long-lived assets, valuation of warrants and the valuation of deferred tax assets.
Added
In January 2025, the FASB issued ASU 2025-01, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220-40),which clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Early adoption of Update 2024-03 is permitted.
Removed
Revenue Recognition We recognized revenue following Accounting Standards Update (“ASU”) 2014-09 Revenue from Contracts with Customers (“ASC Topic 606”).
Added
In May 2025, the FASB issued ASU 2025-03, Business Combinations (Topic 805) and Consolidation (Topic 810), Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity, which revised current guidance for determining the accounting acquirer for a transaction effected primarily by exchanging equity interests in which the legal acquiree is a VIE that meets the definition of a business.
Removed
In accordance with ASC 606, to determine revenue recognition for contracts with customers, we perform the following five steps: (i) identify the contract(s) with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
Added
The amendments require that an entity consider the same factors that are currently required for determining which entity is the accounting acquirer in other acquisition transactions.
Removed
We recognize revenue when we transfer our goods and services to customers in an amount that reflects the consideration to which we expect to be entitled in such exchange. All of our contracts have a single performance obligation satisfied at a point in time and the transaction price is stated in the contract, usually as a price per ton.
Added
The amendments in this Update require an entity involved in an acquisition transaction effected primarily by exchanging equity interests when the legal acquiree is a VIE that meets the definition of a business to consider the factors in paragraphs 805-10-55-12 through 55-15 to determine which entity is the accounting acquirer.
Removed
We evaluate whether it is appropriate to record the gross amount of product sales and related costs or the net amount earned as commissions.
Added
The amendments in this Update are effective for all entities for annual reporting periods beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. The amendments in this Update require that an entity apply the new guidance prospectively to any acquisition transaction that occurs after the initial application date.
Removed
In accordance with ASC 606, when we act as a principal, that we obtain control of the specified goods before they are transferred to the customers, the revenues should be recognized in the gross amount of consideration to which it expects to be entitled in exchange for the specified goods transferred.
Added
Early adoption is permitted as of the beginning of an interim or annual reporting period.
Removed
Refer to Note 14 – Segment reporting for details of revenue segregation of our Consolidated Financial Statements. Accounts Receivable Accounts receivable are presented net of allowance for doubtful accounts. We maintain allowance for doubtful accounts for estimated losses.
Added
In May 2025, the FASB issued ASU 2025-04, Compensation – Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606), Clarifications to Share-Based Consideration Payable to a Customer, which revised the Master Glossary definition of the term performance condition for share-based consideration payable to a customer.
Removed
We review our accounts receivable on a periodic basis and make general and specific allowances when there is doubt as to the collectability of individual balances. In evaluating the collectability of individual receivable balances, we consider various factors, including the age of the balance, customer’s payment history, its current credit-worthiness and current economic trends.
Added
The revised definition incorporates conditions (such as vesting conditions) that are based on the volume or monetary amount of a customer’s purchases (or potential purchases) of goods or services from the grantor (including over a specified period of time).
Removed
Accounts are written off after efforts at collection prove unsuccessful. As of September 30, 2024 and 2023, allowance for doubtful accounts was approximately $0.3 million and $14,719, respectively. Inventory, net We value our inventory at the lower of cost, determined on a weighted average basis, or net realizable value.
Added
The revised definition also incorporates performance targets based on purchases made by other parties that purchase the grantor’s goods or services from the grantor’s customers.
Removed
We review our inventory periodically to determine if any reserves are necessary for potential obsolescence or if the carrying value exceeds net realizable value. We recorded inventory reserve of $13,197 and $8,809 as of September 30, 2024 and 2023, respectively. 85 Table of Contents Recent accounting pronouncements The Company considers the applicability and impact of all ASUs.
Added
The revised definition of the term performance condition cannot be applied by analogy to awards granted to employees and nonemployees in exchange for goods or services to be used or consumed in the grantor’s own operations.
Removed
Management periodically reviews new accounting standards that are issued. In September 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The FASB is issuing the amendments to enhance the transparency and decision usefulness of income tax disclosures.
Added
Although it is expected that entities will conclude that fewer awards contain service conditions, for those that are determined to have service conditions, the amendments in this Update eliminate the policy election permitting a grantor to account for forfeitures as they occur.

