BION ENVIRONMENTAL TECHNOLOGIES INC

Previous wording

THE COMPANY HAS BEEN UNDER SUBSTANTIAL FINANCIAL AND MANAGEMENT STRESS OF THE PAST SIX MONTHS (AND THE CURRENT QUARTER TO DATE) DUE TO THE RECENT DEATH (FOLLOWING EXTENDED ILLNESS) OF DOMINIC BASSANI (WHO MOST RECENTLY SERVED AS OUR COO (FROM MAY 2022) AFTER SERVING AS OUR CEO FOR THE PRIOR DECADE) AND DIFFICULTIES IN RAISING NEEDED FUNDS (WHICH RE-EMERGED LATE IN THE 2023 FISCAL YEAR AND HAS CONTINUED). THE COMPANY IS FACING INCREASED CAPITAL NEEDS AND THE NEED TO TRANSITION TO A YOUNGER MANAGEMENT TEAM (MARK A. SMITH, THE COMPANY’S PRESIDENT AND GENERAL COUNSEL PROVIDED NOTICE DURING EARLY 2023 OF HIS INTENT TO PHASE OUT HIS MANAGEMENT ROLES EARLY THIS CALENDAR YEAR). THESE ITEMS HAVE BEEN PREVIOUSLY DISCLOSED BUT THE COMPANY BELIEVES IT IS IMPORTANT TO FEATURE THEM ‘UPFRONT’ AT THIS POINT.

Current wording

THE COMPANY HAS BEEN UNDER SUBSTANTIAL FINANCIAL AND MANAGEMENT STRESS OF THE PAST NINE MONTHS (AND THE CURRENT QUARTER TO DATE) DUE TO THE PASSING (FOLLOWING EXTENDED ILLNESS) OF DOMINIC BASSANI (WHO MOST RECENTLY SERVED AS OUR COO (FROM MAY 2022) AFTER SERVING AS OUR CEO FOR THE PRIOR DECADE) AND DIFFICULTIES IN RAISING NEEDED FUNDS (WHICH RE-EMERGED LATE IN THE 2023 FISCAL YEAR AND HAS CONTINUED). THE COMPANY IS FACING INCREASED CAPITAL NEEDS AND THE NEED TO TRANSITION TO A YOUNGER MANAGEMENT TEAM (MARK A. SMITH, THE COMPANY’S PRESIDENT AND GENERAL COUNSEL PROVIDED NOTICE DURING EARLY 2023 OF HIS INTENT TO PHASE OUT HIS MANAGEMENT ROLES EARLY THIS CALENDAR YEAR). THESE ITEMS HAVE BEEN PREVIOUSLY DISCLOSED BUT THE COMPANY BELIEVES IT IS IMPORTANT TO FEATURE THEM ‘UPFRONT’ AT THIS POINT.

Previous wording

**A:The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing Projects, JVs and proposed Projects will not be sufficient to meet the Company’s anticipated operational and capital expenditure needs for many years. Current liabilities were approximately $4.2 million and $1.6 million at December 31, 2023 and 2022, respectively. There was an increase of approximately $2.6 million (which was largely due to an increase in ‘accounts payable and accrued expenses’ totaling approximately $2.0 million and an increase in ‘deferred compensation’ of approximately $.35 million as a result of the Company’s limited success in raising new financing (equity and/or debt) during the recent period combined with continued expenses (including those related to the Initial Project).See NOTE 1, “Going Concern and Management’s Plans” above and “Plan of Operations and Outlook” below.

Current wording

**A:The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing Projects, JVs and proposed Projects will not be sufficient to meet the Company’s anticipated operational and capital expenditure needs for many years. Current liabilities were approximately $4.5 million at March 31, 2024 which represents an increase of approximately $2.9 million from June 30, 2023 (largely due to an increase in ‘accounts payable and accrued expenses’ totaling approximately $2.1 million and an increase in ‘deferred compensation’ of approximately $.9 million as a result of the Company’s limited success in raising new financing (equity and/or debt) during the recent period combined with continued expenses (including those related to the Initial Project). Similarly, the cash on hand decreased from approximately $625,000 to approximately $50,000 over the same period. See NOTE 1, “Going Concern and Management’s Plans” and “Plan of Operations and Outlook” above.

