BION ENVIRONMENTAL TECHNOLOGIES INC

(a)Exhibits

*This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

Table of Contents

To the Board of Directors and

Stockholders of Bion Environmental Technologies, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Bion Environmental Technologies, Inc. (the Company) as of June 30, 2025 and 2024, and the related consolidated statements of operations, changes in stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended June 30, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of June 30, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the two-year period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has yet to generate any revenue and has suffered recurring losses from operations. These factors raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also discussed in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Equity Transactions and Convertible Debt Transactions

As discussed in Note 5 and Note 6 to the financial statements, the Company has numerous equity-based agreements, including stock options and warrants issued for services and debt convertible into units (which include common stock and warrants). These agreements require management to estimate the value of options and warrants issued for services on the measurement date, constituting a significant management estimate subject to possible management bias, or include complicated calculations when debt is converted to equity, which requires significant knowledge for evaluation. During the year ended June 30, 2025, the Company recorded interest expense related to the modification of warrants in the amount of $180,930, and modification expense related to the extension of options and warrants of $332,128 and $511,410, respectively.

Our audit procedures required a significant amount of time performing procedures and evaluating audit evidence in connection with forming our overall opinion on the financial statements. Those procedures included gaining an overall understanding of the Company’s process for estimating fair value and the related calculations. We read the related equity-based agreements verifying the terms of each agreement to the Company’s calculations and ensuring the mathematical accuracy. We evaluated the assumptions used by management to develop their estimates and considered the relevant accounting guidance.

/s/ Haynie & Company

We have served as the Company’s auditor since 2023.

Salt Lake City, Utah

September 29, 2025

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** **BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIES

**CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (DEFICIT)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED JUNE 30, 2025 AND 2024

**1. BUSINESS AND ORGANIZATION: **

Nature of Operations

Bion Environmental Technologies, Inc.'s ("Bion," "Company," "We," "Us," or "Our") was incorporated in 1987 in the State of Colorado.

Our patented and proprietary technology was developed to provide advanced waste treatment and resource recovery for large-scale livestock production facilities (also known as “Concentrated Animal Feeding Operations” or “CAFOs"). Our Gen3Tech can largely mitigate the environmental problems of CAFOs, while simultaneously improving operational/ resource efficiencies by recovering high-value co-products from the waste stream, including renewable energy, nutrients, and clean water. For the last several years, Bion was focused on the beef industry because we believe it faces the most challenges of all the livestock sectors and can benefit the most from the application of Bion’s technology and business strategy.

Until recently, we believed that the best opportunity for the Company to prove its technology, along with the sustainable beef concept, was with the Stovall Ranch, in Montana. In June 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies. Bion and Stovall 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 anticipated establishing the Stovall-Bion JV and creating related distribution agreements with key value chain partners, with the intent to begin construction in the first quarter of 2025. However, due to several factors, including 1) the extended development timeline to reach revenues at Stovall (which could be at least two years or more), 2) a need to both prove our technology at full-scale as quickly as possible, and 3) enter the fertilizer markets with product in the 2026 growing season, at the end of calendar 2024 we shifted our focus to smaller ‘bolt-on’ opportunities in both the animal waste and industrial sectors that we think can be developed more quickly.

Bion’s patents were expanded in 2024 to include industrial and municipal wastewater sources, in addition to animal waste streams that were previously covered. To that end, Bionhas directed most of its limited resources to pursuing opportunities to apply its Ammonia Recovery System (ARS) as a bolt-on or ‘standalone’ ammonia control solution in the industrial sector. In such cases, the ARS would be deployed as an ammonia control 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 will also seek to identify opportunities to provide ammonia control solutions in the livestock/animal waste at existing farms with anaerobic digesters already in place (which will also shorten the development timeline). While we have not abandoned developing new integrated livestock projects with our Gen3tech platform, we believe there is a robust opportunity to provide bolt-on ammonia control solutions to the operators of their own biogas projects, and we are now devoting almost all of our resources to developing this opportunity.

Going Concern

The Company’s consolidated financial statements have been prepared assuming the Company will continue as a going concern.

The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing JVs and proposed projects will not be sufficient to offset operating and capital costs (for Projects) for a minimum of two to five years. Further, there are no assurances that the Company will ultimately be successful in its efforts to develop and construct its Projects and market its Systems; but, 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. The aggregate effect of these factors raises substantial doubt about the Company’s ability to continue as a going concern.

During the year ended June 30, 2025 the Company had a loss of $2,380,000 including $844,000 non-cash compensation expenses related to extension of warrants and options.

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 above in Item 7, 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.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

The constraints on available resources have had, and continue to have, negative effects on the pace and scope of the Company’s efforts to operate and develop its business. The Company has had to delay payment of trade obligations and has had to economize in many ways that have potentially negative consequences. If the Company is able to raise needed funds during the subsequent fiscal year, of which there is no assurance, management will not need to consider deeper cuts (including additional personnel cuts) and/or curtailment of ongoing activities including research and development activities. The Company will need to obtain additional capital to fund its operations and technology development, to satisfy existing creditors, and to develop Projects. The Company anticipates that it may seek to raise from $3,000,000 to $10,000,000 or more debt and/or equity through sale of its equity securities (common, preferred and/or hybrid) and/or debt (including convertible) securities, and/or through use of ‘rights’ and/or warrants (new and/or existing) and/or license payments and/or through other means during the next twelve months. Further, Bion may be required to fund $15 million (or more) in project finance for the initial ARS project, in a combination of debt financing and equity investment. However, as discussed above, there is no assurance, especially in light of the difficulties the Company has experienced in many recent years and the extremely unsettled capital markets that presently exist for small pre- revenue companies like us, that the Company will be able to obtain the funds that it needs to stay in business, complete its technology development or to successfully develop its business and Projects. Ultimately, in the event the Company cannot secure additional financial resources, or complete a strategic transaction in the longer term, the Company may need to curtail or suspend its operational plans or current initiatives, or potentially liquidate its business interests, and investors may lose all or part of their investment.

The accompanying 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.

Management’s Plan

The Company continues to explore sources of financing to satisfy its current operating requirements and future growth needs. The Company faced substantial demand for capital and operating expenditures during fiscal year 2025, which we expect to increase for the periods thereafter as we move toward commercial implementation of our ARS (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 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.

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, see further details in subsequent events. As of the filing date, BLG has advanced 407,384. 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.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

In November 2024, the Company launched a series of secured promissory note offerings to previous investors/shareholders (and certain others)(Shareholder Notes) with similar terms to the BLG note. Based on feedback from shareholders and registered representatives with which the Company has long standing relationships, management believed at that time that sufficient capital could 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 of the filing date, Bion has raised $611,000 in the Shareholder Note offerings. Further, Bion has changed its focus from pre-development work on the Stovall project, to an initial bolt-on project at an existing facility.

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.

Bion is currently in discussions with several potential strategic partners in engineering, renewable energy (biogas/RNG) and clean fuels, organic fertilizer distribution, and others involved in reducing the environmental footprint of biogas and livestock production. With today’s U.S, and global emphasis on decarbonizing energy and the food supply chain, and their impacts on water and air pollution, the sectors have become closely intertwined. They are evolving quickly, and integrated solutions have become increasingly desired, but complex. Bion is now evaluating engineering and construction firms, biogas operators, and others as potential development partners for industrial and livestock 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 recently finished 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.

