BION ENVIRONMENTAL TECHNOLOGIES INC

Current report

The Company has been under substantial financial and management stress over the past eighteen (18) months. Covid-related delays during technology pilot development at Buflovak in New York, followed by post-Covid supply chain disruptions during construction of our demonstration facility at Fair Oaks, have led to extreme difficulties in raising needed funds. These delays prevented us from meeting our project development and related capital timelines, and were further compounded by the 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, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective May 31, 2024, followed by the anticipated retirement of Mark A. Smith, the Company’s President, General Counsel and Chief Financial Officer, effective July 31, 2024.

Current report

Since the end of May 2024, a new core leadership team has been installed (see H and I, below) and a short-term funding facility has been implemented (see K, below) while longer term capital solutions are evaluated. Our new leadership team believes the financial and management difficulties Bion has faced are outweighed by the success of our technology demonstration and optimization initiatives at our Fair Oaks facility. This success coincides with clear and growing trends in both sustainable agriculture and clean fuels technology and policy that favor Bion’s technology and business opportunities. Bion leadership believes this confluence of events positions the Company, assuming it aligns with appropriate strategic partners and obtains sufficient financing, to exploit a unique opportunity to participate in transformational change at the intersection of agriculture, renewable energy and clean fuels, clean air and water, and evolving consumer demand.

Current report

Further, after extensive discussion between previous management and the Board, it was determined that the ‘carrying value’ of the Initial Project, as of that date, be reduced to $0 on the Company balance sheet, in order to conform with accepted accounting practices. Bion’s technology demonstration system was always planned as a small scale integrated Gen3Tech beef project. Due to covid-related delays and increased capital constraints, it was decided to move quickly to initially construct Phase 1, which was the standalone ARS at Fair Oaks. As matters progressed, including cost overruns, management and financial crises, etc., Bion was unable to proceed further at Fair Oaks. It was anticipated that the ARS would be relocated to another site (potential locations included Ribbonwire Ranch or University of Nebraska-Lincoln) after providing the final design data, where it would be integrated with a small scale Gen3Tech beef facility as originally planned. We recently learned it would not be economically feasible to decommission and disassemble the ARS, then transport, reassemble, and recommission it at another location. Therefore, since the Initial Project is now: i) largely a research & development facility and ii) is located on land subject to a short-term lease, it no longer has commercial value and was written down to $0. As a result, a large ‘one time/non-recurring’ ‘non-cash’ charge of $9,460,425 has been taken by the Company, at that date, which charge reduced the Company shareholders’ equity to ($5,808,501) and resulted in a loss of $11,691,115 for the 2024 fiscal year.

Current report

D: At the end of December 2023, Bion achieved key objectives in the optimization of the Ammonia Recovery System at our commercial-scale demonstration facility in Fair Oaks, Indiana. Though delayed by supply chain issues, the demonstration at Fair Oaks confirmed the system's state-of-the-art capabilities and economics. In managements’ opinion, the wide applicability of the ARS and its environmental benefits cannot be overstated, as livestock-related and other nutrient issues continue to grow, both in the U.S. and globally.

Current report

E: On January 2, 2024, Bion received a new (continuation) patent that broadened the claims related to its Ammonia Recovery System (ARS) to include industrial and municipal wastewater sources, in addition to animal waste streams that were previously covered. Since that time, Bion has and will continue to direct part of its limited resources to understanding and evaluating opportunities to apply its ARS as a ‘standalone’ ammonia control solution in these sectors. In such cases, the ARS would be deployed as a bolt-on ammonia solution (vs integrated into a Bion Gen3Tech livestock platform) for facilities (both new and existing) that produce biogas from organic waste streams, such as food, food processing, and livestock packing/slaughter. These facilities are subject to EPA-mandated discharge limits that require ammonia control or face other limitations on ammonia/nitrogen in the effluent from biogas production. We believe at this time there is potentially a robust opportunity to provide ammonia control solutions to others and we intend to pursue this opportunity in the coming year.

