bon natural life limited (nasdaq: bon)

Bon Natural Life Limited(Nasdaq: Bon)1H2021 Earnings Call PresentationAugust 17th 2021

Confidentiality Note and Disclaimer

This presentation may contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements are characterized by future or conditional verbs such as “may,” “will,” “expect,” “intend,” “anticipate,” believe,” “estimate” and “continue” or similar words. You should read statements that contain these words carefully because they discuss future expectations and plans, which contain projections of future results of operations or financial condition or state other forward-looking information. Such statements are only predictions, and our actual results may differ materially from those anticipated in these forward-looking statements.

We believe that it is important to communicate future expectations to investors. However, there may be events in the future that we are not able to accurately predict or control. Factors that may cause such differences include, but are not limited to, those discussed under Risk Factors in our registration statement filed with the SEC, including the uncertainties associated with the Company's ability to raise additional capital to finance the Company's activities; the Company's and its subsidiaries' ability to fully perform all of their obligations under the contractual obligations applicable to them; the effectiveness, profitability, and the marketability of its ongoing mix shift to more advanced products; legal and regulatory risks; the Company's ability to execute its growth strategy and the effectiveness of its increased research and developments pending; the future trading of the ordinary shares of the Company; the Company's ability to operate as a public company; the period of time for which its current liquidity will enable the Company to fund its operations; general economic and business conditions; the volatility of the Company's operating results and financial condition; the Company's ability to attract or retain qualified senior management personnel and research and development staff . We do not assume any obligation to update forward-looking statements as circumstances change.

Speakers – Chairman / Chief Executive Officer & Chief Financial Officer

Yongwei Hu | Chairman & Chief Executive Officer§ Mr. Hu has over 20 years of experience in the marketing and management of personal care, dietary and food

supplement products both in China and abroad.§ Mr. Hu founded Xi’an App-Chem Bio(Tech) Co., Ltd. (the company’s predecessor) in 2006, and has served as its

President, CEO and Chairman since then.§ He previously worked as the department head of Shaanxi Agriculture Industry and Trade, and was also Deputy

Executive President of Shaanxi Iko Ostriches, the largest ostrich farm in China.§ Mr. Hu received his B.S. in Biology from Northwest University (Xi’an, China) in 1993.

Zhenchao Li | Chief Financial Officer§ Mr. Li has over 36 years of experience in finance and accounting and has served as CFO and senior accounting

executive of multiple companies in various industries, including manufacturing, real estate, construction, energy, consumer, and asset management.

§ Mr. Li has served as the CFO of Xi’an App-chem since 2019.§ He is a Senior Certified Public Accountant, Certified Forensic Accountant and the only candidate to pass the

National Forensic Authentication Accounting exam in 2008. § He is a committee member of Shaanxi Accounting Society and committee member of International Tax Research

Institute in Xi’an city.

Yingchun Xue | Chief Operating Officer§ Mrs. Xue is a veteran phytochemical engineer with 26 years of industry experience, Ms.

Xue specializes in research and development of plant extracts, as well as quality control and procurement of trade products.

§ She was a former Sales Manager at Nu Skin, and Amway China.§ She received a Bachelor’s degree in Applied Chemistry from Nanjing University.

Value Added Midstream Player with Important Role

Farm sourced raw materials• Apples• Stachys affinis (aka, Chinese artichoke)• Clary Sage

Raw materials are processed at its bio-manufacturing facilities in the Xi’an area.

Fragrances Powdered Drinks

Bioactive Ingredients

Flavorings & Sweeteners

Types of Finished Products Sold By Customers

Then produced into fine powders of various natural chemicals.

These fine powders are base active ingredients to make several different proprietary formulations by BON or its OEM & ODM customers.

3 major product categories§ Fragrance compounds§ Natural health supplements§ Bioactive food ingredient

Blue Chip Customers in Asia, Europe and the United States

BON’s customers include very well-known names in Asia.

