BION ENVIRONMENTAL TECHNOLOGIES INC

Previous wording

These factors include potential conflicts of interest related to the BLG loan group, its control by three of Bion’s Directors and key management, and its security position in the Company’s IP (see below, Item K), adverse economic conditions, entry of new and stronger competitors, inadequate capital and limited ability to obtain financing, needed personnel and equipment, unexpected costs, failure (or delay) to gain product certifications and/or regulatory approvals in the United States (or particular states) or foreign countries, loss (permanently or for any extended period of time) of the services of members of the Company’s small core management team and failure to obtain access to new markets. Additional risks and uncertainties that may affect forward looking statements about Bion's business and prospects include: i) the possibility that markets for eco-friendly/sustainable beef, organic and low-carbon fertilizer products, and clean fuels will be slow to develop (or not develop at all), ii) the possibility that competitors will develop more comprehensive and/or less expensive environmental solutions, iii) delays in market awareness of Bion and our Systems, iv) uncertainties and costs increases related to research and development efforts to update and improve Bion’s technologies and applications thereof, and/or v) delays and/or costs exceeding expectations relating to Bion's development of the Initial Project, JVs and/or Projects and vi) failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us behind our competitors and requiring expenditures of our limited resources.

Current wording

These factors include potential conflicts of interest related to the BLG loan group, its control by three of Bion’s Directors and key management, and its security position in the Company’s IP (see I below), adverse economic conditions, entry of new and stronger competitors, inadequate capital and limited ability to obtain financing, needed personnel and equipment, unexpected costs, failure (or delay) to gain product certifications and/or regulatory approvals in the United States (or particular states) or foreign countries, loss (permanently or for any extended period of time) of the services of members of the Company’s small core management team and failure to obtain access to new markets. Additional risks and uncertainties that may affect forward looking statements about Bion's business and prospects include: i) the possibility that markets for eco-friendly/sustainable beef, organic and low-carbon fertilizer products, and clean fuels will be slow to develop (or not develop at all), ii) the possibility that competitors will develop more comprehensive and/or less expensive environmental solutions, iii) delays in market awareness of Bion and our Systems, iv) uncertainties and costs increases related to research and development efforts to update and improve Bion’s technologies and applications thereof, and/or v) delays and/or costs exceeding expectations relating to Bion's development of the Initial Project, JVs and/or Projects and vi) failure of marketing strategies, each of which could have both immediate and long term material adverse effects by placing us behind our competitors and requiring expenditures of our limited resources.

Previous wording

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

Current wording

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

Previous wording

The Company has been under substantial financial and management stress over the past twenty-four (24) months. Covid-related delays during technology pilot development at Buflovak in New York, followed by post-Covid supply chain disruptions during construction of our demonstration facility at Fair Oaks, have led to extreme difficulties in raising needed funds. These delays prevented us from meeting our project development and related capital timelines, and were further compounded by the death (following extended illness) of Dominic Bassani, who most recently served as our COO from May 2022 after serving as our CEO for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective May 31, 2024, followed by the retirement of Mark A. Smith, the Company’s recently retired President, General Counsel and Chief Financial Officer, effective July 31, 2024.

Current wording

The Company has been under substantial financial and management stress over the past four (4) years. Covid-related delays during technology pilot development at Buflovak in New York, followed by post-Covid supply chain disruptions during construction of our demonstration facility at Fair Oaks, have led to extreme difficulties in raising needed funds. These delays prevented us from meeting our project development and related capital timelines, and were further compounded by the death (following extended illness) of Dominic Bassani, who most recently served as our COO from May 2022 after serving as our CEO for the prior decade, the subsequent resignation of Bill O’Neill, Dominic’s replacement at the CEO position, effective May 31, 2024, followed by the retirement of Mark A. Smith, the Company’s President, General Counsel and Chief Financial Officer, effective July 31, 2024.

Previous wording

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

Current wording

At the end of May 2024, a new core leadership team was installed (seeG andH below) and a short-term funding strategy was implemented (seeI, below) while longer term capital solutions were pursued. These efforts are ongoing. Our new leadership team believes the difficulties Bion has faced are outweighed by our recent successes that include the technology demonstration and optimization at our Fair Oaks facility and the initial responses from our fertilizer outreach. This is coupled with strong recent interest in our ammonia control solution from the biogas operators and developers that will be needed to ensure a supply of feedstock for our fertilizer products. These successes coincide with growing trends in sustainable agriculture and fuels and the circular economy that favor Bion’s business opportunities. Bion leadership believes this confluence of events positions the Company, assuming it aligns with appropriate strategic partners and obtains sufficient financing, to exploit a unique opportunity at the intersection of agriculture, renewable energy, the environment, and consumer demand.