… 134 more changes not shown on this page.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

22 edited+1 added−2 removed79 unchanged
Biggest changeAll Other Fiscal Salary Bonus Compensation Total Name and Principal Position Year ($) ($) (1) ($) (2) ($) Yefang Zhang Chief Executive Officer 2023 161,626 - - 161,626 2024 162,857 - - 162,857 Dehong Zhang (3) Former Chief Operating Officer 2023 61,248 - 7,484 68,732 2024 46,772 - 46,772 Lingge Wu (4) Former Chief Financial Officer 2023 30,284 - 1,626 31,910 2024 11,085 - 11,085 Zhimin Lu ( 5 ) - - - - Chief Financial Officer 2024 19,428.57 - 19,428.57 ______________ (1) No officer received a bonus in the years ended September 30, 2024 and 2023.
Biggest changeAll Other Fiscal Salary Bonus Compensation Total Name and Principal Position Year ($) ($) (1) ($) (2) ($) Yefang Zhang (3) 2025 148,700 - - 148,700 Chief Executive Officer 2024 162,857 - - 162,857 Dehong Zhang (4) 2025 45,338 - 2,134 47,472 Former Chief Operating Officer 2024 46,772 - - 46,772 Zhimin Lu (5) 2025 22,821.50 - - 22,821.50 Chief Financial Officer 2024 19,428.57 - - 19,428.57 Chenyang Wang (6) 2025 11,000 - 4,800 15,800 Director 2024 8,057 - 4,800 12,857 ______________ (1) No officer received a bonus in the years ended September 30, 2025 and 2024.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers or persons controlling our company under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 107 Table of Contents Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.
Insofar as indemnification for liabilities arising under the Securities Act may be permitted for our directors, officers or persons controlling our company under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable. 109 Table of Contents Involvement in Certain Legal Proceedings To the best of our knowledge, none of our directors or officers has been convicted in a criminal proceeding, excluding traffic violations or similar misdemeanors, nor has been a party to any judicial or administrative proceeding during the past five years that resulted in a judgment, decree or final order enjoining the person from future violations of, or prohibiting activities subject to, federal or state securities laws, or a finding of any violation of federal or state securities laws, except for matters that were dismissed without sanction or settlement.
Our Board of Directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party. 106 Table of Contents Qualification A majority of our Board of Directors is required to be independent.
Our Board of Directors may exercise all the powers of the company to borrow money and to mortgage or charge our undertakings and property or any part thereof, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the company or of any third party. 108 Table of Contents Qualification A majority of our Board of Directors is required to be independent.
(4) Qinyi Fu’s term began on June 3, 2021. He is entitled to a board fee of $10,000 per years beginning from June 3, 2021. 103 Table of Contents Employment Agreements Each employee is required to enter into an employment agreement. Accordingly, all of our employees, including management, have executed their employment agreements.
(4) Qinyi Fu’s term began on June 3, 2021. He is entitled to a board fee of $10,000 per years beginning from June 3, 2021. 105 Table of Contents Employment Agreements Each employee is required to enter into an employment agreement. Accordingly, all of our employees, including management, have executed their employment agreements.
Fu has been an independent director at Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) and a member of its audit committee. Mr. Fu received his bachelor’s degree in international economics and trade in July 2007 and his master’s degree in international economics in July 2010, both from Xiamen University. 100 Table of Contents Hongdao Qian. Mr.
Fu has been an independent director at Blue Hat Interactive Entertainment Technology (NASDAQ: BHAT) and a member of its audit committee. Mr. Fu received his bachelor’s degree in international economics and trade in July 2007 and his master’s degree in international economics in July 2010, both from Xiamen University. 102 Table of Contents Hongdao Qian. Mr.
Zhang has extensive knowledge and experience in company management and food industry. We have appointed Ms. Zhang to be a director due to her strong understanding of our industry and business. Ms. Zhang is the wife of our former director, Mr. Zhengyu Wang. 99 Table of Contents Chenyang Wang . Ms. Wang has been our director since January 2025.
Zhang has extensive knowledge and experience in company management and food industry. We have appointed Ms. Zhang to be a director due to her strong understanding of our industry and business. Ms. Zhang is the wife of our former director, Mr. Zhengyu Wang. 101 Table of Contents Chenyang Wang . Ms. Wang has been our director since January 2025.
Summary Director Compensation Table Name Fiscal Year Fees earned or paid in cash ($) All Other Compensation ($)(1) Total ($) Hongdao Qian (2) 2023 10,000 - 10,000 2024 10,000 - 10,000 Hui Ruan (3) 2023 10,000 - 10,000 2024 10,000 - 10,000 Qinyi Fu (4) 2023 10,000 - 10,000 2024 10,000 - 10,000 _____________ (1) No Non-Employee Director received other compensation for the years ended September 30, 2024 and 2023.