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 ARS MODULE IS PROJECTED TO COST IN EXCESS OF $10 MILLION 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 STRATEGIC PARTNERS.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

**2. SIGNIFICANT ACCOUNTING POLICIES **

Principles of consolidation:

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Bion Integrated Projects Group, Inc., Bion Technologies, Inc., BionSoil, Inc., Bion Services, Bion PA2 LLC and Bion 3G-1 LLC (“3G1”); and its 58.9% owned subsidiary, Centerpoint Corporation (“Centerpoint”). All significant intercompany accounts and transactions have been eliminated in consolidation.

Operating Segment:

The Company operates a single reportable segment: advanced waste treatment and resource recovery solutions for organic waste streams. While in the future the Company may pursue other segments—develop integrated livestock projects, implement CAFO retrofits, and exploit other opportunities to use its proprietary technology (as previously described)—at this time it is now focused entirely on bolt-on solutions for existing or planned biogas production facilities. The business is managed by the Chief Executive Officer who is the Chief Operating Decision Maker (“CODM”). The CODM evaluates segment performance based on the operating income (loss) for purposes of allocating resources and evaluating financial performance. The accounting policies of our single reportable segment are the same as those for the Company as a whole.

Cash and cash equivalents:

The Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash and cash equivalents. As of June 30, 2025 and June 30, 2024 there areno cash equivalents.

Property and equipment:

Property and equipment are stated at cost and are depreciated, when placed into service, using the straight-line method over the estimated useful lives of the related assets, generally three to twenty years. The Company capitalizes all direct costs and all indirect incrementally identifiable costs related to the design and construction of its Integrated Projects such as consulting fees, internal salaries and benefits and interest. The Company reviews its property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss would be recognized based on the amount by which the carrying value of the assets or asset group exceeds its estimated fair value and is recognized as a loss from operations.

Patents:

The Company has elected to expense all costs and filing fees related to obtaining patents (resulting in no related asset being recognized in the Company’s consolidated balance sheets) because the Company believes such costs and fees are immaterial (in the context of the Company’s total costs/expenses) and have no direct relationship to the value of the Company’s patents.

Stock-based compensation:

The Company follows the provisions of Accounting Standards Codification (“ASC”) 718, which generally requires that share-based compensation transactions be accounted and recognized in the statement of operations based upon their grant date fair values.

**Derivative Financial Instruments: **

Pursuant to ASC Topic 815 “Derivatives and Hedging” (“Topic 815”), the Company reviews all financial instruments for the existence of features which may require fair value accounting and a related mark-to-market adjustment at each reporting period end. Once determined, the Company assesses these instruments as derivative liabilities. The fair value of these instruments is adjusted to reflect the fair value at each reporting period end, with any increase or decrease in the fair value being recorded in results of operations as an adjustment to fair value of derivatives.

Options:

The Company has issued options to employees and consultants under the 2006 Plan to purchase common shares of the Company. Options are valued on the grant date using the Black-Scholes option-pricing model. The expected volatility is based on the historical price volatility of the Company’s common stock. The dividend yield represents the Company’s anticipated cash dividend on common stock over the expected term of the stock options. The U.S. Treasury bill rate for the expected term of the stock options was utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding based upon management’s estimates.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Warrants:

The Company has issued warrants to purchase common shares of the Company. Warrants are valued using a fair value based method, whereby the fair value of the warrant is determined at the warrant issue date using a market-based option valuation model based on factors including an evaluation of the Company’s value as of the date of the issuance, consideration of the Company’s limited liquid resources and business prospects, the market price of the Company’s stock in its mostly inactive public market and the historical valuations and purchases of the Company’s warrants. When warrants are issued in combination with debt or equity securities, the warrants are valued and accounted for based on the relative fair value of the warrants in relation to the total value assigned to the debt or equity securities and warrants combined.

Concentrations of credit risk:

The Company's financial instruments that are exposed to concentrations of credit risk consist of cash. The Company's cash is in demand deposit accounts placed with federally insured financial institutions and selected brokerage accounts. Such deposit accounts at times may exceed federally insured limits. The Company has not experienced any losses on such accounts.

Noncontrolling interests:

In accordance with ASC 810, “Consolidation”, the Company separately classifies noncontrolling interests within the equity section of the consolidated balance sheets and separately reports the amounts attributable to controlling and noncontrolling interests in the consolidated statements of operations. In addition, the noncontrolling interest continues to be attributed its share of losses even if that attribution results in a deficit noncontrolling interest balance.

Fair value measurements:

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or most advantageous market. The Company uses a fair value hierarchy that has three levels of inputs, both observable and unobservable, with use of the lowest possible level of input to determine fair value.

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2 – observable inputs other than Level 1, quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, and model-derived prices whose inputs are observable or whose significant value drivers are observable; and

Level 3 – assets and liabilities whose significant value drivers are unobservable.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Observable inputs are based on market data obtained from independent sources, while unobservable inputs are based on the Company’s market assumptions. Unobservable inputs require significant management judgment or estimation. In some cases, the inputs used to measure an asset or liability may fall into different levels of the fair value hierarchy. In those instances, the fair value measurement is required to be classified using the lowest level of input that is significant to the fair value measurement. Such determination requires significant management judgment.

The fair value of cash and accounts payable approximates their carrying amounts due to their short-term maturities. The fair value of the loan payable is indeterminable at this time due to the nature of the arrangement with a state agency and the fact that it is in default. The fair value of the redeemable preferred stock approximates its carrying value due to the dividends accrued on the preferred stock which are reflected as part of the redemption value. The fair value of the deferred compensation and convertible notes payable - affiliates are not practicable to estimate due to the related party nature of the underlying transactions.

Lease Accounting:

The Company accounts for leases under ASC 842,Leases (“ASC 842”). Accordingly, the Company will determine whether an arrangement contains a lease at the inception of the arrangement. If a lease is determined to exist, the term of such lease is assessed based on the date on which the underlying asset is made available for the Company’s use by the lessor. The Company’s assessment of the lease term reflects the non-cancelable term of the lease, inclusive of any rent-free periods and/or periods covered by early-termination options which the Company is reasonably certain of not exercising, as well as periods covered by renewal options which the Company is reasonably certain of exercising. The Company also determines lease classification as either operating or finance at lease commencement, which governs the pattern of expense recognition and the presentation reflected in the consolidated statements of operations over the lease term.

For leases with a term exceeding 12 months, a lease liability is recorded on the Company’s consolidated balance sheet at lease commencement reflecting the present value of its fixed minimum payment obligations over the lease term. A corresponding right-of-use (“ROU”) asset equal to the initial lease liability is also recorded, adjusted for any prepaid rent and/or initial direct costs incurred in connection with execution of the lease and reduced by any lease incentives received. For purposes of measuring the present value of its fixed payment obligations for a given lease, the Company uses its incremental borrowing rate, determined based on information available at lease commencement, as rates implicit in its leasing arrangements are typically not readily determinable. The Company's incremental borrowing rate reflects the rate it would pay to borrow on a secured basis and incorporates the term and economic environment of the associated lease.

Revenue Recognition:

The Company currently does not generate revenue and if and when the Company begins to generate revenue the Company will comply with the provisions of ASC 606 “Revenue from Contracts with Customers”.

Income (Loss) per share:

Basic income (loss) per share amounts are calculated using the weighted average number of shares of common stock outstanding during the period. Diluted income (loss) per share assumes the conversion, exercise, or issuance of all potential common stock instruments, such as options or warrants, unless the effect is to reduce the income (loss) per share or increase the earnings per share. During the years ended June 30, 2025 and 2024, the basic and diluted income (loss) per share was the same, as the impact of potential dilutive common shares was anti-dilutive.

