Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2024 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE A ...

CHENGDU, China, July 12, 2024 /PRNewswire/ -- Qilian International Holding Group Limited (NASDAQ: QLI) ("Qilian" or the "Company"), a China-based pharmaceutical and chemical products manufacturer, today announced that on July 10, 2024, NASDAQ notified the Company that it has determined that for the 10 consecutive business days, from June 21, 2024 to July 9, 2024, the closing bid price of the Company's Class A ordinary shares has been at $1.00 per share or greater. Accordingly, the Company has regained compl ...

CHENGDU, China, June 18, 2024 /PRNewswire/ -- Qilian International Holding Group Limited (NASDAQ:QLI) ("Qilian" or the "Company"), a China-based pharmaceutical and chemical products manufacturer, announced today that an 1 for 5 reverse split of its authorized share capital, was approved by the Company's board of directors on May 29, 2023 and will become effective on June 21, 2024. In connection with the reverse share split, the Company's shareholders will receive one new Class A ordinary share or Class B or ...

JIUQUAN, China, May 17, 2024 /PRNewswire/ -- Qilian International Holdings Group Limited (NASDAQ: QLI) ("Qilian" or the "Company"), a pharmaceutical and chemical products manufacturer headquartered in China, today announced: In the past two years, Qilian International Holdings Group Limited has encountered significant challenges stemming from the continuous shrinkage in market demand for its oxytetracycline products, coupled with a persistent decline in market prices and escalating environmental protection ...

Financial Overview - Qilian International Holding Group Limited raised approximately US$23.87 million in net proceeds from its initial public offering on January 12, 2021[273]. - The company transferred its Ordinary Shares from The Nasdaq Global Market to The Nasdaq Capital Market on December 15, 2023[275]. - A one-time special cash dividend of $0.05 per ordinary share was declared on February 16, 2023, and paid on March 6, 2023[306]. - The company has not declared or paid dividends in the past, nor does it have a fixed dividend policy, leaving the board with complete discretion on future distributions[308]. - For the year ended September 30, 2023, cash flow from VIE to WFOE includes payment of $39,508 for net payments for product sales and purchases, a decrease from $272,527 in 2022 and $1,263,906 in 2021[305]. - The company has a low asset-liability ratio of less than 70%, indicating strong financial health[366]. VIE Structure and Legal Risks - The company has no direct ownership in Gansu QLS due to PRC legal restrictions on foreign ownership in the pharmaceutical sector[285]. - The contractual arrangements with Gansu QLS allow the company to consolidate its financial results under U.S. GAAP, despite not having direct equity ownership[281]. - The company is subject to risks associated with its contractual arrangements with the VIE, which may not be as effective as direct ownership[282]. - There are significant legal and operational risks associated with the VIE structure, including potential changes in PRC regulations that could adversely affect business operations[298]. - The deconsolidation of the VIE could have a material adverse effect on the company's operations and significantly diminish the value of its Ordinary Shares[301]. - The contractual arrangements with the VIE are subject to risks, including potential penalties or loss of interests if found non-compliant with PRC laws[301]. Regulatory Environment - The company has been advised that its U.S. listing is not currently subject to PRC regulatory review, but uncertainties remain regarding future regulatory changes[300]. - Recent regulatory developments indicate that if an operator has personal information of over one million users and intends to be listed in a foreign country, it must undergo a cybersecurity review[309]. - The PCAOB has secured complete access to inspect and investigate registered public accounting firms in mainland China and Hong Kong, which may affect the trading of the company's securities[304]. - Cash transfers from the holding company are subject to PRC laws and regulations, which may delay or prevent the use of proceeds from future financing activities[305]. Product and Market Presence - The VIE and its subsidiaries operate a pharmaceutical and chemical company focusing on oxytetracycline products, licorice products, traditional Chinese medicine derivatives, heparin products, sausage casings, and fertilizers[312]. - The company’s products are sold in more than 20 provinces in China, indicating a significant market presence[312]. - Gan Di Xin® sold approximately 2.99 million pieces for the year ended September 30, 2023, reflecting its growing popularity in the market[322]. - Gansu QLS's Gan Di Xin® was awarded "Famous Trademark of Gansu Province" in 2011 and "China Chemical and Pharmaceutical Industry's Excellent Product Brand" in 2013, indicating strong brand recognition[322]. - Gansu QLS's Qilian Shan® Oxytetracycline Tablets are used to prevent and treat a wide range of diseases in livestock and humans, with sales across more than 20 provinces in China[324]. - Gansu QLS is the only producer in China manufacturing both oxytetracycline tablets and APIs, providing a competitive edge in the market[325]. Research and Development - The company has been recognized for its strong R&D capacities and market competitiveness[370]. - The company has established a Nationally Recognized Enterprise Technology Center, reflecting its strength in technological innovation and robust R&D activities[389]. - The R&D department has significantly improved the company's industry competitiveness and overall business outlook[389]. - The company invested approximately RMB 1,000,000 in a mutational breeding experiment of oxytetracycline-producing bacteria, increasing the average fermentation unit from 32,000 U/ml to 35,000 U/ml[391]. - The R&D department is developing nitrofurantoin enteric-coated tablets and vitacoenzyme as new products to meet market demands[392]. Intellectual Property - Gansu QLS currently holds 21 patents in China, with expiration dates ranging from 2026 to 2029[381]. - The company relies on a combination of patent, trademark, and trade secret laws to protect its proprietary rights[380]. - The WFOE and VIE subsidiaries do not rely on third-party licenses for intellectual property use[380]. - The company has filed multiple patent applications related to various technologies, including purification and coating technologies, with expiration dates extending to 2029 and beyond[384]. Taxation and Financial Regulations - The EIT Law imposes a 25% enterprise income tax rate on resident enterprises for income obtained in and outside the PRC[465]. - Non-resident enterprises with no institutions in the PRC pay a reduced enterprise income tax rate of 10% on PRC-sourced income[465]. - Companies incorporated in Hong Kong may benefit from a 5% withholding tax on dividends from PRC companies if they hold a 25% interest or more[466]. - Gansu GLS and its subsidiaries are subject to a 25% enterprise income tax rate as resident enterprises in the PRC[467].