Chinao Tong Ren Tang (pharmaceutical company)o Liangmianzhen (personal care company)o Jing Brand (health-care liquor company)o Angel Yeast (yeast manufacturer)

Japano Kao (chemical and cosmetics company)o Asahi (food and dietary supplement company)

South Koreao J2K Bio (cosmetics company)

United Stateso International Flavors & Fragranceso Mars Wrigley

European Uniono Symriseo Fridalo ACS International

The Company’s clients also include some of the biggest companies in the United States and Europe.

Manufacturing Facilities

Xi’an

Corporate HQ

Production Facility 1

ProductionFacility 2

Production Facility 1 Production Facility 2

• Located in the Tongchuan New District Industrial Park

• Owned by the Company • Expansion phase is currently

under construction• 50 mins away from Corp. HQ

• Located in the Weinan Dali Xuzhuang Industrial Park

• Leased by the Company• 90 mins away from Corp. HQ

BON has 2 facilities outside of Xi’an, China.§ Located in Industrial parks within 90 minutes

from the Company’s HQ.

§ Room for growth in capacity utilization within existing production footprint.

§ Third production site is under construction

Combined Production Capacity For Both BON Facilities

Production* (FY 2021)

Production Capacity

Utilization Rate (%)

Scheduled†Capacity

Fragrance Compounds 53.4 Tons* 64.5 Tons83% 196.5 Tons†

(+204.6%)

Health Supplements416.0K Cases* 440K Cases

95% 1.76M Cases†(+302.9%)

Bioactive Food Ingredients66.7 Tons* 106.2 tons

63% 323.5 Tons†(+204.6%)

• Annualized production capacity: FY 2021 production * 2• Additional capacities of 3 products are expected to achieve in 3 stages within 3 years

Production Facility 3

• Located in the Yumenmaterial and chemical Industrial Park

• Construction is underway, Expected completion in June, trial and ready in September 2022

• Expected output value of 30M

Growth Strategy

Growth Strategy

Four pathways towards growth in the near future.

§ Branded retail channels§ Expand product offering in

legacy business

§ Capacity expansion with existing Tongchuan facility

§ Third new facility Yumen plant§ Outsourcing production

§ 12 Sales Professionals

§ Cover U.S., EU, China, Asia

Sales Force Expansion


§ The same


§ The same with focus on U.S. and China

Production Capacity

§ Capacity expansion within existing Tongchuan facility

§ Yumen plant under construction

§ Outsourcing production

§ $18M add’ capacity from Tongchuan facility

§ Ready for production in Yumen facility

Product Development

Strategic collaboration & synergetic acquisition

Proprietary products§ 2 in the market Legacy products§ 2 in pre-trial test§ 1 in trial test§ 2 in pilot test

§ Initiated primary discussion

§ Evaluating potential opportunities

§ More new proprietary & legacy products development

§ Multi-channel distribution

§ Synergetic acquisition

Around IPO Current Within A Year

Near-Term Growth

Subsequent Events

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June § Received the certificate of a land use right for the future site of its third production facility in Yumen.

July § Broke ground on the facility in Yumen, Construction is under way

§ Bon was invited to WPE-WHPE 2022, the largest natural health industry exhibition in China, as a guest speaker.

Summary Investment Highlights

Nutritional and Dietary Ingredients in China is a Massive Market

§ The Nutritional and Dietary Ingredients subsector in the Chinese Healthcare space is estimated to be $106 Billion by 2023; industry growth of 50.0% from 2020 – 2023.o Driven by rising disposable income and increasing spending in nutritional and dietary supplements

by consumers in China.

Strong Long-Term Customer Relationships

§ Chosen by many name-brand customers both in China and abroad, including:o International Flavor & Fragrance, Inc, Mars Wrigley, Fridal, Syrimise AG.o Tongrentang (同仁堂), Liangmianzhen (两面针), Jing Brand (劲牌), Angel Yeast (安琪酵母).

Solid Financials

§ >63.6% Revenue growth from FY 1H 2020(1) to FY 1H 2021(1).§ Net Income Margin is 19.6% in FY 1H 2021(1).