The following table represents the warrants and options (as if exercised) and convertible securities (as if converted) that have been excluded from the calculation of basic income (loss) per share:

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

The following is a reconciliation of the denominators of the basic and diluted income (loss) per share computations for the years ended June 30, 2025 and 2024.

Use of estimates:

In preparing the Company’s consolidated financial statements in conformity with accounting principles generally accepted in the United States of America, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements:

The Company continually assesses any new accounting pronouncements to determine their applicability. When it is determined that a new accounting pronouncement affects the Company’s financial reporting, the Company undertakes a study to determine the consequences of the change to its consolidated financial statements and assures that there are proper controls in place to ascertain that the Company’s consolidated financial statements properly reflect the change.

ASU 2023-07: Improvements to Reportable Segment Disclosures

In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, which amends Topic 280, Segment Reporting. The update is designed to improve financial reporting by requiring public entities to disclose more detailed and disaggregated information about their reportable segments.

Key changes introduced by ASU 2023-07 include the requirement for public entities to disclose significant expense categories for each reportable segment, applicable to expenses regularly provided to the chief operating decision maker (CODM). Entities with a single reportable segment must now provide all segment disclosures required by Topic 280. The expanded disclosures are required for both annual and interim periods. Entities may report multiple measures of segment profit or loss, as long as one aligns with U.S. GAAP. Additionally, the title and position of the CODM and an explanation of how the reported profit or loss measures are used must be disclosed.

ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments are applied retrospectively unless impractical, and prior-period segment information should be recast to conform to the new presentation.

The adoption of ASU 2023-07 primarily impacts the disclosures in the notes to the consolidated financial statements by requiring more detailed segment expense information. It does not affect the consolidated balance sheets, statements of operations, or statements of cash flows. The company adopted this guidance effective June 30, 2025.

3. PROPERTY AND EQUIPMENT:

Property and equipment consist of the following:

Depreciation expense was $695 and $1,582 for the years ended June 30, 2025 and 2024, respectively.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

4. DEFERRED COMPENSATION:

The Company owes deferred compensation to various employees, former employees and consultants totaling $1,173,237 and $890,223 as of June 30, 2025 and June 30, 2024, respectively. Included in the deferred compensation balances as of June 30, 2025, are $367,500, $12,306 and $83,964 owed William O’Neill (“O’Neill”), the Company’s former CEO (until May 31, 2024), the estate/heirs of Dominic Bassani (“Bassani”), the Company’s recently deceased former Chief Operating Officer (who was Chief Executive Officer until through April 30, 2022) (NOTE: Dominic Bassani passed away on November 11, 2023.), and Mark A. Smith (“Smith”), the Company’s recently retired President, respectively.

The sums owed to Bassani and Smith are owed pursuant to extension agreements effective January 1, 2015, whereby unpaid compensation earned after January 1, 2015, accrues interest at 4% per annum and can be converted into shares of the Company’s common stock at the election of the employee during the first five calendar days of any month. The conversion price shall be the average closing price of the Company’s common stock for the last 10 trading days of the immediately preceding month. The deferred compensation owed Bassani and Smith as of June 30, 2025 was $12,306 and $83,964, respectively.

O’Neill is owed a balance of $367,500 and $367,500 at June 30, 2025 and June 30, 2024, respectively, pursuant to his 2021 employment agreement. There is no interest accrual or conversion rights related to the deferred balance. O’Neill terminated his service to the Company prior to the full term of his agreement.

The Company owes deferred compensation to Craig Scott of $330,046 and $160,133 at June 30, 2025 and June 30, 2024, respectively, with similar conversion terms as those described above for Bassani and Smith, with the exception that the interest accrues at 0% to 3% per annum.

The Company also owes various consultants and employees, pursuant to various agreements, for deferred compensation of $306,920 and $202,509 as of June 30, 2025 and June 30, 2024, respectively, with similar conversion terms as those described above for Bassani and Smith, with the exception that the interest accrues at 0% to 3% per annum. The Company also owes a former employee $72,500, which is not convertible and is non-interest bearing.

Bassani and Smith have each been granted the right to convert up to $300,000 of deferred compensation balances at a price of $0.75 per share until September 15, 2025, into common shares (to be issued pursuant to the 2006 Plan). Smith also has the right to convert all or part of his deferred compensation balance into the Company’s securities (to be issued pursuant to the 2006 Plan) “at market” and/or on the same terms as the Company is selling or has sold its securities in its then current (or most recent if there is no current) private placement. Smith also received the right to transfer future deferred compensation to his 2020 Convertible Obligation at his election but such right is no longer in force.

The Company recorded interest expense of $15,764 ($10,131 with related parties) and $30,379 ($25,893 with related parties) for the years ended June 30, 2025 and 2024, respectively.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

5. CONVERTIBLE NOTES PAYABLE:

Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes

Effective February 1, 2023, three (3) directors/officers of the Company agreed to adjust the provisions of long term convertible obligations (including most of the 2020 Convertible Obligations and September 2015 Convertible Notes --- see below) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately $3.47 million, in aggregate** **while equitably maintaining existing conversion rights). The debt modification was treated as an equity transaction because the modifications were with affiliates that are related parties.

Mark A. Smith (the Company’s former President)(“Smith”), Dominic Bassani (the Company’s former Chief Operating Officer) (“Bassani”) (NOTE: Dominic Bassani passed away on November 11, 2023 and is no longer an affiliate during the year ended June 30, 2025.) and Ed Schafer (Director)(“Schafer”), adjusted/reduced the principal owed to them by $1,109,649, $1,939,670 and $424,873, respectively. Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020 Convertible Obligations and the adjusted portion of the September 2015 Convertible Notes were renamed Adjusted September 2015 Convertible Notes. The Adjusted 2020 Convertible Obligations of Smith, Bassani and Schafer are convertible into Units (consisting of 1 share and from one half (1/2) to one (1) warrant) at prices of $.0946, $.0953, and $.0953, respectively, and the Adjusted September 2015 Convertible Notes may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.115 per share. The adjusted conversion prices slightly reduce the securities to be issued on conversion of each instrument from the amount receivable under the unadjusted instruments. The Adjusted 2020 Convertible Obligations and Adjusted September 2015 Convertible Notes do not accrue any interest until their maturity date. After the adjustment, the Company owed Smith, Bassani (and trust) and Schafer $262,154, $434,016 and $96,364, respectively, of Adjusted 2020 Convertible Obligations and Bassani and Schafer, respectively, $24,230 and $4,012 of Adjusted September 2015 Convertible Notes. The Company has extended the maturity dates to September 15, 2025.

As of June 30, 2025, the Adjusted 2020 Convertible Obligation balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer were $459,277, nil and $101,973, respectively. As of June 30 2024, the Adjusted 2020 Convertible Obligation balances, including accrued interest, owed Bassani (and his donees), Smith and Edward Schafer were $459,277, nil and $101,973, respectively.

As of June 30, 2025 the Adjusted September 2015 Convertible Notes balances, including accrued interest, owed Bassani Family Trusts and Schafer were $7,907 and nil respectively. As of June 30, 2024 the Adjusted September 2015 Convertible Notes balances, including accrued interest, owed Bassani Family Trusts and Schafer were $7,907 and $4,246, respectively.

On September 15, 2025, settlements were reached with Mr. Smith, Mr. Schafer, and the Bassani family, to surrender additional securities. Included in these agreements were provisions to cancel these convertible note obligations, effective on that date. For details on these settlement agreements, see Item 1, Note F above.