Previous wording

B:On September 28, 2023 the Company entered into an agreement for a $1,500,000 bridge loan and executed documents including a convertible promissory note (“Note”) and a binding subscription agreement (“Subscription”) (collectively the Note and the Subscription are the “Bridge Loan Agreements”) with SEB LLC, a non-affiliated party (“Lender”). The Bridge Loan Agreements require the Lender to loan the Company $1,500,000 in six monthly tranches of $250,000 commencing October 2023. All sums advanced under the Bridge Loan Agreements (and accrued interest thereon) would due and payable (with interest accrued at 8% per annum) on October 1, 2024 if not previously converted into securities of the Company. The Note is convertible at $1.00 per unit, at the sole election of the Lender, into units consisting of one share of the Company’s common stock and a warrant to purchase one half share. The initial $250,000 tranche was received by the Company on October 5, 2023. However, no further funds were received by the Company from the Lender. During early November 2023 the Lender informed the Company verbally that it did not intend to fulfill its obligations pursuant to the Bridge Loan Agreements and since such time the Lender has been in default (“Default”). The Default (which is continuing) has created substantial problems for and materially damaged the Company and rendered the Company unable to meet its current creditor obligations on a timely basis. The Company is currently evaluating its rights regarding the Default by the Lender. This situation has contributed to the substantial increase in the Company’s ‘Current Liabilities’ including ‘accounts payable’ over recent periods.See Consolidated Financial Statements(above) and‘Management’s Discussion and Analysis’(below). The Company is in discussion/negotiation with its larger creditors (including its largest creditor--- the primary contractor on the Initial Project) and anticipates reaching agreements re payments during the current quarter (or soon thereafter).

Current wording

**B:**On September 28, 2023 the Company entered into an agreement for a $1,500,000 bridge loan and executed documents including a convertible promissory note (“Note”) and a binding subscription agreement (“Subscription”) (collectively the Note and the Subscription are the “Bridge Loan Agreements”) with SEB LLC, a non-affiliated party (“Lender”). The Bridge Loan Agreements require the Lender to loan the Company $1,500,000 in six monthly tranches of $250,000 commencing October 2023. All sums advanced under the Bridge Loan Agreements (and accrued interest thereon) would due and payable (with interest accrued at 8% per annum) on October 1, 2024 if not previously converted into securities of the Company. The Note is convertible at $1.00 per unit, at the sole election of the Lender, into units consisting of one share of the Company’s common stock and a warrant to purchase one half share. The initial $250,000 tranche was received by the Company on October 5, 2023. However, no further funds were received by the Company from the Lender. During early November 2023 the Lender informed the Company verbally that it did not intend to fulfill its obligations pursuant to the Bridge Loan Agreements and since such time the Lender has been in default (“Default”). The Default (which is continuing) has created substantial problems for and materially damaged the Company and rendered the Company unable to meet its current creditor obligations on a timely basis. The Company is currently evaluating its rights regarding the Default by the Lender.

Previous wording

Bion Environmental Technologies, Inc.'s ("Bion," "Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado. Bion’s mission is to make livestock production more sustainable, profitable and transparent. We intend to accomplish this by deploying our Gen3Tech platform/business model (discussed below) in ventures focused on the ‘feeder’ space of the livestock production/value chain to provide the consumer with verifiably sustainable premium meat products (together with environmentally friendly, sustainable and/or organic co-products from the production process). Bion believes this approach can create extraordinary value for our shareholders and employees (all of whom own securities in the Company) and for livestock/agriculture industry ‘partners’ who join us in our ventures. We anticipate pursuing the opportunity created by our third generation technology (“Gen3Tech”) and business/technology platform in conjunction with other industry practices (“Gen3Tech Platform” or “Platform”).

Current wording

Bion Environmental Technologies, Inc.'s ("Bion," "Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado. Bion’s long term mission has been to make livestock production more sustainable, profitable and transparent by deploying our Gen3Tech platform/business model (discussed below) in ventures focused on the ‘feeder’ space of the livestock production/value chain to provide the consumer with verifiably sustainable premium meat products (together with environmentally friendly, sustainable and/or organic co-products from the production process). Based on the expanded capabilities of our Gen3Tech platform, the Company’s mission and focus now includes mitigation of ammonia nitrogen releases by industrial and municipal facilities utilizing anaerobic digestion (“ADs”) (in addition to animal waste streams generated by CAFOs) by capturing and utilizing such polluting waste emissions to produce organic and/or low carbon fertilizer and (potentially) fuel products. Bion believes these approaches can create extraordinary value for our shareholders and employees (all of whom own securities in the Company) and for livestock/agriculture/industry ‘partners’ who join us in our ventures and/or utilize our technology. We anticipate pursuing the opportunities created by our third generation technology (“Gen3Tech”) and business/technology platform in conjunction with other industry practices (“Gen3Tech Platform” or “Platform”) utilizing a joint venture/strategic partner model and/or through sales/licensing transactions (where appropriate). We believe our approach will improve the well-being of those enterprises utilizing our technology and create value for our shareholders while improving the environment.