Current report

F: Effective April 1, 2024, the Company entered into two material definitive agreements regarding voluntary surrender for cancellation of securities of the Company (and related matters) by: a) members of the family of Dominic Bassani, recently deceased former Chief Executive Officer and (with his family) the Company’s largest shareholder (collectively “Bassani Family”), and b) Mark A. Smith, President of the Company and a director (“MAS”). The Bassani Family and MAS entered into these agreements with the intention of mitigating dilution to shareholders as new, successor management is added to the Company’s management team. The Bassani Family has agreed to surrender not less than approximately 20% of its Company holdings (as of December 2023) which surrender will increase to approximately 30% based on certain financing performances (see Form 8-K dated April 3, 2024, Exhibit 10.1). The Bassani Family will elect exactly which Company securities it will surrender for cancellation on or before June 30, 2024, the Company’s fiscal year end. The Bassani Family Agreement also sets forth requirements regarding conversion of convertible notes held by members of the Bassani Family after the security surrender. See Exhibit 10.1 for the material terms of the contemplated transactions. MAS has agreed to surrender approximately 30% of his Company holdings (as of December 2023). Immediately upon the effectiveness of the MAS Agreement, he cancelled all Company options held by him (2,425,000, in aggregate) and waived $56,250 of accrued deferred compensation (convertible into 75,000 shares of the Company’s common stock). The MAS Agreement also sets forth requirements regarding conversion of convertible notes held by MAS after the security surrender and references the planned retirement of MAS on or before May 15, 2024. See Exhibit 10.2 for the material terms of the contemplated transactions. Subsequently, and effective June 27, 2024, the Board of Directors of the Company agreed to amend the terms of the agreements dated April 1, 2024. The amendments solely extend any dates of certain required conversions and/or exercises (and related promissory note maturity dates and warrant expiration dates), if any, that were earlier than January 15, 2025, to said date. No changes were made regarding any ‘givebacks’ of securities of the Company. On June 30, 2024, the Bassani Family provided the Company with their list regarding surrender of 20% of its Company holdings (as of December 2023) (See Exhibit 10.1). As previously reported, MAS has previously completed 100% of his ‘give backs’.

Current report

H: Effective May 31, 2024, Bion accepted the resignation of Bill O’Neill, both as CEO and Director. Mr. O’Neill had previously informed the Board that he believed he was not being adequately compensated or incentivized and the job was too difficult. On May 21, 204, Bion received a letter from Mr. O’Neill that expressed his dissatisfaction with the Board’s refusal to address his demands and stated he was resigning to pursue other opportunities, despite the fact he had not yet completed the last year of a three-year agreement. Bion chose to accept his resignation in the belief the Company needed a change in leadership and approach.

Current report

I: On June 1, 2024, Craig Scott joined the Company's Board of Directors. Mr. Scott has served Bion in several senior positions, dating back to 1996. Mr. Scott also agreed to assume a broader management role for Bion and subsequently accepted the role of interim Chief Executive Officer. Also in June, Greg Schoener assumed the role of Chief Operating Officer on an interim basis. He also joined Bion's Board of Directors. Mr. Schoener is a successful business owner and operator, serving the construction industry in Houston, Texas. He brings broad business management experience, with an emphasis on mission-focused execution and accountability. He has been a Bion shareholder since late-2020. Bob Weerts, another Bion shareholder and a successful serial entrepreneur from Winnebago, Minnesota, also accepted a position on Bion’s Board of Directors.

Current report

J: On June 18, 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies with the goal of developing a 16,000-head sustainable beef project at Stovall’s Yellowstone Cattle Feeders (YCF) location in Shepherd, Montana. The YCF feedyard is a traditional outdoor dirt feedlot that today is permitted to feed up to 25,000 head. Mr. Stovall also agreed to join Bion's Board of Directors and lead a joint venture between Stovall Ranching Companies and Bion to develop the project. The facility is envisioned to produce premium quality Montana beef that we believe will be the 'cleanest', most eco-friendly finished beef in the marketplace.

Current report

K: To help alleviate short-term cash needs for continued operations, in August, three affiliates of the Company (Greg Schoener, Interim COO & Director; Turk Stovall, Director; Bob Weerts, Director) and two shareholders (one of whom is the brother of Greg Schoener) began advancing money to Bion to cover critical payables. They subsequently formed a loan group, BION BLG, LLC (“BLG”), and have continued to provide short-term funding for Bion in a secured promissory note of up to $500,000. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG. As a group, Schoener, Stovall, and Weerts own 60% of BLG, which has a security interest in the Company’s Intellectual Property. The BLG note will bear interest at a rate of 7.5% per annum and the maturity date is April 15, 2025. As of the filing date, BLG has advanced $336,957. The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note). If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a Note with similar terms being offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing.