2020 Convertible Obligations

The 2020 Convertible Obligations (which combined/replaced prior convertible instruments dating to 2017 (or earlier), which accrue interest at either 4% per annum or 4% compounded quarterly and effective January 1, 2020 were due and payable on July 1, 2024. The 2020 Convertible Obligations (including accrued interest, plus all future deferred compensation added subsequently), are convertible, at the sole election of the holder, into Units consisting of one share of the Company’s common stock and one half to one warrant to purchase a share of the Company’s common stock, at a price of $0.50 per Unit until July 1, 2024. The maturity date of the notes has been extended to July 15, 2025. The original conversion price of $0.50 per Unit approximated the fair value of the Units at the date of the agreements; therefore, no beneficial conversion feature exists. Management evaluated the terms and conditions of the embedded conversion features based on the guidance of ASC 815-15 “Embedded Derivatives” to determine if there was an embedded derivative requiring bifurcation. An embedded derivative instrument (such as a conversion option embedded in the deferred compensation) must be bifurcated from its host instruments and accounted for separately as a derivative instrument only if the “risks and rewards” of the embedded derivative instrument are not “clearly and closely related” to the risks and rewards of the host instrument in which it is embedded. Management concluded that the embedded conversion feature of the deferred compensation was not required to be bifurcated because the conversion feature is clearly and closely related to the host instrument, and because of the Company’s limited trading volume that indicates the feature is not readily convertible to cash in accordance with ASC 815-10, “Derivatives and Hedging”. Effective February 1, 2023, a large portion of the 2020 Convertible Obligations were adjusted as set forth herein. The maturity date of the notes has been extended to September 15, 2025.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Effective January 9, 2025, the Board of Directors amended the terms of the 2020 Adjusted Convertible Note owned by Ed Schafer, who retired from the Company’s Board of Directors on December 31, 2024. The maturity date of the 2020 Adjusted Convertible Note has been extended to September 15, 2025.

On September 15, 2025, a settlement was reached with Mr. Schafer to cancel the 2020 Adjusted Convertible Note, effective on that date. For details on the settlement agreement, see Item 1, Note F above.

As of June 30, 2025, the remaining unadjusted portion of the 2020 Convertible Obligation balances, including accrued interest, owed Bassani Family Trusts and Smith were $386,676 and $125,919, respectively. As of June 30, 2024, the remaining unadjusted portion of the 2020 Convertible Obligation balances, including accrued interest, owed Bassani Family Trusts (and his donees) and Smith, were $373,999 and $121,076, respectively.

The Company recorded interest expense of $17,521 and $16,558 for the years ended June 30, 2025 and 2024, respectively.

Effective February 1, 2023, three (3) directors/officers of the Company agreed to adjust the provisions of long-term convertible obligations (including most of the 2020 Convertible Obligations and September 2015 Convertible Notes) owed to them by the Company in a manner which reduced the indebtedness of the Company by 80% (approximately $3.47 million, in aggregate) while equitably maintaining existing conversion rights. Because the modifications where with affiliates that are related parties, the debt modification was treated as an equity transaction. The Company recorded a deemed dividend for the reductions.

Smith, Bassani and Schafer, adjusted/reduced the principal owed to them by $1,109,649, $1,939,670 and $424,873, respectively. Subsequent to the adjustment, the adjusted portion of the 2020 Convertible Obligations were renamed Adjusted 2020 Convertible Obligations (see above and Note 8.).

September 2015 Convertible Notes

During the year ended June 30, 2016, the Company entered into September 2015 Convertible Notes with Bassani, Schafer and a Shareholder which replaced previously issued promissory notes. The September 2015 Convertible Notes bear interest at 4% per annum, have maturity dates of July 1, 2024, and may be converted at the sole election of the noteholders into restricted common shares of the Company at a conversion price of $0.60 per share. As the conversion price of $0.60 approximated the fair value of the common shares at the date of the September 2015 Convertible Notes, no beneficial conversion feature exists. The maturity date of the notes has been extended to September 15, 2025 forall note holders. On September 15, 2025 the maturity date for two of the 2015 Convertible Notes was extended to September 15, 2027.

Effective January 16, 2025, Mr. Schafer voluntarily surrendered 36,918 shares of common stock that would have been issued as the result of the conversion of his $4,246 Adjusted 2015 Convertible Note. The note was convertible at $0.115 per share.

As of June 30, 2025, the remaining unadjusted portion of the 2015 Convertible Notes balances including accrued interest, were $169,383, nil and $491,107, respectively. The balances of the September 2015 Convertible Notes as of June 30, 2024, including accrued interest owed Bassani, Schafer and Shareholder, are $164,183, nil and $475,990, respectively.

The Company recorded interest expense of $20,317 and $20,317 for the years ended June 30, 2025 and 2024, respectively.

On September 15, 2025, settlements were reached with Mr. Smith, Mr. Schafer, and the Bassani family to surrender additional securities. Included in these agreements were provisions to cancel these convertible note obligations, effective on that date. For details on these settlement agreements, see Item 1, Note F above.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Convertible Bridge Loan/Default

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”). SEB and the note represented a strategic investment that would ‘anchor’ a larger capital raise. In addition to SEB, it was to include an offering to Bion shareholders, alongside new retail and institutional investors introduced by Titan Partners, the NY investment banking firm Bion engaged to underwrite the offering. The Bridge Loan Agreements required 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 be due and payable (with interest accrued at 9% 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.

On May 10, 2024 the Company received $150,000 from affiliates of the Bridge Loan Lender on terms not yet finalized and included in an agreement. These funds were received in the context of negotiations/discussions regarding a potential larger investment by affiliates and/or associates of the Lender but no further funds were received and the larger transaction was never completed. The funds were used primarily to re-initiate operations at the Initial Project. The Company is currently involved in discussions with representatives of SEB in an effort to achieve a mutually satisfactory resolution.

The Company recorded interest expense of $36,298 and $18,659 for the years ended June 30, 2025 and 2024, respectively.

May 2024 Convertible Notes

During the year ended June 30, 2024, the Company entered into May 2024 Convertible Notes with five individuals. The May 2024 Convertible Notes bear interest at 6% per annum, have maturity dates of December 31, 2025, and may be converted at the sole election of the noteholders into one restricted common shares and one warrant of the Company at a conversion price of $1.00 per unit. As the conversion price of $1.00 approximated the fair value of the common shares at the date of the May 2024 Convertible Notes, no beneficial conversion feature exists.

The balances of the May 2024 Convertible Notes including accrued interest owed is $133,067 and $125,567 as of June 30, 2025 and June 30, 2024, respectively.

The Company recorded interest expense of $7,500 and $567 for the year ended June 30, 2025 and 2024, respectively.

2024 Secured Convertible Note

On October 22, 2024, Bion's Board of Directors ratified an agreement with the Bion BLG, LLC, loan group, effective October 15, 2024, to purchase a Convertible Promissory Note in the principal amount of up to $500,000. The Company received advances the year ended June 30, 2025 in the amount of $399,763 and interest was applied based on the date the funds were received. The note bears interest at 7.5% per annum and has a maturity date of April 15, 2025.