Previous wording

Our patented and proprietary technology provides advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations” or “CAFOs"). Livestock production and its waste, particularly from CAFOs, has been identified as one of the greatest soil, air, and water quality problems in the U.S. today. Application of our Gen3Tech can largely mitigate these environmental problems, while simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the CAFOs’ waste stream. These waste ‘assets’ – nutrients and methane – have traditionally been wasted or underutilized and are the same ‘pollutants’ that today fuel harmful algae blooms, contaminate surface groundwater, and exacerbate climate change.

Current wording

Our patented and proprietary technology provides advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations” or “CAFOs") (and industrial/municipal ADs). Livestock production and its waste, particularly from CAFOs, has been identified as one of the greatest soil, air, and water quality problems in the U.S. today. Additionally, regulatory focus has been increasing regarding ammonia releases by industrial and municipal entities utilizing ADs for gas production and/or waste treatment as well. Application of our Gen3Tech” can largely mitigate these environmental problems, while simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the CAFOs’ and municipal and industrial facilities utilizing ADs’ waste streams. These ‘assets’ have traditionally been wasted or underutilized and are the same ‘pollutants’ that today fuel harmful algae blooms, contaminate surface groundwater, and exacerbate climate change.

Previous wording

Bion’s business model and technology platform can create the opportunity for joint ventures (in various contractual forms)(“JVs”) between the Company and large livestock/food/fertilizer industry participants based upon the supplemental cash flow generated by implementation of our Gen3Tech business model, which cash flows will support the costs of technology implementation (including servicing related debt). We anticipate this will result in substantial long-term value for Bion. To accomplish Bion’s goals, we anticipate the we will ‘partner’ with other technology companies who provide solutions for different links of the beef (and other livestock) value chain and with strategic partners up and down the supply chain. In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional and organic) in meat will represent one of the single largest enhanced revenue contributor provided by Bion to the JVs (and, in some cases, Bion licensees). The Company believes that the largest portion of its business with be conducted through such JVs, but a material portion may involve licensing and or other approaches.

Current wording

Bion’s business model and technology platform can create the opportunity for joint ventures (in various contractual forms) (“JVs”) between the Company and large livestock/food/fertilizer industry participants based upon the supplemental cash flow generated by implementation of our Gen3Tech business model, which cash flows will support the costs of technology implementation (including servicing related debt). To accomplish Bion’s goals in this sector, we anticipate the we will ‘partner’ with other technology companies who provide solutions for different links of the beef (and other livestock) value chain and with strategic partners up and down the supply chain**.** We anticipate this will result in substantial long-term value for Bion. In the context of such JVs, we believe that the verifiable sustainable branding opportunities (conventional and organic) in meat will represent one of the larger enhanced revenue contributors provided by Bion to the JVs (and Bion licensees). The Company believes that a large portion of its business with be conducted through such JVs, but a material portion may involve licensing and or other approaches.

Previous wording

During the 2023 calendar year, the Company has constructed (construction is largely completed) our 3GTech Ammonia Recovery System (‘ARS’) located near Fair Oaks, Indiana and begun operations of phase 1 of our Initial Project (our commercial scale demonstration facility) located near Fair Oaks, Indiana. The Initial Project has been deemed ‘placed in service’ effective January 1, 2024. Operating results to date at Fair Oaks indicate ARS performance will exceed initial expectations for ammonia recovery and related economics. The Company recently announced that we have achieved key objectives in the optimization of its ARS and will now begin the final design process for full-scale systems based on results to date (and testing over the remainder of this fiscal year) at the Initial Project. The ARS has achieved and maintained controlled steady-state operations under a variety of conditions. When operated at steady state, the system produces an ammonium distillate (solution), the base of Bion’s nitrogen fertilizer products. Bion has begun optimizing the ARS’s operating parameters with the goal of meeting and/or exceeding the results needed for Bion’s economic models for large-scale commercial projects. The Company expects the current optimization phase will continue during the next quarter (or longer) and provide data required to support final design/engineering for commercial project modules. We believe this data will also provide additional potential stakeholders (cattle producers, cattle feeders, packers, distributors, retailers and financial institutions) with the information they need to proceed with confidence in collaborating with Bion on multiple new projects (see below). Final economic and energy efficiency models will be validated during the final design process. The Company intends to engage a third party engineering firm during the next quarter to prepare a third-party evaluation of the ARS while also moving forward on final commercial design process.