Previous wording

A: The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing Projects, JVs and proposed Projects will not be sufficient to meet the Company’s anticipated operational and capital expenditure needs for many years. Current liabilities were approximately $6.8 million at March 31, 2025 which represents an increase of approximately $1,040,000 from June 30, 2024 (largely due to new debt as well as increased deferred compensation). Similarly, the Company’s cash on hand decreased from approximately $52,000 to approximately $5,000 over the same period. The Company has faced extreme difficulty obtaining needed funding during the entire 2024 fiscal year, which has continued throughout the first nine months of the current fiscal year to date.

Current wording

A:The Company is not currently generating any significant revenues. Further, the Company’s anticipated revenues, if any, from existing Projects, JVs and proposed Projects will not be sufficient to meet the Company’s anticipated operational and capital expenditure needs for many years. Current liabilities were approximately $6.0 million at September 30, 2025 which represents a decrease of approximately $1.2M from June 30, 2025 (largely due to Settlement Agreements detailed inP below). Similarly, the Company’s cash on hand increased from approximately $4,400 to approximately $27,700 over the same period. The Company has faced extreme difficulty obtaining needed funding during the entire 2025 fiscal year, which has continued throughout the first three months of the current fiscal year to date.

Previous wording

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

Current wording

**B:Effective June 30, 2024, at the same time the Initial Project was deemed placed in service, it was determined that because the Company’s Initial Project at Fair Oaks, IN, was i) largely a research & development facility and ii) is located on land subject to a short-term lease, it no longer had commercial value and its ‘carrying value’ was reduced to $0 on the Company balance sheet, in order to conform with accepted accounting practices. As a result, a large ‘one time/non-recurring’ ‘non-cash’ charge of $9,460,425 was taken by the Company, 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. GAAP accounting rules required the write-down and zero carrying value; however, the Fair Oaks facility has been and continues to be the most important asset of the Company. In addition to providing data needed to optimize a full-scale commercial system, Bion has conducted dozens of demonstrations with developers and operators, engineering firms, potential fertilizer and finance partners, and others. Further, Fair Oaks is operating at capacity to produce samples of Bion’s Ammonium Bicarbonate fertilizers for testing by various stakeholders. For more details on the Initial Project, see the Company’s Form 10-K for 2025. **

Previous wording

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

Current wording

**D:**On January 2, 2024, Bion received a new (continuation) patent that broadened the claims related to its Ammonia Recovery System (ARS) to include industrial and municipal wastewater sources, in addition to animal waste streams that were previously covered. Since that time, Bion has a directed part of its limited resources to understanding and evaluating opportunities to apply its ARS as a ‘standalone’ or ‘bolt-on’ ammonia control solution in these sectors. In such cases, the ARS would be deployed as a standalone ammonia control solution (vs integrated into a Bion Gen3Tech 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 believed then, and at this time, that there is a robust opportunity to provide bolt-on ammonia control solutions to others in the industrial and animal waste sectors. During fiscal 2025, and continuing, we have devoted increasing resources to pursuing the bolt-on opportunity in both of these sectors.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

**G:**On June 1, 2024, Craig Scott joined the Company's Board of Directors. Mr. Scott has served Bion in several senior positions, dating back to 1996. Mr. Scott also agreed to assume a broader management role for Bion and subsequently accepted the role of interim Chief Executive Officer. Also in June, Greg Schoener assumed the role of Chief Operating Officer on an interim basis. He also joined Bion's Board of Directors. Mr. Schoener is a successful business owner and operator, serving the construction industry in Houston, Texas. Bob Weerts, another Bion shareholder and a successful serial entrepreneur from Winnebago, Minnesota, also accepted a position on Bion’s Board of Directors (Mr. Weerts recently passed away).

Previous wording

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

Current wording

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

Previous wording

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 provided short-term funding for Bion in a secured promissory note of up to $500,000. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG. As a group, Schoener, Stovall, and Weerts own 60% of BLG, which has a security interest in the Company’s Intellectual Property. The BLG note will bear interest at a rate of 7.5% per annum and the maturity date is April 15, 2025. As of the filing date, BLG has advanced $399,763. The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note). If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a secured promissory note with similar terms being offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing.