Three Bion Directors (Schoener, Turk and Weets) are members of the loan group and together comprise 60% ownership of the loan group (each member owns 20%). The Note is secured by the Company's Intellectual Property (IP)/patents. The Note will convert into securities in the Company at the terms of a later capital raise (or other source of funding) in excess of $3.0 million, which must be completed within six (6) months.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

On July 24, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, (effective July 15, 2025) extending the maturity date of the BLG Note to January 15, 2026 (attached as exhibit). The agreement was ratified by Bion’s Board on July 24, 2025. Under the terms of the Forbearance Agreement, the amounts outstanding under the Note will continue to bear interest at a rate of 9% per annum. Bion agreed to a new formula to determine BLG’s obligation for up to $100,000 in legal costs related to litigation over delinquent payment for construction costs incurred at Bion’s demonstration facility near Fair Oaks, IN (see Bion’s Forms 8-K, dated April 17, May 30 and July 24, 2025). Bion BLG, LLC, also extended their agreement to share their collateral with investors in the three prior Shareholder Note offerings, with investors participating in a new offering, dated July 25, 2025.

Effective October 15, 2024, the Company entered into an Agreement with BLG, LLC, to purchase a Convertible Promissory Note in the principal amount of up to $500,000 (See Bion’s Form 8-K, dated October 24, 2024). At that time, BLG, LLC, consisted of three affiliates of the Company (Directors Greg Schoener (also Interim COO), Turk Stovall, and Bob Weerts) and two shareholders (one of whom is the brother of Greg Schoener). BLG membership is currently the same, but Bion accepted Turk Stovall’s resignation as a Director, effective May 30, 2025. Amounts outstanding under the original BLG Note bore interest at a rate of 7.5% per annum through the maturity date of the Note, which was April 15, 2025. The Note is secured by the Company’s Intellectual Property (IP)/patents and it will convert into securities in the Company at the terms of a later capital raise (or other source of funding) in excess of $3.0 million, that had to be completed within six (6) months, and other terms as defined in the Note and Security Agreements (attached as exhibits).

Effective May 29, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, extending the maturity date of the BLG Note to July 15, 2025 (See Bion’s Form 8-K, dated May 30, 2025). Under the terms of the Forbearance Agreement, the amounts outstanding under the Note began to bear interest at a rate of 9% per annum.

The balances of the 2024 Convertible Note Advances as of June 30, 2025 including accrued interest owed is$423,053.

The Company recorded interest expense of $23,290 for the years ended June 30, 2025.

November 2024 Convertible Notes

During the year ended June 30, 2025, the Company entered into November 2024 Convertible Notes with twelve individuals. The November 2024 Convertible Notes bear interest at 7.5% per annum, have maturity dates of December 31, 2025. The November Notes will convert into Units in the Company at the terms of a later capital raise, in which the Company crosses the threshold of $3 million aggregate capital raised, including proceeds from this filing.

The balances of the November 2024 Convertible Notes including accrued interest owed is $207,389 as of June 30,2025.

The Company recorded interest expense of $6,389 for the year ended June 30, 2025.

February 2025 Convertible Notes

During the year ended June 30 2025, the Company entered into February 2025 Convertible Notes with seven individuals. The February 2025 Convertible Notes bear interest at 7.5% per annum, have maturity dates of December 31, 2025. The February 2025 Notes will convert into Units in the Company at the terms of a later capital raise, in which the Company crosses the threshold of $3 million aggregate capital raised, including proceeds from this filing.

The balances of the February 2025 Convertible Notes including accrued interest owed is $157,416 as of June 30, 2025. The Company recorded interest expense of $2,416 for the year ended June 30, 2025.

May 2025 Notes

During the year ended June 30, 2025, the Company entered into May 2025 Convertible with two individuals. The May 2025 Convertible Notes bear interest at 7.5% per annum, have maturity dates of December 31, 2025. The May 2025 Convertible Nores will convert into Unity in the Company at the terms of a later capital raise, in which the Company crosses the threshold of $3 million aggregate capital raised, including proceeds from the filing.

The balances of the May 2025 Convertible Notes including accrued interest owed is $70,288 as of June 30, 2025. The Company recorded interest expense of $287 for the year ended June 30, 2025.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

6. STOCKHOLDERS’ EQUITY:

Write down of carry value of Initial Project

Effective June 30, 2024, at the same time the Initial Project was deemed placed in service, the Board of Directors determined that the capitalized carrying value of the Initial Project on the Company balance sheet as of that date be reduced to $0 in order to conform to the applicable accounting practices, 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 above in Item 7, Management’s Discussion and Analysis). 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.

“Give-back” Agreements to Additional Paid in Capital

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”)(see Exhibit 10.1)(“Bassani Family Agreement”), and b) Mark A. Smith, President of the Company and a director (see Exhibit 10.2)(“MAS Agreement”). The Bassani Family and Smith 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 “giveback” agreements were treated as equity transactions because the forfeitures were with affiliates that are related parties.

The Bassani Family agreed to surrender not less than approximately 20% of its Company holdings (as of December 2023), which surrender would increase to approximately 30% based on certain financing performances. The Bassani Family elected to surrender deferred compensation of $652,252 (for 770,792 shares), $17,734 of partial surrender of the 2015 adjusted replacement note (for 154,208 shares) and 4,025,000 options as of June 30, 2024. The Bassani Family Agreement also sets forth requirements regarding conversion of convertible notes held by members of the Bassani Family after the security surrender.

On January 18, 2025, under the Bassani Family Agreement described above, Bion cancelled 1,237,500 warrants owned by the Bassani Family. Under the terms of the Agreement, the Bassani Family was required to surrender an additional 5% of their holdings after Bion successfully raised $500,000 in funding, following the date of the agreement. The warrants had a net exercise cost of $0.1875.

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.

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.

On January 9, 2025, the Company agreed to amend the terms of the agreements dated April 1, 2024 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”)(see Form 8-K dated April 3, 2024, Exhibit 10.1)(“Bassani Family Agreement”), and b) Mark A. Smith, President of the Company and a director (“MAS”)(see Form 8-K dated April 3, 2024, Exhibit 10.2)(“MAS Agreement”). 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 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 dated January 15, 2025, to April 15, 2025. No changes were made regarding any ‘give backs’ of securities of the Company.

On September 15, 2025, settlements were reached with Mr. Smith and the Bassani family, to surrender additional securities. Included in the Bassani family agreement was a provision to cancel their remaining 5% obligation under the giveback agreement. For details on this settlement agreements, see Item 1, Note F above.

Series B Preferred stock:

Since July 1, 2014, the Company had 200 shares of Series B redeemable convertible Preferred stock outstanding with a par value of $0.01 per share, convertible at the option of the holder at $2.00 per share, with dividends accrued and payable at 2.5% per quarter. The Series B Preferred stock is mandatorily redeemable at $100 per share by the Company three years after issuance and accordingly was classified as a liability. The 200 shares had reached their redemption date and the Company approved the redemption of the Series B preferred stock during the year ended June 30, 2022. The 200 shares of Series B redeemable convertible Preferred stock were redeemed for $41,000, which included the $21,000 in accrued dividend payable.

During the years ended June 30, 2025, and 2024, the Company declared dividends of nil and nil respectively. The dividends are classified as a component of operations as the Series B Preferred stock is presented as a liability in these consolidated financial statements. There isno liability at June 30, 2025.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Common stock:

Holders of common stock are entitled to one vote per share on all matters to be voted on by common stockholders. In the event of liquidation, dissolution or winding up of the Company, the holders of common stock are entitled to share in all assets remaining after liabilities have been paid in full or set aside and the rights of any outstanding preferred stock have been satisfied. Common stock has no preemptive, redemption or conversion rights. The rights of holders of common stock are subject to, and may be adversely affected by, the rights of the holders of any outstanding series of preferred stock or any series of preferred stock the Company may designate in the future.