Current wording

During the 2023 calendar year, the Company constructed (construction is largely completed--- subject to installation of some final modules and repair/maintenance for some equipment which has broken down during operations over the last quarter) phase 1 of our Initial Project (our commercial scale demonstration facility) located near Fair Oaks, Indiana (our 3GTech Ammonia Recovery System (‘ARS’)) and begun its operations. Operating results to date at the Initial Project indicate ARS performance will exceed initial expectations for ammonia recovery and related economics. The Company recently announced that we have achieved multiple key technical objectives in the optimization of its ARS and which will support the final design process for full-scale systems (based on results to date and testing over the remainder of this calendar year) at the Initial Project. The ARS has achieved and maintained controlled steady-state operations under a variety of conditions. When operated at steady state, the system produces an ammonium distillate (solution), the base of Bion’s nitrogen fertilizer products. Bion has begun optimizing the ARS’s operating parameters with the goal of meeting and/or exceeding the results needed for Bion’s economic models for large-scale commercial projects. The Company expects the current optimization phase will continue during the current quarter (and through the balance of the year) and provide data required to support final design/engineering for commercial project modules. We believe this data will also provide additional potential stakeholders (including: a) cattle producers, cattle feeders, packers, distributors, retailers in the agricultural segment, b) operators of industrial and/or municipal facilities utilizing ADs and c) financial institutions) with the information they need to proceed with confidence in collaborating with Bion on projects. Final economic and energy efficiency models will be validated during the final design process. The Company intends to engage a third party engineering firm during the upcoming quarter to prepare a third-party evaluation of the ARS while also moving forward on final commercial design processes. Each of the initiatives/activities referenced above are subject to resolution of the financial constraints facing the Company that are described in multiple places in this document

Previous wording

The patented ARS is the core of Bion’s Gen3Tech platform. It recovers and upcycles problem ammonia contained in the effluent from anaerobic digestion (where methane is captured and more ammonia is released) of the livestock manure waste stream. The ARS captures the ammonia, minimizing its environmental impacts and creating low-carbon and/or organic nitrogen fertilizer products with it. During the last three (3) months,, the Company has produced ammonium distillate and ammonium bicarbonate solutions at the Initial Project in several concentrations and plans to initiate the application process for organic certification for each concentration of liquid fertilizer product. Multiple applications to OMRI (Organic Materials Review Institute) and CDFA (California Department of Food and Agriculture) are being prepared for listing/certification of new organic products. Bion received an OMRI-Listing in 2020 for its initial product. Bion will continue producing liquid and crystal fertilizers at the Initial Project to support testing and life-cycle analysis, product trials, and ongoing organic initiatives. Bion will produce a solid/granular nitrogen fertilizer product at the Initial Project (when the crystalizer module is ready for operation) which we believe will be both ‘Climate-Smart’ and ‘Water-Smart’ – a pure nitrogen fertilizer with a low carbon footprint, that is water soluble and readily available to plants. Samples of the granular product will also be utilized to support organic certification applications. See**Fertilizer---Organic and ‘ClimateSmart’**below.

Current wording

The patented ARS is the core of Bion’s Gen3Tech platform. It recovers and upcycles problem ammonia contained in the effluent from anaerobic digestion (where methane is captured and more ammonia is released) of the livestock manure waste stream (as well as various industrial waste streams including food processing and municipal facilities that utilize ADs in their process trains). The ARS captures the ammonia, minimizing its environmental impacts and enables creation of creating low-carbon and/or organic nitrogen fertilizer products with it. , The Company has produced ammonium distillate and ammonium bicarbonate solutions at the Initial Project in several concentrations and has initiated the application process for organic certification for the initial concentration of liquid fertilizer product that have been recovered (to be followed by additional applications for products of varied concentrations and attributes). Multiple applications to OMRI (Organic Materials Review Institute) and CDFA (California Department of Food and Agriculture) are being prepared for listing/certification of new organic products and the initial OMRI application has been filed. Bion received an OMRI-Listing in 2020 for its initial liquid product. Bion intends to continue producing liquid and crystal fertilizer products at the Initial Project to support testing and life-cycle analysis, product trials, and ongoing organic initiatives. Bion has produced and will continue to produce a solid/granular nitrogen fertilizer product at the Initial Project which we believe will be both ‘Climate-Smart’ and ‘Water-Smart’ – a pure nitrogen fertilizer with a low carbon footprint, that is water soluble and readily available to plants. Samples of the granular product will also be utilized to support organic certification applications.

Previous wording

Bion expects the Initial Project data will document the effectiveness of our Gen3Tech in a commercial-scale setting during the current fiscal year and support development of one or more of the LOI Projects (and/or other Gen3Tech beef JV projects) commencing later this fiscal year. We do not presently know the order in which the JV Projects will be developed as that decision will be made based on many factors not yet in place. We believe the Initial Project data will also provide additional potential stakeholders (cattle producers, cattle feeders, packers, food distributors and retailers and financial institutions) with the information they need to proceed with confidence in collaborating with Bion on multiple new projects (see below).