Current report

L: In November, the Company launched a secured promissory note offering to previous investors/shareholders (and certain others) with similar terms to the BLG note. Based on feedback from shareholders and registered representatives with which the Company has long standing relationships, management believes that sufficient capital can be raised with this group to 1) continue to cover critical payables to maintain operations that will allow the Company to finish the engineering report and technology demonstration at Fair Oaks, 2) move forward with pre-development work on the Stovall project, 3) continue discussions with potential strategic partners, and 4) position ourselves for the larger offering/ funding that will be required. However, there can be no assurance the Company will be successful in its efforts to obtain such financing.

Current report

Change in Approach

Current report

Bion’s new leadership team has returned the company to its earlier approach, focusing on building a ‘flagship’ first project to prove concept feasibility and to provide a development and finance model for future projects. Leadership made this decision after determining that a) a large addressable market for sustainable beef does exist and consumers have demonstrated a ‘willingness to pay’ a premium for sustainable food products; however, since such products cannot be supplied today at scale, it is not a ‘ready’ market and will take time to develop), b) an entrenched industry is never eager for change and it will only occur through enlightened/ proven self-interest, and c) investment capital of the magnitude needed for large scale conversion to sustainable production will first require proof of concept.

Current report

Leadership believes for several reasons that the best opportunity for the Company to prove its sustainable beef concept at this time is with the Stovall Ranch JV in Montana. In June 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies. Turk Stovall is a fifth-generation Montana cattleman, with an extensive graduate-level education in cattle husbandry and an MBA in agribusiness, and he is the largest custom cattle feeder in Montana. He also has broad experience and relationships with both the U.S. and Montana’s beef industry and important state leaders, resources, and agencies. Bion and Stovall have agreed to establish a JV, to be led by Mr. Stovall, with the goal of developing a 16,000-head sustainable beef project at Stovall’s Yellowstone Cattle Feeders (‘YCF’) location in Shepherd, Montana. We anticipate establishing the Stovall-Bion JV and creating related distribution agreements with key value chain partners during the current calendar year, with the intent to begin construction before the end of 2024.

Current report

The Company’s on-going difficulties raising needed funds over the past two years have rendered the Company unable to meet its current creditor obligations on a timely basis. The Company has engaged in discussion/negotiation with its larger creditors (including its largest creditor--- the primary contractor on the Initial Project) but has been unable to reach agreements regarding payments due to the uncertainty as to if, when, and how much funding the Company will be able to raise in future periods. As a result, the primary contractor has filed a mechanics in Indiana (and its largest sub-contractor has sent notices related to its intention to file a mechanics lien) and other creditors are threatening to commence litigation and/or repossess/remove leased equipment. The Company is behind on its lease payments related to the site of the Initial Project. On September 5, 2024, three members of the LLC met with representatives of two of the largest creditors: the primary contractor and the property lessor. We have resumed payments to certain creditors, whose services the Company requires to continue operations at Fair Oaks, including lease payments to the property lessor (and ongoing supplier of digestate). Discussions and ultimate resolution are ongoing and subject to Bion’s ability to raise capital in a timely manner. We have implemented extreme cost savings measures: maintaining only mission-critical operations and funding, on a weekly basis, funding only those expenses needed to maintain operations. These measures will continue until we can execute a larger financing or obtain other sources of capital, such as a potential strategic investor/partner or license agreement.

Current report

Bion is currently in discussions with several potential strategic partners in renewable energy (biogas/RNG and solar) and clean fuels, organic fertilizer distribution, and others involved in reducing the carbon footprint of livestock production, especially beef. With today’s U.S, and global emphasis on decarbonizing energy and the food supply chain, the sectors have become closely intertwined, they are evolving quickly, and integrated solutions have become increasingly desired, but complex. Bion is now evaluating both European and U.S. renewable energy/clean fuels developers, operators, and investors to determine the best fit for moving forward with AD/RNG development for its own beef project(s), access to clean fuels value chains for its low-carbon fertilizers, animal waste treatment for others, both here and in the EU, as well as a development partner in industrial and municipal opportunities. Further, with the recent OMRI Listing for its commercial fertilizer, the Company has initiated discussions with several large U.S. fertilizer manufacturers and distributors that have expressed interest in the product. Bion believes that such relationships could entail a direct investment in Bion, licensing fee, or some other ‘up front’ financial benefit to Bion, although there is no assurance that they will. The Company is finishing data acquisition at Fair Oaks needed to complete an independent engineering report that is critical to demonstrating the technology performance and economics of its ammonia recovery technology to potential strategic partners.