Centerpoint holds 704,309 shares of the Company’s common stock. These shares of the Company’s common stock held by Centerpoint are for the benefit of its shareholders without any beneficial interest.

During the year ended June 30, 2025,159,228 shares of restricted common stock were issued for consulting services valued at$34,500.

Warrants:

As of June 30, 2025, the Company had approximately 15.9 million warrants outstanding, with exercise prices from $0.60 to $1.60 and expiring on various dates through December 31, 2026.

The weighted-average exercise price for the outstanding warrants is $0.79, and the weighted-average remaining contractual life as of June 30, 2025 is 40 years.

On July 15, 2024 the Company modified 5,795,099 warrants by extending the exercise date. Employees and directors were extended two year and investors were extended one year. The valuation method used by the Company determines the valuation based on prior private placements. One year extensions were valued at $0.05 and two year extensions were valued at $0.15. The company had non-cash employee compensation of $326,475 and interest expenseof $180,929.

On January 15, 2025 the Company modified 7,147,369 warrants by extending the exercise date from January 15, 2025 to July 15, 2025. The valuation method used by the Company determines the valuation based on prior private placements. 6 month extensions were valued at $0.025. The company had non-cash employee compensation of $178,684.

On January 18, 2025, under the Bassani Family Agreement described above, Bion cancelled 1,237,500 warrants owned by the Bassani Family. Under the terms of the Agreement, the Bassani Family was required to surrender an additional 5% of their holdings after Bion successfully raised $500,000 in funding, following the date of the agreement. The warrants had a net exercise cost of $0.1875.

On April 15, 2025 the Company modified 3,000,000 warrants by extending the exercise date from June 30, 2025 to July 15, 2025. The valuation method used by the Company determines the valuation based on prior private placements. 6 month or less extensions were valued at $0.002. The company had non-cash employee compensation of $6,250.

On September 15, 2025, settlements were reached with Mr. Smith and the Bassani family, to surrender additional securities. Included in the Bassani family agreement was a provision to cancel their remaining 5% obligation under the giveback agreement. For details on this settlement agreements, see Item 1, Note F above.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

Stock options:

On April 7, 2022 the Company’s shareholders approved the Bion Environmental Technologies, Inc. 2021 Equity Incentive Award Plan (the “Equity Plan”). The Equity Plan provides for the issuance of options (and/or other securities) to purchase up to 30,000,000 shares of the Company’s common stock. The Equity Plan was adopted and ratified by Board of Directors on April 8, 2022. Terms of exercise and expiration of options/securities granted under the Equity Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years. No grants have been made pursuant to the Equity Plan as of the date of this report.

The Company’s 2006 Consolidated Incentive Plan, as amended during the year ended June 30, 2021 (the “2006 Plan”), provides for the issuance of options (and/or other securities) to purchase up to 36,000,000 shares of the Company’s common stock. Terms of exercise and expiration of options/securities granted under the 2006 Plan may be established at the discretion of the Board of Directors, but no option may be exercisable for more than ten years. The 2006 Plan will be maintained to service grants already made thereunder (together with new grants, if any, to employees and consultants who already has received grants pursuant to its terms).

The Company recorded compensation expense related to employee stock options of $332,128 and $(18,314) for the years ended June 30, 2025 and 2024, respectively. The Company granted nil and nil options for the years ended June 30, 2025 and 2024, respectively.

On July 15, 2024 the Company modified 3,806,600 options by extending the exercise date.3,736,600 options held by employees and directors were extended two years from December 31, 2024 to December 31, 2026.70,000 options with a non-employee were extended one year from December 31, 2024 to December 31, 2025. The company used the Black- Scholes valuation method and expensed $332,128 to non-cash compensation.

On September 15, 2025, a settlement was reached with Mr. Schafer to cancel the 2020 Adjusted Convertible Note and surrender options, effective on that date. For details on the settlement agreement, see Item 1, Note F above.

A summary of option activity under the 2006 Plan for years ended June 30, 2025 and 2024 is as follows:

The total fair value of stock options that vested during the years ended June 30, 2025 and 2024 was nil and $2,730, respectively. As of June 30, 2025, the Company hadno unrecognized compensation cost related to stock options.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

7. SUBSCRIPTION RECEIVABLE - AFFILIATES:

As of June 30, 2025, the Company has three interest bearing, secured promissory notes with an aggregate principal amount of $428,250 ($551,766, including interest) from Bassani which were received as consideration for purchases of warrants to purchase 5,565,000 shares, in aggregate, of the Company’s restricted common stock, which warrants have an exercise price of $0.75 (with a 75% exercise price adjustment provision) and have expiry dates ranging from December 31, 2024 (extended to July 15, 2025) to December 31, 2025 (subject to extension rights) secured by portions of Bassani Family Trust’s 2020 Convertible Obligation and Bassani Family Trust’s September 2015 Convertible Notes. The secured promissory notes are payable July 15, 2025 (extended to September 15,2025).

As of June 30, 2025, the Company has an interest bearing, secured promissory note for $30,000 ($38,282 including interest) from Smith as consideration to purchase warrants to purchase 300,000 shares of the Company’s restricted common stock, which warrants are exercisable at $0.60 (with a 75% exercise price adjustment provision) and had expiry dates of December 31, 2024 (extended to September 15, 2025). The promissory note bears interest at 4% per annum and is secured by $30,000 original principal ($38,282 including interest) of Smith’s 2020 Convertible Obligations. The secured promissory note is payable July 15, 2025 (extended to September 15,2025).

As of June 30, 2025, the Company has an interest bearing, secured promissory note for $19,400 ($25,323 including interest) from Scott as consideration to purchase warrants to purchase 485,000 shares of the Company’s restricted common stock, which warrants are exercisable at $0.75 (with a 90% exercise price adjustment provision) and have expiry dates of December 31, 2024 (extended to December 31, 2026). The promissory note bears interest at 4% per annum and is secured by the warrants (which 400,000 were gifted subject to the security interest).

As of June 30, 2025, the Company has one interest bearing, secured promissory note with an aggregate principal amount of $27,000 ($35,244 including interest) from one employee as consideration to acquire warrants to purchase 570,000 shares of the Company’s restricted common stock, which warrants are exercisable at $0.75 (with a 90% exercise price adjustment provision) and have expiry dates of December 31, 2024 (now extended to December 31, 2026). The promissory note bears interest at 4% per annum and is secured by a perfected security interest in the warrants, and are payable on December 31, 2026.

These secured promissory notes are recorded as “Subscription receivable—affiliates” on the Company’s balance sheet pending payment .

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

8. COMMITMENTS AND CONTINGENCIES:

A: Employment/Consulting (and related)agreements:

Stephen Craig Scott (“Scott”) was appointed interim CEO effective June 1, 2024. Scott had previously been working with the Company as an employee/consultant since 1993 in various positions including Director of Communications, SVP- Capital Markets and Head of Business Development. On October 25, 2023, Scott entered into an agreement with the Company which included provisions for a monthly salary of $14,000 almost all of which Scott deferred to help the Company conserve cash. For the years ended June 30, 2025 and 2024, deferred compensation was $163,000 and $104,000 and Scott was paid $5,000 and $64,000 respectively.