Current wording

Bion expects the Initial Project data will document the effectiveness of our Gen3Tech in a commercial-scale setting during the current year and support commencement of development of one or more Gen3Tech beef JV projects and an initial industrial/municipal project over the next year.. We do not presently know the order in which JV Projects will be developed as that decision will be made based on many factors not yet in place. We believe the Initial Project data will also provide additional potential stakeholders with the information they need to proceed with confidence in collaborating with Bion on multiple new projects.

Previous wording

Note that Bion recently announced its intention to establish strategic partnerships to market the ARS as a stand-alone addition to anaerobic digestion (“AD”) nitrogen control solution in two sectors:

Current wording

Note that Bion recently announced its intention to establish strategic partnerships and to market the ARS as a ‘stand-alone’/’bolt-on’ addition to anaerobic digestion (“AD”) nitrogen control facilities in two sectors:

Previous wording

Bion is now focused primarily on: i) operation and further testing at the Initial Project, our initial commercial-scale Gen3Tech installation, for support of design/feasibility studies/reports related to our initial JV Projects (and further optimization of its operational parameters), ii) pre-development planning of the LOI Projects (and/or other Gen3Tech beef JV projects) including steps toward distribution agreements, iii) developing applications and markets for its low carbon ‘ClimateSmart’ and organic fertilizer products (including listings/certifications of multiple liquid and solid products) and its sustainable (conventional and organic) animal protein products, and iv) discussions regarding initiation and development of agreements and joint ventures (“JVs” as discussed herein) (and related Projects) based on the augmented capabilities of our Gen3Tech business platform (in the sustainable beef and other livestock segments), (v) exploring JVs re stand-alone ARS markets, while (vi) continuing to pursue business opportunities related to large retrofit projects (such as the Kreider poultry project JV described below) and vi) ongoing R&D activities.

Current wording

Bion is now focused primarily on: i) operation and further testing at the Initial Project, our initial commercial-scale Gen3Tech installation, for support of design/feasibility studies/reports related to our initial JV Projects (and further optimization of its operational parameters), ii) pre-development planning of the LOI Projects (and/or other Gen3Tech beef JV projects) including steps toward distribution agreements, iii) developing applications and markets for its low carbon ‘ClimateSmart’ and organic fertilizer products (including listings/certifications of multiple liquid and solid products) and its sustainable (conventional and organic) animal protein products, and iv) discussions regarding initiation and development of agreements and joint ventures (“JVs” as discussed herein) (and related Projects) based on the augmented capabilities of our Gen3Tech business platform (in the sustainable beef and other livestock segments), (v) exploring opportunities re stand-alone ARS markets, and v) ongoing R&D activities. Each of the initiatives/activities referenced above are subject to resolution of the financial constraints facing the Company that are described in multiple places in this document

Previous wording

At present, there is essentially no traceable and verifiable ‘sustainable beef’ available to the US market except for niche products. In response to consumer demand for transparency and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver these attributes in their products. While we anticipate a faster adoption of tracking, verification and sustainability technologies in other perishable food categories like produce and dairy due to their shorter product cycles (and related harvest and production techniques), meat industry leaders have also announced their willingness to move forward with initiatives in this area. Many companies have announced ‘sustainability’ initiatives but most appear to consist largely of ‘greenwashing’ marketing commitments rather than substantive undertakings at this date. Note, however, that Tyson’s Brazen beef initiative (which was announced during March 2023) may develop into a substantive competitive factor in the sustainable beef marketplace. Bion predicts that within approximately five-six years, consumers will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the meat department. Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three-four (3-4) years (end of 2028) and 25% in five-six (5-6) years (end of 2029-30) (approximately 6-7,000,000 cattle annually) (and more thereafter).

Current wording

At present, there is essentially no traceable and verifiable ‘sustainable beef’ available to the US market except for niche products. In response to consumer demand for transparency and sustainability, Bion expects the meat industry in general, and beef specifically, to evolve towards using new technologies to deliver these attributes in their products. While we anticipate a faster adoption of tracking, verification and sustainability technologies in other perishable food categories like produce and dairy due to their shorter product cycles (and related harvest and production techniques), meat industry leaders have also announced their willingness to move forward with initiatives in this area. Many companies have announced ‘sustainability’ initiatives but most appear to consist largely of ‘greenwashing’ marketing commitments rather than substantive undertakings at this date. Note, however, that Tyson’s Brazen beef initiative (which was announced during March 2023) may develop into a substantive competitive factor in the sustainable beef marketplace. Bion believes that within approximately five-six years, consumers will be able to track and verify claims including sustainability on 25% (or more) of the products merchandised in the meat department. Bion believes that the retail market share of verifiably sustainable beef in the US will approach 7-10 % within three-four (3-4 years (end of 2028) and 25% in five-six (5-6) years (end of 2029-30) (approximately 6-7,000,000 cattle annually) (and more thereafter).