JIUQUAN, China, Jan. 12, 2024 /PRNewswire/ -- Qilian International Holding Group Limited (NASDAQ: QLI) ("Qilian" or the "Company"), a China-based pharmaceutical and chemical products manufacturer, today announced that on January 10, 2024, the Company received a written notification from the Nasdaq's Listing Qualifications Department, granting the Company another 180 calendar days extension, or until July 8, 2024, to regain compliance with Nasdaq's minimum bid price requirement. The Company can cure this def ...

Financial Overview - Qilian International Holding Group Limited raised approximately US$23.87 million in net proceeds from its initial public offering on January 12, 2021[277]. - The company has not declared or paid dividends in the past, nor does it have a fixed dividend policy[307]. - Gansu QLS and its subsidiaries are subject to a 25% enterprise income tax rate in the PRC[467]. - The company pays value-added tax (VAT) at rates of 13% for pharmaceutical manufacturing and sales, 9% for leasing, and 6% for human resource services[471]. - Dividends declared to non-PRC resident investors are subject to a 20% income tax rate, which can be reduced to 5% under certain conditions for Hong Kong resident enterprises[472]. Corporate Structure and VIE Agreements - The company operates through a variable interest entity (VIE) structure, with no direct equity ownership in Gansu QLS due to PRC legal restrictions[286]. - The contractual arrangements with Gansu QLS allow the company to consolidate its financial results in accordance with U.S. GAAP[287]. - The company’s corporate structure is subject to risks associated with the effectiveness of its contractual arrangements with the VIE[284]. - The Hainan Exclusive Service Agreement allows Hainan Trade to collect a service fee equal to 99.214% of the net profits of Gansu QLS, effective for ten years[278]. - The service fee percentage of 99.214% is based on the number of shares held by shareholders who signed the VIE Agreements[289]. - The corporate structure relies on contractual arrangements with the VIE, posing risks if these arrangements are deemed non-compliant with PRC laws[299]. - The Hainan Exclusive Service Agreement is valid under PRC law, but its effectiveness in providing control may not match direct ownership[291]. - The Gansu QLS Shareholders agreed not to transfer pledged equity interests without WFOE's consent, ensuring control over Gansu QLS[294]. - The Equity Pledge Agreement was established, with Gansu QLS Shareholders pledging 99.214% of their shares to WFOE to guarantee Gansu QLS's obligations under the Exclusive Service Agreement[292]. - The Call Option Agreement allows WFOE to purchase equity interests or assets in Gansu QLS at a price not exceeding $1.00, subject to PRC law[295]. - The Shareholders' Voting Rights Proxy Agreement grants WFOE exclusive rights to act on behalf of Gansu QLS Shareholders, including voting and appointing management[296]. Regulatory Environment - The company faces potential delisting risks under the HFCA Act if the PCAOB cannot inspect its auditors, which could significantly affect the value of its Ordinary Shares[303]. - The company is subject to uncertainties regarding PRC government regulations, which could materially impact its business operations and financial performance[300]. - Recent regulatory developments may impact the company's ability to conduct future offerings or maintain its listing on U.S. exchanges[309]. - The pharmaceutical industry in China is highly regulated, with oversight from the NMPA and other governmental bodies, affecting all aspects of production and sale[402]. - The NMPA has the authority to enforce regulations through various actions, including fines, product recalls, and operational restrictions[414]. - The company is subject to periodic inspections and safety monitoring by the NMPA to ensure compliance with regulatory requirements[411]. - All marketed pharmaceutical products meet the packaging requirements as per PRC regulations[417]. Product Development and Innovation - Gansu QLS's business scope includes the development, manufacture, marketing, and sale of its products, distinct from the consulting services provided by WFOE[274]. - The VIE and its subsidiaries operate a pharmaceutical and chemical company focusing on oxytetracycline products, licorice products, TCMD products, heparin products, sausage casings, and fertilizers[312]. - The innovative antitussive and expectorant medicine Gan Di Xin® is developed by the VIE and its subsidiaries[312]. - Gansu QLS has invested approximately RMB 1,000,000 in mutational breeding experiments, increasing the average fermentation unit of oxytetracycline from 32,000 U/ml to 35,000 U/ml, significantly