William O’Neill (“O’Neill”) was hired as the Company’s Chief Executive Officer (“CEO”) effective May 1, 2022 and he elected not to complete his contractual term and ended his service with the Company effective May 31, 2024. O’Neill had previously been working with the Company as a consultant and had been employed by the Company as its CEO during 2010-2011. (Upon the hiring of O’Neill, Bassani, CEO of the Company from 2011, assumed the position of COO while retaining existing operational management responsibilities and working with O’Neill on ‘commercialization’ of the Company’s technology and work related to JVs (and other transactions) based on the Company’s Gen3 Technology and related matters until his recent death. Bassani’s compensation arrangements with the Company were not altered in the context of the change of positions.) The Company and O’Neill entered into a thirty- seven (37) month employment agreement with compensation of $25,000 cash and $10,000 deferred compensation per month. The cash payment waspaid $12,500 to O’Neill and $12,500 to an entity affiliated with O’Neill. An entity affiliated with O’Neill was issued 1,000,000 Incentive Warrants exercisableat $1.00 per share (a 75% exercise price adjustment provision if the terms set forth therein are met) until April 30, 2026 of which up to 304,743 Incentive Warrants have been cancelled due to O’Neill’s failure to serve the entire contract term. O’Neill was not paid, from October 31, 2023 until his resignation, deferring part or all of his cash compensation due to the Company’s financial crisis described in multiple places herein, and $157,500 was accrued during that period.

Until his retirement on July 31, 2024, Smith held the positions of Director, President, Interim Chief Financial Officer and General Counsel of Company (and its subsidiaries) under various agreements (and extensions) and terms since March 2003. On October 10, 2016, the Company approved a month-to-month contract extension with Smith which included provisions for i) a monthly salary of $18,000 (deferred until the Board of Directors re-instated cash payments to all employees and consultants who are deferring compensation), ii) the right to convert up to $300,000 of his deferred compensation, at his sole election, at $0.75 per share, until December 31, 2024, and iii) the right to convert his deferred compensation in whole or in part, at his sole election, at any time in any amount at “market” or into securities sold in the Company’s current/most recent private offering at the price of such offering to third parties. Smith agreed effective July 29, 2018 to continue to serve the Company under the same basic terms on a month-to-month basis. On May 1, 2022 Smith’s compensation was increased to $25,000 per month of which $5,000 per month was deferred. Smith deferred substantial portions of his monthly compensation to help the Company conserve cash. For the years ended June 30, 2025 and 2024, Smith was paid nil and $20,000, respectively, of cash compensation. Smith was paid, deferring part or all of his cash compensation, since October 31, 2023, due to the Company’s financial crisis described in multiple places herein and $135,000 has been accrued during that period until June 30, 2025.

From no later than March 31, 2005, the Company had various agreements with Dominic Bassani (and/or Brightcap which provided his services during some of the years) (NOTE: Dominic Bassani passed away on November 11, 2023.) who was serving as the Company’s Chief Operating Officer (‘COO’) at the time of his passing and formerly served as the Company’s Chief Executive Officer (‘CEO’) for the prior decade (any reference to Brightcap or Bassani for all purposes are referring to the same individual). The Board appointed Bassani as the Company's CEO effective May 13, 2011. On February 10, 2015, the Company executed an Extension Agreement with Bassani pursuant to which Bassani extended the term of his service to the Company to December 31, 2017 (with the Company having an option to extend the term an additional six months.) Pursuant to the Extension Agreement, Bassani continued to defer his cash compensation ($31,000 per month) until the Board of Directors re-instated cash payments to all employees and consultants who were deferring their compensation. During October 2016 Bassani was granted the right to convert up to $125,000 of his deferred compensation, at his sole election, at $0.75 per share, until March 15, 2018 (which was expanded on April 27, 2017, to the right to convert up to $300,000 of his deferred compensation, at his sole election, at $0.75 per share, until June 30, 2024 (including extensions). During February 2018, the Company agreed to the material terms for a binding two-year extension agreement for Bassani’s services as CEO. Bassani’s salary remained $31,000 per month, which accrued in part during periods when the Board determined there was not adequate cash available. Additionally, the Company agreed to pay or accrue $2,000 per month to be applied to life insurance premiums (which sums were accrued as liabilities). On August 1, 2018, in the context of extending his agreement to provide services to the Company on a full-time basis through December 31, 2022) plus 2 years after that on a part-time basis, the Company received an interest bearing secured promissory note for $300,000 from Bassani as consideration to purchase warrants to purchase 3,000,000 shares of the Company’s restricted common stock, which warrants are exercisable at $0.60 and have expiry dates of July 15, 2025 (extended to September 15, 2025). The promissory note is secured by a portion of Bassani’s 2020 Convertible Obligations and, as of June 30, 2025, the principal and accrued interest was $386,677. For the years ended June 30, 2025 and 2024, Brightcap was paid nil and $20,000, respectively, of cash compensation.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

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”)(“Bassani Family Agreement”), and b) Mark A. Smith, recently retired President of the Company and a director (“MAS”) (“MAS Agreement”), as described in multiple places herein.

B: Initial Project:

On January 28, 2022 Bion Environmental Technologies, Inc. (‘Bion’), on behalf of Bion 3G1 LLC (‘3G1’), a wholly-owned subsidiary, entered into a Purchase Order Agreement with Buflovak and Hebeler Process Solutions (collectively ‘Buflovak’) in the amount of $2,665,500 (and made the initial 25% payment ($666,375) for the core of the ‘Bion System’ portion (without the crystallization modules which will be ordered and fabricated pursuant to subsequent agreements) of the previously announced 3G Tech Initial Project. This Purchase Order encompassed the core of Bion’s 3G Technology. The Company received progress billing in March 2022 and June 2022 for the second and third 25% installments, both of which have been paid as of the filing date. On January 17, 2023 the Company received an invoice from Buflovak for $533,100 which was paid on March 1, 2023 and on April 24, 2023 the Company received an invoice from Buflovak for $83,275 which was paid on May 2, 2023 bringing the aggregate payments to $2,615,500 as of the date of this filing. On July 26, 2023 the Company received the final invoice for $50,000, $16,666 was paid on January 2, 2024 leaving a balance of $33,334. In addition to the Purchase Order, through June 30, 2025 the Company has incurred additional costs of $6,794,925 on the Initial Project for capitalized interest and costs, non-cash compensation, equipment and consulting fees. $7,371,371 has been paid and $1,658,469 has been billed and not yet paid.

Buflovak (a division of Hebeler Process Solutions) has worked with the Company on design and testing of its 3G Tech over several years. The basic design for the Initial Project’s ARS System, fabrication and delivery of equipment from Buflovak, and assembly/construction were completed in July 2023, followed by system startup. Steady-state operations were achieved in September 2023, after which time we began optimization of the ARS in preparation for providing final design for full-scale systems, as well as demonstrating its performance and economics for an independent engineering report. Due to delays and interruptions in our ability to operate the system (as below), those efforts have continued to date. We worked in concert with Integrated Engineering Services, the primary site engineering firm for the facility, on the integration of all project components/modules at the Initial Project site during assembly/construction. Additional agreements were entered into with various professional services providers (engineers, surveyors, utilities, etc.) for work related to the Initial Project. The Company has incurred costs of $8,406,434 on the Initial Project, not including capitalized labor and interest.