Previous wording

Based on these trends, Bion has set an aspirational target---which will require that Bion can successfully execute on its sustainable beef business plan (which is subject to many contingencies ---including raising extremely large amounts of project financing for its JVs and the acquisition of adequate senior and operating management personnel to implement the business plan---and is not assured). We believe that facilities utilizing Bion’s Gen3Tech platform will potentially supply one-third (1/3) or more of that of the premium market segment (and a higher portion of meat that is actually traceable and verifiably sustainable). Our goal is to have multiple sustainable beef projects under development (within 3-5 distinct JVs) by the end of 2025-6. Our first commercial project is likely to be one of our current LOI Projects (however, a different project might move to the foreground) with the target of commencing development of an initial sustainable beef project during the current calendar year. Our current target is to have at least three (3) facility modules (15,000 head per module)(“Modules”) in development and/or under construction during 2024-5 in three (3) different JVs with the initial barns being populated with livestock during 2025-6. Further expansion in the number of distinct JVs is projected through 2026-7 aiming at 5-10 JVs in process --- each of which JVs will be pursuing development of multiple Modules with targets of 12-15 populated Modules by the end of 2026-7 (approximately 2%-3% of the US beef market) and 30-45 Modules constructed and being populated by 2029-30 (approximately 6%-8% of the US beef market) with further expansion thereafter. Bion’s current goal is that its Gen3Tech platform will be utilized to produce 33% of the verifiable “sustainable beef” category at the end of the period (which will equal approximately 2 million cattle annually)(45 Modules).

Current wording

Based on these industry trends, and assuming that Bion can successfully execute on its sustainable beef business plan (which is subject to many contingencies ---including raising adequate operating capital plus extremely large amounts of project financing for its JVs and the acquisition of adequate senior and operating management personnel to implement the business plan---and is not assured), we believe that facilities utilizing Bion’s Gen3Tech platform will potentially capture a significant market share in the premium market segment (and a higher portion of meat that is actually traceable and verifiably sustainable). Our goal is to have one or more sustainable beef projects under development by the end of 2025. Our first commercial project may be one of our current LOI Projects (or a different project might move to the foreground) with the target of commencing development of an initial sustainable beef project during the next year.

Previous wording

There is no assurance that the Company will reach or approach the goals/targets set forth above. Reaching such goals/targets will require access to very large amounts of capital (equity and debt) as each module is projected to cost in excess of $50 million (debt/equity/grants) to construct and require mobilization of substantial personnel, technical resources and management skills. The Company does not possess either the financial or personnel resources required internally and will need to source such resources from outside itself.

Current wording

THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE. REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH BEEF PROJECT MODULE IS PROJECTED TO COST IN EXCESS OF $50 MILLION (DEBT/EQUITY/GRANTS) TO CONSTRUCT AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS. THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE ITSELF.

Previous wording

For additional information regarding our ‘HISTORY, BACKGROUND AND CURRENT ACTIVITIES’, see discussion in Notes to the Financial Statements (particularly Notes 1, 3, 5 and 9) included in this report and Item 1 in our annual report on Form 10-K.

Current wording

For expanded information regarding our ‘HISTORY, BACKGROUND AND CURRENT ACTIVITIES’, see discussion within the Notes (particularly Notes 1, 3, 5, 9 and 10) included in this report, in Forms 8-K and Forms 10-Q filed earlier this year and Item 1 (and other sections) in our Annual Reports on Form 10-K.

Previous wording

Total general and administrative expenses were $636,000 and $631,000 for the three months ended December 31, 2023 and 2022, respectively.

Current wording

Total general and administrative expenses were $527,000 and $859,000 for the three months ended March 31, 2024 and 2023, respectively.

Previous wording

Salaries and related payroll tax expenses were $161,000 and $176,000 for the three months ended December 31, 2023 and 2022, respectively. Consulting costs were $168,000 and $101,000 for the three months ended December 31, 2023 and 2022, respectively. The $67,000 increase in consulting costs is due an increase in activity with outside consultants during the second quarter. Investor relations expenses were $76,000 and $174,000 for the three months ended December 31, 2023 and 2022, respectively, and the $98,000 decrease was due to less investor related activity during the second quarter in order to conserve cash. Legal costs were $7,000 and $23,000 for the three months ended December 31, 2023 and 2022, respectively.