Current wording

I: 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 (at that time); Bob Weerts, (now-deceased former 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 provided short-term funding for Bion in a secured promissory note of up to $500,000. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG. As a group, Schoener, Stovall, and Weerts own 60% of BLG, which has a security interest in the Company’s Intellectual Property. The BLG note will bear interest at a rate of 7.5% per annum and the maturity date is April 15, 2025. As of the filing date, BLG has advanced $440,213. The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note). If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a Note with similar terms being offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing.

Previous wording

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

Current wording

**J:**In November, the Company launched a secured promissory note offering (Shareholder Notes) to previous investors/shareholders (and certain others) with similar terms to the BLG note. Based on feedback from shareholders and registered representatives with which the Company has long standing relationships, management 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 the Company for the larger offering/ funding that will be required. As of filing date, Bion has raised $916,000 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 or planned facility.

Previous wording

Through the end of calendar 2022, Bion’s strategy to exploit the beef opportunity was focused on developing an initial sustainable beef project as ‘proof of concept’. At the beginning of 2023, under the guidance of our last CEO, Bion’s strategy shifted to executing multiple letters of intent and agreements for sustainable beef JV projects and moving forward with development of those projects in quick succession. During our 2023 fiscal year, Bion entered into three (3) letters of intent (“LOIs”): a) July 2022 letter of intent to develop a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together with the Ribbonwire Ranch (“Ribbonwire LOI”), in Dalhart, Texas (with a provision to expand to 60,000 head) (“Dalhart Project”), b) January 2023 letter of intent to develop a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together with the Olson Feeders and TD Angus (“Olson LOI”), near North Platte, Nebraska (with a provision to expand to 45,000 head or more) (“Olson Project”), c) April 2023 letter of intent to develop a large-scale commercial project - a 15,000-head sustainable beef cattle feeding operation together with Dakota Valley Growers (“DVG LOI”) near Bathgate, North Dakota (“DVG Project”). Based on our experience, we believe it will not be difficult to secure participation in our Projects from additional feeders/cattlemen, especially once project financing and offtake agreements for both protein and co-products, are in place.

Current wording

Through the end of calendar 2022, Bion’s strategy to exploit the beef opportunity was focused on developing an initial sustainable beef project as ‘proof of concept’. At the beginning of 2023, under the guidance of Bill O’Neill, our immediately previous CEO, Bion’s strategy shifted to executing multiple letters of intent and agreements for sustainable beef JV projects and moving forward with development of those projects in quick succession. During our 2023 fiscal year, Bion entered into three (3) letters of intent (“LOIs”) to develop large integrated beef projects. It became increasingly apparent that while it was easy to find feeders/cattle production partners, finding partners that could and would commit to beef and coproduct offtake agreements was much more difficult. Without such partners, it would be all but impossible to finance integrated projects. As described above, Mr. O’Neill decided he was unable to accomplish this strategy and departed Bion in May 2024.

Previous wording

Leadership continues to believe, for several reasons, that the best opportunity for the Company to prove its sustainable beef concept is with the Stovall Ranch JV in Montana. In June 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies. Turk Stovall is a fifth-generation Montana cattleman, with an extensive graduate-level education in cattle husbandry and an MBA in agribusiness, and he is the largest custom cattle feeder in Montana. He also has broad experience and relationships with both the U.S. and Montana’s beef industry and important state leaders, resources, and agencies. Bion and Stovall have agreed to establish a JV, to be led by Mr. Stovall, with the goal of developing a 16,000-head sustainable beef project at Stovall’s Yellowstone Cattle Feeders (‘YCF’) location in Shepherd, Montana. While we still plan to implement an ammonia recovery system at Stovall/YCF, we are now actively seeking opportunities to develop projects more quickly.