Summary Director Compensation Table Name Fiscal Year Fees earned or paid in cash ($) All Other Compensation ($)(1) Total ($) Hongdao Qian (2) 2025 10,000 - 10,000 2024 10,000 - 10,000 Hui Ruan (3) 2025 10,000 - 10,000 2024 10,000 - 10,000 Qinyi Fu (4) 2025 10,000 - 10,000 2024 10,000 - 10,000 _____________ (1) No Non-Employee Director received other compensation for the years ended September 30, 2025 and 2024.
Director Compensation The following section presents information regarding the compensation paid during the fiscal years ended September 30, 2024 and 2023 to members of our Board of Directors who are not also our employees (referred to herein as “Non-Employee Directors”).
Director Compensation The following section presents information regarding the compensation paid during the fiscal years ended September 30, 2025 and 2024 to members of our Board of Directors who are not also our employees (referred to herein as “Non-Employee Directors”).
Currently we have the following Non-Employee Directors: Qinyi Fu, Hongdao Qian and Hui Ruan. 102 Table of Contents Non-Employee Directors Historically, we have not paid our directors for acting as such, as they have consisted of our Chief Executive Officer and her spouse.
Currently we have the following Non-Employee Directors: Qinyi Fu, Hongdao Qian and Hui Ruan. 104 Table of Contents Non-Employee Directors Historically, we have not paid our directors for acting as such, as they have consisted of our Chief Executive Officer and her spouse.
The nominating committee considers diversity of opinion and experience when nominating directors. 105 Table of Contents The candidates of members of the audit committee, the compensation committee and the nominating committee are set forth below. All such members qualify as independent under the rules of The Nasdaq Capital Market.
The nominating committee considers diversity of opinion and experience when nominating directors. 107 Table of Contents The candidates of members of the audit committee, the compensation committee and the nominating committee are set forth below. All such members qualify as independent under the rules of The Nasdaq Capital Market.
Wu is entitled to the following: · Base compensation of RMB 204,000 per year. · Reimbursement of reasonable expenses incurred by Mr. Lu. Mr. Lu’s employment may be terminated at any time by either party upon presentation of 30 days’ prior notice or immediately for cause. 104 Table of Contents C.
Lu is entitled to the following: · Base compensation of RMB 204,000 per year. · Reimbursement of reasonable expenses incurred by Mr. Lu. Mr. Lu’s employment may be terminated at any time by either party upon presentation of 30 days’ prior notice or immediately for cause. 106 Table of Contents C.
Zhang’s employment may be terminated at any time by either party upon presentation of 30 days’ prior notice or immediately for cause. Zhimin Lu We entered into an employment agreement with our chief financial officer, Mr. Zhimin Lu, effective February 4, 2024. Under the terms of Ms. Wu’s employment, Ms.
Zhang’s employment may be terminated at any time by either party upon presentation of 30 days’ prior notice or immediately for cause. Zhimin Lu We entered into an employment agreement with our chief financial officer, Mr. Zhimin Lu, effective February 4, 2024. Under the terms of Mr. Lu’s employment, Mr.
This pool contains shares and options to purchase 1,168,000 of our Ordinary Shares, equal to 10% of the number of Ordinary Shares outstanding at the conclusion of our initial public offering. Subject to approval by the Compensation Committee of our Board of Directors, we may grant shares or options in any percentage determined for a particular grant.
This pool contains shares and options to purchase our Ordinary Shares, equal to 10% of the number of ordinary shares outstanding at the conclusion of our initial public offering. Subject to approval by the Compensation Committee of our Board of Directors, we may grant shares or options in any percentage determined for a particular grant.
The Board of Directors has oversight of executive compensation plans, policies and programs. 101 Table of Contents Summary Executive Compensation Table The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered to us for the years ended September 30, 2024 and 2023.
The Board of Directors has oversight of executive compensation plans, policies and programs. 103 Table of Contents Summary Executive Compensation Table The following table presents summary information regarding the total compensation awarded to, earned by, or paid to each of the named executive officers for services rendered to us for the years ended September 30, 2025 and 2024.
As of September 30, 2024, the remaining ordinary shares available to be issued under our 2021 plan were 2,857 shares following the reverse share split completed in September 2023. Compensation Recoupment (Clawback) Policy We maintain a compensation clawback policy, which we adopted in November 2023 in compliance with Nasdaq listing requirements.