Current wording

Salaries and related payroll tax expenses were $148,000 and $194,000 for the three months ended March 31, 2024 and 2023, respectively. Consulting costs were $70,000 and $107,000 for the three months ended March 31, 2024 and 2023, respectively.. The $37,000 decrease in consulting costs is due to a decrease in activity with outside consultants during the third quarter in an effort to conserve cash. Investor relations expenses were $106,000 and $172,000 for the three months ended March 31, 2024 and 2023, respectively, and the $66,000 decrease was due to less investor related activity during the third quarter in order to conserve cash. Legal costs were nil and $23,000 for the three months ended March 31, 2024 and 2023, respectively.

Previous wording

Stock-based compensation for the three months ended December 31, 2023 and 2022 were $67,000 and nil, respectively.

Current wording

Stock-based compensation for the three months ended March 31, 2024 and 2023 were $56,000 and $226,000, respectively.

Previous wording

Total depreciation expense was $461 and $394 for the three months ended December 31, 2023 and 2022, respectively.

Current wording

Total depreciation expense was $331 and $461 for the three months ended March 31, 2024 and 2023, respectively.

Previous wording

Total research and development expenses were $7,000 and $15,000 for the three months ended December 31, 2023 and 2022, respectively, representing an $8,000 decrease was due to less consulting expense being allocated to research and development.

Current wording

Total research and development expenses were $6,000 and $24,000 for the three months ended March 31, 2024 and 2023, respectively, representing an $18,000 decrease was due to less consulting expense being allocated to research and development.

Previous wording

Salaries and related payroll tax expenses were $1,000 and $3,000 for the three months ended December 31, 2023 and 2022, respectively. Consulting costs were $1,000 and $10,000 for the three months ended December 31, 2023 and 2022, respectively. The decrease of $9,000 was due to a smaller portion of Brightcap’s consulting cost being allocated to research and development.

Current wording

Salaries and related payroll tax expenses were $2,000 and $2,000 for the three months ended March 31, 2024 and 2023, respectively. Consulting costs were nil and $9,000 for the three months ended March 31, 2024 and 2023, respectively. The decrease of $9,000 was due to none of Brightcap’s consulting cost being allocated to research and development.

Previous wording

As a result of the factors described above, the loss from operations was $644,000 and $646,000 for the three months ended December 31, 2023 and 2022 respectively.

Current wording

As a result of the factors described above, the loss from operations was $533,000 and $884,000 for the three months ended March 31, 2024 and 2023 respectively.

Previous wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $91,000 and $121,000 for the three months ended December 31, 2023 and 2022, respectively. The decrease of $30,000 is due to debt modifications and reduction of principal balances.

Current wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $17,000 and $27,000 for the three months ended March 31, 2024 and 2023, respectively. The decrease of $10,000 is due to debt modifications and reduction of principal balances.

Previous wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $719,000 and $730,000 for the three months ended December 31, 2023 and 2022, respectively, and the net loss per basic common share was $.01 and $.02 for the three months ended December 31, 2023 and 2022, respectively.

Current wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $538,000 and $858,000 for the three months ended March 31, 2024 and 2023, respectively, and the net loss per basic common share was $.01 and $.02 for the three months ended March 31, 2024 and 2023, respectively.

Previous wording

SIX MONTHS ENDED DECEMBER 31, 2023 COMPARED TO THE SIX MONTHS ENDED DECEMBER 31, 2022

Current wording

NINE MONTHS ENDED MARCH 31, 2024 COMPARED TO THE NINE MONTHS ENDED MARCH 31, 2023

Previous wording

Total revenues were nil for both the six months ended December 31, 2023 and 2022.

Current wording

Total revenues were nil for both the nine months ended March 31, 2024 and 2023.

Previous wording

Total general and administrative expenses were $1,302,000 and $1,497,000 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

Total general and administrative expenses were $1,829,000 and $2,356,000 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

Salaries and related payroll tax expenses were $327,000 and $347,000 for the six months ended December 31, 2023 and 2022, respectively. Consulting costs were $354,000 and $219,000 for the six months ended December 31, 2023 and 2022, respectively. The $135,000 increase in consulting costs is due an increase in activity with outside consultants during the first and second quarter. Investor relations expenses were $122,000 and $422,000 for the six months ended December 31, 2023 and 2022, respectively, and the $300,000 decrease was due to less investor related activity during the first and second quarters in order to conserve cash. Legal costs were $15,000 and $32,000 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

Salaries and related payroll tax expenses were $475,000 and $541,000 for the nine months ended March 31, 2024 and 2023, respectively. Consulting costs were $425,000 and $326,000 for the nine months ended March 31, 2024 and 2023, respectively. The $99,000 increase in consulting costs is due an increase in activity with outside consultants during the first three quarters. Investor relations expenses were $228,000 and $594,000 for the nine months ended March 31, 2024 and 2023, respectively, and the $366,000 decrease was due to less investor related activity during the first three quarters in order to conserve cash. Legal costs were $15,000 and $52,000 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

Stock-based compensation for the six months ended December 31, 2023 and 2022 were $129,000 and nil, respectively.

