Bon Natural Life Limited Announces Record First Half-Year Revenue and Net Income

1H-2022 Revenue increases by 17.0% to $13.7 million

XI'AN,China,Aug. 1,2022 -- Bon Natural Life Limited (Nasdaq: BON) ("BON" or the "Company"),one of the leading bio-ingredient solutions providers in the natural,health and personal care industries,today announced its half-year financial results for the six months ended March 31,2022.

1H-2022 Financial Highlights

Total net revenues were US$13.7 million,representing a 17.0% increase from US$11.7 million for the same period in 2021.

Gross profit increased by 19.6% to US$4.0 million from US$3.4 million for the same period in 2021.

Gross margin was 29.5%,an increase by 70 basis points from 28.8% for the same period in 2021,and an increase by 2.4% sequentially compared to that of the six months ended September 30,2021.

Sales volumes and gross profit of our bioactive food ingredient products increased by 47.5% and 191.1% compared to the same period of 2021.

Net income increased by 10.2% to US$2.5 million from US$2.3 million for the same period in 2021.

Diluted earnings per share ("EPS") was $0.30,compared to $0.40 for the same period in 2021.

Diluted weighted-average number of ordinary shares outstanding increased to 8,386,306 from 5,800,000 for the same period in 2021 due to more shares issued in connection with IPO.

Management Commentary

"We are pleased with a strong start to 2022 and a positive momentum across many of our new initiatives despite unprecedented challenges caused by the pandemic and the most recent macro-economic conditions." Said Richard (Yongwei) Hu,BON's Chairman & CEO,"I am incredibly proud of our teams' achievements to adapt these conditions and help offset pressures over time by our pricing actions,in combination with our continuing cost discipline and market strategy adjustment. In the first six months of the current fiscal year,the average selling prices of fragrance compound,health supplemental powder drinks and bioactive food ingredients increased by 64.1%,11.2% and 79.2% year over year,respectively,as we effectively passed through the rising raw material costs downstream by raising our selling prices on top of our product mix shift to higher value added and higher margin products. We are encouraged by the positive trending of our gross margin,which has been on a stable upward trajectory and expanded 2.4% sequentially."

"We are excited about the multiple near term catalysts ahead of us. In this fiscal half year,we kept investing in our future and our third production base,Yumen plant is on track to complete construction as scheduled and expected to be operational in the fourth quarter of 2022. Once up and running,Yumen plant will add 200% increase in production capacity in fragrance compounds and bioactive food ingredients and 150% overall revenue growth potential on an annualized basis. In addition,with the successful rollout of our new proprietary vegetable based probiotic powder drink for regulation and improvement of human's overall microbiome and digestive health,stachyose and apple extract based personal care product for female hygiene health,we are expecting growing demand from natural and health -conscious consumers. Our new Yumen Plant and the expansion of Tongchuan plant,coupled with our new product initiatives will enable us to meet more customer demand efficiently,accelerate our global business expansion and deliver lasting long-term value for our shareholders."

1H-2022 Product Categories Summary: Growth vs. Prior Year

Revenues increase

(decrease)

Gross Profits increase

(decrease)

Fragrance Compounds

24.9%

53.9%

Health Supplements (Powder Drinks)

(28.5%)

(36.4%)

Bioactive Food Ingredients

171.8%

191.1%

Fragrance Compounds

Revenue from sales of fragrance compound products increased by 24.9% to US$7.4 million from US$6.0 million for the same period in 2021.The increase was primarily attributable to a 64.1% increase in average selling price driven by our product mix shift towards higher value added and higher margin products,such as ambroxide,a key ingredient of fragrance,as well as a 2.8% positive impact from currency exchange,partially offset by a decrease of 26.0% in sales volume due to shortage of material supply.

Gross profit from fragrance compound increased by 53.9% from US$1.2 million to US$1.8 million for the same period in 2021. The increase was attributable to the above referenced factors.

Health Supplements (Powder Drinks)

Revenue from sales of health supplement (powder drinks) products decreased by 28.5% to US$3.3 million from US$4.7 million for the same period in 2021. The decrease was primarily attributable to the decrease in sales volume due to material supply shortage,partially offset by increase in average selling price and positive impact from currency exchange.

Gross profit from health supplement (powder drinks) decreased by 36.4% from US$1.8 million to US$1.2 million for the same period in 2021. The decrease was mainly due to the decrease in sales volume and increase in weighted average unit cost,partially offset by positive impact from currency exchange.

Bioactive Food Ingredients

Revenue from sales of bioactive food ingredient products increased by 171.8% to US$2.9 million from US$1.1 million for the same period in 2021. The increase was mainly attributable to 79.2% and 47.5% increase in average selling price and sales volume due to strong customer demand and sales effort as well as a 2.8% positive impact from currency exchange.

Gross profit of our bioactive food ingredient products increased by 191.1% to $1.1 million from $365,867 for the same period in 2021. This increase was primarily due to the above referenced factors.