As of September 30, 2025, the remaining ordinary shares available to be issued under our 2021 plan were 238 shares following the reverse share split completed in February 2025. Compensation Recoupment (Clawback) Policy We maintain a compensation clawback policy, which we adopted in November 2023 in compliance with Nasdaq listing requirements.
Directors and Senior Management The following table provides information regarding our executive officers and directors as of the date of this report: Name Age Position(s) Yefang Zhang 58 Chief Executive Officer and Chairwoman of Board of Directors Chenyang Wang 37 Director Zhimin Lu 50 Chief Financial Officer Qinyi Fu 40 Director (Independent) Hongdao Qian 62 Director (Independent) Hui Ruan 57 Director (Independent) The business address of all such senior management and directors is Fl 1, Building No. 1, 888 Tianning Street, Liandu District, Lishui City, Zhejiang Province, People’s Republic of China 323000.
Directors and Senior Management The following table provides information regarding our executive officers and directors as of the date of this report: Name Age Position(s) Yefang Zhang 59 Chief Executive Officer and Chairwoman of Board of Directors Chenyang Wang 38 Director Zhimin Lu 51 Chief Financial Officer Qinyi Fu 41 Director (Independent) Hongdao Qian 63 Director (Independent) Hui Ruan 58 Director (Independent) The business address of all such senior management and directors is F3 Building No. 1, 888 Tianning Street, Liandu District, Lishui City, Zhejiang Province, People’s Republic of China 323000.
Major Shareholders and Related Party Transactions - A. Major Shareholders.” 108 Table of Contents Equity Compensation Program We have established a pool for shares and share options for our employees.
Share Ownership For information regarding the share ownership of our directors and senior management, see “Item 7. Major Shareholders and Related Party Transactions - A. Major Shareholders.” 110 Table of Contents Equity Compensation Program We have established a pool for shares and share options for our employees.
Employees As of September 30, 2024, we employed a total of 42 full-time and no part time employees in the following functions: Number of Employees Department September 30, September 30, September 30, 202 4 202 3 2022 Senior Management 7 7 7 Human Resource & Administration 4 4 4 Finance 6 7 7 Procurement 2 4 4 Production 15 36 36 Sales & Marketing 5 8 8 Quality Control 2 2 2 E-commerce 0 0 0 (1) Business Development 1 2 2 Total 42 70 56 ____________ (1)We began to reduce the size of our E-commerce business in the fiscal year ended September 30, 2020, and close most of our E-commerce operations in January 2023.
Employees As of September 30, 2025, we employed a total of 15 full-time and no part time employees in the following functions: Number of Employees September 30, September 30, September 30, Department 2024 2023 202 5 Senior Management 7 7 5 Human Resource & Administration 4 4 2 Finance 6 7 5 Procurement 2 4 1 Production 15 36 0 Sales & Marketing 5 8 1 Quality Control 2 2 0 Business Development 1 2 1 Total 42 70 15 _______ Our employees are not represented by a labor organization or covered by a collective bargaining agreement.
In addition, we are required by PRC law to cover employees in China with various types of social insurance. For the years ended September 30,2024, 2023 and 2022, we contributed approximately $55,938, $55,801 and $69,393 to the employee benefit plans and social insurance, respectively. The effect on our liquidity by the payments for these contributions is immaterial.
For the years ended September 30, 2025, 2024 and 2023, we contributed approximately $32,725, $55,938, and $55,801 to the employee benefit plans and social insurance, respectively. The effect on our liquidity by the payments for these contributions is immaterial. We believe that we are in material compliance with the relevant PRC employment laws. E.
Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We have not experienced any work stoppages. We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit.
We have not experienced any work stoppages. We are required under PRC law to make contributions to employee benefit plans at specified percentages of our after-tax profit. In addition, we are required by PRC law to cover employees in China with various types of social insurance.
Country of Principal Executive Offices: China Foreign Private Issuer: Yes Disclosure Prohibited under Home Country Law: No Total Number of Directors: 5 Gender Identity Female Male Directors 2 3 Demographic Background Underrepresented Individual in Home Country Jurisdiction 1 LGBTQ+ - Did not disclose demographic background - Limitation of Director and Officer Liability Under Cayman Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
Limitation of Director and Officer Liability Under Cayman Islands law, each of our directors and officers, in performing his or her functions, is required to act honestly and in good faith with a view to our best interests and exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.
(3) Dehong Zhang, former Chief Operating Officer of the Company who resigned on December 18, 2024. (4) Lingge Wu resigned as our Chief Financial Officer on February 4, 2024. (5) Zhimin Lu was appointed as our Chief Financial Officer on February 4, 2024.