Current report

Bion’s new leadership team is strongly committed to Bion’s continuation, its future success, and its shareholders. We have returned the company to its earlier approach of focusing on building a ‘flagship’ first project to prove the concept and markets and provide a development and finance model for future projects, instead of attempting to move forward on multiple projects simultaneously or in rapid succession. We believe this will put us on a more achievable path. Further, this strategy will substantially reduce our need for capital, and we believe that a more reasonable and credible objective will make it easier to raise that capital. We also believe that the recent changes in leadership, including the addition of Turk Stovall to that leadership team, will lend validation and credibility to Bion and its business plan, making it easier to raise capital from potential strategic, institutional, and retail investors. For several reasons, we think that the best opportunity to finance a project, and to prove the sustainable beef concept, is with the Stovall Ranch JV in Montana and we are exploring a wide range of alternatives related to funding both the JV and Bion.

Current report

Other expense was $206,000 and $71,000 for the three months ended September 30, 2024 and 2023, respectively.

Current report

During the three months ended September 30, 2024 and 2023, the Company invested nil and $164,000 in the purchase of property and equipment, respectively. The decrease was due to the Company’s effort to conserve cash in the three months ended September 30, 2024.

Current report

During the quarter ended September 30, 2024 the Company had a loss of $1,171,600, including $659,000 non-cash compensation expenses of related to extension of warrants and options.

Current report

During the year ended June 30, 2024, a one-time, non-recurring, non-cash charge of $9,460,425 was incurred by the Company in connection with a write-down of the capitalized carrying value of the Initial Project (at Fair Oaks, Indiana) because the Initial Project was recently reclassified as largely a research & development facility and is located on land subject to a short term lease (as described below in Item 2, Management’s Discussion and Analysis). This charge reduced the Company shareholders’ equity to ($5,808,501) and resulted in a loss of $11,691,115 for the 2024 fiscal year.

Current report

The Company’s extreme difficulty in obtaining needed funds during the entire 2024 fiscal year has continued throughout the first quarter of the current fiscal year to date. See Note 1. Going Concern and Management’s Plans, Plan of Operations and Outlook and Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations and Note 9. Subsequent Events.

Current report

Management’s Plan

Current report

To help alleviate short-term cash needs for continued operations, in August, three affiliates of the Company (Greg Schoener, Interim COO & Director; Turk Stovall, Director; Bob Weerts, Director) and two shareholders (one of whom is the brother of Greg Schoener) began advancing money to Bion to cover critical payables. They subsequently formed a loan group, BION BLG, LLC (“BLG”), and have continued to provide short-term funding for Bion in a secured promissory note of up to $500,000. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG. As a group, Schoener, Stovall, and Weerts own 60% of BLG, which has a security interest in the Company’s Intellectual Property. The BLG note will bear interest at a rate of 7.5% per annum and the maturity date is April 15, 2025. As of the filing date, BLG has advanced $336,957. The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note). If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a secured promissory note with similar terms being offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing.

Current report

In November, the Company launched a secured promissory note offering to previous investors/shareholders (and certain others) with similar terms to the BLG note. Based on feedback from shareholders and registered representatives with which the Company has long standing relationships, management believes that sufficient capital can be raised with this group to 1) continue to cover critical payables to maintain operations that will allow the Company to finish the engineering report and technology demonstration at Fair Oaks, 2) move forward with pre-development work on the Stovall project, 3) continue discussions with potential strategic partners, and 4) position ourselves for the larger offering/funding that will be required, as described above. However, there can be no assurance the Company will be successful in its efforts to obtain such financing.

Current report

To date, the Company has primarily raised funds through private placements with accredited investors, often conducted through FINRA-registered broker/dealers. However, the Company anticipates moving forward, it will need to raise capital using a combination of financial instruments and sources, that could also include strategic and/or institutional investors, including family offices and private equity, brokered equity or debt offerings with both public and private investors, and banks and other ag lending institutions, among others, although there can be no assurance it will be successful. Many of these financing options may involve dilution, potentially substantial, for current shareholders. Management intends to augment its access to capital by adding one or more staff members (or consultants) with experience in the capital markets, as well as utilizing its current contacts and relationships in the capital markets.

