BION ENVIRONMENTAL TECHNOLOGIES INC

Disclosure Controls and Procedures

As of June 30, 2026, management evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures, under the supervision and with the participation of the Company's Interim Chief Executive Officer, who also serves as the Company's principal financial and accounting officer. Based on that evaluation, the Interim Chief Executive Officer concluded that the Company's disclosure controls and procedures were not effective as of June 30, 2026, because of the material weakness in internal control over financial reporting described below.

Changes in Internal Control over Financial Reporting

There were no changes in internal control over financial reporting during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

Management’s Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934. The Company's Interim Chief Executive Officer, who also serves as its principal financial and accounting officer, evaluated the effectiveness of the Company's internal control over financial reporting based on the framework inInternal Control – Integrated Framework (2013), issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

Based on this evaluation, management concluded that the Company's internal control over financial reporting was not effective as of June 30, 2026, due to a material weakness in the Company's control environment. This weakness results in inadequate segregation of duties and a lack of timely review and approval of related party transactions.

The Company's small size has prevented it from employing sufficient resources to provide an adequate level of supervision and segregation of duties. One person processes the Company's accounting and banking transactions, and a single person oversees cash disbursements, cash receipts and the overall accounting process. While some compensating controls are in place, effective segregation of accounting duties is difficult to achieve, and the volume of transactions does not justify additional full-time staff.

To address this material weakness, the Company engages an outside accounting and consulting firm with SEC and U.S. GAAP experience to assist with the preparation of its financial statements, the evaluation of complex accounting matters, and the review of financial statement account balances. The Company first engaged such a firm in May 2006 and changed to its current firm in December 2021. The Company believes this outside review has improved its disclosure controls and procedures and, if effective over time, will help remediate the segregation of duties weakness. However, the Company may not be able to fully remediate the material weakness without hiring additional staff, and it will continue to evaluate the costs and benefits of doing so.

This annual report does not include an attestation report of the Company's independent registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the Company's independent registered public accounting firm pursuant to SEC rules that permit the Company to provide only management's report in this annual report.