(5) Zhimin Lu was appointed as our Chief Financial Officer on February 4, 2024. (6) Chenyang Wang has served as a director of the Company since January 2025.
Removed
Board Diversity The table below provides certain information regarding the diversity of our board of directors as of the date of this report.
Added
(3) Compensation paid included (i) salaries paid of RMB72,946.76 (approximately $10,246.77) as the CEO of the Company and of $84,952 as an officer of U.S. subsidiaries, (ii) social security payment of $5,642. (4) Dehong Zhang, former Chief Operating Officer of the Company, resigned on December 18, 2024.
Removed
We believe that we are in material compliance with the relevant PRC employment laws. Over 90% of our employees at Farmmi Biotechnology and Farmmi Food are female workers. We have bought life insurance for all workers of Farmmi Food’s factory. E. Share Ownership For information regarding the share ownership of our directors and senior management, see “Item 7.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

18 edited+10 added−4 removed5 unchanged
Biggest changeOrdinary Shares beneficially owned(1)(2) Number Percent Directors and Named Executive Officers: Yefang Zhang(3)(4) 47,500 0.33 % Zhimin Lu - - Chenyang Wang - - Hongdao Qian - - Hui Ruan - - Qinyi Fu - - All directors and executive officers as a group (seven (7) persons) 47,500 0.33 % Principal Shareholders: FarmNet Limited(3) 46,500 0.32 % ______________ (1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the Ordinary Shares.
Biggest changeOrdinary Shares Beneficially Owned Class A Ordinary Shares Class B Ordinary Shares Percentage of Beneficial Ownership (1) Percentage of Aggregate Voting Power (2) Number Number % % Director and Executive Officers: (3) Yefang Zhang, CEO and Chairwoman (4)(5) 82 3,873 0.03 % 0.14 % Zhimin Lu, CFO — — — — Chenyang Wang, Director — — — — Hongdao Qian, Independent Director — — — — Hui Ruan, Independent Director — — — — Qinyi Fu, Independent Director — — — — All directors and executive officers as a group 82 3,873 0.03 % 0.14 % 5% or Greater Shareholders: Alera Capital Inc (6) 1,000,000 — 7.24 % 7.23 % Bravell Partners Inc (7) 1,000,000 — 7.24 % 7.23 % Cavora Holdings Inc (8) 1,000,000 — 7.24 % 7.23 % Vanta Capital Inc (9) 980,000 — 7.09 % 7.09 % UFIST Trading LLC (10) 833,334 — 6.03 % 6.03 % ______________ (1) Beneficial ownership is determined in accordance with the rules of the SEC and includes voting or investment power with respect to the ordinary shares.
The Company and Forasen Group signed a Non-Competition Agreement which provides that Forasen Group should not engage in any business that the Company engages in, except purchasing products from us. In addition, Mr. Wang and Ms. Zhang signed a Non-Competition Agreement with the Company and Tantech which provides that Mr. Wang and Ms.
Non-Competition Agreement The Company and Forasen Group signed a Non-Competition Agreement which provides that Forasen Group should not engage in any business that the Company engages in, except purchasing products from the Company. In addition, Mr. Wang and Ms. Zhang signed a Non-Competition Agreement with the Company and Tantech which provides that Mr. Wang and Ms.
Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of our Company at Farmmi, Inc., Fl 1, Building No. 1, 888 Tianning Street, Liandu District, Lishui City, Zhejiang Province, People’s Republic of China 323000. The shareholders of record listed in the table are not located in the United States.
Unless otherwise indicated in the footnotes, the address for each principal shareholder is in the care of our Company at Farmmi, Inc., F3 Building No. 1, 888 Tianning Street, Liandu District, Lishui City, Zhejiang Province, People’s Republic of China 323000. The shareholders of record listed in the table are not located in the United States.
Related party transactions In addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” below we describe transactions for the years ended September 30, 2024, 2023 and 2022, to which we have been a participant, in which the amount involved in the transactions is material to us or the related party.
Related party transactions In addition to the executive officer and director compensation arrangements discussed in “Executive Compensation,” below we describe transactions for the years ended September 30, 2025, 2024, and 2023, to which we have been a participant, in which the amount involved in the transactions is material to us or the related party.
In computing the number of Ordinary Shares beneficially owned by a person listed below and the percentage ownership of such person, Ordinary Shares underlying options, warrants or convertible securities held by each such person that are exercisable, convertible or repayable within 60 days of January 24, 2025 are deemed outstanding and are deemed outstanding for computing the percentage ownership of any other person.