Current wording

Stock-based compensation for the nine months ended March 31, 2024 and 2023 were $185,000 and $407,000, respectively.

Previous wording

Total depreciation expense was $921 and $724 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

Total depreciation expense was $1,251 and $1,185 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

Total research and development expenses were $16,000 and $44,000 for the six months ended December 31, 2023 and 2022, respectively, representing a $28,000 decrease was due to less consulting expense being allocated to research and development.

Current wording

Total research and development expenses were $22,000 and $68,000 for the nine months ended March 31, 2024 and 2023, respectively, representing a $46,000 decrease was mostly due to less consulting expense being allocated to research and development.

Previous wording

Salaries and related payroll tax expenses were $3,000 and $6,000 for the six months ended December 31, 2023 and 2022, respectively. Consulting costs were $4,000 and $26,000 for the six months ended December 31, 2023 and 2022, respectively. The decrease of $22,000 was due to a smaller portion of Brightcap’s consulting cost being allocated to research and development. Legal expenses were $7,000 and $5,000 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

Salaries and related payroll tax expenses were $5,000 and $8,000 for the nine months ended March 31, 2024 and 2023, respectively. Consulting costs were $4,000 and $35,000 for the nine months ended March 31, 2024 and 2023, respectively. The decrease of $31,000 was due to a smaller portion of Brightcap’s consulting cost being allocated to research and development. Legal expenses were $11,000 and $10,000 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

As a result of the factors described above, the loss from operations was $1,319,000 and $1,541,000 for the six months ended December 31, 2023 and 2022 respectively.

Current wording

As a result of the factors described above, the loss from operations was $1,852,000 and $2,425,000 for the nine months ended March 31, 2024 and 2023 respectively.

Previous wording

Other expense was $145,000 and $108,000 for the six months ended December 31, 2023 and 2022, respectively. The increase of $37,000 was a result of a greater interest expense for warrant modifications.

Current wording

Other expense was $150,000 and $82,000 for the nine months ended March 31, 2024 and 2023, respectively. The increase of $68,000 was a result of a greater interest expense for warrant modifications.

Previous wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $172,000 and $177,000 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $49,000 and $132,000 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

The net loss attributable to the noncontrolling interest was nil and nil for the six months ended December 31, 2023 and 2022, respectively.

Current wording

The net loss attributable to the noncontrolling interest was nil and nil for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $1,464,000 and $1,649,000 for the six months ended December 31, 2023 and 2022, respectively, and the net loss per basic common share was $.03 and $.04 for the six months ended December 31, 2023 and 2022, respectively.

Current wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $2,002,000 and $2,507,000 for the nine months ended March 31, 2024 and 2023, respectively, and the net loss per basic common share was $.04 and $.06 for the nine months ended March 31, 2024 and 2023, respectively.

Previous wording

The Company's condensed consolidated financial statements for the six months ended December 31, 2023 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Report of our Independent Registered Public Accounting Firm on the Company's consolidated financial statements as of and for the year ended June 30, 2023 includes a "going concern" explanatory paragraph which means that the auditors stated that conditions exist that raise substantial doubt about the Company's ability to continue as a going concern.

Current wording

The Company's condensed consolidated financial statements for the nine months ended March 31, 2024 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Report of our Independent Registered Public Accounting Firm on the Company's consolidated financial statements as of and for the year ended June 30, 2023 includes a "going concern" explanatory paragraph which means that the auditors stated that conditions exist that raise substantial doubt about the Company's ability to continue as a going concern.

Previous wording

As of December 31, 2023, the Company had cash of approximately $385,000. During the six months ended December 31, 2023, net cash used in operating activities was $451,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations expenses as well as the purchase of property and equipment. Cash expenditures were offset by proceeds from financing activities, primarily the exercise of warrants and sale of common shares.As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years. While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.

Current wording

As of March 31, 2024, the Company had cash of approximately $50,000. During the nine months ended March 31, 2024, net cash used in operating activities was $755,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations expenses as well as the purchase of property and equipment. Cash expenditures were offset in part by proceeds from financing activities, primarily the exercise of warrants and sale of common shares. As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years. While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. As stated in multiple places in this report, over the last 12 months the Company has had only very limited success in raising needed funds which lack of success has had material negative effects on the Company and its business. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.

Previous wording

During the six months ended December 31, 2023, the Company invested $484,000 in the purchase of property and equipment, primarily related to the Initial Project construction in process.

Current wording

During the nine months ended March 31, 2024, the Company invested $690,000 in the purchase of property and equipment, primarily related to the Initial Project construction in process.