Current report

Bion is currently in discussions with several potential strategic partners in renewable energy (biogas/RNG and solar) and clean fuels, organic fertilizer distribution, and others involved in reducing the carbon footprint of livestock production, especially beef. With today’s U.S, and global emphasis on decarbonizing energy and the food supply chain, the sectors have become closely intertwined, they are evolving quickly, and integrated solutions have become increasingly desired, but complex. Bion is now evaluating both European and U.S. renewable energy/clean fuels developers, operators, and investors to determine the best fit for moving forward with AD/RNG development for its own beef project(s), access to clean fuels value chains for its low-carbon fertilizers, animal waste treatment for others, both here and in the EU, as well as a development partner in industrial and municipal opportunities. Further, with the recent OMRI Listing for its commercial fertilizer, the Company has initiated discussions with several large U.S. fertilizer manufacturers and distributors that have expressed interest in the product. Bion believes that such relationships could entail a direct investment in Bion, licensing fee, or some other ‘up front’ financial benefit to Bion, although there is no assurance that they will. The Company is finishing data acquisition at Fair Oaks needed to complete an independent engineering report that is critical to demonstrating the technology performance and economics of its ammonia recovery technology to potential strategic partners.

Current report

The Company has not made lease payments since October 16, 2023 and owes $68,750 in lease payments at September 30, 2024.

Previous report

THESE RISKS, UNCERTAINTIES AND FACTORS BEYOND OUR CONTROL ARE MAGNIFIED DURING THE CURRENT UNCERTAIN PERIOD RELATED TO THE COVID-19 PANDEMIC AND THE UNIQUE ECONOMIC, FINANCIAL, GOVERNMENTAL AND HEALTH-RELATED CONDITIONS IN WHICH THE COMPANY, THE ENTIRE COUNTRY AND THE ENTIRE WORLD NOW RESIDE. TO DATE THE COMPANY HAS EXPERIENCED DIRECT IMPACTS IN VARIOUS AREAS INCLUDING WITHOUT LIMITATION: I) GOVERNMENT-ORDERED SHUTDOWNS WHICH HAVE SLOWED THE COMPANY’S RESEARCH AND DEVELOPMENT PROJECTS AND OTHER INITIATIVES, II) SHIFTED FOCUS OF STATE AND FEDERAL GOVERNMENT WHICH IS LIKELY TO NEGATIVELY IMPACT THE COMPANY’S LEGISLATIVE INITIATIVES IN PENNSYLVANIA AND WASHINGTON DC, III) STRAINS AND UNCERTAINTIES IN BOTH THE EQUITY AND DEBT MARKETS HAVE MADE DISCUSSION AND PLANNING OF FUNDING OF THE COMPANY AND ITS INITIATIVES AND PROJECTS WITH INVESTMENT BANKERS, BANKS AND POTENTIAL STRATEGIC PARTNERS MORE TENUOUS, IV) STRAINS AND UNCERTAINTIES IN THE AGRICULTURAL SECTOR AND MARKETS HAVE MADE DISCUSSION AND PLANNING OF FUNDING OF THE COMPANY AND ITS INITIATIVES AND PROJECTS MORE DIFFICULT AS FUTURE INDUSTRY CONDITIONS ARE NOW MORE DIFFICULT TO ASSESS/PREDICT, V) CONSTRAINTS DUE TO PROBLEMS EXPERIENCED IN THE GLOBAL INDUSTRIAL SUPPLY CHAIN WHICH HAVE INCREASED ANTICIPATED PROJECT DEVELOPMENT COSTS, VI) DUE TO THE AGE AND HEALTH OF OUR CORE MANAGEMENT TEAM, MOST OF WHOM ARE AGE 70 OR OLDER AND HAVE HAD ONE OR MORE EXISTING HEALTH ISSUES, THE COVID-19 PANDEMIC PLACES THE COMPANY AT GREATER RISK THAN WAS PREVIOUSLY THE CASE (TO A HIGHER DEGREE THAN WOULD BE THE CASE IF THE COMPANY HAD A LARGER, DEEPER AND/OR YOUNGER CORE MANAGEMENT TEAM), AND VII) THERE ALMOST CERTAINLY WILL BE OTHER UNANTICIPATED CONSEQUENCES FOR THE COMPANY AS A RESULT OF THE CURRENT PANDEMIC EMERGENCY AND ITS AFTERMATH.