Current wording

Bion’s new leadership team returned the company to its earlier approach, focusing on building an initial ‘flagship’ project to prove the ARS technology and the Gen3Tech platform it supports. New leadership continued to focus on beef, for several reasons, and believed the best opportunity for the Company to prove its sustainable beef concept was with the Stovall Ranch JV in Montana. In June 2024, Bion formed a strategic relationship with Turk Stovall and Stovall Ranching Companies. Turk Stovall is a fifth-generation Montana cattleman, with an extensive graduate-level education in cattle husbandry and an MBA in agribusiness, and he is the largest custom cattle feeder in Montana. He also has broad experience and relationships with both the U.S. and Montana’s beef industry and important state leaders, resources, and agencies. Bion and Stovall agreed to establish a JV, that was 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. However, over the following months, it became apparent to Bion’s leadership that a) Bion did not have the requisite strategic partners or resources needed to develop these large integrated projects, even a single one, b) that project development timelines would be much longer than anticipated, and c) it was unlikely Bion would be able to raise sufficient capital to execute such a plan.

Previous wording

We have correspondingly devoted most of our resources to the bolt-on business opportunity: using the ARS as a standalone ammonia control solution for others’ biogas production facilities. We are currently focused on existing large-scale livestock facilities with digesters in place, since they have waste streams for which the ARS has been optimized. Further, we are also adding resources to pursue opportunities we believe we have in the larger industrial wastewater sector, where regulatory drivers already exist, and we believe the ARS and its byproducts may give us a competitive advantage over existing solutions. We have no intention of abandoning our opportunities to develop integrated sustainable livestock projects. However, we believe the bolt-on business opportunity has the advantage of requiring substantially less project development capital and could represent a much shorter path to fertilizer production and revenues.

Current wording

Bion pivoted to devote almost all its resources to the bolt-on business opportunity: using the ARS as a standalone ammonia control solution for others’ biogas production facilities. We are currently focused on both existing and planned large-scale livestock facilities integrated with digesters, since they have waste streams for which the ARS has been optimized. Further, we have and will continue to devote resources to pursuing opportunities in the industrial wastewater sector, where regulatory drivers already exist, and we believe the ARS and its byproducts may give us a competitive advantage over existing solutions. We have not abandoned our opportunity to develop integrated sustainable livestock projects, which we believe our technology and business model is best suited for. However, we believe the bolt-on business opportunity has the advantage of requiring substantially less capital and could represent a much shorter path to fertilizer production and revenues. We intend to revisit integrated projects if and when it is in our interests to do so.

Previous wording

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

Current wording

The Company’s on-going difficulties raising needed funds over the past two years have rendered the Company unable to meet its current creditor obligations on a timely basis. The Company has engaged in discussion/negotiation with its larger creditors (including its largest creditor--- the primary contractor on the Initial Project) but has been unable to reach agreements regarding payments due to the uncertainty as to if, when, and how much funding the Company will be able to raise in future periods. As a result, the primary contractor has filed a mechanics in Indiana and is pursuing action in federal court, and other creditors are threatening to commence or have commenced litigation and/or repossess/remove leased equipment. The Company is behind on its lease payments related to the site of the Initial Project. We have resumed payments to certain creditors, whose services the Company requires to continue operations at Fair Oaks, including partial lease payments to the property lessor (and ongoing supplier of digestate). Discussions and ultimate resolution are ongoing and subject to court proceedings (seeK, above) and Bion’s ability to raise capital in a timely manner.

Previous wording

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 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.

Current wording

Bion has continued to raise minimal capital through our Shareholder Note Offerings and we have implemented extreme cost savings measures: maintaining only mission-critical operations and funding. Despite the Company’s financial state, the technology has been optimized and proven, the requisite organic approvals for the fertilizer have been obtained, initial offtake partners have been identified, and (nonbinding) agreements executed. We are now 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, agriculture, and livestock production. Bion is now evaluating a number of these as potential development and finance partners for project opportunities. Further, the Company has initiated discussions with several large U.S. organic fertilizer manufacturers and distributors that have demonstrated interest in the product. Bion believes that any of these industry 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.

Previous wording

Bion’s new leadership team is strongly committed to Bion’s continuation, its future success, and its shareholders. We have refocused the Company’s efforts to the bolt-on opportunity, to prove the technology at full scale and reach revenues more quickly. We believe this will put us on a more achievable path. Further, this strategy will substantially reduce our need for capital, and we believe that a more reasonable and credible objective will make it easier to raise that capital. We also believe that the recent changes in leadership will lend validation and credibility to Bion and its business plan, making it easier to execute needed strategic alliances and raise capital from potential strategic, institutional, and retail investors.

Current wording

Bion’s new leadership team is strongly committed to Bion’s continuation, its future success, and its shareholders. We have refocused the Company’s efforts to the bolt-on opportunity, which should allow us to prove the technology at full scale and reach revenues more quickly. We believe this puts us on a more achievable path, that we will be able to move forward with at least one project in the current or next quarter, and that we will be able to execute a larger financing or obtain other sources of capital, such as a potential strategic investor/partner or a license agreement.

