BOT Fundamentals - Let us calm down!

As many shareholders here, I am extremely disappointed with share price at the moment. I have spent some time today to think if my investment theory for BOT still holds (The answer is a big Yes). I am going to share my thinking with you, happy to get your feedback/comments.

* Is there anything wrong with recent results or the company that we are not aware of which might explain the sell down over the last 2-3 weeks which has caused the share price to drop from the highs of 19 cents to 11 cents? I don’t think so because:

1- There has been no changes at all (not a single share sold) in the holding of our two substantial shareholders since the last annual report (25 August 2020):

· Shenasaby Investments Pty Ltd who holds 70,738,187 shares (7.33%)

· Gayle McGarry and Caperi Pty Ltd who holds 59,573,874 shares (6.12%)

2- None of the company directors have sold any of their shares

* I strongly believe that the share price is way too low for the following reasons:

1- US institutional investors were happy to pay 21 centsper share on 1 August 2019 (a total of A$40m was raised). Back then, we didn’t finish Phase 2BTX 1503 and we have not started on phase 2a BTX1801. These US institutional investors including specialist US-based biotech investment funds and leading institutional investors have done their expert due diligence back then and they were happy to pay 21 cents. Now the company have been de-risked further with the successful completion of Phase 2 BTX 1503 and phase 2a BTX 1801. Weworth much more than 21 cents.

2- Argonaut conservative valuation for BOT share was 22.5 cents (Research on 4 February 2021)

3- Strong cash position (Cache at 31/12/2020 was A$19.2 Million). On 12 February 2021, we received A$6.87m R&D Tax Incentive Refund

4- FDA Granted BTX 1801 Qualified Infectious Disease Product Designation Status. This a significant milestone for Botanix as BTX 1801 (US$4.2bn focus market) is the first cannabinoid-based program to receive the designation globally and represents a strong endorsement of Botanix’s data. FDA QIDP creates multiple commercial benefits:

· QIDP status entitles BTX 1801 an extra five years of valuable FDA exclusivity: Up to 10 years of sales where generics cannot enter the market

· As well as eligibility for fast-track status: Enables more frequent communication with the FDA during development

· And priority FDA review which reduces time to the market: FDA guidance throughout development de-risks clinical trials

5- New antimicrobial data (which was published in in leading peer-reviewed research journal) also demonstrates the potential to develop novel structural analogs of cannabinoids with increased antimicrobial activity providing a foundation for the development of a whole new class of antimicrobials. “The published data clearly establishes Botanix as the world leader in characterising and exploiting the pharmaceutical potential of synthetic cannabinoids as antimicrobials – and vast potential for the development of novel and effective treatments. Structural activity characterized by Botanix (IP Position secured): This could be a gold mine for us

6- Significant upside potential– Multiple AMR Opportunities:

· Dialysis related infections from catheter usage

· C. Diff (Clostridium Difficile) causes diarrhea and colitis

· N. Gonorrhoeae (Gonorrhea) re-emerging STD with significant AMR challenges

· N. meningitidis (Meningitis) particular risk for infants

· Legionella pneumophila (Legionnaires disease) severe form of pneumonia

* Near term catalysts:

1- The planned BTX 1702 rosacea Phase 1b study is on track to commence in 1H CY 2021.

2- Planning is now underway for Phase 3 BTX 1503 clinical studies with the final outcomes informed by the completion of the BTX 1702 (rosacea) Phase 2 study

3- Antimicrobial platform planned to expand following the success last week with the BTX 1801 Phase 2a nasal decolonisation study.

4- The Company also continues to assess complementary opportunities and partnerships for products that can be rapidly brought to market.

5- Considerable M&A activity and investor interest in CBD (Jazz this week bid US$7.2B for GW Pharma). Maybe someone is interested to buy BOTANIX. If this is the case, you would expect at least 30 cents (very conservative) per share based on the great potential BOTANIX have, what US institutional investors paid on 1 August 2019 for when the company was much more riskier than what it is now

For the above, I think we need to calm down and hold our shares tightly. Anything below 20 cents is a steal. Fair share price at the moment is between 25 and 30cents in my opinion. Upside potential if things go our way is huge.

This is not a financial advice, please do your own research.

Good luck!

Regards,

Sam