improving product yield and reducing production costs[392]. - Gansu QLS is focusing on developing new products, including nitrofurantoin enteric-coated tablets and vitacoenzyme, to meet unmet market demands[393]. - The company has established a TCMD research project leading to the Ahan® antibacterial paste, which has been on the market since November 2017[392]. - Ahan® antibacterial paste will be further developed to cater to different skin types and cultural regions in China, with additional product variants under research and development[394]. - Gansu QLS has initiated a "Quality Improvement Process for Oxytetracycline Injections" project to enhance product quality and reduce production costs, which includes research on various pharmaceutical products[394]. Intellectual Property - The company has a strong focus on protecting intellectual property as a strategic priority[381]. - The company does not rely on third-party licenses for intellectual property, utilizing a combination of patents, trademarks, and trade secrets[381]. - Gansu QLS holds 14 Chinese patents, with expiration dates ranging from 2026 to 2029[382]. - Chengdu QLS has eight Chinese patents, all expiring in 2029[382]. - The company has filed for record with the Drug-related Information Filing Platform, which has streamlined the re-registration process for its products[320]. - The company’s current patents and applications are crucial for maintaining competitive advantages in the market[382]. - The company has multiple effective patents related to various technologies, including oxytetracycline residue neutralizers and traditional Chinese medicine extraction devices[385]. - The company currently holds ten Chinese trademarks, with expiration dates ranging from 2020 to 2030[388]. - Gansu QLS has obtained the National New Drug Certificate for Gan Di Xin® (No. H20040463) on April 30, 2004, indicating compliance with national medicine quality standards[318]. Market Performance and Recognition - Gan Di Xin® sold approximately 674 million pieces for the year ended September 30, 2021, showing significant growth from 213 million pieces in 2020[320]. - Gansu QLS's oxytetracycline products are certified for both veterinary and human consumption, providing a competitive edge over domestic competitors[324]. - Gansu QLS was recognized as a Strategic Emerging Growth Exemplar Enterprise, indicating its market competitiveness and future development potential[361]. - Gansu QLS received the Gansu Provincial Excellent Engineering Consulting Award for its "Gan Di Xin Industrialization Project," recognized for its high level of ingenuity and economic potential[356]. - The company was awarded the Gansu Province's Famous Brand title, evaluated based on product quality control, market share, and customer satisfaction[357]. - Gansu QLS's trademark Qilian Shan® was awarded the Famous Trademark of Gansu Province, reflecting its high reputation and customer service satisfaction[360]. - Gansu QLS was recognized as a "Specialized New Technology" Enterprise by Gansu Province, reflecting its technological innovation and product development capabilities[364]. - Gansu QLS achieved the status of a Nationally Recognized Enterprise Technology Center, based on criteria including annual sales revenue and research and development capabilities[363]. Operational Insights - The company’s financial management system is complete and organized, contributing to its operational success[366]. - The company has a high average annual growth rate of net profit, with a target of no less than 10%[366]. - The company has well-qualified employees for manufacturing and quality control procedures to ensure product compliance[345]. - The prices for raw materials used by the WFOE and its subsidiaries are subject to market forces and have varied significantly in the past[350]. - For the fiscal year ended September 30, 2022, two customers represented approximately 11% of the sales of the WFOE and its subsidiaries[348]. - One vendor accounted for 14% of total purchases for the fiscal year ended September 30, 2022[351]. - Chengdu QLS has 54 corporate customers for its heparin products and 39 for its sausage casings throughout China[346]. - The WFOE and its subsidiaries intend to engage more qualified distributors and dealers to strengthen their distribution network[346]. - The manufacturing process for heparin sodium involves collecting and processing cleaned pigs' intestines[340]. - Moshangfa's organic fertilizer is designed to improve crop yield and reduce soil compaction[330]. - The company leases a production facility of approximately 6,000 square meters for an annual rent of RMB200,000 (US$30,969), which is sublet to Rugao for the same amount[399].