Previous wording

THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE. REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH BEEF PROJECT ARS MODULE IS PROJECTED TO COST IN EXCESS OF $15 MILLION (DEBT/EQUITY/GRANTS) TO CONSTRUCT AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS. THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE ITSELF.

Current wording

THERE IS NO ASSURANCE THAT THE COMPANY WILL REACH OR APPROACH THE GOALS/TARGETS SET FORTH ABOVE. REACHING SUCH GOALS/TARGETS WILL REQUIRE RESOLUTION OF THE COMPANY’S EXISTING FINANCIAL DIFFICULTIES AND ACCESS TO VERY LARGE AMOUNTS OF CAPITAL (EQUITY AND DEBT) AS EACH BOLT-ON ARS PROJECT IS PROJECTED TO COST IN EXCESS OF $8 MILLION (DEBT/EQUITY/GRANTS) TO CONSTRUCT AND WILL REQUIRE MOBILIZATION OF SUBSTANTIAL PERSONNEL, TECHNICAL RESOURCES AND MANAGEMENT SKILLS. THE COMPANY DOES NOT POSSESS EITHER THE FINANCIAL OR PERSONNEL RESOURCES INTERNALLY AND WILL NEED TO SOURCE SUCH RESOURCES FROM OUTSIDE ITSELF.

Previous wording

THREE MONTHS ENDED MARCH 31, 2025 COMPARED TO THE THREE MONTHS ENDED MARCH 31, 2024

Current wording

THREE MONTHS ENDED SEPTEMBER 30, 2025 COMPARED TO THE THREE MONTHS ENDED SEPTEMBER 30,2024

Previous wording

Total general and administrative expenses were $475,000 and $527,000 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Total general and administrative expenses were $470,000 and $959,000 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Salaries and related payroll tax expenses were $92,000 and $148,000 for the three months ended March 31, 2025 and 2024, respectively. Consulting costs were $49,000 and $70,000 for the three months ended March 31, 2025 and 2024, respectively. The $56,000 decrease in salary costs is due to Bill O’Neill resigning, Dominic Bassani passing away and the Company not replacing the position and the retirement of Mark Smith. Investor relations expenses were $27,000 and $106,000 for the three months ended March 31, 2025 and 2024, respectively. Legal costs were nil and nil for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Salaries and related payroll tax expenses were $89,000 and $95,000 for the three months ended September 30, 2025 and 2024, respectively. Consulting costs were $59,000 and $45,000 for the three months ended September 30, 2025 and 2024, respectively. Investor relations expenses were $17,000 and $($57,000) for the three months ended September 30, 2025 and 2024, respectively. Legal costs were $8,000 and nil for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Stock-based compensation for the three months ended March 31, 2025 and 2024 were $179,000 and $56,000, respectively.

Current wording

Stock-based compensation for the three months ended September 30, 2025 and 2024 were $117,000 and $659,000, respectively.

Previous wording

Total depreciation expense was $205 and $331 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Total depreciation expense was nil and $285 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

Total research and development expenses were $6,000 and $6,000 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Total research and development expenses were $6,500 and $6,400 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

As a result of the factors described above, the loss from operations was $481,000 and $533,000 for the three months ended March 31, 2025 and 2024 respectively.

Current wording

As a result of the factors described above, the loss from operations was $477,000 and $966,000 for the three months ended September 30, 2025 and 2024 respectively.

Previous wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $34,000 and $4,000 for the three months ended March 31, 2025 and 2024, respectively. Interest expense related to warrant modifications was nil and nil for the three months ended March 31, 2025 and 2024, respectively.

Current wording

Interest expense related to deferred compensation, loan payable and convertible notes prior to capitalization was $44,000 and $25,000 for the three months ended September 30, 2025 and 2024, respectively. Interest expense related to warrant modifications was $61,000 and $181,000 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $511,000 and $538,000 for the three months ended March 31, 2025 and 2024, respectively, and the net loss per basic common share was $.01 and $.01 for the three months ended March 31, 2025 and 2024, respectively.

Current wording

As a result of the factors described above, the net loss attributable to Bion’s stockholders was $581,000 and $1,172,000 for the three months ended September 30, 2025 and 2024, respectively, and the net loss per basic common share was $.01 and $.02 for the three months ended September 30, 2025 and 2024, respectively.