Management previously believed that the Initial Project had reached the point where it could be appropriately deemed ‘placed in service’ at January 1, 2024. However, discussions with the key technical and engineering personnel involved at the Initial Project during the recently concluded quarter convinced management that such a characterization was premature as some key modules had not yet been completed and/or fully tested. Additionally, due to some recent equipment break-downs, the Initial Project was in maintenance mode at that time (and not conducting operations), while the Company awaited required replacement parts and subsequent repairs. This process was slowed by the Company’s ongoing difficulties in raising needed funds for its activities. The Company’s Board of Directors re-evaluated the classification/status of the Initial Project as part of the Company’s annual review process and determined that the Initial Project had been ‘placed in service’ at the June 30, 2024, fiscal year end. Further, after extensive discussion, it was determined that the ‘carrying value’ of the Initial Project on the Company balance sheet as of that date be reduced to $0 in order to conform to accepted accounting practices, 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). 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.

C: Lease:

The Company entered into an agreement on September 23, 2021, to lease approximately four acres of land near Fair Oaks, Indiana, for the development site of its Initial Project. The lease ended December 31, 2024 and there is an agreement to extend month to month at the same rate.

The Company has not made consistent lease payments since October 16, 2023 and has made no payments since February 24, 2025. The Company owes $106,250 in lease payments at June 30, 2025.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

D: Litigation (and related matters):

On April 16, 2025, the Company was served a summons by Hamstra Builders, Inc. (“Hamstra”) along with three other defendants: Bion Technologies, Inc. (“Biontech”), Bion 3G-1, LLC (“3G-1”), both entities of Bion Environmental Technologies, Inc., and North Prairie Holdings, LLC (‘NPHLLC”) the property lessor. The Hamstra suit is related to the Notice of Intent to file a Mechanic’s Lien, that was filed April 16, 2024, and has been disclosed in our public filings since that date. Bion has retained counsel in Indiana to represent the company in these actions. Hamstra is seeking to recover $1,494,513 in unpaid invoices related to the construction of Bion’s Ammonia Recovery System at Fair Oaks, Indiana. This sum includes $653,915 owed to Dilling Group, Inc., a subcontractor of Hamstra. Dilling filed suit to recover that amount on March 31, 2025, which was disclosed in Bion’s 8-K, dated April 7, 2025. These amounts are included in accounts payable and accrued expenses.

The Company currently is not involved in any other material litigation or similar events.

9. INCOME TAXES:

The reconciliation between the expected federal income tax benefit computed by applying the Federal statutory rate to loss before income taxes and the actual benefit for taxes on loss for the years ended June 30, 2025 and 2024 is as follows:

The Company has net operating loss carry-forwards (“NOLs”) for tax purposes of approximately $32,879,000 as of June 30, 2025. These NOLs expire on various dates through 2043.

The utilization of the NOLs may be limited under Section 382 of the Internal Revenue Code.

The Company’s deferred tax assets for the years ended June 30, 2025 and 2024 are estimated as follows:

The Company has provided a valuation allowance of 100% of its net deferred tax asset due to the uncertainty of generating future profits that would allow for the realization of such deferred tax assets

10.401(k) PLAN:

The Company has adopted the Bion Technologies, Inc. 401(k) Profit Sharing Plan and Trust (the “401(k) Plan”), a defined contribution retirement plan for the benefit of its employees. The 401(k) Plan is currently a salary deferral only plan and at this time the Company does not match employee contributions. The 401(k) is open to all employees over 21 years of age and no service requirement is necessary.

The Company discontinued the 401K plan as of July 7, 2025.

BION ENVIRONMENTAL TECHNOLOGIES, INC. AND SUBSIDIARIESNOTES TO CONSOLIDATED FINANCIAL STATEMENTSYEARS ENDED JUNE 30, 2025 AND 2024

11. SUBSEQUENT EVENTS:

During August and September, the Company extended warrants with expiration dates of July 15, 2025 to August 15, 2025 and September 15, 2025.

On July 24, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, (effective July 15, 2025) extending the maturity date of the BLG Note to January 15, 2026 (attached as exhibit). The agreement was ratified by Bion’s Board on July 24, 2025. Under the terms of the Forbearance Agreement, the amounts outstanding under the Note will continue to bear interest at a rate of 9% per annum. Bion agreed to a new formula to determine BLG’s obligation for up to $100,000 in legal costs related to litigation over delinquent payment for construction costs incurred at Bion’s demonstration facility near Fair Oaks, IN (see Bion’s Forms 8-K, dated April 17, May 30 and July 20, 2025). Bion BLG, LLC, also extended their agreement to share their collateral with investors in the three prior Shareholder Note offerings, with investors participating in a new offering, dated July 25, 2025

Effective October 15, 2024, the Company entered into an Agreement with BLG, LLC, to purchase a Convertible Promissory Note in the principal amount of up to $500,000 (See Bion’s Form 8-K, dated October 24, 2024). At that time, BLG, LLC, consisted of three affiliates of the Company (Directors Greg Schoener (also Interim COO), Turk Stovall, and Bob Weerts) and two shareholders (one of whom is the brother of Greg Schoener). BLG membership is currently the same, but Bion accepted Turk Stovall’s resignation as a Director, effective May 30, 2025. Amounts outstanding under the original BLG Note bore interest at a rate of 7.5% per annum through the maturity date of the Note, which was April 15, 2025. The Note is secured by the Company’s Intellectual Property (IP)/patents and it will convert into securities in the Company at the terms of a later capital raise (or other source of funding) in excess of $3.0 million, that had to be completed within six (6) months, and other terms as defined in the Note and Security Agreements (attached as exhibits).

Effective May 29, 2025, the Company entered into a Forbearance Agreement with Bion BLG, LLC, extending the maturity date of the BLG Note to July 15, 2025 (See Bion’s Form 8-K, dated May 30, 2025). Under the terms of the Forbearance Agreement, the amounts outstanding under the Note began to bear interest at a rate of 9% per annum.

During July 2025, the Company raised $35,000 under the May 2025 convertible note.

On August 11, 2025, the Company entered into a demand note with 10% interest with a current board member of $24,728.

During August and September 2025, the Company entered into July 2025 Convertible Notes with five individuals. The July 2025 Convertible Notes bear interest at 7.5% per annum, have maturity dates of December 31, 2025. The July Notes will convert into Units in the Company at the terms of a later capital raise, in which the Company crosses the threshold of $3 million aggregate capital raised, including proceeds from the Shareholder Note offerings.

Effective September 15, 2025, pending formal documentation and execution, two affiliates of the Company (Danielle Lominy and Christopher Parlow, family members of the late Dominic Bassani, Bion’s former CEO), and three non-affiliates of the Company (Dominic Bassani’s spouse, Mark A. Smith, previously a Director and President, and Edward Schafer, previously a Director) (referred to hereinafter collectively as ‘Holders’) have each individually agreed to a settlement (“Settlement Agreements”) that will simplify Bion’s capital structure and substantially reduce the number of Fully Diluted Shares. In consideration of the cancellation of various obligations and security instruments held by the Holders, including without limitation deferred compensation, convertible notes, warrants, and options, the Holders (as a whole) will receive, in aggregate, 8,101,746 shares of common stock. If all the instruments they forfeited had been converted or exercised, it could have increased the Company’s shares outstanding by 22,498,405. The transactions represent a net reduction in fully diluted shares of 14,369,659 and an increase in outstanding shares of 8,101,746 (approximately). The shares will be issued by January 15, 2026, or earlier upon the election of the individual Holders. When the formal agreements are executed and ratified by the Board, they will be attached as an exhibit to a Form 8-K.

On September 15, 2025 the maturity date for two of the 2015 Convertible Notes was extended to September 15, 2027.

Effective September 26, 2025, Bob Weertz, a Bion Director, was placed on an indefinite leave of absence for personal reasons

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned thereunder duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated: