Bon Natural Life Limited Q4 FY2022 earnings call

Manufacturing Facilities

• Two facilities in Xi'an; Yumen Plant first phase construction completed as scheduled, expected to finish in May 2023, increasing fragrance compounds and bio-active food ingredients production capacity. Second phase for new proprietary products.

Proprietary Products

• FeatherPure female personal care product expected to bring ~$3 million in revenue over two years. Broccoli-based probiotic powdery drink launched, with plans for other cruciferous vegetable-based products like immune boosters, digestive health products, etc.

Growth Strategies

• Plan to expand product line with 2-3 new raw material categories. Carry out 2-3 mergers/acquisitions to enhance bio manufacturing technology and sales networking. Expand globally in US, Japan, Europe, SE Asia.

In fiscal year 2022, Bon Natural Life generated approximately $29.9 million in revenue, a 17.3% increase from the prior year. Fragrance compounds: Revenue increased 7.6% from $12.7 million to $13.7 million. Health supplements (powder drink): Increased 7.4% from $6.7 million to $7.1 million. Bioactive food ingredients: Grew 38.5% from $6.1 million to $9.1 million. Domestic China revenue was $28.8 million (96.1% of total), while overseas sales were $1.2 million (3.9% of total).

Yumen Plant

• First phase expected to complete in May 2023, increasing production capacity and potentially driving 130% annualized revenue growth. ### Overseas Sales
• Expect overseas sales to pick up in fiscal year 2023 as global logistics improve post-China reopening.

• Supply chain issues impacted fragrance compounds due to raw material shortages and COVID-19-related logistics disruptions. - Initial delay in Yumen Plant completion, but management expects no further delays post-China reopening.

Q: Regarding the delay in the Yumen plant completion, do you expect it to finish in May 2023 and what about production capacity and demand?

A: Management does not foresee further delays, expects completion in May 2023. Phase one increases fragrance compounds and bio-active food ingredients production capacity, with existing demand and plans to meet increased production.

Q: Why did overseas sales decline in 2022 and will the plan be adjusted?

A: Overseas sales declined due to port congestion in 2022 and global supply chain disruptions. Company expects overseas sales to pick up in fiscal year 2023.

Q: About accounts receivable over $6 million, any bad debt provisions?

A: Payment terms are 90 days, all payments on schedule, no bad debt provision as all payments were made according to schedule by January 2023