In computing the number of ordinary shares beneficially owned by a person listed below and the percentage ownership of such person, ordinary shares underlying options, warrants or convertible securities held by each such person that are exercisable, convertible or repayable within 60 days of February 6, 2026 are deemed outstanding and are deemed outstanding for computing the percentage ownership of any other person.
The relationship and the nature of related party transactions are summarized as follow: Name of related party Relationship to the Company Nature of transactions Zhejiang Yili Yuncang Technology Group Co., Ltd 10% equity interest owned by the Company Prepayment of electricity and water expenses for office leased to the Company FarmNet Limited Owns 0.7% equity interest of the Company Payment of expenses by the Company.
The relationship and nature of related party transactions are summarized as follow: Name of related party Relationship to the Company Nature of transactions Zhejiang Yili Yuncang Technology Group Co., Ltd 10% equity interest owned by the Company Prepayment of electricity and water expenses for office leased to the Company FarmNet Limited Owns 0.7% equity interest of the Company Payment of expenses by the Company Epakia Canada Inc The legal representative of Epakia Canada Inc is a director of the Company.
Amounts due from FarmNet Limited, Epakia Canada Inc, Forasen Group Co., Ltd, Zhang Bin, Shanghai Zhongjian Yiting Medical Health Technology Partnership and Dehong Zhang were mainly related to expenses paid by the Company which can be recoverable from these related parties.
Amounts due from FarmNet Limited, Epakia Canada Inc, Forasen Group Co., Ltd, Zhang Bin, and Dehong Zhang were mainly related to expenses paid by the Company which can be recoverable from these related parties.
Amount due to Forasen Holdings Group Co., Ltd and Yefang Zhang were related to payment of expenses by related parties for the Company. Amount was due on demand and non-interest bearing. Sales to related parties The Company periodically sells merchandise to its affiliates during the ordinary course of business.
Amounts due to Yefang Zhang were related to payment of expenses by related parties for the Company. Amounts were due on demand and non-interest bearing. Sales to related parties The Company periodically sells merchandise to its affiliates during the ordinary course of business.
Yefang Zhang Chief Executive Officer and Chairwoman of the Company Payment of expenses for the Company. Zhejiang Tantech Bamboo Technology Co., Ltd Under common control of Mr. Zhengyu Wang and Ms. Yefang Zhang, CEO of the Company Lease factory building to the Company and charging water and electricity for offices leased to the Company.
Zhengyu Wang, the Chairman of the Board of Directors of the Company Purchases from the Company Zhejiang Tantech Bamboo Technology Co., Ltd Under common control of Mr. Zhengyu Wang and Ms. Yefang Zhang, CEO of the Company Lease factory building to the Company and charging water and electricity for offices leased to the Company.
Major Shareholders The following table sets forth information with respect to beneficial ownership of our Ordinary Shares as of January 24, 2025 by: · Each person who is known by us to beneficially own 5% or more of our outstanding Ordinary Shares; · Each of our directors and named executive officers; and · All directors and named executive officers as a group. 109 Table of Contents The number and percentage of Ordinary Shares beneficially owned are based on 14,526,354 Ordinary Shares issued and outstanding.
Major Shareholders The following table sets forth information with respect to beneficial ownership of our ordinary shares as of February 6, 2026 by: · Each person who is known by us to beneficially own 5% or more of our outstanding ordinary shares; · Each of our directors and named executive officers; and · All directors and named executive officers as a group. 111 Table of Contents The number and percentage of ordinary shares beneficially owned are based on 13,811,335 Class A Ordinary Shares and 3,873 Class B Ordinary Shares issued and outstanding.
Zhengyu Wang, a former director of the Company who resigned effective January 19, 2025 Purchases from the Company Due from related parties consisted of the following: As of As of September 30, September 30, 2024 2023 Due from related parties Name of related parties Other receivables Dehong Zhang $ 202,547 $ 137 Other receivables Zhejiang Yili Yuncang Holding Group Co., Ltd 99,441 103,417 Other receivables FarmNet 4,100 4,100 Other receivables Epakia Canada Inc 2,996 2,996 Trade receivables Forasen Group Co., Ltd 2,094 - Trade receivables Zhang Bin 1,184 - Other receivables Shanghai Zhongjian Yiting Medical Health Technology Partnership - 308 Total $ 312,362 $ 110,958 Amount due from Zhejiang Yili Yuncang Holding Group Co., Ltd was mainly related to prepayment of electricity and water expenses for offices leased to the Company.