Previous wording

As of March 31, 2025, the Company had cash of approximately $5,000. During the nine months ended March 31, 2025, net cash used in operating activities was $677,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations. Cash expenditures were offset in part by proceeds from financing activities, a total of $636,000 in debt funding. During the nine months ended March 31, 2024, net cash used in operating activities was $755,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations expenses as well as the purchase of property and equipment. Cash expenditures were offset by proceeds from financing activities, primarily the exercise of warrants and sale of common shares

Current wording

As of September 30, 2025, the Company had cash of approximately $28,000. During the three months ended September 30, 2025, net cash used in operating activities was $248,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations. Cash expenditures were offset in part by proceeds from financing activities, a total of $271,000 in debt funding. During the three months ended September 30, 2024, net cash used in operating activities was $218,000, primarily consisting of cash operating expenses related to salaries and benefits, and other general and administrative costs such as insurance, legal, accounting, consulting and investor relations expenses as well as the purchase of property and equipment. Cash expenditures were offset by proceeds from financing activities, a total of $202,000 in debt funding.

Previous wording

As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years. While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. As stated in multiple places in this report, over the last 3 months the Company has had only very limited success in raising needed funds which lack of success has had material negative effects on the Company and its business. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.

Current wording

As previously noted, the Company is currently not generating significant revenue and accordingly has not generated cash flows from operations. The Company does not anticipate generating sufficient revenues to offset operating and capital costs for a minimum of two to five years. While there are no assurances that the Company will be successful in its efforts to develop and construct its Projects and market its Systems, it is certain that the Company will require substantial funding from external sources. As stated in multiple places in this report, over the last three months the Company has had only very limited success in raising needed funds which lack of success has had material negative effects on the Company and its business. Given the unsettled state of the current credit and capital markets for companies such as Bion, there is no assurance the Company will be able to raise the funds it needs on reasonable terms.

Previous wording

During the nine months ended March 31, 2025 and 2024, the Company invested nil and $690,000 in the purchase of property and equipment, respectively. The decrease was due to the Company’s effort to conserve cash.

Current wording

During the three months ended September 30, 2025 and 2024, the Company invested nil and nil in the purchase of property and equipment, respectively. The decrease was due to the Company’s effort to conserve cash.

Previous wording

During the nine months ended March 31, 2025, the Company received net cash proceeds of $630,000 from notes payable.

Current wording

During the three months ended September 30, 2025, the Company received net cash proceeds of $240,000 from convertible notes payable, less $1,250 in commissions, $25,000 from demand note and $8,000 from notes payable from related parties.

Previous wording

As of March 31, 2025, the Company has debt obligations consisting of: a) deferred compensation of $1,080,000, b) convertible notes payable – affiliates of $1,733,000, c) convertible note payable including accrued interest of $816,000 and d) notes payable including accrued interest of $414,000. As of March 31, 2024 the Company had debt obligations of a) deferred compensation of $1,433,000, and b) convertible notes payable – affiliates of $1,711,000 and c) current note payable including accrued interest of $261,000.

Current wording

As of September 30, 2025, the Company has debt obligations, including accrued interest, consisting of: a) deferred compensation of $1,087,000, b) convertible notes payable of $1,315,000, c) convertible bridge note payable of $464,000, d) notes payable related party of $440,000 and demand note of $25,000. As of September 30, 2024, the Company had debt obligations of a) deferred compensation of $957,000, and b) convertible notes payable – affiliates of $1,718,000 and c) current note payable including accrued interest of $630,000 and d) notes payable including accrued interest of $127,000.

Previous wording

As of March 31, 2025, the Company had cash of approximately $5,000.

Current wording

As of September 30, 2025, the Company had cash of approximately$28,000.

Previous wording

The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. During fiscal year 2023 and 2022 (as a whole), the Company faced less difficulty in raising equity funding (but was subject to substantial equity dilution from the larger amounts of equity financing during the periods) than was experienced in the prior 3 years. However, this positive trend did not continue during the last quarter of the 2023 fiscal year and the entirety of fiscal year 2024 (and the first three quarters of 2025 through the date of this report). The Company raised very limited equity funds during such periods to meet some of its immediate needs, and therefore, the Company needs to raise substantial additional funds in the upcoming periods. The Company faced substantial demand for capital and operating expenditures for the fiscal year 2024 that we anticipate will continue (or increase) during the 2025 fiscal year and periods thereafter as it moves toward commercial implementation of its ARS, 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company) and, therefore, is likely to continue to face significant cash flow management issues due to limited capital resources and working capital constraints which had only begun to be alleviated during 2022 and 2023. 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.