Revenue Performance - Revenue for the first six months of fiscal year 2022 was approximately $32.1 million, representing a 7% increase from $29.9 million in the same period of the previous year[3] - Revenue from heparin products increased by 9.9% to $8.8 million, driven by a 31% increase in quantity sold, despite a 16% decrease in average selling price[7] - Revenue from fertilizers surged by 254.8% to $0.5 million, following the resumption of normal production after capacity expansion[9] - Net revenue for the six months ended March 31, 2022, was $32,086,522, an increase of 7.2% from $29,939,173 in 2021[23] Profitability - Net income decreased by 89% to $249,681 compared to $2.2 million in the same period of the prior fiscal year, primarily due to rising raw material prices[2] - Gross profit fell by 31% to $2.8 million, with gross margin decreasing from 13.7% to 8.8% year-over-year[4] - Gross profit decreased to $2,820,252, down 30.9% from $4,090,663 in the previous year[23] - Net income attributable to Qilian International Holding Group Limited was $87,862, a significant decline from $2,350,584 in the same period last year[23] - The company reported a comprehensive income of $838,837, down from $3,330,150 in the previous year[23] Cash Flow and Liquidity - Cash provided by operating activities was $4.2 million, down from $9.7 million in the same period last year, reflecting a decrease in net income[15] - Cash and cash equivalents at the end of the period were $16,666,171, down 17.9% from $20,312,619 at the end of the previous year[25] - Operating cash flow for the period was $4,187,130, a decrease of 56.7% compared to $9,695,578 in the prior year[25] Assets and Liabilities - Total current assets increased to $42,936,453, up 6.4% from $40,365,153 as of September 30, 2021[21] - Total liabilities rose to $22,640,169, an increase of 21.5% from $18,684,805 in the previous period[21] - Total assets increased to $80,147,464, up 6.4% from $75,353,263 as of September 30, 2021[21] Equity and Retained Earnings - As of March 31, 2021, total equity reached $56,141,272, an increase from $28,841,507 on September 30, 2020[27] - The statutory reserve appropriation for the year was $(217,386), indicating a decrease in retained earnings[28] - Retained earnings as of March 31, 2021, were $13,932,050, showing an increase from $12,197,372 on September 30, 2020[27] Foreign Currency and Exchange Rates - The average exchange rate of RMB to USD improved from 1 USD = 6.5541 RMB to 1 USD = 6.3712 RMB year-over-year, positively impacting revenue[6] - Foreign currency translation adjustments resulted in a gain of $531,243 for the year ending March 31, 2022[28] Future Outlook - The company expects to complete certain construction projects in 2023 and anticipates new growth driven by improved control of the COVID-19 pandemic in China[2]