Due from related parties consisted of the following: As of As of September 30, September 30, 2025 2024 Due from related parties Name of related parties Other receivables Dehong Zhang - $ 202,547 Other receivables Zhejiang Yili Yuncang Holding Group Co., Ltd - 99,441 Other receivables FarmNet - 4,100 Other receivables Epakia Canada Inc - 2,996 Trade receivables Forasen Group Co., Ltd - 2,094 Trade receivables Zhang Bin - 1,184 Total - $ 312,362 113 Table of Contents Amount due from Zhejiang Yili Yuncang Holding Group Co., Ltd was mainly related to prepayment of electricity and water expenses for offices leased to the Company.
Due to related parties from the Company consisted of the following: As of As of September 30, September 30, 2024 2023 Due to related parties Name of related parties Other payable Yefang Zhang $ 356,975 $ 9,150 Other payable Zhejiang Tantech Bamboo Technology Co., Ltd 144,525 24,496 Other payable Forasen Holdings Group Co., Ltd - 168 $ 501,500 $ 33,814 Amount due to Zhejiang Tantech Bamboo Technology Co., Ltd were related to water and electricity expenses for offices leased to the Company.
Due to related parties from the Company consisted of the following: As of As of September 30, September 30, 2025 2024 Due to related parties Name of related parties Other payable Yefang Zhang $ 241,773 $ 356,975 Other payable Zhejiang Tantech Bamboo Technology Co., Ltd. 52,146 144,525 Total $ 293,919 $ 501,500 Amount due to Zhejiang Tantech Bamboo Technology Co., Ltd was related to water and electricity expenses for offices leased to the Company.
For the years ended September 30, 2024, 2023, and 2022, the Company recorded sales to related parties of $2,785, nil, and $1,016, respectively. 111 Table of Contents Operating lease from related parties The following table summarizes operating leases with related parties Zhejiang Tantech Bamboo Technology Co., Ltd detailing lease begin date, lease end date, leasing purpose, leasing areas in square meters, and annual rent in RMB and its equivalent in USD.
Operating leases from related parties The following table summarizes operating leases with related party, Zhejiang Tantech Bamboo Technology Co., Ltd, detailing lease begin date, lease end date, leasing purpose, leasing area in square meters, and annual rent in RMB and its equivalent in USD. Zhejiang Tantech Bamboo Technology Co., Ltd.
Forasen Holdings Group Co., Ltd Owned by Mr.
Payment of expenses by the Company Forasen Group Co., Ltd Owned by Mr.
Zhejiang Tantech Bamboo Technology Co., Ltd Lease No 1 Lease No. 2 Lease No. 3 Total Lease begin date August 1, 2021 July 14, 2021 March 1, 2023 Lease end date July 31, 2031 July 13, 2031 February 29, 2028 Leasing purpose Factory building Factory building Office Annual rent in RMB 168,854 421,431 131,835 722,120 Annual rent in USD $ 23,438 $ 58,497 $ 18,299 $ 100,234 Area (in square meters) 1,180 1,914 479 3,573 For the years ended September 30, 2024, 2023, and 2022, the Company incurred lease expenses of $100,235, $66,116, and $88,847, respectively.
Lease No 1 Lease begin date March 1, 2023 Lease end date February 29, 2028 Leasing purpose Office Annual rent in RMB 131,835 Annual rent in USD $ 18,279 Area (in square meters) 479 For the years ended September 30, 2025, 2024, and 2023, the Company incurred lease expense of $18,279, $100,235, and $66,116, respectively.
Sales from the Company. Shanghai Zhongjian Yiting Medical Health Technology Partnership A partnership jointly set up by the Company with another limited partner ("LP"). Payment of expenses by the Company. Zhang Dehong Brother of Ms. Yefang Zhang, CEO and Chairwoman of the Company Provide guarantee and payment of expenses by the Company.
Zhengyu Wang, the Chairman of the Board of Directors of the Company Sales from the Company Zhang Bin Serves as the supervisor of Farmmi Food Sales from the Company Shanghai Zhongjian Yiting Medical Health Technology Partnership A partnership jointly set up by the Company with another limited partner ("LP").
We have also adopted a policy that prohibits loans to related parties by the Company. 112 Table of Contents Future Related Party Transactions The Corporate Governance Committee of our Board of Directors must approve all related party transactions.
Zhang shall not vote in favor or otherwise cause Tantech to engage in the business that the Company conducts. 114 Table of Contents Future Related Party Transactions The Corporate Governance Committee of our Board of Directors must approve all related party transactions.