General and administrative expensesincreased by $319,308,or approximately 47.0%,from $679,635 in the six months ended March 31,2021,to $998,943 in the same period of 2022,mainly attributable to increase of $335,265 in professional service fees such as directors' and officers' liability insurance,investor relations management,etc. as we become a public company since we completed the IPO in July 2021.

Research and development ("R&D") expensesincreased by $57,677,or approximately 53.9%,from $106,998 in the six months ended March 31,to $164,675 in the same period of 2022. The increase was mainly due to an increase of $69,022 in outsourcing R&D activities to external consulting firms.

Government subsidies received in the form of a grant and recognized as other operating income totaled $542,256 and $446,910 in the six months ended March 31,2022 and 2021,respectively.

Net incomeincreased from $2.3 million in the six months ended March 31,2021 to $2.5 million in the same period of 2022.

Net cash used in operating activitiesduring the six months ended March 31,2022 was $130,577 compared to net cash provided in operating activities of $2.0 million in the same period of 2021.

Diluted earnings per share ("EPS") was $0.30,compared to $0.40 for the same period in 2021.

Investors are encouraged to review the Company's complete financial statements and related disclosures for additional information. These materials are available at https://www.sec.gov/edgar/browse/?CIK=1816815&owner=exclude.

Subsequent Events

On May 5,2022,the Company announced that its third production site – Yumen Plant has completed the building structure of the facility as scheduled and forecasted to commence around September 2022.

On June 16,the Company launched a new cruciferous vegetable based probiotic powder drink that could help regulate digestive system.

Effective June 28,Jeffery Guzy was appointed as a new independent Director to the Company's Board of Directors and as Chair of the Audit Committee. Mr. Christopher Constable resigned as a director of the Company for personal reasons and stepped down as a member and chairman of the audit committee of the Board.

Investor Conference Call and Webcast

A live webcast to discuss the Company's 1H 2022 financial results will be held on August 1,beginning at 9:00 a.m. EST. The webcast and accompanying slide presentation may be accessed on the Company's IR website at https://ir.bnlus.com/events-presentations/. The webcast also can be accessed by using the direct link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=1sM1QUxQ

For those unable to listen to the live webcast,a recorded version will be available on the Company's website after the event.

Pre-registration: https://dpregister.com/sreg/10169993/f3e46b2118

Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the operator. Participants may pre-register at any time,up to and including after the time that the call has started.

Those without internet access or unable to pre-register may dial in by calling:

U.S. Toll Free: 1-866-777-2509 | International Toll: 1-412-317-5413

AboutBon Natural Life Limited

The Company focuses on the manufacturing of personal care ingredients,such as plant extracted fragrance compounds for perfume and fragrance manufacturers,natural health supplements such as powder drinks and bioactive food ingredient products mostly used as food additives and nutritional supplements by their customers. For additional information,please visit the Company's website atwww.bnlus.com.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans,objectives,goals,strategies,future events or performance,and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may,"will,"intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters,it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including,but not limited to,the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the natural,health and personal care market inChinaand the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions inChinaand the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC. For these reasons,among others,investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC,which are available for review atwww.sec.gov. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof.

For more information,please contact:

In the United States:

Maggie Zhang | Impact IR

Sophie Zhang | Impact IR

Phone: (646) 893-8916

Phone: (786) 953-2513

Email:maggie.zhang@irimpact.com

Email:sophie.zhang@irimpact.com

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

As Of

March 31,2022

September 30,

2021

ASSETS

CURRENT ASSETS

Cash

$

1,609,079

$

1,903,867

Short-term investments

132,114

1,703,314

Accounts receivable,net

7,534,786

6,152,807

Inventories,net

2,143,385

1,596,492

Advance to suppliers,net

3,187,116

4,094,312

Deferred offering costs

-

-

Acquisition deposit

1,000,000

1,000

Prepaid expenses and other current assets

95,286

98,960

TOTAL CURRENT ASSETS

15,701,766

16,549,752

Property,plant and equipment,net

23,069,191

19,228,642

Intangible assets,net

416,024

411,056

Right-of-use lease assets,net

171,380

201,007

Deferred tax assets,net

22,774

22,342

TOTAL ASSETS

$

39,381,135

$

36,412,799

LIABILITIES AND EQUITY

CURRENT LIABILITIES

Short-term loans

$

1,615,503

$

41,381

Current portion of long-term loans

1,845,275

448,005

Accounts payable

553,750

380,385

Due to related parties

272,942

245,104

Taxes payable

3,328,986

5,052,018

Deferred revenue

673,974

1,096,101

Accrued expenses and other current liabilities

73,710

41,711

Finance lease liabilities,current

114,216

161,286

Operating lease liability,current

69,167

62,871

TOTAL CURRENT LIABILITIES

$

8,547,523

$

7,528,862

Long-term loans

1,080,402

2,173,532

Finance lease liabilities,noncurrent

-

28,953

Operating lease liability,noncurrent

113,478

146,703

TOTAL LIABILITIES

9,741,403

9,878,050

COMMITMENTS AND CONTINGENCIES

EQUITY

Ordinary shares,$0.0001 par value,500,000 shares authorized,

8,350,381 and 8,330,000 shares issued and outstanding as of

March 31,2022 and September 30,respectively

$

835

$

833

Additional paid in capital

15,630,251

15,540,433

Statutory reserve

1,050,721

1,721

Retained earnings

11,354

9,192,676

Accumulated other comprehensive income

710,020

222,221

TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS'