Previous report

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 report

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 report

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 report

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 report

Bion’s Gen3Tech was designed to capture and stabilize these assets and produce renewable energy, fertilizer products, and clean water as part of the process of raising verifiably sustainable livestock. All steps and stages in the animal raising and waste treatment process will be third-party verified, providing the basis for additional revenues, including carbon and/or renewable energy-related credits and, eventually, payment for a range of ecosystem services, including nutrient credits as described below. The same verified data will be used to substantiate the claims of a USDA-certified sustainable brand that will support premium pricing for the meat/ animal protein products that are produced in Bion facilities.

Previous report

Our business plan focused on executing multiple agreements and letters of intent related to additional sustainable beef JV projects over the next twenty-four (24) months while continuing our work at the Initial Project (see below) and commencing development of one (or more) of the Dalhart/Olson/DVG Projects (“LOI Projects”)(and/or other Gen3Tech beef JV projects) while pursuing other opportunities in the livestock industry (and related to industrial and municipal entities utilizing ADs for gas production and/or waste treatment) enabled by our Gen3Tech business model. The LOI announcements generated significant interest within the livestock industry (among ranchers, feedlot operators, farmers and other AG industry parties) and has led to and assisted our discussions with many major of the larger agriculture/livestock industry companies (including those involved with distribution and/or sales of meat products) in the country which are ongoing at this date. We believe that this interest, combined with consumer interest in ‘sustainable products’ and growing enthusiasm among some livestock industry parties for environmental/sustainable/regenerative practices, may provide Bion (and its partners/venturers) with an opportunity to move forward with a truly sustainable solution in this industry segment at a rapid pace.

Previous report

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 report

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.

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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.

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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:

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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 report

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 report

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.

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Additionally, the Company targets initiating one or more CAFO and/or industrial/municipal ‘bolt-on’ Gen3Tech ARS systems during the next fiscal year.

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COVID-19 PANDEMIC RELATED MATTERS:

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The Company faces risks and uncertainties and factors beyond our control that are magnified during the current Covid-19 pandemic and the unique economic, financial, governmental and health-related conditions in which the Company, the country and the entire world now reside. To date the Company has experienced direct impacts in various areas including but without limitation: i) government ordered shutdowns which have slowed the Company’s research and development projects and other initiatives, ii) shifted focus of state and federal governments which is likely to negatively impact the Company’s legislative initiatives in Pennsylvania and Washington D. C., iii) strains and uncertainties in both the equity and debt markets which have made discussion and planning of funding of the Company and its initiatives and projects with investment bankers, banks and potential strategic partners more tenuous, iv) strains and uncertainties in the agricultural sector and markets have made discussion and planning more difficult as future industry conditions are now more difficult to assess and predict, v) constraints due to problems experienced in the global industrial supply chain since the onset of the Covid-19 pandemic, which have delayed certain research and development testing and have delayed and/or increased the cost of construction of the Company’s initial 3G Tech installation as equipment/services remain difficult to acquire in a timely manner, vi) due to the age and health of our core management team, many of whom are age 70 or older and have had one or more existing health issues (including brief periods of Covid-19 infection), the Covid-19 pandemic places the Company at greater risk than was previously the case (to a higher degree than would be the case if the Company had a larger, deeper and/or younger core management team), and vii) there almost certainly will be other unanticipated consequences for the Company as a result of the current pandemic emergency and its aftermath.

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Other expense was $5,000 and $26,000 for the three months ended March 31, 2024 and 2023, respectively.

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Revenue

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General and Administrative

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

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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.

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

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Depreciation

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

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Research and Development

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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.

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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.

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Loss from Operations

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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.

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Other Expense

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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.

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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.

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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.

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During the nine months ended March 31, 2024, the Company received net cash proceeds of $590,000 from the sale of units of $611,000 less commissions of $20,000. During the nine months ended March 31, 2023, the Company received gross cash proceeds of $3,218,000 from the sale of units of $3,266,000 less commissions of $48,000. The decrease of $2,628,000 or 82% is due to the decrease in the Company’s ability to raise capital.