GrowthProspects

§ Building additional sales team in China and abroad.§ Expanding manufacturing capacity to meet upcoming demand.§ Branded and white label goods with higher margins.

Discount To Market vs. Peer Group

§ Pre-money market valuation of approximately a ~56% P/E multiple discount(2) to International Flavors & Fragrances Inc. (NYSE:IFF) and Sensient Technologies Corporation (NYSE:SXT).

(1) FY 2020 ended September 30th, 2020, and FY 2021 ended March 31th , 2021(2) Market data used to determine public company comparable discount to NYSE:IFF and NYSE:SXT taken from 6/9/2021 and obtained from S&P Capital IQ.

Financial Highlights

Summary Financials

Strong growth driven by increasing demand from customers.

§ During the six months ended March 31, 2021 , Sales increased to $11.70M, an increase of 63.6% over the same period in previous year.

― Increased in sales volume of fragrance compounds (90.1%) and health supplemental powder drinks (306.3%)― Increased in number of customers by 34.4%.

§ Both gross and net income margins decreased due to change in product mix, a retreat in bioactive ingredients products selling price and increase in raw material costs affected by COVID-19 impact.

Income Statement(1)For the Six-Month Ended March 31

FY 2020 FY 2021

Total Revenue $7.15 $11.70

Revenue Growth 63.6%

Gross Profit $2.55 $3.37

Gross Profit Growth 32.2%Net Income $1.59 $2.30

Net Income Growth 43.9%Diluted EPS $0.3 $0.4

Diluted EPS Growth 33.3%FY 2021 | Significant top and bottom-line growth

(1) All numbers in the Income Statement represented in Millions of USD.

Sales by Volume For the Six-Month Ended March 31

FY 2021 FY 2020 Growth Rate

Fragrance Compound 26,678 Kg 14,035 Kg 90.1%

Health Supplement 207,994 Cases 51,189 Cases 306.3%

Bioactive Food Ingredient

33,352 Kg 68,583 Kg -51.4%

$3.5

$1.1

2020 2021

$1.1

$4.7

2020 2021

$2.6

$6.0

2020 2021

Revenues in the Six-month Ended March 31, 2021 (by Segment) Segment Growth (H1 from FY 2020 – FY 2021)

Fragrance Compounds (Millions)

Health Supplements / Powder Drinks (Millions)

Bioactive Ingredients (Millions)

+133.0%

+338.4%

-69.7%

There was significant growth in two segments:

§ Fragrance Compounds§ Health Supplements / Powder Drinks

Summary Financials | Segment Growth

Fragrance Compounds $5.96M (50.9%)Health Supplements +

Powder Drinks$4.67M (39.9%)

Bioactive Ingredients$1.07M (9.2%)

The decrease in Bioactive Ingredients was mainly due to subdued COVID-19 spread which resulted in a decreased customer orders of stachyose, our product being designated as pandemic control substance by government in 2020.

We shifted our sales strategy, due to disruptions of logistics caused by COVID-19 outbreak and spread. § by Promoted our products to large domestic enterprise clients, rather than export sales to overseas customers

Summary Financials | Geographic Growth

Geographical Sales Growth (For the Six-month Ended March 31) (Unaudited)

FY 2020 % of Total FY 2021 % of Total Absolute Growth

China $6.36 89.0% $10.74 91.8% 68.7%

Overseas (Ex-PRC) $0.79 11.0% $0.96 8.2% 22.3%

Total $7.15 $11.70

Revenues in the Six-month Ended March 31, 2021(by Geography)(Unaudited)

China $10.7M | (91.8%)

Overseas (Ex-PRC)$1.0M | (8.2%)

The % of domestic Chinasales vs. international sales increased due to new sales strategy in response to global supply chain disruption

Q&A

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Bon Natural Life Limited(Nasdaq: Bon)1H2021 Earnings Call PresentationAugust 17th 2021

Principal Executive Offices:C601, Gazelle Valley, No.69 Jinye Road.Xi’an Hi-tech Zone, Xi’an, China

bon natural life limited (nasdaq: bon)

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