UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
6-K
REPORT
OF FOREIGN PRIVATE ISSUER
PURSUANT
TO RULE 13a-16 OR 15d-16 OF THE
SECURITIES
EXCHANGE ACT OF 1934
For
the month of September 2023
Commission
File Number 001-40517
BON
NATURAL LIFE LIMITED
(Translation
of registrant’s name into English)
C601,
Gazelle Valley, No.69 Jinye Road
Xi’an
Hi-Tech Zone, Xi’an, China
People’s
Republic of China
(Address
of principal executive offices)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F ☒ Form
40-F ☐
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐
Note:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report
to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐
Note:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that
the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated,
domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on
which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to
be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the
subject of a Form 6-K submission or other Commission filing on EDGAR.
Bon
Natural Life Limited Announces Interim 2023 Results
Bon
Natural Life Limited (“we,” “us,” or “the Company”), a bio-ingredient solutions provider in the natural,
health and personal care industries engaged in the research and development, manufacturing and sales of functional active ingredients
extracted from natural herb plants which are widely used by manufacturer customers in the functional food, personal care, cosmetic and
pharmaceutical industries, today announced its unaudited financial results for the six months ended March 31, 2023.
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements. All statements contained in this report other than statements of historical fact, including
statements regarding our future results of operations and financial position, our business strategy and plans, and our objectives for
future operations, are forward-looking statements. The words “believe,” “may,” “will,” “estimate,”
“continue,” “anticipate,” “intend,” “expect,” and similar expressions are intended to
identify forward-looking statements. We have based these forward-looking statements largely on our current expectations and projections
about future events and trends that we believe may affect our financial condition, results of operations, business strategy, short-term
and long-term business operations and objectives, and financial needs. These forward-looking statements are subject to a number of risks,
uncertainties and assumptions, including those described in the “Risk Factors” section. Moreover, we operate in a very competitive
and rapidly changing environment. New risks emerge from time to time. It is not possible for our management to predict all risks, nor
can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual
results to differ materially from those contained in any forward-looking statements we may make. In light of these risks, uncertainties
and assumptions, the future events and trends discussed in this report may not occur and actual results could differ materially and adversely
from those anticipated or implied in the forward-looking statements.
2023
Interim Results Highlights
| ● | Revenue
- Total revenues were $14,149,967 for the six months ended March 31, 2023, an increase
of $461,567, or 3.4% as compared to $13,688,400 in the same period of 2022. |
| | | |
| ● | Income
from operation – for the six months ended March 31, 2023 was $2,985,234 increase
of $196,875 or 7.1% as compared to $2,788,359 in the same period of 2022. |
| | | |
| ● | Net
income attributable to Bon Natural Life Limited - for the six months ended March
31, 2023 was $2,119,760 as compared to $2,548,678 in the same period of 2022. |
| | | |
| ● | Earnings
per share – Basic earnings per shares was $0.24 per share for the six months ended
March 31, 2023 as compared to $0.31 in the same period of 2022. Diluted earnings
per shares was $0.24 per share for the six months ended March 31, 2023 as compared to $0.30
in the same period of 2022. |
COVID-19
Impact
Our
business operations have been affected and may continue to be affected by the ongoing COVID-19 pandemic. In December 2022, the Chinese
government lifted all the COVID-19 related restriction. As of the date of this report, the daily life in China is largely back to its
normal state. Although there were significant surges of COVID-19 cases in many cities in China during the period from January 2023 to
March 2023, the spread of the COVID-19 had been slowed down and it was under control currently in China. However, the impact of COVID-19
pandemic still depends on the future developments that cannot be accurately predicted at this time. A resurgence could cause city lockdown,
negatively affect the execution of customer contracts, the collection of customer payments, or disrupt our supply chain, and the continued
uncertainties associated with COVID 19 may cause our revenue and cash flows to underperform in the next 12 months from the date our unaudited
condensed consolidated interim financial statements for the six months ended March 31, 2023 are released. The extent of the future impact
of the COVID-19 pandemic on our business and results of operations is still uncertain.
Comparison
of Interim Financial Results for the six months ended March 31, 2023 and 2022
The
following table summarizes the results of our operations during the six months ended March 31, 2023 and 2022, respectively, and provides
information regarding the dollar and percentage increase or (decrease) during such periods.
| | |
In the Six Months Ended March 31, | |
| | |
2023 | | |
2022 | | |
Variance | |
| | |
Amount | | |
% of revenue | | |
Amount | | |
% of revenue | | |
Amount | | |
% | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| REVENUE | |
| 14,149,967 | | |
| 100.0 | % | |
| 13,688,400 | | |
| 100.0 | % | |
| 461,567 | | |
| 3.4 | % |
| COST OF REVENUE | |
| (9,432,619 | ) | |
| (66.7 | )% | |
| (9,652,453 | ) | |
| (70.5 | )% | |
| 219,834 | | |
| (2.3 | )% |
| GROSS PROFIT | |
| 4,717,348 | | |
| 33.3 | % | |
| 4,035,947 | | |
| 29.5 | % | |
| 681,401 | | |
| 16.9 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| OPERATING EXPENSES | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Selling expenses | |
| (136,164 | ) | |
| (1.0 | )% | |
| (83,970 | ) | |
| (0.6 | )% | |
| (52,194 | ) | |
| 62.2 | % |
| General and administrative expenses | |
| (1,465,955 | ) | |
| (10.4 | )% | |
| (998,943 | ) | |
| (7.3 | )% | |
| (467,012 | ) | |
| 46.8 | % |
| Research and development expenses | |
| (129,995 | ) | |
| (0.9 | )% | |
| (164,675 | ) | |
| (1.2 | )% | |
| 34,680 | | |
| (21.1 | )% |
| Total operating expenses | |
| (1,732,114 | ) | |
| (12.2 | )% | |
| (1,247,588 | ) | |
| (9.1 | )% | |
| (484,526 | ) | |
| 38.8 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| INCOME FROM OPERATIONS | |
| 2,985,234 | | |
| 21.1 | % | |
| 2,788,359 | | |
| 20.4 | % | |
| 196,875 | | |
| 7.1 | % |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| OTHER INCOME (EXPENSE) | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Interest expense, net | |
| (169,825 | ) | |
| (1.2 | )% | |
| (277,175 | ) | |
| (2.0 | )% | |
| 107,350 | | |
| (38.7 | )% |
| Other income, net | |
| (202,676 | ) | |
| (1.4 | )% | |
| 581,213 | | |
| 4.2 | % | |
| (783,889 | ) | |
| (134.9 | )% |
| Total other income (expenses), net | |
| (372,501 | ) | |
| (2.6 | )% | |
| 304,038 | | |
| 2.2 | % | |
| (676,539 | ) | |
| (222.5 | )% |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| INCOME BEFORE INCOME TAX PROVISION | |
| 2,612,733 | | |
| 18.5 | % | |
| 3,092,397 | | |
| 22.6 | % | |
| (479,664 | ) | |
| (15.5 | )% |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| PROVISION FOR INCOME TAXES | |
| (510,077 | ) | |
| (3.6 | )% | |
| (562,737 | ) | |
| (4.1 | )% | |
| 52,660 | | |
| (9.4 | )% |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| NET INCOME | |
| 2,102,656 | | |
| 14.9 | % | |
| 2,529,660 | | |
| 18.5 | % | |
| (427,004 | ) | |
| (16.9 | )% |
Revenues
We
currently produce our products for our customers in three broad product categories: fragrance compounds, health supplemental (powder
drinks) and bioactive food ingredients.