EQUITY

29,133,181

26,006,884

Non-controlling interest

506,551

527,865

Total equity

29,639,732

26,749

TOTAL LIABILITIES AND EQUITY

$

39,799

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

For the six months ended

March 31,

2022

2021

REVENUE

$

13,688,400

$

11,698,830

COST OF REVENUE

(9,652,453)

(8,325,148)

GROSS PROFIT

4,035,947

3,373,682

OPERATING EXPENSES

Selling expenses

(83,970)

(52,666)

General and administrative expenses

(998,943)

(679,635)

Research and development expenses

(164,675)

(106,998)

Total operating expenses

(1,247,588)

(839,299)

INCOME FROM OPERATIONS

2,788,359

2,383

OTHER INCOME (EXPENSES)

Interest income

589

294

Interest expense

(277,764)

(197,168)

Unrealized foreign transaction exchange loss

(16,994)

(65,691)

Government subsidies

542,256

446,910

Income from short-term investments

12,419

-

Other income

43,532

41,548

Total other income,net

304,038

225,893

INCOME BEFORE INCOME TAX PROVISION

3,092,397

2,760,276

INCOME TAX PROVISION

(562,737)

(465,077)

NET INCOME

2,529,660

2,295,199

Less: net loss attributable to non-controlling interest

(19,018)

(16,200)

NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE

LIMITED

$

2,548,678

$

2,311,399

NET INCOME

2,660

2,199

OTHER COMPREHENSIVE INCOME

Total foreign currency translation adjustment

485,503

406,143

TOTAL COMPREHENSIVE INCOME

3,015,163

2,342

Less: comprehensive loss attributable to non-controlling interest

(21,314)

(13,580)

COMPREHENSIVE INCOME ATTRIBUTABLE TO BON

NATURAL LIFE LIMITED

$

3,036,477

$

2,714,922

EARNINGS PER SHARE

Basic

$

0.31

$

0.40

Diluted

$

0.30

$

0.40

WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING

Basic

8,381

5,000

Diluted

8,306

5,000

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the six months ended

March 31,

2022

2021

Cash flows from operating activities

Net income

$

2,660

$

2,199

Adjustments to reconcile net income to cash provided by operating

activities

Allowance for doubtful accounts

187

6,323

Depreciation and amortization

112,945

117,888

Deferred income tax

(28)

13,879

Amortization of operating lease right-of-use assets

33,122

26,195

Amortization of stock options

89,820

-

Unrealized foreign currency exchange loss

16,994

65,691

Gain on disposal of property and equipment

(745)

-

Changes in operating assets and liabilities:

Accounts receivable

(1,265,109)

(2,898,493)

Inventories

(515,690)

(391,958)

Advance to suppliers,net

977,033

1,738,442

Prepaid expenses and other current assets

(38,795)

(99,108)

Accounts payable

165,741

(760,103)

Operating lease liabilities

(30,589)

(21,975)

Taxes payable

(1,806,543)

1,120,847

Deferred revenue

(440,032)

403,246

Accrued expenses and other current liabilities

41,452

383,696

Net cash provided by (used in) operating activities

(130,577)

1,999,769

Cash flows from investing activities

Purchase of short-term investments

(3,678,199)

-

Proceeds upon redemption of short-term investments

5,273,186

-

Purchase of property and equipment

(10,231)

(715)

Proceeds from sales of property and equipment

1,659

Capital expenditures on construction-in-progress

(3,577,995)

-

Net cash used in investing activities

(1,991,580)

(715)

Cash flows from financing activities

Proceeds from short-term loans

1,608,378

943,517

Proceeds from long-term loans

594,864

685,067

Repayment of short-term loans

(41,945)

(457,729)

Repayment of long-term loans

(339,343)

(109,382)

Proceeds from (repayment of) borrowings from related parties

91,965

(1,391,813)

Proceeds from (repayment of) third party loans

-

(716,574)

Principal payment from (repayment of) capital lease

(89,465)

254,970

Payment for deferred offering costs

-

(155,557)

Net cash provided by (used in) financing activities

1,824,454

(947,501)

Effect of changes of foreign exchange rates on cash

2,915

(64,052)

Net increase (decrease) in cash

(294,788)

987,501

Cash,beginning of year

1,867

53,106

Cash,end of year

$

1,040,607

Supplemental disclosure of cash flow information

Cash paid for interest expense

$

277,764

$

215,268

Cash paid for income tax

$

785,853

$

1,424

Supplemental disclosure of non-cash investing and financing activities

Amortization of share-based compensation for initial public offering

services

$

89,820

$

316,668

Right-of-use assets obtained in exchange for operating lease

obligations

$

-

$

255,811

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