(4) Consists of 46,500 ordinary shares held directly by FarmNet Limited and 1,000 ordinary shares held directly by children individually who are members of the household of Yefang Zhang and Zhengyu Wang. 110 Table of Contents B.
(5) Consists of (i) 3,873 Class B Ordinary Shares held by FarmNet Limited, of which Yefang Zhang is the sole shareholder, and (ii) 82 Class A Ordinary Shares owned by Ms. Zhang’s children who are members of the household of Ms. Zhang.
Removed
(2) Assuming the exercise of all the Warrants, no change to the initial conversion rate or the initial exercise price. (3) The sole shareholder of FarmNet Limited is Ms. Yefang Zhang, who is the Chief Executive Officer and Chairwoman of our company. Ms. Zhang’s spouse is Mr. Zhengyu Wang, a director of our company until January 19, 2025.
Added
(2) Percentage is calculated based on 13,811,335 Class A Ordinary Shares and 3,873 Class B Ordinary Shares issued and outstanding.
Removed
By virtue of this relationship, Mr. Wang may be deemed to share beneficial ownership of the shares of, and voting and investment power over, our company held by FarmNet Limited with Ms. Zhang.
Added
(3) Unless otherwise indicated, the address for each director or executive officer is in the care of our Company at Farmmi, Inc., Fl 1, Building No. 1, 888 Tianning Street, Liandu District, Lishui City, Zhejiang Province, People’s Republic of China 323000. (4) Ms. Yefang Zhang is the Chief Executive Officer, Chairwoman of the Board, and the Founder of the Company.
Removed
Epakia Canada Inc Legal representative of Epakia Canada Inc is a director of the Company Payment of expenses by the Company. Forasen Group Co., Ltd Owned by Mr. Zhengyu Wang, a former director of the Company who resigned effective January 19, 2025 Sales from the Company. Zhang Bin Zhang Bin serves as the supervisor of Farmmi Food.
Added
(6) Such Class A Ordinary Shares may be deemed to be beneficially owned by Guangyue Xu, President and Director of Alera Capital Inc. The shareholder granted a voting proxy with respect to such shares to Yefang Zhang, who disclaims beneficial ownership over these shares. The address of Alera Capital Inc is 1410 North Ave, Ste 126, Spearfish, SD 57783.
Removed
Zhang shall not vote in favor or otherwise cause Tantech to engage in the business that the Company conducts. Therefore, we do not believe that there are business activities of Mr. Wang and Ms. Zhang that would compete directly with our business operations.
Added
(7) Such Class A Ordinary Shares may be deemed to be beneficially owned by Wei Huang, the Chief Executive Officer of Bravell Partners Inc. The shareholder granted a voting proxy with respect to such shares to Yefang Zhang, who disclaims beneficial ownership over these shares.
Added
The address of Bravell Partners is 114 S Main Ave Unit 211, Sioux Falls, SD 57104. (8) Such Class A Ordinary Shares may be deemed to be beneficially owned by Sheng Huang, the President of Cavora Holdings Inc. The shareholder granted a voting proxy with respect to such shares to Yefang Zhang, who disclaims beneficial ownership over these shares.
Added
The address Cavora Holdings Inc is: 218 E 7th St Ste 121, Casper, WY 82601. (9) Such Class A Ordinary Shares may be deemed to be beneficially owned by Jia Liu, who is the President of Vanta Capital Inc. The shareholder granted a voting proxy with respect to such shares to Yefang Zhang, who disclaims beneficial ownership over these shares.
Added
The address of Vanta Capital Inc is: 1603 Capitol Ave Ste 1019, Cheyenne, WY 82001. (10) Such Class A Ordinary Shares may be deemed to be beneficially owned by Ailing Huang, who is the Chief Executive Officer of UFIST Trading LLC, a California limited liability company.
Added
The shareholder granted a voting proxy with respect to such shares to Yefang Zhang, who disclaims beneficial ownership over these shares. The address of UFIST Trading LLC is: 5032 Highview St, Chino Hills, CA 91709. 112 Table of Contents B.
Added
Payment of expenses by the Company Zhang Dehong The brother of the Company’s CEO, Ms. Yefang Zhang Payment of expenses by the Company and provide guarantees as an additional security for certain loans Yefang Zhang Chief Executive Officer of the Company Payment of expenses for the Company Forasen Holdings Group Co., Ltd Owned by Mr.
Added
For the years ended September 30, 2025, 2024, and 2023, the Company recorded sales to related parties of $138, $2,785, and nil, respectively.