Total
revenues were $14,149,967 in the six months ended March 31, 2023, an increase of $461,567, or approximately 3.4% as compared to $13,688,400
in the same period of 2022. Specifically, the increase in revenues was primarily attributable to (i) an overall increase in sales volume
of fragrance compound, health supplemental powder drinks and bioactive food ingredients by 1.8%, 50.0% and 2.4%, due to strong customer
demand and our sales effort to promote sales of milk thistle extracts with benefits to protect liver and lower blood sugar. The increase
in sales order was also due to the decrease of price of fragrance compound, health supplemental powder drinks and bioactive food ingredients
by 10.1%, 8.6% and 7.5%, respectively, as we lowered our selling prices to attract more customers; (ii) We sold our products to 94 and
87 customers in the six months ended March 31, 2023 and 2022, respectively, representing an increase of 8.0%. In terms of purchase order
size, average purchase order by our customers decreased slightly by 4.5% from approximately $157,00 per customer in six months ended
March 31, 2022 to approximately $150,000 per customer in six months ended March 31, 2023; For the six months ended March 31, 2023, three
customers accounted for43.3%, 32.9% and 14.2% of the Company’s total revenue, respectively. For the six months ended March 31,
2022, three customers accounted for 44.0%, 24.4% and 11.2% of the Company’s total revenue, respectively; (iii) offset by a 9.5%
negative impact from foreign currency fluctuation when average exchange rate used in converting RMB into USD changed from US$1 to RMB
6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same period of 2023.
The
following table summarizes the breakdown of revenues by categories for the periods indicated.
| | |
Revenues | |
| | |
In the Six Months Ended March 31, | |
| | |
2023 | | |
2022 | | |
Change | | |
Change | |
| | |
Amount | | |
% | | |
Amount | | |
% | | |
Amount | | |
% | |
| | |
| | |
| | |
| | |
| | |
| | |
| |
| Fragrance compounds | |
$ | 6,810,374 | | |
| 48.1 | % | |
$ | 7,438,950 | | |
| 54.3 | % | |
$ | (628,576 | ) | |
| (8.4 | )% |
| Health supplements (powder drinks) | |
| 4,583,272 | | |
| 32.4 | % | |
| 3,340,530 | | |
| 24.4 | % | |
| 1,242,742 | | |
| 37.2 | % |
| Bioactive food ingredients | |
| 2,756,320 | | |
| 19.5 | % | |
| 2,908,919 | | |
| 21.3 | % | |
| (152,599 | ) | |
| (5.2 | )% |
| Total Revenue | |
$ | 14,149,967 | | |
| 100 | % | |
$ | 13,688,399 | | |
| 100.0 | % | |
$ | 461,567 | | |
| 3.4 | % |
Revenues
from sales of our fragrance compound products
Our
fragrance compound products primarily include natural compounds extracted from plants for cosmetic applications, such as sclareolide
and ambroxide, a sustainable replacement to ambergris, a secretion by sperm whales.
Revenues
from sales of our fragrance compound products decreased by 8.4% or $628,576 to $6,810,374 in the six months ended March 31, 2023 from
$7,438,950 in the same period of 2022. This decrease was attributable to the following: (i) a 10.1% decrease in average selling price
of our fragrance compound products. Weighted average unit cost for this product category decreased by 16.6% in the six months ended March
31, 2023, as compared to that in same period of 2022; (ii) a 9.5% negative impact from foreign currency fluctuation when average exchange
rate used in converting RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in
the same period of 2023; and (iii) the decrease is offset by a 1.8% increase of sales volume from 19,729 kilograms sold in the six months
ended March 31, 2022 to 20,093 kilograms sold in the same period of 2023.
Revenues
from sales of our health supplement (powder drinks) products
Our
health supplement (powder drinks) products primarily include Prebiotics series with benefits such as intestine rejuvenation and probiotic
proliferation acceleration.
Revenues
from sales of health supplement (powder drinks) products increased by 37.2% or $1,242,742 to $4,583,272 in the six months ended March
31, 2023 from $3,340,530 in the same period of 2022. This increase was attributable to the following: (i) an increase of 50% in sales
volume from 130,000 cases sold in the six months ended March 31, 2022 to 195,035 cases sold in the same period of 2023. (ii) the increase
is offset by a 9.5% negative impact from foreign currency fluctuation when average exchange rate used in converting RMB into USD changed
from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same period of 2023.
Revenues
from sales of our bioactive food ingredient products
Our
bioactive food ingredient products primarily include fruit juice concentrates and extracts for a variety of health benefits that can’t
be sufficiently sourced from daily dietary intakes, such as fruit concentrates, apple polyphenol, rich in anti-oxidant and derived from
apple, milk thistle extracts with benefits to protect liver and lower blood sugar, and phloretin, an anti-oxidant with skin discoloration
effect extracted from leaves and roots of apple, pear and other fruits.
Revenues
from sales of our bioactive food ingredient products decreased by 5.2% or $152,599 to $2,756,320 in the six months ended March 31, 2023
from $2,908,919 in the same period of 2022. The decrease was mainly attributable to the following: (i) a 7.5% decrease in average price
from $52.8 in the six months ended March 31, 2022 to $48.83 in the same period of 2023. (ii) a 9.5% negative impact from foreign currency
fluctuation when average exchange rate used in converting RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March
31, 2022 to US$1 to RMB 6.9761 in the same period of 2023. (iii) the decrease is offset by a 2.4% increase in sales volume from
55,104 kilograms in the six months ended March 31, 2023 to 56,444 kilograms in the same period of 2023 due to strong customer demand
and our sales effort to promote sales of milk thistle extracts with benefits to protect liver and lower blood sugar.
Cost
of Revenues
Our
cost of revenues primarily consists of inventory costs (raw materials, labor, packaging cost, depreciation and amortization, freight
costs and overhead) and business tax. Cost of revenues generally changes as our production costs change, which are affected by factors
including the market price of raw materials, or labor productivity, and as the customer and product mix changes.
Our
cost of revenues decreased by $219,834 or 2.3%, from $9,652,452 in the six months ended March 31, 2022 to $9,432,619 in the same period
of 2023. The decrease in our cost of revenues was mainly attributable to the following: (i) a decrease of 16.6% and 21.7% in the weighted
average unit cost of our fragrance compound products and bioactive food ingredients products, respectively, due to the decrease in raw
material purchase costs, as well as product mix change of fragrance compounds and bioactive food ingredients; (ii) sale volume of our
fragrance compound products, health supplemental powder drinks and bioactive food ingredients products increased by 1.8 %, 50.0% and
2.4% in the six months ended March 31, 2023 compared to the same period of 2022 due to strong customer demand and our sales effort to
promote sales of milk thistle extracts with benefits to protect liver and lower blood sugar, which we were able to negotiate for a better
price from our suppliers, and (iii) a 9.5% negative impact from foreign currency fluctuation when average exchange rate used in converting
RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same period of 2023.
| | |
In the Six Months Ended March 31, | |
| | |
2023 | | |
2022 | | |
Change | |
| | |
Amount | | |
Amount | | |
Amount | | |
% | |
| | |
| | |
| | |
| | |
| |
| Cost of revenues – Fragrance compound products | |
$ | 4,785,695 | | |
| 5,636,789 | | |
$ | (851,094 | ) | |
| (15.1 | )% |
| Cost of revenues – Health supplement (powder drinks) | |
| 3,168,714 | | |
| 2,171,757 | | |
| 996.957 | | |
| 45.9 | % |
| Cost of revenues – Bioactive food ingredients | |
| 1,478,210 | | |
| 1,843,907 | | |
| (365,697 | ) | |
| (19.8 | )% |
| Total cost of revenues | |
$ | 9,432,619 | | |
| 9,652,453 | | |
$ | (219,834 | ) | |
| (2.3 | )% |
Cost
of Revenues from sales of our fragrance compound products
The
15.1 % decrease in cost of revenues for our fragrance compound products from $5,636,789 in the six months ended March 31, 2022 to $4,785,695
in the same period of 2023 was mainly attributable to the following: (i) a decrease of 16.6% in weighted average unit cost for this product
category mainly due to lower raw material purchase costs as we were able to negotiate better prices from our suppliers; (ii) a 16.6%
decrease in weighted average unit cost from $285.7 in the six months ended March 31, 2022 to $238.2 in the same period of 2023; and (iii)
partially offset by an increase of 1.8% in sales volume from 19,729 kilograms sold in the six months ended March 31, 2022 to 20,093 kilograms
sold in the same period of 2023.