Previous report

During the years ended June 30, 2023 and 2022, the Company received gross proceeds of approximately $4,038,000 and $1,737,000, respectively, from the sale of its debt and equity securities. The Company paid commissions on the exercise of warrants in the amount of $86,000 and $19,000 in 2023 and 2022, respectively.

Previous report

During the nine months ended March 31, 2024 and 2023 the Company received total proceeds of approximately $889,000 and $3,385,000, respectively, from the sale of its debt and equity securities for a decrease of over 80% in total proceeds raised to finance the Company’s operations. During the nine months ended March 31, 2024 the Company received proceeds of $250,000 from a convertible bridge loan but the provider of the bridge loan during November 2023 (and on an ongoing basis since such time) breached its contractual obligation/binding subscription agreement to fund an additional $1,250,000 to the Company, which breach (combined with management stresses related to the final illness and passing of Dominic Bassani, Bion’s then COO and former CEO, and required management transitions) has created substantial cash flow difficulties for the Company which are ongoing.

Previous report

Current liabilities were approximately $4.5 million and $1.6 million at March 31, 2024 and 2023, respectively. There was an increase of approximately $2.9 million (which was largely due to an increase in ‘accounts payable and accrued expenses’ and an increase in ‘deferred compensation’) 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).

Previous report

During the years ended June 30, 2023 and 2022, the Company received gross proceeds of approximately $4,038,000 and $1,737,000, respectively, from the sale of its debt and equity securities. The Company paid commissions on the exercise of warrants in the amount of $86,000 and $19,000 in 2023 and 2022, respectively.

Previous report

During the nine months ended March 31, 2024 and 2023, the Company received gross proceeds of approximately $611,000 and $3,266,000, respectively, from the sale of its debt and equity securities. This over 80% decrease in proceeds has created substantial difficulties for the Company.

Current report — wording carried from elsewhere

As of September 30, 2024, the Company had cash of approximately $36,000. During the three months ended September 30, 2024, net cash used in operating activities was $218,000, 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, a total of $202,000 in debt funding. During the three months ended September 30, 2023, net cash used in operating activities was $395,000, 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

Current report — wording carried from elsewhere

The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability or classification of assets or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern. The following paragraphs describe management’s plans with regard to these conditions.

Current report — wording carried from elsewhere

The Company continues to explore sources of financing to satisfy its current operating requirements and future growth needs. The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2024 that we anticipate will increase during the 2025 fiscal year and periods thereafter as we move toward commercial implementation of our 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company). As a result, the Company has faced, and continues to face, significant cash flow challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods.

Previous report — wording carried elsewhere

Bion disclaims any obligation subsequently to revise any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Previous report — wording carried elsewhere

The following discussion and analysis should be read in conjunction with the Condensed Consolidated Financial Statements and Notes to Condensed Consolidated Financial Statements filed with this Report.** **

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

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

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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.

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Net Loss Attributable to the Noncontrolling Interest

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

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Net Loss Attributable to Bion’s Common Stockholders

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As of March 31, 2023, the Company had debt obligations of a) deferred compensation of $784,000, b) convertible notes payable – affiliates of $1,736,000, and c) current note payable including accrued interest of nil.

Previous report — wording carried elsewhere

The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. During fiscal years 2023 and 2022 (as a whole), the Company faced less difficulty in raising equity funding (but was subject to substantial equity dilution from the larger amounts of equity financing during the periods) than was experienced in the prior 3 years. However, this positive trend did not continue during the last quarter of the 2023 fiscal year and the first three quarters of the current fiscal year (and the fourth quarter through the date of this report). The Company raised only raised very limited equity funds during such periods to meet its some of its immediate needs, therefore, the Company needs to raise substantial additional funds in the upcoming periods. The Company has faced substantial increases in demand for capital and operating expenditures for the fiscal year 2024 to date (and we anticipate such increased demands will continue during the remainder of the 2024 fiscal year and periods thereafter) as it moves toward commercial implementation of its 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company) and, therefore, is likely to continue to face, significant cash flow management issues due to limited capital resources and working capital constraints which had only recently begun to be alleviated. As a result, the Company has faced, and continues to face, significant cash flow management challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods. The Company continues to explore sources of additional financing (including potential agreements with strategic partners – both financial and ag-industry) to satisfy its current and future operating and capital expenditure requirements as it is not currently generating any significant revenues.