Current wording

The Company continues to explore sources of additional financing to satisfy its current operating requirements as it is not currently generating any significant revenues. During fiscal years 2024 and 2023 (as a whole), the Company faced less difficulty in raising equity funding (but was subject to substantial equity dilution from the larger amounts of equity financing during the periods) than was experienced in the prior 3 years. However, this positive trend did not continue during the 2025 fiscal year (and the first two quarters of 2026 through the date of this report). The Company raised very limited equity funds during such periods to meet some of its immediate needs, and therefore, the Company needs to raise substantial additional funds in the upcoming periods. The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2025 that we anticipate will continue (or increase) during the 2026 fiscal year and periods thereafter as it moves toward commercial implementation of its 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company) and, therefore, is likely to continue to face, significant cash flow management issues due to limited capital resources and working capital constraints which had only begun to be alleviated during 2024 and 2023. 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.

Previous wording

Year to date ended March 31, 2025 the Company had a loss of $2,057,000 including $837,000 non-cash compensation expenses related to extension of warrants and options.

Current wording

During the fiscal 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.

Previous wording

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 remainder of the current fiscal year (and subsequent periods), 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 will 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 will be required to raise $15 million (or more) to fund its initial 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.

Current wording

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 remainder of the current fiscal year (and subsequent periods), 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 will 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 raise $8 million (or more) to fund its initial 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.

Previous wording

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

Current wording

The Company continues to explore sources of financing to satisfy its current operating requirements and future growth needs. The Company has faced substantial demand for capital and operating expenditures for the fiscal year 2025 that we anticipate will increase during the 2026 fiscal year and periods thereafter as we move toward commercial implementation of our ARS and 3G Tech and development of JVs (including costs associated with additions of personnel to carry out the business activities of the Company). As a result, the Company has faced, and continues to face, significant cash flow challenges due to material working capital constraints. To partially mitigate these working capital constraints, the Company's core senior management and some key employees and consultants have been deferring most of their cash compensation and/or are accepting compensation in the form of securities of the Company and members of the Company's senior management have from time-to-time made loans to the Company in the past and may do so in future periods.

Previous wording

K: To help alleviate short-term cash needs for continued operations, in August, three affiliates of the Company (Greg Schoener, Interim COO & Director; Turk Stovall, Director; Bob Weerts, Director) and two shareholders (one of whom is the brother of Greg Schoener) began advancing money to Bion to cover critical payables. They subsequently formed a loan group, BION BLG, LLC (“BLG”), and have continued to provide short-term funding for Bion in a secured promissory note of up to $500,000. Schoener, Weerts, and the two non-affiliate members were also large Bion shareholders, prior to the formation of BLG. As a group, Schoener, Stovall, and Weerts own 60% of BLG, which has a security interest in the Company’s Intellectual Property. The BLG note will bear interest at a rate of 7.5% per annum and the maturity date is April 15, 2025. As of the filing date, BLG has advanced $399,763. The BLG note will convert into Units (shares and/or warrants) in the Company at the terms of a later capital raise, in which Bion crosses the threshold of $3 (three) million in aggregate capital raised (or other source of funding, and other terms as defined in the note). If the Company is unable to complete such funding within six (6) months, it will be in default of the BLG note, which is secured by the Company’s Intellectual Property (“IP” “Collateral”). BLG will share the Collateral on a pro rata basis with investors in a Note with similar terms being offered to previous Bion investors. The BLG note and security agreements contain other terms set forth therein and are included as exhibits to this filing.

Current wording

To help alleviate short-term cash needs for continued operations, in August 2024, three affiliates of the Company (Greg Schoener, Interim COO & Director; Turk Stovall, previous Director; Bob Weerts, now-deceased 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 provided 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 bears interest at a rate of 9% per annum and the maturity date is January 15, 2026. 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. The Company has entered into two forbearance agreement that raised the interest rate to 9% and extended the maturity date to January 15, 2026.

Previous wording

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

Current wording

In November, the Company launched a secured promissory note offering 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 $816,000 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 or planned facility.