Cost
of Revenues from sales of our health supplement (powder drinks) products
The
45.9% increase in cost of revenues for our health supplement (powder drinks) products from $2,171,757 in the six months ended March 31,
2022 to $3,168,714 in the same period of 2023 was mainly attributable to the following: (i) an increase of 50.0% in sales volume from
130,000 cases sold in the six months ended March 31, 2023 to 195,035 cases sold in the same period of 2023, due to strong customer
demand; and partially offset by (ii) an decrease of 2.7% in weighted average unit cost for this product category mainly due to our ability
to negotiate better prices from our suppliers.
Cost
of Revenues from sales of our bioactive food ingredient products
The
19.8% decrease in cost of revenues for our bioactive food ingredient products from $1,843,907 in the six months ended March 31, 2022
to $1,478,210 in the same period of 2023 was mainly attributable to the following: (i) a decrease of 21.7% in weighted average unit cost
of our bioactive ingredient products as a result of decreased raw materials purchase price as affected by the change in product mix,
more milk thistle extracts products with lower average unit cost were sold in the six months ended March 31, 2023; and partially offset
by (ii) a 2.4% increase in sales volume from 55,104 kilograms in the six months ended March 31, 2022 to 56,444 kilograms in the same
period of 2023 due to strong customer demand and our sales effort to promote sales of milk thistle extracts with benefits to protect
liver and lower blood sugar.
Gross
Profit
| | |
In the Six Months Ended March 31, | |
| | |
2023 | | |
2022 | | |
Change | |
| | |
Amount | | |
Amount | | |
Amount | | |
% | |
| | |
| | |
| | |
| | |
| |
| Gross Profit – Fragrance compound products | |
$ | 2,024,680 | | |
$ | 1,802,161 | | |
$ | 222,518 | | |
| 12.3 | % |
| Gross Profit – Health supplement (powder drinks) | |
| 1,414,558 | | |
| 1,168,773 | | |
| 245,785 | | |
| 21.0 | % |
| Gross Profit – Bioactive food ingredients | |
| 1,278,111 | | |
| 1,065,013 | | |
| 213,098 | | |
| 20.0 | % |
| Total Gross Profit | |
$ | 4,717,348 | | |
$ | 4,035,947 | | |
$ | 681,401 | | |
| 16.9 | % |
| Gross Profit Margin | |
| 33.3 | % | |
| 29.5 | % | |
| | | |
| 3.9 | % |
Our
gross profit in the six months ended March 31, 2023 increased by $681,401 or 16.9%, to $4,717,348 from $4,035,947 in the same period
of 2022. Our gross margin increased by3.9% from 29.5% in the six months ended March 31, 2022 to 33.3% in the same period of 2022. The
increase in gross profit was due to (i) an overall increase of 32.6% in sales volume of all products due to stronger demand and change
in sales strategy as discussed above; (ii) a decrease of overall cost by 3.4% due to our ability to negotiate better prices from suppliers
as discussed above; and (iii) partially offset by a 9.5% negative impact from foreign currency fluctuation when average exchange rate
used in converting RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same
period of 2023. The increase in our gross margin by 3.9% from 29.5% in the six months ended March 31, 2022 to 33.3% in the same period
of 2023 was due to changes in product mix and decrease in weight average unit cost.
Gross
profit from sales of our fragrance compound products
Gross
profit of our fragrance compound products increased by $222,518 or12.3% from $1,802,161 in the six months ended March 31, 2022 to $2,024,680
in the same period of 2023. The increase was primarily attributable to (i) a 1.8% increase of sales volume from 19,729 kilograms sold
in the six months ended March 31, 2022 to 20,093 kilograms sold in the same period of 2023. (ii) a 16.6% decrease in weighted average
unit cost from $285.7 in the six months ended March 31, 2022 to $238.2in the same period of 2023, due to our ability to negotiate better
price from suppliers; and (iii) partially offset by a 9.5% negative impact from foreign currency fluctuation when average exchange rate
used in converting RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same
period of 2023. As a result of the above, gross margin for our fragrance compound products increased by percentage point from 24.2% in
the six months ended March 31, 2022, to 29.7% in the same period of 2023.
Gross
profit from sales of our health supplement (powder drinks) products
Gross
profit of our health supplement (powder drinks) products increased by $245,785 or 21% from $1,168,773in the six months ended March 31,
2022, to $1,414,558 in the same period of 2023. The increase was primarily attributable to: (i) an increase of 50.0% in sales volume
from 130,000 cases sold in the six months ended March 31, 2022 to 195,035 cases sold in the same period of 2023 as discussed above; (ii)
weighted average unit cost for this product category decreased by 2.7%(iii) a 9.5% negative impact from foreign currency fluctuation
when average exchange rate used in converting RMB into USD changed from US$1 to RMB 6.3712 in the six months ended March 31, 2022 to
US$1 to RMB 6.9761 in the same period of 2023.
Gross
profit from sales of our bioactive food ingredient products
Gross
profit of our bioactive food ingredient products increased by $213,098 or 20%, from $1,065,013 in the six months ended March 31, 2022,
to $1,278,111in the same period of 2023. This increase was primarily due to (i) a 2.4% increase in sales volume from 55,104 kilograms
in the six months ended March 31, 2023 to 56,444 kilograms in the same period of 2023 due to strong customer demand and our sales effort
to promote sales of milk thistle extracts with benefits to protect liver and lower blood sugar; (ii) a decrease of 21.7% in weighted
average unit cost of our bioactive ingredient products as a result of decreased raw materials purchase price as affected by the change
in product mix, more milk thistle extracts products with lower average unit cost were sold in the six months ended March 31, 2023; and
(iii) a 9.5% negative impact from foreign currency fluctuation when average exchange rate used in converting RMB into USD changed from
US$1 to RMB 6.3712 in the six months ended March 31, 2022 to US$1 to RMB 6.9761 in the same period of 2023.
Selling
expenses
| | |
In the six months ended | | |
Change | |
| (in US dollars, except percentage) | |
2023 | | |
2022 | | |
Amount | | |
% | |
| Selling Expenses | |
$ | 136,164 | | |
$ | 83,970 | | |
$ | 52,194 | | |
| 62.2 | % |
| as a percentage of revenues | |
| 1.0 | % | |
| 0.6 | % | |
| | | |
| | |
Selling
expenses increased by $52,194, or 62.2%, from $83,970 in the six months ended March 31, 2022, to $136,164 in the same period of 2023.
The increase mainly due to (i) a 202.4% increase in staff payroll from $18,948 in the six months ended March 31, 2022 to $57,305 compared
to the same period of 2023, as we expanded our sales effort and increase in our staff headcount from 3 in the six months ended March
31, 2022 to 11 compared to the same period of 2023; (ii) a 155.9% increase in shipping and handling expenses from $16,607 in the six
months ended March 31, 2022 to $42,491 compared to the same period of 2023, due to the increase in our sales volume; and partially offset
by (iii) a decrease of 78.7% of advertising expenses from $27,774 in the six months ended March 31, 2022 to $5,914 compared to the same
period of 2023, as we focus in our in-house sales network.
General
and administrative expenses
| | |
In the six months ended | | |
Change | |
| (in US dollars, except percentage) | |
2023 | | |
2022 | | |
Amount | | |
% | |
| General and Administrative Expenses | |
$ | 1,465,955 | | |
$ | 998,943 | | |
$ | 467,012 | | |
| 46.8 | % |
| as a percentage of revenues | |
| 10.4 | % | |
| 7.3 | % | |
| | | |
| | |
General
and administrative expenses increased by $467,012, or 46.8 %, from $998,943 in the six months ended March 31, 2022, to $1,465,955 in
the same period of 2023, mainly attributable to (i) a 44.2% increase in staff payroll from $206,412 in the six months ended March 31,
2022 to $297,578 compared to the same period of 2023,with an increase in average staff headcount from 21 in the six months ended March
31, 2022 to 25 compared to the same period of 2023; (ii) a 234.8% increase in rent expenses from $36,154 in the six months ended March
31, 2022 to $121,036 compared to the same period of 2023; (iii) a 42.7% increase in expenses such as professional service and
consulting fees and investor relations expenses, as we become a public company since we completed the IPO in July 2021.
Research
and development (“R&D”) expenses
| | |
In the six months ended | | |
Change | |
| (in US dollars, except percentage) | |
2023 | | |
2022 | | |
Amount | | |
% | |
| Research and Development Expenses | |
$ | 129,995 | | |
$ | 164,675 | | |
$ | (34,680 | ) | |
| (21.1 | )% |
| as a percentage of revenues | |
| 0.9 | % | |
| 1.2 | % | |
| | | |
| | |
Research
and development expenses decreased by $34,680, or approximately 21.10%, from $164,675 in the six months ended March 31, 2022, to $129,995
in the same period of 2023. The decrease was mainly due (i) a 79.3% decrease in staff payroll from $53,063 in the six months ended March
31, 2022 to $11,001 compared to the same period of 2023; (ii) a 34.4% decrease in outsourcing R&D activities to external consulting
firms from $69,022 in the six months ended March 31, 2022 to $45,260 compared to the same period of 2023.
Other
income (expenses)
Other
income (expenses) primarily includes interest income generated from our bank deposits, interest expenses incurred on our borrowings from
various banks and financial institutions, government subsidy income, rental income, income from technology transfer, unrealized foreign
currency exchange gain due to our export sales, and investment income of short-term investment.
| | |
In the six months ended | | |
Change | |
| (in US dollars, except percentage) | |
2023 | | |
2022 | | |
Amount | | |
% | |
| Interest expense, net | |
$ | (178,557 | ) | |
$ | (277,764 | ) | |
$ | 99,207 | | |
| (35.7 | )% |
| Foreign currency exchange gain (loss) | |
| 8,452 | | |
| (16,994 | ) | |
| 25,446 | | |
| (149.7 | )% |
| Other income, net | |
| | | |
| | | |
| | | |
| | |
| -Government grants | |
| 11,916 | | |
| 542,256 | | |
| (530,340 | ) | |
| (97.80 | )% |
| -Rental income | |
| 39,059 | | |
| 43,532 | | |
| (4,473 | ) | |
| (10.28 | )% |
| -Investment income | |
| - | | |
| 12,419 | | |
| (12,419 | ) | |
| (100.0 | )% |
Interest
expense, net, decreased by $99,207 or approximately 35.7% in the six months ended March 31, 2023 as compared to 2022. The decrease was
mainly attributable to decreased average loan balances in long-term loan that we carried during the six months ended March 31, 2023 compared
to the same period of 2022.
Government
subsidies received in the form of provincial-level export credit insurance subsidy and unemployment insurance expansion grant totaled
$11,916 in the six months ended March 31, 2023. Government subsidy income in the six months ended March 31, 2022 primarily relate to
local government’s cash award to HNTEs based on their financial performance to promote entrepreneurship and stimulate local economies.
Such awards are granted on a case-by-case basis by various local governments. Our subsidiary, Xi’an App-chem was approved as a
HNTE and received government subsidy in the form of an export sales refund and cash awards based on our annual financial performance.
We recognize government subsidies as other operating income when they are received because they are not subject to any past or future
conditions, there are no performance conditions or conditions of use, and they are not subject to future refunds.
Our
subsidiary, Xi’an App-Chem, leased office space to a third-party and recorded rental income of $39,059 and $43,532 in the six months
ended March 31, 2023 and 2022, respectively.
Investment
income related to income generated by our short-term investments, amounted to $Nil and $12,419 in the six months ended March 31, 2023
and 2022, respectively.
The
overall changes in our other income (expenses) reflected the above major factors.
Provision
for Income Taxes
Our
provision for income taxes was $510,007 in the six months ended March 31, 2023, a decrease of $52,660 or 9.4% from $562,737 in the same
period of 2022 mainly due to our decreased taxable income.
Net
income
As
a result of the foregoing, our net income decreased from $2,529,660 in the six months ended March 31, 2022 to $ 2,102,656 in the
same period of 2023.
Cash
Flow
As
of March 31, 2023, we had cash on hand of $542,272. The following table sets forth summary of our cash flows for the periods indicated:
| | |
In the Six Months Ended March 31, | |
| | |
2023 | | |
2022 | |
| Net cash used in operating activities | |
$ | (2,177,992 | ) | |
$ | (130,577 | ) |
| Net cash provided by (used in) investing activities | |
| 12,161 | | |
| (1,991,580 | ) |
| Net cash provided by financing activities | |
| 1,914,916 | | |
| 1,824,454 | |
| Effect of exchange rate change on cash | |
| (47,674 | ) | |
| 2,915 | |
| Net decrease in cash | |
| (298,589 | ) | |
| (294,788 | ) |
| Cash, beginning of period | |
| 840,861 | | |
| 1,903,867 | |
| Cash, end of period | |
$ | 542,272 | | |
$ | 1,609,079 | |
Cash
flows from operating activities
Net
cash used in operating activities during the six months ended March 31, 2023 was $2,177,992, primarily attributable to net income of
$2,102,656 for the six months ended March 31, 2023, our taxes payable increased by $386,510 primarily due to the increase in income and
VAT in the six months ended March 2023, an increase of $2,198,450 account receivable due to increased sales in the six months ended March
31, 2023, and an increase in inventory of $124,601 due to increase of the raw materials stockpile in order to prepare for anticipated
increase in production to fulfill increased sales orders from customers, an increase of $3,335,205 in accrued expenses and other current
liabilities.
Net
cash used in operating activities during the six months ended March 31, 2022 was $130,577, primarily attributable to net income of $2,529,660
for the six months ended March 31, 2022, our taxes payable decreased by $1,806,543 primarily due to income and VAT tax paid in March
2022, an increase of $1,265,109 account receivable due to increased sales in the six months ended March 31, 2022, and an increase in
inventory of $515,690 due to increase of the raw materials stockpile in order to prepare for anticipated increase in production to fulfill
increased sales orders from customers, offset by a decrease of $977,033 in advance payment to suppliers for raw material purchase.
Cash
flows from investing activities
Net
cash used in investing activities during the six months ended March 31, 2023 was $12,161 which was primarily attributable to a capital
expenditure on construction-in-progress in the amount of $15,131.
Net
cash used in investing activities during the six months ended March 31, 2022 was $1,991,580 which was primarily attributable to (i) capital
expenditure on construction-in-progress in the amount of $3,577,995, which we had two CIP projects in Tongchuan and Yumen City.
As of March 31, 2023, the new manufacturing facilities in Yumen City is still under construction and is expected to be
completed in March 2024. (ii) purchase of short-term investments in the amount of $3,678,199 because we purchased wealth management
financial products from PRC banks to earn investment income and (iii) partially offset by proceeds upon redemption of short-term investments
in the amount of $5,273,186.
Cash
flows from financing activities
Net
cash provided by financing activities during the six months ended March 31, 2023 was $1,914,916 primarily include net proceeds from issuance
of Ordinary Shares in initial public offerings of $2,200,000, proceeds from short-term loans of $259,767. repayment of long-term loans
of $437,412, repayment of short-term loans of $79,165 and principal payment from capital lease of $27,236.
Net
cash provided by financing activities during the six months ended March 31, 2022 was $1,824,454, primarily include proceeds from short-term
loans of $1,608,378, proceeds from long-term loans of $594,864, offset by repayment of long-term loans of $339,343.
During
the six months ended March 31, 2023, we experienced a net decrease in cash of $1,066,807 compared to 2022.
On September 11, 2023, we issued the press
release furnished herewith as Exhibit 99.2.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
| Date:
September 11, 2023 |
Bon
Natural Life Limited |
| |
|
|
| |
By: |
/s/
Yongwei Hu |
| |
|
Yongwei
Hu |
| |
|
Chairman
and Chief Executive Officer |
EXHIBIT
INDEX
Exhibit 99.1
BON NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | |
As of | |
| | |
March 31, 2023 | | |
September 30, 2022 | |
| ASSETS | |
| | |
| |
| CURRENT ASSETS | |
| | | |
| | |
| Cash | |
$ | 542,272 | | |
$ | 840,861 | |
| Accounts receivable, net | |
| 9,260,407 | | |
| 6,784,307 | |
| Inventories, net | |
| 1,803,374 | | |
| 1,722,120 | |
| Advance to suppliers, net | |
| 7,644,920 | | |
| 4,091,990 | |
| Acquisition deposit | |
| 1,000,000 | | |
| 1,000,000 | |
| Prepaid expenses and other current assets | |
| 3,967,756 | | |
| 277,509 | |
| TOTAL CURRENT ASSETS | |
| 24,218,729 | | |
| 14,716,787 | |
| | |
| | | |
| | |
| Property, plant and equipment, net | |
| 22,135,274 | | |
| 21,624,437 | |
| Intangible assets, net | |
| 373,751 | | |
| 366,167 | |
| Right-of-use lease assets, net | |
| 450,282 | | |
| 546,690 | |
| Deferred tax assets, net | |
| 29,023 | | |
| 2,768 | |
| TOTAL ASSETS | |
$ | 47,207,059 | | |
$ | 37,256,849 | |
| | |
| | | |
| | |
| LIABILITIES AND EQUITY | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | |
| Short-term loans | |
$ | 2,666,457 | | |
$ | 2,424,587 | |
| Current portion of long-term loans | |
| 1,934,411 | | |
| 2,135,979 | |
| Accounts payable | |
| 324,240 | | |
| 214,585 | |
| Due to related parties | |
| 120,203 | | |
| 72,836 | |
| Taxes payable | |
| 1,676,714 | | |
| 1,239,708 | |
| Deferred revenue | |
| 989,027 | | |
| 188,745 | |
| Accrued expenses and other current liabilities | |
| 3,503,550 | | |
| 114,431 | |
| Finance lease liabilities, current | |
| - | | |
| 26,285 | |
| Operating lease liability, current | |
| 247,397 | | |
| 230,182 | |
| TOTAL CURRENT LIABILITIES | |
| 11,461,999 | | |
| 6,647,338 | |
| | |
| | | |
| | |
| Long-term loans | |
| 30,336 | | |
| 189,813 | |
| Operating lease liability, noncurrent | |
| 212,955 | | |
| 327,202 | |
| TOTAL LIABILITIES | |
$ | 11,705,290 | | |
$ | 7,164,353 | |
| | |
| | | |
| | |
| COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| EQUITY | |
| | | |
| | |
| Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 11,146,226 and 8,396,226 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively | |
| 1,115 | | |
| 840 | |
| Additional paid in capital | |
| 17,946,174 | | |
| 15,711,450 | |
| Statutory reserve | |
| 1,804,116 | | |
| 1,804,116 | |
| Retained earnings | |
| 16,796,529 | | |
| 14,676,769 | |
| Accumulated other comprehensive income | |
| (1,559,550 | ) | |
| (2,631,171 | ) |
| TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS’ EQUITY | |
| 34,988,384 | | |
| 29,562,004 | |
| Non-controlling interest | |
| 513,387 | | |
| 530,492 | |
| TOTAL SHAREHOLDERS’ EQUITY | |
| 35,501,771 | | |
| 30,092,496 | |
| TOTAL LIABILITIES AND EQUITY | |
$ | 47,207,059 | | |
$ | 37,256,849 | |
BON NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(UNAUDITED)
| | |
For the six months ended March 31, | |
| | |
2023 | | |
2022 | |
| REVENUE | |
$ | 14,149,967 | | |
$ | 13,688,400 | |
| COST OF REVENUE | |
| (9,432,619 | ) | |
| (9,652,453 | ) |
| GROSS PROFIT | |
| 4,717,348 | | |
| 4,035,947 | |
| | |
| | | |
| | |
| OPERATING EXPENSES | |
| | | |
| | |
| Selling expenses | |
| (136,164 | ) | |
| (83,970 | ) |
| General and administrative expenses | |
| (1,465,955 | ) | |
| (998,943 | ) |
| Research and development expenses | |
| (129,995 | ) | |
| (164,675 | ) |
| Total operating expenses | |
| (1,732,114 | ) | |
| (1,247,588 | ) |
| | |
| | | |
| | |
| INCOME FROM OPERATIONS | |
| 2,985,234 | | |
| 2,788,359 | |
| | |
| | | |
| | |
| OTHER INCOME (EXPENSES) | |
| | | |
| | |
| Interest income | |
| 8,732 | | |
| 589 | |
| Interest expense | |
| (178,557 | ) | |
| (277,764 | ) |
| Unrealized foreign transaction exchange loss | |
| 8,452 | | |
| (16,994 | ) |
| Government subsidies | |
| 11,916 | | |
| 542,256 | |
| Income from short-term investments | |
| - | | |
| 12,419 | |
| Other income | |
| (223,043 | ) | |
| 43,532 | |
| Total other income, net | |
| (372,501 | ) | |
| 304,038 | |
| | |
| | | |
| | |
| INCOME BEFORE INCOME TAX PROVISION | |
| 2,617,733 | | |
| 3,092,397 | |
| | |
| | | |
| | |
| INCOME TAX PROVISION | |
| (510,077 | ) | |
| (562,737 | ) |
| | |
| | | |
| | |
| NET INCOME | |
| 2,102,656 | | |
| 2,529,660 | |
| Less: net loss attributable to non-controlling interest | |
| (17,104 | ) | |
| (19,018 | ) |
| NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | |
$ | 2,119,760 | | |
$ | 2,548,678 | |
| | |
| | | |
| | |
| NET INCOME | |
| 2,102,656 | | |
| 2,529,660 | |
| | |
| | | |
| | |
| OTHER COMPREHENSIVE INCOME | |
| | | |
| | |
| Total foreign currency translation adjustment | |
| 1,071,621 | | |
| 485,503 | |
| TOTAL COMPREHENSIVE INCOME | |
| 3,174,277 | | |
| 3,015,163 | |
| Less: comprehensive loss attributable to non-controlling interest | |
| (17,104 | ) | |
| (21,314 | ) |
| COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | |
$ | 3,191,381 | | |
$ | 3,036,477 | |
| | |
| | | |
| | |
| EARNINGS PER SHARE | |
| | | |
| | |
| Basic | |
$ | 0.24 | | |
$ | 0.31 | |
| Diluted | |
$ | 0.24 | | |
$ | 0.30 | |
| | |
| | | |
| | |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | |
| | | |
| | |
| Basic | |
| 8,918,309 | | |
| 8,350,381 | |
| Diluted | |
| 8,979,243 | | |
| 8,386,306 | |
BON NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
SHAREHOLDERS’ EQUITY
FOR THE SIX MONTHS ENDED MARCH 31, 2023 AND
2022
(UNAUDITED)
| | |
Common shares | | |
Additional paid-in | | |
Statutory | | |
Retained | | |
Accumulated other comprehensive | | |
Total shareholders’ | | |
Non- controlling | | |
Total | |
| | |
Shares | | |
Amount | | |
capital | | |
reserve | | |
earnings | | |
loss | | |
equity | | |
interest | | |
equity | |
| Balance at September 30, 2021 | |
| 8,330,000 | | |
$ | 833 | | |
$ | 15,540,433 | | |
$ | 1,050,721 | | |
$ | 9,192,676 | | |
$ | 222,221 | | |
$ | 26,006,884 | | |
$ | 527,865 | | |
$ | 26,534,749 | |
| Non-cash exercise of warrants | |
| 20,381 | | |
| 2 | | |
| (2 | ) | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | |
| Amortization of share-based compensation | |
| - | | |
| - | | |
| 89,820 | | |
| - | | |
| - | | |
| - | | |
| 89,820 | | |
| - | | |
| 89,820 | |
| Net income (loss) | |
| - | | |
| - | | |
| - | | |
| - | | |
| 2,548,678 | | |
| - | | |
| 2,548,678 | | |
| (19,018 | ) | |
| 2,529,660 | |
| Foreign currency translation adjustment | |
| - | | |
| - | | |
| - | | |
| - | | |
| - | | |
| 487,799 | | |
| 487,799 | | |
| (2,296 | ) | |
| 485,503 | |
| Balance at March 31, 2022 | |
| 8,350,381 | | |
$ | 835 | | |
$ | 15,630,251 | | |
$ | 1,050,721 | | |
$ | 11,741,354 | | |
$ | 710,020 | | |
$ | 29,133,181 | | |
$ | 506,551 | | |
$ | 29,639,732 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at September 30, 2022 | |
| 8,396,226 | | |
$ | 840 | | |
$ | 15,711,450 | | |
$ | 1,804,116 | | |
$ | 14,676,769 | | |
$ | (2,631,171 | ) | |
$ | 29,562,004 | | |
$ | 530,492 | | |
$ | 30,092,496 | |
| Issuance of ordinary shares in initial public offerings, net | |
| 2,750,000 | | |
| 275 | | |
| 2,199,725 | | |
| - | | |
| - | | |
| - | | |
| 2,200,000 | | |
| - | | |
| 2,200,000 | |
| Amortization of stock options | |
| - | | |
| - | | |
| 35,000 | | |
| - | | |
| | | |
| - | | |
| 35,000 | | |
| - | | |
| 35,000 | |
| Net income (loss) | |
| - | | |
| -- | | |
| - | | |
| - | | |
| 2,119,760 | | |
| - | | |
| 2,119,760 | | |
| (17,104 | ) | |
| 2,102,656 | |
| Foreign currency translation adjustment | |
| - | | |
| - | | |
| | | |
| - | | |
| - | | |
| 1,071,621 | | |
| 1,071,621 | | |
| - | | |
| 1,071,621 | |
| | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | |
| Balance at March 31, 2023 | |
| 11,146,226 | | |
$ | 1,115 | | |
$ | 17,946,175 | | |
$ | 1,804,116 | | |
$ | 16,796,529 | | |
$ | (1,559,550 | ) | |
$ | 34,988,384 | | |
$ | 513,387 | | |
$ | 35,501,771 | |
BON NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | |
For the six months ended March 31, | |
| | |
2023 | | |
2022 | |
| Cash flows from operating activities | |
| | | |
| | |
| Net income | |
$ | 2,102,656 | | |
$ | 2,529,660 | |
| Adjustments to reconcile net income to cash provided by operating activities | |
| | | |
| | |
| Allowance for doubtful accounts | |
| - | | |
| 187 | |
| Depreciation and amortization | |
| 282,888 | | |
| 112,945 | |
| Inventory reserve | |
| 105,314 | | |
| - | |
| Deferred income tax | |
| (25,749 | ) | |
| (28 | ) |
| Amortization of operating lease right-of-use assets | |
| 114,179 | | |
| 33,122 | |
| Amortization of stock options | |
| 35,000 | | |
| 89,820 | |
| Unrealized foreign currency exchange loss | |
| (8,452 | ) | |
| 16,994 | |
| Gain on disposal of property and equipment | |
| - | | |
| (745 | ) |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (2,198,450 | ) | |
| (1,265,109 | ) |
| Inventories | |
| (124,601 | ) | |
| (515,690 | ) |
| Advance to suppliers, net | |
| (3,353,433 | ) | |
| 977,033 | |
| Prepaid expenses and other current assets | |
| (3,595,458 | ) | |
| (38,795 | ) |
| Accounts payable | |
| 100,386 | | |
| 165,741 | |
| Operating lease liabilities | |
| (115,170 | ) | |
| (30,589 | ) |
| Taxes payable | |
| 386,510 | | |
| (1,806,543 | ) |
| Deferred revenue | |
| 781,183 | | |
| (440,032 | ) |
| Accrued expenses and other current liabilities | |
| 3,335,205 | | |
| 41,452 | |
| Net cash used in operating activities | |
| (2,177,992 | ) | |
| (130,577 | ) |
| | |
| | | |
| | |
| 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 | |
| (15,131 | ) | |
| (10,231 | ) |
| Proceeds from sales of property and equipment | |
| - | | |
| 1,659 | |
| Capital expenditures on construction-in-progress | |
| (2,970 | ) | |
| (3,577,995 | ) |
| Net cash used in investing activities | |
| (18,101 | ) | |
| (1,991,580 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Net proceeds from issuance of Ordinary Shares in initial public offerings | |
| 2,200,000 | | |
| - | |
| Proceeds from short-term loans | |
| 259,767 | | |
| 1,608,378 | |
| Proceeds from long-term loans | |
| - | | |
| 594,864 | |
| Repayment of short-term loans | |
| (79,165 | ) | |
| (41,945 | ) |
| Repayment of long-term loans | |
| (437,412 | ) | |
| (339,343 | ) |
| Proceeds from (repayment of) borrowings from related parties | |
| (1,038 | ) | |
| 91,965 | |
| Principal repayment of capital lease | |
| (27,236 | ) | |
| (89,465 | ) |
| Net cash provided by financing activities | |
| 1,914,916 | | |
| 1,824,454 | |
| | |
| | | |
| | |
| Effect of changes of foreign exchange rates on cash | |
| (17,412 | ) | |
| 2,915 | |
| Net decrease in cash | |
| (298,589 | ) | |
| (294,788 | ) |
| Cash, beginning of period | |
| 840,861 | | |
| 1,903,867 | |
| Cash, end of period | |
$ | 542,272 | | |
$ | 1,609,079 | |
| | |
| | | |
| | |
| Supplemental disclosure of cash flow information | |
| | | |
| | |
| Cash paid for interest expense | |
$ | 178,557 | | |
$ | 277,764 | |
| Cash paid for income tax | |
$ | 500,251 | | |
$ | 785,853 | |
| Supplemental disclosure of non-cash investing and financing activities | |
| | | |
| | |
| Amortization of share-based compensation for initial public offering services | |
$ | 35,000 | | |
$ | 89,820 | |
| Right-of-use assets obtained in exchange for operating lease obligations | |
$ | 458,181 | | |
$ | - | |
Exhibit
99.2
1H-2023
Revenue increases by 3.4% to 14.1 million
XI’AN,
China, Sep. 11, 2023 (GLOBE NEWSWIRE) – 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, 2023.
1H-2023
Financial Highlights
| |
● |
Revenue
- Total revenues were $14.1 million, representing a 3.4% increase from US$13.7 million for the same period in 2022. |
| |
|
|
| |
● |
Income
from operation – for the six months ended March 31, 2023 was $2,985,234 increase of $196,875 or 7.1% as compared to $2,788,359
in the same period of 2022. |
| |
|
|
| |
● |
Net
income attributable to Bon Natural Life Limited - for the six months ended March 31, 2023 was $2,119,760 as compared to
$2,548,678 in the same period of 2022. |
| |
|
|
| |
● |
Earnings
per share – Basic earnings per shares was $0.24 per share for the six months ended March 31, 2023 as compared to $0.31
in the same period of 2022. Diluted earnings per shares was $0.24 per share for the six months ended March 31, 2023 as
compared to $0.30 in the same period of 2022. |
1H-2023
Product Categories Summary: Growth vs. Prior Year
| | |
Revenues increase (decrease) | | |
Gross Profits increase
(decrease) | |
| Fragrance Compounds | |
| (8.4 | )% | |
| 12.3 | % |
| Health Supplements (Powder Drinks) | |
| 37.2 | % | |
| 21.0 | % |
| Bioactive Food Ingredients | |
| (5.2 | )% | |
| 20.0 | % |
Fragrance
Compounds
Revenues
from sales of fragrance compound products decreased by 8.4% to US$6.8 million in the six months ended March 31, 2023 from US$7.4 million
for the same period in 2022. The decrease was primarily attributable to a 10.1% decrease in average selling price and a 9.5% negative
impact from currency exchange, partially offset by an increase of 1.8% in sales volume.
Gross
profit from fragrance compound products increased by 12.3% to US$2.0 million from US$1.8 million for the same period in 2022. The increase
was primarily attributable to a 16.6% decrease in cost of products due to our ability to negotiate better price from suppliers and an
increase of 1.8% in sales volume, partially offset by a 9.5% negative impact from currency exchange.
Health
Supplements (Powder Drinks)
Revenues
from sales of health supplement (powder drinks) products increased by 37.2% to US$4.6 million in the six months ended March 31, 2023
from US$3.3 million for the same period in 2022. The increase was primarily attributable to an increase of 50% in sales volume and partially
offset by a 9.5% negative impact from currency exchange.
Gross
profit from health supplement (powder drinks) products increased by 21.0% to US$1.4 million from US$1.2 million for the same period in
2022. The increase was primarily attributable to the above referenced factors.
Bioactive
Food Ingredients
Revenues
from sales of bioactive food ingredient products decreased by 5.2% to US$2.8 million in the six months ended March 31, 2023 from US$2.9
million for the same period in 2022. The decrease was primarily attributable to a 7.5% decrease in average price and a 9.5% negative
impact from currency exchange, partially offset by a 2.4% increase in sales volume due to strong customer demand and sales effort.
Gross
profit from bioactive food ingredient products increased by 20.0% to US$1.3 million from US$1.1 million for the same period in 2022.
The increase was mainly due to a 2.4% increase in sales volume and a decrease of 21.7% in cost of products due to the decreased raw materials
purchase price, partially offset by a 9.5% negative impact from currency exchange.
General
and administrative expenses increased by $467,012, or approximately 46.8%, from $998,943 in the six months ended March 31, 2022,
to $1,465,955 in the same period of 2023, mainly attributable to an increase of 44.2% in staff payroll due to the increase in staff headcount,
a 234.8% increase in rent expenses and a 42.7% increase in expenses such as professional service and consulting fees and investor relation
expenses, etc. as we become a public company since we completed the IPO in July 2021.
Research
and development (“R&D”) expenses decreased by $34,680, or approximately 21.1%, from $164,675 in the six months ended
March 31, 2022, to $129,995 in the same period of 2023. The decrease was mainly due to a 79.3% decrease in staff payroll and a 34.4%
decrease in outsourcing R&D activities to external consulting firms.
Government
subsidies received in the form of provincial-level export credit insurance subsidy and unemployment insurance expansion grant totaled
$11,916 in the six months ended March 31, 2023.
Net
income decreased from $2.5 million in the six months ended March 31, 2022 to $2.1 million in the same period of 2023.
Net
cash used in operating activities during the six months ended March 31, 2023 was $2,177,992 compared to net cash used in operating
activities of $130,577 in the same period of 2022.
Diluted
earnings per share (“EPS”) was $0.24, compared to $0.30 for the same period in 2022.
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
About
Bon 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 at www.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 in China and 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 in China and
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 at www.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:
Bon
Natural Life
Cindy
Liu | IR
Email:
bonnatural@appchem.cn
BON
NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| | |
As of | |
| | |
March 31, 2023 | | |
September 30, 2022 | |
| ASSETS | |
| | | |
| | |
| CURRENT ASSETS | |
| | | |
| | |
| Cash | |
$ | 542,272 | | |
$ | 840,861 | |
| Accounts receivable, net | |
| 9,260,407 | | |
| 6,784,307 | |
| Inventories, net | |
| 1,803,374 | | |
| 1,722,120 | |
| Advance to suppliers, net | |
| 7,644,920 | | |
| 4,091,990 | |
| Acquisition deposit | |
| 1,000,000 | | |
| 1,000,000 | |
| Prepaid expenses and other current assets | |
| 3,967,756 | | |
| 277,509 | |
| TOTAL CURRENT ASSETS | |
| 24,218,729 | | |
| 14,716,787 | |
| | |
| | | |
| | |
| Property, plant and equipment, net | |
| 22,135,274 | | |
| 21,624,437 | |
| Intangible assets, net | |
| 373,751 | | |
| 366,167 | |
| Right-of-use lease assets, net | |
| 450,282 | | |
| 546,690 | |
| Deferred tax assets, net | |
| 29,023 | | |
| 2,768 | |
| TOTAL ASSETS | |
$ | 47,207,059 | | |
$ | 37,256,849 | |
| | |
| | | |
| | |
| LIABILITIES AND EQUITY | |
| | | |
| | |
| CURRENT LIABILITIES | |
| | | |
| | |
| Short-term loans | |
$ | 2,666,457 | | |
$ | 2,424,587 | |
| Current portion of long-term loans | |
| 1,934,411 | | |
| 2,135,979 | |
| Accounts payable | |
| 324,240 | | |
| 214,585 | |
| Due to related parties | |
| 120,203 | | |
| 72,836 | |
| Taxes payable | |
| 1,676,714 | | |
| 1,239,708 | |
| Deferred revenue | |
| 989,027 | | |
| 188,745 | |
| Accrued expenses and other current liabilities | |
| 3,503,550 | | |
| 114,431 | |
| Finance lease liabilities, current | |
| - | | |
| 26,285 | |
| Operating lease liability, current | |
| 247,397 | | |
| 230,182 | |
| TOTAL CURRENT LIABILITIES | |
| 11,461,999 | | |
| 6,647,338 | |
| | |
| | | |
| | |
| Long-term loans | |
| 30,336 | | |
| 189,813 | |
| Operating lease liability, noncurrent | |
| 212,955 | | |
| 327,202 | |
| TOTAL LIABILITIES | |
$ | 11,705,290 | | |
$ | 7,164,353 | |
| | |
| | | |
| | |
| COMMITMENTS AND CONTINGENCIES | |
| | | |
| | |
| EQUITY | |
| | | |
| | |
| Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 11,146,226 and 8,396,226 shares issued and outstanding as of March 31, 2023 and September 30, 2022, respectively | |
| 1,115 | | |
| 840 | |
| Additional paid in capital | |
| 17,946,174 | | |
| 15,711,450 | |
| Statutory reserve | |
| 1,804,116 | | |
| 1,804,116 | |
| Retained earnings | |
| 16,796,529 | | |
| 14,676,769 | |
| Accumulated other comprehensive income | |
| (1,559,550 | ) | |
| (2,631,171 | ) |
| TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS’ EQUITY | |
| 34,988,384 | | |
| 29,562,004 | |
| Non-controlling interest | |
| 513,387 | | |
| 530,492 | |
| TOTAL SHAREHOLDERS’ EQUITY | |
| 35,501,771 | | |
| 30,092,496 | |
| TOTAL LIABILITIES AND EQUITY | |
$ | 47,207,059 | | |
$ | 37,256,849 | |
BON
NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| | |
For the six months ended March 31, | |
| | |
2023 | | |
2022 | |
| REVENUE | |
$ | 14,149,967 | | |
$ | 13,688,400 | |
| COST OF REVENUE | |
| (9,432,619 | ) | |
| (9,652,453 | ) |
| GROSS PROFIT | |
| 4,717,348 | | |
| 4,035,947 | |
| | |
| | | |
| | |
| OPERATING EXPENSES | |
| | | |
| | |
| Selling expenses | |
| (136,164 | ) | |
| (83,970 | ) |
| General and administrative expenses | |
| (1,465,955 | ) | |
| (998,943 | ) |
| Research and development expenses | |
| (129,995 | ) | |
| (164,675 | ) |
| Total operating expenses | |
| (1,732,114 | ) | |
| (1,247,588 | ) |
| | |
| | | |
| | |
| INCOME FROM OPERATIONS | |
| 2,985,234 | | |
| 2,788,359 | |
| | |
| | | |
| | |
| OTHER INCOME (EXPENSES) | |
| | | |
| | |
| Interest income | |
| 8,732 | | |
| 589 | |
| Interest expense | |
| (178,557 | ) | |
| (277,764 | ) |
| Unrealized foreign transaction exchange loss | |
| 8,452 | | |
| (16,994 | ) |
| Government subsidies | |
| 11,916 | | |
| 542,256 | |
| Income from short-term investments | |
| - | | |
| 12,419 | |
| Other income | |
| (223,043 | ) | |
| 43,532 | |
| Total other income, net | |
| (372,501 | ) | |
| 304,038 | |
| | |
| | | |
| | |
| INCOME BEFORE INCOME TAX PROVISION | |
| 2,617,733 | | |
| 3,092,397 | |
| | |
| | | |
| | |
| INCOME TAX PROVISION | |
| (510,077 | ) | |
| (562,737 | ) |
| | |
| | | |
| | |
| NET INCOME | |
| 2,102,656 | | |
| 2,529,660 | |
| Less: net loss attributable to non-controlling interest | |
| (17,104 | ) | |
| (19,018 | ) |
| NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | |
$ | 2,119,760 | | |
$ | 2,548,678 | |
| | |
| | | |
| | |
| NET INCOME | |
| 2,102,656 | | |
| 2,529,660 | |
| | |
| | | |
| | |
| OTHER COMPREHENSIVE INCOME | |
| | | |
| | |
| Total foreign currency translation adjustment | |
| 1,071,621 | | |
| 485,503 | |
| TOTAL COMPREHENSIVE INCOME | |
| 3,174,277 | | |
| 3,015,163 | |
| Less: comprehensive loss attributable to non-controlling interest | |
| (17,104 | ) | |
| (21,314 | ) |
| COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED | |
$ | 3,191,381 | | |
$ | 3,036,477 | |
| | |
| | | |
| | |
| EARNINGS PER SHARE | |
| | | |
| | |
| Basic | |
$ | 0.24 | | |
$ | 0.31 | |
| Diluted | |
$ | 0.24 | | |
$ | 0.30 | |
| | |
| | | |
| | |
| WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING | |
| | | |
| | |
| Basic | |
| 8,918,309 | | |
| 8,350,381 | |
| Diluted | |
| 8,979,243 | | |
| 8,386,306 | |
BON
NATURAL LIFE LIMITED AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| | |
For the six months ended March 31, | |
| | |
2023 | | |
2022 | |
| Cash flows from operating activities | |
| | | |
| | |
| Net income | |
$ | 2,102,656 | | |
$ | 2,529,660 | |
| Adjustments to reconcile net income to cash provided by operating activities | |
| | | |
| | |
| Allowance for doubtful accounts | |
| - | | |
| 187 | |
| Depreciation and amortization | |
| 282,888 | | |
| 112,945 | |
| Inventory reserve | |
| 105,314 | | |
| - | |
| Deferred income tax | |
| (25,749 | ) | |
| (28 | ) |
| Amortization of operating lease right-of-use assets | |
| 114,179 | | |
| 33,122 | |
| Amortization of stock options | |
| 35,000 | | |
| 89,820 | |
| Unrealized foreign currency exchange loss | |
| (8,452 | ) | |
| 16,994 | |
| Gain on disposal of property and equipment | |
| - | | |
| (745 | ) |
| Changes in operating assets and liabilities: | |
| | | |
| | |
| Accounts receivable | |
| (2,198,450 | ) | |
| (1,265,109 | ) |
| Inventories | |
| (124,601 | ) | |
| (515,690 | ) |
| Advance to suppliers, net | |
| (3,353,433 | ) | |
| 977,033 | |
| Prepaid expenses and other current assets | |
| (3,595,458 | ) | |
| (38,795 | ) |
| Accounts payable | |
| 100,386 | | |
| 165,741 | |
| Operating lease liabilities | |
| (115,170 | ) | |
| (30,589 | ) |
| Taxes payable | |
| 386,510 | | |
| (1,806,543 | ) |
| Deferred revenue | |
| 781,183 | | |
| (440,032 | ) |
| Accrued expenses and other current liabilities | |
| 3,335,205 | | |
| 41,452 | |
| Net cash used in operating activities | |
| (2,177,992 | ) | |
| (130,577 | ) |
| | |
| | | |
| | |
| 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 | |
| (15,131 | ) | |
| (10,231 | ) |
| Proceeds from sales of property and equipment | |
| - | | |
| 1,659 | |
| Capital expenditures on construction-in-progress | |
| (2,970 | ) | |
| (3,577,995 | ) |
| Net cash used in investing activities | |
| (18,101 | ) | |
| (1,991,580 | ) |
| | |
| | | |
| | |
| Cash flows from financing activities | |
| | | |
| | |
| Net proceeds from issuance of Ordinary Shares in initial public offerings | |
| 2,200,000 | | |
| - | |
| Proceeds from short-term loans | |
| 259,767 | | |
| 1,608,378 | |
| Proceeds from long-term loans | |
| - | | |
| 594,864 | |
| Repayment of short-term loans | |
| (79,165 | ) | |
| (41,945 | ) |
| Repayment of long-term loans | |
| (437,412 | ) | |
| (339,343 | ) |
| Proceeds from (repayment of) borrowings from related parties | |
| (1,038 | ) | |
| 91,965 | |
| Principal repayment of capital lease | |
| (27,236 | ) | |
| (89,465 | ) |
| Net cash provided by financing activities | |
| 1,914,916 | | |
| 1,824,454 | |
| | |
| | | |
| | |
| Effect of changes of foreign exchange rates on cash | |
| (17,412 | ) | |
| 2,915 | |
| Net decrease in cash | |
| (298,589 | ) | |
| (294,788 | ) |
| Cash, beginning of period | |
| 840,861 | | |
| 1,903,867 | |
| Cash, end of period | |
$ | 542,272 | | |
$ | 1,609,079 | |
| | |
| | | |
| | |
| Supplemental disclosure of cash flow information | |
| | | |
| | |
| Cash paid for interest expense | |
$ | 178,557 | | |
$ | 277,764 | |
| Cash paid for income tax | |
$ | 500,251 | | |
$ | 785,853 | |
| Supplemental disclosure of non-cash investing and financing activities | |
| | | |
| | |
| Amortization of share-based compensation for initial public offering services | |
$ | 35,000 | | |
$ | 89,820 | |
| Right-of-use assets obtained in exchange for operating lease obligations | |
$ | 458,181 | | |
$ | - | |
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